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Money Laundering - Case Laws
Showing 1 to 20 of 196 Records
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2021 (12) TMI 1330 - BOMBAY HIGH COURT
Seeking for withdrawal of the Interim Application - HELD THAT:- The Interim Application is dismissed as withdrawn.
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2021 (12) TMI 1311 - DELHI HIGH COURT
Jurisdiction - Power to issue SCN - illegal coal mining in the State of West Bengal - case of the petitioners is that the petitioners No. 2, 3, 4 are investigating officers as per Section 48 of Prevention of Money Laundering Act, 2002 and while working as Assistant Directors in the Directorate of Enforcement, the said petitioners claim to be Public Servants in terms of section 21 of Indian Penal Code - HELD THAT:- It becomes apparent that power of the Police Officer to require attendance of a witness is circumscribed by the words "within the limits of his own or any adjoining station". It is to be noted that if the said power was in the nature of pan-India power, as has been sought to be argued by the respondents, there was no reason for the Legislature to use the terminology quoted above. To the contrary, if the same was the intention of the Legislature, the Legislature would have clearly stated so and bestowed unlimited jurisdiction on the Police Officer by using terminology in the nature of "anywhere in the country" or even "anywhere within the State". The clear departure of the Legislature and the use of the terms "within the limits of his own or any adjoining station" points towards a legislative intention to limit the jurisdiction in this regard.
On the issue of the competence of the Respondents to issue the impugned notices, a serious challenge has been presented by the petitioners, which prima facie, seems to have considerable merit. It may also be noted that the said issue goes to the root of the matter and if the respondents lacks jurisdiction itself to issue the impugned notices, the entire case of the respondents falls.
Maintainability of the petition filed by the Directorate of Enforcement - HELD THAT:- There are no merit in the preliminary objection as to the maintainability of the petition on this ground. The question of law whether the Petitioner No. 1 can maintain writ petition under Article 226 can be decided at a later stage. The Court further does not seek to comment upon whether the counsel for the petitioners can appear for petitioner Nos. 2, 3 and 4 or not as the same is not germane to the present proceedings.
On a perusal of the entire facts and circumstances pleaded in the petition, and further, specifically the claim of the petitioners that the legal right claimed by them has been infringed by the respondents within the territorial jurisdiction of this Court, the opinion that the petitioners have made out a prima facie case as to the maintainability of the present petition.
Petition disposed off.
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2021 (12) TMI 1234 - CITY CIVIL AND SESSIONS COURT, MUMBAI
Money laundering - scheduled offence - Siphoning of funds - ED has jurisdiction to investigate the scheduled offence or not - forged documents - HELD THAT:- It is material to note that, there is absolutely on justification for withdrawal of ₹ 1 Crore, that too when accounts were freeze as a part of conversion process. Even there is nothing before the Court to indicate that, Deepak Kumar Prajapati is any legal entity or holding any legal character. Even there is absolutely nothing before the Court to indicate any jural relation between applicant and Deepak Kumar Prajapati. Also there is no explanation nor any justification how cash amount was given to Deepak Kumar Prajapati (A4) and the same came to the applicant by way of loan or otherwise - there is a clear case which prima-facie indicates all the material stages of process of money laundering i.e, generation of proceeds of crime, layering, placement and integration thereof. These statements coupled with documents prima-facie indicate an offence under Sec.3 of PML Act.
It is material to note that statement of Chartered Accountant Mr. Upendra G. Muley, Aurangabad prima-facie indicates the conduct of the applicant. It cannot be ignored that, once the said C.A. refused to go ahead with the plot of the applicant and Ms. Bhawana Gawali, his office was attacked and report thereof was lodged at Mukundwadi Police Station, Aurangabad. It cannot be ignored that, some of the documents were procured from the office of Assistant Charity Commissioner and all this was done to materialize the connivance with a goal of money laundering - Considering the conduct of the applicant and the investigation is still pending, if he is released on bail certainly there is every possibility that he would take law in his hands to mould the prosecution case as per their goal.
Once the applicant is released on bail, both of them are likely to take fate of the case in their hands by frustrating all the efforts of the ED. Certainly, none of the parameters including tripod test prescribed under Sec.439 of Cr.P.C. is applicable to the case of the applicant. It has to be noted that, if the application is allowed there will be no safe trial - even if the rigors of twin conditions under Sec. 45 of PML Act are not existing and even if the application is dealt with under Sec. 439 of Cr.P.C. with remaining part of Sec.45 of PML Act, the applicant is not entitled to be released on bail.
Bail application dismissed.
