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Money Laundering - Case Laws
Showing 441 to 460 of 1548 Records
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2022 (11) TMI 502 - KARNATAKA HIGH COURT
Money Laundering - Jurisdiction of lower court - Summoning of petitioner by the ED for recording of the statement after registration of the crime - petitioner is in judicial custody - HELD THAT:- It is deemed appropriate to notice the statutory frame work of the PMLA. Section 2 of the PMLA deals with definitions. Section 2(1)(z) defines a ‘Special Court’ to mean a Court of Session designated as Special Court under sub-section (1) of Section 43. It is not in dispute that an ECIR is filed against the petitioner and it is in furtherance of the said registration of the crime, statements of the petitioner are sought to be recorded by the respondent/ED to consider whether there is an offence made out against the petitioner for offences punishable under the PMLA. Now PMLA would mean offences punishable under Chapter II which deals with offence of money laundering.
Section 50 empowers the authorities under the PMLA with regard to summons, production of documents and to give evidence. Sub-Section (3) of Section 50 directs that all persons so summoned shall be bound to attend in person or through authorized agents and shall be bound to state the truth upon any subject with respect to which they are examined or make statements and produce documents as may be required. Therefore, the authority under the PMLA does have power to summon and record statement of witnesses in terms of Section 50 of the Act - If the ED wants to invoke the provisions of the PMLA to discern the offence under Section 3 of the PMLA, the designated Court is the Court of Session alone which had the power to even consider any application emanating from the provisions of the PMLA as the offence supra, Section 43 supra and Section 71 clearly mean that the designate Court to try anything emanating from the PMLA is the Special Court and the Special Court is the Court of Session. Section 71 has overriding effect on any law.
A Three Judge Bench of the Apex Court in the case of HARSHAD S.MEHTA [2001 (9) TMI 991 - SUPREME COURT] followed the judgment in the case of A.R.ANTULAY [1984 (2) TMI 317 - SUPREME COURT] to hold, if a Special Court is created under the provisions of a special enactment, the proceedings falling under that enactment shall be held only before the Special Court. For this purpose the Apex Court holds that the Special Court enjoys all the powers of the court of original jurisdiction and it holds a dual capacity and powers of both the Magistrate and the Court of Session depending upon the stage of the case.
In the light of the statutory frame work of the PMLA and the application filed under Section 50 of the Act, this Court is of the considered view that the application was not maintainable before the learned Magistrate, since the Court did not have the power to direct recording of statements for it to become a record under the PMLA, the order which is passed by the Court which did not have a jurisdiction to even consider any application under the PMLA, is rendered unsustainable.
Petition allowed.
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2022 (11) TMI 401 - PUNJAB & HARYANA HIGH COURT
Seeking grant of regular bail - siphoning off of funds - twin conditions for grant of bail satisfied or not - Section 4 read with Section 70 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Section 45(1) of PMLA 2002 imposes twin conditions before bail could be granted to a person accused of having committed an offence punishable under the PMLA. As per section 45(1) PMLA, the Public Prosecutor was required to be given an opportunity to oppose the plea for bail and that where the Public Prosecutor opposed such plea, the Court could grant bail only after recording satisfaction that there were reasonable grounds to believe that the person to be released was not guilty of the offence he was accused of and that while on bail he was not likely to commit any offence.
The constitutional validity of provisions of section 45 PMLA 2002, imposing the twin conditions for grant of bail, which were also there before amendment of section 45 PMLA in 2018, was questioned before Hon'ble the Supreme Court in Nikesh Tarachand Shah vs. Union of India [2017 (11) TMI 1336 - SUPREME COURT] and the Supreme Court, after holding that the prescribed twin conditions for release on bail were violative of Articles 14 and 21 of the Constitution of India, declared Section 45(1) of the PMLA, to that extent, to be unconstitutional - Thus it is apparent that despite the Supreme Court having declared that the twin conditions for release on bail as prescribed by un-amended provisions of Section 45(1) of the PMLA,were violative of Articles 14 and 21 of the Constitution of India and thus unconstitutional.
Obesity, as in the case of the petitioner, who weighs 153 kilograms is not just a symptom but is itself a disease which becomes root-cause of several other diseases. With such co-morbodities, the response, the resistance, the resilience and the capacity of the body to fight ailments and recuperate efficaciously, decreases substantially. The jail doctor or for that matter, a civil hospital may not be fully equiped to handle a patient having multiple aiments who apart from medical treatmet may require a certain level of monitoring, care and attention which ordinarily is not available in jail - Considering the co-morbodities of the petitioner, it can safely be said that he falls in the exception of being “sick” as carved out in Section 45 of the Act, so as to be entitled to be released on bail.
