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Money Laundering - Case Laws
Showing 121 to 140 of 342 Records
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2023 (8) TMI 1267
Money Laundering - Scheduled offences - respondents were well within their jurisdiction to initiate proceedings against them under the provisions of the PMLA or not - Constitutional validity of the provisions of the PMLA - HELD THAT:- The same has been finally decided by the Supreme Court in the case of Vijay Madanlal Choudhary and others vs. Union of India and others, [2022 (7) TMI 1316 - SUPREME COURT]. A three Judge Bench of the Supreme Court in the aforesaid case has upheld the constitutional validity of various provisions of the PMLA. The judgment of the Supreme Court in the aforesaid case being binding upon this Court, as such, there is no scope for this Court to re-open the issue.
In the instant case, the petitioners are facing trial for various offences under ULA(P) Act whereas the respondents have initiated proceedings against them for offences under the PMLA. So, the petitioners are neither being prosecuted nor punished for the same offence. The offences under ULA(P) Act are quite distinct from the offence under the PMLA. The Supreme Court has in Vijay Madanlal Choudhary’s case [2022 (7) TMI 1316 - SUPREME COURT], while interpreting the provisions contained in Section 3 of the PMLA, which defines the offence of ‘money laundering’ observed involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence — except the proceeds of crime derived or obtained as a result of that crime.
From a perusal of the observation of the Supreme Court, it is clear that the offence under Section 3 of the PMLA is an independent offence distinct from the offences under ULA(P) Act which has been incorporated in the Schedule to the PMLA - it is also clear that merely because the predicate offence in the instant case dates back to a period when such offence was not incorporated in the Schedule to the PLMA, it cannot be stated that that the petitioners cannot be prosecuted for the offence under the PMLA.
The petitioners besides facing trial for the offences under ULA(P) Act, are also facing trial for offence under Section 121-A of RPC. The offence under Section 121-A of IPC, which is in pari materia with Section 121-A of the RPC, was a scheduled offence even prior to the Amendment Act of 2009. On this ground also, the petitioners cannot claim that they could not have been prosecuted for offence under Section 3 of the PMLA.
There are no merit in these petitions and the same are, accordingly, dismissed.
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2023 (8) TMI 1241
Seeking grant of Bail - Money Laundering - Company had lured the public to invest in its schemes with the promise of good returns, but the Company did not fulfill its promise and did not return even the invested amounts - HELD THAT:- Prima facie it appears that the applicant has been implicated in the present case merely on the basis of suspicion. It is a settled principle of law that however strong a suspicion may be, it cannot take place of a proof beyond reasonable doubt.
This fact is also relevant that the E.D. had registered the ECIR on 29.06.2019 and statement of applicant was recorded under Section 50 PMLA on 22.10.2019, 23.10.2019 and 20.03.2020, but he was not taken into custody. The applicant remained in custody in connection with the scheduled offences since 26.02.2021, and although the applicant was named as accused in supplementary compliant filed on 30.01.2022, the E.D. did not seek his custody even during that period - The E.D. took the applicant into custody on 21.07.2022, only after he was granted bail by the Hon’ble Supreme Court on 13.07.2022, after having spent about one and a half years in custody and the investigation of the case already stood completed long ago and there was no need for his custodial interrogation.
The trial is likely to take many years to conclude because many of the named accused persons have not appeared yet or they have not been arrested yet and 11 witnesses are to be examined by the Prosecution and documents running into 5,000 pages have to be proved - The applicant is said to be one of the key decision makers for purchase of property by GIPL, alongwith Vijender Singh and Vijender Singh has already been granted bail and, therefore, the applicant is also entitled to be released on bail on the ground of parity.
The applicant is also entitled to be released on bail. Accordingly, the bail application stands allowed.
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2023 (8) TMI 1240
Money Laundering - proceeds of crime - huge fund diversion from the Company, which is managed by the Directors, to its subsidiaries and related entities and made investments - HELD THAT:- In the instant case, the statements made by the petitioners under Section 50 of PMLA indicate the possible commission of offence under Section 3 of PMLA. The charge sheet has also not been filed in the instant ase. Above all, in view of the statements made by the petitioners indicating their nexus with the first accused Company, there was a possibility that they could be involved in the management of the company, which possibility requires to be established through the proceeds of a full fledged trial.
The scope of the powers of the Court to quash the complaint under Section 482 Cr.P.C. has been time and again dealt by the Hon'ble Supreme Court, in a catena of decisions, by holding that such powers requires to be exercised in the rarest of rare cases, the exceptions to which have been repeatedly pointed out. In the case of STATE OF HARYANA VERSUS BHAJAN LAL [1990 (11) TMI 386 - SUPREME COURT], some of the exceptions for quashing the complaint under Section 482 Cr.P.C. held that Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.
