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Money Laundering - Case Laws
Showing 161 to 180 of 196 Records
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2021 (2) TMI 1355 - KARNATAKA HIGH COURT
Non-removal of office objections - appellant submitted that owing to urgency in the matter, a memo was moved for listing the case before the Court - HELD THAT:- It is deemed appropriate to dispose of this appeal by relegating appellant to the Appellate Tribunal reserving liberty to him to press for interim /protective orders pending disposal of the appeal by the Appellate Tribunal. It is noted that the next date of hearing by the Appellate Tribunal is 11.02.2021. On the said date or any subsequent date, the Appellate Tribunal may consider the interim application of the appellant as well as the main matter.
Pending disposal of the appeal filed by the appellant herein before the Appellate Tribunal, the respondent shall not take any precipitative action pursuant to the impugned order as well as the notice dated 07.06.2018.
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2021 (2) TMI 1354 - KARNATAKA HIGH COURT
Maintainability of appeal - impugned notice has been issued during the pendency of the appeal before the Appellate Tribunal - HELD THAT:- It is considered appropriate to dispose of this appeal by relegating appellant to the Appellate Tribunal reserving liberty to him to press for interim /protective orders pending disposal of the appeal by the Appellate Tribunal. It is noted that the next date of hearing by the Appellate Tribunal is 11.02.2021. On the said date or any subsequent date, the Appellate Tribunal may consider the interim application of the appellant as well as the main matter.
Pending disposal of the appeal filed by the appellant herein before the Appellate Tribunal, the respondent shall not take any precipitative action pursuant to the impugned order as well as the notice dated 07.06.2018.
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2021 (2) TMI 1353 - MADRASHIGH COURT
Money Laundering - cheating the complainant - accused entered into an amicable settlement - offences under Sections 419 and 420 r/w 34 IPC - Section 45(1) r/w 3, 4 and 8(5) of the Prevention of Money Laundering Act, 2002 - HELD THAT:- The complete answer to the arguments of the learned counsel for the petitioners is available in the recent amendments to Sections 3 and 44 of the PML Act, vide Act No. 23 of 2019. The amendment clearly states that a prosecution under the PML Act can proceed notwithstanding the result of the prosecution under the predicate offence. That apart, the amendment also clarifies that, the date of commission of the predicate offence is not relevant and that, if a person projects the proceeds of crime as untainted, it is a continuing offence. Hence, the arguments fail.
However, the learned counsel for the petitioners prayed that a direction may be issued to the trial Court to complete the trial in a time bound manner.
This criminal original petition is dismissed with a direction to the trial Court to complete the trial within a period of six months from the date of receipt of a copy of this order subject to the appearance and cooperation of the petitioners/accused before the trial Court.
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2021 (2) TMI 1330 - SUPREME COURT
Money Laundering - provisional attachment order - Section 5(1) of the Prevention of Money Laundering Act, 2002 - proceeds of crime - HELD THAT:- The Special Leave Petition is dismissed.
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2021 (2) TMI 1295 - PUNJAB AND HARYANA HIGH COURT
Purchase of notified land from the villagers at the meagre price - obtaining fraudulent licenses for colonization in connivance with other accused / bureaucrats / public servants - Sections 420, 465, 467, 471 and 120-B of IPC and under Section 13 of the Prevention of Corruption Act, 1988 - HELD THAT:- Notice of motion for 31.03.2021.
Mr. Satya Pal Jain, Additional Solicitor General of India, assisted by Mr. Sanjay Vashisth, Sr. Panel Counsel, UOI, who is on advance notice, accepts notice on behalf of the respondent(s)-UOI.
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2021 (2) TMI 1283 - SUPREME COURT
Seeking grant of default bail - inclusion of days of remand or not - whether while computing the period of 90 days or 60 days as contemplated in Section 167 (2)(a)(ii) of the CrPC, the day of remand is to be included or excluded, for considering a claim for default bail?
HELD THAT:- The moot question has been considered by this Court in various matters, but there is divergence of opinion on how the period available for completing the investigation is to be computed. Some judgements have favoured the exclusion of date of remand, while few other cases have taken a contrary view.
