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Money Laundering - Case Laws
Showing 261 to 280 of 1544 Records
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2023 (5) TMI 868
Jurisdiction to hear PMLA cases - whether the Adjudicating Authority consisting of only one technical member can hear the cases under the PMLA Act, 2005 and pass attachment orders? - HELD THAT:- This Court has already taken the view that under Section 26 of PMLA Act, any person aggrieved by an order is entitled to approach the Appellate Tribunal.
In the recent decision of the Supreme Court in M/S. SOUTH INDIAN BANK LTD. & ORS. VERSUS NAVEEN MATHEW PHILIP & ANR. ETC. ETC. [2023 (5) TMI 798 - SUPREME COURT]] the Court has observed that the statutory mechanism needs to be followed and writ jurisdiction ought to be exercised with caution.
The opinion of the Court is that the Petitioner who claims a beneficial interest in the property ought to approach the Appellate Tribunal under Section 26 of the Act. At this stage, ld. Counsel for the Petitioner submits that he may be permitted to approach the Appellate Tribunal.
The petition is dismissed as withdrawn with liberty to approach the Appellate Tribunal constituted under Section 26 of the PMLA Act.
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2023 (5) TMI 816
Seeking grant of bail - Money Laundering - cheating and misappropriation of money by making false promises and forging documents - HELD THAT:- In Rohit Tondan [2017 (11) TMI 779 - SUPREME COURT], the Hon'ble Supreme Court has held that The Court is not required to record a positive finding that the accused had not committed an offence under the Act. The Court ought to maintain a delicate balance between a subsequent judgment of acquittal and conviction and an order granting bail much before commencement of trial. The duty of the Court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. Further, the Court is required to record a finding as to the possibility of the accused committing a crime which is an offence under the Act after grant of bail.
The only allegation against the applicant is of having transferred the company and there is no allegation against the applicant of having acquired any company or any other property. Even while the applicant was a director in the company, there is no allegation that he was having the authority to make financial transactions and that he in fact did make any transaction which may amount to commission of any offence. What prima facie appears from the allegation levelled in the complaint is that there is absolutely no allegation of commission of any of act which may amount to commission of any offence and he has been charged with the alleged offences merely for the reason that he held the position of director in the company.
From the material placed before the Court at this stage, apart from being a director of the company which had been sold away to the persons accused of launching a Bike Bot scheme, there appears to be no allegation that the applicant has actually committed any such act, as would attract the offence described in Section 3 of the Prevention of Money Laundering Act.
As the applicant has no previous criminal history, apart from the predicate offences, there appears to be no likelihood that the applicant would again indulge in commission of similar offence in case he is released on bail and no material has been plato theced in the counter affidavit to give rise to a reasonable apprehension to this effect. The applicant is languishing in jail since 20.12.2020 and he has already been granted bail in the predicate offence as also in case Case Crime No. 558/2021, under Section 2 & 3 U.P. Gangsters and Anti-Social Activities (Prevention) Act, 1986, in which the applicant has been implicated after his arrest in the present case.
Applicant is released on bail subject to conditions imposed - Application allowed.
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2023 (5) TMI 660
Principles of natural justice - Non-service of proper SCN - Provisional Attachment Order - Money laundering - proceeds of crime - investing part of proceeds of crime to purchase properties - HELD THAT:- This Court notes with some concern that the impugned email/communication has been written to the promoters of the TDI in respect of the properties which are not even subject matter of any investigation, and that too by Assistant Director, Mr. Hemant, who is not authorised under the PMLA to pass such communications. Though the email is now sought to be withdrawn, it is clear that such an email ought not to have been written in the first place - The higher authorities including the Director, Enforcement Directorate shall be informed of this impugned email which was written in the present case, so that appropriate instructions and directions could be given to the concerned officials of the Enforcement Directorate.
The communication dated 26th July, 2019 having been withdrawn, no further orders are called for in this writ petition - Petition disposed off.
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2023 (5) TMI 659
Violation of principles of natural justice - opportunity to summon the Assistant Director and Deputy Director of the respondent authority for their examination/cross-examination, rejected - rejection holding that no meaningful purpose would be served by cross-examining the said officers - HELD THAT:- The appeal is disposed of with the following directions:
(i) It would be open to the appellant to raise all issues, factual as well as legal before the Adjudicating Authority at the time of final hearing.
(ii) The Adjudicating Authority would be at liberty to take an independent view of the entire factual matrix as well as legal issues without being influenced by any observation contained in the impugned order of the Tribunal dated 08.05.2023 on the merits of the factual matrix as well as legal issues.
