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Money Laundering - Case Laws
Showing 21 to 40 of 196 Records
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2021 (11) TMI 902 - TELANGANA HIGH COURT
Money laundering - Freezing of petitioner's bank account - grievance of the petitioners can be addressed in the proceedings for continuation of freezing orders or not - urgency in the matter as salaries and statutory benefits of the employees have not been paid and the employees would suffer hardship - HELD THAT:- This Court is inclined to grant interim order to the extent of payment of salary to the employees of the petitioners. There shall therefore, be a direction to the respondents to permit the petitioners to operate the bank accounts to the extent of ₹ 2 crores, subject to their furnishing bank guarantee for the said amount. The petitioners are permitted to operate the bank accounts with respect to the amounts deposited on or after 12.10.2021, forthwith. Both the learned counsel agree that in terms of this interim order, the Writ Petitions may be disposed of giving liberty to the petitioners to approach the Adjudicating Authority, in accordance with law.
Petition disposed or giving liberty to the petitioners and the respondents to raise all legal contentions before the Adjudicating Authority.
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2021 (11) TMI 557 - RAJASTHAN HIGH COURT
Seeking grant of Anticipatory Bail - commission of a serious economic offence of money laundering - offence punishable under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Looking to the facts and circumstances of the case; specially, to the fact that the petitioner had not challenged the order dated 17.09.2021 passed by the trial court. Petitioner is involved in serious economic offence, the principle of law enunciated by Hon’ble Apex Court in P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [2019 (9) TMI 286 - SUPREME COURT], but without expressing any opinion on the merits of the case, it is not considered to be a fit case to enlarge the petitioner on anticipatory bail.
The anticipatory bail application filed by the petitioner is dismissed.
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2021 (11) TMI 556 - RAJASTHAN HIGH COURT
Stay against Attachment/Freezing of Bank Account of petitioner - stay against the criminal investigation and prosecution - HELD THAT:- If we revert back to the operative portion of the impugned order of learned Single Judge which is reproduced in the earlier portion of this order, what it says is that the respondents (that is the present appellant) are restrained from taking any coercive steps against the petitioner “as directed by the Supreme Court.” Firstly, this direction preventing the department from taking coercive action against the petitioner nowhere includes stay against the order of attachment imposed by the Department. In any case the order of attachment has not been challenged and could not have been stayed.
Question of stay against the criminal investigation and prosecution - HELD THAT:- In view of the clarification and modification by the Supreme Court in its own order in the case of Anil Kumar Gadodia, it is provided that the direction for not taking coercive action against the petitioner is given by the learned Single Judge in the impugned order, would not cover any criminal prosecution against him. In other words, it would be open for the department to continue the investigation and prosecution in relation to the alleged actions of the petitioner in accordance with law.
Appeal disposed off.
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2021 (11) TMI 555 - CALCUTTA HIGH COURT
Constitutional validity of Section 50(2), (3) and (4) of the Prevention of Money Laundering Act, 2002 (PMLA) read with Section 24, 63 and 66 of the PMLA 2002 - Seeking for a direction to restrain the respondent no. 2 from issuing any further summons under Section 50(2) of PMLA 2002 against the petitioner - HELD THAT:- This Court while considering the prayer as made on behalf of the petitioner finds that petitioner has challenged the constitutional validity of the provisions of the PMLA, 2002 as void and inoperative or being violative of Article 14, 20(3), 21 of the Constitution of India. The petitioner has also sought for an order of interim stay of the operation of the impugned summons dated 24.9.2021 and 25.10.2021 to restrain the respondent no. 2 from issuing any further summons under Section 50 (2) of the PMLA, 2002. It is rightly pointed out that the summon dated 24.9.2021 has already been dealt with by virtue of the reply given by the petitioner on 7.10.2021 enclosing the copies of the documents required by the respondent authority. So, there is no question of challenging the summon dated 24.9.2021. It appears that the second summon dated 25.10.2021 issued by respondent no. 2 received by the petitioner is on similar terms as in the first summon in response to which the petitioner had replied and sought for accommodation of time for his attendance and to appear before the respondent no. 2 through video conferencing or by physical appearance before the office of the respondent no. 2 in Kolkata.
Thus, the petitioner is not avoiding to co-operate the respondent no. 2 into the investigation but the prayer as made on behalf of the petitioner alternatively is for ad interim order of protection which has been sought for against the respondent no. 2 from taking any coercive action against the petitioner in connection with the said case and further to allow him to be examined or to allow him to cooperate into the investigation before the respondent no. 2 vide video conferencing or at the office of the respondent no. 2 at Kolkata.