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2021 (12) TMI 1149 - ORISSA HIGH COURT
Seeking grant of Bail - Smuggling - rule of presumption of innocence - Section 45(1) of the PML Act - constitutional validity of the provision - HELD THAT:- This Court is of the opinion that the declaration by the Supreme Court in Nikesh Tarachand Shah's [2017 (11) TMI 1336 - SUPREME COURT] would render the twin conditions prescribed in Section 45(1) of the PML Act for release of an accused on bail to be void in toto; such conditions have to be disregarded of any legal force from its inception. They cease to be law and are rendered inoperative to the extent that they are to be regarded as if they had never been enacted. That being so, the twin conditions for grant of bail under Section 45(1) of the PML Act as are now sought to be pressed into service by the ED cannot be considered to have revived or resurrected only on the prospective substitution of the words “punishable for a term of imprisonment of more than three years under Part A of the Schedule” with the words “under this Act” especially without there being any amendment with regard to the twin conditions for grant of bail which had specifically been declared to be unconstitutional as also in the absence of any validating law in this regard with retrospective effect.
It was also brought to this Court’s notice that the Petitioner has been in custody for a period of about 8 years. “Justice delayed is justice denied” is the cornerstone in delivering justice and a speedy trial forms the essence of the entire criminal justice system. At the same time, “justice hurried is justice buried” and therefore, there has always existed a need to strike a balance between the two adages in the delivery of justice to the people.
The fundamental right to speedy trial is a result of judicial activism shown in respect of Article 21. In USA, the right to speedy trial has been guaranteed by the VI Amendment of the US Constitution. The VI Amendment of the US Constitution says that ‘in all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial’ - The fundamental right to speedy trial is peculiar in character and is generically different from other constitutional rights of the accused. The right is in the interest of the accused if he is innocent. He does not suffer unduly for a long period. But it also works against him if he is actually guilty of the offence. The right is also in the interest of prosecution because it does not face the problems such as non-availability of witnesses and disappearance of evidence etc. But sometimes, it also goes against the prosecution specially when the prosecution does not have hundred per cent foolproof case against known or hardened criminals.
It is a matter of great concern that the Petitioner has been in detention for more than 8 years as on today, however, the trial in the instant case has not yet been commenced. The longevity of detention of the under-trial prisoners without commencement of trial defeats the very purpose of Criminal Justice System.
It is directed that the Petitioner be released on bail with some stringent terms and conditions as deemed just and proper by the learned court in seisin over the matter with further conditions imposed - application allowed.
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2021 (12) TMI 1109 - ALLAHABAD HIGH COURT
Seeking grant of Anticipatory Bail - property relating on the creation of mortgage/security - fake/bogus loans - no assets were created - loan turned bad NPA in the name of non existing/pseudonymous borrowers without adhering to the prescribed norms and guidelines of the Bank and causing wrongful loss - overriding effect of PML Act over other acts - HELD THAT:- PML Act, 2002 deals with the offence of money laundering and Parliament enacted this law to deal and curb the activities of money laundering. Being a special enactment it has overriding effect on general law. Section 71 of PML Act specially provides that provisions of PML Act shall have overriding effect on any other law time being in force. Thus, it is very clear that provisions of Code of Criminal Procedure will not be applicable until there is no specific provision is given in PML Act, 2002.
In case of UNION OF INDIA VERSUS VARINDER SINGH @ RAJA & ANR. [2017 (7) TMI 1056 - SUPREME COURT], Supreme court observed that Section 45 of PML Act imposes conditions for grant of bail. Bail cannot be granted without complying with requirements of section 45 of PML Act.
Money Laundering being an offence is economic threat to national interest and it is committed by the white collar offenders who are deeply rooted in society and cannot be traced out easily. These kinds of offence is committed with proper conspiracy, deliberate design with the motive of personal gain regardless of the consequences to the society and economy of Country. Hence, for money-launderers “jail is the rule and bail is an exception” - Socio-economic criminals are economically sound, therefore, in releasing them on anticipatory bail there is probability of abscondance not only within country but also beyond country. Usually socio-economic offenders abscond to some other country in order to escape themselves from Criminal Prosecution. The status and position of offenders provides opportunity to influence investigation and prosecution.
This Court finds no merit in the application under Section 438 Cr.P.C. filed by the applicant. Consequently, the instant anticipatory bail application is rejected.
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2021 (12) TMI 1053 - DELHI HIGH COURT
Maintainability of petition - availability of alternative remedy of appeal - Validity of Provisional Attachment order - HELD THAT:- The writ petition is partly allowed by directing that, subject to the petitioners filing a statutory appeal before the Appellate Tribunal within a period of two weeks from today, the parties will maintain status quo qua the subject matter of the impugned order till the petitioners’ appeal and stay application are taken up for consideration by the Tribunal as and when it becomes functional.
