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Money Laundering - Case Laws
Showing 1 to 20 of 2064 Records
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2025 (4) TMI 1602
Money Laundering - proceeds of crime - reasons to believe - arrest of the petitioner complied with the mandatory provisions of Section 19(1) of the Prevention of Money Laundering Act, 2002 (PMLA) or not - twin conditions under Section 45 of the PMLA have been fulfilled to justify bail or not - HELD THAT:- The Hon’ble Apex Court in the said judgment has further laid down that the twin conditions as to fulfil the requirement of Section 45 of the Act, 2002 before granting the benefit of bail is to be adhered to which has been dealt with by the Hon’ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors.[2022 (7) TMI 1316 - SUPREME COURT (LB)] wherein it has been observed that the accused is not guilty of the offence and is not likely to commit any offence while on bail - In the judgment rendered by the Hon’ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. as under paragraph-284, it has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of “proceeds of crime”. Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process.
Issue of legality of Arrest - HELD THAT:- It is evident from the record that the Petitioner was informed about the ground of arrest immediately by the Enforcement Directorate with his acknowledgement. Further, it is also an admitted position that within 24 hours of the arrest, the arrestee was supplied with the remand application which virtually contains all the grounds of arrest and therefore the legal requirement of informing the grounds of arrested "as soon as may be" also stood fulfilled both as per the statutory requirement under S. 19 (1) of the PMLA as well as the constitutional mandate under Article 22 (1) of the Constitution of India. The Hon’ble Supreme Court in the case of Pankaj Bansal [2023 (10) TMI 175 - SUPREME COURT] had made the requirement of furnishing grounds of arrest in writing, only prospective, by using the word "henceforth". The same has also been clarified by the Hon'ble Supreme Court in Ram Kishor Arora (supra) at Para 23. Hence, the law as it prevailed on the date of arrest was complied with.
On the basis of discussion made hereinabove it is evident that the remand application was provided to the petitioner’s counsel and there is no objection raised during the time of remand. Further, the law as it prevailed on the date of arrest was complied with by the Respondent. However, it is also an admitted position that within 24 hours of the arrest, the arrestee was supplied with the remand application which virtually contains all the grounds of arrest.
Issue of culpability of the present petitioner - HELD THAT:- It is manifestly apparent from the aforesaid fact that present petitioner has close linkup with the said company i.e. M/s Jagatbandhu Tea Estates Pvt. Ltd. However, the present petitioner is the director of the said company or not, is the matter of trial wherein both the parties are free to lead evidence in this regard - It needs to refer herein that in the case of Rohit Tandon v. Directorate of Enforcement, [2017 (11) TMI 779 - SUPREME COURT], the Hon'ble Supreme Court observed that the provisions of Section 24 of the PMLA provide that unless the contrary is proved, the authority or the Court shall presume that proceeds of crime are involved in money laundering and the burden to prove that the proceeds of crime are not involved, lies on the petitioner.
The ground of custody of 22 months of the petitioner has been taken. There is no dispute that the question of personal liberty is to be taken care of in order to follow the mandate of Article 21 of the Constitution of India but equally it is not in dispute that in a case of like nature, in which the petitioner has been involved, as per the allegation, balance is to be maintained in order to have the message to the society that the thing which has been done by the petitioner, as has been alleged, cannot be considered merely on the ground of long custody rather the nature of allegation is required to be seen.
Conclusion - i) The reason for giving explanation under Section 2(1)(u) is by way of clarification that proceeds of crime include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. ii) The conditions specified under Section 45 of PMLA are mandatory and need to be complied with even in respect of an application for bail made under Section 439 CrPC.
The instant application stands dismissed.
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2025 (4) TMI 1601
Money Laundering - scheduled/predicate offence - reasons to believe - legality of search and seizure proceedings conducted under Section 17 of Prevention of Money Laundering Act, 2002 - Whether the preconditions set out in Section 17 has been complied with or not? - HELD THAT:- This Court finds it unfortunate that women officers and employees are used as shields to prevent investigations from proceeding. Courts have time and again stressed on gender equality in public service. Women are far more empowered and are more proactive nowadays especially in public service. We see women progressing across different fields.
It is the duty of public officials to aid and assist in investigations and it is also the responsibility of both the investigation agencies and State Government officials in-charge to protect and ensure the safety of women. In spite of that, if the woman as an individual feels that her right has been infringed she is fully within her rights to approach the competent court of law. But let not a government try to discourage a woman from moving towards the path of empowerment - No allegations of violation of fundamental rights or coercion was raised by them in those letters to Directorate of Enforcement. Hence, the Directorate of Enforcement contended that this entire petition filed on behalf of TASMAC company is an abuse of process of law.
This Court feels that there is a strong disconnection between the averments and the relief sought for in the writ petition. It is imperative that a broader view of the issue needs to be taken at times, where the rights of people at large will be affected. It is without doubt that the prima facie allegations and complaints against the Tamil Nadu State Marketing Corporation (TASMAC) are grave in nature. It definitely warrants deeper investigation. But these present writ petitions are filed challenging the very initial step of search conducted based on certain information on record - How can a State Government would file a writ petition stating that an Investigating Agency cannot enter and conduct a search in a Government Company, that too when allegations are so serious in nature. In fact, it is the Tamil Nadu Directorate of Vigilance and Anti-Corruption, which has registered multiple First Information Reports (F.I.Rs) regarding malpractices of corruption ongoing in TASMAC.
A raid or a search by an investigating agency must be discreetly planned and executed to ensure that the offenders are caught off guard. In the present case, it is argued that the petitioner employees were asked to stay and that their mobile phones were seized and hence they were unable to contact their family. But that is how normally a surprise check is conducted - How can such a petition even be maintainable. If there are charges of harassment, how can one file a petition to state that a search must be declared illegal and that in essence prohibits any future searches as well. This is highly alarming and such petitions ought to be dismissed at threshold. It raises pertinent question as to the intention behind filing such writ petitions, whether is it a strategy to prolong and protract the investigation is a legitimate query that arises.
The arguments of officers being detained for hours during search and that the employees being sent home at odd hours when a search is in progress is inadequate and highly disproportional, when compared to the rights of millions of people of our Great Nation. The search conducted is for the interest and benefit of this Nation. Can a few inconveniences which is product of ‘procedure established by law’ as embedded in Article 21 be equated against the economic rights of the people of this country. It is the mandate of the Constitution to secure to all its citizens Economic Justice. And legislations such as PMLA serve this object by ensuring that offences which jeopardise our National economic growth is dealt with strictly in accordance with law.
Conclusion - The judicial review powers of the Courts is limited only to the extent as to whether the reasons to believe is recorded in writing before conducting search. The scope of Judicial review is limited to this alone and cannot go beyond or examine the subjective satisfaction of the investigating officer.
Petition dismissed.
The Directorate of Enforcement is at liberty to proceed with all further actions under PMLA - petition dismissed.
