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Money Laundering - Case Laws
Showing 321 to 340 of 342 Records
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2023 (1) TMI 1410
Rejection of application filed u/s 190 read with Section 245(2) of the Code of Criminal Procedure, 1973 - scheduled offence or not - proceeds of crime - The learned counsel for the accused Nos. 1 and 2/ petitioners submitted that in view of the Judgment rendered by Hon'ble Apex Court in Vijay Madanlal Choudhary and others v. Union of India and others [2022 (7) TMI 1316 - SUPREME COURT], if the accused were acquitted in the scheduled offences, that should result in termination of the chargesheet filed for the predicate offences under the provisions of the PML Act. The learned counsel submitted that the petitioners / accused are already acquitted of the scheduled offences and therefore the proceedings under the PML Act cannot proceed.
HELD THAT:- This is not disputed by the learned Central Government Standing Counsel for the respondent.
This Revision Petition is allowed and 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.
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2023 (1) TMI 1349
Seeking grant of bail - money laundering - while working as a public servant in the capacity of AG-1, Divisional Office, FCI Bhopal, during the check period from 02.12.2016 to 29.05.2021, amassed property 900% disproportionate to his known sources of income - HELD THAT:- Citing several earlier judgments in P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [2019 (9) TMI 286 - SUPREME COURT], the Supreme Court observed that power under Section 438 of CrPC is an extraordinary power and the same has to be exercised sparingly. The privilege of the pre-arrest bail should be granted only in exceptional cases. The judicial discretion conferred upon the court has to be properly exercised after application of mind. Repelling the submission that anticipatory bail is a facet of Article 21 of the Constitution of India and its denial would amount to denial of the right conferred upon under the said Article, the Apex Court stated that "We are conscious of the fact that the legislative intent behind the introduction of Section 438 CrPC is to safeguard the individual's personal liberty and to protect him from the possibility of being humiliated and from being subjected to unnecessary police custody.
Coming back to the present case, it is observed that conduct of the petitioner shows that he has deliberately disobeyed the order of the Court and intentionally, willfully and purposely avoided his appearance before the trial Court. The reason assigned by him for his non-appearance lacks bona fide. His conduct speaks loudly and clearly that he is avoiding his presence and is not cooperating with the trial. He is trying to make the straight path crooked to achieve his object to somehow get bail under the cover of a petition under Section 482 of CrPC by avoiding the jurisdictional Bench which refused to accede to his similar prayer. Such practices malign the noble image of the great institution and spread an impression that by twisting and turning the law, a desired lousy and atrocious result can be obtained.
It is further observed that even lenient view taken by the trial Court to facilitate the petitioner to appear before it by keeping the arrest warrant issued against him at abeyance could not mend him to honour the process of the Court.
Taking into consideration the fact that despite ample opportunities being given, the petitioner has not bothered to appear before the trial Court. He defied the direction of the Court knowingly and willfully. No reason has been demonstrated to show that the findings of the trial Court are perverse or contrary to the record or suffers from any illegality, irregularity or impropriety so as to invite our interference in the orders impugned. Thus, there are no error being committed by the trial Court in rejecting the petitioner’s application under Section 70(2) of CrPC.
Petition dismissed.
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2023 (1) TMI 1309
Grant of Interim Bail - Money Laundering - proceeds of crime - violation of Sections 41, 41-A and 60-A Cr.P.C. - whether the arrest of the petitioners was illegal i.e. contrary to the constitutional mandate and statutory provisions and consequently, whether the petitioners are entitled to be released on interim bail? - HELD THAT:- The Apex Court in the case of SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. [2022 (8) TMI 152 - SUPREME COURT], has issued certain directions to investigating agencies and the courts; has discussed arrest in cognizable offences, the mandate of Section 41, effect of its non-compliance while considering the bail application; has issued directions to ensure that police officers do not arrest the accused unnecessarily and magistrates do not authorise detention casually and mechanically; has held that Sections 41 and 41-A are facets of Article 21 of the Constitution; and has issued certain guidelines for avoiding unwarranted arrest, amongst other directions/observations.
From various judgments, it is evident that arrest is not mandatory; that the notice issued under Section 41-A is to ensure that the persons upon whom notice is served, is required to attend for 'answering certain queries' relating to the case; that if an officer is satisfied that a person has committed a cognizable offence punishable with imprisonment for a term, which may be less than 7 years or which may extend to the said period, with or without fine, an arrest can follow only when there is a reason to believe or suspect that the said person has committed an offence, and there is a necessity for an arrest.
