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Money Laundering - Case Laws
Showing 241 to 260 of 1544 Records
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2023 (6) TMI 247
Remand application - Money Laundering - operation of the large scale Havala racket in international cricket betting through U.K. based website - HELD THAT:- The grounds as observed for rejection of remand application is noting the medical condition of the accused on record, as was perused of the medical check up certificate issued by the Medical Officer of VS hospital, Ahmedabad and accordingly, it was observed that the blood pressure of the accused was very high. No other medical condition was noted to suggest any imminent danger to the life of the respondent. No such ailment or illness has been noted which would not permit the respondent to face the custodial interrogation. The only observation is of the applicant suffering from blood pressure which is noted to be high. However that medical condition of the respondent could be taken care of by providing medicine to control his blood pressure and it may be possible that the respondent himself may be under such medication. However, if necessary, the respondent can always take the assistance of the medical doctor during the course of interrogation as it would be the duty of the applicant as provided under Section 55A of the Cr.P.C. to take reasonable care of the health and safety of the accused. In view of the provision of Section 55A of the Cr.P.C., the applicant would be under duty to take all reasonable care to see that the health and safety of the accused is protected.
So any apprehension raised by the respondent about his life is unfounded as investigating officer of Directorate of Enforcement would have to ensure about the safety of the accused.
The order order dated 8.4.2023 passed by the learned Special Designated Judge (PMLA), Ahmedabad (Rural) at Mirzapur is quashed and set aside and the applicant is granted the remand of the respondent accused for 4 (four) days - Application allowed.
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2023 (6) TMI 67
Seeking grant of Regular Bail - Money Laundering - predicate Offence - siphoning off of funds on the basis of fake/fictitious invoices - main thrust of the petitioner's submission is that the petitioner exercised no control over the affairs of Phoenix FZC; and that he was neither an employee, nor did he hold any key position in the management of the company - HELD THAT:- It cannot be gainsaid that the offence comprised in section 3 of the PMLA is a grave and serious economic offence, and has been couched in the widest of terms. However, before proceeding to consider the rival submissions of the parties, it is necessary to briefly set-out the position of law as enunciated by the Supreme Court as regards the considerations that must inform the grant or denial of bail in matters under the PMLA.
In its recent decision in Ashish Mittal vs. Serious Fraud Investigation Office [2023 (5) TMI 144 - DELHI HIGH COURT], in the context of section 212(6) of the Companies Act, 2013 which contains a provision in pari materia to section 45(1)(i) and (ii) of the PMLA, this court has held that When the public prosecutor opposes a bail plea, he would have to establish foundational facts sufficiently to dislodge the presumption of innocence, and it is only then that the onus of satisfying the stringent twin-conditions would shift onto the accused. To be clear, there is no statutory mandate for the court to depart from the presumption of innocence.
Insofar as the ED not having arrested similarly placed co-accused persons; and not even having arraigned some other persons evidently connected with the offending transactions as accused in the prosecution complaint, though these aspects would not be dispositive of a bail plea one way or the other, they are also not wholly irrelevant and the ‘doctrine of parity’ is not immaterial - insofar as the allegation of the ED as regards the petitioner’s conduct is concerned, it would appear that the petitioner has been forthcoming with the investigating agency about information that he did possess about the affairs of Phoenix FZC, as is seen from his statements recorded under section 50 of the PMLA. As regards the ED’s submission that the petitioner asked his son to delete e-mails concerning transactions of Phoenix FZC from his e-mail ID ramesh1994@yahoo.com and forwarded the same to another e-mail ID mainjhukekanahi@gmail.com, it is observed that such e-mails have subsequently been recovered by the investigating agency and the investigation has not suffered on that count. The prosecution complaint having now been filed, there is no demonstrable risk as to evidence tampering.