The appellants rely inter alia on the line of reasoning in RAVI PRAKASH SINGH VERSUS STATE OF BIHAR [2015 (2) TMI 1371 - SUPREME COURT] and M. RAVINDRAN VERSUS THE INTELLIGENCE OFFICER, DIRECTORATE OF REVENUE INTELLIGENCE [2020 (10) TMI 1105 - SUPREME COURT] where it was held that the date of remand is to be excluded for computing the permitted period for completion of investigation - On the other hand, the Respondents seek to rely inter alia on CHAGANTI SATYANARAYAN VERSUS STATE OF AP. [1986 (5) TMI 265 - SUPREME COURT], CENTRAL BUREAU OF INVESTIGATION SPECIAL INVESTIGATION CELL-I VERSUS ANUPAM J. KULKARNI [1992 (5) TMI 191 - SUPREME COURT], STATE THROUGH CBI VERSUS MOHD. ASHRAFT BHAT & ANR. [1995 (12) TMI 389 - SUPREME COURT], STATE OF MAHARASHTRA VERSUS MRS. BHARATI CHANDMAL VARMA @ AYESHA KHAN [2001 (12) TMI 876 - SUPREME COURT], and SADHWI PRAGYNA SINGH THAKUR VERSUS STATE OF MAHARASHTRA [2011 (9) TMI 1078 - SUPREME COURT] to contend that the date of remand must be included for computing the available period for investigation for determining entitlement to default bail.
Because of the conflicting view on the proposition of law for grant of default bail, a judicial conundrum has arisen which is required to be resolved for guidance of the Court. In Chaganti, the Court examined the legislative intent for expeditious conclusion of investigation and the consequences of the failure of the prosecution to conclude investigation within the permitted period. However, the ratio in Chaganti and also in Mhd. Ashraft Bhat Supra was not brought to the notice of the 3 judges bench in M Ravindran and the Court took a contrary view in declaring that the date of remand is to be excluded for computing the period of investigation, to facilitate the claim of default bail by an accused.
Since the earlier position of law was not considered and the latest decision is of a 3 judges bench, it is necessary for a bench of appropriate strength to settle the law taking note of the earlier precedents. Unless the issue is appropriately determined, the courts across the country may take decision on the issue depending upon which judgement is brought to the Court’s notice or on the Courts own understanding of the law, covering default bail under Section 167 (2)(a) II of CrPC.
As the respondents are praying for benefit of the High Court’s bail order, which was stayed on 3.9.2020, this matter be placed before a bench of 3 judges on a near date, for consideration of the interim prayer for the respondents.
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2021 (2) TMI 1276 - MADRAS HIGH COURT
Money Laundering - Proceeds of crime in the name of daughter - scheduled offences - Murder - attempt to murder - extortion - cases under the Arms Act - escape to Dubai and continued to remote control his criminal empire with his minions in India until his demise - it is submitted that petitioner cannot be prosecuted under the PML Act for the alleged sins of her father, inasmuch as, she had no knowledge that her father had acquired the assets that stand in her name with the proceeds of crime - HELD THAT:- The fact remains that 22 cases of serious nature were registered by the police against Sridhar, which include murder, attempt to murder, extortion, criminal intimidation, use of fire arms and criminal conspiracy to commit such offences. It is not in dispute that most of the offences mentioned in the FIRs are schedule offences under the PML Act and therefore, the Enforcement Directorate was justified in registering a case under the PML Act and taking up the investigation. The Enforcement Directorate has conducted extensive investigation and has identified 5 immovable properties in the name of Sridhar, 68 immovable properties in the name of Kumari, his wife, 10 immovable properties in the name of the petitioner, apart from the immovable properties purchased in the name of the other accused. It is not the case of the accused that Sridhar was born with a silver spoon in his mouth and that by sheer dint of hard work expending his sweat and blood, he had acquired the properties.
Investigation conducted by the Enforcement Directorate shows that Sridhar never had any legitimate income and that his daughter Dhanalakshmi had not even filed income tax returns, whereas, she owns properties worth around ₹ 19 crores - If this Court, without appreciating the object and spirit of the PML Act, interferes and quashes the prosecution under the PML Act on abstract sympathetic grounds that the offspring of an accused who had amassed wealth by indulging in criminal activities should not be unnecessarily penalised, it would amount to frustrating the very will of the Parliament. In fact, the Courts should bear in mind that under Section 24 of the PML Act, the onus is on the accused to prove that such proceeds of crime are not involved in money laundering.
Finally, a complete reading of the complaint shows that there are prima facie materials for the trial to proceed against the petitioner and hence, in exercise of the powers under Section 482 Cr.P.C., the impugned proceedings cannot be quashed - this criminal original petition is dismissed.