Section 41 Cr.P.C. mandates the concerned officer to record his reasons in writing while making the arrest. Thus, a statutory duty is cast on the officer not only to record the reasons for arrest in writing, but also, if the officer chooses not to arrest - The Apex Court in its judgments in ARNESH KUMAR VERSUS STATE OF BIHAR & ANR [2014 (7) TMI 1143 - SUPREME COURT] and SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. [2022 (8) TMI 152 - SUPREME COURT], has clearly interpreted Sections 41(1)(b)(i) and (ii) Cr.P.C. It is evident from the said judgments that both the elements, "reason to believe" and "satisfaction for an arrest" as mandated in Section 41(1)(b)(i) and Section 41(1)(b) (ii) have to be read together and as such recorded by the concerned officer whilst arresting an accused. The object being to ensure that officers do not arrest the accused unnecessarily and the Magistrates do not authorise detention casually and mechanically.
Thus, it is clearly evident from the mandate of Section 41 Cr.P.C., that for a cognizable offence, an arrest is not mandatory and the onus lies with the officer who seeks to arrest. For effecting arrest, the officer must be satisfied that a person has committed a cognizable offence, punishable with imprisonment for a term which may be less than seven years or which may extend to the said period with or without fine, and that there is a necessity for an arrest - In the facts, it is evident that the officer, in the arrest memo, in the column, 'Grounds of arrest' has merely stated that 'The accused is an FIR named. She has been not cooperating and disclosing true and full facts of the Case.', which prima-facie appears to be contrary to the facts on record. Nothing specific has been noted/set-out therein, as mandated by Section 41(1)(b) (ii) (a) to (e). The only reason mentioned is that the petitioners have not co-operated and not given true and correct disclosure. The same cannot be a ground for arrest.
Courts have time and again re-iterated the role of courts in protecting personal liberty and ensuring that investigations are not used as a tool of harassment.
In the present case, the reasons recorded by the Officer in the ground of arrest, does not satisfy the tests laid down in Section 41(1)(b)(ii) (a) to (e) of Cr.P.C. It does not disclose as to whether the arrest was necessary for one or more purpose(s) as envisaged in the said provision - the petitioners' arrest is not in accordance with law. Thus, non-compliance of the mandate of Section 41(1)(b)(ii), Section 41-A and Section 60-A of Cr.P.C. will enure to the benefit of the petitioners, warranting their release on bail.
The petitioners are entitled to be released on bail, pending the hearing and final disposal of the aforesaid petitions on the conditions imposed - petition allowed.
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2023 (1) TMI 1268
Validity of closure report accepted by the Ld. Magistrate - HELD THAT:- The criminal proceedings are closed at this stage. However, at later stage, if any change in circumstances arises, the respondent is at liberty to take appropriate steps available under the law including recall of the present order, if so advised.
SLP disposed off.
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2023 (1) TMI 1239
Rejection of bail - bail application has been filed after expiry of the interim protection being granted by the Hon'ble Apex Court - application rejected mainly on the ground that applicant has not appeared before the Court rather she was absent - HELD THAT:- Considering the fact that the liberty of the present applicant has been protected by the Apex Court till 13.1.2023, therefore, her non-appearance before the learned trial court on or before 13.1.2023 would not be considered as an illegality on her part. Further, when she filed her application for bail before the learned trial court on 13.1.2023 she should have appeared before the learned trial court inasmuch as if the applicant does not appear before the learned trial court in the present case, her bail application could have not been decided by the learned trial court. Her presence at the time of hearing and disposal of the bail application was required under the law, therefore, there are no infirmity, illegality or perversity in the impugned order dated 16.1.2023.
Considering the ailments of the present applicant which has been indicated in the application and such critical physical condition has been considered by this Court in earlier occasion and by the Apex Court, therefore, liberty is given to the present applicant to appear before the learned trial court within one week from today. To be more precise on or before 1.2.2023 and file her bail application. The said bail application shall be heard and disposed of expeditiously preferably on the same date, if possible.
Application disposed off.
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2023 (1) TMI 1189
Money Laundering - proceeds of crime - twin conditions as mandated under Section 45 of PML Act satisfied or not - corroborative evidences or not - tampering with the evidences or not - HELD THAT:- From the account of the A1 and A3, the money has been layered and operated the account where the proceeds of crime parked at Hong Kong. Hence, the petitioner parked a sum of Rs.59.47 crores outside the country with the support of money parked outside the country may go underground and as such it is impossible to make him to participate in the trial. Further, there is possibility of tampering with the evidence and influencing the co-accused.