In the circumstances, for the purpose of grant of regular bail to the petitioner, this court is satisfied that there are reasonable grounds to believe that the petitioner is ‘not guilty’ of the offence under section 3 of the PMLA. Further, considering that the prosecution complaint has been filed before the learned trial court; that the petitioner has materially co-operated in the investigation; and in view of the nature of the alleged role played by the petitioner in the allegedly offending transactions, this court is also satisfied that the petitioner is not likely to commit any offence under PMLA while on bail.
This court is of the view that the petitioner deserves to be granted relief; and is hereby admitted to regular bail pending trial, subject to the conditions imposed - application allowed.
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2023 (5) TMI 1282
Grant of interim protection - HELD THAT:- ECIR was registered on 31.01.2011. The prosecution complaint was registered on 29.06.2018. The appellant was not named therein. But in the supplementary complaint filed on 23.12.2022, the appellant was named.
During this entire period of eleven years, the appellant was not arrested - Appeal allowed - the interim protection granted to the appellant on 24.03.2023 is made absolute.
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2023 (5) TMI 1281
Money Laundering - maintainability of petition - availability of alternative remedy - provisional attachment of properties - HELD THAT:- The appeal stands allowed in terms of the signed order.
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2023 (5) TMI 1272
Non-compliance of certain directions in certain districts - HELD THAT:- The fact that the directions in the case would apply to anticipatory bail cases was enunciated in the order dated 21.03.2023 and thus, there could not have been any confusion on this aspect - The States are directed to supply copy of standing orders within two weeks from today failing which their Home Secretaries will remain present in Court as nothing seems to work except the peremptory orders of this nature.
List on 08.08.2023.
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2023 (5) TMI 1271
Seeking grant of Bail - HELD THAT:- The appeal is allowed and the appellant is directed to be released on bail in connection with Case NO.01/LKZO/2018 dated 18.02.2018, lodged by the Enforcement Directorate, on the basis of F.I.R. No.0831 dated 19.06.2017 registered at Police Station Gomti Nagar, Lucknow, U.P., subject to the terms and conditions as imposed by the concerned Trial Court.
Bail application allowed.
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2023 (5) TMI 1263
Seeking grant of Regular Bail - though initially bail was sought on the merits but however in the interregnum period, the health condition of the petitioner has deteriorated and the medical record which is being furnished shows that the petitioner is sick and infirm - HELD THAT:- It is pertinent to mention that the respondent department has also not brought on record any material on record to show that the petitioner is a flight risk. It is also a settled proposition that right to life is facet of Fundamental Right enshrined by the Constitution. Right to live with dignity includes right to live a healthy life. The person who is sick or infirm has a right to have adequate and effective treatment. Though jails and designated hospitals provide good basic treatment, but we cannot expect them to provide specialised treatment and monitoring as required in the present case. Last medical report of the petitioner dated 03.05.2023 shows that petitioner is in bad state and can be put into the category of sick/infirm.
In view of the medical record being furnished by the petitioner and the submissions made by learned ASG, the petitioner is admitted to bail on furnishing a personal bond in the sum of Rs.1,00,000/- with two sureties of the like amount to the satisfaction of the trial court, subject to the conditions imposed - application allowed.
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2023 (5) TMI 1241
Money Laundering - proceeds of crime - transfer of shares by committing the offence of cheating, breach of trust, falsification and forgery - new offence unearthed by the Enforcement Directorate - power of police to investigate the case - compromise entered into between parties.
What is the nature of the new offence unearthed by the Enforcement Directorate, who are the accused in the said offence, who can investigate that offence and as to whether the first respondent police can investigate that offence arise in the instant case? - HELD THAT:- There cannot be any dispute that the Enforcement Directorate officials can neither investigate offences committed under the other acts nor interfere in the investigation conducted by another agency. However, this Court is of the view that would not mean that they have no right to file an impleading petition and oppose a quash petition filed against the FIR in the predicate offence. Since the Enforcement Directorate is concerned with the proceeds of the crime, it cannot be said as a rule that they have no right to intervene and assist the Court in a quash petition challenging the proceedings relating to the crime (i.e) the predicate offence. Though they cannot supervise the investigation of another agency or interfere in their investigation, their views cannot be shut, while this Court is hearing a petition to quash the proceedings relating to the predicate offence. Hence, this Court is of the view that the Enforcement Directorate’s impleading petition Crl.M.P.No. 4883 of 2023 deserves to be allowed and hence allowed.