(iii) The Adjudicating Authority shall permit the appellant to address arguments and rely upon the material that has already been placed before it by the appellant before forming an opinion with regard to passing of the final order in terms of Section 8 of the Act.
The appeal is accordingly dismissed as withdrawn.
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2023 (5) TMI 658
Violation of principles of natural justice - Petitioner’s application for right to cross examine witnesses has been rejected - Appealable order or not - Provisional Attachment Order - HELD THAT:- It is now the settled position that the order under challenge being an order passed by the Adjudicating Authority, PMLA is appealable under Section 26 of the PLMA - This provision has been considered by this Court in DR. U.S. AWASTHI VERSUS ADJUDICATING AUTHORITY PMLA & ANR. [2023 (1) TMI 595 - DELHI HIGH COURT] wherein the Court under similar circumstances interpreted the order rejecting application for cross examination passed by the Adjudicating Authority, PMLA as appealable under Section 26 of the PMLA.
The Appellate Tribunal, PMLA is currently constituted and is functioning. The impugned order would be appealable to the Appellate Tribunal. Thus, this Court is not inclined to entertain the present writ petition. The Petitioner is relegated to avail of its Appellate remedy in accordance with law.
However, this Court would like to specifically note that it appears that the Respondent No. 1 has failed to take into consideration the observations of this Court in the U.S. Awasthi case where the use of such disconcerting language as contained in paragraph 8 of the impugned order, has been frowned upon by this Court. Repeated use of templated paragraphs, as though the principles of Natural Justice are mere rhetoric, is not permissible. The present order shall be treated as a warning to the concerned authority to not use such language, failing which the Court would be constrained to direct action to be taken.
The Appellate Tribunal, PMLA shall ensure that the Respondent No. 1. shall abide by the principles of natural justice as also the observations of this Court given in Dr. U.S. Awasthi - The Petitioner is permitted to approach the Appellate Tribunal, PMLA within a period of one month. The period during which the present writ petition was pending shall be deductible from the period of limitation for filing of the appeal - the observations of this Court qua the language of the impugned order used would not have a bearing on the merits of the case.
Petition disposed off.
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2023 (5) TMI 527
Challange to the bail granted by the HC - Money Laundering - scheduled offence - It is submitted that while enlarging respective respondent No. 1 – accused on bail the High Court has not properly appreciated Section 45 of the PML Act, 2002 - HELD THAT:- At the outset, it is required to be noted that respective respondent No. 1 – accused are facing the investigation by the Enforcement Directorate for the scheduled offences and for the offences of money laundering under Section 3 of the PML Act punishable under Section 4 of the said Act. An enquiry/investigation is still going on by the Enforcement Directorate for the scheduled offences in connection with FIR No. 12/2019. Once, the enquiry/investigation against respective respondent No. 1 is going on for the offences under the PML Act, 2002, the rigour of Section 45 of the PML Act, 2002 is required to be considered.
From the impugned judgment(s) and order(s) passed by the High Court, it appears that what is weighed with the High Court is that chargesheet has been filed against respective respondent No. 1 – accused and therefore, the investigation is completed. However, the High Court has failed to notice and appreciate that the investigation with respect to the scheduled offences under the PML Act, 2002 by the Enforcement Directorate is still going on. Merely because, for the predicated offences the chargesheet might have been filed it cannot be a ground to release the accused on bail in connection with the scheduled offences under the PML Act, 2002. Investigation for the predicated offences and the investigation by the Enforcement Directorate for the scheduled offences under the PML Act are different and distinct. Therefore, the High Court has taken into consideration the irrelevant consideration. The investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is till going on.
The High Court has neither considered the rigour of Section 45 of the PML Act, 2002 nor has considered the seriousness of the offences alleged against accused for the scheduled offences under the PML Act, 2002 and the High Court has not at all considered the fact that the investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is still going on and therefore, the impugned orders passed by the High Court enlarging respective respondent No. 1 on bail are unsustainable and the matters are required to be remitted back to the High Court for afresh decision on the bail applications.
Appeal allowed.