This Court is convinced that the petitioner is required by the respondent authority only for cooperating into the investigation as he is not an FIR named accused in connection with the case - Let the matter appear six weeks hence with the direction upon the respondents to file affidavit-in-opposition and reply thereto within the period of six weeks.
List the matter accordingly.
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2021 (11) TMI 366 - PATIALA HOUSE COURTS
Grant of regular bail - Diversion of funds - rejection of bail application on the ground that investigation is not complete and applicant/accused may influence the fair course of investigation but now the circumstances have changed as complaint u/s 45 of PMLA has been filed by the investigating agency - HELD THAT:- The material available on record makes out a formidable case of money laundering against the applicant/accused.
The submission that pre-trial detention is antithetic to the Presumption of Innocence is infact missing the woods for the trees. Pretrial detention is neither preventive nor punitive. Pre-trial detention is infact an incident of Fair Trial. There may be cases wherein releasing the accused would enable him to jeopardize the course of fair trial by attempting to wipe out the traces of crime. Therefore, in appropriate cases, pre-trial detention becomes indispensable to ensure a free and fair trial.
All the material witnesses in the instant case are family members/relatives/friends/close acquaintance of the applicant/accused. They are apparently working under his direct influence. The applicant/accused being a qualified Chartered Accountant and an influential man in all likelihood would attempt to wipe off his footsteps to jeopardize not only the fair trial but the crucial aspects of pending investigations - Since the charge-sheet in the instant matter has already been filed, merely because ED is still further investigating the matter on some counts, the statutory right of bail u/s 167 CrPC is not available to the accused. The indefeasible right of the accused to claim statutory bail comes to an end once the charge-sheet is filed.
Considering the nature of offence, seriousness of allegations and a strong possibility of applicant/accused attempting to influence the course of trial by influencing the witnesses and tampering with the evidence, the bail application is bereft of any merits - Application dismissed.
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2021 (11) TMI 247 - JHARKHAND HIGH COURT
Money Laundering - violation of undertaking of captive mining for the grant of Mining Lease - violation of environmental laws - section 3 read with section 70 which is punishable under section 4 of the Act of 2002 - territorial jurisdiction - petition filed at Patna - jurisdiction of State of Bihar for the said complaint - HELD THAT:- It is an admitted fact that C.B.I case was filed in the year 2016 in which the charge-sheet has not been submitted as yet the authority concerned had filed petition at Patna wherein the Hon'ble Patna High Court has held that the State of Bihar has got no jurisdiction for the said complaint and directed to return the complaint copy to the complainant and thereafter the case in hand has been filed at Ranchi. There is no doubt that the petitioner's lease is being governed under the Act of 1957. The provisions placed by Mr. Luthra, the learned counsel appearing on behalf of the petitioner under the said Act are statutory in nature and action under that Act is open to be taken by the authority prescribed under that Act.
The application of special law and the Indian Penal Code are well settled as has been argued by the learned counsel appearing on behalf of the petitioner. But, it must be in the facts and circumstances of each case. Section 2(1)(y) of the Act of 2002 defined the scheduled offences under the Act in Part-A and Part-B and in the schedule section 120B and section 420 are provided. Thus, it cannot be said that cheating is not prescribed under the scheduled of section 2(1)(y) of the Act. It is an admitted fact that the C.B.I has registered the case under section 120B and 420 of the IPC - In view of own admission of the officers of the company about the export, at this stage, it cannot be held that the petitioner was not exported the iron ore. Moreover, when undertaking to that effect has been submitted by the petitioner that iron ore will be used for own industry only.
Explanation to section 3 of P.M.L.A Act which has been added later on stated that process or activity connected with proceeds of crime continues till such time a person is directly or indirectly enjoying the proceeds of the crime, accordingly the entire process/activity connected to the proceeds of crime is a continuing offence - In the case in hand, it cannot be said that at this stage, in absence of trial where the facts are hazy when initial action itself was not in consonance with law.
Moreover, it is crystal clear that the object of exercise of power under Section 482 Cr.P.C. is to prevent abuse of process of Court and to secure ends of justice. The exercise of extraordinary jurisdiction is an exception, but not a rule of law. There is no straitjacket formula nor defined parameters to enable a Court to invoke or exercise its inherent powers. It will always depend upon the facts and circumstances of each case. The Court requires to be very cautious while exercising jurisdiction under Section 482 Cr.P.C. The expression 'cognizance' has not been defined in the Code. Cognizance merely means 'become aware of' and when used with reference to Court or a Judge, it cannot 'to take notice of judicially'.