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2025 (4) TMI 1542
Money Laundering - challenge to impugned notice issued under Section 8 (4) of PMLA and Rule 5 (2) of the Rules - such a notice can be issued prior to a formal order of confiscation by the Special Court under Section 8(6) of the PMLA or not - HELD THAT:- A meaningful reading of the notice in the light of section 8 (4) of the PMLA and Rule 5 (2) of the Rules would reveal that the order dated August 22, 2022 passed by the Adjudicating Authority (whereby the Provisional Attachment Order was confirmed) forms the foundation of the impugned eviction notice. The said notice is in effect a statutory consequence of the order dated August 22, 2022 passed by the Adjudicating Authority.
As regards the petitioner’s contention that there is nothing on record to show that the provisions of Rule 5 (1) of the Rules have been complied with, this Court is of the prima facie view that non-compliance or belated compliance with the provisions of Rule 5 (1) would not at the threshold vitiate a notice under Rule 5 (2) of the Rules. Rule 5 (1) contemplates notice of the attachment to the Registrar having jurisdiction over the area where the property is situated requiring the Registrar not to transfer or create any interest in the property till further orders are passed. The purpose of such provision is clearly different from that of Rule 5 (2). While the former provision is aimed at avoiding/preventing encumbrance and transfer of title, the latter is aimed at securing possession thereof. Both are important but non compliance or belated compliance of one would not vitiate the lawful compliance with the other.
The point that the notice impugned has been issued after 2 years 9 months is also not appealing. The statute does not provide for a mandatory time limit for such notice to be issued. In such situation the length of time taken by the Respondents to issue the notice impugned cannot be taken advantage of by the petitioner in the facts of the present case.
This Court, therefore, feels that the petitioner should be left free to approach the Appellate Tribunal and get the hearing of the stay application done expeditiously. Since the petitioner has approached this Court under Article 226 of the Constitution it would be just and proper for this Court to request the Appellate Tribunal before whom the petitioner’s appeal under Section 26 of the PMLA is pending to dispose of the petitioner’s appeal as expeditiously as possible. Insofar as the petitioner’s application for stay of the order dated August 22, 2022 is concerned, this Court would request the Appellate Tribunal to consider the same on priority basis and dispose of the same as expeditiously as possible preferably within a period of 2 months from date.
Conclusion - i) The eviction notice dated November 19, 2024 issued under Section 8(4) of the PMLA and Rule 5(2) of the Rules is prima facie valid and within jurisdiction. ii) The petitioner's challenge to the eviction notice is premature before the High Court given the pending appeal and stay application before the Appellate Tribunal under Section 26 of the PMLA.
Petition disposed off.
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2025 (4) TMI 1398
Challenge to direction issued by the Directorate of Enforcement (ED) to the HDFC Bank, by invoking sub-section (4) of Section 8 of the Prevention of Money-Laundering Act, 2002 - provisional attachment of the properties - power of Directorate of Enforcement (ED) to direct a bank to transfer the amounts held in Fixed Deposits (FDs) along with accrued interest - HELD THAT:- Since the fixed FDRs, which is a movable property and the power has been exercised by the Deputy Director, an Officer subordinate to the Director of Enforcement, who is bound by the procedure that is specifically set out in Chapter III of the PMLA in relation to the attachment, adjudication and confiscation, since the FDR’s of the petitioners has already faced an attachment, the direction issued to transfer the amount in the name of the Directorate of Enforcement to be unsustainable.
The attempt on the part of the respondent to seek recourse to the provisions of the Prevention of Money-Laundering (Issuance of Provisional Attachment Order) Rules, 2013, it is unable to trace any such power, to direct transfer of the property while the proceedings are pending before the Special Court, in the name of the Enforcement Director and we do not think that Rule 5 of the Rules of 2013, in any case, permit such a course of action to be adopted.
There are no justification for the aforesaid action and the learned Additional Public Prosecutor in addition has not been able to point out any power permitting the transfer of the amount in the Fixed Deposits along with the interest in the name of the Enforcement Directorate, it is deemed appropriate to quash and set aside the said direction, though it is made clear that in so far as the order of attachment, which is already pending before the appellate Authority, the final decision shall be taken by the Authority, with all the remedies that are available to be invoked by the petitioner.
Conclusion - i) The direction issued by the ED to the bank to transfer the FD amounts along with accrued interest to the Enforcement Directorate was quashed and set aside. ii) The attachment order confirmed by the Adjudicating Authority remains in force, and the petitioner's appeal against it is pending, with all remedies available.
Petition allowed in part.
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2025 (4) TMI 1342
Money Laundering - seeking an extension of the interim Bail for a period of 60 days on the humanitarian grounds - it is held by High Court that 'two-week extension of interim bail was justified on humanitarian grounds, subject to existing bail conditions.'
HELD THAT:- It is not inclined to interfere with the impugned judgment and order. The Special Leave Petition is, accordingly, dismissed.
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2025 (4) TMI 1193
Money laundering - predicate offence - possession of proceeds of crime - attachment of shares - HELD THAT:- The description of the litigation taken by the appellant has been given with operative paras as otherwise the appellant has also summarized certain parts of the order in the written argument but it is only after extracting small part of the para suitable to the appellant leaving other parts and it is without referring to the operative part of the orders. The earlier litigation resulted in the order based on facts available then and otherwise the involvement of appellants in commission of crime was revealed even in further investigation and therefore prosecution complaint (PC) has been filed against the appellant. The fact otherwise reveals receipt of the amount and purchase of shares was designed for transfer of bribe money out of the deal of Agusta Westland, UK.
Paras 77 and 83 of judgment have also been referred to indicate that the shares were acquired in the year 2003 which is prior to the allegation of any scheduled offence and as a result of alleged kickbacks paid by AgustaWestland and thereby the Deputy Director of Enforcement Directorate had no authority to freeze the shares which were delivered in settlement to the purchaser and there was no allegation against the purchaser.
It is necessary to clarify that in the aforesaid judgment, cognizance of the freezing of shares under section 17(1) of the Act of 2002 was taken along with the appeal preferred by the appellant against the freezing order with appropriate liberty to pursue the appeal. If final conclusion would have been drawn by High Court of Delhi in favour of the appellant, there was no reason to allow the appellant to pursue the appeal. It is, further, necessary to clarify that the main allegation against the appellant is routing the bribe money for which ledger entry was referred and thereupon money was transferred and used for purchase of shares. The case of money-laundering is to be taken when it is revealed that proceeds of crime has been channelized. In reference to this, we may cite the judgment of Karnataka High Court in Mr. Dyani Antony Paul versus Union of India [2020 (12) TMI 1296 - KARNATAKA HIGH COURT] and Telangana High Court in Vem Krishna Keerthan versus Directorate of Enforcement [2024 (12) TMI 1557 - TELANGANA HIGH COURT] where it was held that the relevant time to look into the crime would be the date when it comes to the notice of Enforcement Directorate that a crime of money-laundering has taken place and not the date of predicate offence.
Part of paras 92 and 93 of the judgment of the High Court of Delhi [2019 (1) TMI 515 - DELHI HIGH COURT] have been quoted without indicating the reason of making observation by the High Court of Delhi in regard to the transaction of sale of equity shares of KRBL. In fact, the Writ Petition was filed when the respondent restrained the appellant to transact in the shares and it was addressed by the High Court of Delhi as to whether action is legally sustainable or not. Subsequently those shares were frozen and against which appellant filed the appeal and was noted by the High Court of Delhi. No interference in the freezing order was caused.
