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Money Laundering - Case Laws
Showing 341 to 360 of 1537 Records
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2023 (2) TMI 615
Appropriate forum - Validity of provisional attachment order - petitioner approached this court on account of non-availability of the Appellate Tribunal under the PMLA - HELD THAT:- In the present petition, since the Appellate Tribunal under the PMLA Act has now been constituted, in the opinion of this Court, the entire issue would have to be comprehensively considered by the Appellate Tribunal in the two appeals which are pending before the said tribunal. Therefore, the entertaining of this writ, at this stage, when the Tribunal stands constituted could result in multiplicity of proceedings and also there is a possibility of conflicting rulings, which ought to be avoided.
The appeals challenging the show cause notice dated 13th July, 2021 and the appeal of the ED challenging the order dated 20th June, 2018 passed by the adjudicating authority shall now be considered together by the Appellate Tribunal - The challenges and the grounds raised against the impugned PAO dated 7th June, 2021 as part of this writ petition shall also be considered by the Appellate Tribunal under the PMLA Act. The Petitioner is thus permitted to approach the PMLA to raise its challenge to the impugned PAO dated 7th June 2021. The Appellate Tribunal would then adjudicate the appeals and pass a decision in accordance with law.
Petition disposed off.
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2023 (2) TMI 614
Maintainability of petition - non-constitution of appropriate forum - Validity of provisional attachment order - It is the submission of Respondents that the Appellate Tribunal under the PMLA Act has now been constituted and the Petitioner ought to be relegated to the Appellate Tribunal - HELD THAT:- In the present petitions before the Court, since the Appellate Tribunal under the PMLA Act has now been constituted, in the opinion of this Court, the entire issue would have to be comprehensively considered by the Appellate Tribunal. There are already two pending appeals filed by the ED in respect of the earlier order of the AA. The present PAO is now challenged before this Court. Therefore, the entertaining of this petition, at this stage, when the Tribunal stands constituted could result in multiplicity of proceedings and also there is a possibility of conflicting rulings, which ought to be avoided.
Considering that the impugned provisional attachment order by the ED was of 27th November, 2020 and the present writ petition was filed way back in September, 2021. The Supreme Court in M.A. No. 21 of 2022 of Suo Moto Writ Petition (C) No. 3/2020 titled ‘In Re: Cognizance for Extension of Limitation’ [2021 (11) TMI 387 - SC ORDER] had held that the period between 15th March, 2020 to 28th February, 2022 would not be counted for the purpose of limitation.
It is accordingly directed that the present writ petition shall be treated as an appeal challenging the PAO dated 27th November, 2020. This appeal to the PAO shall be considered by the Appellate Tribunal under the PMLA Act in accordance with law along with the two pending appeals filed by the ED. The stay application filed before this Court shall be considered as a stay application before the Appellate Tribunal under the PMLA Act.
Petition disposed off.
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2023 (2) TMI 399
Money Laundering - proceeds of crime - more than 200 accounts were opened in various Banks, to collect the scam money and further route the same, to utilize it for the personal gains, of the scamster/accused - grievance of the petitioner/Enforcement Directorate were to the manner in which the production warrant which was issued on 18.01.2023 by the Learned Special Court was recalled and the accused persons were directed to be set at liberty - HELD THAT:- The interpretation of the learned Senior advocate appearing for the opposite parties that ECIR can be registered only after finality is attained in a criminal proceeding is not acceptable to this Court.
Taking into account the provisions of Section 19(3), Section 45 (Explanation), Section 46, Section 65 and Section 71 of the PMLA Act, 2002 read with paragraph 324 of the judgment of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], it is held that the foundation, finding and conclusion of the order dated 21.01.2023 passed by the Learned Special Judge is bad in law and the same as such is set aside.
Application allowed.
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2023 (2) TMI 398
Seeking grant of regular bail - scheduled offences or not - illegal tapping of phone calls of NSE employees was conducted under the guise of an agreement between NSE and M/s ISEC Services Private Limited - HELD THAT:- As regards section 72 of the IT Act is concerned, the elements of the said offence are not made out in the present case as neither the Applicant nor the NSE was conferred with any powers under the said Act. Moreover, the Applicant or the NSE was not acting in pursuance of the powers conferred under the IT Act or the rules or regulations made therein.
As per the documents placed, it is observed that NSE was recording conversations since 1997 through other vendors and the transactions with ISEC occurred from 2009 to 2017. The Applicant was DMD of NSE till 2010 and JMD till 2013 and MD till 2016. As call recording was done by NSE prior to ISEC’s involvement, it is wrong to allege that the Applicant conspired with ISEC to illegally tap and record calls. Thus, the ingredients of section 120B IPC are not made out in the present case - In the present case, there was no complaint from NSE or any employee of the NSE that the Applicant cheated NSE or its employees. Furthermore, there is no allegation that the Applicant deceived or fraudulently induced NSE to deliver any property to any person.
The documents titled “Periodic Study of Cyber Vulnerabilities” clearly records that M/s ISEC proposes to “continue” its services in the area of “electronic monitoring services at NSE”. Since NSE was at all times aware that the scope of “Periodic Study of Cyber Vulnerabilities” includes electronic monitoring, there is no deception, fraud or dishonest inducement on the part of the Applicant - Pertinently, no victim has been identified by the ED who has suffered a wrongful loss on account of deception or cheating by the Applicant. Except for a vague and bald averment that customers have been cheated, there is no mention of the names of the persons who have been cheated. Thus, the ingredients of section 420 IPC are not made out in the present case - prima facie the ingredients of the scheduled offences under IPC viz., Section 120B read with section 420 IPC are not made out against the Applicant.