The petitioner is ordered to be released on regular bail on his furnishing bail bonds/surety bonds to the satisfaction of learned trial Court/Chief Judicial Magistrate/Duty Magistrate concerned - petition allowed.
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2022 (11) TMI 293 - KARNATAKA HIGH COURT
Seeking enlargement of bail - money laundering - predicate offence - diversion of funds/shell companies - It is the specific allegation that the petitioner herein through the said entities collected money from the public through investment apps by offering high and lucrative returns under exchange for the money deposited by them and in this regard more than 300 crores was collected from various depositors and more than 290 crores was diverted to various shell companies - HELD THAT:- Admittedly, the nature of services which was represented to Razorpay and PayU were not adhered to and it was Power Bank and Sunfactory which lured the general public to invest the money. It is also evident that Power Bank and Sunfactory were not available on Google Playstore and later on complaint came to be filed in Cr.No.8/2021. Later on Enforcement Directorate has taken up this case. It is also evident from the records that there is specific allegations that the present petitioner did not cooperate during the investigation and the software developer informed that some source code in the software for gaming platform was manipulated by the present petitioner and gateways were linked to Power Bank and Sunfactory.
There is no dispute of the fact that the petitioner is partner in both M/s. Clifford Ventures and M/s. H & S Ventures Inc. and admittedly more than 290 crores was diverted to various companies and though the services of Razorpay and PayU were taken, but the amount was routed through Power Bank and Sunfactory apps. Thus it clearly establish the intention of the petitioner for routing the transactions from different sources of business - The records also prima-facie disclose that money collected from public has been transferred to several various companies by the petitioner without there being any reason/occasions. It is further alleged that it is a process of concealment and layering of funds that had been acquired by duping the public at large.
Admittedly after completing preliminary investigation, the complaint came to be lodged and there is prima-facie material. The other ground for bail on predicate offence cannot be entertained as admittedly it is a economic offence and it is required to be dealt firmly. Further the explanation under Section 50 of the PML Act is required to be considered during the course of the trial and prima-facie there is material evidence which disclose that he has cheated public at large by receiving deposits to the tune of more than Rs.300 crores - Admittedly petitioner is also involved in similar offences in other States also. Looking to these facts and circumstances, this is not a fit case wherein discretion can be exercised in admitting the petitioner on bail.
Petition dismissed.
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2022 (11) TMI 155 - KARNATAKA HIGH COURT
Seeking grant of bail - Money Laundering - predicate offence - scheduled offence - creation of bogus/fake deposits by debiting loans and advances - allegation is said that the accused No. 1-Ramakrishna, who is said to be the Director of the co-operative bank lent loan to the petitioner to the tune of Rs. 105 crores without following the procedure and without obtaining proper and adequate security and collected the documents for the purpose of recovering the loan amount - main apprehension of the prosecution is that the petitioner is having considerable influence and if he is released on bail, he would scuttle the investigation and destroy the evidence and he may also defeat the objectives of the PML Act.
HELD THAT:- The petitioner was released on bail in the predicate offence, but this case is based upon the money laundering. Of course, Section 45 provides that if the Court is satisfied that there are reasonable grounds to believe that the petitioner is not guilty of such offence and he is not likely to commit any offence while on bail, then only he shall be released. Here in this case, the petitioner has not whispered and has not given any details of the property on which he has invested. Even though, he has received Rs. 60 crores by way of cash which was against the law has not disclosed the amount in which he has invested.
Considering the facts and circumstances of the case, if the petitioner is granted bail, there is every possibility of obstructing the ED from attaching the properties and they require some more time for getting other sources to trace the property in which the petitioner has invested. When the petitioner has not disclosed about the investment, it is for the ED officials to find out any other method to unearth the properties and attach the same. Therefore, when the petitioner himself has not properly explained the investment made by him and is reluctant in giving information, the ED shall make an endeavour to find out truth in various other modes known to law. Hence, the petitioner cannot be released on bail at this stage.
Bail application dismissed.
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2022 (11) TMI 154 - PATNA HIGH COURT
Seeking grant of anticipatory bail - Money Laundering - received huge donations/funds from the Government and other sources which have been siphoned off and concealed for acquiring properties - proceeds of crime - Scheduled Offences - compliance with the twin conditions of Section 45 of PMLA or not - HELD THAT:- From a bare perusal of Section 45 of the Act, it is established that petitioner cannot claim anticipatory bail as above mentioned eventualities depends on the discretion of the learned Special Court and learned Special Court has rightly exercised its discretion and in the facts of the case has rejected the anticipatory bail of the petitioner as money laundering is an economic offence of grave nature and assisted the main accused in laundering proceeds of crime generated from criminal activities relating to scheduled offence.