It is necessary to further add that the High Court of Delhi had disposed of the appeal and operative part of the said order has been quoted. It was not entirely favourable to the appellant, rather, Writ Petition was disposed with certain observations. Had it been a case to hold action of the respondent to be illegal and the appellant is not the recipient of the proceeds of crime, there was no reason for the High Court of Delhi to dispose of the petition in reference to the appeal preferred by the appellant against the order of seizure of the shares.
Conclusion - The appellants are involved in money laundering activities. The attachment of shares is lawful and justified under the PMLA.
Appeal dismissed.
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2025 (4) TMI 889
Money Laundering - scheduled offence - Challenge to arrest order under PMLA - territorial jurisdiction of Himachal Pradesh High Court to entertain the writ petition - reasonable grounds for arrest or not - HELD THAT:- A perusal of the complaint (Annexure P-62) would go on to show that allegations as such in the complaint are against the petitioner and various other accused, who are residents of Uttar Pradesh, including one Deepak Chaudhary, who is partner in Star Mines, one of partnership firm, apart from other accused like Bhanu Karnwal and Ravinder Kumar Malik. The allegations as such mentioned about the fact that Rs.1.60 crores was paid in cash generated from sale of illegal mined mineral/sand of Jai Maa Jawala Stone Crusher situated within the jurisdiction this Court and tentative funds as such were invested in Uttar Pradesh. Details as such had been given of the companies involved in the money laundering including Ambey Stone crusher and Time Builder stone crusher, in which the petitioner has been associated either as partner or as proprietor of Jai Maa Jawala Stone crusher.
In Kaushik Chatterjee vs. State of Haryana and Others [2020 (9) TMI 1305 - SUPREME COURT], the prayer was to seek transfer of three criminal cases pending on the files of Court of Additional Judicial Magistrate, Gurugram to a competent Court at New Delhi. The plea as such was raised that no part of cause of action arose in Gurugram for lodging a complaint in the Police Station at Gurugram since the loan had been sanctioned in Delhi and other loans had been sanctioned in Indore and Gujarat. Nothing had happened at Gurugram to invoke the jurisdiction and resultantly challenge as such had been laid to the criminal proceedings with an objection as such taken by the respondents/complainant that it was a question of fact to be established by evidence, which would not be gone into in a transfer proceedings and accordingly while placing reliance on Sections 177 to 184 of the erstwhile Cr.P.C, the petition was dismissed by holding that these questions have to be raised before the Court trying the offence and the Court is bound to consider the same and since it goes to the root of the matter. The said principle as such would also apply to the facts of this case.
The Apex Court in similar circumstances in the case of Rana Ayyub [2023 (2) TMI 236 - SUPREME COURT] also has held that for the trial of the offence of money laundering, the same should take place before the Special Court, which has taken cognizance of the offence and the trial of the scheduled offences insofar as the question of territorial jurisdiction is concerned, should follow the trial of the offence of money-laundering and not vice versa.
The scheduled offence had been lodged in District Saharanpur in FIR No. 360 of 2024 and the Special Court had passed the remand order, we are of the considered opinion that this Court as such would be denuded of jurisdiction to entertain the arrest having taken place at New Delhi and ECIR having been lodged in Delhi, merely because initially there was some notice of FIRs in the jurisdiction of this Court and a raid was carried out which has led to the trail of proceeds of crime, as such would not bring it within the ambit of part of cause of action by which this Court would test the merits as such of the arrest order as contended by Mr. Chaudhari.
Conclusion - There is a lack of jurisdiction to entertain the writ petition due to the location of the predicate offence and subsequent proceedings in Uttar Pradesh.
Petition dismissed.
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2025 (4) TMI 696
Seeking grant of bail - Money Laundering - predicate offence - proceeds of crime - offence under Sections 420, 467, 471, and 120B of the Indian Penal Code, 1860, and Sections 7 and 12 of the Prevention of Corruption Act, 1988 - HELD THAT:- As far as the prosecution under the Prevention of Money Laundering Act, 2002 (PMLA), the appellant has undergone incarceration for a period of 9 months. The case of the prosecution appears to be that the proceeds of crime were transferred in the accounts of private limited company with which the appellant is associated and thereafter, there were further transfers at his instance. There are 44 witnesses cited in the complaint and supplementary complaints. Charge is not yet framed. As of today, there are 17 accused and even hearing on charge has not taken place. Therefore, there is no possibility of even commencement of the trial in near future.
Considering the peculiar facts of the case and the observations made in the earlier order in the predicate offence, it is inclined to enlarge the appellant on bail.
Appeal allowed.
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2025 (4) TMI 695
Money Laundering - duration for which the order of attachment, retention, or freezing of property, passed by the Adjudicating Authority under sub-Section (3) of Section 8 of the Prevention of Money Laundering Act, 2002 (PMLA) - period for which the order of attachment or retention or freezing passed by the Adjudicating Authority under sub-Section (3) of Section 8 will continue to operate - HELD THAT:- There is no dispute that the complaint is based on ECIR dated 17th March, 2017 in which the respondent was shown as one of the accused. Moreover, clause (a) will apply during the continuation of the proceedings relating to an offence under the PMLA in a Court. There is no dispute that when an order under Section 8(3) was passed, the proceedings of a complaint under Section 44 of the PMLA was pending before the Special Court and cognizance of the offence under Section 3 of the PMLA was taken on the basis of the complaint.
For attracting clause (a), it is enough if a complaint alleging commission of offence under Section 3 of the PMLA is pending. It is not necessary for the applicability of clause (a) that the person affected by the order under Section 8(3) must be shown as an accused in the complaint. The complaint under Section 44 will always relate to the offence under Section 3 punishable under Section 4 of the PMLA. The order of cognizance is of the offence and not of the accused or the offender.
Obviously, the amended clause (a) was not applicable when the order dated 4th April, 2018 was passed under Section 8(3). Even assuming that the amended clause (a) was applicable, even after completion of investigation for 90 days, the order under Section 8(3) would continue to operate as the complaint remained pending. Therefore, the Appellate Tribunal as well as the High Court have committed an error and both orders deserve to be set aside.
Conclusion - The original provision of Section 8(3)(a) of the PMLA, as it existed before the amendment on 19th April, 2018, applied to the order in question.
The impugned judgment and order dated 16th February, 2022 of the High Court and the impugned order dated 25th April, 2019 passed by the Appellate Tribunal set aside - appeal allowed.
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2025 (4) TMI 694
Money Laundering - Judicial interpretation and consideration - whether it is obligatory for the arresting officer / agency to produce the arrested person before the nearest Magistrate within 24 hours of his arrest or the term “nearest Magistrate” extends to jurisdictional Magistrate in relation to production of the accused within 24 hours of his arrest? - HELD THAT:- Before search and seizure, the authorised officer shall have the reasons to believe about the existence of clauses (i) to (iv) of Section 17(1) of the PMLA. Subsequent search and recovery of tainted money, records or documents emboldens the authorized officer to arrest the offender in terms of Section 19 (1) of the PMLA.