In a recent decision of the Hon'ble Supreme Court in ANOOP BARTARIA & ETC. VERSUS DY. DIRECTOR ENFORCEMENT DIRECTORATE & ANR. [2023 (5) TMI 102 - SUPREME COURT], the dictum in Bhajan Lal's case was followed and by pointing out that the case involved therein, did not fall under any of the exceptions pointed out in Bhajan Lal's case and in view of the material to show prima facie involvement of the accused for the offence of money laudering, the Supreme Court had refused to quash the complaint.
Thus, the material on record does make out a prima facie case to implicate the petitioners for the offence of money laundering, as contemplated under PMLA - there are no reason to entertain the prayer sought for in the present petition.
Petition dismissed.
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2023 (8) TMI 1239
Seeking grant of bail - Money Laundering - proceeds of crime - diversion of funds - disproportionate assets more than 14 crores - HELD THAT:- Prevention of Money Laundering Act provides for a two pronged approach, one dealing with the proceed of crime and the other dealing with the persons guilty of the offence of money laundering.
In the present case, as per the respondent/ED, the applicant is found to be an accessory to money-laundering and unless the twin conditions prescribed under Section 45(1) of PMLA is fulfilled, applicant is not entitled to bail.
In GORAV KATHURIA VERSUS UNION OF INDIA AND OTHERS [2016 (6) TMI 309 - PUNJAB & HARYANA HIGH COURT], the Division Bench of Punjab and Haryana High Court, considered the applicability of the twin conditions/limitation imposed vide Section 45(1) on grant of bail in all the cases of PMLA. After considering the Prevention of Money Laundering (Amendment) Bill, 2011 and the amendment incorporated in 2013 in Section 45(1) in respect of limitation in grant of bail to a person accused of schedule offences earlier falling under part B of the schedule but now existing in part A thereof, held the reference to the offences under Part A of the Schedule in the context of Section 45(1) has to be necessarily read down to apply only to those persons who are arrested under Section 19 of PMLA on accusation of money laundering, who are accused of commission of scheduled offences which were listed under the Part A of the schedule existing prior to 2013 amendment.
The constitutional validity of Section 45(1) of PMLA, 2002 was challenged before the Hon'ble Supreme Court in the case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. [2017 (11) TMI 1336 - SUPREME COURT]. The Hon'ble Supreme Court after detailed discussion about the statutory history of Section 45 of PMLA and adverting to various judgments cited by the respective parties and considering the similar provisions under Section 37 of NDPS Act and Section 20(8) of the TADA has struck down the pre-trial bail provisions under Section 45 imposing twin stringent conditions under Section 45(1) for the offence classified thereunder after holding that it is manifestly arbitrary, discriminatory, invalid and violative of Articles 14 and 21 of the Constitution.
Time and again it has been held that personal liberty of an individual is a sacrosanct right and pretrial detention cannot be taken as a punitive measure. However, a balance is required to be maintained between the interest of an individual and the interest of the society at large.
In the instant case, the applicant had been enlarged on bail under the predicate offences. Though the investigation for predicated offence and investigation under the PML Act are different and distinct, but in the present case also the charge sheet had been filed - The applicant is divested of all his powers and does not hold any post now, he has remained under custody for more than four months. As evident from the charge sheet, the investigating agency has already collected all the documentary evidence and recorded the statement of material witnesses, under such circumstances there is no possibility of tampering with the evidence or influencing the witnesses. The only apprehension of ED is with regard to co-operation in the pending FIR registered in various states, wherein he is named as a co-accused, for that stringent conditions may be imposed.
It is deemed appropriate to allow this application and the applicant herein enlarged on bail subject to the conditions imposed - bail application allowed.
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2023 (8) TMI 1098
Transcripting the interview - affidavit placed on record - HELD THAT:- After considering the transcript, it is directed that the Acting Chief Justice of the High Court at Calcutta shall reassign the pending proceedings in the case to some other Judge of the Calcutta High Court. The Judge to whom the proceedings are reassigned by the Acting Chief Justice would be at liberty to take up all applications which may be moved in that regard.
The Special Leave Petitions are accordingly disposed of.
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2023 (8) TMI 1051
Money Laundering - quorum non judis - adjudicating authority presently functioning with only one member - attachment/retention/freezing of property or record during the pendency of the proceedings relating to the schedule (predicate) offence - HELD THAT:- The functions of the adjudicating authority are civil in nature to the extent that it does not decide on the criminality of the offences nor does it have power to levy penalties or impose punishment. Thus, the decision in PAREENA SWARUP VERSUS UNION OF INDIA [2008 (9) TMI 558 - SUPREME COURT] would go to support the stand taken by the Enforcement Directorate before this Court - The decision in MADRAS BAR ASSOCIATION VERSUS UNION OF INDIA & ANR. [2020 (12) TMI 3 - SUPREME COURT] pertain to the constitutionality of various provisions concerning the selection, appointment, tenure, conditions of service and ancillary matters relating to various tribunals which act in aid of the judicial branch. While considering such an issue, namely appointment to tribunals which are in aid of the judicial branch namely tribunals constituted under Section 323A and 323B of the Constitution, the court made pointed observations as to the constitution of Search and Selection Committees to such tribunals, and held that the judicial dominance in the composition of the Search and Selection Committees is required to ensure independence of tribunals. Therefore, decision in Madras Bar Association would be inapplicable to the facts and circumstances of the case on hand.