In SHYAM SUNDER BAJAJ, SON OF LATE JUGAL KISHORE BAJAJ VERSUS THE UNION OF INDIA, THROUGH THE ASSISTANT DIRECTOR (P.M.L.A.) ENFORCEMENT DIRECTORATE, GOVERNMENT OF INDIA, PATNA [2022 (3) TMI 1436 - PATNA HIGH COURT], the Hon’ble Patna High Court has refused to grant anticipatory bail and held that twin conditions have to be considered at the time of grant of anticipatory bail. The Court did not grant anticipatory bail in the light of the gravity of the offence of money laundering, facts of the case which reveals his complicity and the fact that trial could not proceed because of his non-appearance.
The prayer for grant of anticipatory bail to the petitioner stands rejected.
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2022 (11) TMI 153 - KARNATAKA HIGH COURT
Money Laundering - Scheduled offence - Legal jugglery - framing of charges - Acquittal form predicate offence - accused 1 and 2 are said to have involved in the commission of murder of one Rajesh and one Ramu while injuring few others in a farm house belonging to one Muddappa situated behind APMC in Hunsur - petitioners having been acquitted of the predicate offences made under the IPC - whether accused 1 and 2 having been acquitted of the offences alleged under the IPC – predicate offence, the offence alleged i.e., scheduled offence under the Act can continue? - HELD THAT:- The offence under Section 3 is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property which constitutes the offence of money laundering. The Apex Court holds that the authorities under the Act cannot prosecute any person on notional basis or on the assumption that the scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. The Apex Court answers the issue further holding that if a person is finally discharged/acquitted of the predicate offences or the criminal case against him is quashed by a Court of competent jurisdiction, there can be no offence of money laundering against him or any one claiming such property being the property linked to stated scheduled offence through him. The Apex Court answers the very issue which is the kernel of the conundrum in the case at hand, in the aforesaid clause of conglomeration of conclusions.
The view as taken by the Trial Court in this matter had been a justified view of the matter and the High Court was not right in setting aside the discharge order despite the fact that the accused No. 1 had already been acquitted in relation to the scheduled offence and the present appellants were not accused of any scheduled offence.
It is not in dispute that accused 3, 4 and 5 are hauled into the proceedings under the Act only because the property that they have acquired is linked to the criminal activity of accused 1 and 2. Accused 1 and 2 are into the proceedings under the Act for the reason of allegations of money laundering under Section 3, as according to the prosecution it is proceeds of crime. Therefore, the entire issue initiated by the Enforcement Directorate against the accused herein would revolve round Section 3 of the Act. Section 3 of the Act is interpreted by the Apex Court (supra). The conclusion of the Apex Court is that if they are discharged/acquitted or the criminal case against them is quashed, there can be no offence of money laundering against them or anyone claiming such property being the property linked to the scheduled offence through them. The contention of the respondent that the issue inter partes has become final is unacceptable.
The Criminal Petitions are allowed.
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2022 (11) TMI 103 - MADRAS HIGH COURT
Money Laundering - proceeds of crime - obtaining huge loans from Andhra Bank and Union Bank of India for starting a medical college in the name of D.D.Medical College - raising huge amounts from students, for giving admission without even getting the necessary permission from the Medical Council of India - HELD THAT:- Even if the accused was not involved in the criminal activity that generated the proceeds of crime, but, if he is involved in some way or the other with the proceeds of crime so generated, he would be liable to be prosecuted under Section 3 read with 4 of the PML Act. Whether the cars were purchased from and out of the proceeds of crime, is also a question of fact which has to be decided only during trial.
There are no infirmity in the orders passed by the trial Court in the discharge petitions warranting interference by this Court. Similarly, there are prima facie materials against Sonia and therefore, the prosecution against her cannot be quashed.
The presence of Tataji and Sonia may be dispensed with on the conditions imposed - application disposed off.