The petitioner has not disputed that the arresting officer recorded reasons for such believe under Section 19 (1) of the PMLA in black and white, prepared and served copy of ground of arrest to the accused and entire fact was elaborately stated in the remand order for consideration of the learned CJM, Patna. The impugned order was passed on the basis of the application filed by the ED and the documents regarding “reasons to believe” “grounds of arrest” etc.
Therefore, failure on the part of the learned Chief Judicial Magistrate to state the magic word “reasons to believe” contemplated in Section 19 (1) of the PMLA ought to be considered as an inadvertent omission and not an error which touches the root of the case.
It will not be out of place to mention here that the petitioner did not make any prayer for issuance of writ in the nature of habeas corpus. Therefore, this Court does not have any opportunity to deal with such an issue. Only issue which has been raised by the petitioner in course of his elaborate argument is that the detention of the accused is illegal being violative of Articles 21 and 22 (2) of the Constitution of India and Section 187 of the BNSS.
Requirement of production of the accused before the nearest Magistrate in the locality where his arrest comes into play when a person who after arrest is required to be produced before the jurisdictional Judicial Magistrate is detained in a place which is far away from that jurisdiction and therefore cannot be produced before the jurisdictional Magistrate within 24 hours as mandated both by Article 22 (2) of the Constitution and by Section 57 of the Code of Criminal Procedure, now Section 58 of the BNSS. In such circumstances, he will be produced before the nearest Judicial Magistrate together with a copy of the entries in the diary. Therefore, even before a Magistrate before whom a transit remand application is filed, the mandatory requirement of Section 167 (1) Cr.P.C., now Section 187 of BNSS, is that a copy of the entries in the case diary should also be produced. It is on the basis of the entries in the case diary, under Section 167 (2), such “nearest Judicial Magistrate” while passing an order authorizing detention of person arrested for a term not exceeding 15 days in a whole. Where he has no jurisdiction to try the case and he finds further detention unnecessary, he may order the accused to be produced before the Jurisdictional Magistrate.
In the instant case, the accused was produced within 24 hours of his arrest. Therefore, the requirement of his production before the nearest Magistrate of the place of arrest was not mandatory.
The right of an accused rests on the Constitutional and Statutory requirement of his production before the Magistrate within 24 hours. If the arresting officer finds that he may be produced before the jurisdictional Magistrate within 24 hours, there is no necessity to produce the accused before the nearest Magistrate where he is arrested. The fundamental right of the accused is said to be violated if he is detained for more than 24 hours without being produced before the Magistrate.
Conclusion - i) The "nearest Magistrate" in Article 22(2) does not exclusively mean the geographically closest Magistrate but includes the jurisdictional Magistrate if production within 24 hours is feasible. ii) The writ jurisdiction is not applicable to challenge remand orders unless there is a clear violation of constitutional or statutory rights. iii) The remand order issued by the CJM, Patna, is valid, as it complied with the necessary legal requirements under the PMLA.
Petition dismissed.
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2025 (4) TMI 693
Money Laundering - predicate offence - provisional attachment order - conspiracy between the accused and officials of NSE which resulted in undue gain to the appellant Company and undue loss to the NSE - whether an offence under section 420 IPC is made out or not? - HELD THAT:- In the instant case, the work assigned to the appellant was not constitutionally permissible because it effected privacy of the employees guaranteed under Article 21 of the Constitution of India. Huge amount of 4.54 crore was yet paid with dishonest intention to the benefit of the appellant Company and with wrongful loss to the NSE. Despite specific allegation to this effect in the FIR, the argument was made that the offence under section 420 is not made out. If the order of the High Court on the bail application is also taken note of, an opinion in favour of the appellant is found but therein the allegation of wrongful loss to the NSE and wrongful gain to the Company in connivance of each other was not brought to the notice of the court. It is alleged to be a case of cheating in connivance of the top officials of the NSE.
If the entire FIR is looked into, the serious allegation of connivance of top official of NSE with the appellant Company has been made. The learned representative appearing for the appellant could not disclose as to how NSE could gain out of the work assigned to the appellant for a sum of Rs. 4.54 crore. The allegation otherwise refers to the position of Sanjay Pandey who remained the IPS Officer and Commissioner of Police and established the Company taking his mother (Smt. Santosh Pandey) as Director where even Directors were changed from time to time. All these facts were not brought to the notice of Delhi High Court.
The perusal of the FIR discloses the allegation of wrongful gain to the appellant Company to the tune of Rs. 4.5 crores and wrongful loss to the NSE. The gain and loss has been quantified and made in terms of the money and not on account of the breach of confidentiality and privacy of the employees of NSE, rather, it was a separate part of allegation than the allegation for wrongful loss to the NSE and wrongful gain to the appellant for a sum of Rs. 4.5 cr. which has not been referred to, rather brought to the notice of the Delhi High Court in the bail application where order is in terms of reply given by the respondents before the High Court.
Conclusion - i) The appellant's actions constituted cheating under Section 420 IPC, as there was a dishonest intention to cause wrongful loss to NSE and wrongful gain to the appellant. ii) The appellant's conduct fell within the definition of money laundering under Section 3 of the PMLA, as the proceeds from the NSE were projected as legitimate income, constituting proceeds of crime.
There is no case in favour of the appellant and the appeal is accordingly dismissed.
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2025 (4) TMI 692
Money Laundering - attachment of properties despite the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC) - offence under Section 120-B read with Section 420 of IPC and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 - precedence of provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) over the PMLA - HELD THAT:- Section 14 of IBC 2016 does not bar attachment of the property under the Act of 2002. It is not required to go deep on the issue because it has been settled by the Delhi High Court in the case of Rajiv Chakraborty Resolution Professional of EIEL Vs. Directorate of Enforcement [2022 (11) TMI 600 - DELHI HIGH COURT] where it was held that moratorium under section 14 of IBC 2016 does not bar proceeding of attachment under the Act of 2002. Accordingly, the issue raised by the appellant cannot be accepted.
Perusal of Section 32A of the IBC, 2016 reveals non- obstante clause to give overriding effect to the provision. Sub-Section (1) to Section 32A provides that liability of a corporate debtor for an offence committed prior to the commencement of Corporate Insolvency Resolution Process shall cease and the corporate debtor shall not be prosecuted for such an offence from the date of Resolution Plan is approved by the Adjudicating Authority under Section 31 if the resolution plan results in change in the management or control of the corporate debtors to other persons which has been narrated in sub-section(1) of Section 32A.
The approval of the resolution plan should result in the change in control of the corporate debtor to a person who was not a promoter in management and control of corporate debtor or related party and a person with whom the relevant investigating authority has on the basis of material in their possession reason to believe that he had abetted or conspired for the commission of offence and has submitted or filed a report or a complaint to the relevant statutory authority or Court. If the change results in control of the corporate debtor to a related party, then even approval of resolution plan under section 31 of IBC would not allow attachment of the property. We find no pleading or material to satisfy conditions given under clause (i) and (ii) to sub-section (2) of 32A of IBC to seek release of the property. Thus, for these reasons, it is found that without making out a case under Section 32A of the IBC, a challenge is made to the attachment.