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2021 (2) TMI 1262 - DELHI HIGH COURT
Money Laundering - drug trafficking - possession of Heroin - international syndicate of laundering the money generated out of drug trafficking in Australia and other countries - involvement of the Respondents in criminal activities that constitute offences under Part A and Part C of the schedule to PMLA - HELD THAT:- The Respondents No. 1 and 2, before this Court, have been acquitted of charges under Section 420/468/471 of the IPC and Section 29 of the NDPS Act, vide Order dated 3rd August 2015. It was observed by the learned Additional Sessions Judge/Judge, Special Court, Amritsar that the prosecution failed to bring home guilt against the concerned Respondents. The Petitioner filed a supplementary complaint on the basis of findings and recovery made during further investigation. Thereafter, taking into account all the material before it, the learned Additional Sessions Judge discharged the Respondents of Section 3/4 of the PMLA and Section 20/22/27A of the NDPS Act. The present Petitioner is aggrieved by the said Order of discharge and has impugned the same by invoking the revisional jurisdiction of this Court.
The legislation of PMLA had been enacted with the objective to prevent and control money laundering and to confiscate and seize the property obtained from the laundered money. The PMLA is a specific and special enactment to combat the menace of laundering of money, keeping in view the illegal practices that have been surfacing with respect to transfer and use of tainted money and subsequent acquisition of properties by using the same - The offence of money laundering under the PMLA is therefore, layered and multi-fold and includes the stages preceding and succeeding the offence of laundering money as well.
No scheduled offence was made out against the Respondents, this Court finds that an investigation and proceedings into the PMLA could not have been established against them at the first instance - This Court in its revisional jurisdiction will not proceed into the enquiry of the records, documents and other evidence in consideration before the learned Trial Court, but shall constrain itself to the findings of the learned Court below in the impugned order and to the question whether there is any patent illegality, error apparent on record or incorrectness.
In the present matter, the Petitioner had filed a Supplementary Complaint based on certain additional documents received by it against the Respondents, including, the Prosecution Report of Commonwealth Director of the Public Prosecution by the Australian Federal Police. The Petitioner based its findings against the Respondents on the said documents and alleged certain facts based on the apprehension that the amount being transferred from the business accounts of the Respondents were proceeds of drug trafficking and hence, was laundered money - the Additional Sessions Judge was not satisfied that the apprehension and suspicion of the Petitioner was well founded and even for the offences under the NDPS, no recovery was brought on record. It was observed that the additional evidence did not disclose prima facie any material to infer that the accused persons, Respondents herein, were involved in the commission of the offences alleged against them.
This Court finds force in the argument that since no offences were made out against the Respondents as specified in the Schedule of the PMLA, the offence under Section 3/4 of the PMLA also, do not arise as the involvement in a scheduled offence is a pre-requisite to the offence of money laundering. The Petitioner was not able to establish the allegations against the Respondents and as such the material produced was not sufficient to find guilt against them - there is no apparent error, gross illegality or impropriety found in the Order of the learned Additional Sessions Judge.
This Court does not find any cogent reason to interfere with the Order of the learned Additional Sessions Judge, Patiala House Courts, New Delhi, dated 15th May, 2017, in the revisional jurisdiction - petition dismissed.
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2021 (2) TMI 1255 - RAJASTHAN HIGH COURT
Seeking grant of Bail - bribe - allegation of disproportionate assets - offences under Sections 7, 13(1)(d) and 13(2) of the Prevention of Corruption Act and Sections 384 and 120-B of IPC - HELD THAT:- The Apex Court in Nikesh Tarachand Shah [2017 (11) TMI 1336 - SUPREME COURT] held Section 45 of the Act of 2002 unconstitutional “as a whole”. The Apex Court observed that Section 45 of the Act of 2002 was a drastic provision and is inconsistent with the principle of “presumption of innocence”. The Apex Court further observed that Section 45 of the Act of 2002 is akin to Section 20(8) of the TADA and that the latter was upheld only because it was imminent for the State to deal with terrorist activities.