That apart, the twin conditions as mandated under Section 45 of PML Act shall apply in this case and the petitioner failed to adduce anything contrary to establish that he is not involved in the offence. Therefore, there is no change of circumstances to consider the present bail petition.
This Court is not inclined to grant bail to the petitioner - Petition dismissed.
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2023 (1) TMI 1051
Provisional attachment of properties under Section 5 of the Prevention of Money Laundering Act, 2002 - no proceedings relating to the predicate offense may have been initiated by the competent agency functioning under an independent statute and in terms of which the scheduled offense stands created - whether the ED could be recognised to have the jurisdiction to enforce the measures contemplated in Section 5 of the Act solely upon it being of the opinion that the material gathered in the course of an investigation or enquiry evidences the commission of a predicate offense?
HELD THAT:- The Court finds that till date the ED has failed to take any steps as are envisaged under Section 66(2) of the PMLA. As would be manifest from a reading of sub-section (2) of Section 66 if the Director or other authority on the basis of material in its possession comes to form the opinion that the provisions of any other law in force are contravened, it is obliged to share that information with the concerned agency for necessary action. Section 66(2) thus fortifies the conclusion of the Court that ED does not stand conferred with any independent power to try offences that may be evidenced or may stand chronicled as offences under any other law. What the Court seeks to highlight is that the jurisdiction and authority of the ED stands confined to considering whether an offence of money laundering stands evidenced. If in the course of its enquiry and investigation, it were to come to the conclusion that the material in its possession evidences the commission of an offence created under any other enactment, it would be obliged to furnish requisite information in respect thereof to the concerned agency for necessary action.
The allocation of the preferential shares and the proceeds garnered therefrom is what constitutes the substratum of the PAO. However, no report or complaint in relation thereto stands registered. In fact, the allegation of an offense having been committed by the petitioner in the course of allotment of preferential shares was also not shown to have been ever investigated by the concerned agency. It is thus established beyond an iota of doubt that the PAO rests on a mere presumption of the ED that a scheduled offense was committed by the petitioner while allotting preferential shares.
The Court is constrained to observe that despite both those proceedings being pending since 2014, ED did not deem it fit, appropriate or imperative to furnish any information to the CBI in order to enable it to examine whether the allotment of preferential shares would evidence the commission of an offence under the IPC or any other Statute. Regard must also be had to the fact that the PAO itself came to be made on 29 November 2018 and thus almost four years after the registration of the FIR by the CBI and the filing of the ECIR. In fact, and undisputedly, the ED was not shown to have furnished information with respect to allotment of preferential shares even when the present petitions were closed for rendering judgment.
The Court is further constrained to observe that the preferential allotment of shares was made on 03 January 2008. The respondent alleges that the coal block allocation and disclosures in respect thereof were made before the BSE and other regulatory authorities around that time. It was the increase in the share price of the petitioner between 02 January 2007 and 01 January 2008 which formed subject matter of its scrutiny. The premium amount of Rs.118.75 crores was also received during this period. The Court is thus faced with a situation where the PAO was based on events which had occurred six years prior to the submission of the ECIR. The PAO came to be drawn ten years after the allocation of preferential shares - In fact, and till date even though more than fourteen years have elapsed, ED has failed to furnish any information to the competent agency to try, investigate or examine aspects pertaining to the preferential allotment of shares in order to ascertain whether they evidence the commission of a scheduled offence. Thus, in the considered opinion of the Court, the aforesaid facts render the impugned PAO’s not only violative of the statutory provisions but also patently arbitrary and illegal.
The impugned PAO cannot be countenanced as falling within the meaning of an emergency attachment order bearing in mind that the allotment had itself occurred more than 11 years prior to the action initiated by the ED. In fact, even after the passing of 14 years, that aspect has neither been investigated by the competent agency nor has any report in that respect been lodged. While it may be urged that it would still be open to the ED to provide information under Section 66(2) of the Act, that too does not convince the Court to hold in favour of the respondent in the facts of the present case. It must be stated that an action to attach properties provisionally under Section 5 must necessarily be tested based upon the facts and the material that exists on the day when it comes to be made. A PAO cannot possibly be sustained based upon what the ED may prospectively choose to do.
The impugned PAO shall stand quashed - Petition allowed.
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2023 (1) TMI 1050
Money Laundering - proceeds of crime - Accumulation of disproportionate assets accumulated by the accused/ MLA/ Minister, Anos Ekka and Harinarayan Rai - criminal conspiracy - misappropriation - criminal breach of trust - cheating forgery fraudulent execution of deed of transfer containing false statement of consideration amount - acquiring assets disproportionate to his known lawful source of income and also to have acquired lands in violation of C.N.T. Act in the name of his wife Smt Menon Ujjana Ekka - scheduled offence/predicate offence.