Absence of two members in the adjudicating authority whether a single member has become quorum non judis and cannot take up the cases for adjudication - HELD THAT:- Section 6 of the PMLA Act deals with adjudicating authorities, composition, powers etc. Sub Section (1) of Section 6 states that the Central Government shall by notification appoint and adjudicating authority to exercise jurisdiction, powers and authority conferred by or under the Act. Sub Section (2) states that the adjudicating authority shall consists of a Chairperson and two other members. The proviso states that one member each shall be a person having experienced in the field of law, administration and finance or accountancy - A plain reading of the provision makes it clear that the Central Government is empowered to appoint an adjudicating authority by issue of notification in the Gazette to exercise the jurisdiction, powers and authority conferred by or under the Act and in accordance with the said provision the Central Government has issued a notification on 01.07.2005 and have appointed the adjudicating authority to exercise jurisdiction, powers and authority conferred by or under the Act. Thus, for all purposes an adjudicating authority has been put in place and the manner in which the business of the adjudicating authority has to be carried out is stipulated in Sub-Section (5) of Section 6 and in terms of Clause (b) of Sub Section (5) of Section 6, a single member bench of the adjudicating authority is competent to adjudicate any matter under the provisions of the Act. Any other interpretation as suggested by the appellant, if acceded to would make the provisions of the Act unworkable, apart from such interpretation not being in line and in tenor with the provisions of Section 6. Therefore, the contention raised by the appellant has to necessarily fail.
The Hon’ble Division Bench of the High Court of Delhi 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] held that under Section 6(5)(b) of the PMLA Act, a bench may be constituted by the Chairperson of the adjudicating authority “with one or two members” as the Chairperson may deem fit. It was held that it is possible to have a single member bench. The word “bench” therefore does not connote plurality; that could, even under Section 6(5)(b) of the PMLA Act be a “single member bench”. Further it was held that when Section 6(6) of the PMLA Act states that a Chairperson can transfer a member from one bench to another, it has to be noted in the above context of their also being a single member bench.
By a reading of Section 6 of the PMLA Act without adding or substituting words into the statute, it is clear that the adjudicating authority which comprises of a single member bench is entitled to adjudicate the matter and any other interpretation would tantamount to distorting the language adopted in the statute which is impermissible.
The appellant has not made out any case for interference with the order passed by the learned single bench. Accordingly, the appeal fails and it is dismissed.
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2023 (8) TMI 904
Seeking release on Bail - money laundering - predicate offence - withdrawal of SLP arising out of the rejection of his prayer for bail - wrong interpretation of Section 45 of the Prevention of Money Laundering Act, 2002 - flight risk - HELD THAT:- It is true that the respondent moved this Court by way of a Special Leave Petition against the refusal of the High Court to grant bail in the predicate offence. But the withdrawal of the said Special Leave Petition need not stand in the way of this Court independently considering the correctness of the impugned judgment.
It is true that the interpretation given by the High Court to Section 45 of the PMLA, 2002 is not in tune with the law laid down by this Court. But, it is made clear that the interpretation given by the High Court in the impugned judgment to Section 45 is not correct.
The respondent is still in custody in connection with the predicate offence. Therefore, at least as on date, the question of the respondent being a flight risk does not arise. As to what happens to the bail application moved by him in the predicate offence, as and when it comes up for hearing, will at present be a matter of guesswork. In any case, by directing the respondent to surrender his passport, the said apprehension can also be taken care of. It is stated that the passport is already surrendered.
The continued incarceration of the respondent, who has now completed nearly half of the penalty that can be imposed, may not be necessary. Therefore, the Special Leave Petition is dismissed.
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2023 (8) TMI 858
Freezing of Bank Accounts of petitioner - Illegal smuggling of human hair - HELD THAT:- The initial order of freezing of the 5(4+1) Bank Accounts of the respondents/writ petitioners which was purportedly undertaken by the authorities of ED under Sub- Section (1A) of Section 17 of the Act of 2002. The authorities seizing/freezing of the record is required to file an application requesting for retention of the record of property or the order of freezing served under Sub- Section (1A) of Section 17 of the Act of 2002 to the adjudicating authority within a period of 30 days from the date of such seizure and freezing. The adjudicating authority, in turn, is empowered by virtue of Section 20(1) of the Act of 2002 to direct continuation of the freezing of the Bank Account or retention of the seized property within a period of 180 days from the date on which such property was seized or frozen, as the case may be.
There is no dispute amongst the parties that the list of Bank Accounts enclosed with the Original Application (O.A.) filed by the ED to the adjudicating authority, did not contain, the numbers of the 5 (4+1) disputed Bank Accounts of the writ petitioners. The ED, of course, tried to demonstrate before the learned Single Judge that an order of freezing these 5(4+1) Bank Accounts had also been passed on 10.02.2022, which fact was disputed by the writ petitioners.
