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Money Laundering - Case Laws
Showing 201 to 220 of 342 Records
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2023 (5) TMI 1197
Seeking grant of Anticipatory bail - Money Laundering - predicate offence - allegation against the applicant is that he was also involved in the conspiracy and he had taken seven cheques to deposit in the account of co-accused Kapil Kumar - HELD THAT:- Non appearance of the applicant right from dismissal of Special Leave Petition on 25.09.2018 till date cannot be justified on the ground of transfer of file as the applicant had full knowledge of pendency of the case and he had challenged the proceedings by filing applications under Section 482 Cr.P.C. and by filing S.L.P. Spread of covid-19 pandemic also does not justify non-appearance of applicant four five years.
As such, without making any further observations, this court is of the considered opinion that the aforesaid conduct of the applicant disentitles him to grant pre-arrest bail by this court - the application for anticipatory bail is hereby dismissed.
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2023 (5) TMI 1196
Money Laundering - seeking release of attached petitioner’s properties - it is the specific contention of the petitioner that the property was purchased by him along with another person and thereafter the said property was converted into plots and so many plots was purchased by the third parties - HELD THAT:- It is evident that interest of a co-owner and that of the third party bona fide purchasers of the plots are involved in attached property No.4. The petitioner has offered fixed deposit of Rs.10,00,000/-, which is the value estimated by the competent authority in the Provisional Attachment Order. Therefore, the alternative prayer sought in the writ petition appears to be just and reasonable.
The writ petition is allowed-in-part granting alternative relief sought by the petitioner. The respondent is directed to release the attached property No.4 i.e. Ac.6-00 situated at Survey No.376/2, Alamur Village, Ananthapur, subject to the petitioner furnishing security in the form of a fixed deposit for Rs.10,00,000/-.
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2023 (5) TMI 1158
Presence of Advocate during Enquiry/interrogation as a matter of right - petitioner submits that as of now the investigation has been completed and the prosecution complaint has also been filed - HELD THAT:- In view of the fact that the investigation has already completed and the respondent has chosen not to come forward to contest the same. There is no impediment in confirming the order in DIRECTORATE OF ENFORCEMENT VERSUS SATYENDAR KUMAR JAIN [2022 (6) TMI 382 - DELHI HIGH COURT] granting permission that “during the time of enquiry/interrogation from the accused, one Advocate of the accused shall be allowed to remain present at a safe distance where from where he can see the accused but not hear him”.
The petition is allowed in terms of order in DIRECTORATE OF ENFORCEMENT VERSUS SATYENDAR KUMAR JAIN [2022 (6) TMI 382 - DELHI HIGH COURT].
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2023 (5) TMI 1157
Seeking enlargement on bail - Money Laundering - scheduled offences - discrepancies including diversion of APSSDC funds through various shell companies - requirement under Section 45 (1) of the PMLA for grant of bail, fulfilled or not - HELD THAT:- In an identical case in SANJAY RAGHUNATH AGARWAL VERSUS THE DIRECTORATE OF ENFORCEMENT [2023 (4) TMI 874 - SUPREME COURT], lodging of the prosecution complaint is sequel to the registration of the FIR in the predicate offence way back in the year 2021. In the present case on hand also, no charge sheet has been filed in the predicate offence for the last more than 15 months. The petitioner herein is also a Chartered Accountant by profession and has been in jail from 04.03.2023. It is the first offence insofar as the petitioner is concerned. There are no other complaints registered as against him. The said argument gives room to say that second condition in clause (2) of sub-section (1) of Section 45 of the PMLA would be satisfied. In the aforesaid circumstances, continued incarceration of the petitioner is not justified.
In respect of a query raised by the investigating agency, the petitioner herein gave response to each and every question that has been asked for. Prosecution complaint was also filed on 01.05.2023. The petitioner was arrested on 04.03.2023 and since then he is in judicial custody. Time and again, petitioner is continuously attending before the investigating agency and co-operating with the investigation. This Court is of the opinion that it is not necessary to detain the petitioner in jail further. In view of the aforesaid facts and circumstances, this Court feels that request of the petitioner for grant of bail can be considered, however, on certain conditions.
The petitioner shall be enlarged on bail on his executing a personal bond for a sum of Rs. 50,000/- with two sureties each for the like sum to the satisfaction of the I Additional Sessions Judge-cum- Metropolitan Sessions Judge, Visakhapatnam - petition allowed.
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2023 (5) TMI 1156
Money Laundering/Conspiracy - proceeds of crime - scheduled offences - forgery, manipulation of Government records, preparing back dated orders so that compensation may be granted at a much higher rate showing land as 'Non-Agricultural' - causing loss to Government Treasury - joint trial - HELD THAT:- In the case of STATE OF JHARKHAND THROUGH SP, CBI VERSUS LALU PRASAD @ LALU PRASAD YADAV, SAJAL CHAKRABORTY AND DR. JAGANNATH MISHRA [2017 (5) TMI 490 - SUPREME COURT], the Hon’ble Supreme Court discussed the aspect of joint trial. In such huge cases, there may be a conspiracy, conspiracy separate and interlinked. The Hon’ble Supreme Court held that When several offences are alleged to have been committed by several accused persons this Court has laid down that normal rule is of separate trials.