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2023 (5) TMI 444
Money Laundering - proceeds of crime - predicate offence - property purchased from proceeds of crime is attached - whether there is ground for putting the petitioner on trial for offence of money laundering? - HELD THAT:- Organized crime in general and economic offences in particular are not individual act, they are collaborative criminal enterprise of collective of persons, with defined role, who may join at its different stage of its execution. These are species of economic offence, where proceed of crime may run into crores with wide ramification undermining financial institutions and the economic health of the country. Actors involved are skilled and educated, the process of money laundering involves meticulous planning and deft execution in placement, layering and integration of the ill-gotten money in a complex layer of financial transactions to disguise it and project it as untainted. Different players may enter and exit in stages, to bring into fructification the larger design.
In order to curb this, Prevention of Money Laundering Act aims at the persons who may not be involved in the predicate offence, but in laundering the proceeds of crime. The offence of money laundering is a stand alone offence and it is not necessary that the person accused of offence under PMLA should also be charged of the Scheduled offence. It is sufficient that proceed of crime so generated by the commission of scheduled offence, is laundered by the accused for being charged under PMLA. Money laundering is an independent offence has been held in Vijay Madan Lal Choudhary Vs Union of India [2022 (7) TMI 1316 - SUPREME COURT].
After investigation chargesheet has been submitted against the contracting company M/s Classic Coal Construction Pvt. Ltd through its directors Sri Pawan Kumar Singh (father of the petitioner, since dead) and others for causing wrongful loss to the Govt. of Jharkhand and wrongful gain to the Company - Petitioner became a salaried director in the year 2010 and after the death of his father on 27.03.2013 he became the Managing Director and inherited the assets and liabilities of the Company.
The presumption under Section 24 of PML Act can be rebutted only at the stage of trial and not at the stage of framing of charge. Nexus if any, between the properties acquired in the name of this petitioner and the proceeds of crime is a question of fact to be looked into at the stage of trial and not at the stage of discharge.
There are no infirmity in the impugned order - Criminal Revision Petition accordingly stands dismissed.
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2023 (5) TMI 443
Money Laundering - provisional attachment order - scheduled offences - no reasons given by the authorities while attaching the bank accounts - non-application of mind - Section 5(1) of PML Act, 2002 - HELD THAT:- On a perusal of para 10 of the impugned attachment order, no specific reasons for attaching Account Nos. 641301010050403 and 641304010000001, are stated. If the contention of the petitioners that, no third-party has deposited any amount in the said accounts is taken as true and, in such circumstances, whether such accounts can be attached or not, the reasons are not coming forward in the provisional attachment order. If that is the case, it can be easily presumed that the provisional attachment order, insofar as two accounts is concerned, is without application of mind and without any reasons to believe i.e., the reasons for such belief has not been recorded. Further, this Court, under Articles 226 of the India, cannot adjudicate or decide the aspect of depositing of amounts by the third parties in the subject accounts.
The scope of entertaining this Writ Petition under Article 226 of the Constitution of India is no doubt limited and this Court cannot adjudicate on provisional attachment order if it is in consonance with Section 5 of the Act, 2002. There is no dispute with regard to the law laid down by various courts in that regard. But Section 5 of the PML Act, clearly says that the authority should record reasons while attaching the properties, both movable and immovable. However, in the present case, in the impugned attachment order, the respondent-authorities have not recorded any reasons for attaching the subject accounts referred supra. As such, this Court holds that the attachment of the said accounts is without proper reasons.
The impugned order is set-aside only to the extent of attaching Account Nos. 641301010050403 and 641304010000001 of the Union Bank of India. However, the 2nd respondent-Deputy Director is at liberty to look into the said two accounts and if he finds that the said two accounts are to be attached, he may do so by passing a fresh reasoned order, in accordance with law - the Writ Petition is disposed of.
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2023 (5) TMI 102
Money Laundering - proceeds of crime - Scheduled Offences - knowledge of the accused is the condition precedent or sine qua non required to be shown by the prosecution for lodging the complaint - absence of any material to show that the petitioners had the knowledge that they were dealing with the proceeds of crime committed by Bharat Bomb and his associates - HELD THAT:- Section 2(u) defines what is “proceeds of crime” and Section 2(y) defines what is “Scheduled offence”. As discernable from the record, the Prosecution complaint in ECIR was lodged against the petitioners and others under the PMLA by the ED, pursuant to the investigation carried out by the CBI in the FIR No. RCBD1/2016/E/0002 dated 07.03.2016 and the charge-sheet dated 14.06.2016 filed by the CBI against Bharat Bomb and others for the offences under Sections 120B, 420, 467, 468, 471, 472 and 474 of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 at the Designated CBI Court at Jaipur. All the said offences are scheduled offences within the meaning of Section 2(y) of the said Act - Suffice it to say that serious allegations of money laundering are alleged against both the petitioners in the Prosecution complaint and sufficient material particulars have been narrated in the said complaint to substantiate the said allegations, which prima facie show the direct involvement of the petitioners in the alleged offences of money laundering as defined in Section 3 of the said PMLA.