Whether the impugned FIRs can be quashed on the basis of a compromise arrived at between the parties? - HELD THAT:- It is well settled that if the dispute arises out of a commercial transaction and has a predominant civil flavour, then the proceedings can be quashed on the basis of compromise. It is also settled that if the case relates to economic offences involving large-scale fraud or when there are other victims or persons involved besides the defacto complainant, then quashing on the basis of compromise may not be allowed. In the instant case, it is seen that the dispute between the defacto complainant and the accused is private in nature - That apart, it is the admitted case of the Enforcement Directorate that the offence alleged by the defacto complainant is not made out and that the defacto complainant had suppressed certain vital facts.
Thus, under normal circumstances, this Court would have quashed the impugned FIRs for the aforesaid reasons without any further discussion. However, the Enforcement Directorate have now in their impleading petition, stated that the petitioners and defacto complainant have committed other offences.
Thus it is seen that the Enforcement Directorate’s opposition to the quashing of the FIRs cannot be accepted. The Enforcement Directorate cannot resist the quashing of the FIRs prayed on the basis of compromise since the allegations in the FIRs have a predominant civil flavour which discloses a commercial dispute and is private in nature. There are no other victims or other persons involved in the offence alleged in the FIRs - The new offence said to have been committed by the petitioners alleged by the Enforcement Directorate has been the subject matter of the proceedings before the SEBI Act, 1992.
This Court is of the view that the impugned FIRs are liable to be quashed not only on the basis of the compromise but also since no offence has been made out on the allegations - Petition allowed.
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2023 (5) TMI 1240
Money Laundering - closure of proceedings - petitioner would contend that the ‘B’ report has been filed in favour of the petitioner by the investigating agency and the concerned court has after hearing the complainant accepted the ‘B’ report and closed the proceedings.
HELD THAT:- The issue that has fallen for consideration need not detain this Court for long or delve deep into the matter as the three Judge bench of the Apex Court in the case of VIJAY MADANLAL CHOUDHARY & OTHERS VS UNION OF INDIA & OTHERS [2022 (7) TMI 1316 - Supreme Court] has held In view of special mechanism envisaged by the 2002 Act, ECIR cannot be equated with an FIR under the 1973 Code. ECIR is an internal document of the ED and the fact that FIR in respect of scheduled offence has not been recorded does not come in the way of the Authorities referred to in Section 48 to commence inquiry/investigation for initiating “civil action” of “provisional attachment” of property being proceeds of crime.
The Apex Court in the afore quoted paragraph has clearly held that if the accused in the predicate case gets acquitted on three circumstances, (1) by an order of acquittal after full blown trial, (2) if the proceedings are quashed by the High Court in exercise of its jurisdiction under Section 482 Cr.PC, or (3) if the accused gets discharged of the offences. If these circumstances are met, the proceedings in the Enforcement Case Information Report (ECIR) cannot be permitted to be continued. The circumstances narrated by the Apex Court (supra) is not the one that is found in the case at hand.
The petitioner is neither acquitted after a full blown trial nor discharged from the array of accused and the proceedings against him are not quashed by this Court in exercise of its jurisdiction under Section 482 of the Cr.P.C. The circumstance in which the petitioner is placed though does not form a part of the Apex Court’s finding, the effect is the same. The cause is different, but the effect is to what the Apex Court has held.
The closure of the proceedings on acceptance of ‘B’ report and such acceptance becoming final would be closure of proceedings akin to a discharge, as in both the cases no trial is held. Therefore, the petitioner does become entitled to the benefit of the finding of the Apex Court supra and his entitlement leads to obliteration of the proceedings against him as initiated by the Enforcement Directorate - petition allowed.