A perusal of Section 26E of SARFAESI Act, 2002, does not provide an overriding effect to all the statutes rather it is limited in operation. The provision does not refer to and bar action under the Act of 2002. The non-obstante clause otherwise apply when there is conflict between two provisions and not otherwise. The amending Act 2016 does not affect the proceedings under the Act of 2002. Thus, we do not find any substance in the argument in reference to it also. In the light of discussions made above, there are no reason to cause interference in the order.
Conclusion - i) The moratorium under Section 14 of the IBC does not bar attachment proceedings under the PMLA, as the two statutes serve different purposes. ii) Section 32A of the IBC provides immunity only when a resolution plan is approved, and specific conditions are met, which were not satisfied in this case. iii) Properties acquired before the crime can be attached under the PMLA if they are equivalent in value to the proceeds of crime. iv) The SARFAESI Act does not take precedence over the PMLA, as the latter addresses the confiscation of proceeds of crime, a distinct legislative objective.
Appeal dismissed.
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2025 (4) TMI 668
Money Laundering - proceeds of crime - illegal allotment of tender for supply, installation, testing and commissioning of electromagnetic flow meters and corresponding operations - admissibility of the Section 50 of PMLA - availability of benefit from the proviso to Section 45(1) of the PMLA - Whether the Petitioners are entitled to be released on the ground of delay in trial? - HELD THAT:- It is now a well-settled position in law that the right to personal liberty under Article 21 of the Constitution is not fettered by the rigours of Section 45 of the PMLA. Consequently, where a prolonged delay in trial infringes upon this fundamental right, an accused may justifiably seek bail on constitutional grounds. The Supreme Court, as well as various High Courts, have consistently affirmed that undue delay in the conduct of trial constitutes a legitimate ground for grant of bail, even in cases governed by stringent statutory frameworks such as the NDPS Act and the PMLA. The right to a speedy trial is thus an essential facet of Article 21 of the Constitution, and in appropriate circumstances, prolonged incarceration without any foreseeable conclusion to the trial can, constitutes a valid ground for seeking bail.
It must also be noted that recently, in Union of India through the Assistant Director v. Kanhaiya Prasad [2025 (2) TMI 563 - SUPREME COURT], the Supreme Court has reiterated that the twin conditions under Section 45 of the PMLA are mandatory and must be objectively satisfied while considering a bail application. Emphasising the legislative intent behind the stringent bail provisions under the PMLA, the Court set aside the order of the High Court and cancelled the bail granted to the accused. This ruling reaffirmed the importance of strict adherence to the conditions stipulated in Section 45 while adjudicating bail pleas under the PMLA.
As regards the contention that the delay is attributable to the Applicants, the Court finds no merit in that argument. The application seeking deferment of argument on charge has admittedly been moved not by the Applicants but by the co-accused company, NKGIL. Even assuming the ED’s characterisation of that application as frivolous were accepted, it would be impermissible to attribute that delay to the Applicants. No material has been placed on record to show that the Applicants have either encouraged or benefited from any obstruction to the progress of the trial. In the absence of any demonstrable conduct suggesting abuse of process by the Applicants themselves, the inference of delay cannot be drawn against them.
Applicability of threshold Clause under proviso to Section 45 (1) of PMLA - HELD THAT:- The prosecution complaint, as filed by the Enforcement Directorate, clearly records that the proceeds of crime attributable to Applicant Anil Kumar Aggarwal amount to INR 4.26 crores, of which INR1.63 crores were allegedly retained and utilised by him. These figures have not been shown to be incorrect on the face of the record - It is the total sum of money laundering in the offence which is to be seen for the purpose of the proviso, which in the present case is to the tune of INR. 8.80 Crores - In view of the above, the Applicant cannot avail the benefit of the monetary threshold under the proviso to Section 45 of the PMLA. The entire scheme, as unearthed during the course of investigation, involves multiple layers of laundering and routing of funds well above the statutory limit of INR 1 crore.
Scope of the Court’s Jurisdiction and the Twin Conditions under Section 45 (1) (ii) of the PMLA - HELD THAT:- A plain reading of the provision indicates that the definition is broad and intentionally expansive. The use of the phrase “criminal activity relating to a scheduled offence” rather than “as a result of a scheduled offence” is significant. It reflects a deliberate legislative choice to widen the scope beyond direct proceeds of a specific offence to encompass property derived from any activity connected to such an offence. In this light, the contention that the absence of a charge of bribery in the CBI chargesheet negates the very existence of ‘proceeds of crime’ is misconceived. So long as the property or value thereof is traceable to criminal activity linked to the scheduled offence, it falls within the net of money laundering under Section 3 of the Act.
In the present case, the core of the ED’s case against the Applicants appears to be grounded in the statements of the approver and a set of Excel sheets recovered from a pen drive. These sheets are unsigned, do not bear the Applicants’ names, and were not recovered from their possession. Further, the prosecution complaint does not disclose any direct financial flow of alleged bribe money to Applicant Mr. Jagdish Kumar Arora. It is rather the case that such funds were allegedly collected by Mr. Tajinder Pal Singh, now an approver. In these circumstances, while the evidentiary weight and reliability of the said materials can only be tested during trial, at present, the same are not conclusive enough for the court to deny the benefit of bail to the Applicants.
Accordingly, in the opinion of the court, the Applicants have prima facie satisfied the twin conditions under Section 45 (1) (ii) of the PMLA and are thus entitled to be enlarged on bail.
Whether there is evidence to infer that the Applicant (Jagdish Kumar Arora) is likely to tamper with the evidence? - HELD THAT:- Upon examining the material placed on record, this Court finds that the alleged incident occurred in January, 2023. There is no contemporaneous complaint, police report, or corroborative material placed on record by the approver to support his version. It is also not the case that he reported these threats to the ED or any other authority at the earliest available opportunity. His allegations were disclosed belatedly to the Respondent i.e., six months after his initial statement, which significantly weakens their reliability. Moreover, there is no material to suggest that the Applicant attempted to interfere with the investigation during his time in custody or that he possesses the capacity to subvert the course of justice, especially now that the ED’s investigation is substantially complete, and the prosecution complaint has been filed - In the considered view of this Court, the mere assertion of an apprehension of interference—absent credible corroboration—cannot form the basis for denying bail. The prosecution’s concern in this regard can be adequately addressed by imposing stringent conditions on the Applicant to prevent any misuse of liberty or contact with witnesses during the pendency of trial.
Conclusion - i) The prolonged incarceration without trial constitutes a valid ground for bail under Article 21 of the Constitution, even in cases governed by the PMLA. ii) The Applicants cannot avail the benefit of the monetary threshold under the proviso to Section 45 of the PMLA, as the total proceeds of crime exceed INR 1 crore.
This Court is satisfied that the Applicants have made a sufficient case for the grant of regular bail. Both the Applicants are, therefore, directed to be released on bail, subject to fulfilment of conditions imposed - bail application allowed.
