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Money Laundering - Case Laws
Showing 81 to 100 of 196 Records
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2021 (7) TMI 305 - GUJARAT HIGH COURT
Money Laundering - seeking release of provisionally attached of movable properties - waterfall mechanism - overriding provisions of IBC - NCLT had already passed an order appointing an Official Liquidator for the sale of the assets of the Company In Liquidation - Adjudicating Authority under the PMLA ought not to have passed the Provisional Attachment Order - HELD THAT:- On a plain reading of the provisions of the IB Code, it is clear that statutory dues, which come within the meaning of ‘operational debt’, could be claimed against the Corporate Debtor only under the provisions of the IB Code and not under any other law. All such claims have to be lodged with the Official Liquidator and are payable under the waterfall mechanism provided in Section 53 of IB Code - the dues relatable to the vehicles belonging to the Corporate Debtor can only be recovered under the provisions of the IB Code, i.e. the waterfall mechanism under Section 53 of the IB Code and not from the petitioners, being the auction purchasers. The petitioners could be held liable to pay statutory dues in respect of the subject vehicles, which have been claimed by the respondent – Regional Transport Offices after their purchase by the petitioners in April 2019, only from the date when they had purchased the subject vehicles after having exercised their right to raise objections to such claim.
It would be appropriate to direct the petitioners to make payment of the statutory dues from the date of purchase of the subject vehicles by the petitioners, which would be made subject to other proceedings in relation to the said vehicles since the petitioners, being the auction purchasers, could not be asked to make payment of the statutory dues claimed against the Corporate Debtor in liquidation in respect of vehicles prior to their date of purchase by the petitioners.
The respondents – Regional Transport Offices, Gujarat and Maharashtra are directed to complete the transfer proceedings of the subject vehicles purchased by the petitioners from the Court appointed Official Liquidator of M/s. Siddhi Vinayak Logistic Ltd., which shall be subject to the outcome of the proceedings that may be pending under the provisions of the PMLA or under any other corresponding law - the petition is partly allowed.
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2021 (6) TMI 1098 - TELANGANA HIGH COURT
Seeking to grant anticipatory bail - cheating and other offences - fraudulent activity in regard to the sanction of loans - HELD THAT:- A perusal of the material on record would show that basing on the complaints lodged by the I.F.C.I. alleging cheating and other offences in respect of to V.N.R. Infrastructures Limited, Hyderabad and Sri Krishna Stockists and Traders Private Limited, Rajahmundry, C.B.I., BSFC, Bangalore, registered two cases. Initially the petitioner was not made as an accused in the complaints, but in the charge sheets filed in both the cases, the name of the petitioner was shown as A.3 and A.5 respectively. The petitioner was arrested and he was released on bail in the said cases. The record further discloses that in the year 2017 itself, the S.F.I.O., issued notice to the petitioner to appear before the S.F.I.O. and in compliance of the said notice, the petitioner had appeared and his statement was recorded. In the year 2020, the S.F.I.O. again issued summons to the petitioner directing him to appear before the S.F.I.O. on 09.11.2020 and apprehending arrest in connection with the said summons, the petitioner filed Crl.P.No.5980 of 2020 and this Court granted anticipatory bail to the petitioner vide order dated 18.03.2021.
Admittedly, entire investigation has been completed and charge sheets were filed by the C.B.I., BSFC, Bangalore and the C.B.I. and seized all the documents connected to the subject loan transactions and those documents were filed along with the charge sheets. Hence, there may not be a chance of tampering with the investigation at this stage.
Considering the facts and circumstances of the case and since the petitioner has already been appeared before the S.F.I.O., in compliance with the notice, dated 18.07.2017 and his statement has already been recorded; entire investigation has already been completed and charge sheets were also filed in both the complaints, the custodial interrogation of the petitioner at present may not be required. In such circumstances, granting anticipatory bail to the petitioner on certain conditions is justifiable - petition allowed.
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2021 (6) TMI 1096 - CHHATTISGARH HIGH COURT
Direction to provide a copy of ECIR to the petitioners forthwith - HELD THAT:- A careful perusal of writ petition would show that respondent No.2 has been impleaded by his name, but he has not been impleaded in his official capacity, whereas the Assistant Director (Enforcement Directorate) ought to have been impleaded as respondent herein as writ is sought against Assistant Director (Enforcement Directorate) - Likewise, the petitioners have also pleaded that action of respondent No.2 in not supplying a copy of ECIR is arbitrary and irrational, but no quashing has been sought.