Having regard to the definition contained in Section 3, it would be a folly to hold that the knowledge of the accused that he was dealing with the proceeds of crime, would be a condition precedent or sine qua non required to be shown by the prosecution for lodging the complaint under the said Act. As the definition itself suggests whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering - In the instant case, the direct involvement of the petitioners in the activities connected with the proceeds of crime has been alleged, along with the material narrated in the complaint which would require a trial to be conducted by the competent court.
Apart from the fact that after filing of the SLPs, no documents could have been filed without the permission of the Court, which in the instant case does not appear to have been sought for by the petitioners nor granted by the Court, the very practice of not filing the essential and relevant documents, more particularly, the documents in respect of which a relief is sought in the SLPs, is strongly deprecated. It may be noted that non-production of the relevant documents especially the documents in respect of which the relief is sought, along with the SLPs could be the sole ground for rejection of the SLPs at the outset - The Registry is also directed to verify at the time of registration of SLPs as to whether all the relevant documents, more particularly, the documents in respect of which the relief is sought, have been produced at the first instance by the petitioners along with the SLPs or not.
The interim relief granted earlier stands vacated forthwith - petition dismissed.
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2023 (5) TMI 88
Seeking grant of Regular Bail - money laundering - predicate offences - petitioner not being released on account of production warrants - rigour of Section 45 of the PMLA Act met or not - HELD THAT:- In the instance case, it is an admitted case that even after the issuance of production warrants, the accused persons have not been formally arrested as yet by the ED. The petitioners were in custody in predicate offences for more than 9 years and no admittedly, have been admitted to bail for the predicate offences. However, admittedly, they have not been released on account of production warrants issued by the learned Trial Court subsequent to the filing of the complaint by the ED.
Since the petitioners have yet not been taken into formal custody in this case, the bail applications filed by the accused persons are infructuous - Hence, the bail applications along with pending applications are dismissed.
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2023 (4) TMI 1315
Money Laundering - predicate/scheduled offence - illegal racket of kidney transplantation - offences including the offences punishable under Section 307 of the Indian Penal Code, 1860 and Sections 18, 19 and 20 of the Transplantation of Human Organs Act, 1994 - whether acquittal of the accused i.e., Jeevan Kumar from the predicate offence and quashing of criminal proceedings mentioned above qua the appellant-Rajiv Channa, shall also lead to the cessation of the attachment proceedings? - HELD THAT:- For the commission of an offence of money laundering, the essential preconditions which emerge from the aforesaid provisions are that firstly, it requires an involvement in any process or activity connected with the proceeds of crime; and secondly, projection of the same as untainted property.
The proceeds of crime allude to any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence. It may also include the value of any such property or in cases where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. The Explanation to Section 2(1)(u) of PMLA, 2002 further clarifies that the proceeds of crime would include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a consequence of any criminal activity pertaining to the scheduled offence.
In Nik Nish Retail Ltd. v. Assistant Director, Enforcement Directorate [2022 (11) TMI 1280 - CALCUTTA HIGH COURT], the Calcutta High Court, while dealing with a case where the FIR in respect of the predicate offence was quashed on the basis of settlement has held that the proceedings initiated under PMLA, 2002 provisions cannot stand in isolation in the absence of any scheduled offence.
This Court, in the case of Prakash Industries Ltd. v. Directorate of Enforecement [2022 (7) TMI 877 - DELHI HIGH COURT], has taken a view that once it is found that a criminal offence does not stand evidenced, the question of any property being derived or obtained therefrom or its confiscation or attachment would not arise at all.
A bare perusal of the facts of the present case would show that the Trial Court had already acquitted the appellant-Jeevan Kumar of all the charges framed against him vide judgment dated 22.03.2013 and the same has remained unchallenged by the respondent. Therefore, his acquittal in the scheduled offence breaks the entire chain leading to the other appellants. Moreover, this Court, vide judgment dated 15.01.2024, had quashed the ECIR bearing no. ECIR/07/DZ/2008 alongwith all the consequential proceedings arising therefrom, and the charge framed qua the appellant-Rajiv Channa vide order dated 24.04.2012. Thus, a necessary corollary would be that all the proceedings in furtherance of prosecution, including attachment, would also fall and are therefore, liable to be quashed.