It is clear from the impugned order dated 28.04.2022 that it was passed when the petitioners were not before the Court. Undoubtedly, an accused has no right to be heard before taking cognizance. The petitioners could not have been heard at that stage. The finding with regard to the separate trials, as recorded, in the order 28.04.2022 is definitely a tentative finding. It has been recorded at a pre-cognizance stage. Now, separate complaints have been filed against the petitioners. If petitioners are so advised, they may definitely move an application before the court for joinder of charges or a joint trial. In the eventuality of such application having been filed, the court would have an advantage of having views of the petitioners also and thereafter, such an application could be decided. Any conclusion recorded by this court, on this aspect, at this stage may prejudice the rights of the petitioners to move such an application for joinder of charge/trial before the court concerned. Therefore, the Court refrains from recording any conclusion on it.
This Court is of the view that the court had acted within its jurisdiction while passing the order dated 28.04.2022, in the case. It is in accordance with law. The question as to whether all the subsequent seven complaints may be jointly tried or not is still open. In case, an application for joint trial is filed in any of the subsequent seven complaints, the court would definitely decide such application in accordance with law. Therefore, the impugned order dated 28.04.2022 does not warrant any interference.
Enhancement of compensation - HELD THAT:- A bare perusal of Section 3C of the NH Act, in fact, makes it clear that at this stage objections to the use of land for the purpose or purposes mentioned under Section 3A (1) of the NH Act are entertained. It means that any person can object that for the purpose or purposes as mentioned in Notification under Section 3A(1) of the NH Act, land cannot be acquired. It apparently does not relate to compensation part, which is a subsequent stage - At the stage of Section 3D of the NH Act the objections raised under Section 3C are considered and final notification is made. The determination of compensation is done under Section 3G of the NH Act. At that stage, the competent authority would give a public notice in the newspapers inviting claims from all persons interested in the land to be acquired. Section 3G (7) of the NH Act is quite wide. It empowers the competent authority as well as the arbitrator to determine the compensation by assessing market value, etc.
In the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA VERSUS SRI P. NAGARAJU @ CHELUVAIAH & ANR [2022 (7) TMI 1413 - SUPREME COURT], the Hon’ble Supreme Court has held that for the purposes of determination of compensation under the NH Act, the provisions of the RFCTLARR Act, 2013 would also apply.
Cognizance of an offence is taken and thereafter, summoning is done, if there is prima facie case made out against the person to be summoned. The words “prima facie case” as such have not been defined under any provision of the Code. At different stages of a criminal case, the level of satisfaction is different. At the stage of summoning “prima facie case” is to be seen. At the stage of the framing of charge, the level of satisfaction is higher than it and, finally, at the stage of judgment, the level of satisfaction is “proved beyond reasonable doubt”. For “Prima facie case”, it has to be shown that some offence has been committed and there is material regarding grave involvement of the person to be summoned.
In the case of Martin Burn Ltd. Vs. R.N. Bangerjee, [1957 (9) TMI 65 - SUPREME COURT], the Hon’ble Supreme Court in some other context discussed the concept of a prima facie case and observed that “a prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the same were believed. While determining whether a prima facie case had been made out the relevant consideration is whether on the evidence led it was possible to arrive at the conclusion in question and not whether that was the only conclusion which could be arrived at on that evidence.”
Having considered the material, cognizance has been taken and the petitioners and others have been summoned. This Court does not see any illegality in the summoning order. Therefore, there is no reason to interfere in the cognizance and summoning order dated 06.09.2022 passed in SST No. 14 of 2022.
In the instant case, the petitioners Ramesh Kumar and Om Prakash are farmers. Their land was notified as ‘Agricultural Land’ under Section 3D of the NH Act. They had never filed any objections either under Section 3C or 3G of the NH Act. Their role is given in paras 9.1 and 9.2 of the complaint respectively. The role of the petitioners Dinesh Pratap Singh, Arpan Kumar, Bhole Lal and Vikas Kumar is given in paras 9.4, 9.3, 9.5 and 9.7 of the complaint respectively. They all were revenue officers/official at the relevant time. Their role is identical to the acts attributed to them in other complaints.
The averments as made in the complaint definitely make out a prima facie case against all these petitioners. The cognizance and summoning order passed on14.10.2022 is quite in detail. The court below has taken into consideration the material placed before it. Having considered the material, cognizance was taken and the petitioners and others have been summoned. This Court does not see any illegality in the summoning order. Therefore, there is no reason to interfere in the cognizance and summoning order dated 14.10.2022 passed in SST No. 17 of 2022.
Petition dismissed.
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2023 (5) TMI 1155
Maintainability of petition - availability of alternative remedy of appeal - Validity of the provisional attachment order - Money Laundering - petitioner joined as a Clerk with the customs clearing agency - indulging in wrong practice of passing orders favourable to the importers of unaccompanied baggage on getting illegal gratification - petitioner has been afforded with the opportunity to defend his case or not - violation of principles of natural justice - HELD THAT:- Section 8 of the PMLA denotes adjudication and the procedure to be followed for adjudication under the Act. The learned counsel for the petitioner reiterated that if the property is claimed by a person other than the person to whom notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money laundering. As far as Clause 8(2) is concerned, the authorities are bound to give an opportunity to such persons to prove that the property has not been involved in money laundering.