There is no evidence placed on record to prove corruption or abuse of position by the Applicant. The consideration received by M/s ISEC is pursuant to a contract entered into with NSE and work orders issued with the approval of Mr. Ravi Narain, the Managing Director. Thus, the ingredients of section 13(1)(d) r/w 13(2) PC Act are not made out against the Applicant. Hence, scheduled offence under section 13 PC Act is not established against the Applicant - prima facie no scheduled offences against the Applicant are established, the provisions of PMLA cannot be attracted to the present case.
In the case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT] the Hon’ble Supreme Court has opined that provisions of PMLA would apply when a person has derived or obtained property as a result of a scheduled offence, and then indulged in any process or activity connected with such property - In the present case there is no allegation that the Applicant has derived or obtained any property or proceeds of crime. Additionally, there is no allegation or evidence produced before me to suggest that the Applicant has concealed, possessed, used, projected or claimed any proceeds of crime as untainted property.
Prima facie there are reasonable grounds to believe that the Applicant is not guilty of the offence and she is not likely to commit any offence while on bail. Opportunity provided to the ED to oppose the bail application thereby satisfying the twin conditions enumerated under 45 PMLA.
The application is allowed and the applicant is granted bail subject to the conditions imposed.
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2023 (2) TMI 374
Seeking grant of bail - financial irregularity and siphoning of funds in relation to credit facilities obtained by SBFL from a consortium of banks led by the SBI and thereby causing a loss of Rs. 3269.42 crores - Applicant not named in FIR - compliance with the twin conditions of Section 45 of PMLA - HELD THAT:- The three Judge Bench decision of the Hon’ble Supreme Court in its recent decision in the case of Vijay Madanlal Chaudhary [[2022 (7) TMI 1316 - SUPREME COURT]] and connected matters, has upheld the mandatory twin conditions u/s 45 of the PMLA.
The twin conditions, are independent of each other and require the Court to weigh each one of them and adjudicate on the potential guilt of the offender based on the material relied upon by the accused and the opposition made to the same by the prosecution - Hence the Hon'ble Court is not required to render a finding of guilt or acquittal at this stage, nor is it required to conduct a mini trial or meticulously examine the evidence but rather is to examine whether the applicant has made out reasonable grounds for believing that he is not guilty.
Prima Facie no reasonable grounds for believing that the applicant is guilty - HELD THAT:- The applicant is not named in the FIR. The applicant is also not named as an accused in the ECIR registered by the ED, as the same is simply a replica of the FIR registered by the CBI - the role assigned to the Applicant is that since he was an Internal Auditor of SBFL and statutory auditor of several sister concerns of SBFL, it was through his aid and assistance that Shakti Bhog Foods Limited, borrowed, layered and siphoned off the loan funds using the platform of about 24 known group companies and several shell entities.
It is clear from timeline of the applicant with SBFL, that the applicant was not the statutory auditor at the time of the commission of offence i.e., the period between 2013 and 2017.
The ED has alleged that the applicant was the mastermind of the whole operation and to prove the same the ED has produced evidence in form of some emails and statements of management and employees of SBFL given u/s 50 of the PMLA - the documents do not support the contention of the ED that the applicant is guilty. Heavy reliance has been placed on section 50 of PMLA statements made by the employees of the SBFL. The only relevant document remaining that prima facie may establish the guilt are the statements u/s 50 of the PMLA. The investigation of the ED is hinged on the statements made u/s 50 of the employees of the SBFL.
Reliability of retracted statements - HELD THAT:- In the present case as well, the question is not regarding the admissibility but the reliability. The statements had concretely named the applicant. However, in their subsequent retraction the reliability of the statements themselves become doubtful. Statements of Employees of SBFL, Accommodation Entry Operators (Devki Nandan Garg & Ashok Kumar Goel) are a cut copy paste job with even the punctation marks of commas, full stops not differing - Prima facie in view of the retraction, the reliability of these statements is questionable. The retracted statements cannot form the basis of the guilt of the applicant of the offences as alleged. Prima facie, it is found difficult to place the guilt of the offence under PMLA on the applicant, based on these statements. Further, the questions as to why the statements were retracted are questions of trial.
In the present case, there is no relevant document to support the allegations. Admittedly the applicant has the 15-year association with SBFL, but despite the allegation that he was the mastermind of the whole operation the ED has relied on 5 documents to show the applicant’s complicity. For the reasons as noted, the documents do not show that the applicant is guilty of offences as alleged against him. In addition, there is not satisfactory explanation given by the ED for the lack of documents that directly point to the applicant as the “mastermind.”
Delay in filing chargesheet - Investigating still continuing - HELD THAT:- In the present case, out of a possible 7-year sentence, the applicant in case has already served more than 17 months of pre-trial detention (as of 23.01.2023). It is also important to state that the applicant has been interrogated only once on 13.11.2021 in entire judicial custody of more than 1 year - there can be no arguments on framing charges or initiation of a trial because the investigation is still ongoing. The ED has listed 109 witnesses till date and the Prosecution Complaints run into lakhs of pages in multiple trunks. Without a completion of investigation, no charges can be framed nor can trial cannot begin. In the light of this, the court cannot let the applicant undergo long period of detention. If this court allows the continuing pre-trial incarceration, the same will amount to deprivation of personal liberty as well as travesty of justice as the same is equivalent to punishment without trial.
