2023 (9) TMI 1069 - HC - Money Laundering

Validity of the cognizance/ summoning order - non-bailable warrant issued against the applicant - grant of pardon under Section 306 Cr.P.C. would fall within the purview of finally absolved by a Court of competent jurisdiction owing to an order of discharge acquittal or because of quashing of the scheduled offence against him ? - HELD THAT - An order for discharge of the accused is passed or the criminal proceedings against him are quashed when on the face of the allegations no triable offence is made out against the accused person and an order of acquittal is passed when the accused could not be proved guilty even after facing the trial. On the other hand pardon is granted to a person who is supposed to have been directly or indirectly concerned in or privy to an offence . Pardon is granted only to persons who were involved in commission of the offence and not to a person against whom no case is made out or no case could be established. Therefore a person who is granted pardon under Section 306 Cr.P.C. in a scheduled offence would not be a person who has been finally absolved by a Court of competent jurisdiction owing to an order of discharge acquittal or because of quashing of the scheduled offence against him mentioned in Vijay Madanlal Chaudhary 2022 (7) TMI 1316 - SUPREME COURT against whom no proceedings under PMLA can continue. Section 46 of the Prevention of Money Laundering Act 2002 provides that the persons conducting the prosecution before the Special Court shall be deemed to be a Public Prosecutor. However the public prosecutor conducting the trial of the offence under PMLA before the Special Court cannot file objections regarding concealment of facts relating the processes or activities connected with proceeds of the offence namely - (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property before the Court trying the scheduled offence. Grant of pardon under Section 306 Cr.P.C. would not fall within the purview of the words finally absolved by a Court of competent jurisdiction owing to an order of discharge acquittal or because of quashing of the scheduled offence against him - The pardon granted under Section 306 Cr.P.C. to a person in a scheduled offence would not ipso facto result in his acquittal in the offence under the PMLA unless of course the accused person seeks pardon in the case under PMLA also by making a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence under PMLA also. The power under Section 482 Cr.P.C. can be exercised to secure the ends of justice as held in State of Haryana v. Bhajan Lal 1990 (11) TMI 386 - SUPREME COURT wherein the Hon ble Supreme Court gave a word of caution by stating that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases . In case the contention put forth by the learned Counsel for the applicant is accepted it would result in a person accused of committing an offence under PMLA going scot free without facing trial and without seeking pardon in PMLA case by making a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence and it would defeat the ends of justice. There is no illegality in the cognizance/ summoning order - Application dismissed.

Summary

Issues Involved:
1. Validity of the cognizance/summoning order and non-bailable warrant.
2. Effect of the applicant being made an approver and granted pardon in the scheduled offence on proceedings under the Prevention of Money Laundering Act (PMLA).

Summary:

Validity of the Cognizance/Summoning Order and Non-Bailable Warrant:

The applicant challenged the validity of the cognizance/summoning order dated 08.08.2019 and the non-bailable warrant issued on 04.02.2023 in Complaint Case No.121/2019 under Sections 3/4 of PMLA. The court found no illegality in the orders and dismissed the application under Section 482 Cr.P.C. The proceedings initiated by the Enforcement Directorate (E.D.) were based on the applicant's involvement in layering and converting ill-gotten money into white money through fake business transactions.

Effect of Being Made an Approver and Granted Pardon:

The applicant argued that being granted pardon in the scheduled offence should absolve him of charges under PMLA. The court referred to several judgments, including Vijay Madanlal Chaudhary vs. Union of India, which stated that a person finally absolved by discharge, acquittal, or quashing of the criminal case cannot face money laundering charges. However, the court distinguished that pardon under Section 306 Cr.P.C. does not equate to being finally absolved. Pardon is granted to those involved in the offence, not to those against whom no case is made out. Therefore, the applicant's pardon in the scheduled offence does not automatically absolve him of PMLA charges.

Legal Precedents and Interpretations:

The court emphasized that the offence under PMLA is a stand-alone offence and independent of the scheduled offence. It cited multiple cases to support this, including Dipesh Chandak v. Union of India and A.J. Peiris v. State of Madras, which clarified the scope of pardon and its implications. The court also deprecated the practice of including numerous case laws in affidavits, stating it results in wastage of court's time.

Conclusion:

The court concluded that the applicant, having been granted pardon in the scheduled offence, does not fall within the purview of 'finally absolved' as per Vijay Madanlal Chaudhary. Therefore, the proceedings under PMLA can continue. The application under Section 482 Cr.P.C. was dismissed, affirming the validity of the cognizance/summoning order and the non-bailable warrant.