HELD THAT:- The three ingredients of the offence under Section 3 read with Section 4 of PMLA are:
I. A criminal activity which is a scheduled offence, should have been committed.
II. Some money should have been generated by the criminal activity;
III. The money so generated (proceed of the crime) should have been projected as untainted one.
In the present case the prosecution has proved all the three basic ingredients of the offence. I do not find any infirmity in the impugned Judgment of conviction by the trial Court. Judgment of conviction under predicate offence is also affirmed in Criminal Appeal no.326/,327/ and 328/ pending before this Court and pronounced by a separate Judgment today.
Sentence - HELD THAT:- It is a settled principle that criminal law generally adheres to the principles of proportionality in sentencing. Imposition of sentence without considering its effect on the social order in many cases can render the criminal adjudication as an exercise in futility. Appellant in the present case was none other than an elected representative of the people, who was reposed with faith to discharge his constitutional obligations with the highest degree of probity. Unfortunately, power blinded his wisdom and he indulged in rampant corruption by acquiring movable and immovable property much beyond his known sources of income. The proceeds of crime under a grand design and various contrivances, were projected as untainted by the process of money laundering. The nature of crime, post held by the appellant, does not justify any leniency in sentencing.
On the point of sentence, considering the gravity of offence and the position of responsibility as held by the appellant/accused, the sentence of imprisonment and fine needs no interference by this Court. The learned Court below has recorded adequate and sufficient reasons for awarding sentence which will meet the ends of justice. These are species of crime that strike at the financial foundation of the State and the convict does not deserve any clemency so that the deterrent effect of punishment is not completely diluted - the order of confiscation of crime proceeds is also affirmed.
The Judgment of conviction and sentence passed by the learned Court below is upheld - Appeal is dismissed.
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2023 (1) TMI 919
Money Laundering - generation of proceeds of crime or not - alleging perpetration of criminal activities in the sanction and disbursement of credit facility to the company - role of petitioner in the commission of offence - HELD THAT:- The requirement of projecting the proceedings of crime as untainted property may be one of the modes by which the offence is committed and is no longer a sine qua non for constituting the offence of money-laundering under Section 3 of the PML Act.
The predicate offence against the petitioner is that he fraudulently sanctioned and disbursed the loan. The loan is, therefore, the proceeds of crime. It is necessary to notice that the scope of Section 3 is wide enough to cover all persons who “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.” It is clear that even a person who knowingly assists in any process or activity connected with the proceeds of crime would also be caught within the net of Section 3. In the case on hand, on a reading of the complaint, the allegation is that, but for the role played by the petitioner, the loans could not have been sanctioned and disbursed to A-1. Prima facie, these allegations would attract Section 3 of the PML Act.
The conclusion have been arrived at in the light of a recent decision of the Supreme Court in DIRECTORATE OF ENFORCEMENT VERSUS PADMANABHAN KISHORE [2022 (11) TMI 53 - SUPREME COURT], wherein, it was observed that By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime. Without such active participation on part of the person concerned, the money would not assume the character of being proceeds of crime. The relevant expressions from Section 3 of the PML Act are thus wide enough to cover the role played by such person.
The case set up in paragraph 10.6 of the complaint is that, A-5 had sanctioned and disbursed the credit facilities/loan. But, for the alleged active participation and assistance of the petitioner/A-5 the money so disbursed would not have assumed the character of proceeds of crime. Consequently, it cannot be said that the alleged role played by the petitioner does not come within the net of the definition of proceeds of crime under Section 3 of the PML Act.
There are no ground to interfere with the criminal prosecution of the petitioner/A-5 - petition dismissed.
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2023 (1) TMI 846
Provisional attachment order - case of petitioner is that Madura Chemicals Pvt. Ltd. was acquired by the petitioner in the year 2015 and that the petitioner was never put on notice either after the provisional attachment order was passed or when the confirmation order was passed by the Adjudicating Authority - HELD THAT:- Madura Chemicals Pvt. Ltd. has been specifically added as a party before the Adjudicating Authority and it is represented by the above said Mathesh. We are dealing with a legal persona in the present case and it is enough if notice is issued to the company. The grievance of the petitioner that he did not personally know about this case is a matter to be resolved with Mathesh, who had received money from the petitioner enabling the petitioner to acquire the company. Hence, we are not satisfied with the contention raised by the learned counsel for the petitioner that Madura Chemicals Pvt. Ltd. was never put on notice by the Adjudicating Authority while confirming the provisional attachment order. In any event, we cannot get into this factual issue for the first time while dealing with this writ petition and such factual disputes cannot be adjudicated in a writ petition.