However, the authorities are of an opinion that no such enquiry is required in respect of the third parties. It is for them to take a decision to proceed with the adjudicatory process. It is for the person who is claiming the right over the property, has to establish that the property has not been involved in money laundering. In this regard, if any person is aggrieved, either they can approach the adjudicating authority or the appellate authority, as the case may be, under Section 26 of the PMLA. Therefore, the petitioner cannot claim that an opportunity must be afforded by the competent authority at the time of adjudication.
Such an opportunity provided under the Act cannot be misconstrued for the purpose of claiming that the adjudicating authority should issue notice for such third parties for the purpose of completing the adjudicatory process. In the present case, if at all the petitioner possess any materials to establish that the property has not been involved in money laundering, then, he is at liberty to approach the appellate authority for the purpose of establishing his case. As far as the provisional attachment order dated 28.03.2017 is concerned, the authority under Section 5(1) of the PMLA has elaborately considered the facts and circumstances of the case and evidences available on record including the materials / documents - The authorities, after elaborate discussion, made a finding that he has a reason to believe that the case under PMLA is established and therefore, invoked the powers under Section 5(1) of the PMLA and issued the order of provisional attachment. The language applied under the Act is “reason to believe”, therefore, it is sufficient if the authorities form an opinion that the materials available on record are sufficient for the purpose of proceeding against the persons.
In respect of the appellate remedy contemplated under the statutes and approaching the High Court under Article 226 before exhausting the remedy, this Court considered the principles in M/S. SRI SATHYA JEWELLERY, M/S. G.R. THANGAMALIGAI (FIRM) , M/S. SHREE VIGNESHKUMAR JEWELLERS, SHRI. N.S. CHENGALVARAYAN, PARTNER, M/S. SRI VASAVI GOLD & BULLION PVT. LTD., SHRI. P. SEETHARAM (ERSTWHILE DIRECTOR) , M/S. ROYAL INDIA GEMS AND JEWELS PVT. LTD., SHRI K. UMAPATHY, CHAIRMAN, M/S. THANGAMAYIL JEWELLERY LIMITED, M/S. JAIPUR GEMS, M/S. INTERNATIONAL EXIM AGENCY, MR. A.M. MARIAPPAN, PROPRIETOR, SHRI. SANDEEP SURANA, FORMERLY EXECUTIVE DIRECTOR, M/S. G.R. THANGAMALIGAI & SONS, SHRI G. RAJENDRAN, SHRI G.R. RADHAKRISHNAN, SHRI G.R. PADMANABHAN, SHRI. MITHUN SACHETI, M/S. STARFIRE GEMS PVT. LTD., M/S. SURANA CORPORATION LIMITED VERSUS THE PRINCIPAL COMMISSIONER OF CUSTOMS, CHENNAI, THE JOINT COMMISSIONER OF CUSTOMS [2021 (4) TMI 1210 - MADRAS HIGH COURT] where it was held that The High Court cannot adjudicate the facts and merits with reference to documents and evidences. Trial is not entertainable under Article 226 of the Constitution of India. All such procedural aspects are to be followed by complete adjudication/trial by the original authorities as well as by the appellate authorities under the provisions of the Statute and the powers under Article 226 of the Constitution of India is limited to find out whether the processes contemplated under the Statutes and the procedural aspects are followed by the competent authorities as well as the appellate authorities or not. The High Court, under Article 226 of the Constitution of India, is not expected to usurp the powers of the appellate authorities by adjudicating the merits of the matter on certain documents and evidences. In the event of adjudication of merits under Article 226 of the Constitution of India in the absence of complete trial with reference to the documents and evidences, there is a possibility of miscarriage of justice, and therefore, the High Court is expected to be cautious, while entering into the venture of adjudication of certain merits with reference to the original documents and evidences produced by the respective parties to the lis. This being the legislative intention, High Court is expected to trust the institutional authorities as well as the hierarchy of institutions contemplated under the Statutes.
The petitioner is at liberty to prefer an appeal before the appellate authority under Section 26 of the PMLA. In the event of preferring an appeal, the same shall be considered on merits and in accordance with law - Petition dismissed.
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2023 (5) TMI 1031
Money Laundering - Attachment of assets of petitioner - case of the Petitioners was that the 180 days period after the PAO was passed, as prescribed under the PMLA, has expired - HELD THAT:- There is no doubt that the issue relating to the expiry of 180 days and the manner in which the same would affect the PAO, is pending in Vikas WSP and Others Vs. Directorate Enforcement and Another, [2020 (11) TMI 629 - DELHI HIGH COURT]. However, the same being a legal issue, there are various other submissions also which may have to be considered in the present matter, bearing in mind that the Petitioner Company has gone into insolvency and moratorium has been declared.
Admittedly, the Tribunal under the PMLA is functioning and the Petitioner is free to approach the Tribunal under Section 26 of the PMLA. 15. The Petitioner has already filed an appeal before the Appellate Tribunal, which is stated to have been dismissed for non-prosecution - However, since the Petitioner was already before this Court and was granted interim protection, it is deemed appropriate to permit the Petitioner Company through the RP to approach the Appellate Tribunal for restoration of its appeal within the next two weeks. The Appellate Tribunal would proceed to hear the appeal in accordance with law.
Petition disposed off.