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2025 (4) TMI 633
Money Laundering - Provisional Attachment Order of properties - proceeds of crime - scheduled offence - violation of Environment Protection Act, 1986 - Illegal construction of pipelines for wate disposal and joining to the main GIDC pipeline and without following the said measures, releasing the hazardous waste in Unn and Gabheni Creeks, in contravention of Section 25(1)(A) Water (Prevention and Control of Pollution) Act, 1974 - HELD THAT:- As is seen from the facts narrated in the impugned order, the loan against which the subject property was offered as collateral security had already been substantially repaid and was in the process of being repaid regularly. Accordingly, there was every chance of the loan being fully discharged and the property being released from mortgage in the foreseeable future. Furthermore, arguably, the same was being repaid out of the profits of the company which themselves have been taken to be proceeds of crime. The word “immediately” occurring in the second Proviso to Section 5 (1) need not be interpreted to mean in the very next moment. A sufficiently senior level of due diligence has been provided for by the said Proviso by way of application of mind by an officer of the level of Deputy Director and above, duly authorized by the Director. Therefore, no fault can be found in attachment of the property and the same did not cause any prejudice to the appellants. There is no reason to think that attachment of property under the PMLA, 2002 cannot co-exist with mortgage thereof to a financial institution.
It is next contended that the evidence which would have supported the appellant’s case such as manifests/way bills for the receipt of waste by the appellant's units from various industrial units and also for transportation of the fuel prepared from the waste to the end user, were seized but have been suppressed by the ED. The ED seized all these documents from various premises during the search and seizure operation conducted as a part of the investigations against the appellants, though the same were not seized from the appellant's own premises - it is to be noted that the present proceeding arises out of an OC filed by the respondents after provisional attachment of property and not out of an OA against order of retention of seized documents, if any, made by the respondents. Moreover, there are no pleadings or grounds to this effect in the appeal filed by the appellants. Accordingly, there are no merit in these contentions either.
It has also been argued that all the documents have to be forwarded to the Adjudicating Authority as per the provisions of law. The respondents have submitted that the defendant has sought directions to Department to place on record internal material collected during the investigation however, it is the sole prerogative of investigating Authority which document has to be relied upon to support his case - Even if there is any irregularity in terms of not bringing on record the documents not relied upon, the same would not in my view vitiate the entire proceedings, particularly in view of the provisions of section 68 which provide that no notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of his Act shall be invalid, or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons, order, document or other proceeding if such notice, summons, order, document or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.
Conclusion - i) The attachment of properties under the PMLA upheld. ii) The procedural requirements under Sections 5 and 8 of the PMLA Are duly followed, with reasons to believe and satisfaction recorded appropriately. iii) The non-disclosure of certain documents by the ED do not affect the validity of the attachment order, as the relied-upon documents are duly presented.
Appeal dismissed.
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2025 (4) TMI 573
Seeking grant of Regulat Bail - Money Laundering - illegal extortion on Coal Transportation - twin conditions of Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) satisfied or not - HELD THAT:- This Court has already rejected the bail application of other co-accused persons who are also senior Government Officers. This Court while rejecting their bail application has recorded prima facie involvement of the Government servants, therefore, considering the prima facie involvement of the applicant as also the role played by the applicant, the present bail application deserves to be rejected. Even otherwise, the law has been well settled by Hon’ble the Supreme Court in Directorate of Enforcement Vs. Aditya Tripathi [2023 (5) TMI 527 - SUPREME COURT] that while considering the bail application, the Court is not required to weigh the evidence collected by the investigating agency meticulously, nonetheless, the Court should keep in mind the nature of accusation, the nature of evidence collected in support thereof, the severity of the punishment prescribed for the alleged offences, the character of the accused, the circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the time of trial, reasonable apprehension of the witness being tempered with, the large interest of the public/state etc.
From bare perusal of ECIR with regard to the allegations leveled against the present applicant, it is quite vivid that the present applicant has played a specific role in commission of offence. Investigation revealed that the applicant had helped Surykant Tiwari in the offence. The ECIR would further reflect that the present applicant has knowingly and willingly assisted the extortion syndicate in committing the predicate crime of extortion and also in generation of proceeds of crime - the applicant is unable to fulfill the twin conditions of Section 45 of the PMLA, 2002.
Further contention of learned counsel for the applicant is that the applicant is government servant, therefore, before prosecuting the applicant under the PMLA, 2002, sanction to prosecute as per Section 218 of the BNSS is necessary, as such the prosecution is illegal, therefore, the applicant is entitled to be released on bail, is being considered by this Court - In the present case, prima facie, the applicant is involved in crime in question which is not relates to public duty, therefore, sanction to prosecute under Section 218 BNSS is not required. Accordingly, the submission made by counsel for the applicant that without sanction prosecution has been initiated, therefore, the prosecution deserves to be quashed and he may be released on bail, is rejected.
Conclusion - i) The stringent conditions under Section 45 of the PMLA must be met for bail to be granted in cases of money laundering, the applicant failed to meet these conditions, given the evidence of his involvement in the extortion scheme. ii) It is also held that no sanction for prosecution is required when the alleged acts are outside the scope of official duties, thereby rejecting the applicant's argument for bail based on the lack of sanction under Section 218 of the BNSS.
The bail application filed under Section 483 of the Bhartiya Nayay Suraksha Sanhita, 2023 is liable to be and is hereby rejected.
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2025 (4) TMI 572
Money Laundering - challenge to seizure and freezing order - generation of proceeds of crime by cheating and defrauding Indian user of ‘Garena Free Fire’ by M/s Garena International with the help of M/s Coda Payments India Private Limited. - reasons to believe - HELD THAT:- Due to lack of transparency, the people were not knowing that appellant’s company was an entity behind the unauthorized deductions from their accounts and hence the appellant’s name may not appear in all the FIRs, but the Company has collected the money. An amount of Rs.2850 crore was collected and out of it Rs.2320 crore was transmitted out of India. The appellant company was keeping its ratio of profit. The appellant company otherwise failed to disclose source of Rs.100 crore in their account though required under Section 8(1) of the Act of 2002 for which show cause notice was given by the Adjudicating Authority. In view of the above, first ground of challenge to the order is not made out.
It has come on record that reasons to believe were recorded under Section 20(1) of the Act of 2002. It was sent to the Adjudicating Authority and has been quoted by us. The procedure under Section 17 of the Act of 2002 was also followed. The reasons to believe under section 20(1) of the Act of 2002 were recorded in writing and forwarded to the Adjudicating Authority. It is, thus, not correct on the part of the appellant to state that the procedure given under section 20(1) of the Act of 2002 has been flouted - The compliance of the aforesaid provisions has been made and while raising the issue, the appellant has failed to show basis for alleging the violation of Section 20(1) of the Act of 2002. Thus, even the second argument raised by the appellant is not made out.
The third argument is in reference to alleged violation of Section 8(3) of the Act of 2002. It is alleged that the Adjudicating Authority has failed to record its findings that the property is involved in money-laundering. In the absence of such a finding, the order of seizure and retention could not have been confirmed.
The final finding on it is to be recorded by the Trial Court otherwise it would create two parallel jurisdictions of the Court and Authority on one in the same subject. The Adjudicating Authority found that in pursuance to the FIRs, investigation is going on and it has further noted that the Company integrated its APIs with the website of game publishers, including Garena Free Fire and when customers purchase digital content on the game’s website, they were not knowing who is collecting the money. It was with the further opinion that the main persons of the accused company did not come forward to join the investigation rather they avoided their appearance before the ED. All these grounds were considered by the Adjudicating Authority to justify further retention of the documents and the property.