The attachment proceedings in the present case are unsustainable as the appellants cannot be said to be involved in any activity connected with the proceeds of crime - Appeal disposed off.
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2023 (4) TMI 1306
Money Laundering - Provisional attachment order - predicate offences - subject property is involved in any money laundering activities or not - Section 8(2) first proviso of the PMLA Act - HELD THAT:- The predicate offence in the present case are acts of criminal breach of trust and forgery by the accused persons with respect to the credit facilities provided by the Appellant/Bank between the years 2007-2018. The issue as to whether the commission of the offence between 2007-2018 overlaps or is prior to the creation of mortgage can be adjudicated by the authorities under the PMLA Act and this Court, at this juncture, is not inclined to go into that question. This Court, therefore, does not find any reason to interfere with the order of the learned Single Judge who has also not commented on this question and has left the matter to the authorities under the PMLA Act to consider the issue.
It is well settled that when a statute prescribes a particular mode or a mechanism for adjudication of disputes arising out of that statute, then writ Courts must loathe in interfering the mode prescribed in that stature.
The scheme of the PMLA Act provides for mechanism beginning with a Provisional Attachment Order (PAO) attaching the property which is then confirmed by the Adjudicating Authority under Section 8(2) of the Act. When a property stands confiscated, a trial is conducted by the Special Court and in accordance with Section 8(8) of the Act, the Special Court may direct Central Government to restore such confiscated property. Therefore, this Court is of the view that the Appellant/Bank has an alternate efficacious remedy within the scope of the Act - This Court, therefore, does not find any infirmity in the judgment of the learned Single Judge in relegating the Appellant/Bank to the Adjudicating Authority to ventilate its grievances under Section 8(2) of the PMLA Act and the same does not require interference and is accordingly upheld.
Application dismissed.
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2023 (4) TMI 1290
Seeking clarification of the judgment dated 27th March, 2023 passed by this Court - Grant of Default Bail - HELD THAT:- Necessary correction is directed to be made.
The Interlocutory Application is allowed.
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2023 (4) TMI 1257
Arrest without jurisdiction - Violation of principles of natural justice - Non-speaking order - non-application of mind - issuance of summons to appear before the respondent based on the impugned proceedings - arrest of petitioner on appearance before respondent - no valid reason given for such arrest - HELD THAT:- From a reading of Paragraph 325 of the Judgment of the Hon'ble Supreme Court in VIJAY MADANLAL CHOUDHARY & ORS. VERSUS UNION OF INDIA & ORS. [2022 (7) TMI 1316 - SUPREME COURT] the position is understood that mere stating of ingredients or language employed in Section 3 under the Prevention of Money Laundering Act, 2002, may not be sufficient to connect the petitioner with the offence.
Since the writ petitioner is not one of the accused in the case registered for the offences punishable Sections 120-B, 420 and 471 under the Indian Penal Code, 1860, the prosecution of the writ petitioner as a person involved in the commission of the offence of money laundering under the provisions of the Prevention of Money Laundering Act, 2002, cannot be justified.
Interim stay granted in respect of all further proceedings - List the matters after two weeks.
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2023 (4) TMI 1246
Primary Teachers’ Recruitment Scam - whether a person can laugh while his testicles are squeezed is required to be known from medical experts which CBI should do? - HELD THAT:- This court wanted to know from Mr. Billwadal Bhattacharya, learned advocate representing CBI and Mr. Samrat Goswami, learned advocate representing ED, whether the investigating officers in respect of the other scams in this State are also facing same situation, i.e., complaint to the police by some persons against the officers and the police is investigating those complaints and interrogating the officers. Mr. Bhattacharya gave me three names referring to the Coal scam and the names are: Mr. Kapil Raj, Joint Director of ED; Mr. Umesh Kumar, SP of CBI and in respect of the custodial death of one Lalan Sheikh in Bogtui case, one officer not at all even remotely connected with the investigation namely Mr. Sushanta Bhattacharya of CBI.
Therefore, it has become a sinister design of some persons to make allegations against the investigating officers of different scams to terrorize them by using the police force which have now come to light in the State and I see this letter of Kuntal Ghosh is also an attempt to terrorize the officers of ED and CBI and to throttle the investigation process and I term it as – very smart action; which cannot be allowed for a fair investigation and for the ends of justice.