The Court is not required to make a roving enquiry, and discuss the evidences for coming to a conclusion that no prima-facie case is made out, at this stage, which is against the mandate of law - application disposed off.
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2021 (11) TMI 233 - JHARKHAND HIGH COURT
Grant of anticipatory bail - Proceeds of crime - cheating the investors - recipient of crime - Sections 3 read with Section 70 of Prevention of Money Laundering Act, 2002 and punishable under Section 4 of Prevention of Money Laundering Act, 2002 - HELD THAT:- Considering the serious allegations against the petitioner and in the absence of any material to suggest that the petitioner is not guilty of the offence and that he is not likely to commit any offence, while on bail, this Court is of the considered view that this is not a fit case, where the privilege of anticipatory bail be given to the petitioner.
The prayer for anticipatory bail of the petitioner is rejected - Application dismissed.
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2021 (11) TMI 178 - JHARKHAND HIGH COURT
Money Laundering - proceeds of crime - conspiracy - provisional attachment of assets/properties of the petitioner - offence u/s 120 (B) read with Sections 420, 467, 468 and 471 of the Indian Penal Code, 1860 and under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 - HELD THAT:- On perusal of Section 2(1)(u) of the Prevention of Money Laundering Act, it is crystal clear that any property derived or obtained, directly or indirectly by any person as a result of criminal activity will come within the proceeds of crime. In the explanation it is clarified 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.
It is crystal clear that any property derived or obtained, directly or indirectly by any person as a result of criminal activity will come within the proceeds of crime. In the explanation it is clarified 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.
While conditioning the exercise of the power on the formation of an opinion by the Commissioner that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, it is evident that the statute has not left the formation of opinion to an unguided subjective discretion of the Commissioner. The formation of the opinion must bear a proximate and live nexus to the purpose of protecting the interest of the Government revenue. An anticipatory attachment of this nature must strictly conform to the requirements, both substantive and procedural, embodied in the statute and the rules. The exercise of unguided discretion cannot be permissible because it will leave citizens and their legitimate business activities to the peril of arbitrary power. It is an admitted fact that the landed property was purchased by the petitioner prior to institution of the criminal case. The amount in question shown to the tune of ₹ 89,63,511/- to be invested in construction of hotel in question. The authority has come to the conclusion that the proceeds of crime of ₹ 1,08,95,583/- has been invested, which is the subject matter of 26 forged invoices.
Thus, it is an admitted fact that there is no finding and it has not been identified that movable or immovable property linked directly with proceeds of crime but the same could not be done by the authority concerned. The material and reason has also not been disclosed so far as alienation of the property in question is concerned. There is no doubt that the authority is having the power to attach the property, but that power is required to be exercised in terms of the statute, which is lacking in the case in hand.
The provisional attachment order contained in Annexure-2 passed by respondent no.2 is, hereby, quashed. The matter is remanded back to the concerned authority to pass a fresh order - petition allowed by way of remand.
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2021 (11) TMI 21 - BOMBAY HIGH COURT
Money Laundering - scope of proceedings - issuance of summons - compliance with the mandate of Section 50(2) & 50(3) of PMLA - penal/coercive action against the Applicant in purported exercise of powers under Section 19 of PMLA - arrest and sentence contemplated under Section 3 of PMLA - HELD THAT:- The learned ASG is right in contending that the reference to remedies under Cr.P.C. is significant, and reference to Article 226 of the Constitution of India is consciously omitted as the issues of law are under consideration of the Supreme Court.
In the case of DEVENDRA DWIVEDI VERSUS UNION OF INDIA & ORS. [2021 (1) TMI 302 - SUPREME COURT], the Supreme Court had disposed of the petitions under Article 32 and left it open to the petitioner therein to pursue the remedies available in law by approaching the High Court, unlike in the present case, where the petition is pending consideration in the Supreme Court. Since the Supreme Court had disposed of the case pending before it in the case Devendra Dwivedi, the Supreme Court, in that context, made observations in paragraph-8 that the Supreme Court will have the benefit of the considered view of the jurisdictional High Court.
The Supreme Court made a distinction between Article 226 of the Constitution of India and section 482 of Cr.P.C. in respect of grievance regarding the conduct of the investigation. Therefore, the Applicant's grievance will have to be considered in the light of the remedies under Cr.P.C. and cannot be considered under Article 226 of the Constitution of India. Therefore, it is not proper to decide and declare on the questions of law pending before the Apex Court in the Applicants petition.