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2021 (12) TMI 677 - CHHATTISGARH HIGH COURT
Money Laundering - seeking grant of anticipatory bail - creation of shell companies - bogus bank accounts - Section 50 of PMLA, 2002 - HELD THAT:- Applicants before this Court are employees of Union Bank of India, Raipur posted at Ramsagarpara and Pandri Branches respectively. Applicants No.1 & 2 were posted in Ramsagarpara Branch, applicant No.3 was posted in Pandri Branch and applicant No.2 is posted at Pandri Branch. Allegations against them are that they being officials got the 446 bank accounts (in both branches) opened without properly following procedure prescribed and without verifying documents annexed along with account opening application forms. Allegation against applicants is that they verified application forms for opening of bank accounts. There is specific submission by learned counsel for both sides that there is no requirement of custodial interrogation of applicants.
Considering nature of accusation in instant crime and background of applicants, without commenting anything on merits of case, the benefit of anticipatory bail granted to applicants, subject to conditions imposed - application allowed.
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2021 (12) TMI 627 - DELHI HIGH COURT
Jurisdiction under PMLA vs IBC - power or authority to proceed against the properties of a corporate debtor once a liquidation measure has come to be approved in accordance with the provisions made in the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The resolution plan essentially must make provision for the payment of debts of the corporate debtor owed to financial and operational creditors, workmen and others specified in Section 53 of the IBC. The resolution plans which may be received by the RP are then placed before the Committee of Creditors for their consideration. In terms of Sub-Section (4) of Section 30, a resolution plan may be approved if it is passed by a vote of not less than sixty percent of the voting share of the financial creditors in a meeting of the Committee of Creditors. The resolution plan as approved by the Committee of the Creditors is then placed before the Adjudicating Authority who upon being satisfied that the same meets the requirements as placed by Section 30(2) of the IBC, approve the same.
By virtue of Amending Act 26 of 2019, a significant amendment came to be introduced in sub-Section (1) of Section 31 and in terms thereof, it now stands clarified that the plan as approved by the Adjudicating Authority, would also bind the Central and State Governments or any local authority to whom a debt is owed. The provisions as introduced and incorporated in terms of Act 26 of 2019 have been upheld and judicially recognised to be declaratory.
Section 32A and the legislative intent - HELD THAT:- Maximization of value would be clearly impacted if a resolution applicant were asked to submit an offer in the face of various imponderables or unspecified liabilities. The amendment to sub-Section (1) of Section 31 and the introduction of Section 32A undoubtedly seek to allay such apprehensions and extend an assurance of the resolution applicant being entitled to take over the corporate debtor on a fresh slate. Section 32A assures the resolution applicant that it shall not be held liable for any offense that may have been committed by the corporate debtor prior to the initiation of the CIRP. It similarly extends that warranty in respect of the properties of the corporate debtor once a resolution plan stands approved or in case of a sale of liquidation assets.
The Legislature in its wisdom has recognised a pressing and imperative need to insulate the implementation of measures for restructuring, revival or liquidation of a corporate debtor from the vagaries of litigation or prosecution once the process of resolution or liquidation reaches the stage of the adjudicating authority approving the course of action to be finally adopted in relation to the corporate debtor.
Liquidation under IBC - HELD THAT:- The Liquidator in terms of the provisions engrafted in Section 36 is obliged to form a corpus comprising of various assets of the corporate debtor which constitutes the “liquidation estate”. The Liquidator is then by law mandated to collect and consolidate all claims of creditors that may be received pursuant to the public announcement of its liquidation. The functions of the Liquidator and the various steps that he is obliged to take are more elaborately spelt out in the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
Statutory provisions under PMLA - HELD THAT:- As is manifest from a reading of the long title of the PMLA, it has essentially been promulgated to prevent money laundering and to provide for confiscation of property derived from or involved in the crime of money laundering. The expression “proceeds of crime” has been defined in Section 2(u) of the PMLA to mean any property derived or obtained whether directly or indirectly by a person as a result of criminal activity relating to a scheduled offence or the value of any such property and where such property is taken or held outside the country, then property equivalent in value thereto - The word property has been defined to mean assets of every description whether corporeal or incorporeal, tangible or intangible, movable or immovable and includes deeds and instruments evidencing title to or interest in such property or assets wherever located. The scheduled offences stand enumerated in parts A and B of the Schedule appended to the enactment.