In the present case, although the applicant, has not undergone half of the period, the offence with which the applicant is charged with is punishable with imprisonment upto 7 years but not with life or death. There are no criminal antecedents reported against the applicant. Out of this sentence, the applicant has already undergone 17 months of incarceration - Even though the allegations are serious but the chargesheet is yet to be filed. Assuming that the applicant was the mastermind, the respondent did not name him in the original FIR. The applicant had conducted audit of the company and had certified the fictitious accounting entries in the books of accounts of the company to inflate financials of SBFL, even then during his entire custody he has been interrogated only on one occasion on 13.11.2021.
The period of incarceration as well as the delay in investigation along with any reliable material which directly involved the Applicant justifies a prima facie release on bail. The only substantial evidence which is produced are the statements u/s 50 PMLA which too have been retracted - The standing counsel for the ED has been given the opportunity to oppose the bail. Hence the twin conditions as enumerated u/s 45 of PMLA have been met.
The applicant should be released on bail. The application is allowed subject to conditions imposed.
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2023 (2) TMI 373
Money Laundering - connivance with the bank officials and private persons entered into a criminal conspiracy to cheat the bank causing huge loss to the bank and corresponding wrongful gain to themselves - HELD THAT:- The petitioner has been enlarged on bail in predicate offences by this Court. The Enforcement Directorate took the investigation in respect of the money laundering. During the course of investigation by the Enforcement Directorate, the role of the petitioner has come in entering into criminal conspiracy with the accused Chandra Prakash Singh and other co-accused. The Enforcement Directorate has found that a Pay Order of Rs.5,10,000/- was issued in favour of the petitioner from Rs.56,40,000/- amount, which was embezzled/misappropriated by Chandra Prakash Singh and other co-accused.
It is stated that learned counsel for the Enforcement Directorate and Sri Manoj Kumar Singh are not in a position to dispute that rigour of Section 45 of PMLA, 2002 would not apply in the facts and circumstances of the case inasmuch as the total amount involved in the present case is less than One Crore.
The present petition is disposed of with liberty to the petitioner to surrender before the concerned PMLA court within a period of ten days from today and applies for regular bail. If he apply for bail within the aforesaid period, his bail application should be considered and decided preferably on the same day keeping in mind that rigour of Section 45 PMLA, 2002 would not apply in the facts and circumstances of the case.
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2023 (2) TMI 236
Money Laundering - scheduled/predicate offence - initiation of crowdfunding campaign through an online crowdfunding platform named “Ketto” and ran three campaigns from April 2020 to September 2021 - whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa? - HELD THAT:- The trial of the scheduled offence should take place in the Special Court which has taken cognizance of the offence of money-laundering. In other words, the trial of the scheduled offence, insofar as the question of territorial jurisdiction is concerned, should follow the trial of the offence of money-laundering and not vice versa - Since the Act contemplates the trial of the scheduled offence and the trial of the offence of money-laundering to take place only before the Special Court constituted under Section 43(1), a doubt is prone to arise as to whether all the offences are to be tried together. This doubt is sought to be removed by Explanation (i) to Section 44(1). Explanation (i) clarifies that the trial of both sets of offences by the same Court shall not be construed as joint trial.
It may be seen from the principles culled out from Sections 177 to 184 of the Cr.P.C that almost all contingencies that are likely to arise have been carefully thought out and laid down in these provisions. The only contingency that could not have been provided in the above provisions of the Cr.P.C, is perhaps where the offence of money-laundering is committed. This is why Section 44(1) begins with a non-obstante clause. The whole picture is thus complete with a combined reading of Section 44 of the PMLA and the provisions of Sections 177 to 184 of the Cr.P.C. - Once this combined scheme is understood, it will be clear that in view of the specific mandate of clauses (a) and (c) of subsection (1) of Section 44, it is the Special Court constituted under the PMLA that would have jurisdiction to try even the scheduled offence. Even if the scheduled offence is taken cognizance of by any other Court, that Court shall commit the same, on an application by the concerned authority, to the Special Court which has taken cognizance of the offence of money-laundering.
Whether the Court of the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, can be said to have exercised extra-territorial jurisdiction, even though the offence alleged, was not committed within the jurisdiction of the said Court? - HELD THAT:- A person may (i) acquire proceeds of crime in one place, (ii) keep the same in his possession in another place, (iii) conceal the same in a third place, and (iv) use the same in a fourth place. The area in which each one of these places is located, will be the area in which the offence of money laundering has been committed. To put it differently, the area in which the place of acquisition of the proceeds of crime is located or the place of keeping it in possession is located or the place in which it is concealed is located or the place in which it is used is located, will be the area in which the offence has been committed.
Having seen the legal landscape on the question of jurisdiction, let us now come back to the facts of the case on hand. It is the case of the petitioner that what was attached by the Enforcement Directorate under Section 5 of the Act as proceeds of crime, was the bank account of the petitioner in Navi Mumbai, Maharashtra and that therefore the offence of moneylaundering, even according to the respondent has been committed in Maharashtra.
The question of territorial jurisdiction in this case requires an enquiry into a question of fact as to the place where the alleged proceeds of crime were (i) concealed; or (ii) possessed; or (iii) acquired; or (iv) used. This question of fact will actually depend upon the evidence that unfolds before the Trial Court.
The issue of territorial jurisdiction cannot be decided in a writ petition, especially when there is a serious factual dispute about the place/places of commission of the offence. Hence, this question should be raised by the petitioner before the Special Court, since an answer to the same would depend upon evidence as to the places where any one or more of the processes or activities mentioned in Section 3 were carried out. Therefore, giving liberty to the petitioner to raise the issue of territorial jurisdiction before the Trial Court, this writ petition is dismissed.