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2023 (5) TMI 1030
Seeking recall of order - allegation of bias - application on which the said order was passed, does not contain any pleading in connection with the public speech made by AB - HELD THAT:- The application on which the impugned order was passed was filed by ED wherein it was mentioned that one of the accused who is presently in custody in the PMLA case i.e. KG lodged a complaint before the police station making false, frivolous and baseless allegations against the officers of ED. Copy of the complaint was neither served upon the ED nor upon the learned Special Court, PMLA.
Aspersions have been cast upon the investigation of ED. Based upon the inputs received from the media and elsewhere, ED came to learn that the said accused i.e. KG lodged a complaint before the CBI Court and before the Hastings police station against the officers of ED through the Superintendent, Presidency Correctional Home. The said accused along with other politically exposed persons were trying to lodge similar complaints against the officers of ED through the police authorities - Though ED did not make any specific prayer with regard to the relief(s) sought for and made an innocuous prayer for passing appropriate order on the submissions made in the body of the application, but the Court upon hearing submissions made on behalf of all the appearing counsels and upon perusal of documents placed before the Court passed the said impugned order.
The offence which ED is dealing with is under the Prevention of Money Laundering Act, 2002 and the predicate offence under the Prevention of Corruption Act, 1988 and the Indian Penal Code is being investigated by CBI. It appears from records that the investigation started a couple of months back and the same has proceeded to a fair extent. Several high ranking politicians including Member of Legislative Assembly, Minister-in-Charge of Education, ex President of the West Bengal Board of Primary Education, several persons in the Bengali film industry have been arrested and taken in custody. Astronomical amount of cash, documents, evidences both physical and electronic have been seized from the custody of the accused - There is hardly any scope to afford prior opportunity of hearing in a proceeding under PMLA. If the proposition of the applicants that, prior opportunity of hearing be afforded before starting the investigation is to be accepted by the Court, then the investigating officers will never be able to conclude the investigation in a time bound manner. There may be several persons involved in an offence under the PMLA. It is for the investigating officer to decide as to who should be interrogated and when. It is not for the suspected/proposed accused or the accused to dictate terms upon the investigating officer as to how and in which manner the investigation should proceed.
The principle of adherence to natural justice thereby meaning that opportunity of hearing is to be given to a person prior to summoning him to give evidence is not the same in all branches of law. The said principle has a different connotation in a proceeding involving civil consequences but has an absolute contrary implication in a criminal proceeding. Application of the principle of natural justice in connection with PMLA and the predicate offences is practically nil. Summoning a person for interrogation in connection with a public scam of such humungous magnitude does not ipso facto imply that coercive step will be taken against him; neither does it suggest that he is an accused or a suspected accused - There is no application of the principle of natural justice requiring prior opportunity of hearing to be given to a person who may be required for investigating a crime.
In the instant case, the application for intervention and recalling has been filed by third parties not connected with the relief sought for in the writ petition. The applicants may be required for investigation purpose, but that does not mean that their presence will be necessary for adjudicating the writ proceeding. Intervention/addition of the applicants will in no way aid in disposal of the writ petition. The applicants can always put forward their defence and avail remedies in law, if at all, they are aggrieved by any act of the investigating agencies - The proceeds of crime have penetrated through several strata and have exchanged numerous hands. In such type of cases it is not unusual that threats and challenges will be there in practically each and every step. It is for the investigating officers to overcome the hurdle and unravel the truth to punish the offenders. The powers of the investigating officers to summon are not restricted to any particular person and the said power to investigate is to be utilized effectively to reach the goal.
It appears from the prayers made in the applications that recalling has been sought only for the portion of the order where direction has been passed for causing investigation of the involvement of the applicants. The applicants do not appear to be bothered by the investigation per se. It is only where direction has been passed to investigate their involvement, that the applicants oppose the same.
The act of the applicants in pressing the instant applications raises doubt in the mind of the Court that the same have been filed with mala fide intention to deter the investigating officers to follow through the process of investigation which has already opened up a box of worms with more to follow suit. The idea is to delay the entire process to the extent possible so that the real culprits can remain shielded. In fact, on account of filing the applications neither the ED nor the CBI appear to have proceeded any further - If the trend to delay the main investigation and intimidate the investigating officers is not dealt with appropriately at the very first stage, then the same will develop as a style and very many investigations in future may be held up for the same reasons. Such a move must be stubbed with an iron hand and upon imposition of exemplary costs so that the same has a deterring effect and similar offenders will be compelled to think a multiple time before adopting such a stand.
Thus, no relief can be granted to the applicants - application dismissed.
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2023 (5) TMI 1029
Money Laundering - existence of scheduled offences or not - no accused persons shown in FIR - Petitioners contend that since no scheduled offences were alleged against them and even though more than a year had elapsed after filing the prosecution complaint against them, no summons could be issued to the Petitioners under the PMLA - HELD THAT:- In Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], the Hon'ble Supreme Court, in the context of attachment of property, held that it is only such property which is derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence that can be regarded as proceeds of crime. Therefore, the Authorities under the PLMA 2002 cannot act against any person for money laundering on the assumption that a scheduled offence has been committed unless the same is registered with the jurisdictional Police or pending inquiry/trial, including by way of criminal complaint before the competent forum. The Hon'ble Supreme Court held that taking any other view would be rewriting of these provisions and disregarding express language of the definition clause "proceeds of crime", as it obtains now.