The amendment, which has been incorporated under Section45 of the Act of 2002 substitutes the words “under this Act” for“punishable for a term of imprisonment of more than three years under Part A of the Schedule”. Prior to the amendment, Section 45of the Act of 2002 was applicable to offences punishable for a term of imprisonment of more than three years under Part A of the Schedule, however, after the amendment, Section 45 of the Act of 2002 was made applicable to the offences punishable under the Act. If this amendment is to be taken note of, even for offences, which are punishable for 3 years, the twin condition shave to be considered - The Apex Court in Nikesh Tarachand Shah case has already declared the twin conditions as void and unconstitutional being violative of Articles 14 and 21 of the Constitution of India and has directed the High Courts to decide the bail application ignoring the twin conditions. Merely by an amendment and substitution of some words and insertion of the Explanation, the twin conditions would not be revived, as the twin conditions were held to be violative of Articles 14 and 21 of the Constitution.
The petitioner was granted bail in the predicate FIR way back on 23.8.2017. As far as assets purchased by the petitioner is concerned, it is a flat worth ₹ 14 lacs. The petitioner himself is MBBS, MD (Pediatrics). There is no chance of his fleeing from justice or threatening the witnesses as the witnesses in this case are government personnel - the sentence provided under the Act of 2002 ranges from 3 years to 7 years, that the petitioner has remained in custody for a period of 5 months, that conclusion of the trial will take time and that the petitioner has been given benefit of bail in predicate FIR, it is deemed proper to allow the present bail application.
Bail application allowed.
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2021 (2) TMI 1234 - TELANGANA HIGH COURT
Seeking grant of anticipatory bail - illegal unregulated collective investment scheme by collecting deposits from public, without the approval of RBI/SEBI or any government agency, under the name board of "Real Estate Business" - laundering the ill-gotten wealth which is acquired by duping the lakhs of gullible public in the guise of real estate business - HELD THAT:- In the instant case, major part of the investigation has been completed and the Chairman and other Directors of the Company were granted bails and in most of the cases, the conditions imposed against the Directors while granting bail were relaxed. Though the respondent authorities have registered the case in the year 2018, a notice was issued for the first time in the year 2020 and that the petitioner has been cooperating with the authorities and attending before them along with required information as and when called for. The delay in issuing the notice after two years has not been properly explained by the respondent authorities - the application for anticipatory bail in case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [2019 (9) TMI 286 - SUPREME COURT], which was relied upon by the learned Counsel for the respondent authorities, was rejected on merits of the allegations and other materials and hence, the facts and circumstances of that case are entirely different from the facts of the present case.
Since the petitioner has been regularly attending before the respondent authorities as and when called for and cooperating with the investigation by furnishing required information; the main accused have already been arrested and their custodial interrogation has already been done by the respondent authorities; major part of the investigation has already been completed and the properties worth ₹ 4109.13 Crores have already been attached, the custodial interrogation of the present petitioner is not required. In such circumstances, granting anticipatory bail to the petitioner on certain conditions is justifiable.
The petitioner is directed to surrender before the Assistant Director, Directorate of Enforcement, Hyderabad, within a period of fifteen days from today, and on such surrender, he shall be released on bail on -his executing a personal bond to the tune of ₹ 5,00,000/- with two sureties each to the like amount to his satisfaction - The petitioner is granted anticipatory bail on the terms and conditions imposed - application allowed.
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2021 (2) TMI 1215 - DELHI HIGH COURT
Money Laundering - it is the grievance of the Petitioners that since the Enforcement Directorate has not written any further communications limiting the extent to which the Petitioners’ bank accounts are frozen and hence the banks are not lifting the said freezing order - HELD THAT:- Since there is no dispute that the initial freezing orders stand amended and limited the Petitioners in these cases are permitted to approach the banks with the present order, in order to ensure that their bank accounts are duly de-frozen, so long as the amounts, as contained in the amendment of attachment order dated 28th December 2020, are maintained either by way of a deposit or a bank guarantee or in any other manner.
The limitation period for challenging the order of the Adjudicating Authority shall remain suspended during the pendency of the present writ petitions - List for hearing on 2nd March, 2021 at 2:30 P.M.
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2021 (2) TMI 1185 - MADRAS HIGH COURT
Money Laundering - proceeds of crime - diversion of funds during the demonetisation period - conversion of old currency notes into new currency notes - the trial of the offences under the PMLA can proceed or not, when the FIR with regard to the schedule offence was closed for want of evidence and in the absence of connected evidence with a crime of schedule offence - prosecution for offences under Sections 3 and 4 of the PMLA - HELD THAT:- From a reading of the provisions in the PMLA that though the commission of schedule offence is a fundamental pre-condition for initiating proceedings under the Act, ''the offence of money laundering is independent of the schedule offences'', the scheme of the PMLA indicates that it deals only with laundering of money acquired by committing the schedule offence. In other words, the PMLA deals only with the process or activity with the ''Proceeds of the Crime'' including its concealment, possession, acquisition or use. So that in the Act under Section 44 explanation (i) clearly indicated that the Special Court while dealing with the offence under the Act shall not be dependent upon any orders passed, in respect of the schedule offence.