All orders passed by the adjudicating authority can be assailed in appeal in terms of Section 25 which prescribes that the Appellate Tribunal constituted under SAFEMA shall also act as the Appellate Tribunal for the purposes of the PMLA. Any person aggrieved by a decision or order of the Appellate Tribunal has the right to appeal to the High Court in accordance with the provisions of Section 42. Offences committed under the PMLA are triable by Special Courts which may be constituted in accordance with the provisions made in Chapter VII. Section 71 engrafts a non-obstante clause by providing that the provisions of the PMLA shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
Issue of primacy - HELD THAT:- It is evident that the two statutes essentially operate over distinct subjects and subserve separate legislative aims and policies. While the authorities under the IBC are concerned with timely resolution of debts of a corporate debtor, those under the PMLA are concerned with the criminality attached to the offense of money laundering and to move towards confiscation of properties that may be acquired by commission of offenses specified therein. The authorities under the aforementioned two statutes consequently must be accorded adequate and sufficient leeway to discharge their obligations and duties within the demarcated spheres of the two statutes - this Court is of the firm view that the issue of reconciliation between the IBC and the PMLA insofar as the present petition is concerned, needs to be answered solely on the anvil of Section 32A. Once the Legislature has chosen to step in and introduce a specific provision for cessation of liabilities and prosecution, it is that alone which must govern, resolve and determine the extent to which powers under the PMLA can be permitted in law to be exercised while a resolution or liquidation process is ongoing.
The Resolution and Liquidation roadways - HELD THAT:- It is only once that resolution plan stands approved that the question of further steps for implementation of the mode adopted would logically arise. This is further buttressed from the provisions contained in Section 31(4) which makes provision for a situation where the mode of resolution accepted and approved may require approval under an independent statute. It is while factoring in that eventuality that sub section (4) proceeds to prescribe the outer timeline of one year from the date of approval of the resolution plan for obtaining all requisite approvals. A similar situation would obtain where a corporate debtor while in liquidation is sold as a going concern. Here also Regulation 44 of the Liquidation Regulations, 2016 provides for the completion of the liquidation process within one year from the date of its commencement or within further extended time as contemplated under the Proviso thereto and additionally under Regulation 44(2). The Court thus finds itself unable to accept the submission of Mr. Hossain that the on the date of approval of a resolution plan under Chapter II, the corporate debtor undergoes a transformational change or metamorphoses. In any case, it cannot be viewed as ceasing to exist in the eyes of law merely upon a resolution plan coming to be approved.
Identically, where a corporate debtor undergoing liquidation under Chapter III, it continues to exist as an entity till such time as it is fundamentally rearranged or altered consequent to the implementation of the procedure of settlement of its affairs as contemplated under the plan approved by the Adjudicating Authority.
Section 32A and the defining moment - HELD THAT:- This Court is of the opinion that the answer to determining when the bar under Section 32A would come into play must be answered bearing in mind the ethos of Section 32A and upon an interpretation of the provisions of the IBC and the Regulations framed thereunder. As is evident from a careful reading of Section 32A(2), the Legislature in its wisdom has provided that no action shall be taken against the properties of the corporate debtor in respect of an offense committed prior to the commencement of the CIRP and once either a resolution plan comes to be approved or when a sale of liquidation assets takes place - Section 32A in unambiguous terms specifies the approval of the resolution plan in accordance with the procedure laid down in Chapter II as the seminal event for the bar created therein coming into effect. Drawing sustenance from the same, this Court comes to the conclusion that the approval of the measure to be implemented in the liquidation process by the Adjudicating Authority must be held to constitute the trigger event for the statutory bar enshrined in Section 32A coming into effect.
Petition allowed.
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2021 (12) TMI 432 - MADRAS HIGH COURT
Money Laundering - provisional attachment of property - proceeds of crime - scheduled offences - offences under Section 45 read with Sections 70 and 8(5) of the Prevention of Money-Laundering Act, 2002 - HELD THAT:- The complaint by the Authorised Officer is akin to a private complaint under Section 200 of Cr.P.C. and it is not a final report by Police Officer under Section 173(2) of Cr.P.C. It is clearly stated in the complaint that it is filed by the Officer, who is duly authorized by the Central Government to file complaint in writing in tune with the second proviso to Section 45(1) of the PMLA.
Both the Sections 44 and 45 of the PMLA commence with the non-obstante clause, indicating the complaint in writing by a duly Authorised Officer to be taken cognizance by the learned Special Judge without the accused being committed, notwithstanding anything contained in the Cr.P.C. - this Court has no hesitation to hold that the plea of the petitioner/A3 regarding locus of the respondent to file the complaint without registering F.I.R. under Section 154 of Cr.P.C. is unfounded and held against the petitioner.