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2023 (2) TMI 72
Seeking grant of anticipatory bail - allegations of laundering a massive sum of money in connivance with main accused - petitioner argued that the custodial investigation would serve no purpose whatsoever, and the pre-trial incarceration would cause an irreversible injustice to the petitioner and family.
HELD THAT:- The petitioner is directed to join the investigation as and when called by the Investigator. The petitioner shall be in deemed custody for Section 27 of the Indian Evidence Act. The petitioner shall join the investigation as and when called by the Investigating Officer or any Superior Officer; and shall cooperate with the investigation at all further stages as required. In the event of failure to do so, it will be open for the prosecution to seek cancellation of the bail. Whenever the investigation occurs within the police premises, the petitioner shall not be called before 8 AM, let off before 6 PM, and shall not be subjected to third-degree, indecent language, inhuman treatment, etc. - The petitioner shall not influence, browbeat, pressurize, make any inducement, threat, or promise, directly or indirectly, to the witnesses, the Police officials, or any other person acquainted with the facts and the circumstances of the case, to dissuade them from disclosing such facts to the Police, or the Court, or to tamper with the evidence.
The bail bonds shall remain in force throughout the trial and after that in Section 437-A of the Cr.P.C., if not canceled due to non-appearance or breach of conditions.
Any Advocate for the petitioner and the Officer in whose presence the petitioner puts signatures on personal bonds shall explain all conditions of this bail order in any language that the petitioner understands - If the petitioner finds bail condition(s) as violating fundamental, human, or other rights, or causing difficulty due to any situation, then for modification of such term(s), the petitioner may file a reasoned application before this Court, and after taking cognizance, even to the Court taking cognizance or the trial Court, as the case may be, and such Court shall also be competent to modify or delete any condition.
There would be no need for a certified copy of this order for furnishing bonds, and any Advocate for the Petitioner can download this order along with case status from the official web page of this Court and attest it to be a true copy. In case the attesting officer wants to verify the authenticity, such an officer can also verify its authenticity and may download and use the downloaded copy for attesting bonds.
Petition allowed.
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2023 (2) TMI 43
Seeking grant of bail - money laundering - proceeds of crime - allegation of amassing property and cash - HELD THAT:- After reading the law laid down in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], this Court considers it expedient to reiterate that the Petitioner was acquitted of the criminal case in Barbil P.S. Case No. 58 of 2010 for offence U/Ss. 307/387 of IPC r/w Section 25 and 27 of the Arms Act which are considered to be the predicate offence leading to launching of prosecution under PML Act in the present complaint, but subsequently the property involved in such criminal case had been directed to be restored to the Petitioner in criminal appeal no. 11 of 2012 and whether such order is/was challenged in the higher forum has not been brought to the notice of this Court. No matter a complaint under PML Act has been filed and pending against the petitioner for commission of offence of Money Laundering, but the acquittal of the petitioner for commission of offence under IPC as scheduled offence under PML Act and direction of the Appellate Court for restoration of property to the petitioner relating to such offence of IPC, unless the same are varied or set aside reversing the findings therein, it appears to this Court that these circumstances of acquittal of petitioner and direction for restoration of the property to the petitioner are sufficient to consider about existence of reasonable grounds for believing the petitioner to have prima facie discharged the satisfaction of the rigors of Sec. 45(1) of PML Act, which appears to be logically justified and fortified.
According to Sec. 3 of PML Act, whoever directly or indirectly attempts to indulge or knowingly assist 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 this case, of course, the Petitioner is facing a proceeding under PML Act for commission of offence of Money Laundering and, therefore, the rival claims of ED and the petitioner with respect to the offence and the property attached or seized by the ED are subject of adjudication and presumption under PML Act but keeping the Petitioner in custody for the purpose of trial or in anticipation of any other complaint or supplementary complaint which is not in existence at present, would be devoid of any sound logic, especially when the petitioner had already been acquitted for commission of scheduled/ predicate offences and the property seized in connection with that case had already been directed to be returned back to the Petitioner, no matter the criminal appeal against such order of acquittal is pending before this Court.
The bail application of the petitioner stands allowed and the petitioner be released on bail by the Court in seisin of the case on such terms and conditions as deem fit and proper and subject to his furnishing a cash surety of Rs. 5,00,000/- which shall be kept in fixed deposit/STDR in any Nationalised Bank, in addition to furnishing of property surety of Rs. 20,00,000/- and bail bonds of Rs. 10 lakhs with two solvent sureties each.
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2023 (2) TMI 42
Seeking grant of Bail - Money Laundering - round tripping of money - proceeds of crime - predicate offences - misappropriation and criminal breach of trust - manipulation of books of accounts through fictitious accounts - retraction of statements - conversion of property against unknown public servants - tampering with the evidences - mens rea - offences punishable under Sections 120-B read with Sections 420, 467, 468 and 471 IPC and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988.
Whether the petitioner, who is alleged to have abetted the main accused in the offence of money laundering, is entitled for bail or not?
HELD THAT:- If the court finds a prima facie case against the accused, it cannot come to a satisfaction that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail as specified in Section 45(1)(ii) of the PML Act.