Jurisdiction of the second respondent to pass the confirmation order beyond the period of 180 days - HELD THAT:- The second respondent apart from dealing with the merits of the case, has justified the passing of the Adjudication Order beyond 180 days by relying upon the various orders passed by the Apex Court extending the period of limitation.
In the Apex Court has explained the scope of the order passed in S.Kasi case [2020 (6) TMI 727 - SUPREME COURT] and has categorically held that the same cannot be applied in a matter involving proceedings before a Court. The second respondent was exercising a quasi-judicial function and the ratio in S.Kasi case cannot be applied to such a quasi-judicial authority. In any case, we keep this issue open to enable the petitioner to agitate the same before the Appellate Tribunal.
This Writ Petition is dismissed and liberty is granted to the petitioner to approach the Appellate Tribunal u/s.26 of the PMLA and work out his remedy in accordance with law.
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2023 (1) TMI 809
Money Laundering - schedule offence - proceeds of crime - non-existent or non-functional or fake functional MSMEs - offences under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 besides Sections 420, 468, 471 and 120-B IPC - HELD THAT:- The PMLA is a law linked with the scheduled offence. The same is evident from a sincere reading of Sections 5 and 8 of PMLA as it stood prior to 2009 and 2013 Amendments. In Section 5 of the PMLA (as it was originally enacted), a condition prerequisite for an order of provisional attachment of property was that the accused has been charged of having committed a scheduled offence. The said requirement was diluted to the effect that notwithstanding the above, provisional attachment could be ensured under Section 5 of PMLA when the concerned officer expressed his view in writing that the failure to immediately attach property would likely frustrate or defeat the action against money laundering.
Section 8 of the PMLA prior to its 2013 Amendment), any attachment or retention of property under the PMLA would cease to exist once the person charged with a scheduled offence stood acquitted for the said offence. However, the amendment of 2013 was done away with the unamended Section 8 of PMLA. Having discussed so far, it is clear and apparent that while the continuance of the proceeding under the PMLA was intricately linked to the scheduled offence proceeding, the Legislature attempted to erase the said distinction by introducing amendments which led to incongruent interpretations resorted to by the various High Courts.
With the above ratio laid down by the Supreme Court [2022 (7) TMI 1316 - SUPREME COURT], it has to be held that proceedings of money laundering are liable to be terminated with the underlined scheduled offences ending in acquittal, dismissal or being quashed.
All the aforesaid decisions relief upon by the ED have been neutralized by the decision of the Apex Court in Vijay Madanlal Choudhury [2022 (7) TMI 1316 - SUPREME COURT]. In the plain language, if the foundation does not exist, how the edifice can survive. In other words, when the predicate offence fails, the foundation having been demolished, the superstructure is to fall and crumbl
Application allowed.
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2023 (1) TMI 808
Money Laundering - proceeds of crime - when a juristic person has been arrayed as an accused in a prosecution, who should have to represent such a legal persona? - HELD THAT:- A12 has volunteered to represent the juristic person A13. In view of the same, the juristic entity has nominated a person to represent it in the prosecution and as a result, the petitioner can be discharged from the complaint.
This Criminal Revision Case stands allowed.
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2023 (1) TMI 744
Seeking grant of bail - Money Laundering - proceeds of crime - collection of funds under false promises of exorbitant high rate of interest on the deposits - HELD THAT:- Primarily delay in trial is attributable to the accused. Though the complaint was filed in the year 2018. The trial court could deliver the copies under Section 207 of the Cr.P.C only on 22nd March, 2022 to the accused. Prosecution cannot be blamed for causing delay in conducting ML Case No.2 of 2018.
It is also not out of place to mention that the petitioner is involved in money laundering of huge sum of money amounting to Rs.1750 crores (approximately). He has already siphoned out a sum of Rs.6666 crores which are proceeds of crime. The Enforcement Directorate has also produced reports and documents as to how the petitioner tried to coerce the present director of M/s Chocolate Group of Hotels for extortion of money and wrongful gain. Repayment process by the High Court constituted Asset Disposal Committee has been going on.
The benefit of Section 436A of the Code of Criminal Procedure cannot be granted - Prayer for bail of the accused Goutam Kundu is, thus, considered and rejected.