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2022 (11) TMI 102 - PATNA HIGH COURT
Seeking grant of anticipatory bail - Money laundering - proceeds of crime - scheduled offence - offence of cheating and dishonestly inducing delivery of property - attachment of the property - HELD THAT:- Against the alleged proceeds of crime to the tune of Rs.10,15,94,961/- properties valued at Rs.4,21,85,018 have been identified and have been provisionally attached vide PAO No.09/2018 dated 31.03.2018. A complaint under section 5(5) of PMLA 2002 vide O.C. No.947/2018 dated 23.04.2018 was filed before the Hon’ble Adjudicating Authority under PMLA for confirmation of the provisional attachment order and Authority under PMLA confirmed the provisional Attachment order No.09/2018 vide order dated 05.09.2018 considering the fact that the petitioner has committed the scheduled offence, generated proceeds of crime and laundered them - Hence the property in the name of Neelam Devi, w/o Dinesh Prasad Gupta has rightly been identified for attachment.
Considering the aforesaid facts and circumstances, it is pertinent that the petitioner has not produced any document to show that he purchased the said land from own money - Petitioner along with his partner i.e. other accused persons are involved in concealment, possession, acquisition and using properties acquired out of proceeds of crime and projecting the same as untainted, as such, the privilege of anticipatory bail cannot be granted.
Application dismissed.
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2022 (11) TMI 101 - BOMBAY HIGH COURT
Seeking grant of Bail - Money Laundering - allegation of siphoning off huge amount of money from Mahila Utkarsha Pratishthan, Risod, (hereinafter referred to as ‘the Trust’) for his personal use - it is also alleged that Applicant and the co-accused converted the Trust into Section 8 Company on the basis of forged and fabricated documents - diversion of funds/proceeds of crime - twin conditions as mentioned in Section 45 of the PMLA fulfilled or not?.
HELD THAT:- It may be mentioned that Section 45 of the PMLA imposes two conditions for grant of bail to any person accused of an offence punishable for a term of imprisonment of more than three years under part A of the schedule of the Act viz, (i) the public prosecutor must be given an opportunity to oppose the application for such bail; (ii) where the public prosecutor opposes the application, the Court must be satisfied that there are reasonable grounds for believing that the accused person is not guilty of such offence and is not likely to commit any offence while on bail.
Reverting to the facts of the present case, the thrust of the accusations against the Applicant is that he in connivance with the co- accused Bhavna Gawali cheated and misappropriated the funds of the Trust, for his personal use. The Applicant credited cash of Rs. 3.58 crores into the account of Deepak Prajapati, who transferred the money into the account of M/s. Master Plan Finance Ltd, of which he is one of the Directors. Said Deepak Prajapati aided money laundering by effecting a loan entry to give legitimacy to the proceeds of crime and/or to disguise the illicit nature of criminal proceeds. The said payment was then utilized by the applicant to purchase office No.16 on the first floor of Nariman Bhavan at Nariman Point.
The only incriminating material against the Applicant is in the form of the statements of Upendra Mule, Ashok Gandole, Uddhav Gandole, Vinod Pandhare, Santosh Somani, Bharat Devgire and others, who are the accused in crime No.389 of 2020 registered at Risod Police Station, pursuant to the complaint lodged by Bhavna Gawali for cheating and misappropriating the money of the Trust. Said Ashok Gandole and others had filed applications before the Division Bench of this Court at Nagpur Bench for quashing the said FIR. While dismissing the said applications, the Division Bench of this Court had prima facie observed that Ashok Gandole was Incharge of the affairs of the Trust and the other Applicants were connected with him - It is observed that Ashok Gandole and others are alleged to have deposits in their personal accounts and have substantial properties. In the light of these observations, the statements of these witnesses recorded under Section 50 of the PMLA will have to be tested in evidence during trial.
Considering the totality of the circumstances, prima facie the offence of cheating is not made out and in all probability, the Applicant may not be ultimately convicted for offence of money laundering. In the absence of any material as regards criminal antecedents of the Applicant, it can be held that there is no possibility of the Applicant committing such crime in future. Most of the co-accused are either on bail or are not arrested. The Applicant is in custody since September, 2021. The charge sheet has been filed and considering the large pendency, the trial is not likely to commence and conclude in the immediate future. The Applicant is a permanent resident of the State and there is no likelihood of the Applicant absconding or tampering with the evidence. Considering the above facts and circumstances, it is not necessary to detain the Applicant any further. Hence, case is made out for grant of bail.
Bail application allowed.