The investigation so far done by the respondent, prima facie, leads to an inference that it is a classic case of money laundering by round tripping of money. Therefore, the stand taken by the respondent that even after commission of the scheduled offence and generatioin of proceeds of crime, different persons could join the main accused either as abettors or conspirators for committing the offence of money laundering by helping him in laundering the proceeds of crime and such persons might not have involved in the original criminal activity that had resulted in the generation of "proceeds of crime" and just because they were not prosecuted for the predicate offence, their prosecution for money laundering cannot be said to be illegal, appears to be a valid one.
No doubt "bail is a rule and jail is an exception" and it has been time and again held by various courts that no person shall be deprived of his life or personal liberty except according to a procedure established by law. But, at the same time, the courts must strike a balance between the interest of the society in general and the right of an accused to personal liberty.
In the case on hand, the petitioner, claiming to be an uneducated or a little educated person, is said to have been deployed to act as Director in various Companies for several years by the main accused, which itself shows the understanding and relationship between them and the mens rea of the petitioner in abetting the offence of the main accused. Therefore, this court cannot brush aside the objection of the respondent that in the event of the petitioner's coming out on bail at this stage, there is every possibility of his continuance in abetting the offence of the main accused in tampering with the evidence and interfering with the further investigation claiming that he does not have the so-called mens rea, by feigning ignorance as if he was a mere puppet at the hands of the main accused and thereby, this court is of the view that the petitioner has not complied with the second condition laid down under Section 45(1) of the Prevention of Money Laundering Act, 2002 for grant of bail.
This court is of the view that the petitioner is not entitled to grant of bail at this stage - Petition dismissed.
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2023 (2) TMI 15
Money Laundering - provisional attachment order - SARFAESI Act will have the primacy/overriding effect over the provisions of the PMLA or not - diversion of funds - HELD THAT:- It has been brought to our notice that all the petitioners have already raised objections both on facts and on law and it has been submitted before the Adjudicating Authority viz., the second respondent. The second respondent is a quasi judicial authority, who can go into both the facts and law while dealing with the objections raised by the petitioners. The provisional attachment order passed u/s.5 of the PMLA has been held to be constitutionally valid by the Apex Court in Vijay Madanlal Choudhary and others v. Union of India and others [2022 (7) TMI 1316 - SUPREME COURT] and hence, the provisional attachment order passed by the first respondent does not suffer from lack of jurisdiction. The provisional attachment order has been placed before the second respondent for confirmation u/s.8(3) of the PMLA.
The alternative remedy is only a self-imposed restriction and it is not an absolute one and in appropriate cases, this Court can exercise its jurisdiction under Article 226 of the Constitution of India in spite of the availability of an alternative remedy. Such exercise of jurisdiction is normally done in cases where the authority has initiated proceedings or passed orders without or in excess of jurisdiction or in cases where there is a serious violation of principles of natural justice or where certain extraordinary/special circumstances exist, which require the exercise of extraordinary power and jurisdiction under Article 226 of the Constitution of India. The law on this issue is too well settled.
In the facts of the present case, it is already held that the provisional attachment order passed by the first respondent does not suffer from any excess or lack of jurisdiction. The petitioners in both the writ petitions have been put on notice by the Adjudicating Authority and the petitioners have also submitted their objections both on facts and on law and hence, it cannot be held that a decision is taken behind the back of the petitioners and there is no violation of principles of natural justice - the petitioners have an effective, alternative and efficacious remedy and hence, we are not inclined to entertain these writ petitions. If any adverse order is passed by the Adjudicating Authority, an appeal is provided u/s.26 of the PMLA to the Tribunal from where there is a further appeal to the High Court u/s.42 of the PMLA.
There are no ground to entertain these writ petitions and we leave it open to the petitioners to raise all the grounds both on facts and on law before the Adjudicating Authority, viz., the second respondent and the same shall be considered on its own merits and in accordance with law - petition dismissed.
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2023 (1) TMI 1349
Seeking grant of bail - money laundering - while working as a public servant in the capacity of AG-1, Divisional Office, FCI Bhopal, during the check period from 02.12.2016 to 29.05.2021, amassed property 900% disproportionate to his known sources of income - HELD THAT:- Citing several earlier judgments in P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [2019 (9) TMI 286 - SUPREME COURT], the Supreme Court observed that power under Section 438 of CrPC is an extraordinary power and the same has to be exercised sparingly. The privilege of the pre-arrest bail should be granted only in exceptional cases. The judicial discretion conferred upon the court has to be properly exercised after application of mind. Repelling the submission that anticipatory bail is a facet of Article 21 of the Constitution of India and its denial would amount to denial of the right conferred upon under the said Article, the Apex Court stated that "We are conscious of the fact that the legislative intent behind the introduction of Section 438 CrPC is to safeguard the individual's personal liberty and to protect him from the possibility of being humiliated and from being subjected to unnecessary police custody.
Coming back to the present case, it is observed that conduct of the petitioner shows that he has deliberately disobeyed the order of the Court and intentionally, willfully and purposely avoided his appearance before the trial Court. The reason assigned by him for his non-appearance lacks bona fide. His conduct speaks loudly and clearly that he is avoiding his presence and is not cooperating with the trial. He is trying to make the straight path crooked to achieve his object to somehow get bail under the cover of a petition under Section 482 of CrPC by avoiding the jurisdictional Bench which refused to accede to his similar prayer. Such practices malign the noble image of the great institution and spread an impression that by twisting and turning the law, a desired lousy and atrocious result can be obtained.
It is further observed that even lenient view taken by the trial Court to facilitate the petitioner to appear before it by keeping the arrest warrant issued against him at abeyance could not mend him to honour the process of the Court.