Another argument of the learned counsel for the petitioners that the observation of the trial Court, while granting bail, that there is no material to connect the petitioner with the offence will not be enough to quash the case which has to be decided only on legal evidence let in by the respondent. Therefore, we find that the argument of the learned counsel for the petitioners in this aspect is legally unsustainable and is accordingly rejected.
The explanation to Section 44(1) of the PMLA is complete answer to the statement of the learned counsel for the petitioners. The distinction that the counsel for the petitioners sought to make for distinguishing the law laid down by this Court in VGN Developers [2019 (10) TMI 1236 - MADRAS HIGH COURT] is a distinction without a difference. Considering the above fact, we should not forget that money laundering, being an economic offence, poses a serious threat to the National economy and National interest and committed with cool calculation and deliberate design and with motive of personal gain regardless of the consequences to the society.
Petition dismissed.
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2021 (2) TMI 1033 - GUJARAT HIGH COURT
Maintainability of petition - availability of alternative remedy - Money Laundering - search and seizure proceedings - confiscation of properties - It is the case of the petitioners that upon drawing the panchnama, the Assistant Director issued a letter dated 22.7.2020, intimating the petitioners not to part with any of the noted bank accounts, properties and insurance policies named therein, without prior sanction and further not to withdraw, renew or deal with the same in any manner without prior permission of the respondent No.2 - HELD THAT:- The judgment of the co-ordinate bench in the case of JJIGNESH KISHOREBHAI BHAJIAWALA VERSUS STATE OF GUJARAT AND ORS. [2017 (7) TMI 1377 - GUJARAT HIGH COURT] clinches the issue. The said writ petition was dismissed by this court, inter alia, holding that the PML Act was enacted to prevent money laundering and to provide for the confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. It has been further held that in terms of Section 8 of the PML Act, the Adjudicating Authority independently considers the issue of such attachment and if it has reason to believe that the person is in possession of proceeds of crime, he shall issue show cause notice to such person. The accused is entitled to explain the sources of income, earning or assets, out of which or by means of which he has acquired the property, lead evidence and furnish any other information in his possession to justify the legitimate means of acquiring the properties in dispute. It is only after taking all the submissions of the accused and documents brought on record to establish the sources of his property so attached that the Adjudicating Authority takes a final decision on the same. In paragraph 22, it has been further observed that any person aggrieved by an order made by the Adjudicating Authority under Section 8 of PML Act can avail the remedy of appeal under Section 26 of PML Act to the Appellate Tribunal, whereby again the accused person is given ample opportunity of being heard, before any orders are passed. It is only when a person is aggrieved by the decision or order of the Appellate Tribunal that he may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him. The remedy of appeal under Section 42 of PML Act is in the nature of second appeal.
Section 26 of the PML Act provides for remedy of appeal to the Appellate Tribunal to an aggrieved person. Any person aggrieved by an order made by the Adjudicating Authority under Section 8, can file an appeal under the aforesaid Section 26 to the Appellate Tribunal and the parties concerned will get an opportunity to put-forth his case. A further appeal is provided under Section 42 before the High Court within 60 days from the date of the communication of the decision or order of the Appellate Tribunal. Therefore, reading the provisions of Section 17 in juxtaposition with the provisions of Section 8 read with further provisions of Sections 26 and 42, an alternative efficacious remedy has been provided to the aggrieved person. The PML Act, therefore, is a Code unto itself.
In view of the effective alternative efficacious remedy available to the persons aggrieved so also considering the object of enacting the PML Act and the principle enunciated by this court, this court would be loath to exercise its extra-ordinary power under Article 226 of the Constitution of India - Petition dismissed.