From today no police station shall lodge any FIR against any complaint made to it in respect of any officer of CBI and ED who are investigating the Educational Recruitment Scam both of West Bengal Central School Service Commission and the West Bengal Board of Primary Education, without the leave of this court.
List this matter on 20.04.2023 and will be heard at 12.00 noon.
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2023 (4) TMI 1236
Money Laundering - proceeds of crime - forbearing respondent from proceeding further on the ground that the respondent is acting beyond the jurisdiction conferred by the provisions of Prevention of Money Laundering Act, 2002 - contravention of the provisions of FEMA.
After investigation, the Closure Report has been filed by the Investigating Officer before the competent court of jurisdiction.
HELD THAT:- It is informed that the matter is fixed for hearing before the learned Magistrate tomorrow i.e.on 11.04.2023. The parties are directed not to take adjournment in the matter so as to enable the Ld. Magistrate to decide the matter expeditiously.
List the matter in the third week of July, 2023.
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2023 (4) TMI 1199
Seeking release of attached property - Money laundering - proceeds of crime - acquittal in predicate offence - compounding of offences - closure of the criminal case involving the predicate offence - HELD THAT:- The appellant No. 1 was an accused in the criminal case for offences which are considered as predicate offences under PMLA. In view thereof, a case was registered under PMLA following which the properties mentioned above were provisionally attached. Subsequently, the provisional attachment was confirmed by the adjudicating authority whereafter complaint was lodged before the designated court based on which S.C.No. 342 of 2018 has been registered.
From the scheme of Rule 3-A of the Prevention of Money Laundering (Restoration of Property) Rules, 2016, what is discernible is that this provision is primarily meant for a claimant to seek restoration of property which he had lost as a result of the predicate offence leading to proceeds of crime and consequently the offence of money laundering. This provision may not be applicable in a case where the predicate offence itself has been closed on being compounded under Section 320 Cr.P.C.
The Supreme Court in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT] dealt with the expression “proceeds of crime” and observed 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. Authorities under PMLA cannot resort to action against any person for money laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry before the competent forum.
This decision was examined in detail by a Single Bench of this Court in M/S. JAGATI PUBLICATION LTD VERSUS ENFORCEMENT DIRECTORATE [2022 (9) TMI 1448 - TELANGANA HIGH COURT]. After analysing the above decision of the Supreme Court, this Court held that the expression “proceeds of crime” which is the very essence of the offence of money laundering needs to be construed strictly. Only such property which is derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime - Single Bench of this Court held that existence of scheduled offence and proceeds of crime being the property derived or obtained as a result of criminal activity relating to the scheduled offence are sine qua non for not only initiating prosecution under PMLA, but also for continuation thereof. In the absence of these two conditions, the Special Court dealing with the offence under PMLA would not be competent to pronounce on the guilt or otherwise of the person concerned accused of money laundering.
Adverting to the facts of the present case, it is evident that upon closure of the criminal case and acquittal of appellant No. 1 on discharge, there is no scheduled offence against the appellants. In the absence of any crime, question of any proceeds of crime would not arise - learned Single Judge had erred in refusing to grant relief to the appellants by taking the view that acquittal of the appellants was on compromise and not on merit and relegating the appellants to the forum of the designated court. When there is no crime because of closure of the criminal case involving the predicate offence, continuation of attachment of the properties of appellants would not be justified.
The petition is allowed by directing the respondents to release the properties of the appellants from attachment - appeal allowed.
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2023 (4) TMI 1078
Seeking grant of Regular Bail - Money Laundering - pecuniary advantage/illegal gratification was obtained by the accused out of the funds received from UAE Red Crescent meant for flood victims in Kerala though Life Mission Project - reception of bribe in foreign currency and rooting of the sam e through the diplomatic channel - case of petitioner is that the entire case is built up as a political hit by the Enforcement Directorate to falsely implicate the petitioner and by extension, the executive head of the State and his family members - bail sought also on medical grounds (Section 45 of PMLA).
HELD THAT:- Since this Court is considering bail plea at the instance of the petitioner in the instant crime on scrutiny of the relevant materials in the present case, this Court cannot consider the said aspect without going into niceties of the facts of the two cases in detail. Therefore, I leave the said question to be decided at an appropriate stage after referring all the materials in both these crimes meticulously. As of now, for the just disposal of the bail application, I am inclined to accept the argument tendered by the learned ASGI that a portion of the bribe being converted into foreign currency and taken to diplomatic channel to the foreign country, emanated from the predicate offence as pointed out by the learned ASGI, and the said aspect is a matter within the ambit of PML Act for which detailed investigation shall go on.