The Supreme court, in the case of NEEHARIKA INFRASTRUCTURE PVT. LTD. VERSUS STATE OF MAHARASHTRA AND ORS. [2021 (4) TMI 1244 - SUPREME COURT], has laid down that the High Court shall not pass the order of not to arrest and/or “no coercive steps” while dismissing/disposing of the quashing petition under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India - As no case is made out by the Applicant on facts for the exercise of jurisdiction under 482 of the Cr.P.C., this dicta of the Supreme Court will be applicable.
No case is made out by the Applicant for the exercise of our jurisdiction under Section 482 Cr. P.C to restrain Respondent No.1 and Respondent No.2 from taking any penal/coercive action against the Applicant. If the applicant has apprehension of arrest, he has the statutory remedy under section 438 of Cr. P.C by approaching the competent court - the prayer to direct Respondent No.2 to permit the Applicant to appear through an authorized representative or through any electronic mode and not to compel the presence of the Applicant in person, is rejected and it is left to the discretion of the Directorate of Enforcement as regards the mode.
Direction to the Directorate to act in a transparent manner and not to misuse the power - HELD THAT:- It is not a specific prayer. Even if it could be considered, it must be first demonstrated that there is an arbitrary exercise of power, which the Applicant has not established.
Under the provisions of PMLA, the issuance of summons is part of the investigation. The High Courts would not interfere and interdict a lawful investigation under its powers under section 482 of Cr.P.C. unless exceptional circumstances as per the settled law are present. None of these grounds exists in the present case. There is no jurisdictional error in the issuance of summonses as they have been issued by the officers duly authorized under the PMLA. The object and purpose of PMLA show that it not only confers powers on the authority to investigate the offence of money laundering but a duty to investigate it in the larger public interest. The Applicant, without any valid reason, has refused to cooperate with the investigation by not attending the summonses issued by the authorities. The Applicant has failed to establish the case of legal and factual malice on the part of the Respondent-Directorate in proceeding with the investigation in question.
The Applicant has failed to make out a case for exercise of jurisdiction under 482 of Cr.P.C. to quash the impugned summonses and for order directing Respondent Nos.1 and 2 not to take coercive steps against the Applicant. Like any other person apprehending arrest the Applicant can, if so advised, approach the competent court relief under section 438 of Cr.P.C. to be decided on its own merits - application disposed off.
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2021 (11) TMI 2 - DELHI HIGH COURT
Money Laundering - pre-conditions under Section 32A of the IBC is satisfied or not - HELD THAT:- It is made clear that WP(C) 4680/2021 shall be listed on 30th November, 2021 to receive the status report as directed, pertaining to the issue of appointments and vacancies at the Adjudicating Authority under the PMLA. For the said purpose only, WP(C) 4680/2021 shall be treated as a part heard matter.
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2021 (10) TMI 1301 - ORISSA HIGH COURT
Seeking grant of bail - commission of certain Schedule Offences - collection of huge amount from innocent depositors by floating different alluring schemes in falsely promising them with very high returns and benefits - petitioner is said to have the direct and indirect indulgement in these activity of the Companies and knowingly assisted and became a party in the processed activity connected with the proceeds of the crime - offence under Section 120- B/294/341/406/409/420/467/468/471/506/34 of the IPC read with Section 4/5 & 6 of the Prize Chit and Money Circulation Scheme (Banning) Act, 1978.
HELD THAT:- Section 45 of the PMLA at it presently stands begins with non-obstante clause. Section 45 imposes two conditions for grant of bail to any person accused of any offence under the Act viz., (i) that the prosecutor must be given an opportunity to oppose the application for such bail; (ii) where the move is opposed, the court must be satisfied that there are reasonable grounds for believing that the accused persons is not guilty of such offence and that he is not likely to commit any offence while on bail.
If by the amendment introduced in Section 45 of the PMLA, by Act No. 13 of 2018; the entire Section 45 has been reframed in reviving and resurrecting the requirement of twin-conditions under sub-Section (1) of Section 45 of the PMLA for grant of bail. In view of clear language used in paragraph 46 of the Hon'ble Supreme Court's decision in case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. [2017 (11) TMI 1336 - SUPREME COURT], this Court is of the considered view that the amendment in sub-Section (1) of Section 45 of the PMLA introduced after the Hon'ble Supreme Court's decision in case of Nikesh Tarachand Shah does not have the effect of reviving the twin-conditions for grant of bail, which have been declared ultra vires Articles 14 and 21 of the Constitution of India.