In the subject complaint, the respondent herein pray for two reliefs. One to proceed against the accused persons for money-laundering and second to confiscate the proceeds of crime. As far as the punishment for money-laundering is concerned, Section 4 of the Act prescribes rigorous imprisonment for a period of not less than three years, but which may extend to seven years and shall also be liable to fine. Provided the proceeds of crime involved in money-laundering relating to offences under the Narcotic Drugs and Psychotropic Substances Act, the period of imprisonment may extend to ten years. The finding of the adjudicating authority is not a clean chit to the petitioner herein for the offence of money-laundering.
In the opinion of this Court a prima facie satisfaction of the adjudicating authority in a preventive proceedings regarding certain properties, no way stand in the way of prosecuting the person accused of the offence of money-laundering, which covers not only possession but also use or concealment - even assuming the finding of the adjudicating authority has reached finality, the summons issued to the petitioner herein cannot be treated as premature or illegal, since the petitioner is liable to face the trial both in his individual capacity as well as a person in-charge and responsible for the conduct of the business of A1 Company, which has alleged to have contravened the provisions of the PMLA.
Petition dismissed.
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2021 (12) TMI 431 - MADRAS HIGH COURT
Money Laundering - Validity of search operation held in the premises of the petitioner - pendency of investigation relating to the proceedings - main grievance projected by the petitioners is that the motive behind the search of their premises is to implicate them in some false case under the provisions of the Prevention of Money Laundering Act, 2002 - HELD THAT:- The FEMA Act, which is a legislation for regulating the economic aspect, has been passed to consolidate and maintain law relating to foreign exchange, external trade and payments and for promoting orderly development of foreign exchange. Concededly, the petitioners have knocked the doors of this court by filing these writ petitions, against the proceedings initiated under section 37 of the FEMA Act and consequential action of investigation conducted by the third respondent.
As regards the allegation of violating the fundamental rights, etc, it is the categorical stand of the respondents that on the basis of credible information, summons were issued to the petitioners and the same were followed by search of their premises. The petitioners were neither arrested nor taken into custody by the respondents. Therefore, the question of infringement of their rights under any provision of law, will not arise - The Supreme Court in C.Sampath Kumar v. Enforcement Officer [1997 (9) TMI 458 - SUPREME COURT], while deciding the case in respect of Section 40 of the FERA, held that when a person is summoned and examined under Section 40, it cannot be presumed that a statement will be obtained under pressure or duress and such a statement obtained does not infringe the constitutional guarantee of protection against self-incrimination under Article 20(3) of the Constitution. Therefore, the concept of applying the theory of self-incrimination even at the stage of investigation in case of violation of FEMA Act cannot be raised to the level of an investigation of a criminal offence protected by Articles 20(3) and 21 of the Constitution.
It is settled law that the summons issued under Section 37 of the FEMA Act, by the officers of the Enforcement Directorate, cannot be questioned by way of a writ. When there is suspicion with regard to the involvement of the petitioners in any of the transactions which are prohibited under the FEMA Act, it is open to the respondent authorities to summon them for enquiry. Since the documents are pertaining to them, it cannot be said that the investigation has no nexus with the documents called for from the petitioners. When an investigation is commenced, it is not possible for the authorities to come to the conclusion with regard to the involvement or the non-involvement of any person until the enquiry is completed - According to the petitioners, they were ill-treated and humiliated an subjected to harassment; and the statements obtained from them during the course of search, were under threat and coercion and the same would be used as material evidence, in the proceedings initiated against them; and hence, they have come up with these writ petitions for the larger reliefs as stated supra. However, it is reiterated on the side of the respondents that the entire search operations conducted in the premises of the petitioners on 02.09.2021 and 03.09.2021 were recorded and the statements were obtained from the petitioners without any threat or coercion; and in connection with the said proceedings, the petitioners were neither arrested nor taken into the custody by the respondent officials. Therefore, this court is of the opinion that the submissions so made on the side of the respondents would be sufficient enough to meet the grievance expressed by the petitioners.
Having regard to the settled legal proposition that 'fair and just investigation is a hall mark of any investigation and it is not the duty of the investigating officer to strengthen the case of the prosecution by withholding the evidence collected by him; and an impartial and fair opportunity in the proceedings initiated, is the legal right of the accused and justice can be ensured only if the rules of procedure are diligently adhered to'.
Petition disposed off.