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2021 (2) TMI 620 - DELHI HIGH COURT
Validity of provisional attachment order - proceeds of crime - unauthorised payments for obtaining the coal blocks allocation - allegations against her in the PAOs date back to the time when she was a PR professional i.e., sometime between 2007-08 to 2015 when the FIR was lodged - HELD THAT:- The manner in which all the liquid savings of the Petitioner have been completely frozen appears completely unjustified, especially when the allegations against the Petitioner are merely in the realm of speculation, at this stage. The letter dated 22nd January 2021 issued to M/s. Centrum attached the Petitioner’s entire deposits to the tune of ₹ 6 crores. Coupled with the assets attached in the PAO, the total assets attached are cumulatively worth 9,23,51,787/- crores, when admittedly, even as per the ED’s own case, the total amount received by M/s. Centrum from M/s. AES Chhattisgarh Energy Private Ltd is only ₹ 5.60 crores. Some opportunity ought to have been granted to the Petitioner before passing orders attaching all her accounts and deposits. Attaching all her assets was totally unwarranted.
It is directed that in place of the attachment of the assets of the Petitioner, as per the PAOs dated 22nd January, 2021 and 8th February, 2021, the Petitioner shall voluntarily keep a fixed deposit of ₹ 3 crores and not dispose of the immovable property, being Commercial Shed bearing No. Gat No.-126, Sawardari, Tal-Khed, Chakan, Pune-410501, Maharashtra, India, valued at ₹ 2,24,43,670/-. Details of the Fixed deposit of ₹ 3 crores, shall be provided to the ED within one week. Subject to the above terms being complied with within a week by filing of an affidavit of undertaking before this Court, the Petitioner would be free to deal with all other assets - Petitioner is now free to approach the Adjudicating Authority in accordance with law, at the appropriate stage.
The de-freezing of the bank accounts shall be effected by the banks concerned upon service of a digitally signed copy of this order, downloaded from the High Court’s website - Petition disposed off.
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2021 (2) TMI 488 - DELHI HIGH COURT
Money Laundering - attachment of the bank account of the Petitioner - Section 8 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- A perusal of the impugned order shows that the application filed by the Petitioner has not been considered by the Adjudicating Authority. According to ld. counsel for the Petitioner, the question as to whether “reasons to believe” have to be be supplied or not, has been decided by two judgments i.e. the Division Bench of this court in J. SEKAR, S. RAMACHANDRAN, K. RETHINAM, SRS MINING, T. VINAYAK RAVI REDDY, SURENDRA KUMAR JAIN AND ORS., M/S. SWASTIK CEMENT PRODUCTS PVT. LTD. & ORS., DHAWAN CREATIVE PRINTS PVT. LTD. AND ANR., APARAJITA KUMARI & ANR., PRATIBHA SINGH & ANR. VERSUS UNION OF INDIA & JOINT DIRECTOR, ENFORCEMENT DIRECTORATE & ANR. [2018 (1) TMI 535 - DELHI HIGH COURT].
The Adjudicating authority ought to have decided the application and thereafter proceeded to finally adjudicate the matter. However, the submission as to availability of an alternate remedy is not without merit. Under Section 26 of the PML Act, an appeal lies to the Appellate Tribunal against an order of the Adjudicating Authority. Merely because of the fact the application was not decided by the authority would not be sufficient ground to entertain the present writ petition. The same could be a plea that the Petitioner can raise before the PMLA Appellate tribunal as well - This Court directs the Petitioner to approach the Appellate Tribunal under Section 26 of PML Act. The said Appellate Tribunal would firstly take a view on the Application filed by the Petitioner, and after adjudicating upon the said Application, the Appellate Tribunal shall proceed to hear the appeal on merits, against the order passed by the Adjudicating Authority.
Petition disposed off.
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2021 (2) TMI 390 - DELHI HIGH COURT
Provisional attachment of the properties - while the implementation of the resolution plan was in process, the impugned order has been passed by the Directorate of Enforcement attaching the properties of Respondent No.4, including three properties already mortgaged to the Bank. It is the case of the Petitioner that this has had a negative impact on the CIRP and realization of the debt of the Petitioner from the Respondent No.4 - HELD THAT:- The ED’s order of provisional attachment of the properties of Respondent No. 4 has been passed after the approval of the resolution plan by the NCLT, the said provisional attachment would prima facie be contrary to Section 32A of the IBC.