In that view of the matter, instead of proceeding further, two weeks time is granted to learned counsel for the petitioners to make the record straight if they are so adviced - List this matter after two weeks.
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2021 (6) TMI 1091 - MADRAS HIGH COURT
Seeking enlargement on bail - main allegation against the petitioners is that the petitioners and the others, who are family members availed loans on the basis of inflated value of the properties mortgaged - wilful diversion of funds through various group accounts - whether in the facts and circumstances of the case, bail can be granted under Section 45 (1) of Prevention of Money Laundering Act? - twin conditions satisfied or not - HELD THAT:- In view of the amendment, the twin conditions must be satisfied, who seeks bail. A reading of this provision, will take us to the twin conditions that are imposed in Section 37 of NDPS Act. The wording 'in both the Section' are verbatim similar in nature. So, this shows the real purpose and object for which, this amendment has been introduced. So, I am of the considered view that the Parliament thought it fit to treat the offences against the economy on par with the offences against the health. That is why, we see verbatim reproduction of words used section 37 in NDPS Act into the provision of Money Laundering Act.
The reason can be seen in the present day situation. At one end the economy of the country is growing and at another end, Offences against the economy, more particularly, Banking frauds are on the rise running to several Crores. The economic offences are more capable of destablishing the very sustenance of penniless Indian majority than affecting the society at large. When we approach this provision from this angle, we see more reason than one expressed in the words used. But, this is also greatly commented as draconian in nature. But as long as it remains in the Statute Book, it has to be applied with its full vigour and force - unless the petitioners satisfy the above important condition under Section 45 (1) of the Prevention of Money Laundering Act, they cannot be granted bail even though they are in custody for more than 70 days.
Entire case depends upon the documentary evidence - HELD THAT:- The question of tampering the evidence will not arise. So, according to the learned Senior counsel, continuation of detention will not serve any purpose. They are also ready to surrender their Passports; ready to abide any condition that may be imposed by this Court and also ready to co-operate with the investigation conducted by CBI as well as the Enforcement Directorate. According to them, these undertakings are sufficient enough for granting bail - Serious allegations have been levelled against these petitioners that they siphoned off the loan amount obtained from the Bank and forged documents for the purpose of laundering the money.
Considering the stringent provision, the amount involved, the modes operandi adopted, they are not entitled for Bail - bail Petitions are dismissed.
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2021 (6) TMI 1071 - GUJARAT HIGH COURT
Seeking stay of the operation, implementation and execution of the order - HELD THAT:- The order dated 17.01.2019 has been challenged by the applicant by way of First Appeal No.1224 of 2021. The First Appeal came to be admitted by this Court vide order dated 07.06.2021.
Let Notice be issued to the opponent – returnable on 12.07.2021. Till the next returnable date, the opponent shall maintain status quo as regards the nature, character and possession of the attached properties.
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2021 (6) TMI 1070 - GUJARAT HIGH COURT
Maintainability of appeal - HELD THAT:- This appeal is under Section42 of the Prevention of Money Laundering Act, 2002 against the order passed by the Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS, PBPT Act at New Delhi.
The appeal requires consideration. Admit - Let Notice of admission be issued to the otherside.
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2021 (6) TMI 1069 - DISTRICT COURTS NEW DELHI
Seeking grant of Bail - criminal conspiracy - fraudulent import of fertilizers and other materials for fertilizer production at inflated prices - commission of crime - sham consultancy agreements - fake invoices for consultancy services were prepared - Applicability of twin conditions of Section 45 of PMLA - HELD THAT:- The issue of applicability of twin conditions of amended Section 45 of PMLA has arisen before the various Hon'ble High Courts of this country and divergent view has come across. The Hon'ble High Court of Delhi in the matter of UPENDRA RAI VERSUS DIRECTORATE OF ENFORCEMENT [2019 (7) TMI 576 - DELHI HIGH COURT] and, the Hon'ble Madhya Pradesh High Court in the matter of DR. VINOD BHANDARI VERSUS ASSISTANT DIRECTOR DIRECTORATE OF ENFORCEMENT [2018 (8) TMI 1848 - MADHYA PRADESH HIGH COURT] and the Hon'ble Bombay High Court in the matter of CHHAGAN CHANDRAKANT BHUJBAL VERSUS ASSISTANT DIRECTOR ENFORCEMENT DIRECTORATE AND ANR [2016 (6) TMI 1148 - BOMBAY HIGH COURT] have taken a view that post amendment of Section 45 of PMLA, twin conditions do not get revived and hence, are inapplicable to the bail application filed under the PMLA - However, a contrary view has been taken by the Hon'ble High Court of Orissa at Cuttack in the matter of MOHAMMAD ARIF VERSUS DIRECTORATE OF ENFORCEMENT, GOVT. OF INDIA [2020 (7) TMI 425 - ORISSA HIGH COURT] and by the Hon'ble High Court of Patna in the matter of VIDYUT KUMAR SARKAR VERSUS THE STATE OF BIHAR AND ORS. [2020 (7) TMI 581 - PATNA HIGH COURT].