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2021 (12) TMI 80 - MANIPUR HIGH COURT
Grant of pre-arrest bail - laundering of proceeds of crime - economic offences or not - HELD THAT:- Economic offences constitute a class apart and need to be viewed with a different approach in the matter of bail, as such offences are normally sourced in deep-rooted conspiracies involving huge loss of public funds and need to be looked at seriously, being grave offences that affect national economy as a whole and posing a serious threat to the financial health of the country.
The irrefutable fact is that the present case originated from FIR No.5(3) 2018 dated 24.03.2018 and the evidence seized in connection therewith is already in the custody of the authorities. The petitioner has also been granted anticipatory bail in relation to the said FIR in August, 2019. Documentary evidence, which would be the fulcrum of the case, having already been secured and given the passage of time since registration of the earlier case, there is no manifest risk of the petitioner tampering with evidence or witnesses at this late stage. Further, his status and firm roots in society being undisputed, the petitioner is not shown to be a flight-risk. This Court finds no tangible reason to believe that he would abscond or try to evade the law and, in any event, the same can be guarded against by imposing restrictions.
The petitioner shall be released on bail forthwith in the event of his arrest, subject to conditions imposed - bail petition allowed.
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2021 (12) TMI 79 - KARNATAKA HIGH COURT
Money Laundering - siphoning of funds - petitioner being vexed for two times - offences punishable under Sections 409, 420, 468, 471 and 477 IPC and Section 13(2) r/w 13(1)(c) and (d) of Prevention of Corruption Act - HELD THAT:- Merely for the reason that clause (a) of Section 44(1) states that Special Court is constituted for trial of offence under Section 4; it cannot be construed that the case has to be committed to the Special Court in accordance with Section 209 Cr.P.C. In the expression, 'without the accused being committed, the word 'committed' does not take the meaning as can be ascribed to it in the context of Section 209 Cr.P.C. Here expression takes the meaning that even without production of accused before the court or even in the absence of the accused, the Special Court can take cognizance.
The petitioner being vexed two times - HELD THAT:- The CBI prosecuted the petitioners for the offences which are not same as offences under Section 4 of PMLA Act. Article 20(3) of the Constitution of India as also Section 300 of Cr.P.C. are applicable only when prosecution is launched for the second time for the same offence or offences in relation to a particular incident of crime, which is not the factual position here. Therefore this ground also fails.
Bar envisaged under Article 20(2) of the Constitution of India - HELD THAT:- Although the Supreme Court in STATE OF BOMBAY VERSUS KATHI KALU OGHAD [1961 (8) TMI 34 - SUPREME COURT] has held that the interest of an accused is protected under Article 20(2) of the Constitution of India if his statement is taken during investigation, it is also held that such statement must have been outcome of compulsion during the time the accused is in police custody. Para 20 of the judgment which Sri. M.S. Shyamsundar referred to, states that the protection under Article 20(3) is available to accused in the court room and also outside the court during investigation if it is a compelled testimony.
By applying the conclusions drawn by the Supreme Court in Kathi Kalu Oghad, the position that becomes clear is that if a person is examined under Section 50 of PMLA during investigation, he cannot seek protection under Article 20(3) of the Constitution unless he was an accused at the time of investigation. If it is assumed that protection under Article 20(3) is still available even if a person is not shown as accused during investigation, the prosecution can still prove its case based on other evidence. In this view, third point of argument of Sri. M.S. Shyamsundar also fails.
Petition dismissed.
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2021 (12) TMI 78 - KARNATAKA HIGH COURT
Seeking grant of bail - smuggling of drugs - MDMA pills - possession of the contraband exceeding the permissible limit - generation of proceeds of crime by collecting money from their customers in exchange for supply of illegal Narcotic Drugs, Psychotropic Substances, Controlled Substances and Conveyances - HELD THAT:- There is huge difference of cash deposits and declaration of income by the petitioner in his income tax returns. There is suppression of fact regarding the amount transferred in favour of accused No. 1. The conduct of the petitioner in getting the loan by paying interest from the banks by mortgaging the property and transferring the said amount to accused No. 1 is also suspicious - information that are collected from accused No. 1, the petitioner and other witnesses disclose that there is regular and huge transfer of amount from the petitioner to the bank account of accused No. 1. However, there are stray instance of payment of amount in cash. The explanation given by accused Nos. 1 & 4 regarding transfer of these amounts as financial assistance to run the Restaurant or to withstand the loss in the business or for undergoing surgery etc., appears to be not probable and the transfer of the amount even though appears to be unusual as the same are not said to have disclosed while filing income tax returns, the same cannot be the sole basis for recording the finding the guilt of the petitioner at this stage. Even though the statements given by the petitioner under Section 50(3) of PMLA is admissible in evidence, the veracity of such statements will have to be judged at the time of trial and a conclusion cannot be drawn at this stage that the money transferred between accused Nos. 1 & 4 are the proceeds of crime as contended by the prosecution.