The Adjudicating Authority was thus cautious to record that the finding on commission of crime would be recorded by the Special Court trying the criminal case.
Conclusion - The detailed facts about the working and involvement of appellant company and others have been given, substantiate the findings that the documents would be required for further investigation and otherwise property has rightly been seized and retained by the respondent as is involved in money-laundering, which would obviously subject to final outcome of the Trial.
There are no reason to cause interference in the impugned order and hence the appeal is dismissed
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2025 (4) TMI 511
Money Laundering - dismissal of LR petition, and the appeal on the ground of delay in filing the LR petition - absence of any specific limitation prescribed under Section 72 of PMLA - applicability of provisions of CPC to Section 35 of the PMLA - proper opportunity not provided to the appellant to defend her case - violation of principles of natural justice - HELD THAT:- The Order 22 of C.P.C., deals with death, marriage and insolvency of parties and Order 22, Rule 2 contemplates the procedure where one of the several plaintiffs or defendants dies and right to sue survives. The said provisions which are the basis for the orders under challenge cannot be made applicable to the PMLA, which is a special enactment. In fact, the Code of Civil Procedure had limited application to the Appellate Tribunal in respect of the matters as set out in Section 35. From a plain reading of the said provision, it is clear that the Appellate Tribunal is not bound by the procedure laid down by the Code of Civil Procedure, but it should be guided by the principles of natural justice and it shall have the powers to regulate its own procedure. When the provision i.e., Section 35 contemplates the application of Code of Civil Procedure to the extent indicated therein and that the Appellate Tribunal is not bound by the procedure laid down by the Code of Civil Procedure, provisions of Order 22 C.P.C., though there is no absolute bar, in the opinion of this Court cannot be pressed into service, in the absence of any regulations / rules formulating the procedure or making it applicable to the matters before the Appellate Tribunal, more particularly in view of the Section 72 of the Act, which enables continuation of proceedings in the event of death or insolvency.
A close reading of Section 72, is indicative of the intention of the legislature of continuation of proceedings in the event of death or insolvency and it shall be lawful for the legal representative of an appellant, who dies during the pendency of an appeal to continue the same before the Appellate Tribunal in the place of the deceased-appellant. No time limit was prescribed for making of an application for continuation of proceedings/appeal by the legal representatives of the appellant.
In M.P. Steel Corporation’s case [1998 (6) TMI 322 - CEGAT, MUMBAI], the appellant before the Hon’ble Supreme Court was challenging the order of Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The Commissioner of Customs (Appeals) dismissed the appeal on the ground of delay stating that the same was filed beyond the period of 60 days + 30 days provided for in Section 128 of the Customs Act. On Appeal, CESTAT dismissed the appeal stating that the Commissioner of Customs (Appeals) had no power to condone the delay beyond the period specified in Section 128 of the Act. The Hon’ble Supreme Court inter alia examined the point as to whether the Limitation Act applies to only Courts and not to Tribunals with reference to a series of decisions, wherein it was laid down that the Limitation Act applies only to Courts and does not apply to quasi judicial bodies.
The order of the Tribunal pressing into service the provisions of C.P.C., i.e., Order 22 and thereby dismissing the appeal as abated is also not tenable. Even if the appeal is abated, the right conferred under statute viz., Section 72 cannot be taken away on the ground that no formal application to condone the delay was filed. Section 35 provides for limited application of the provisions of the C.P.C., and no regulations have been framed formulating the procedure / applicability of provisions of C.P.C., under Order 22 etc. - Further, in the present case, the legal heir of the deceased / appellant filed the application to record her as legal representative while the appeal is pending. The Appellate Tribunal, in such circumstances, in the considered opinion of this Court should have allowed the same and decided the matter on merits taking a liberal view rather than rejecting it on technicalities.
Conclusion - i) The dismissal of the LR petition and the appeal on the grounds of delay is not legally sustainable. ii) The Tribunal's use of CPC provisions to abate the appeal is not tenable. iii) The Tribunal's decision violated principles of natural justice by not allowing the legal representative a proper opportunity to be heard.
The impugned order is set aside - appeal allowed.
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2025 (4) TMI 454
Money Laundering - seeking an extension of the interim Bail for a period of 60 days on the humanitarian grounds - HELD THAT:- In the prevailing circumstances and on humanitarian grounds coupled with the fact that the Petitioner would be required to carry out post-cremation rituals and to support his Mother emotionally and financially, the interim Bail granted to the Petitioner is hereby extended for a further period of 2 weeks from today, as it is stated that the interim Bail granted by this Court vide Order dated 28.03.2025 is set to expire today i.e. 08.04.2025, subject to the same conditions as imposed by this Court vide Order dated 28.03.2025.
The interim Bail Application is disposed of.
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2025 (4) TMI 453
Money Laundering - confirmation of provisional attachment order - siphoning off of huge amount from the bank by opening fake staff over draft account in Maliga on branch of ICBL - no predicate offence - property attached by the respondents were acquired before the commission of offence - proceeds of crime or not - Failure to pass confirmation order within a period of 180 days from the date of provisional attachment of the properties -
Predicate offence was existing not only at the time of recording of the ECIR - HELD THAT:- The facts on record show that another FIR number 10/22 was registered on 29.06.2022 by the Bureau of Investigation Economic Offence, Guwahati for the offence under section 120 B, 420, 409, 468, 471 IPC against the accused Subhra Jyoti Bharali and other accused. It was towards the loan amounting to Rs. 3.69 crores from Industrial Cooperative Bank Limited in the name of 09 individuals. Even, if we ignore the second FIR, the facts on the record shows that at the time of the provisional attachment and recording of the ECIR, the FIR was for the predicate offence. The subsequent chargesheet for the offence undersection 120 B, 408, 409 IPC would not nullify the proceeding initiated at the time of existence of the predicate offence and otherwise the chargesheet is not taken to be the final word about the commission of offence, rather it is submitted before and the Trial Court alone is competent to consider it and take cognizance of the offence, as is made out which can be other than given in the charge sheet. The charge sheet is filed by the police and thereby it cannot be considered to the final word on commission of offence rather it remains in the hands of Special Court.
The subsequent filing of the charge sheet would not nullify the provisional attachment order passed earlier so as the recording of the ECIR. It is more so when the investigation reveal a predicate offence and the offence under section 3 of the Act of 2002 by the appellants - The material on record even shows a prima facie case of offence under section 420 IPC.
It is submitted that the property attached by the respondents were acquired before the commission of offence, thus could not have been taken to be the proceeds of crime - HELD THAT:- If the details of the property attached by the respondent is taken note of, properties were acquired subsequent to the commission of crime. Thus, it is not that the properties attached by the respondents were acquired by the appellant prior to the commission of crime rather the appellant had acquired the properties subsequent to period of crime. The period of crime is not to be taken from the date of registration of the FIR but it can be prior to the FIR. In this case, mis- appropriation of fund was much prior to the registration of the FIR. It is also that proceeds fall in the hand of the appellant would fall in the definition of “proceeds of crime” when the proceeds directly or indirectly acquired or derived out of criminal activity of a schedule offence is not available. The attachment of the property can be even for equivalent value and is permissible under the law.