Further, till date, no court has declared the twin conditions mentioned in the amended Section 45 of PMLA to be unconstitutional on the ground of it being violative of Article 14 of the Constitution of India.
Further, having regard to the fact that twin conditions in the amended Section 45 of the PMLA have not been struck down being unconstitutional till date by any court in India, therefore, twin conditions as mentioned in Section 45 of the PMLA are required to be made applicable to the present bail application.
It is apparent that accused played a major role by getting the illegal commission transferred from M/s. Uralkali General Trading, Gibralter and Gulf Marine, Dubai into the account of entities owned by Rajiv Saxena and from there, the said commission was transferred as per his instructions and that of co-accused Pankaj Jain and Sanjay Jain - the accused in his statement under Section 50 of PMLA has not been able to give the source of such huge funds received by him in cash or in the entities owned by him. Therefore, there is a prima facie material to hold that accused is involved in the offence of money laundering and since the Ld. Special Counsel for the ED has opposed the grant of bail, therefore, as per Section 45 of PMLA, accused is not entitled to bail.
The accused is also not entitled to bail as per proviso to Section 45 of the PMLA on the ground of he being a sick and infirm person as there is nothing on record to suggest that accused is sick to that extent that in case he remains incarcerated, then his health condition will further deteriorate.
The investigation is at the stage of collection of evidence regarding identification of proceeds of crime and finding of trail of remaining ill gotten money, which in the case of money laundering is generally routed through a complex web of companies. Therefore, taking into account the above mentioned factors, even if twin conditions mentioned in Section 45 of PMLA are ignored, then also having regard to the serious economic offence committed by accused wherein the alleged amount of ₹ 685 Crores has been laundered, the possibility of tempering with the witnesses, the accused being an influential person and the investigation being at an initial stage, the court is not inclined to release the accused on bail, even as per Section 439 Cr.P.C.
Bail application dismissed.
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2021 (6) TMI 1061 - BOMBAY HIGH COURT
Provisional attachment of property in cash - person against whom action is taken, is found to be in possession of proceeds of crime or not - concealment of such proceeds or not - confiscation under Chapter III of the PML Act - search and seizure proceedings - HELD THAT:- It is important to note that in the present case, the property was seized, after a search was carried out under Section 17 of the PML Act on 23 March, 2021, and on 9 April, 2021, that is to say, within about a fortnight of such seizure, the Director, who was of the view that there was a sufficient case to proceed under Section 5 of the PML Act, ordered its provisional attachment. There is no substance in the Petitioners’ contention that having seized the property under Section 17 of the PML Act, the State was bound to apply for continuation of seizure under sub-section (4) of that section, and not exercise powers under Section 5 of the PML Act.
The initial search followed by seizure may well be under Section 17 of the PML Act, but if the Director had reason to believe that the seized property was proceeds of crime and was likely to be dealt with by the person from whose possession it was seized, the Director may still choose to act under Section 5 of the PML Act and order its provisional attachment - The two provisions, namely, Sections 5 and 17 are not mutually exclusive alternative powers; there is no reason why they cannot be simultaneously resorted to - The fact that the property seized was hard cash, by itself and without anything more, did give rise to a reason to believe that it was likely to be transferred or dealt with by the person in whose possession it was found.
There is adequate compliance with both pre-conditions of Section 5 of the PML Act for the Director to pass the impugned order of provisional attachment - Petition dismissed.
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2021 (6) TMI 1048 - JAMMU & KASHMIR HIGH COURT
Validity of attachment of property - whether it is permissible for the Assistant Director, Directorate of Enforcement, acting under the provisions of Prevention of Money Laundering Act, 2002, to ask the Tehsildar, Narbal, Budgam, Kashmir, not to issue revenue extracts vis-à-vis certain properties which, admittedly, have not been attached under Section 5 of the said Act and have, in fact, been left out of attachment order already made by and confirmed by the competent authority?