Taking into consideration the fact that despite ample opportunities being given, the petitioner has not bothered to appear before the trial Court. He defied the direction of the Court knowingly and willfully. No reason has been demonstrated to show that the findings of the trial Court are perverse or contrary to the record or suffers from any illegality, irregularity or impropriety so as to invite our interference in the orders impugned. Thus, there are no error being committed by the trial Court in rejecting the petitioner’s application under Section 70(2) of CrPC.
Petition dismissed.
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2023 (1) TMI 1309
Grant of Interim Bail - Money Laundering - proceeds of crime - violation of Sections 41, 41-A and 60-A Cr.P.C. - whether the arrest of the petitioners was illegal i.e. contrary to the constitutional mandate and statutory provisions and consequently, whether the petitioners are entitled to be released on interim bail? - HELD THAT:- The Apex Court in the case of SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. [2022 (8) TMI 152 - SUPREME COURT], has issued certain directions to investigating agencies and the courts; has discussed arrest in cognizable offences, the mandate of Section 41, effect of its non-compliance while considering the bail application; has issued directions to ensure that police officers do not arrest the accused unnecessarily and magistrates do not authorise detention casually and mechanically; has held that Sections 41 and 41-A are facets of Article 21 of the Constitution; and has issued certain guidelines for avoiding unwarranted arrest, amongst other directions/observations.
From various judgments, it is evident that arrest is not mandatory; that the notice issued under Section 41-A is to ensure that the persons upon whom notice is served, is required to attend for 'answering certain queries' relating to the case; that if an officer is satisfied that a person has committed a cognizable offence punishable with imprisonment for a term, which may be less than 7 years or which may extend to the said period, with or without fine, an arrest can follow only when there is a reason to believe or suspect that the said person has committed an offence, and there is a necessity for an arrest.
Section 41 Cr.P.C. mandates the concerned officer to record his reasons in writing while making the arrest. Thus, a statutory duty is cast on the officer not only to record the reasons for arrest in writing, but also, if the officer chooses not to arrest - The Apex Court in its judgments in ARNESH KUMAR VERSUS STATE OF BIHAR & ANR [2014 (7) TMI 1143 - SUPREME COURT] and SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. [2022 (8) TMI 152 - SUPREME COURT], has clearly interpreted Sections 41(1)(b)(i) and (ii) Cr.P.C. It is evident from the said judgments that both the elements, "reason to believe" and "satisfaction for an arrest" as mandated in Section 41(1)(b)(i) and Section 41(1)(b) (ii) have to be read together and as such recorded by the concerned officer whilst arresting an accused. The object being to ensure that officers do not arrest the accused unnecessarily and the Magistrates do not authorise detention casually and mechanically.
Thus, it is clearly evident from the mandate of Section 41 Cr.P.C., that for a cognizable offence, an arrest is not mandatory and the onus lies with the officer who seeks to arrest. For effecting arrest, the officer must be satisfied that a person has committed a cognizable offence, punishable with imprisonment for a term which may be less than seven years or which may extend to the said period with or without fine, and that there is a necessity for an arrest - In the facts, it is evident that the officer, in the arrest memo, in the column, 'Grounds of arrest' has merely stated that 'The accused is an FIR named. She has been not cooperating and disclosing true and full facts of the Case.', which prima-facie appears to be contrary to the facts on record. Nothing specific has been noted/set-out therein, as mandated by Section 41(1)(b) (ii) (a) to (e). The only reason mentioned is that the petitioners have not co-operated and not given true and correct disclosure. The same cannot be a ground for arrest.
Courts have time and again re-iterated the role of courts in protecting personal liberty and ensuring that investigations are not used as a tool of harassment.
In the present case, the reasons recorded by the Officer in the ground of arrest, does not satisfy the tests laid down in Section 41(1)(b)(ii) (a) to (e) of Cr.P.C. It does not disclose as to whether the arrest was necessary for one or more purpose(s) as envisaged in the said provision - the petitioners' arrest is not in accordance with law. Thus, non-compliance of the mandate of Section 41(1)(b)(ii), Section 41-A and Section 60-A of Cr.P.C. will enure to the benefit of the petitioners, warranting their release on bail.
The petitioners are entitled to be released on bail, pending the hearing and final disposal of the aforesaid petitions on the conditions imposed - petition allowed.
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2023 (1) TMI 1268
Validity of closure report accepted by the Ld. Magistrate - HELD THAT:- The criminal proceedings are closed at this stage. However, at later stage, if any change in circumstances arises, the respondent is at liberty to take appropriate steps available under the law including recall of the present order, if so advised.
SLP disposed off.
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2023 (1) TMI 1239
Rejection of bail - bail application has been filed after expiry of the interim protection being granted by the Hon'ble Apex Court - application rejected mainly on the ground that applicant has not appeared before the Court rather she was absent - HELD THAT:- Considering the fact that the liberty of the present applicant has been protected by the Apex Court till 13.1.2023, therefore, her non-appearance before the learned trial court on or before 13.1.2023 would not be considered as an illegality on her part. Further, when she filed her application for bail before the learned trial court on 13.1.2023 she should have appeared before the learned trial court inasmuch as if the applicant does not appear before the learned trial court in the present case, her bail application could have not been decided by the learned trial court. Her presence at the time of hearing and disposal of the bail application was required under the law, therefore, there are no infirmity, illegality or perversity in the impugned order dated 16.1.2023.