The recent judgment of the Supreme Court in MANISH KUMAR VERSUS UNION OF INDIA AND ANOTHER [2021 (1) TMI 802 - SUPREME COURT] has extensively dealt with this issue in context of Section 32A of the IBC and held that Significantly every person who was associated with the corporate debtor in any manner and who was directly or indirectly involved in the commission of the offence in terms of the report submitted continues to be liable to be prosecuted and punished for the offence committed by the corporate debtor. The corporate debtor and its property in the context of the scheme of the code constitute a distinct subject matter justifying the special treatment accorded to them. Creation of a criminal offence as also abolishing criminal liability must ordinarily be left to the judgement of the legislature. Erecting a bar against action against the property of the corporate debtor when viewed in the larger context of the objectives sought to be achieved at the forefront of which is maximisation of the value of the assets which again is to be achieved at the earliest point of time cannot become the subject of judicial veto on the ground of violation of Article 14.
Let copy of the resolution plan be placed on record by the Petitioner Bank. Counter affidavit be filed within four weeks. Rejoinder thereto, if any, be filed within four weeks thereafter. The ED is permitted to take the above objections, with respect to the jurisdiction of this court, in its counter affidavit. The same shall be heard as a preliminary objection - List for hearing on 18th May, 2021.
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2021 (2) TMI 117 - SUPREME COURT
Freezing of Bank Accounts - appellant while assailing the order passed by the High Court, inter alia contended that the freezing of the bank accounts maintained by the appellant company has prejudiced the appellant, inasmuch as, the amount in the account which belongs to the appellant is made unavailable to them due to which statutory payments to be made to the Competent Authorities under various enactments is withheld and the payment of salary which is due to the employees is also prevented - HELD THAT:- If the salutary principle is kept in perspective, in the instant case, though the Authorised Officer is vested with sufficient power; such power is circumscribed by a procedure laid down under the statute. As such the power is to be exercised in that manner alone, failing which it would fall foul of the requirement of complying due process under law. We have found fault with the Authorised Officer and declared the action bad only in so far as not following the legal requirement before and after freezing the account. This shall not be construed as an opinion expressed on the merit of the allegation or any other aspect relating to the matter and the action initiated against the appellant and its Directors which is a matter to be taken note in appropriate proceedings if at all any issue is raised by the aggrieved party.
What has also engaged the attention of this Court is with regard to the plea put forth on behalf of the appellant regarding the need to defreeze the account to enable the appellant to pay the statutory dues. The appellant in that regard has relied on the certificate issued by the Chartered Accountant, (AnnexureP/ 38 at page 231) which indicates the amount payable towards ITDS, PF, ESI, Professional Tax, Gratuity and LIC employees’ deductions, in all amounting to ₹ 79,93,124/. Since we have indicated that the freezing has been done without due compliance of law, it is necessary to direct the respondents No.1 to 3 to defreeze the respective accounts and clear the cheques issued by the appellant, drawn in favour of the Competent Authority towards the ITDS, PF, ESI, Professional Tax, Gratuity and LIC employees’ deductions, subject to availability of the funds in the account concerned. Needless to mention that if any further amount is available in the account after payment of the statutory dues and with regard to the same any action is to be taken by the respondent No.4 within a reasonable time, it would open to them to do so subject to compliance of the required procedure afresh, as contemplated in law.
It is directed that the respondents shall defreeze the accounts and honour payments advised by the appellant towards statutory dues - appeal allowed - decided in favor of appellant.
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2021 (2) TMI 85 - KERALA HIGH COURT
Grant of Anticipatory Bail - Smuggling - Money Laundering - siphoning of funds - predicate offence - proceeds of crime - argument of the learned Senior Counsel that the predicate offence has not been identified and that the prosecution initially started with the proceeds of crime as that from the act of smuggling has later gone to 'kickbacks' in LIFE Mission project - HELD THAT:- This Court had the opportunity to consider the application for anticipatory bail filed by the applicant and it was held that the materials suggested the complicity of the applicant and that the prosecution has to get opportunity to delve further into the allegations in the light of the statements recorded. The applicant was confronted with the statements of the co-accused in this case pertaining to his involvement and he has not been able to give a satisfactory explanation regarding the variance between his version and the versions of the other witnesses as an accused. The applicant could not give a satisfactory explanation regarding why he was anxious to introduce the 2nd accused to the witness Venugopal to facilitate parking of her money in a locker. A2 has given statements to the effect that the applicant was aware of the deposits and withdrawals from the locker. It is true that the prosecution may not have been able to establish with precision how the proceeds of crime was generated. But indications about the applicant having knowledge of the smuggling activities in which A2 was involved suggests that he also had a share in the proceeds of crime. The term "proceeds of crime" is wide enough to include proceeds which have been directly or indirectly obtained as a result of criminal activities mentioned as scheduled offences.