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2023 (5) TMI 1198
Money Laundering - proceeds of crime - criminal conspiracy to cause loss to the exchequer and banks by indulging in illegal foreign exchange transactions on the basis of forged/ fabricated documents - Hawala transactions - It has been submitted that the petitioner is neither named as an accused in the FIR in the predicate offence nor was ever summoned during investigation nor charge-sheeted in the predicate offence.
HELD THAT:- The jurisprudence regarding bail is by now very well settled that rule has always been bail and its exception jail. It has also been stated time and again that such a principle has to be followed strictly. Right to bail is also essential for the reason that it provides the accused with an opportunity of securing fair trial. The right to bail is linked to Article 21 of the Constitution of India, which confers right to live with freedom and dignity. However, while protecting the right of an individual of freedom and liberty the court also has to consider the right of the society at large as well as the prosecuting agency. This is the reason that the gravity of the offence is required to be taken into account. The gravity of the offence is gathered from the attendant facts and circumstances of the case. It is a settled proposition that economic offences fall within the category of 'grave offences' - The money laundering not only is a threat to the financial health of the country but it may also adversely impact its integrity and sovereignty. Moreover, the act of money laundering can even lead to the collapse of the economic system.
Whether the person whose role has been found later knew that the money which he has been dealing with is a proceed of crime? - HELD THAT:- The court understands that this is very difficult for the department to find direct evidence regarding this. But at the same time, despite the twin conditions, the court cannot return any finding merely on the basis of inferences and presumptions.
It is a settled proposition that at the stage of bail, the court is only required to see a prima facie case and is not required to look into the test of guilt. The court is required to maintain a delicate balance between the judgment of acquittal and conviction and an order granting bail before commencement of trial. It is also a settled proposition that the court cannot meticulously examine the evidence and cannot hold a mini trial at this stage. The court is only required to examine the case on the basis of broad probabilities - the department has opposed the bail on the ground that if the petitioner is released on bail, he may tamper with the prosecution evidence. However, it is matter of record that the entire evidence in the present case is in form of the documentary evidence and thus complaint has already been filed. The petitioner also cannot be stated to be at flight risk. He has roots in the society and even this ground has not been considered by the department.
It is pertinent to mention here that in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT] it has been inter alia held that the Court is at the stage of considering the application for the grant of bail is expected to consider the question from the angle as to whether the accused possessed the requisite mens rea. It was further held that the Court is not required to record a positive finding that the accused have not committed an offence under the Act - the jurisprudence of the bail positively lays down that a liberty of a person should not ordinarily been interfered with unless there exist cogent grounds. Despite, the twin conditions, it is not necessary that at the stage of bail, the Court has to come to the conclusion that the petitioner is not guilty for such an offence. The Court is at the stage of has to examine the case on the scale of broad probabilities. The Court at this stage is required to record an objective finding on the basis of material available on record and no other purpose.
A bare perusal of the Section 2 (u) of the Prevention of Money Laundering Act, 2005 which provides for the definition of “proceeds of crime” indicates that it is the property derived or obtained, directly or indirectly which relates to criminal activity relating to a scheduled offence. Similarly in order to be punished under Section 3 of PMLA, It is necessary that person dealing with the “Proceed of crime” must have some knowledge that it is tainted money - the serious medical conditions of the petitioner as stated herein has not improved and he has been under regular treatment and has already undergone two procedures. The applicant has also been stated to undergo further procedures and/or surgeries as and when advised. It has been stated that the petitioner is suffering from numbness of limbs which is a precursor to possible paralysis which requires urgent medical attention. Thus, taking into account the facts and circumstances, the petitioner is admitted to bail on furnishing a personal bond in the sum of Rs. 25,00,000/- with two sureties of the like amount to the satisfaction of the trial court, subject to the conditions imposed.
Bail application allowed.
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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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