Considering the ailments of the present applicant which has been indicated in the application and such critical physical condition has been considered by this Court in earlier occasion and by the Apex Court, therefore, liberty is given to the present applicant to appear before the learned trial court within one week from today. To be more precise on or before 1.2.2023 and file her bail application. The said bail application shall be heard and disposed of expeditiously preferably on the same date, if possible.
Application disposed off.
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2023 (1) TMI 1189
Money Laundering - proceeds of crime - twin conditions as mandated under Section 45 of PML Act satisfied or not - corroborative evidences or not - tampering with the evidences or not - HELD THAT:- From the account of the A1 and A3, the money has been layered and operated the account where the proceeds of crime parked at Hong Kong. Hence, the petitioner parked a sum of Rs.59.47 crores outside the country with the support of money parked outside the country may go underground and as such it is impossible to make him to participate in the trial. Further, there is possibility of tampering with the evidence and influencing the co-accused.
That apart, the twin conditions as mandated under Section 45 of PML Act shall apply in this case and the petitioner failed to adduce anything contrary to establish that he is not involved in the offence. Therefore, there is no change of circumstances to consider the present bail petition.
This Court is not inclined to grant bail to the petitioner - Petition dismissed.
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2023 (1) TMI 1051
Provisional attachment of properties under Section 5 of the Prevention of Money Laundering Act, 2002 - no proceedings relating to the predicate offense may have been initiated by the competent agency functioning under an independent statute and in terms of which the scheduled offense stands created - whether the ED could be recognised to have the jurisdiction to enforce the measures contemplated in Section 5 of the Act solely upon it being of the opinion that the material gathered in the course of an investigation or enquiry evidences the commission of a predicate offense?
HELD THAT:- The Court finds that till date the ED has failed to take any steps as are envisaged under Section 66(2) of the PMLA. As would be manifest from a reading of sub-section (2) of Section 66 if the Director or other authority on the basis of material in its possession comes to form the opinion that the provisions of any other law in force are contravened, it is obliged to share that information with the concerned agency for necessary action. Section 66(2) thus fortifies the conclusion of the Court that ED does not stand conferred with any independent power to try offences that may be evidenced or may stand chronicled as offences under any other law. What the Court seeks to highlight is that the jurisdiction and authority of the ED stands confined to considering whether an offence of money laundering stands evidenced. If in the course of its enquiry and investigation, it were to come to the conclusion that the material in its possession evidences the commission of an offence created under any other enactment, it would be obliged to furnish requisite information in respect thereof to the concerned agency for necessary action.
The allocation of the preferential shares and the proceeds garnered therefrom is what constitutes the substratum of the PAO. However, no report or complaint in relation thereto stands registered. In fact, the allegation of an offense having been committed by the petitioner in the course of allotment of preferential shares was also not shown to have been ever investigated by the concerned agency. It is thus established beyond an iota of doubt that the PAO rests on a mere presumption of the ED that a scheduled offense was committed by the petitioner while allotting preferential shares.
The Court is constrained to observe that despite both those proceedings being pending since 2014, ED did not deem it fit, appropriate or imperative to furnish any information to the CBI in order to enable it to examine whether the allotment of preferential shares would evidence the commission of an offence under the IPC or any other Statute. Regard must also be had to the fact that the PAO itself came to be made on 29 November 2018 and thus almost four years after the registration of the FIR by the CBI and the filing of the ECIR. In fact, and undisputedly, the ED was not shown to have furnished information with respect to allotment of preferential shares even when the present petitions were closed for rendering judgment.
The Court is further constrained to observe that the preferential allotment of shares was made on 03 January 2008. The respondent alleges that the coal block allocation and disclosures in respect thereof were made before the BSE and other regulatory authorities around that time. It was the increase in the share price of the petitioner between 02 January 2007 and 01 January 2008 which formed subject matter of its scrutiny. The premium amount of Rs.118.75 crores was also received during this period. The Court is thus faced with a situation where the PAO was based on events which had occurred six years prior to the submission of the ECIR. The PAO came to be drawn ten years after the allocation of preferential shares - In fact, and till date even though more than fourteen years have elapsed, ED has failed to furnish any information to the competent agency to try, investigate or examine aspects pertaining to the preferential allotment of shares in order to ascertain whether they evidence the commission of a scheduled offence. Thus, in the considered opinion of the Court, the aforesaid facts render the impugned PAO’s not only violative of the statutory provisions but also patently arbitrary and illegal.
The impugned PAO cannot be countenanced as falling within the meaning of an emergency attachment order bearing in mind that the allotment had itself occurred more than 11 years prior to the action initiated by the ED. In fact, even after the passing of 14 years, that aspect has neither been investigated by the competent agency nor has any report in that respect been lodged. While it may be urged that it would still be open to the ED to provide information under Section 66(2) of the Act, that too does not convince the Court to hold in favour of the respondent in the facts of the present case. It must be stated that an action to attach properties provisionally under Section 5 must necessarily be tested based upon the facts and the material that exists on the day when it comes to be made. A PAO cannot possibly be sustained based upon what the ED may prospectively choose to do.
The impugned PAO shall stand quashed - Petition allowed.
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2023 (1) TMI 1050
Money Laundering - proceeds of crime - Accumulation of disproportionate assets accumulated by the accused/ MLA/ Minister, Anos Ekka and Harinarayan Rai - criminal conspiracy - misappropriation - criminal breach of trust - cheating forgery fraudulent execution of deed of transfer containing false statement of consideration amount - acquiring assets disproportionate to his known lawful source of income and also to have acquired lands in violation of C.N.T. Act in the name of his wife Smt Menon Ujjana Ekka - scheduled offence/predicate offence.