The learned Single Judge was perfectly justified in directing de-freezing of 5(4+1) Bank Accounts, because the continued embargo on the operation thereof by the Banks concerned on purported instruction of the ED clearly amounts to violation of the fundamental rights of the Account holders, i.e. respondents/writ petitioners as enshrined under Article 19(1)(g) of the Constitution of India. The availability of statutory remedy cannot act to the detriment of a litigant when the writ jurisdiction of the Court is invoked in the matter wherein there is clear transgression of the fundamental rights of a citizen.
Appeal dismissed.
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2023 (8) TMI 545
Grant of bail - appellant – Rajesh Kumar Rathaur has suffered incarceration for a period of 8 years in the predicate offence and was not arrested during the course of the investigation, which had begun in the year 2016 - HELD THAT:- The bail granted by the trial court will continue during the pendency of the trial. However, in case the appellant – Rajesh Kumar Rathaur violates the terms and conditions of the bail or if there are any grounds which justify the cancellation of bail, it would be open for the prosecution to file an application seeking such cancellation.
The impugned order/judgment is set aside and the appeal is allowed.
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2023 (8) TMI 479
Rejection of Bail - appellant remanded to District Jail - appellant not accused in individual capacity - HELD THAT:- Having regard to the fact that the appellant – Sachin Bhati is not an accused in his individual capacity, the trial court was not right either directing the appellant – Sachin Bhati to appear as the authorized representative of the three companies, or in sending him to judicial custody. The aforesaid three companies are being prosecuted and can be represented by any person in accordance with law and as per Section 309 of the Code of Criminal Procedure, 1973.
In STANDARD CHARTERED BANK VERSUS DIRECTORATE OF ENFORCEMENT [2005 (5) TMI 327 - SUPREME COURT], the majority opinion held that a corporation or a company though the juristic person can be prosecuted for offence punishable under law, but being a juristic person custodial sentence cannot be imposed.
Thus, the direction given to send/remand the appellant – Sachin Bhati to judicial custody is unsustainable in law and, therefore, set aside - appeal allowed.
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2023 (8) TMI 478
Seeking grant of anticipatory bail - Money Laundering - proceeds of crime - siphoning off of funds of partnership firm - HELD THAT:- It is directed that in the event of the appellant – Suresh Kumar being arrested in a case registered under Section 3 and 4 of the Prevention of Money Laundering Act, 2002 pending in the court of learned Special Judge, CBI-cum-PMLA, Ranchi, he shall be released on bail by the arresting/investigating officer/trial court on terms and conditions to be fixed by the trial court. The appellant – Suresh Kumar shall, in addition, comply with the conditions mentioned in Section 438(2) of the Code of Criminal Procedure, 1973 and will regularly appear before the trial court.
Appeal allowed.
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2023 (8) TMI 477
Money Laundering - schedule offence - proceeds of crime - non-existent or non-functional or fake functional MSMEs - HELD THAT:- Issue notice returnable in the month of September 2023.
It is stated that there were two First Information Reports (FIRs) pursuant to which proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) were initiated. Therefore, the High Court has erred in quashing the proceedings under the PMLA, as the second FIR with regard to the predicated offence has not resulted in acquittal etc.
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2023 (8) TMI 476
Seeking grant of bail - Money Laundering - Scheduled Offence - confiscation of proceeds of crime - involvement in acquisition, use, possession and concealment of proceeds of crime with the assistance of other accused persons and entities - HELD THAT:- The petitioner was in no way associated with the West Bengal Board of Primary Education. However, her husband Manik Bhattacharya was the President of West Bengal Board of Primary Education. Section 2 (u) of the PMLA Act includes within its ambit ‘proceeds of crime’ which relate to any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a schedule offence and Section 3 of the PMLA Act which defines the offences of money laundering includes within its ambit, the persons who directly or indirectly indulge or knowingly assists or is a party or is actually involved in any process or activity connected along with the concealment, possession, acquisition and use of proceeds of crime. Thus, a distinction has been created in the statute itself regarding a person who is involved in the criminal activity or generation of ill-gotten money and the person who conceals, possesses, acquires or uses the same from the person who generates it, although both are offences.
Having regard to the fact that the high officials of the Enforcement Directorate did not exercise their powers of arrest at any point of time when the investigation continued till the submission of the complaint, a distinction has already been created between the person who was in office and had the capacity to generate the money by illegal means and the person who concealed or possessed or used the property which was acquired by that means. Further, there was no prayer before the learned trial court when the complaint was filed under Section 87 of the Code of Criminal Procedure that the warrant be issued at the first instance.
What was prayed before the learned special court was for issuance of process. There was no allegation also in the prayer of the complaint that there is any possibility of the present petitioner absconding or fleeing away from justice. Petitioner also in response to the summons appeared on the first day before the court and prayed for bail. Learned court under Section 45 of the PMLA took cognizance of the offence but did not decide the issue of bail and also did not take the petitioner in custody - the court while dealing with the application for grant of bail, need not delve deep into the merits of the case and the consideration must on broad probabilities. It has been reiterated by the Hon’ble Supreme Court that the word guilt appearing in Section 45 of the PMLA is not to be considered as the finding of guilt or acquittal at the end of the trial after the evidence is adduced before the court.