The power under Section 438 of Cr.P.C. is an extraordinary power and the judicial discretion is this regard is required to be exercised with due care and caution. Grant or refusal of bail is entirely discretionary and discretion should depend upon the facts and circumstances of each case as also all other surrounding factors as relevant to the particular case on hand. Certain parameters have to be kept in mind while considering or dealing with the application for anticipatory bail - here the Petitioner has faced the custodial interrogation on 08.02.2016, 09.02.2016, 10.02.2016 and 11.02.2016 as has been stated in the counter affidavit filed by the E.D. His detail statement has also been recorded. The properties said to have been so acquired have already been identified in course of investigation as indicated in the list as provided.
The Petitioner has been at large and free for several years and has not even been arrested during the investigation or thereafter by the E.D. Officials. It is not shown nor any material is pointed out to say that the Petitioner has violated any terms and conditions as imposed on him, while granting bail in the CBI case which include more importantly the surrendering his passport and as to his appearance in Court on each date of posting of the case and before the Investigating Officer on Monday of every month until full completion of investigation. If the Petitioner has been enlarged and free for many years and has not been arrested during investigation or taken to custody; the move to suddenly go for his arrest for being incarcerated further merely because of pendency of the PMLA case against him by resisting the prayer, does not appear to be in the direction of serving any purpose of the case where the cognizance has been taken way back on 01.11.2016 and supplementary complaints being also filed the same have been accepted.
It is directed that in the event of arrest of the Petitioner or upon his surrender before the Court in seisin of the case, he shall be released on bail on the conditions imposed - bail application allowed.
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2021 (10) TMI 1299 - ALLAHABAD HIGH COURT
Maintainability of petition - whether as per Section 47 of the Act, 2002 instead of filing the petition under Section 482 Cr.P.C., the petitioner should file revision? - HELD THAT:- Since the learned counsel for opposite parties wants to address on the aforesaid legal submission of learned counsel for the petitioner, for that, he prays some shortest time, therefore, list/ put up this case on 27.10.2021 as fresh in the additional cause list to enable the learned counsel for the opposite parties to address the Court on the point of maintainability.
Learned counsel for the petitioner shall also come prepared on the point of maintainability on the next date.
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2021 (10) TMI 1177 - PUNJAB & HARYANA HIGH COURT
Seeking grant of regular bail - Money Laundering - secret banking - acts of cheating and forgery in Netherlands by transferring of money of other persons through Hawala operations and earned commissions in the shape of cash - Section 45 of PMLA Act - HELD THAT:- Section 45 (1) (ii) is akin to Section 37 of the NDPS Act, wherein the Court, while granting bail, has to form an opinion. In a case under the NDPS Act, it is easy for an accused who has been released on bail to repeat such offence, however, in a case under the PMLA like the present case, it is not easy for an accused to commit the offence again while on bail while staying in India - there was no request on behalf of the Netherlands authorities to register a case under Section 44/45 or 65 of the PMLA as at the first instance, a mutual legal assistance was called in 2017 and it is not the case of the ED that by way of any further correspondence, it was communicated to corresponding authorities in Netherlands that the petitioner, who is a Dutch National, is being prosecuted in India, for which he has already been convicted by the Courts at Netherlands.
It is well settled principles of law that when the investigation is complete and charge sheet is filed in the Court, conclusion of trial is likely to take a long time, a person/accused like the present petitioner, who is aged about 63 years old, can be released on bail, subject to his furnishing bail/surety bonds and with a condition that his passport shall remain deposited with the Court/Prosecuting Agency and he will not leave the country without seeking prior permission of the Court.
It is held that the petitioner qualifies the test under Section 45 of the Act and therefore, the present petition is allowed.
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2021 (10) TMI 1176 - DELHI HIGH COURT
Freezing of petitioner's Bank Account - allegations of corruption and money laundering were levelled - diversion of funds - reasons to believe - procedure to be followed by the ED when letters of request are received under Section 60 of the Act from a contracting state - requirement to provide ‘reasons to believe’ while passing orders under Section 17 of the PMLA - procedure to be followed by the ED while forwarding the ‘reasons to believe’ and the application under Section 17(4) of the PMLA - requirement to transmit all documents - procedure to be followed by the Adjudicating Authority, upon receipt of the application under Section 17(4) of the PMLA - level of satisfaction to be recorded by the Adjudicating Authority prior to issuance of show cause notice under section 8(1) of the PMLA - requirement to supply Relied Upon Documents while issuing SCN - procedure to be followed for providing inspection of records, and for giving a reasonable hearing to the parties, prior to passing of orders by the Adjudicating Authority under the PMLA.
