2024 (3) TMI 76 - HC - Money Laundering

Limitations of Enforcement Directorate s Powers under PMLA - Money Laundering - proceeds of crime - illegal mining - compoundable offences or not - reasons to believe - petitioner s first prayer is for the issuance of directions to ensure that the respondents do not violate the spirit and sanctity of the proceedings - violation of statutory provisions contained in the MMDR Act Haryana Rules 2012 - statutory limits of Section 66 (2) under the Prevention of Money Laundering Act 2002 - HELD THAT - As per the instructions supplied by the ED in furtherance of the PMLA proceedings based on reasons to believe a search u/s 17 of the PMLA 2002 was conducted at multiple premises to investigate the o ense of commission of money laundering through illegal mining at large scale in Yamuna Nagar and nearby districts. Two premises of the Petitioner-residence and registered office of M/S Mubarikpur Royalty Company were searched and multiple incriminating documents digital devices and evidence were recovered which reveals the generation of proceeds of crime by the Petitioner s firm. Also unaccounted Cash of Rs. 4, 50, 000/- which is believed to be Proceeds of Crime was also recovered from the residence of the Petitioner. The material in possession and findings of the Directorate of Enforcement information was shared under section 66(2) of the PMLA 2002 with the Police. Further under the information shared u/s 66(2) of the FMLA 2002 an FIR No. 21 dated 19.01.2024 was registered u/ s 120-B 420 of IPC 1860 21(1) of Mines and Minerals (Regulation of Development) Act 1957 and 15 16 of Environment Protection Act 1986 at P.S. Pratap Nagar Yamuna Nagar. Violation of statutory provisions contained in the MMDR Act Haryana Rules 2012 - HELD THAT - Once the petitioner has been made an accused by the ED itself in the FIR it cannot be countenanced that he will be asked to appear in person in terms of Section 50 PMLA which contemplates obligation on the person to attend as directed; to state the truth and the proceedings before the ED officer would be a judicial proceeding. The whole context of Section 50 PMLA would have a di erent outlook once the ED itself has chosen to arraign the petitioner as an accused in the FIR lodged by themselves. Therefore the petitioner s fundamental rights under Article 21 of the Constitution of India are grossly violated as the procedure established by law is not followed and the proceedings launched are grossly actuated with malice in law. The petitioner s contention that the said communication amounts to direction is misreading of the said communication which has been reproduced in para 16. The communication is only information and it is the power of concerned investigator/SHO to register FIR if they are satisfied and found o ence cognizable as such the present petition deserves dismissal even on this prayer and related prayers. Thus if this court disrupts the proceedings at this stage it will amount to interfering in the investigation and presuming the malicious intent. It is not that the petitioner has been deprived of his liberty but to carry out investigation is also the statutory obligation of the investigators. If the prosecution is launched it is always permissible to an accused to seek discharge and even to challenge the charges if framed. However disrupting proceedings at initial stage would violate the duty to investigate the crime and bring guilty to justice to do justice to the victim. An analysis of the above does not make a case for issuing a formal notice and seeking a reply and no response is required for the following clarifications. Consequently the petitioner does not justify any prayer except that the further investigation will also be carried out in accordance with law and that in the future also if any information is shared the same shall again be shared within the parameters of section 66 of PMLA. Petition dismissed.

Summary

Issues Involved:
1. Violation of Supreme Court proceedings.
2. Scope of Section 66(2) of the Prevention of Money Laundering Act (PMLA).
3. Legality of the FIR and subsequent proceedings.
4. Jurisdiction and authority of the Enforcement Directorate (ED).

Summary:

1. Violation of Supreme Court Proceedings:
The petitioner sought to ensure that the respondents do not violate the spirit and sanctity of the proceedings pending before the Supreme Court in Civil Appeal No. 7382/2023. The court dismissed this prayer, stating that the petitioner should approach the Supreme Court or the National Green Tribunal (NGT) for such enforcement as the High Court lacks jurisdiction under Section 482 Cr.P.C. to enforce orders from higher courts.

2. Scope of Section 66(2) of PMLA:
The petitioner argued that the ED should remain within the statutory limits of Section 66(2) of PMLA and not share information beyond what is mandated. The court reviewed the communication sent by the Joint Director of ED to the Superintendent of Police, which led to the registration of FIR No. 21 dated 19.01.2024. The court held that the communication was merely informational and did not amount to a directive to register an FIR. It was within the investigator's discretion to register the FIR if they found the offense cognizable. Thus, the petitioner's contention was dismissed.

3. Legality of the FIR and Subsequent Proceedings:
The petitioner sought to quash FIR No. 0021 dated 19.1.2024, arguing that it was registered mechanically without independent inquiry and was thus an abuse of the process of law. The court noted that the primary offenses under Sections 120-B and 420 IPC are cognizable and do not require prior sanction for non-public servants. The court found no violation of Section 66 of PMLA and dismissed the petitioner's argument, stating that disrupting the investigation at this stage would interfere with the statutory obligation of the investigators.

4. Jurisdiction and Authority of the ED:
The petitioner argued that the ED's actions, including directing the police to register specific offenses, were arbitrary and beyond their jurisdiction. The court reviewed the statutory framework and found that the ED acted within its authority under Section 66(2) of PMLA by sharing information with the police. The court held that the ED did not direct the police but merely shared information, and it was within the police's discretion to register the FIR. The petitioner's argument was dismissed.

Conclusion:
The court dismissed the petition, stating that the petitioner failed to make a prima facie case for the issuance of notice. The investigation and proceedings by the ED and police were found to be within the legal framework, and the court emphasized the importance of allowing the investigation to proceed without undue interference. All pending miscellaneous applications were also disposed of.