Based upon Vijay Madanlal Choudhary, a case is made out for a grant of relief to the Petitioners now that it is clear that there is no prosecution against the Petitioners for any scheduled offence under the PMLA 2002. Based upon the communication dated 20/4/2023, addressed by the Crime Branch to the Enforcement Directorate, no case is made to dismiss these Petitions or defer hearings therein - As and when investigations are completed, and further, if the Petitioners are implicated for their involvement in any of the scheduled offences, the Respondent will have the liberty to seek revival of the PMLA proceedings by taking appropriate steps. However, based on the communication dated 20/4/2023, no case has been made to deny relief to the Petitioners.
The Division Bench found that a 'C' summary report had been filed regards the scheduled offences. The Division Bench relied upon State of Maharashtra vs. Bhimrao Vithal Jadhav [1974 (9) TMI 137 - BOMBAY HIGH COURT], where it had been observed that granting of a 'C' summary amounts to an acquittal. After quoting from Vijay Madanlal Choudhary (supra), the Division Bench concluded that if a person is discharged or acquitted of a scheduled offence by a competent Court, there could be no offence of money laundering against him. Finally, the Division Bench held that since no scheduled offence was alleged against the Petitioner because of the closure report filed by the Police, the impugned FIR registered by the Enforcement Directorate would not survive, and the said ECIR would have to be quashed, and set aside.
Petition allowed.
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2023 (5) TMI 1028
Seeking grant of bail - misuse of official position as State Revenue Minister to purchase and claim compensation in respect of the land under survey No.52/2A/2 of Village Bhosari, Taluka Haveli, District Pune - twin condition specified under Section 45 of PMLA or not - bail is sought mainly on the ground that there is no valid predicate offence for the reason that the Anti Corruption Bureau has filed C Summary Report - HELD THAT:- It is well settled that the grant of bail is the rule and refusal and exception. In the case of SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. [2022 (8) TMI 152 - SUPREME COURT] the Hon’ble Supreme Court has reiterated that “liberty is one of the most essential requirements of the modern man. It is stated to be the delicate fruit of a mature civilization. It is the very quintessence of civilized exist and the essential requirement of a modern man.” The nature of offence and the material in support thereof, possibility of the accused fleeing justice, reasonable apprehension of tampering the evidence or influencing the witnesses are the circumstances which normally weigh with the Court while exercising discretion under Section 439 of Cr.P.C.
In P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [2019 (12) TMI 186 - SUPREME COURT], the Apex Court upon considering the previous decisions has reiterated that ”the basic jurisprudence relating to bail remains the same in as much as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial, however, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences, that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of “grave offence” and in such circumstances, while considering the application for bail, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused - the underlining confusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for the grant or refusal of bail, though it may have a bearing on principle. But ultimately, the consideration will have to be on case to case basis on the facts involved therein and securing the presence of the accused to stand trial.
The language of Section 3 clearly implies that the money involved in the offence of Money laundering is necessarily the proceeds of crime, arising out of criminal activity in relation to the scheduled offence. In VIJAY MADANLAL CHOUDHARY & ORS. VERSUS UNION OF INDIA & ORS. [2022 (7) TMI 1316 - SUPREME COURT] the Apex Court has observed that the “proceeds of crime” being the core of the ingredients constituting the offence of money-laundering, that expression needs to be construed strictly. In that, all properties recovered or attached by the investigating agency in connection with the criminal activity relating to a scheduled offence under the general law cannot be regarded as proceeds of crime - In Vijay Chaudhary the Supreme Court has observed that 2002 Act is a special legislation to deal with the subject of money laundering activities having transnational impact on the financial system including sovereignty and integrity of the countries. It is observed that money laundering is not an ordinary offence. It is a separate class of offence requiring effective and stringent measures to combat the menace of money laundering.
The records reveal that though in the agreement for sale dated 28/03/2016 the sale consideration was mentioned as Rs.50 Lakhs, the Applicant and the co-accused subsequently purchased the said property vide sale deed dated 28.04.2016 for sale consideration of Rs.3.75 Crores. The Applicant and the co-accused have paid stamp duty of Rs.1,78,16,600/- on the prevailing market rate of the land, which as per the ready reckoner was assessed to be Rs. 22,83,63,300/-. It is thus evident that the Applicant and the co- accused had purchased the said land much below the prevailing market rate. The defence that the land was purchased at a distress sale is a matter to be proved during the trial - The material on record prima facie reveals that the Applicant and the co-accused have acquired the property by means which are not legally approved, and the property acquired by criminal activity is relatable to scheduled offence. Prima facie, a case of criminal misconduct, which is a scheduled offence is made out. It is stated that the closure report has not been accepted and further investigation has been ordered. Hence, at this stage the predicate offence does not cease to exist.
The Hon’ble Supreme Court, while upholding the validity of Section 19, rejected the grounds pressed into service to declare Section 19 as unconstitutional and held that such a provision has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act of Prevention of Money Laundering and Confiscation of proceeds of crime involved in money laundering, including to prosecute persons involved in the process or activity involved in the process of crime so as to ensure that the proceeds of crime are not dealt with in any manner which may result in frustrating any proceedings relating to confiscation thereof. In the instant case, it is not the case of the Applicant that the authorized officer has not adhered to the safeguards or the stringent conditions contained in Section 19 of the PMLA, 2002, and has thus failed to demonstrate violation of Article 21 of the Constitution as to entitle him for bail.