Procedure to be followed upon receiving letters of requests from a contracting state, under Section 60 of the PMLA - HELD THAT:- Under Section 60 of the PMLA, the Director, ED upon being forwarded a letter of request by the Central Government, has to direct an authority under the PMLA (person authorized) to take steps necessary for tracing and identifying the property, of which freezing/seizure is sought. The person authorized has wide powers, including to inquire, investigate and survey under 60(4) of the Act. However, Section 60 (6) of the Act specifically provides that the provisions contained in Chapter V of the Act for surveys, searches and seizures would apply to all letters of request received from a contracting state.
The requisite safeguards contained in the provisions of Chapters III and V of the Act, for the purpose of attachment, confiscation, search, freezing/seizure etc., would undoubtedly apply even in respect of requests received from contracting states under Section 60 of the Act. Thus, requests from contracting states cannot be treated at a higher threshold - the ED/ Adjudicating Authority, would have to adhere to all the provisions in respect of recording the ‘reasons to believe’, supplying the ‘Relied Upon Documents’ etc., as is required to be done in the case of domestic enquiries, investigations, surveys, searches and seizures under the provisions of the PMLA, and the Rules and Regulations.
Procedure to be followed while passing orders of search and seizure under Section 17 of the PMLA, when letters of request are received under Section 60 of the PMLA - HELD THAT:- The specific procedure that is contemplated under the Act, in respect of investigations, seizures and freezing of assets/property/ bank accounts, ought to be strictly and scrupulously followed, in the manner prescribed under the Act.
The material in possession would mean and include all material in possession, in respect of the investigation, which is to be forwarded by the ED to the AA, irrespective of whether the same have been referred to in the ‘reasons to believe’ or not - On the basis of these “reasons to believe” and the “material in possession” of the ED, the ED has to then move an Application under Section 17(4) of the PMLA before the Adjudicating Authority, for retention of the record or the property seized, or for continuation of the freezing order, as applicable.
Procedure to be followed by the Adjudicating Authority, upon receipt of an Application under Section 17(4) of the PMLA from the ED - HELD THAT:- As the hearing before the Adjudicating Authority is not merely a procedural hearing, but an adjudicatory hearing, the Adjudicating Authority has to, as per Section 8(2) of the PMLA, first consider the reply to the show cause notice filed by the defendants; secondly, hear all the parties in a meaningful manner; and thirdly peruse all the relevant material placed on record before it, and only then record a finding confirming the search or seizure/ confiscation/ freezing, after reaching a conclusion that the defendant(s) is involved in the offence of money laundering under Section 3 of the Act, or is in possession of proceeds of crime - It would not be permissible for the complainant-ED to show any documents or material to the Adjudicating Authority outside of the hearing being given, or behind the back of the parties concerned. The hearing has to also be transparent and in the presence of the parties concerned. Unilateral hearings in the absence of the opposing party would not be permissible before the AA.
If the Adjudicating Authority comes to the conclusion that the party(s) concerned is involved in money laundering, an order would have to be passed in writing under Section 8(3) of the Act - The order passed by the Adjudicating Authority would then be communicated to all the parties concerned. Thereafter, remedies can be availed of by the parties concerned, in accordance with law.
Procedure to be followed for inspection of records - HELD THAT:- he provisions relating to inspection and fees for inspection and copying, are in respect of records which are beyond the ‘Relied Upon Documents’ which may be part of `material in possession’. Inspection of such documents can only be given to the party concerned and not to any third parties. Strict confidentiality ought to be maintained. No fee can be charged for supplying the ‘Relied Upon Documents’ by the Adjudicating Authority directly, or through the ED.
What is the level of satisfaction to be recorded by the Adjudicating Authority prior to issuance of show cause notice under section 8(1) of the PMLA? - HELD THAT:- The Adjudicating Authority cannot mechanically go by the reasons recorded by the ED, and has to have separate and independent grounds to believe that such an offence has been committed. The fact that the Adjudicating Authority is again required to have ‘reason to believe’ as per the provisions of the Act shows that there is a two-tier process which is to be followed prior to the issuance of the show cause notice, namely- satisfaction by the ED and thereafter, independent satisfaction by the Adjudicating Authority.