Section 19 of PMLA deals with the power to arrest the accused by the Director or other officer authorized in this behalf. Such power to arrest could be exercised only on the basis of the material with a reason to believe that such person is guilty of an offence punishable under PMLA - Section 439 of Cr.P.C., deals with special power of High Court or the Court of Sessions regarding bail. Even though, this section is general provision under Cr.P.C., Section 65 of PMLA enables the provisions of Cr.P.C., to apply to the offences under the Act insofar as they are not inconsistent with the provisions of the Act with regard to arrest, search & seizure, attachment, confiscation, investigation, prosecution and all other proceedings under PMLA. Admittedly, there are no other provisions under PMLA which is inconsistent with Section 439 of Cr.P.C. Therefore, filing of the petition by the petitioner under Section 439 of Cr.P.C. cannot be find fault with.
The petitioner is not required to be detained in custody for any other purpose except to ensure his presence before the Trial Court and to see that he will not commit such offence while on bail. Under such circumstances, his further detention in custody would amount to infringement of his valuable right to life and personal liberty. Therefore, the petitioner is entitled to be enlarged on bail - Petition allowed.
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2021 (12) TMI 42 - MADRAS HIGH COURT
Money Laundering - proceeds of crime - possession of movable and immovable properties and pecuniary resources, disproportionate to the known source of income - predicate offence - Sections 13(2) r/w 13(1)(b) of Prevention of Corruption Act and Section 109 of IPC - HELD THAT:- The writ petitioners presume the impugned summon is for provisional attachment. Through this summon, the documents and details are sought from the petitioners in connection with investigation and there is no indication in the said summon that the authorities has reason to believe that the writ petitioners are in possession of proceeds of crime and same if not attached immediately, it will likely to frustrate proceedings under the PMLA. Even otherwise by virtue of second proviso to Section 5(1)(b) of the PMLA, the respondent has the competency and jurisdiction to issue the impugned summon.
Unless final report in the predicate offence is filed, proceedings under the PMLA cannot be initiated is the second fallacy in the petitioners' submission. After the insertion of Explanation to Section 44 and the second proviso to Section 5 (1) (b) of the PMLA, it is made clear in the statute that the proceedings under the PMLA not dependant to the predicate offence. Soon after registration of a schedule offence case, the authorities under the PMLA can act upon and register case under the PMLA, for money-laundering and also provisionally attach the proceeds of crime. Under first proviso to this Section in ordinary circumstances, the authorities shall wait till the filing of final report under Section 173 Cr.P.C. in the predicate offence. In extraordinary circumstances if the authority has reasons to believe that non-attachment of the suspected proceeds of crime will frustrate the proceeding under the PMLA, the authority need not wait for the schedule offence agency to file their final report, but shall proceed even prior to filing of final report by virtue of second proviso.
Though the respondent has jurisdiction to issue summon, since the summon not being in the format prescribed under the statute and the deviation is prejudicial to the petitioners, the respondent is directed to issue fresh summons as per Form-V, fixing any future date for production of documents and other particulars. On receipt of the summons, the writ petitioners shall appear and produce the documents and particulars sought under the summons.
In view of disposal of the Writ Petitions filed to quash the impugned summon issued by the respondent, the applications, filed to amend prayer for a Writ of Certiorarified Mandamus, seeking to quash the impugned summon issued by the respondent, and consequently, direct the respondent not to issue summon in any other future dates till the final report under Section 173 of Cr.P.C. is filed before the Competent Court by the Vigilance and Anti-Corruption Wing, Madurai, is preposterous and not maintainable, accordingly, dismissed - Petition dismissed.
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2021 (11) TMI 1189 - SC ORDER
Grant of regular bail - Money Laundering - reverse burden of proof on the accused under Section 24 of the PML Act - allegation against this applicant is of very serious nature that the applicant being an IAS officer, misused his position and power and made unlawful gain - it was held by High Court that It would be proper to grant bail to the applicant at this stage - HELD THAT:- There are no reason to interfere with the impugned order passed by the High Court granting bail to the respondent herein.
SLP dismissed.