Having considered the nature of blame worthiness or culpability of the present petitioner and the fact that she appeared in response to the summons before the learned special court/trial court and that she is in custody for more than 5 months, it is opined that further detention of the petitioner is unwarranted in the facts and circumstances of the present case.
The prayer for bail of the petitioner is allowed - Bail application allowed subject to conditions imposed.
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2023 (8) TMI 410
Remand in favour of the investigating agency, without seeking any specific prayer challenging the remand orders.
Challenge to Orders passed by the majority of the Judges when a reference was made on a difference of opinion by the Division Bench of the Madras High Court, while dealing with a Writ Petition filed seeking a writ of Habeas Corpus in pursuance of an arrest made, followed by a remand to the judicial custody, and then to the authority concerned.
Maintainability of Writ petition - HELD THAT:- A writ of Habeas Corpus was moved questioning the arrest made. When it was taken up for hearing on a mentioning, the next day by the Court, the appellant was duly produced before the learned Principal Sessions Judge in compliance with Section 19 of the PMLA, 2002. The custody thus becomes judicial as he was duly forwarded by the respondents. Therefore, even on the date of hearing before the High Court there was no cause for filing the Writ Petition being HCP No. 1021 of 2023. Added to that, an order of remand was passed on 14.06.2023 itself. The two remand orders passed by the Court, as recorded in the preceding paragraphs, depict a clear application of mind. Despite additional grounds having been raised, they being an afterthought, there are no hesitation in holding that the only remedy open to the appellant is to approach the appropriate Court under the Statute. This was obviously not done. It is also noted that the appellant was very conscious about his rights and that is the reason why, by way of an application he even opposed the remand.
Despite a conclusion that the writ petition is not maintainable, it is important to go further in view of the extensive arguments made by the learned Senior Advocates appearing for the appellant. As rightly contended by the learned Solicitor General the scheme and object of the PMLA, 2002 being a sui generis legislation is distinct. Though it is not wished to elaborate any further, it is found that there are adequate compliance of Section 19 of the PMLA, 2002 which contemplates a rigorous procedure before making an arrest. The learned Principal Sessions Judge did take note of the said fact by passing a reasoned order. The appellant was accordingly produced before the Court and while he was in its custody, a judicial remand was made. As it is a reasoned and speaking order, the appellant ought to have questioned it before the appropriate forum. We are only concerned with the remand in favour of the respondents. Therefore, even on that ground, it is held that a writ of Habeas Corpus is not maintainable as the arrest and custody have already been upheld by way of rejection of the bail application.
The arguments of the learned Senior Advocates on the interpretation of Section 167(2) of the CrPC, 1973 cannot be accepted as the law has been quite settled by this Court in Deepak Mahajan [1994 (1) TMI 87 - SUPREME COURT]. One cannot say that while all other safeguards as extended under Section 167(2) of the CrPC, 1973 would be available to a person accused but nonetheless, the provision regarding remand cannot be applied. Section 167(2) of the CrPC, 1973 merely complements and supplements Section 19 of the PMLA, 2002 - there are no inherent contradiction between these two statutes. Obviously, an arrest under Section 19 of the PMLA, 2002 can only be made after the compliance of much more stringent conditions than the one available under Section 41 of the CrPC, 1973.
The interplay between an investigation and inquiry conferring the same meaning is only for the usage of common materials arising therefrom. Such materials are to be utilized for both the purposes. This is the basis upon which they are read together, giving the same meaning at a particular stage. In Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT] it was in the context of a challenge to the enactment, particularly in the light of Section 25 of the Evidence Act, 1872.
One shall not confuse such powers conferred under the statute with the police power, however, when it comes to application of Section 167(2) of the CrPC, 1973 such an authority has to be brought under the expression “such custody” especially when the words “police custody” are consciously omitted.
Much arguments have been made on the basis of Anupam J. Kulkarni [1992 (5) TMI 191 - SUPREME COURT]. As rightly submitted by the learned Solicitor General, the facts are different and therefore distinguishable - In the case on hand, there is no custody in favour of the respondents, a fact even acknowledged by the appellant earlier through the arguments of his advocates. The learned Solicitor General is right in his submission that apart from the fact that the word “custody” is different from “detention”, it can only be physical. As pointed out by him even the High Court has observed that the appellant continues to be in judicial custody. Admittedly, physical custody has not been given to the respondents. Admission of the appellant to the hospital of his choice cannot be termed as a physical custody in favour of the respondents. Custody could not be taken on the basis of the interim order passed by the High Court which certainly shall not come in the way of calculating the period of 15 days. An investigating agency is expected to be given a reasonable freedom to do it’s part. To say that the respondents ought to have examined the appellant in the hospital, and that too with the permission of the doctors, can never be termed as an adequate compliance.