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2023 (1) TMI 694
Money Laundering - provisional attachment order - scheduled/ predicate offence - proceeds of crime - Petitioners have been discharged in the scheduled/ predicate offence - It is submitted by petitioner that a closure report filed by the CBI has been accepted by the Trial Court in respect of the predicate offence and no criminal charges are now pending against the Petitioners - HELD THAT:- A perusal of the orders passed in Parvathi Kollur [2022 (8) TMI 1256 - SC ORDER] leaves no matter of doubt in the mind of the Court that if there is an acquittal/ discharge or a closure report has been filed in the predicate offence, the ECIR would not stand and the same would be liable to be quashed. For example, in ADJUDICATING AUTHORITY (PMLA) AND ORS. VERSUS SHRI AJAY KUMAR GUPTA & ORS. [2023 (1) TMI 681 - SC ORDER], there was acquittal in the predicate offence. In view of the said fact, the Supreme Court was of the view that the appeal filed by the Adjudicating Authority (PMLA) would not survive.
Similarly, in DIRECTORATE OF ENFORCEMENT VERSUS M/S OBULAPURAM MINING COMPANY PVT LTD [2023 (1) TMI 682 - SC ORDER], closure report had been accepted by the Trial Court qua the predicate offence. The Supreme Court was again of the view that proceedings under PMLA will not survive and the Court proceeded to quash the ECIR.
In the facts of the present case, the Trial Court, in the complaint case which was pending before it, has clearly come to a conclusion that the closure report deserves to be accepted and no criminality is ascertainable as the documents in respect thereof were not available - the impugned attachment orders dated 14th February, 2022 and 20th June, 2022 as also the ECIRs are quashed.
Petition allowed.
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2023 (1) TMI 682
Grant of Regular bail - Money Laundering - siphoning of funds - the allegation is that the amount was given by RFL to entities which were, directly or indirectly, owned or controlled by the applicant, or in which the applicant otherwise had financial interest, including companies linked to RHC - HC [2020 (7) TMI 556 - DELHI HIGH COURT] held that There seems to be no rationale for continuing the applicant’s judicial custody as an undertrial in this case - HELD THAT:- The present case relates to the predicate offence in respect of the same matter - List before a Bench of one of us (Hon. Sanjay Kishan Kaul, J.) is not a Member - Insofar as the urgent listing now is concerned, it is the prerogative of the Hon’ble the Chief Justice of India.
Money Laundering - public auction - the allegations are to the effect that the lands, which would fetch higher value in the public auction, were purchased by the petitioners in connivance with the other accused resulting in a huge loss - burden to prove - HC [2019 (10) TMI 1236 - MADRAS HIGH COURT] held that the burden of proof by discharging the presumption lies upon the persons charged. Hence, investigation by the Central Bureau of Investigation and the respondent are totally distinct and different - HELD THAT:- Learned Solicitor General fairly states that since there is a closure report in respect of the predicate offence which has been accepted, the present proceeding will not survive and consequently the ECIR No.CEZO/01/2017 stands quashed - SLP disposed off.
Prevention of Money Laundering Act, 2002 - attachment orders - HC [2017 (8) TMI 135 - MADRAS HIGH COURT] held that Admittedly, 2nd respondent filed the case only based on the charge sheet of the CBI, who have not conducted any enquiry on their own. In fact, all the documents are original documents of the alleged proceeds of crime, which are in the custody of the CBI Court. When the entire documents are in the custody of the Court, there cannot be any reason to believe that the properties will be dealt with in any other manner - HELD THAT:- Learned Solicitor General fairly states that since the proceedings before this Court arise from an order of attachment and there is acquittal in respect of predicate offence, the proceedings really would not survive - the appeals filed by the Adjudicating Authority (PMLA) do not survive and are accordingly disposed of.
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2023 (1) TMI 681
The Supreme Court of India, in a judgment by Hon'ble Mr. Justice Sanjay Kishan Kaul and Hon'ble Mr. Justice Abhay S. Oka, disposed of appeals filed by the Adjudicating Authority (PMLA) as there was an acquittal in respect of the predicate offence, rendering the proceedings unnecessary. The trial Court record is to be sent back to the trial Court. (Citation: 2023 (1) TMI 681 - SC Order)
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2023 (1) TMI 642
Search and seizure conducted on 17.10.2022 and consequential panchanamas contrary to the Section 17 of the Prevention of Money Laundering Act - Challenge on the ground that the reasons are to be recorded in writing before issuing search warrant and the reasons are to be communicated immediately after the search and seizure - reasons to believe - HELD THAT:- This Court is of considered view that the Additional Director of the Enforcement Directorate without recording the 'reasons to believe' issued search warrant/authorisation to his subordinates and the Deputy Director of the Enforcement recorded the reasons to believe without any date and time, which clearly shows that without following the requirements under Section 17 (1) of PML Act conducted search and seizure and seized jewellery, cash and other articles belonging to the petitioners.