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2022 (11) TMI 53 - SUPREME COURT
Smuggling - proceeds of crime - Scheduled offences - conspiracy to commit offences punishable under Sections 7, 12, 13(1)(d) read with Section 13(2) of the PC Act - HELD THAT:- The definition of “proceeds of crime” in PML Act, inter alia, means any property derived or obtained by any person as a result of criminal activity relating to a scheduled offence. The offences punishable under Sections 7, 12 and 13 are scheduled offences, as is evident from paragraph 8 of Part-A of the Schedule to the PML Act. Any property thus derived as a result of criminal activity relating to offence mentioned in said paragraph 8 of Part-A of the Schedule would certainly be “proceeds of crime”.
Whether the role played by respondent could come within the purview of Section 3 of the PML Act? - HELD THAT:- It is true that so long as the amount is in the hands of a bribe giver, and till it does not get impressed with the requisite intent and is actually handed over as a bribe, it would definitely be untainted money. If the money is handed over without such intent, it would be a mere entrustment. If it is thereafter appropriated by the public servant, the offence would be of misappropriation or species thereof but certainly not of bribe. The crucial part therefore is the requisite intent to hand over the amount as bribe and normally such intent must necessarily be antecedent or prior to the moment the amount is handed over. Thus, the requisite intent would always be at the core before the amount is handed over - 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.
Appeal allowed.
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2022 (11) TMI 52 - JAMMU AND KASHMIR HIGH COURT
Attachment of property - expiry of period of limitation for filing appeal - whether for the purpose of taking possession of the property attached under Section 5 or frozen under sub-section 1-A of Section 17 of the Prevention of Money Laundering Act, 2002 (PMLA), the Director or any other officer authorized by him has to wait for the expiry of the period of limitation for filing appeal against the attachment order that has been confirmed in terms of sub-section (3) of Section 8 of the PMLA for taking its possession in terms of Section 8(4) of the PMLA?
HELD THAT:- There is no dispute to the legal position that the Supreme Court in Vijay Mandal Choudhary’s case [2022 (7) TMI 1316 - SUPREME COURT] has upheld the vires of the provisions contain in Section 8(4) of the PMLA. The said provision authorizes the Director or any other officer to take possession of the property regarding which provisional order of attachment has been confirmed. As per the Rule 5(2) of the Prevention of Money Laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority),Rules, 2013 (hereinafter referred to as the Rules of 2013), once the attachment of immovable property has been confirmed by the Adjudicating Authority and it is found to be in possession of the owner, the authorized officer has to issue a notice of eviction of ten days so as to prevent the person from enjoying such property and if such person does not vacate the property within the stipulated time, he has to be evicted by taking possession thereof.
The jurisdiction to proceed under Section 8(4) of the PMLA would come into play immediately upon passing of the order of attachment by the Adjudicating Authority. There is no scope to interpret the provisions contained in Section 8(4) and Section 26 of the PMLA and Rule 5(2) of the Rules of 2013 to hold that for taking action under Section 8(4) of the PMLA, the authorized officer has to await the expiry of period of limitation i.e., 45 days - the respondents were well within their powers to issue the impugned notice, which is in tune with the legal position as discernible from the provisions contained in Sections 8 and 26 of the PMLA read with Rule 5(2) of the Rules of 2013.
There are no ground to interfere in the impugned judgments passed by the learned Writ Court. The same are well-reasoned and lucid and deserve to be upheld - appeal dismissed.
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2022 (11) TMI 51 - RAJASTHAN HIGH COURT
Validity of summons issued by the Assistant Director, PMLA, Directorate of Enforcement, Ministry of Finance, Government of India, Jaipur - HELD THAT:- On perusal of the impugned summons dated 31.08.2022, it reveals that the petitioner has been asked to appear before the Investigating Officer on 15.09.2022 - A conjoint reading of sub Section (1) (b) & (2) of Section 50 of the Act of 2002 makes it abundantly clear that it is wide enough to authorise and empower the Director or the Additional Director (as the case may be) to issue a summons to a person.
Mere fact that the reply has been filed and the requisite documents as required in first summons have been furnished, does not absolve the petitioner of his statutory obligation to honour the summons. Nor does it take away right of the authorised officer to call upon the petitioner to appear before him - Petitioner’s argument that the summons issued to the petitioner which does not append the schedule and list of documents is illegal, is preposterous.
When the authorised officer needs only petitioner’s presence, it is not necessary to append the list of documents and the schedule - Petitioner simply wants to avoid summons by way of taking hyper technical pleas, which too have no substance.
This Court does not find any illegality or infirmity in the impugned summons dated 31.08.2022 - Petition dismissed.