Any order of the Court is not meant to affect a person adversely despite its ultimate conclusion in his favour. The doctrine actus curiae neminem gravabit would certainly apply in calculating the period of 15 days.
Appeals dismissed.
Custody of the appellant - HELD THAT:- The learned Solicitor General submitted that the period of 15 days expires by 12.08.2023. Even the learned Principal Sessions Judge has granted 8 days of custody, though could not be given effect to. Conscious of the time constraint, the respondents are permitted to have custody of the appellant till 12.08.2023.
The Registry is directed to place the matter before Hon’ble the Chief Justice of India for appropriate orders to decide the larger issue of the actual import of Section 167(2) of the CrPC, 1973 as to whether the 15 days period of custody in favour of the police should be only within the first 15 days of remand or spanning over the entire period of investigation – 60 or 90 days, as the case may be, as a whole.
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2023 (8) TMI 59
Money Laundering - Seeking permission to enter into the jail premises along with the Laptop and other documents to interrogate and record statements - HELD THAT:- The petition No. 363/2022 was filed on 10.03.2022. This case was initiated against the respondents in the year 2018, when the FIRs No. RC 0172015A0007 and RC 0172015A0008 was registered on 22.08.2018. The case was thereafter, registered as Special PMLA case No. 18/2018. The scanned copies of the LCR reveals that charge was framed on 29.12.2021. On 17.08.2022, the evidence of PW-1 Shri Kishore Kumar Nath was recorded - The so called proceeds of the crime alleged to have been amassed by the respondents came to the notice of the petitioner at a later stage. Trial has already commenced. It is true that, if there are any proceeds of the crime, the same may have to be attached, but at this stage, no order can be passed for further investigation as evidence of PW-1 has already been recorded.
It has been held by the Hon’ble Supreme Court in Vinubhai Haribhai’s case [2019 (10) TMI 1428 - SUPREME COURT] that What is not given any importance at all in the recent judgments of this Court is Article 21 of the Constitution and the fact that the Article demands no less than a fair and just investigation. To say that a fair and just investigation would lead to the conclusion that the police retain the power, subject, of course, to the Magistrate’s nod under Section 173(8) to further investigate an offence till charges are framed, but that the supervisory jurisdiction of the Magistrate suddenly ceases mid- way through the pre-trial proceedings, would amount to a travesty of justice, as certain cases may cry out for further investigation so that an innocent person is not wrongly arraigned as an accused or that a prima facie guilty person is not so left out. There is no warrant for such a narrow and restrictive view of the powers of the Magistrate, particularly when such powers are traceable to Section 156(3) read with Section 156(1), Section 2(h), and Section 173(8) of the CrPC
Reverting back to this case, it is apt to reiterate that the so called proceeds of the crime was not specifically described by the petitioner. The procedure of investigation, framing of charge and recording of evidence cannot be encompassed into the category of ‘inquiry’. Other measures may be adopted by the petitioner at the stage of trial, and if, any such evidence surfaces, the charges can also be altered. However, at this juncture recording the statements of the respondents in furtherance of investigation cannot be allowed.
The present application under Sections 397/401 stands rejected.
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2023 (7) TMI 1530
Money Laundering - provisional attachment order - invocation of Section 8(4) of PMLA 2002, not as a rule but as an exception - validity of notice - notice for possession has been issued without giving any exceptional reasons (for eviction) rather caused as a rule - violation of principles of natural justice - reliance placed in the of OPTO CIRCUIT INDIA LTD. VERSUS AXIS BANK & OTHERS [2021 (2) TMI 117 - SUPREME COURT] to emphasize that reasons needs to be given in the notice and cannot be supplemented.
Challenge to notice - HELD THAT:- The notice for possession has been questioned by the appellant even on the ground that no reason has been given therein, whereas administrative order should disclose the reason. The reference of the judgement of Apex Court in the case of OPTO Circuits (India) Ltd. v. Axis Bank has been given where it was held that the reasons for passing of an order shall be given therein and cannot be substituted - It is found that the order impugned therein was containing reasons but additional reasons were given before the court for the first time. Such a practice was not accepted. The case in hand is not of similar nature. In this case, there is no order under challenge but a notice under Section 8 (4) of the Act of 2002 which does not direct for giving reasons in the notice for possession. In fact, the provision aforesaid allow possession of the property forthwith on passing order of confirmation of provisional attachment order.
The stage for taking possession comes forthwith on the confirmation of order of provisional attachment and it does not mandate assignment of reasons therein for causing possession. The notice otherwise does not require a reply from the effected person so as to assign the reasons for its reply. The appellants have failed to make a differentiation between the administrative order and the notice under the statute not requiring assessment of reasons for taking possession - In fact, it is in view of the judgement of Apex Court in the case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] that provision of Section 8 (4) cannot be invoked as a course but as an exception. The said judgment does not mandate assignment of the reason in the notice itself. What has been ruled is that the possession should not be sought as a course but as an exception. In such circumstance notice was not required to contain the reason for taking possession of the attached property. The reasons can be supplied by the respondents as and when the notice is questioned by the aggrieved party.