Whether the petitioner is liable to be released on bail by resorting to proviso to Section 45(1) of PML Act? - HELD THAT:- It is interesting to note that the Act doesn't define the term either `sick' or `infirm'. The term `sick' as per the Oxford English dictionary means, “affected by illness; unwell, ailing”. Similarly, the term `infirm' means “not physically strong or healthy; weak; feeble, especially through old age”. Therefore, the `sick' or `infirm' condition of a person has to be inferred from the materials available in each individual case. However, it is pertinent to note that the statute provides release of an accused on bail, who are covered by the proviso reading the same disjunctively and the statute used the word `may'. Thus it has to be held that release of a person covered by the proviso to Section 45(1) of PML Act is not mandatory and the same is the discretion of the court.
Three judgements of Supreme Court referred - STATE THRU DY. COMMISSIONER OF POLICE SPL. BRANCH DELHI VERSUS JASPAL SINGH GILL [1984 (6) TMI 264 - SUPREME COURT], DIRECTORATE OF ENFORCEMENT VERSUS SHRI ASHOK KUMAR JAIN AND VICE-VERSA [1998 (1) TMI 529 - SUPREME COURT] and State of U.P. v. Gayatri Prasad Prajapati [2020 (10) TMI 1281 - Supreme Court] - Reading the ratio of the above decisions, if the jail authorities or the prosecution agency could arrange proper and adequate treatment, even a sick person need not be released on bail.
No doubt, crime No.ECIR/KCZO/31/2020 arose out of predicate offence registered by the Vigilance and Anti-corruption Bureau and CBI and the present crime arose out of predicate offence in OR.No.7/2020, registered by the Customs (Preventive) Commissionerate of Cochin and Crime No.2/2020, registered by NIA and, therefore, as I have already pointed out, there is no reason to hold at this stage that registration of this crime is bad in law.
In the instant case, the petitioner could not be held as a person who would flee from trial. However, his propensity to tamper with the evidence and to influence witnesses could be foreseeable, since the petitioner is a person having very much influence in the ruling party of Kerala, particularly with the Chief Minister of Kerala. It is apposite to refer that even after his initial arrest and subsequent release on bail, the petitioner was reinstated in service w.e.f 6.1.2022 and he continued the same till his retirement holding pivotal post in the State of Kerala, ignoring his involvement in serious crimes. That is to say, his involvement in serious crimes prior to this crime, in no way affected his official stature because of his authority in the State Government. - Since it has been discussed that the petitioner is not cooperating with the treatment offered, I am not inclined to release him on medical ground since his sickness would be addressed by the prosecution agency/jail authorities by providing adequate treatment. Similarly, his chance of propensity to tamper with evidence or influencing witnesses, is very much there, since the petitioner is a person having very much influence in the ruling party of Kerala, particularly with the Chief Minister of Kerala.
In this matter, the investigation is at the initial stage. Many accused are yet to be arrested including Smt.Swapna Prabha Suresh. Why the prosecution is delaying the arrest of Swapna Prabha Suresh is also a matter of serious concern, though she had an active role in the present crime - Bail application dismissed.
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2023 (4) TMI 1026
Sanction or a consent? - impugned order passed by the State dated 25.09.2019 under Section 6 of the Delhi Special Police Establishment Act, 1946 - Applicability of principles of res judicata - judgement in rem or personam? - HELD THAT:- The impugned order dated 25.09.2019 passed by the State was nothing but a consent given by the State under Section 6 of the DSPE Act and it is not a sanction as required under either Sections 19 or 17 of the Prevention of Corruption Act.
Though in the impugned order it was mentioned as sanction was accorded but literally it is only a consent and it is not a sanction and it is only a simple executive order by giving consent to the CBI for investigating the matter as against the petitioner. It is also revealed by the opinion given by the Advocate General that the Advocate General has categorically stated that no sanction is required under Section 17(A) or 19 of the P.C. Act. It is also brought to the notice of the Court by the learned Senior counsel for the petitioner that the Co-ordinate Bench while passing the order in the Writ Petition, though it was stated that it was an administrative order in its order, but it is not an administrative order but it is only a simple executive order and it need not require any detailed order for application of mind and even otherwise, the authority i.e., Under Secretary has considered the letter sent by the Directorate of Enforcement Department and passed the order - Such being the case, the contention of the learned counsel for the petitioner cannot be acceptable that there is no application of mind while passing the impugned order. Therefore, on that ground, the impugned order cannot be quashed.