In the instant case the record reveals that the Additional Director of Enforcement Directorate without recording the ‘reasons to believe’ as contemplated under Section 17 (1) of PML Act, issued Search Warrant/Authorisation to the Deputy Director to conduct search and seizure of the premises of the petitioners and thereafter the Deputy Director recorded ‘reasons to believe” without any date and time.
The Hon’ble Apex Court in OPTO CIRCUIT INDIA LTD. VERSUS AXIS BANK & OTHERS [2021 (2) TMI 117 - SUPREME COURT], held that the authorised Officer is vested with sufficient power and such power is circumscribed by a procedure laid down under the statute, as such the power is to be exercised in that manner alone, failing which it would fall foul of the requirement of complying due process under law.
Thus, the action of the respondents in conducting search and seizure at the premises of the petitioner No.1-company and the residences of petitioners 2 to 4 and seizing of all the cash, jewellery and other articles in pursuance to the search warrant/authorization dated 17.10.2022 is contrary to the Section 17 of Prevention of Money Laundering Act, 2002 and accordingly the same is hereby set aside. The respondents are directed to release all the jewellery, cash and other articles seized in pursuance to the search warrant/authorization dated 17.10.2022 - petition allowed.
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2023 (1) TMI 596
Money Laundering - Seeking grant of Regular Bail - objection taken in the affidavit is that prior to the arrest, two times non-bailable warrants were issued to which the petitioner did not respond and during the custody period, he has not cooperated with the investigation - apprehension that if the petitioner is enlarged on bail, he may misuse the concession of bail or evade the process of law or may not face the trial - twin conditions under Section 45 of the PMLA Act not fulfilled - HELD THAT:- It is not disputed that the petitioner when released on interim bail has undergone about 06 months of custody. Since the petitioner is seeking parity with the co-accused, who has already been granted the concession of regular bail vide order dated 01.07.2022 wherein it was observed that the co-accused qualifies the triple test under Section 45 of the PMLA Act.
Considering the fact that the petitioner is in long custody and his co-accused has already been released on bail and no amount was recovered from the petitioner, the present petition is allowed and the interim order dated 26.12.2022, is made absolute and the petitioner is directed to be released on regular bail.
Application disposed off.
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2023 (1) TMI 595
Money Laundering - provisional attachment order - Seeking permission to cross-examine the three person - As per the Petitioner, an order passed in an application seeking cross-examination is merely a procedural order, and not one under either of the provisions specified in Section 26 - HELD THAT:- The powers of the Adjudicating Authority, under Section 8 of PMLA, are quite vast. The said provision stipulates the various steps to be taken, prior to the passing of the final order by the Adjudicating Authority. The Adjudicating Authority has to consider the show cause notice, the reply of the notice/s, hear the aggrieved person, as also, the Director or any officer authorised on his behalf, take into account all relevant materials placed before it, and thereafter, by an order record a finding whether any or all of the property is involved in money laundering under Section 8(2) of the Act. After arriving at a conclusion under Section 8(2), the Adjudicating Authority is to decide the question as to whether the attachment has to be confirmed or modified or detached under Section 8(3) of the PMLA.
The entire process has to be concluded within 180 days from the date of issuance of the show cause notice, provisional attachment order under Section 5 of the PMLA. Thus, the proceedings before the Adjudicating Authority have to proceed in a speedy manner and go through the various steps provided under Section 8 of PMLA - An application for cross-examination filed before the Adjudicating Authority would be an integral part of the process of adjudication and would not be alien to Section 8 proceedings, when considered in this above statutory scheme and context.
In view of the scheme of the PMLA and the provisions of Section 26 of the Act as also the decision of the ld. Division Bench in ARUN KUMAR MISHRA AND M/S AJANTA MERCHANTS PVT LTD VERSUS UNION OF INDIA & ANR AND THE DIRECTORATE OF ENFORCEMENT [2014 (3) TMI 137 - DELHI HIGH COURT], this Court is of the opinion that the Petitioner ought to be relegated to the Appellate Tribunal for assailing the impugned order dated 13th December 2022.