HELD THAT:- The three ingredients of the offence under Section 3 read with Section 4 of PMLA are:
I. A criminal activity which is a scheduled offence, should have been committed.
II. Some money should have been generated by the criminal activity;
III. The money so generated (proceed of the crime) should have been projected as untainted one.
In the present case the prosecution has proved all the three basic ingredients of the offence. I do not find any infirmity in the impugned Judgment of conviction by the trial Court. Judgment of conviction under predicate offence is also affirmed in Criminal Appeal no.326/,327/ and 328/ pending before this Court and pronounced by a separate Judgment today.
Sentence - HELD THAT:- It is a settled principle that criminal law generally adheres to the principles of proportionality in sentencing. Imposition of sentence without considering its effect on the social order in many cases can render the criminal adjudication as an exercise in futility. Appellant in the present case was none other than an elected representative of the people, who was reposed with faith to discharge his constitutional obligations with the highest degree of probity. Unfortunately, power blinded his wisdom and he indulged in rampant corruption by acquiring movable and immovable property much beyond his known sources of income. The proceeds of crime under a grand design and various contrivances, were projected as untainted by the process of money laundering. The nature of crime, post held by the appellant, does not justify any leniency in sentencing.
On the point of sentence, considering the gravity of offence and the position of responsibility as held by the appellant/accused, the sentence of imprisonment and fine needs no interference by this Court. The learned Court below has recorded adequate and sufficient reasons for awarding sentence which will meet the ends of justice. These are species of crime that strike at the financial foundation of the State and the convict does not deserve any clemency so that the deterrent effect of punishment is not completely diluted - the order of confiscation of crime proceeds is also affirmed.
The Judgment of conviction and sentence passed by the learned Court below is upheld - Appeal is dismissed.
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2023 (1) TMI 919
Money Laundering - generation of proceeds of crime or not - alleging perpetration of criminal activities in the sanction and disbursement of credit facility to the company - role of petitioner in the commission of offence - HELD THAT:- The requirement of projecting the proceedings of crime as untainted property may be one of the modes by which the offence is committed and is no longer a sine qua non for constituting the offence of money-laundering under Section 3 of the PML Act.
The predicate offence against the petitioner is that he fraudulently sanctioned and disbursed the loan. The loan is, therefore, the proceeds of crime. It is necessary to notice that the scope of Section 3 is wide enough to cover all persons who “directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime.” It is clear that even a person who knowingly assists in any process or activity connected with the proceeds of crime would also be caught within the net of Section 3. In the case on hand, on a reading of the complaint, the allegation is that, but for the role played by the petitioner, the loans could not have been sanctioned and disbursed to A-1. Prima facie, these allegations would attract Section 3 of the PML Act.
The conclusion have been arrived at in the light of a recent decision of the Supreme Court in DIRECTORATE OF ENFORCEMENT VERSUS PADMANABHAN KISHORE [2022 (11) TMI 53 - SUPREME COURT], wherein, it was observed that By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime. Without such active participation on part of the person concerned, the money would not assume the character of being proceeds of crime. The relevant expressions from Section 3 of the PML Act are thus wide enough to cover the role played by such person.
The case set up in paragraph 10.6 of the complaint is that, A-5 had sanctioned and disbursed the credit facilities/loan. But, for the alleged active participation and assistance of the petitioner/A-5 the money so disbursed would not have assumed the character of proceeds of crime. Consequently, it cannot be said that the alleged role played by the petitioner does not come within the net of the definition of proceeds of crime under Section 3 of the PML Act.
There are no ground to interfere with the criminal prosecution of the petitioner/A-5 - petition dismissed.
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2023 (1) TMI 846
Provisional attachment order - case of petitioner is that Madura Chemicals Pvt. Ltd. was acquired by the petitioner in the year 2015 and that the petitioner was never put on notice either after the provisional attachment order was passed or when the confirmation order was passed by the Adjudicating Authority - HELD THAT:- Madura Chemicals Pvt. Ltd. has been specifically added as a party before the Adjudicating Authority and it is represented by the above said Mathesh. We are dealing with a legal persona in the present case and it is enough if notice is issued to the company. The grievance of the petitioner that he did not personally know about this case is a matter to be resolved with Mathesh, who had received money from the petitioner enabling the petitioner to acquire the company. Hence, we are not satisfied with the contention raised by the learned counsel for the petitioner that Madura Chemicals Pvt. Ltd. was never put on notice by the Adjudicating Authority while confirming the provisional attachment order. In any event, we cannot get into this factual issue for the first time while dealing with this writ petition and such factual disputes cannot be adjudicated in a writ petition.
Jurisdiction of the second respondent to pass the confirmation order beyond the period of 180 days - HELD THAT:- The second respondent apart from dealing with the merits of the case, has justified the passing of the Adjudication Order beyond 180 days by relying upon the various orders passed by the Apex Court extending the period of limitation.
In the Apex Court has explained the scope of the order passed in S.Kasi case [2020 (6) TMI 727 - SUPREME COURT] and has categorically held that the same cannot be applied in a matter involving proceedings before a Court. The second respondent was exercising a quasi-judicial function and the ratio in S.Kasi case cannot be applied to such a quasi-judicial authority. In any case, we keep this issue open to enable the petitioner to agitate the same before the Appellate Tribunal.
This Writ Petition is dismissed and liberty is granted to the petitioner to approach the Appellate Tribunal u/s.26 of the PMLA and work out his remedy in accordance with law.
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