Whether while issuing the show cause notice, all the ‘Relied Upon Documents’ have to be supplied to the parties concerned? - HELD THAT:- A conjoint reading of Section 8(1) of the PMLA and Regulation 13(2) of the Adjudicating Authority (Procedure) Regulations, 2013, leaves no doubt that the Adjudicating Authority is duty bound to serve all the documents, that it has ‘relied upon’ i.e., the ‘Relied Upon Documents (RUDs)’, while coming to its ‘reason to believe’ to the party concerned, in a bound paper book. The said service of documents can be effected through the ED, and the Adjudicating Authority has to ensure that the said service has been effected. A simple service of the show cause notice, without the RUDs would not be sufficient. The 30-day period notice would naturally have to be thus counted from the date when the complete RUDs are supplied to the parties concerned/ Defendants, as no effective opportunity to reply would be possible unless all the RUDs are received.
What is the procedure to be followed for providing inspection of records, and for giving a reasonable hearing to the parties, prior to passing of orders by the Adjudicating Authority under the PMLA? - HELD THAT:- The Adjudicating Authority has to, as per Section 8(2) of the PMLA, first consider the reply to the show cause notice filed by the defendants; secondly, hear all the parties in a meaningful manner; and thirdly peruse all the relevant material placed on record before it, and only then record a finding confirming the search or seizure/ confiscation/ freezing, after reaching a conclusion that the defendant(s) is involved in the offence of money laundering under Section 3 of the Act, or is in possession of proceeds of crime. It would not be permissible for the complainant-ED to show any documents or material to the Adjudicating Authority outside of the hearing being given, or behind the back of the parties concerned. The hearing has to also be transparent and in the presence of the parties concerned. Unilateral hearings in the absence of the opposing party would not be permissible before the AA.
The impugned order under Section 17(1A) of the PMLA in all these petitions, as also the orders passed by the Adjudicating Authority under Section 8 of the PMLA dated 28th December 2020, are set aside - Petition allowed.
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2021 (10) TMI 1165 - PUNJAB AND HARYANA HIGH COURT
Seeking concession of 'pre-arrest bail' - Hawala/underground banking and laundering of direct or indirect proceeds of crime - offences punishable under the provisions of Sections 467/471/120-B/108-A of the IPC - HELD THAT:- This court finds it rather surprising that no offence pertaining to the provisions of Sections 420 specifically, of the IPC, has been even alleged to have been committed in the FIR, even though 'Hawala' transactions/“underground banking” are alleged to have been transacted as per the FIR itself, which prime facie (at least for the purpose of this petition seeking the extra-ordinary relief of pre-arrest bail), would seem to amount to cheating.
In the face of the allegations made in the FIR and the contents of the affidavit filed on behalf of the respondent-State, impossible to accept that no offence of cheating is even alleged to have been committed - Whether or not any such 'Hawala' transactions amounting to cheating eventually are proved, naturally would be a matter of evidence gathered and eventually submitted to the trial court if it comes to that stage; yet, to repeat, as regards this petition filed under the provisions of Section 438 of the Cr.P.C., there are no ground to admit the petitioner to 'anticipatory bail' with the aforesaid allegations made in the FIR itself, as also in the reply filed on behalf of the respondent-State.
As regards all evidence being available by way of documents in the form of a power of attorney, the deed of assets and liabilities, and the loan transactions, though this court was swayed by that contention at first blush yet, with the learned Senior Deputy Advocate General, Punjab, having pointed out that 'Hawala'/“underground banking” transactions have been time and again alleged to have been committed by Shivlal Pabbi in collusion with the petitioner, and the 'modus operandi' of such transactions needs to be disclosed by the petitioner, which may only be possible by way of custodial interrogation and not under the protection of even an interim bail in his favour.
Petition dismissed.
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2021 (10) TMI 1128 - DELHI HIGH COURT
Money Laundering - seeking grant of Anticipatory bail - criminal conspiracy - cheating and defrauding - siphoning off the commission received from the suppliers through a complex web of fake commercial transactions through multiple companies owned by the accused persons, registered outside India - fraudulent transactions - requirement of custodial interrogation of the petitioner - HELD THAT:- In the present case, it is not disputed by the respondent that the petitioner has not joined the investigation. Rather, it is on record that the petitioner has joined the investigation more than 20 times. The statements of the witnesses U/s 50 of PMLA have already been recorded and there is only an apprehension that the petitioner would tamper with the evidence or threaten the witnesses but till date nothing has been placed on record to show that any such attempt has been made by the petitioner in this regard and there appears to be only an apprehension in this regard. All the documents have been seized by the respondent and have been filed alongwith the charge sheet in the court of Special Judge.
Apprehension of arrest - HELD THAT:- The father of the petitioner had already been arrested who was lateron granted regular bail by the Special Judge and as far as the petitioner is concerned, he has been called time and again by the respondent (ED) and when he moved his anticipatory bail application before the Ld. Special Judge, it was opposed tooth and nail by the respondent, so it cannot be said that the apprehension in the mind of the petitioner in regard to his arrest is a mere fear or it is a vague apprehension.