HELD THAT:- In the instant case, except issuing the impugned communication dated 18.03.2020 to the concerned Tehsildar directing him not to issue revenue extracts of even those properties earlier belonging to Zahoor Ahmad Shah Watali and his family members, that too, by an officer of the rank of Assistant Director, not designated in sub-section (1) of Section 5 of the Act, no other procedure contemplated by the provision of law has been followed. Instead it is consistently stated that the case is under further investigation and that mutations and registration of the properties at this stage in favour of third party may result in non-availability for attachments and may also jeopardise the ongoing investigation and siphoning off proceeds of crime - Assistant Director is no body either in terms of the provision of Section 5(1) of the Act or in terms of Rule 5 of the Prevention of Money-laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013, which prescribes the manner of taking possession of immovable property.
The provision of law manifestly, without any doubt, mandates that there must be material to found the belief, meaning thereby that such material has to be in existence at the time such belief is entertained and at the time of making the provisional order of attachment. So, for making the order of attachment, there has to be evidence in existence. Conversely, if there is no provisional order of attachment made, it connotes that as at present there is no evidence in existence - The satisfaction about the ingredients essential to making the provisional order of attachment must relate to the present time, not to presumptive future.
It is not permissible for the designated officer of Directorate of Enforcement, acting under the provisions of Act, to ask the Tehsildar, Narbal, Budgam, Kashmir, not to issue revenue extracts vis-à-vis the properties which, admittedly, have not been attached under Section 5 of the said Act and have, in fact, been left out of attachment - the impugned communication dated 18.03.2020 is not only antithetic to the essentials envisaged by the provision of law, but is also without jurisdiction, and, therefore, the communication in question is rendered wholly unwarranted and illegal. It, therefore, deserves to be quashed.
Petition allowed.
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2021 (6) TMI 1044 - MADHYA PRADESH HIGH COURT
Attachment of property involved in money laundering - proceeds of crime - interpretation of statute - expression “reason to believe” which is different from “reason to suspect” - HELD THAT:- Section 5(5) of the PML Act, 2002 makes it clear that order of attachment of competent authority shall be provisional in nature and said authority is under a statutory obligation to file a complaint before the adjudicating authority within 30 days from the date of attachment - Section 8(1) of the PML Act, 2002 makes it obligatory for adjudicating authority to examine the complaint and if he has “reason to believe” that any person has committed an offence, it may serve a notice to said person calling upon him to indicate the sources of income, earning or assets. It may also issue show-cause notice to such person. After obtaining reply, the adjudicating authority under Section 8(2) of the PML Act is required to consider the reply, hear the aggrieved person and after taking into account all relevant materials, pass an order recording a finding whether all or any of properties referred to in the notice issued under sub-section (1) are involved in money laundering.
A microscopic and conjoint reading of Sections 5 and 8 of the MPL Act leaves no room for any doubt that orders of attachment issued by invoking Section 5 is 'provisional' in nature. Thus, the attachment order passed by the competent authority and “reason to believe” therefor is also tentative / provisional in nature subject to confirmation by the adjudicating authority.
If Scheme ingrained in Sec.24 and 26 of the Act of 1988 is compared with the PML Act, it will be clear that the Scheme is almost pari materia. For this reason also, it is deemed proper to hold that “adjudicating authority” is best suited and statutorily obliged to consider the validity of provisional attachment order and the case put forth by the present appellants - there are substance in the argument of learned counsel for the appellants that despite specific pleading contained in para – 5.7 of the writ petition, learned Single Judge has erroneously held that there is no such foundation in the pleadings of the writ petition. The appellants can very well to raise this relevant ground before the adjudicating authority and the said authority shall be obliged to take into account this ground while taking a decision.
The order of provisional attachment is not a final order and the appellants have a remedy to raise all the pleas including that of jurisdiction of attaching authority and discrimination before the adjudicating authority - Appeal disposed off.
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2021 (6) TMI 1039 - ANDHRA PRADESH HIGH COURT
Seeking pre-arrest bail - scheduled offences - first contention of respondent is that the offences under PML Act cause a serious threat not only to the financial system of the country but also integrity and sovereignty and for the offences under the PML Act, pre-arrest bail should not be granted - HELD THAT:- There cannot be any straitjacket formula for exercising jurisdiction under Section 438 Cr.P.C. and it all depends on the facts and circumstances of the case and where the fundamental right to personal liberty of accused is involved Courts cannot exercise jurisdiction mechanically - In the case on hand admittedly summons were issued to the petitioner in the year 2017 directing him to appear before the officials whereas the case of the petitioner is that he received summons in the year 2020 only and he mentioned reasons why he was not present before the officials and in support of the same the petitioner filed certain documents.