Whether the order passed by the Co-ordinate Bench is the 'Judgment in Rem' which is binding on all the persons including this Court and principles of res judicata applies? - HELD THAT:- The Co-ordinate Bench dealt with the matter in detail by raising three points for consideration and finally dismissed the petition filed by the one SHASHI KUMAR SHIVANNA VERSUS THE GOVERNMENT OF KARNATAKA AND ORS. [2020 (7) TMI 827 - KARNATAKA HIGH COURT] - The Co-ordinate Bench finally has taken the view that there is no requirement of application of mind while granting the consent. Ultimately, the petition was dismissed. The same was challenged before the Division Bench in W.A. 444/2020 which came to be dismissed on 05.02.2021. Admittedly, the said order of the Co-ordinate Bench attained finality and no appeal was filed by the said Shashi Kumar Shivanna. Of course, the present petitioner was not a party to the said proceedings in [2020 (7) TMI 827 - KARNATAKA HIGH COURT] and the Co-ordinate Bench also stated that the said Shashi Kumar Shivanna has no locus standi to challenge the order. However, the Co-ordinate Bench while dealing with the matter where the said Shashi Kumar Shivanna challenged the very order dated 25.09.2019 for referring the matter to the CBI, but the Co-ordinate Bench has categorically held and given finding on the reference to the CBI in the impugned order where the application of mind is not required while giving consent under Section 6 of the DSPE Act. Therefore, it cannot be said that the finding of the Co-ordinate Bench is only on the petition filed by the Shashi Kumar Shivanna, but it was on the issue of reference of the case to the CBI for investigation against this petitioner for the provisions of P.C. Act.
The judgment of the Co-ordinate Bench was 'Judgment In Rem', it was binding on this petitioner and also other persons as the issue of reference under the impugned order has been upheld by the Co-ordinate Bench. Therefore, the contention of the petitioner counsel cannot be acceptable that the judgment should be between the same parties, but it was an identical dispute on the same subject matter which was dealt with by the Co-ordinate Bench. Therefore, the doctrine of the res judicata applies to this case and also the order of the Co-ordinate Bench is binding on this petitioner. Therefore, the judgments relied by the counsel for the petitioner is not applicable to the case on hand.
The impugned order passed by the State under Section 6 of the DSPE Act is only a formal consent and it is not a sanction which requires a detailed order and as stated by the Hon'ble Supreme Court, there is no prescribed form to accord consent under Section 6 of the DSPE Act and the Co-ordinate Bench has already decided the issue of referring the case to CBI which was upheld by the Division Bench. Such being the case, there is no reason for this Court to distinguish or take divergent opinion in respect of the order passed by the Co-ordinate Bench - Petition dismissed.
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2023 (4) TMI 874
Seeking grant of bail - Money Laundering - proceeds of crime - predicate offence - misappropriation of amount by forging the signatures, with the help of the pledged documents - fraudulent GDR issue - Sections 44 and 45 of PMLA - HELD THAT:- There is no controversy about the following facts:
(i) that the registration of the ECIR and the lodging of the prosecution complaint in the year 2022 were a sequel to the registration of the FIR for the predicate offence, way back in the year 2013, at the instance of one M. Srinivas Reddy, Managing Director, Farmax and also a sequel to the order passed by SEBI in the year 2020;
(ii) that no final report has been filed in the FIR for the predicate offence, for the past nine years;
(iii) that even M. Srinivas Reddy, the de-facto complainant in the FIR for the predicate offence, was sought to be arrested as an accused in connection with the ECIR, but the application of the Enforcement Directorate for remand was rejected;
(iv) that the appellant is a Chartered Accountant by profession and has been in jail from 26.09.2022; and
(v) that the relevant portion of paragraph 8 of the prosecution complaint filed by the Enforcement Directorate, which we have extracted in the preceding paragraph, gives room for a valid argument that the second condition found in Clause (ii) of sub-section (1) of Section 45 of PMLA is satisfied qua the appellant.
Therefore, the continued incarceration of the appellant may not be justified.
However, the apprehension of the Enforcement Directorate that the appellant is a flight-risk and may go out of the country if released on bail, has to be taken care of by imposing appropriate conditions.
The appellant is directed to be enlarged on bail, subject to such terms and conditions as may be imposed by the Metropolitan Sessions Judge-cum-Special Court - Appeal allowed.
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