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2022 (11) TMI 50 - CHHATTISGARH HIGH COURT
Money Laundering - Seeking grant of bail - scheduled offences - proceeds of crime - untainted money - framing of charges - Sections 417 of the IPC and under Sections 17, 40 (1)((b) and 40(1)(c) of the Unlawful Activities (Prevention) Act, 1967 - HELD THAT:- The applicant is in custody for more than 2½ years, particularly considering that schedule offence has been registered in the year 2013 and the investigation in respect of other offences commenced after the knowledge of registration of schedule offence and the investigation started belatedly and complaint was filed after more than 5 years, and that the schedule offence has been finished and till so far the Special Court has not framed the charges under the PMLA Act; for the schedule offence the applicant has been in jail for more than 8 years and was granted bail under Section 389 of the CrPC - further considering the nature of accusation and the evidence and that the applicant has taken a specific defence that one unknown person has called him that he has won the lottery and the applicant has been trapped in such a organized crime and further considering the statement given by the applicant under Section 50 of the PMLA Act; without further commenting anything on the merits of the case and that trial is likely to take considerable time, this Court is inclined to release the applicant on bail.
The applicant is directed to be released on bail subject to the conditions imposed - application allowed.
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2022 (11) TMI 49 - CHHATTISGARH HIGH COURT
Money Laundering - Seeking grant of Regular Bail - loan amount declared as NPA - chance of his absconding or tampering with the evidence or influencing the witnesses or not - HELD THAT:- From the order sheets of the trial Court as well as the documents in the case diary, it is clear that the applicant is not produced before the competent Court within 24 hours of his detention. Charge sheet/complaint has been filed before the learned trial Court. As per order sheet dated 2.5.2022, the case is at preliminary state for argument before registration. Looking to the number of documents and list of witnesses, there is every likelihood that conclusion of trial would take considerable time. Therefore, in the totality of facts and circumstances of the case, this Court is of the opinion that present is a fit case to release the applicant on bail.
It is directed that the applicant shall be released on bail on his executing a personal bond for a sum of Rs.10 lacs with two sureties of the like amount to the satisfaction of the trial Court for his appearance before the said Court as and when directed, till final disposal of the trial, on the further conditions imposed - application allowed.
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2022 (11) TMI 3 - DELHI HIGH COURT
Money Laundering - maintainability of petition - availability of alternative remedy - provisional attachment of properties - appellant has vehemently argued before this Court that once the Tribunal has become functional, the order dated 24.08.2022 passed in LPA 487/2022 will not come in the way of the parties as an appeal was already pending on the date when the order was passed - HELD THAT:- This Court has carefully gone through the statutory provisions governing the field and it is an undisputed fact that an appeal lies before the Tribunal. The Division Bench of this Court has requested the learned Single Judge to decide the matter vide order dated 24.08.2022 only because at the relevant point of time when the order was passed by the Division Bench, no Tribunal was functional.
The Hon’ble Supreme Court in TITAGHUR PAPER MILLS CO. LIMITED. AND ANOTHER VERSUS STATE OF ORISSA AND ANOTHER [1983 (4) TMI 49 - SUPREME COURT], has, inter alia, held that We are constrained to dismiss these petitions on the short ground that the petitioners have an equally efficacious alternative remedy by way of an appeal to the Prescribed Authority under sub-section (1) of Section 23 of the Act, then a second appeal to the Tribunal under sub-section (3)(a) thereof, and thereafter in the event the petitioners get no relief, to have the case stated to the High Court under Section 24 of the Act.
In the light of the various judgments delivered by the Hon’ble Supreme Court and this Court, there is an equally efficacious remedy available under Section 26 of the PMLA and the High Court is an Appellate Authority above the Appellate Authority by virtue of Section 42 of the PMLA. Hence as the Appellate Authority is very much functional, the matter deserves to be heard by the Appellate Authority only. It is true that the High Court can certainly exercise its discretion keeping in view the peculiar facts & circumstances of the case to decide a matter even if alternative remedy is available.
In the present case, there is an equally efficacious alternative remedy available before the Appellate Tribunal and the Tribunal is very much functional, the matter deserves to be heard before the Tribunal and, therefore, the Tribunal is requested to decide the appeal at an early date.
The present LPA stands allowed. The Tribunal is requested to decide the appeal at an early date. Needless to state that this Court has not dealt with the merits of the case.