Basing on the statement of one Ayush Goyal, who is nephew of the petitioner herein the petitioner was summoned and search was also conducted in the house of the petitioner during which certain articles were also seized and the petitioner's statement was recorded. Generally the Courts would hesitate to. grant anticipatory bail in case where there is reasonable apprehension that securing presence of the accused is difficult and there is every likelihood that he may influence witnesses and tamper the evidence - The respondents have not proceeded further against the petitioner and they have not taken any steps since 2017. It is stated by the learned counsel for the petitioner that the enquiry as far as nephew of the petitioner is concerned basing on whose statement the petitioner was summoned is also completed.
Taking into consideration the allegations against the petitioner, where only summons were issued under Section 50 of PML Act in the year 2017, as the petitioner is not arrayed as an accused, the bail granted by learned I Additional Metropolitan Sessions Judge-Cum-II Additional District Judge, Visakhapatnam, and the health condition of the petitioner and his wife this Court is of the view that this is a fit case for grant of pre-arrest bail - petitioner shall be released on bail in the event of his arrest in connection with Enforcement Case Information Report vide No. ECIR/VKSZO/03/2017 on the file of Directorate of Enforcement, Sub-Zonal Office, Visakhapatnam on condition of executing self bond for ₹ 50,000/- with two sureties for a likesum each to the satisfaction of Directorate of Enforcement, Sub-Zonal Office, Visakhapatnam.
Petition allowed.
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2021 (6) TMI 990 - MADRAS HIGH COURT
Money Laundering - illegal diversion of funds - schedule offence - supply of Gold Bullion or there was only paper transaction - Section 33 of the Sale of Goods Act - HELD THAT:- In the case at hand, the picture is totally different. The criminal Court can independently come to a conclusion that the 22 fixed deposits were proceeds of crime and they were projected as untainted money from MJPL (A3) and Suresh Khatri (A4). The other distinguishing feature in this case is that, the total proceeds of crime is ₹ 318.75crores, out of which, the 22 fixed deposits represent only ₹ 143crores and for the balance amount which has gone into the kitty of MJPL (A3), they can be prosecuted as abettors of the offence of money laundering committed by KGPL (A1). Lastly, the order of the Adjudicating Authority in this case, has not attained finality and the same is pending before the Tribunal and therefore, on this ground too, the criminal prosecution cannot be quashed.
In a simple private complaint case, the Magistrate may not have any materials dehors the sworn statement of the complainant to take cognizance of the offences alleged in the complaint. In such cases, it will be desirable, if the Magistrate passes an order giving reasons for taking cognizance of the offence and issuing process. In this case, along with the complaint, the Enforcement Directorate has filed 56 documents and also the statements recorded under the PML Act, in support of the allegations in the complaint - The prosecution has to prove the offence, by adducing evidence and this opportunity has to be given to the prosecution in this case too.
The prosecution of MJPL (A3) and Suresh Khatri (A4) cannot be said to be unfounded - Petition dismissed.
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2021 (6) TMI 804 - SUPREME COURT
Bail application - Money Laundering - proceeds of crime - possession of moveable and immoveable assets - misuse of official position - Section 13(2) read with Section 13(1)(e) of the P.C. Act - HELD THAT:- Continuing with the detention of the appellant to face the trial in the present case would not serve the cause of justice. Even if the appellant had earlier not appeared, the fact of the matter remains that he had faced trial in the P.C. Act matter and his appeal remains pending.
The High Court, in the impugned order dated 25.11.2020, declined the bail at the given stage but directed the Trial Court to proceed with the trial on day-to-day basis and also gave liberty to the appellant to apply for bail afresh, if trial did not conclude within six months from the date of production of copy of its order. The fact remains that this appeal is being considered today by this Court only after six months from the date of order of the High Court but, what to say of conclusion, the trial is practically at the very initial stage with even the statement of the first prosecution witness remaining incomplete. Looking to the nature of case and the witnesses to be examined, the trial and is bound to take time. On the other hand, the appellant is said to be in custody since 27.11.2019.