Cross-examination under PMLA - HELD THAT:- The right to cross-examination may be invoked by any person who wishes to cross-examine a witness. There has to be a reasonable basis for seeking the said right which would have to be seriously considered by the Adjudicating Authority and not merely in a routine or an indignant manner. The powers of the Adjudicating Authority are spelt out in Section 11 of PMLA, which are the ‘same powers’ as those of a civil court trying a suit, in respect of certain aspects such as discovery and inspection, enforcing attendance of persons, directing production of records, receiving evidence on affidavits, etc. - while the Adjudicating Authority has all the powers of a civil court, it is free to regulate its own procedure. Cross-examination need not be permitted in every case. At the stage of Section 8 proceedings, if cross examination is permitted in every case, it may result in delay and defeat the purpose of the said adjudication However, whenever deemed necessary, the opportunity of cross-examination ought to be afforded. It cannot be presumed that the said request is to delay or scuttle. The request for cross examination must be examined seriously and not in a routine manner. The language used by the Adjudicating Authority, in the impugned order, leaves a lot to be desired.
The Petitioner is relegated to the Appellate Tribunal under PMLA for agitating the challenge to the impugned order. Since the entire process of adjudication is to be concluded within 180 days, the present writ petition is directed to be transmitted by the Registry to the Appellate Tribunal, so that the same can be taken up in an expeditious manner. Considering that it is a short application seeking permission to cross examine, the Appellate Tribunal shall decide the challenge to the said order or the application for cross-examination, within a period of two weeks from the date of first listing - In the present case, though not spelt out, during the course of hearing before this Court, one of the reasons for seeking cross examination is due to the alleged retraction by one particular witness of the statements made by him to the Income Tax Department. This submission shall be considered by the Tribunal.
Petition disposed off.
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2023 (1) TMI 510
Seeking grant of Regular Bail - Money laundering - settlement of the commission and the betting amount was done mainly through hawala operators in cash or through crypto currency with each individual player and the Union Head, by their respective club managers - offences under Sections 3 and 4 of Goa Gambling Act - no scheduled offences against any of the Accused including Applicant Nos. 1 and 2 - HELD THAT:- From definition of proceeds of crime, it clear that when any property, either directly or indirectly, is derived or obtained as a result of any criminal activity relatable to a scheduled offence, it would be “proceeds of crime”. Therefore, for there to be any “proceeds of crime”, the property must be derived or obtained as a result of any criminal activity relatable to a scheduled offence. If any property is obtained or derived as a result of any criminal activity, but which is not relatable to a scheduled offence, then the same cannot be termed as the “proceeds of crime”.
When one reads Section 3 of the PMLA, 2002 [offence of money-laundering] together with the definition of the words “proceeds of crime” [Section 2(1)(u)] and “scheduled offence” [Section 2(1)(y)], it is clear that for charging a person with the offence of money-laundering, there has to firstly be a scheduled offence. When any property is derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence, then such property would be the “proceeds of crime”. When a person 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, he is guilty of the offence of money-laundering. Therefore, the sine qua non for Section 3 of the PMLA, 2002 to apply would be the commission of a scheduled offence. If there is no scheduled offence, then Section 3 cannot be pressed into service.
As of now, the scheduled offences against the Accused have admittedly been dropped in the chargesheet filed by the Goa Police Crime Branch before the JMFC ‘F’ Court at Mapusa, Goa and the matter is registered as Criminal Case No.AOA/572/2022/F. If there is no scheduled offence, there is no question of any generation of any “proceeds of crime”, and consequently, there can be no offence of money-laundering. In these circumstances, I am satisfied that Applicant Nos. 1 and 2 have made out a case for grant of bail.
This decision squarely answers the argument of Mr. Karpe that because there is no order of a court of competent jurisdiction absolving Applicant Nos. 1 and 2 of the scheduled offences, the judgment of Supreme Court in the case of VIJAY MADANLAL CHOUDHARY & ORS. VERSUS UNION OF INDIA & ORS. [2022 (7) TMI 1316 - SUPREME COURT]) is not applicable. This Court correctly held that when the question of liberty of an individual is involved, it is not really possible to completely ignore the acceptance of the C-Summary Report which has the effect of bringing to an end the proceedings registered with the Yellow Gate Police Station pursuant to the filing of the FIR dated 28.10.2020 - Even in the facts of the present case, when the question of liberty of an individual is involved, it is not possible for me to ignore the fact that the chargesheet filed in the present case, as of now, does not relate to any scheduled offence which would give rise to “proceeds of crime”, which in turn, would make out an offence of money-laundering under Section 3 of the PMLA, 2002.
Applicant is allowed to be released subject to conditions imposed - bail application allowed.
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