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2022 (10) TMI 1167 - TELANGANA HIGH COURT
Seeking release of attached property - Continuation of attachment of the properties even after closer of C.C. No. 319 of 2010 on which action was initiated under PMLA - HELD THAT:- The only ground on which they have filed present writ petition is that the proceedings in C.C. No. 319 of 2010 basing on which the respondent has initiated proceedings which was ended in acquittal by virtue of compromise. Therefore, there are no 'proceeds of crime' and the allegation of respondent that the 1st petitioner has purchased the property derived out of the proceeds of crime is false and baseless. Therefore, the petitioner is entitled for release of the aforesaid property.
Both the criminal proceedings and proceedings under the Act are different and distinct. Enforcement Directorate had filed a complaint before the designated court and the same was also taken cognizance by the Designated Court proceedings in S.C. No. 342 of 2018 are pending. If at all, the petitioner is having any grievance, they have to file an appeal under Rule 3-a of the aforesaid rules seeking release of the aforesaid properties.
The Hon'ble Apex Court in Jai Shanker v. Directorate of Enforcement [2022 (5) TMI 309 - SUPREME COURT] has held that Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law which attracts provisions of Article 20(2) of the Constitution of India or section 300 of the Criminal Procedure Code.
If the exoneration in adjudication proceedings is on technical grounds and not on merits, the prosecution may continue and in case of exoneration, however, on merits where the allegation found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and the circumstances cannot be allowed to continue, to the underlying principle being the highest standard of proof in criminal cases.
The petitioner herein have to approach Designated Court for release of property by way of an application under Rule 3-a of the Prevention of Money Laundering (registration for confiscated properties rules 2016). It is for the said court to decide the said matter. Therefore, this Court is not inclined to grant any relief by raising the attachment order. Viewed from any angle this writ petition is liable to be dismissed.
Petition dismissed.
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2022 (10) TMI 1148 - MADRAS HIGH COURT
Appellate Jurisdiction - Provisional order of attachment - jurisdictional error - HELD THAT:- Had there been no Presiding Officer for the Appellate Tribunal, we would have entertained this petition. Now that a Presiding Officer has been appointed to the Appellate Tribunal, the petitioners can approach the said Tribunal and urge all these points. In fact, under Section 42 of PML Act, a further appeal from the order of the Appellate Tribunal has been provided to the High Court, which is entertained as a Civil Miscellaneous Appeal (CMA).
We do not want to arrogate to ourselves the powers of the Appellate Tribunal by entertaining this writ petition. Hence, this petition is dismissed with liberty to the petitioners to approach the Appellate Tribunal constituted under Section 26 of PML Act. No costs.
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2022 (10) TMI 1082 - SC ORDER
Grant of bail - respondent is suffering from Malignancy and Cancer - HELD THAT:- The Department ought not to have filed such a Special Leave Petition wasting the stationery, the legal fees and Court’s time. The Special Leave Petition stands dismissed with exemplary cost, to be borne by the concerned officer, who granted the permission to file the Special Leave Petition, quantified at Rs.1,00,000/-, to be recovered from the salary of such an officer. The cost to be deposited by the Department with the Registry of this Court within a period of four weeks from today.
On such deposit, Rs.50,000/- be transferred to National Legal Services Authority, New Delhi and Rs.50,000/- to Mediation and Conciliation Project Committee, Supreme Court of India.
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2022 (10) TMI 1081 - GAUHATI HIGH COURT
Plea of alternative remedy - maintainability of the present writ petition - Money Laundering - Provisional Attachment Order - Plea of forum non convenience - Jurisdiction.
Plea of alternative remedy - maintainability of the present writ petition - HELD THAT:- The law is well settled that alternative remedy is not a bar to the exercise of power judicial review under Article 226 of the Constitution of India by the High Court, if the writ petition is filed when it is filed alleging breach of enforcement of fundamental rights, violation of principles of natural justice and where the order or the proceeding are wholly without jurisdiction or when the vires of an act is challenged. In the case in hand the petitioners had questioned the power and jurisdiction or of the authority and the entire proceeding initiated under PMLA, 2002 has been challenged on the ground that the authorities under PMLA are not having their jurisdiction to initiate the proceeding in the given facts of the present case - this Court is of the considered opinion that in the aforesaid factual backdrop neither the adjudication under Section 8 or Section 26 can be treated as an officious alternative remedy when the jurisdiction of authority itself is questioned.
Plea of forum non convenience - HELD THAT:- Section 42 of the Act, provides that High Court shall be an appellate authority against the decision of the appellate tribunal constituted under Section 25 of the PMLA, 2002. In the case in hand, the proceeding was admittedly initiated by the authorities of the Enforcement Directorate at Guwahati Zonal Office, Rajgarh in the State of Assam and as the jurisdiction of the said authority in initiating the proceeding under PMLA, 2002 is the subject matter, this Court is of the considered opinion that this Court shall have a jurisdiction to entertain the petition inasmuch as at least cause of action in part arose within the jurisdiction of this Court.