While setting aside the impugned order dated 25.11.2020, the appellant is ordered to be released on bail on such terms and conditions as deemed fit and necessary by the Trial Court - appeal allowed.
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2021 (6) TMI 803 - MADRAS HIGH COURT
Scope of review petition - error apparent on the face of the record or not - validity and/or legality of the registration of Enforcement Case Information Report (ECIR) in proceedings - effective alternative remedy under Section 8 of The Prevention of Money Laundering Act - territorial jurisdiction - HELD THAT:- It has to be observed that the scope of the Review petition is very limited. The learned Additional Solicitor General appearing for the respondent-Enforcement Directorate submitted that under the guise of Review, the review applicants are only trying to re-argue the case. Therefore, we are not traversing into the submissions made by the parties.
For the purpose of reviewing the matter, the matter has to fall within Order 47 of CPC. In the guise of seeking review, it cannot be reargued. This Court has dismissed the writ petition on the ground that there is alternative remedy and there is no jurisdiction vested with this Court. If at all the petitioners are aggrieved, an appeal has to be filed against the order passed in the writ petition even if the review applicants feel that the conclusion is erroneous in nature. The Review Applications are nothing but an attempt to re-argue the case, which cannot be permitted.
The High Court is designed under the explanation to Section 42, which means, the place where the aggrieved party ordinarily resides or carries on business or personally works for gain. The criteria is not the place where the properties are situated and the jurisdiction is person centric and not property centric. If the appeal is filed by the Central Government, then the jurisdiction will be where the respondent resides or carries on business. Thus, Section 42 is purely person centric whereas a writ petition challenging an order passed under Section 5 of PMLA is based on cause of action and not where the person resides. Therefore, the appeal filed under Section 42 of the PMLA will be filed before this Court and this Court has jurisdiction. Such provision cannot be applied for challenging the provisional order of attachment or ECIR in this case. Therefore, we are not inclined to accept the submission made by the Review Applicants.
The scope of review application is limited and it cannot be entertained only if there is an error apparent on the face of the record - the Review Applications are dismissed.
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2021 (6) TMI 801 - ORISSA HIGH COURT
Seeking pre-arrest Bail - Money Laundering - cheating gullible depositors by attracting them towards different schemes of money investment with false promise of providing high returns - creation and growth of ponzi firms - HELD THAT:- Existence of a prima-facie case regarding nexus of the petitioner with the Saradha Group cannot be denied. Grant of bail to him by the Supreme Court of India in another case also cannot afford him a ground to seek pre-arrest bail in the present case, inasmuch as he was granted bail in the said case solely on health ground while he was admitted in Apollo Hospital, Bhubaneswar. Admittedly, he has since been discharged from the said hospital.
There is no reproach on contention of the counsel for the petitioner with regard to invoking the jurisdiction under Section 438 of Cr.P.C. in respect of the person accused of committing economic offences, inasmuch as there is no such prohibition to entertain such prayer in respect of the accused persons indicted in economic offences in Section 438 of Cr.P.C., provided the offence committed is non-bailable one. It is only in respect of the offences as enumerated under Section 438(4) of Cr.P.C. and also in respect of offence under special statute wherein jurisdiction under Section 438 of Cr.P.C. has been specifically ousted, even if the offences are non-bailable, a person cannot invoke the jurisdiction under Section 438 of Cr.P.C. seeking prearrest bail.
Since in this case the petitioner has been indicted in an economic offence which is of serious in nature and the larger angle of conspiracy with regard to patronage of political and other persons in growth of such ponzi firms are required to be unearthed, no effective investigation can be made by the police by enlarging the petitioner on pre-arrest bail, even if he is ready and willing to cooperate with the investigation by remaining on pre-arrest bail.
The allegation being serious in nature and the offence committed being economic offence and the petitioner is being investigated, custodial interrogation is much more fruitful as held by the Apex Court in the case of P. Chidambaram [2019 (9) TMI 286 - SUPREME COURT], this Court is of the view that the petitioner has made out no case for his release on pre-arrest bail, more particularly when present is prima-facie not a case where the allegations brought against the petitioner can be said to be frivolous or groundless.
There are no merit in the application under Section 438 of Cr.P.C. filed by the petitioner - petition dismissed.