Failure to pass confirmation order within a period of 180 days from the date of provisional attachment of the properties - HELD THAT:- The provisional attachment order was issued on18.08.2022 while the confirmation order was passed by the Adjudicating Authority on 08.02.2023, i.e. within the period of 180 days. The fact however remain that while passing the order on 08.02.2023, a clerical/typographical error remain in the order and therefore a corrigendum was issued on 21.02.2023 which is taken to be an order beyond the period of 180 days.
Section 68 of the Act of 2002 provides that no notice, summon, order, document or other proceeding made or issued shall be invalid or deemed to be invalid merely for the reason of any mistake, defect or omission in the notice, summon, order etc., if such summon/order etc. in substance and effect is in conformity with or according to intent and purpose of the Act. The Adjudicating Authority confirmed the provisional attachment order within a period of 180 days. However, reference of the properties given were different than the attached due to typographical and clerical error thus has been corrected by the corrigendum.
Whenever a typographical or clerical error is corrected by way of corrigendum, it would relate back to the original order and would not be taken to be a substantive order.
The nature of the order has not been changed, rather the details of the property was wrongly mentioned out of typographical error and has been described in the corrigendum. In fact, the Adjudicating Authority was not required to give description of the properties attached when provisional attachment order was sent for confirmation containing description of the properties. The Adjudicating Authority was required to consider rival submission, to confirm or to deny it. The description of the property was not required to be reiterated as it is given in provisional attachment order. Thus, description of the property is not in any manner to cure the defect of the nature which may change the substance of the order, thus in the factual background aforesaid, the corrigendum would relate back to the date of the main order.
As per the Judgement in the case of Jubilant Organosys Limited Vs. Assistant Commissioner of Central Excise and Ors. [2011 (6) TMI 631 - KARNATAKA HIGH COURT], the corrigendum be relate back to the date of the original order and having been passed within 180 days, thus we are unable to accept even the third issue raised by the appellant.
Conclusion - i) The existence of a predicate offense at the time of the provisional attachment order suffices for PMLA proceedings. ii) The validity of the PMLA proceedings, the attachment of properties, affirmed.
Appeal dismissed.
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2025 (4) TMI 375
Seeking grant of regular bail - Money Laundering - involvement in fraudulent sale/purchase of land - predicate offence or not - whether the parameter as fixed under Section 451(i)(ii) of the PML Act 2002 is being fulfilled in order to reach to the conclusion that it is a fit case where regular bail is to be granted or not? - HELD THAT:- It is evident from the prosecution complaint that on 16.04.2024, searches were conducted at the residential premises of the present applicant and from scrutiny of the said documents and diaries revealed cash transactions with respect to several landed properties which are nonsaleable properties. During investigation the accused person Antu Tirkey had admitted his dealings with respect to non-saleable landed properties at Ranchi by which he has acquired huge amount of money. The same is also evident from the cash entries in the diary.
Further, the present applicant in his statement dated 22.04.2024 has also admitted the aforesaid dealing and has further stated to have received Rs. 70 to 80 lakhs till date. It has further come in the investigation that in addition to this the present applicant acquired around 42 decimals of land from Mitku Pahan (bhuinhari property) falling under Khata no. 234 Plot no. 1055 for an amount of Rs. 30 lakhs. Out of this he sold around 6 decimals of land of Saddam Hussain for and amount of Rs. 18.5 lakhs and rest of the land is sold to Krishna Munda for an amount of Rs. 55 lakhs - Further as per the prosecution complaint where CDR analysis of mobile phones of the accused has been mentioned, the petitioner was in touch with co-accused Afsar Ali and as per para 9.45 of the supplementary prosecution complaint, the bank account scrutiny reveals that petitioner had transaction with co-accused Md. Saddam Hussain - the involvement of present petitioner in alleged crime, cannot be lightly brushed out.
To constitute any property as proceeds of crime, it must be derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence. The explanation clarifies that the proceeds of crime include property, not only derived or obtained from scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. Clause (u) also clarifies that even the value of any such property will also be the proceeds of crime - Further it is settled proposition of law that if a person who is unconnected with the scheduled offence, knowingly assists the concealment of the proceeds of crime or knowingly assists the use of proceeds of crime, in that case, he can be held guilty of committing an offence under Section 3 of the PMLA. Therefore, it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence.
Thus, on the basis of the discussion made, the contention of the learned counsel for the petitioner that even if the entire ECIR will be taken into consideration, no offence will be said to be committed so as to attract the ingredients of Sections 3 & 4 of the P.M.L. Act, 2002, is totally misplaced in the light of accusation as mentioned in prosecution complaint - Further, contention has been raised that a prosecution complaint against the petitioner has already been filed and, thus, investigation is complete and therefore, no purpose would be served in keeping the petitioner in judicial custody - Further, it is settled proposition of law that the filing of charge-sheet is not a circumstance that tilts the scales in favour of the accused for grant of bail and needless to say, filing of the charge-sheet does not in any manner lessen the allegations made by the prosecution.
This Court thinks it fit to revisit the scope of section 45 of the PML Act 2002. As discussed in preceding paragraphs that Section 45 of the PMLA Act, 2002 provides twin test. First ‘reason to believe’ is to be there for the purpose of reaching to the conclusion that there is no prima facie case and second condition is that the accused is not likely to commit any offence while on bail.
Principles of parity - HELD THAT:- The Hon’ble Apex Court in Tarun Kumar Vs. Assistant Director Directorate of Enforcement [2023 (11) TMI 904 - SUPREME COURT] wherein at paragraph-18, it has been held that parity is not the law and while applying the principle of parity, the Court is required to focus upon the role attached to the accused whose application is under consideration - It has further been held in the paragraph 19 of the said judgment that the principle of parity is to be applied in the matter of bail but equally it has been laid down therein that there cannot be any negative equality, meaning thereby, that if a co-accused person has been granted bail without consideration of the factual aspect or on the ground said to be not proper, then, merely because the co-accused person has been directed to be released on bail, the same will not attract the principle of parity on the principle that Article 14 envisages positive equality and not negative equality.
Thus, applying the principle of parity, this Court is of the view as per the judgment rendered by the Hon'ble Apex Court rendered in Tarun Kumar that the benefit of parity is to be given if the facts/involvement of the petitioner, is identical to the persons with whom parity is being claimed - This Court, on the basis of the discussion of the involvement of the petitioner, vis-à-vis, the other co-accused person, is of the view that the case of the petitioner is quite distinguishable to that of the case of the co- accused/petitioner of B.A no.4892 of 2024, therefore, is of the view that it is not a fit case for applying the issue of parity herein.
Conclusion - Having regard to the entirety of the facts and circumstances of the case, this Court is of the view that the petitioner has miserably failed to satisfy this Court that there are reasonable grounds for believing that he is not guilty of the alleged offences. On the contrary, there is sufficient material collected by the respondent-ED to show that he is prima facie guilty of the alleged offences. Since, the petitioner has failed to make out a case to exercise the power to grant bail and the parameters, necessary to be considered for adjudication of bail, this Court does not find any exceptional ground to exercise its discretionary jurisdiction to grant bail.
This Court is of the view that it is not a case where the prayer for bail is to be granted, as such, the instant application stands dismissed.
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