The Applicant has failed to meet the test of twin condition under Section 45 of PMLA. Moreover, the Applicant is a British citizen and as such the possibility of the Applicant not being available for trial cannot be ruled out - Application disposed off.
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2023 (5) TMI 868
Jurisdiction to hear PMLA cases - whether the Adjudicating Authority consisting of only one technical member can hear the cases under the PMLA Act, 2005 and pass attachment orders? - HELD THAT:- This Court has already taken the view that under Section 26 of PMLA Act, any person aggrieved by an order is entitled to approach the Appellate Tribunal.
In the recent decision of the Supreme Court in M/S. SOUTH INDIAN BANK LTD. & ORS. VERSUS NAVEEN MATHEW PHILIP & ANR. ETC. ETC. [2023 (5) TMI 798 - SUPREME COURT]] the Court has observed that the statutory mechanism needs to be followed and writ jurisdiction ought to be exercised with caution.
The opinion of the Court is that the Petitioner who claims a beneficial interest in the property ought to approach the Appellate Tribunal under Section 26 of the Act. At this stage, ld. Counsel for the Petitioner submits that he may be permitted to approach the Appellate Tribunal.
The petition is dismissed as withdrawn with liberty to approach the Appellate Tribunal constituted under Section 26 of the PMLA Act.
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2023 (5) TMI 816
Seeking grant of bail - Money Laundering - cheating and misappropriation of money by making false promises and forging documents - HELD THAT:- In Rohit Tondan [2017 (11) TMI 779 - SUPREME COURT], the Hon'ble Supreme Court has held that The Court is not required to record a positive finding that the accused had not committed an offence under the Act. The Court ought to maintain a delicate balance between a subsequent judgment of acquittal and conviction and an order granting bail much before commencement of trial. The duty of the Court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. Further, the Court is required to record a finding as to the possibility of the accused committing a crime which is an offence under the Act after grant of bail.
The only allegation against the applicant is of having transferred the company and there is no allegation against the applicant of having acquired any company or any other property. Even while the applicant was a director in the company, there is no allegation that he was having the authority to make financial transactions and that he in fact did make any transaction which may amount to commission of any offence. What prima facie appears from the allegation levelled in the complaint is that there is absolutely no allegation of commission of any of act which may amount to commission of any offence and he has been charged with the alleged offences merely for the reason that he held the position of director in the company.
From the material placed before the Court at this stage, apart from being a director of the company which had been sold away to the persons accused of launching a Bike Bot scheme, there appears to be no allegation that the applicant has actually committed any such act, as would attract the offence described in Section 3 of the Prevention of Money Laundering Act.
As the applicant has no previous criminal history, apart from the predicate offences, there appears to be no likelihood that the applicant would again indulge in commission of similar offence in case he is released on bail and no material has been plato theced in the counter affidavit to give rise to a reasonable apprehension to this effect. The applicant is languishing in jail since 20.12.2020 and he has already been granted bail in the predicate offence as also in case Case Crime No. 558/2021, under Section 2 & 3 U.P. Gangsters and Anti-Social Activities (Prevention) Act, 1986, in which the applicant has been implicated after his arrest in the present case.
Applicant is released on bail subject to conditions imposed - Application allowed.
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2023 (5) TMI 660
Principles of natural justice - Non-service of proper SCN - Provisional Attachment Order - Money laundering - proceeds of crime - investing part of proceeds of crime to purchase properties - HELD THAT:- This Court notes with some concern that the impugned email/communication has been written to the promoters of the TDI in respect of the properties which are not even subject matter of any investigation, and that too by Assistant Director, Mr. Hemant, who is not authorised under the PMLA to pass such communications. Though the email is now sought to be withdrawn, it is clear that such an email ought not to have been written in the first place - The higher authorities including the Director, Enforcement Directorate shall be informed of this impugned email which was written in the present case, so that appropriate instructions and directions could be given to the concerned officials of the Enforcement Directorate.
The communication dated 26th July, 2019 having been withdrawn, no further orders are called for in this writ petition - Petition disposed off.
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2023 (5) TMI 659
Violation of principles of natural justice - opportunity to summon the Assistant Director and Deputy Director of the respondent authority for their examination/cross-examination, rejected - rejection holding that no meaningful purpose would be served by cross-examining the said officers - HELD THAT:- The appeal is disposed of with the following directions:
(i) It would be open to the appellant to raise all issues, factual as well as legal before the Adjudicating Authority at the time of final hearing.
(ii) The Adjudicating Authority would be at liberty to take an independent view of the entire factual matrix as well as legal issues without being influenced by any observation contained in the impugned order of the Tribunal dated 08.05.2023 on the merits of the factual matrix as well as legal issues.
(iii) The Adjudicating Authority shall permit the appellant to address arguments and rely upon the material that has already been placed before it by the appellant before forming an opinion with regard to passing of the final order in terms of Section 8 of the Act.
The appeal is accordingly dismissed as withdrawn.