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2021 (6) TMI 631 - MADRAS HIGH COURT
Money Laundering - scheduled offences - will the judgments of the Supreme Court rendered under the NI Act can be simply applied to the PML Act? - scope of Section 141 of the NI Act and Section 70 of the PML Act - HELD THAT:- The NI Act offences are not economic offences, unlike offences under the PML Act. A prosecution under Section 138 of the NI Act stems from a civil dispute between the drawer and the drawee of a cheque. It gets a criminal colour, only when the drawer fails to pay the drawee within the stipulated period. Whereas, offences under the PML Act are economic offences and can by no stretch of imagination be equated to a prosecution between a drawer and a drawee under the NI Act. It is well settled that statutes not dealing with the same subject matter cannot be said to be in pari materia.
Constitution Bench of the Supreme Court in STATE OF PUNJAB VERSUS OKARA GRAIN BUYERS SYNDICATE LTD. AND OTHERS [1963 (11) TMI 74 - SUPREME COURT] has held in no uncertain terms that, even if the language of two provisions of different statutes are identical, it does not follow that they are in pari materia if the scope of the two legislations are different - Section 141 of the NI Act confines itself to a prosecution under Section 138 of the NI Act. It is not a general provision like Sections 34, 107 and 120-A IPC to be applied to all offences. Comparing a prosecution under Section 138 of the NI Act to a prosecution under the PML Act would clearly amount to comparing chalk with cheese. Therefore, there are no hesitation in holding that the rulings under Section 141 of the NI Act would not be of any avail to the petitioners herein.
In the opinion of the FATF, Section 70 of the PML Act had been construed, or rather misconstrued, in some quarters to mean that a prosecution for an offence of money laundering against a company was not maintainable without concurrently prosecuting natural persons for offences under the Act - the recommendation of the FATF was incorporated into the PML (Amendment) Bill, 2011. The Bill was, thereafter, referred to a Standing Committee of the Ministry of Finance. The Committee submitted its 56th Report on the PML Amendment Act, 2011 - Explanation 2 to Section 70 was accordingly, inserted vide the PML (Amendment) Act, 2012 (Act 2 of 2013).
The prosecution of juristic persons is not contingent upon the prosecution of natural persons for offences under the PML Act - Petition dismissed.
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2021 (6) TMI 583 - BOMBAY HIGH COURT
Petition pertains to the stage prior to completion of investigation and filing of complaint by Respondent - Summons issued pertaining to the same ECIR, in respect of which present petition is filed - HELD THAT:- An arguable issue arises in the present case, which needs consideration. There is no dispute about the fact that petitioner nos. 1 to 3 are already enjoying an order of interim protection given by the Supreme Court in the pending writ petition. It is only the petitioner no. 4 who is presently apprehending coercive action in pursuance to summons issued by respondent no. 2.
Further investigation undertaken by respondent no. 2 can proceed, subject to the result of the present writ petition - issue notice to respondents, returnable on 30.04.2021.
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2021 (6) TMI 558 - PUNJAB AND HARYANA HIGH COURT
Seeking grant of Regular Bail - Money Laundering - Scheduled Offences - Constitutional validity of Section 45 of the Prevention of Money Laundering Act, 2002 - requirment for fulfilment of two conditions for grant of bail where an offence punishable for a term of imprisonment of more than 3 years under Part A of the Schedule to the Act - HELD THAT:- The declaration by the Supreme Court in Nikesh Tarachand Shah's case [2017 (11) TMI 1336 - SUPREME COURT] would render the twin conditions prescribed in Section 45(1) of the PMLA 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; the same are rendered inoperative and 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 PMLA 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.
The investigations in the case are complete since a report under Section 173 Cr.P.C. as also a supplementary report under Section 173(8) Cr.P.C. by the Haryana Police and a complaint under Sections 44/ 45 of the PMLA by the ED have already been filed; both the petitioners have been in custody since 16.02.2021; all the relevant documents on the basis of which the prosecution seeks to prosecute the petitioners already stand seized in the course of 16 raids conducted by the ED on different premises of the petitioners; the petitioner in CRM-M-12901-2021 has joined the investigation 11 times whereas the petitioner in CRM-M-12459-2021 has joined the investigation on 13 occasions; properties of both the petitioners, to the extent of the alleged money laundered by them, already stands attached - this Court is of the considered opinion that, subject to the satisfaction of the Trial Court/ Illaqa Magistrate/ Duty Magistrate, Gurugram which shall include deposit of the petitioners' Passports and furnishing of heavy local sureties, the petitioners be released on regular bail.
Bail application allowed.