Confirmation of provisional attachment order - HELD THAT:- The possession of the property may be taken at the stage of confiscation but in the case of exceptional nature, it can be after confirmation of provisional attachment order. On strictly going by the Section 8 (4), the right of the respondents to invoke aforesaid provision comes in existence forthwith upon confirmation of the provisional attachment order. The statutory provision cannot be ignored, even by the court. In fact, possession at the stage of confiscation of the property remains automatic because on confiscation of the property, it vests in the government and would be along with the possession and therefore, Section 8 (4) was brought on the statute to allow possession of the property even prior to confiscation and the said provision has been upheld by Apex Court where its constitutional validity was challenged. Once the provision is held to be constitutionally valid, a view contrary or offending the statutory provision cannot be taken. Thus, the appellant cannot be agreed that possession of the property can be taken only on confiscation. It would be rewriting Section 8 (4) of the Act though possession after confirmation of the provisional attachment order would not be as a rule but an exception.
What would be an exception? - HELD THAT:- The principle established is that possession post-confirmation of provisional attachment is permissible as an exception, provided exceptional reasons are demonstrated - The present case being a case of organised crime, the exception exist to invoke Section 8 (4) to take possession of the property.
Conduct of the appellant - HELD THAT:- As per the statement made by them, the purchase of the property is shown to be out the funds earned in cash and not out of the proceeds of crime. It is stated that whatever fund was taken from ABG International Pvt. Ltd., was not out of the bank loan taken by ABG Shipyard Ltd., but out of their own earnings in cash. The fact could not be substantiated and, further with regard to the loan amount said to have been re-paid to the company through a notarized assignment deed, it is stated by the Notary that there is no entry of the said document in the register and that it bears an odd no. 12-A which can happen only in a case of interpolation. The respondents have successfully shown that even the alleged re-payment through the assignment deed is out of the funds of associated companies of ABG Shipyard by routing the proceeds of crime and not after taking loan from the bank or earning for its re-payment.
Conclusion - The money trail is enough to show that the proceeds of crime was diverted for purchase of property in question and thereby the flat no. 4-C was purchased out of the proceeds of crime. The possession of the attached property should not be taken by invoking Section 8(4) of the Act of 2002 as a rule but can be as an exception. The appellant's application for an interim order dismissed - The notice for possession upheld.
Application dismissed.
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2023 (7) TMI 1476
Money Laundering - provisional attachment order - Cross border implications - - offence under Section 51 of the Black Money Act, 2015 - challenge to action taken by the Appellant Department in pursuance to the Act of 2015 and the Prevention of Money-Laundering Act, 2002 - Provisional Attachment Order could be issued without a prior complaint or report to a Magistrate or not - retrospective application of Black money Act of 2015 - requirement of assessment of the tax before the issuance of the Provisional Attachment Order.
Offence under section 51of Black money Act, 2015 - HELD THAT:- In this case, the Income-tax Authority could seize the material to show undisclosed foreign movable and immovable assets in the hands of the Respondent as it was not disclosed in the I.T. Return. It was thus not subjected to Tax by the Respondent under section 3 of the Black Money Act of 2015 and thereby became a case of evasion of tax - The perusal of the order of the Adjudicating Authority shows much emphasis on certain provisions of the Income-tax Act, ignoring Section 3 and 4 of the Act of 2015. The entire order of the Adjudicating Authority does not make a proper consideration of the aforesaid provisions to find out whether it is a case of evasion of Tax.
Cross border implications - When the Scheduled Offence under section 51 of the Act of 2015 would be made out under Part C of Schedule appended to the PMLA Act, 2002? - HELD THAT:- The provision of Section 2(1) thus makes it clear that definition is to be applied in the context it is to be used. In the case in hand, the definition of "offence of cross border implication" under section 2(1)(ra) is to be read in the context. The item no. 4 of Part 'C' Schedule makes a reference to the offence under section 51 of the Black Money Act, 2015. It is an offence of evasion of tax, penalty or interest imposable or chargeable under the Black Money Act, 2015. The definition of "offence of cross border implication" cannot be applied in the context to item No. 4 of part (c) of Schedule. It is for the reason evasion of tax cannot have an element of transfer of money out of India as it is considered to be an unpaid liability of Tax. However, ignoring the aforesaid, the Adjudicating Authority recorded its finding holding that an "offence of cross border implication" is not made out and, therefore, the Provisional Attachment Order cannot be confirmed.
The finding of the Adjudicating Authority is ignoring the provision of the Act of 2002 and Black Money Act of 2015. To fall in item No. 4 of Part 'C' of Schedule, it is not necessary or even possible to meet with the requirement of the definition of "offence of cross border implication" - The Schedule offence under item 4 to part 'C' of Schedule would apply when there is an evasion of Tax chargeable or imposable under the Act of 2015. It can be even penalty or the interest.