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2023 (5) TMI 658
Violation of principles of natural justice - Petitioner’s application for right to cross examine witnesses has been rejected - Appealable order or not - Provisional Attachment Order - HELD THAT:- It is now the settled position that the order under challenge being an order passed by the Adjudicating Authority, PMLA is appealable under Section 26 of the PLMA - This provision has been considered by this Court in DR. U.S. AWASTHI VERSUS ADJUDICATING AUTHORITY PMLA & ANR. [2023 (1) TMI 595 - DELHI HIGH COURT] wherein the Court under similar circumstances interpreted the order rejecting application for cross examination passed by the Adjudicating Authority, PMLA as appealable under Section 26 of the PMLA.
The Appellate Tribunal, PMLA is currently constituted and is functioning. The impugned order would be appealable to the Appellate Tribunal. Thus, this Court is not inclined to entertain the present writ petition. The Petitioner is relegated to avail of its Appellate remedy in accordance with law.
However, this Court would like to specifically note that it appears that the Respondent No. 1 has failed to take into consideration the observations of this Court in the U.S. Awasthi case where the use of such disconcerting language as contained in paragraph 8 of the impugned order, has been frowned upon by this Court. Repeated use of templated paragraphs, as though the principles of Natural Justice are mere rhetoric, is not permissible. The present order shall be treated as a warning to the concerned authority to not use such language, failing which the Court would be constrained to direct action to be taken.
The Appellate Tribunal, PMLA shall ensure that the Respondent No. 1. shall abide by the principles of natural justice as also the observations of this Court given in Dr. U.S. Awasthi - The Petitioner is permitted to approach the Appellate Tribunal, PMLA within a period of one month. The period during which the present writ petition was pending shall be deductible from the period of limitation for filing of the appeal - the observations of this Court qua the language of the impugned order used would not have a bearing on the merits of the case.
Petition disposed off.
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2023 (5) TMI 527
Challange to the bail granted by the HC - Money Laundering - scheduled offence - It is submitted that while enlarging respective respondent No. 1 – accused on bail the High Court has not properly appreciated Section 45 of the PML Act, 2002 - HELD THAT:- At the outset, it is required to be noted that respective respondent No. 1 – accused are facing the investigation by the Enforcement Directorate for the scheduled offences and for the offences of money laundering under Section 3 of the PML Act punishable under Section 4 of the said Act. An enquiry/investigation is still going on by the Enforcement Directorate for the scheduled offences in connection with FIR No. 12/2019. Once, the enquiry/investigation against respective respondent No. 1 is going on for the offences under the PML Act, 2002, the rigour of Section 45 of the PML Act, 2002 is required to be considered.
From the impugned judgment(s) and order(s) passed by the High Court, it appears that what is weighed with the High Court is that chargesheet has been filed against respective respondent No. 1 – accused and therefore, the investigation is completed. However, the High Court has failed to notice and appreciate that the investigation with respect to the scheduled offences under the PML Act, 2002 by the Enforcement Directorate is still going on. Merely because, for the predicated offences the chargesheet might have been filed it cannot be a ground to release the accused on bail in connection with the scheduled offences under the PML Act, 2002. Investigation for the predicated offences and the investigation by the Enforcement Directorate for the scheduled offences under the PML Act are different and distinct. Therefore, the High Court has taken into consideration the irrelevant consideration. The investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is till going on.
The High Court has neither considered the rigour of Section 45 of the PML Act, 2002 nor has considered the seriousness of the offences alleged against accused for the scheduled offences under the PML Act, 2002 and the High Court has not at all considered the fact that the investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is still going on and therefore, the impugned orders passed by the High Court enlarging respective respondent No. 1 on bail are unsustainable and the matters are required to be remitted back to the High Court for afresh decision on the bail applications.
Appeal allowed.
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2023 (5) TMI 444
Money Laundering - proceeds of crime - predicate offence - property purchased from proceeds of crime is attached - whether there is ground for putting the petitioner on trial for offence of money laundering? - HELD THAT:- Organized crime in general and economic offences in particular are not individual act, they are collaborative criminal enterprise of collective of persons, with defined role, who may join at its different stage of its execution. These are species of economic offence, where proceed of crime may run into crores with wide ramification undermining financial institutions and the economic health of the country. Actors involved are skilled and educated, the process of money laundering involves meticulous planning and deft execution in placement, layering and integration of the ill-gotten money in a complex layer of financial transactions to disguise it and project it as untainted. Different players may enter and exit in stages, to bring into fructification the larger design.
In order to curb this, Prevention of Money Laundering Act aims at the persons who may not be involved in the predicate offence, but in laundering the proceeds of crime. The offence of money laundering is a stand alone offence and it is not necessary that the person accused of offence under PMLA should also be charged of the Scheduled offence. It is sufficient that proceed of crime so generated by the commission of scheduled offence, is laundered by the accused for being charged under PMLA. Money laundering is an independent offence has been held in Vijay Madan Lal Choudhary Vs Union of India [2022 (7) TMI 1316 - SUPREME COURT].
After investigation chargesheet has been submitted against the contracting company M/s Classic Coal Construction Pvt. Ltd through its directors Sri Pawan Kumar Singh (father of the petitioner, since dead) and others for causing wrongful loss to the Govt. of Jharkhand and wrongful gain to the Company - Petitioner became a salaried director in the year 2010 and after the death of his father on 27.03.2013 he became the Managing Director and inherited the assets and liabilities of the Company.