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2021 (11) TMI 1110 - ALLAHABAD HIGH COURT
Money Laundering - scheduled offences - Seeking grant of bail - bail sought on the ground of serious and deadly ailments - Section 120B, 418, 420, 421, 467, 471 IPC - HELD THAT:- It is clear that initially the FIR was registered in which the co-ordinate bench of this Court on 13.08.2018 bailed out the applicant and during his arrest, the E.D. on 11.09.2017 moved the present complaint bearing no ECIR/01/ALSZO/2017 and re-affected his arrest on 10.11.2020 and since then he is in jail. During this period, the Department is progressing its investigation with snail's speed but seems to have filed the charge sheet. The ailing applicant is behind the bars under trial for last more than year. So far as apprehension of fleeing away is concerned, seems to be unfounded and without any basis.
The Enforcement Directorate is at the fullest liberty to make seizure the applicant's GREY accounts after grilling him as per the law. But, he cannot be put behind the bars for unlimited period.
The applicant is entitled for bail keeping in view that he is suffering from deadly ailments of Cancer and accordingly, the applicant-Kamal Ahsan be released on bail in the case on furnishing a personal bond of Rs.25 lacs and two sureties to the like amount to the satisfaction of the trial court with the conditions imposed - application allowed.
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2021 (11) TMI 1097 - DELHI HIGH COURT
When can an investigation be stated to commence under PMLA? - Who and at what stage can be termed as an accused? - Whether ECIR can be treated as an FIR for the applicability of CrPC provisions and for testing the invasion of any of the constitutional rights available to persons accused of a crime?
HELD THAT:- In view of the fact that the Hon’ble Supreme Court is seized of the matter in relation to the issue which is raised in the present petition, list these petitions on 11th February, 2022.
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2021 (11) TMI 1083 - CALCUTTA HIGH COURT
Lifting of provisional attachment - seeking permission to respondents/writ petitioners to operate the bank account and postal accounts by declaring the order of provisional attachment as having lost its efficacy as the confirmation order was not passed within a period of 180 days in terms of Section 5(3) of the Act - HELD THAT:- The writ petition is of year 2021 and the same has been allowed. We also find that no adequate opportunity was granted to the appellant to file affidavit-in-opposition. If the writ petition needs to be allowed at the admission stage and/or soon thereafter the court should record the finding that the affidavit-in-opposition is not required to be filed or if the contesting respondents give away its right to file affidavit-in-opposition.
The writ petition could not have been allowed with the finding and observations contained therein which may affect other litigants as well. That apart we find the learned writ Court after making such observations holding the appellant as a ‘non-litigant’ has granted a direction in the penultimate paragraph of the impugned order with an observation that the order passed in the writ petition will not prevent the Adjudicating Authority from passing final order of adjudication in the pending proceeding in accordance with law which, according to the appellants, had already been concluded and final orders passed. The respondents/writ petitioners have not preferred an appeal against the said finding - the present appeal filed by the department against order passed in the writ petition filed by the writ petitioners/respondents questioning the correctness and efficacy of the order of provisional attachment. As of now, the order of provisional attachment is no longer in existence because a final adjudication order has been passed on 9.11.2021. Thus, as on date the prayer sought for in the writ petition would have to be held to be infructuous. Be that as it may, the respondents/writ petitioners seek liberty to question the order passed by the Adjudicating Authority dated 9.11.2021 on all grounds, both factual and legal, including the contention that it has been passed in violation of the principles of natural justice.
A prima facie observation that an order of attachment would mean that status quo needs to be maintained and it could not mean that the person who has attached a property can appropriate the property before a final order was passed. This principle needs to be borne in mind and appropriate orders be passed by the appellant - appeal allowed.
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2021 (11) TMI 1060 - DELHI HIGH COURT
Seeking stay on operation of the impugned order be stayed till the petitioner’s pending appeal - HELD THAT:- The writ petition is partly allowed by directing that till the petitioner’s pending appeal and stay application are taken up for consideration by the Tribunal as and when it becomes functional, both sides will maintain status quo qua the subject matter of the impugned order dated 22.03.2021. Consequently, the respondents will stand restrained from taking any action against the petitioner in pursuance of the impugned order till then.
Petition disposed off.
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2021 (11) TMI 1049 - SUPREME COURT
Seeking grant of bail - HELD THAT:- The High Court has not dealt with these aspects which were relevant, including the statutory bar for grant of bail in offences concerning Prevention of Money Laundering Act.
However, as the respondents have already been released on bail pursuant to the impugned judgment that protection will continue for a period of two weeks from today.
The High Court after hearing the parties may proceed to pass the final order on the original petitions and if it cannot be disposed of may consider the argument regarding continuation of interim protection and pass appropriate orders after hearing both sides - Appeal disposed off.
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