Whether Provisional Attachment Order can be issued only when a report has been forwarded to a Magistrate under section 173 of Cr. P.C., or a complaint by a person authorized to investigate the offences or a report etc.? - HELD THAT:- The fact available on record show that the Respondent was in possession of foreign assets and income and he was in the process of transfer of those properties. It would be relevant to clarify that proceeds of crime does not mean the physical possession of the property rather in a case of evasion of tax, the component of tax so evaded would be the proceeds of crime in the hands of the assesse. The Respondent was in the process of transfer of the foreign assets to over came from the offence of evasion of tax under the Act of 2015 - The transfer of property would have effect on the proceedings under the Act, therefore invoking the second proviso of section 5(1), the Provisional Attachment Order was passed. It does not require a complaint or a report to the Magistrate before the order of provisional attachment. The intention to transfer the foreign property by the Respondent came to the knowledge during the course of search and seizure by the Income-tax Authority.
In the instant case, the Respondent indulged in evasion of tax under section 3 and 4 of the Act of 2015. The Appellant was required to pay tax @ 30% on the foreign assets and income and in absence, the amount of Tax became proceeds of crime. It is when they fail to disclose foreign property and income in the Return and even made an attempt to evade the tax chargeable or imposable under section 3 of the Black Money Act of 2015.
Section 50 would be made out on failure of the assessee to furnish information about any foreign assets and income including financial interest in any entity, located outside India. The Income-tax Authority admittedly initiated action under section 50 of the Black money Act of 2015 which means that the Respondent willfully failed to furnish Return and information relating to assets and income outside India during the relevant years. The initiation of action under section 50 had direct bearing on an offence under section 51 of the Black Money Act of 2015. Non-disclosure of the foreign assets and financial interest in those assets while submitting return resulted in evasion of tax when it was necessary to disclose it from 1st April, 2016 onwards as is coming out from section 3 of the Black Money Act of 2015 - The Learned Adjudicating Authority even ignored the material sufficient to pass Provisional Attachment Order when the Appellant Department could know that non attachment of the property would frustrate the proceedings under the Act of 2002. The Respondent was in the process to transfer the foreign assets and, therefore, second proviso to section 5(1) of the Act of 2002 was invoked.
Whether the Black money Act of 2015 has retrospective application? - HELD THAT:- The Black Money Act of 2015 was made applicable even for the undisclosed foreign income and assets prior to the coming into effect of the Black Money Act of 2015. The Adjudicating Authority has thus committed grave error in questioning the applicability of the Black money Act of 2015 in reference to the foreign income and assets prior to coming into force the Black Money Act of 2015.
Reference made to ECIR and the Provisional Attachment Order which has also been quoted by the Respondent and even by the Adjudicating Authority - a reference of the para of 2.4 of the Provisional Attachment Order dated 1-6-2016, has been referring to the order dated 14-9-2016 only, ignoring other notice alongwith material. Thus, the arguments of the Respondent in reference to it and findings of the Adjudicating Authority cannot be accepted.
Whether assessment of the tax was required before the issuance of the Provisional Attachment Order? - HELD THAT:- The case in hand is unique where there was total non-disclosure of foreign assets and income even though it was liable to be charged as per section 3 of the Act of 2015. In this case, Respondent admitted that he did not disclose foreign income and assets in the Income-tax Return. It is despite the fact that as per under sections 3 & 4 of the Black Money Act, Appellant was required to pay 30% tax on such property. Non-disclosure of foreign income and assets after coming into effect the Black money Act of 2015 was sufficient to make out of case under section 51 of Black Money Act of 2015, however, Adjudicating Authority has made an erroneous interpretation of the provision of the Act of 2015 and the Act of 2002 in passing the impugned order.
The Adjudicating Authority has failed to appreciate the facts available on record and even to make a proper interpretation of law for passing impugned order. It thus deserves to be set aside - Appeal allowed.
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2023 (7) TMI 1468
Grant of Interim bail - HELD THAT:- It is required to interfere with the impugned judgment, as it grants interim bail, which will run itself out within a period of three weeks.
The present special leave petition is dismissed.
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2023 (7) TMI 1466
Rejection of application filed u/s 190 read with Section 245(2) of the Code of Criminal Procedure, 1973 - it was held by High Court that 'the criminal proceedings initiated against the petitioners / accused Nos. 1 and 2 by the respondent under the provisions of the Prevention of Money Laundering Act, 2002 in Spl.C.C. No. 159/2015 are closed.'
HELD THAT:- At this stage, no interference is called for.
SLP disposed off.
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2023 (7) TMI 1465
Money Laundering - complaint for offences punishable under Sections 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 - it was held by High Court that 'The complaint registered against the petitioners in ECIR No. 70/BGZO/2009-10 by the Directorate of Enforcement, Bengaluru Zone, Bengaluru and the proceedings against the petitioners pending before the III Additional District and Sessions Judge, D.K., Mangaluru in Spl.C. No. 74/2018, stand quashed.'
HELD THAT:- It is not required to interfere with the impugned order and, therefore, the special leave petition is dismissed.
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