There is nothing to show that as to for what purpose, the custodial interrogation of the petitioner is required and the alleged offence entail maximum sentence of 7 years with fine - petitioner is allowed to be released on bail subject to condition imposed - bail application allowed.
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2021 (10) TMI 991 - PUNJAB AND HARYANA HIGH COURT
Permission of the Court to go abroad and visit USA and Dubai was sought, which was rejected - HELD THAT:- Counsel for the petitioner could not dispute that vide order dated 19.08.2021 passed in CRM-M No.33804 of 2021 filed by the petitioner, the similar prayer has already been dismissed by this Court.
There are no ground to entertain this petition and the same is accordingly, dismissed.
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2021 (10) TMI 936 - BOMBAY HIGH COURT
Money Laundering - predicate offence - irregularities in the loan disbursement by the City Co-operative Bank - only contention of the Petitioner is that since the Petitioner himself has filed the FIR, if it is to be used against the Petitioner on the premise that it is a predicate offence, then there must be material that the Respondent No. 1 must demonstrate - HELD THAT:- The contention of the Petitioner that without having copies of the ECIRs, the Petitioner cannot approach the competent court with a prayer for anticipatory bail under section 438 of Cr.P.C. is misplaced. The Petitioner apprehends his arrest, and section 438 of Cr.P.C. provides a statutory remedy for such a contingency.
The learned ASG has shown the file containing the statements recorded in furtherance of ECIRs. Considering that the Petitioner has a statutory remedy under section 438 of Cr.P.C. and any observation by us on the merits of the matter against the Petitioner will prejudice the Petitioner in case the Petitioner approaches the competent court for anticipatory bail; we refrain from elaborating the same in this order. However, since this point was argued before us, all we state is that it cannot be said that there is no material against the Petitioner. Furthermore, having concluded after examining the facts that exercise of jurisdiction under section 226 of the Constitution of India and 482 of Cr. P.C is not warranted. There is no question of granting any such relief as sought for by the Petitioner as it would be contrary to the observations made by the Supreme Court in paragraph 23(xvi) of the decision in the case of NEEHARIKA INFRASTRUCTURE PVT. LTD. VERSUS STATE OF MAHARASHTRA AND ORS. [2021 (4) TMI 1244 - SUPREME COURT].
Having considered the grounds urged by the Petitioner in the invocation of 226 of the Constitution and 482 of Cr.P.C., we do not find that the Petitioner has failed to make out a case for interference. As regards the protection from arrest is concerned, the Petitioner has a remedy under the Cr.P.C.
Petition dismissed.
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2021 (10) TMI 930 - DELHI HIGH COURT
Money Laundering - procedure being followed by the AA for serving the Relied Upon Documents (RUDs) on the parties concerned - HELD THAT:- List for further hearing and for conclusion of submissions on behalf of all counsels, on 13th September, 2021 at 2:30 P.M.
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2021 (10) TMI 894 - MADRAS HIGH COURT
Money Laundering - Provisional attachment of amounts that were frozen - substantive offence under Section 3 r/w Section 4 of the PMLA - HELD THAT:- Coming to Rule 3A of the Prevention of Money-Laundering (Restoration of Property) Rules 2016, this Rule is undoubtedly sequel to the inclusion of the second proviso to Section 8(8) of the PMLA. However, both the second proviso to Section 8(8) and Rule 3A use the expression "may" and not "shall". Where in a given case, the Special Court decides to proceed under the second proviso to Section 8(8), then Rule 3A prescribes a procedure for proceeding with the matter further and not otherwise.
It is gainsaid that it is public money which, as narrated supra, had transcended into the hands of the accused and the respondent bank is justified in laying its claim for restoration of the property, more so, as a public sector bank. A fortiori, it would be purposeless to retain the property till the conclusion of the trial, which we find from a reading of the amendment, cannot be the intended purpose.
Canara Bank will be entitled only to the balance amount that is now available. Canara Bank will not only be entitled to the principal amount but also the interest accrued thereon - In this case, the money that were attached are not counterfeit currency notes or phenolphthalein applied currency notes to be marked as material objects during trial. The proof of the fact that these amounts were provisionally attached by the Enforcement Directorate, the confirmation of the attachment by the Adjudicating Authority and the return of the amounts to Canara Bank can be established by marking a copy of the order of this Court.
This Criminal Revision stands dismissed.
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