Reverting to the rigour of the twin test under section 45 of the PMLA, it has to be considered whether the applicant would qualify to get bail. There is no doubt about the complicity of the applicant and there are no reasonable grounds to believe that he is not guilty. However, it should also be considered whether there is a likelihood of the applicant committing any offence while on bail. I am afraid that the prosecution has not been able to establish this fact. Going by the allegations made by the ED, the applicant was indulged in laundering of ₹ 64 lakhs which was seized from the SBI locker. There is no indication that the applicant had anything to do with the locker belonging to A2 in Federal Bank. Thus the proviso to Section 45 (1) of the PMLA would operate in view of the fact that the money allegedly laundered is less than rupees one crore. The fact that the applicant is suffering from various illness would also come to his benefit as the proviso to Section 45 exempts a sick person from the rigours of the Section - The accused may not be detained just to give him a taste of imprisonment is what the Supreme Court held.
The applicant has been in custody since 28/10/2020. He has been subjected to interrogation including custodial interrogation in a number of times. The present pandemic times also does not encourage incarceration of an accused indefinitely. There are no rationale for continuing the applicant's judicial custody as an undertrial in this case The applicant is therefore, entitled to be released on regular bail on stringent conditions.
The bail application is allowed and the applicant is directed to be released on bail on execution of bond for ₹ 5,00,000/- with two solvent sureties for like amount each to the satisfaction of the jurisdictional Court, and on further conditions imposed.
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2021 (1) TMI 1319 - MADRAS HIGH COURT
Money Laundering - scheduled offences - recording of ECIR as a prosecution exhibit - objection by the defence on the ground that the said document was not the original but a photocopy and insisted on marking of the original - HELD THAT:- Suo motu FIRs are normally registered by the police in white-collar offences where the date and timings in the FIR have least significance. The Enforcement Directorate is not conducting an investigation under Chapter XII of the Cr.P.C., but, on the strength of the powers of search, seizure, recording of statements and arrest, conferred on them by various provisions of the PML Act - A person cannot be convicted or acquitted based on the entries in the ECIR form, because, an offence under the PML Act has to be proved by examining witnesses and proving documents in order to establish that the accused had involved himself in a criminal activity, acquired assets and had projected the proceeds of the crime as untainted property. In this scheme of things, the ECIR document really has no significance.
The Special Public Prosecutor placed strong reliance on Section 294 Cr.P.C. to justify his request to the trial Court for marking an office copy of the ECIR form - The Special Public Prosecutor could have obtained the original of the ECIR form from the Adjudicating Authority in New Delhi either by sending a letter to him or filing a petition under Section 91 Cr.P.C. Instead of guiding the Court properly, he has relied upon "a non-existent provision', viz. Section 300 C.R.P."
In the worst scenario, where, the ECIR form itself is not marked during trial, that by itself, will not vitiate the trial, for the simple reason that, the objective satisfaction arrived at and recorded in the ECIR form by the Enforcement Officer that an investigation under the PML Act has to be commenced based on the knowledge acquired by him that the police have registered a case for a 'schedule offence', can, by no stretch of imagination, either lead to the proof of guilt or otherwise of the person prosecuted under the PML Act. Conviction or acquittal of an accused under the PML Act, can be based only on substantive evidence and not on the mere objective satisfaction arrived at and recorded by the Enforcement Officer in the ECIR form - an ECIR form is only an opinion of the Enforcement Officer based on the case registered for a 'schedule offence' that an investigation under the PML Act should be commenced. The melancholic part in criminal justice system is that, it is often found one blind leading another and the two finally ending up in a cul-de-sac.
The impugned order is set aside and the trial Court is directed to permit the prosecution to mark the copy of the ECIR form recording the objections of the defence - this criminal revision is allowed.
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2021 (1) TMI 1187 - MADRAS HIGH COURT
Money Laundering - smuggling of Gold - framing of charges under the PML Act - HELD THAT:- It cannot be stated that there are no prima facie materials against the accused for framing charges under the PML Act. This Court cannot go into disputed questions of fact, while dealing with a petition under Section 482 Cr.P.C.
This criminal original petition stands dismissed with liberty to the petitioner to raise all the points before the trial Court after the charges are framed.
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