This court is of the view that when the jurisdiction of an authority, more particularly the authority under PMLA, 2002 is under challenged in a writ proceeding, the explanation given in Section 42 relating to appeal before the High Court shall not be applicable in toto. Therefore, the argument of the Mr. Sarma, learned counsel in this regard is also rejected.
The jurisdiction - Proof of commission of offence - HELD THAT:- The Section 8 and 5 empowers the authority to act when they are satisfied that there are reasons to believe that any person has committed an offence under Section 3 of PMLA, 2002. The legislature has not used the word for “proof of commission of offence” but reasonable believe can be a basis to proceed under Sections 5 and 8 of the Act, 2002. Therefore, the criminal activity shall mean not a proof of criminal offence but an alleged criminal activity relating to schedule offence. In view of the aforesaid finding, it is the considered opinion of this Court that the authority in initiating the proceeding in the case in hand is having the jurisdiction.
Whether the subjective satisfaction arrived at while issuing the impugned provisional attachment order, the authority had before it, any credible materials or information or such decision was supported by supervening factor? - HELD THAT:- The adjudicating authority under Section 8 of the PMLA, Act is having the power of adjudicate the correctness of the attachment including provisional attachment. For the purpose of such determination, the persons whose property has attached are given opportunity to be heard and to prove that the property is not involved in money laundering. Further when the provisional attachment order is passed in violation of the Sub Section 1 of Section 5 of the PMLA, Act and its proviso, such as that the property attached is not proceeds of crime and there is no likelihood of concealment of property etc., can be raised before the adjudicating authority and adjudicating authority, in the scheme of the Act, need to determine such objection also while exercising its power under Section 8 of the PMLA, Act. It is also well settled that more the stringent provision, more the stricter requirement for adherence of procedural safeguard.
The order of the adjudicating authority can also be challenged before the Appellate Authority. Section 26 (1) of the PMLA Act gives a right to the person aggrieved by an order of confirmation of provisional attachment to approach to the Appellate Tribunal. The order of such Appellate Authority can further be challenged before the High Court under Section 42 of the PMLA Act. The High Court shall have power to deal with any question of fact or law in such a proceeding - the present petitioner shall have opportunities as provided under the Act and agitate the same before the authority under the PMLA Act.
This Court is of the considered opinion that the present is not a fit case wherein this Court should interfere with the order of provisional attachment in exercise of its power under Article 226 of the Constitution of India inasmuch as this Court has held that the authority is having its power and jurisdiction to issue the impugned order of attachment and that the adjudicating authority is having the power and duty to examine the validity of the order of attachment and test the same including the ground of satisfaction that is required under Section 5(1) (a) and (b) of the PMLA Act - the provisional attachment order is not interfered with.
Petition disposed off.
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2022 (10) TMI 1080 - MADRAS HIGH COURT
Money Laundering - scheduled offences - submission of documents of properties with existing encumbrance as collateral security for the loan - Section 420 IPC - Sections 48 and 49 of the PMLA r/w Notification vide G.S.R.441(E), dated 01.07.2005 as amended by G.S.R.579(E), dated 29.08.2013, S.O.1275(E) dated 13th September 2005 - HELD THAT:- Section 48 (c) ibid., clearly classifies the Assistant Director as an "authority for the purposes of this Act". Thus, when the statute itself classifies the Assistant Director as an authority, we are afraid no further authorisation is required for him to file a complaint for the Special Court to take cognizance of the offence u/s.44(b) of the PMLA.
It is true that Section 420 IPC was not a scheduled offence under the PMLA on 25.09.2008 when the case was registered by the CBI and that it was included in the statute only with effect from 01.06.2009. In this case, the Enforcement Directorate has registered the case only after 01.06.2009, viz., on 23.11.2010 - irrespective of the fact as to when the scheduled offence was committed, if the proceeds of crime that is generated from the commission of a scheduled offence is laundered after the coming into force of the PMLA, 2002, then one can be prosecuted u/s.3 r/w 4 of the PMLA.
Manjula cannot claim prejudice for non-identification by any witness during trial. If Anuraag Jain and Manjula were not arrested and released on bail or if they are not on anticipatory bail, the trial Judge shall obtain a bond u/s.88 Cr.P.C. for Rs.25,000/- with two sureties each from them, if not already obtained - Petition dismissed.
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