The presumption under Section 24 of PML Act can be rebutted only at the stage of trial and not at the stage of framing of charge. Nexus if any, between the properties acquired in the name of this petitioner and the proceeds of crime is a question of fact to be looked into at the stage of trial and not at the stage of discharge.
There are no infirmity in the impugned order - Criminal Revision Petition accordingly stands dismissed.
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2023 (5) TMI 443
Money Laundering - provisional attachment order - scheduled offences - no reasons given by the authorities while attaching the bank accounts - non-application of mind - Section 5(1) of PML Act, 2002 - HELD THAT:- On a perusal of para 10 of the impugned attachment order, no specific reasons for attaching Account Nos. 641301010050403 and 641304010000001, are stated. If the contention of the petitioners that, no third-party has deposited any amount in the said accounts is taken as true and, in such circumstances, whether such accounts can be attached or not, the reasons are not coming forward in the provisional attachment order. If that is the case, it can be easily presumed that the provisional attachment order, insofar as two accounts is concerned, is without application of mind and without any reasons to believe i.e., the reasons for such belief has not been recorded. Further, this Court, under Articles 226 of the India, cannot adjudicate or decide the aspect of depositing of amounts by the third parties in the subject accounts.
The scope of entertaining this Writ Petition under Article 226 of the Constitution of India is no doubt limited and this Court cannot adjudicate on provisional attachment order if it is in consonance with Section 5 of the Act, 2002. There is no dispute with regard to the law laid down by various courts in that regard. But Section 5 of the PML Act, clearly says that the authority should record reasons while attaching the properties, both movable and immovable. However, in the present case, in the impugned attachment order, the respondent-authorities have not recorded any reasons for attaching the subject accounts referred supra. As such, this Court holds that the attachment of the said accounts is without proper reasons.
The impugned order is set-aside only to the extent of attaching Account Nos. 641301010050403 and 641304010000001 of the Union Bank of India. However, the 2nd respondent-Deputy Director is at liberty to look into the said two accounts and if he finds that the said two accounts are to be attached, he may do so by passing a fresh reasoned order, in accordance with law - the Writ Petition is disposed of.
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2023 (5) TMI 102
Money Laundering - proceeds of crime - Scheduled Offences - knowledge of the accused is the condition precedent or sine qua non required to be shown by the prosecution for lodging the complaint - absence of any material to show that the petitioners had the knowledge that they were dealing with the proceeds of crime committed by Bharat Bomb and his associates - HELD THAT:- Section 2(u) defines what is “proceeds of crime” and Section 2(y) defines what is “Scheduled offence”. As discernable from the record, the Prosecution complaint in ECIR was lodged against the petitioners and others under the PMLA by the ED, pursuant to the investigation carried out by the CBI in the FIR No. RCBD1/2016/E/0002 dated 07.03.2016 and the charge-sheet dated 14.06.2016 filed by the CBI against Bharat Bomb and others for the offences under Sections 120B, 420, 467, 468, 471, 472 and 474 of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 at the Designated CBI Court at Jaipur. All the said offences are scheduled offences within the meaning of Section 2(y) of the said Act - Suffice it to say that serious allegations of money laundering are alleged against both the petitioners in the Prosecution complaint and sufficient material particulars have been narrated in the said complaint to substantiate the said allegations, which prima facie show the direct involvement of the petitioners in the alleged offences of money laundering as defined in Section 3 of the said PMLA.
Having regard to the definition contained in Section 3, it would be a folly to hold that the knowledge of the accused that he was dealing with the proceeds of crime, would be a condition precedent or sine qua non required to be shown by the prosecution for lodging the complaint under the said Act. As the definition itself suggests whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering - In the instant case, the direct involvement of the petitioners in the activities connected with the proceeds of crime has been alleged, along with the material narrated in the complaint which would require a trial to be conducted by the competent court.
Apart from the fact that after filing of the SLPs, no documents could have been filed without the permission of the Court, which in the instant case does not appear to have been sought for by the petitioners nor granted by the Court, the very practice of not filing the essential and relevant documents, more particularly, the documents in respect of which a relief is sought in the SLPs, is strongly deprecated. It may be noted that non-production of the relevant documents especially the documents in respect of which the relief is sought, along with the SLPs could be the sole ground for rejection of the SLPs at the outset - The Registry is also directed to verify at the time of registration of SLPs as to whether all the relevant documents, more particularly, the documents in respect of which the relief is sought, have been produced at the first instance by the petitioners along with the SLPs or not.
The interim relief granted earlier stands vacated forthwith - petition dismissed.
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2023 (5) TMI 88
Seeking grant of Regular Bail - money laundering - predicate offences - petitioner not being released on account of production warrants - rigour of Section 45 of the PMLA Act met or not - HELD THAT:- In the instance case, it is an admitted case that even after the issuance of production warrants, the accused persons have not been formally arrested as yet by the ED. The petitioners were in custody in predicate offences for more than 9 years and no admittedly, have been admitted to bail for the predicate offences. However, admittedly, they have not been released on account of production warrants issued by the learned Trial Court subsequent to the filing of the complaint by the ED.
Since the petitioners have yet not been taken into formal custody in this case, the bail applications filed by the accused persons are infructuous - Hence, the bail applications along with pending applications are dismissed.
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