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2021 (6) TMI 428 - TELANGANA HIGH COURT
Money Laundering - scheduled offences - Material present to constitute offence - amendment of PML Act in the year 2009 - applicability of schedule offences’ is concerned to an act committed prior to amendment - HELD THAT:- Part B of the Schedule provides that in Paragraph one, besides several offences under the Indian Penal Code, Sections 120-B, 419 and 420 are included vide Section 13 of the Prevention of Money Laundering (amendment) Act, 2009 (since repealed by Repealing and Amending Act, 2019 (31 of 2019) - It is apt to note that the Complaint of the ED in S.C.No.1 of 2019 impugned and is challenged under Section 482 of the Cr.P.C., simply adopts the Charge Sheet contents/accusations against the Accused No. 13 therein who is the Petitioner/Accused No. 12 in this Criminal Petition. There was a Charge Sheet and Supplementary Charge Sheet filed by the CBI. The offences cited against the Petitioner herein (A13 in that charge sheet) in that original Charge Sheet are Sections 120B, 420, 409 and 477-A IPC. Interestingly, the accusations made in that charge sheet against A-13 therein (petitioner herein) are replica of the allegations made in the impugned complaint filed before the Special Court by the ED under the PML Act.
This Court finds reasons to accept the contentions of Sri Mukul Rohatgi, learned Senior Counsel for the Petitioner that according to the findings in Crl.P. No. 3995 of 2016, the scheduled offences are not made out and the Charge Sheet is quashed against the Petitioner and therefore, and in consequence thereof, there cannot exist any more scheduled offences for the purpose of prosecution under Sections 3 and 4 of PML Act, 2002 (as amended) - there is no material to proceed against the petitioner under Sections 3 and 4 of Prevention of Money Laundering Act, 2002 and that there are no ‘schedule offences’ committed by him to proceed under the provisions of PML Act in view of the Order of this Court in Crl.P. No. 3935 of 2016 dated 5.1.2018.
Whether the amendment of PML Act in the year 2009 so far as ‘schedule offences’ is concerned, can be applied to an act committed prior to amendment? - HELD THAT:- Certain High Courts have already taken a view that the amendment to PML Act in 2009 has no retrospective effect. Those decisions are challenged by the ED before the Supreme Court and an interim order has been passed by the Supreme Court in favour of the ED. According to Article 20 of the Constitution of India, as observed by the Supreme Court referred to above, the general power of legislature to make law with retrospective effect is not available in case of criminal law. These conflicting views are yet to be finally decided by the Apex Court - But whether the amendment in 2009 would make the acts committed in the period earlier to amendment falls within the purview of the PML Act or not cannot be answered because the question is pending for final decision before the Apex Court.
Petition allowed.
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2021 (6) TMI 427 - PUNJAB & HARYANA HIGH COURT
Grant of anticipatory bail - Constitutional validity of Section 45 of the Prevention of Money Laundering Act, 2002 - two conditions for grant of bail where an offence punishable for a term of imprisonment of more than 3 years under Part A of the Schedule to the Act - Money Laundering - scheduled offence - HELD THAT:- By Act 13 of 2018 Section 45(1) of the PMLA was sought to be amended w.e.f. 19.04.2018. Through such amendment the words “punishable for a term of imprisonment of more than three years under Part A of the Schedule” as occurring in Section 45(1) before the judgment of the Supreme Court in NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. [2017 (11) TMI 1336 - SUPREME COURT] were substituted with the words “under this Act”. As per learned ASG, after such amendment, the defect on the basis of which the Supreme Court had declared Section 45(1) of the PMLA to be unconstitutional was cured and consequently the twin conditions prescribed in Section 45(1) stood revived. The declaration by the Supreme Court in Nikesh Tarachand Shah's case would render the twin conditions prescribed in Section 45(1) of the PMLA 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; the same are rendered inoperative and 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 PMLA 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.
This Court has no hesitation to hold that as on date the twin conditions for grant of bail, as sought to be pressed by the learned ASG, are liable to be ignored and that the present petitions are required to be considered under Section 438 Cr.P.C. In the light of the above conclusion, this Court considers it unnecessary to delve into the issues raised by the learned ASG with regard to the observations of the Supreme Court in Nikesh Tarachand Shah's case (supra) that Section 45(1) of the PMLA would not apply to anticipatory bails being per incuriam.
The ED is in the midst of analysing the exact role of each of the petitioners qua the offences they are accused of. Grant of anticipatory bail to the petitioners at this stage would certainly result in putting a spoke in the wheel of the investigating agency and dampen their efforts in elucidating the required information from the petitioners - Petition dismissed.
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