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2019 (2) TMI 1716 - HC - Money LaunderingMoney Laundering - confiscation of property derived from or involved in money-laundering and for matters connected therewith or incidental thereto - whether after amendment of Section 45 of the Act and deletion of Sub-section (a) every offence punishable under this act shall be cognizable the offences under the Act have become non-cognizable? HELD THAT - From the investigation done by the Enforcement Directorate it is revealed that the petitioners in connivance with Syndicate Bank s Officials opened two current accounts in the name of World Trade Park Ltd. for receiving the tainted money of Bharat Bomb and instead of depositing in the sale proceed in the escrow accounts as per the terms and conditions of finance got the amount deposited in the current account opened at Syndicate Bank. It is also revealed from the investigation that the sale consideration of the property sold to Bharat Bomb and his associates was shown as Rs. 37.9/- crores to the banks whereas actual sale consideration was Rs. 78.99/- crores. The total sale consideration received by the petitioners and his companies i.e. M/S World Trade Park Ltd. M/S R.F. Trading and Properties and M/S Sincere Infrastructure Pvt. Ltd. was more than Rs. 160/- crores whereas the sale consideration was Rs. 78.99/- crores. It is also revealed from the investigation that even after execution of the last sale deed in August 2015 27 crores was received by the petitioners. The amount received was the tainted money of Bharat Bomb. It is also revealed from the investigation that the persons who have appeared on behalf of the firms for getting the properties registered have categorically stated that they have no concern with the properties and firms in which they are shown as partners the properties actually belong to Bharat Bomb. From investigation done by the Enforcement Directorate it is also revealed that petitioners opened two accounts and had transferred amount directly to those accounts and had thus utilized the proceeds of crime and offence under the Money Laundering Act is made out. The writ petitions are dismissed with cost of Rs. 50, 000/-.
Issues Involved:
1. Quashing of ECIR No. JPZO/01/2016. 2. Quashing of the prosecution complaint in ECIR No. JPZO/01/2016. 3. Cognizability of offences under the Prevention of Money Laundering Act (PMLA) after the amendment. 4. Legality of the proceedings under PMLA without magistrate’s sanction. 5. Simultaneous proceedings before the Appellate Tribunal and Special Court. 6. Awareness of petitioners regarding proceeds of crime. Detailed Analysis: 1. Quashing of ECIR No. JPZO/01/2016: The petitioner filed Criminal Writ Petition No. 704/2018 to quash ECIR No. JPZO/01/2016 and prevent any criminal complaint against them. The court noted that since the complaint had already been filed, the writ petition for quashing the ECIR had become infructuous and dismissed it. 2. Quashing of the Prosecution Complaint in ECIR No. JPZO/01/2016: Petitioners filed Criminal Writ Petition No. 757/2018 seeking to quash the prosecution complaint. The court examined the investigation findings, which revealed that the petitioners and their companies received over Rs. 160 crores of defrauded funds. The petitioners were found to have opened unauthorized accounts and diverted sale proceeds, violating terms with IDBI & DHFL. The court concluded that there was ample evidence of money laundering and dismissed the petition. 3. Cognizability of Offences under PMLA after the Amendment: The petitioners argued that offences under PMLA became non-cognizable after the 2005 amendment. The court referred to multiple judgments, including "Chhagan Chandrakant Bhujbal vs Union of India And Ors" and "Mukesh Kumar Vs. State of Gujarat," concluding that offences under PMLA remain cognizable. The court emphasized that the deletion of clause (a) of Sub-section (1) of Section 45 did not render the offences non-cognizable. 4. Legality of Proceedings under PMLA without Magistrate’s Sanction: Petitioners contended that PMLA offences are non-cognizable, requiring magistrate’s sanction for proceedings. The court rejected this argument, stating that PMLA is a self-contained code with its own provisions for investigation, search, seizure, and arrest, which override other laws. The court cited Section 71 of PMLA, which gives overriding effect to its provisions. 5. Simultaneous Proceedings before Appellate Tribunal and Special Court: Petitioners argued that criminal proceedings should not continue while their appeal was pending before the Appellate Tribunal. The court dismissed this argument, noting that proceedings before the Special Court under PMLA are distinct from those before the Appellate Tribunal, which deals with property attachment. The court found no justification to stay the criminal proceedings. 6. Awareness of Petitioners Regarding Proceeds of Crime: Petitioners claimed they were unaware that the money received was proceeds of crime. The court found this argument unconvincing, citing evidence that petitioners knowingly facilitated the laundering of defrauded funds. The investigation revealed that petitioners received substantial amounts from fictitious firms and failed to comply with banking terms, indicating their involvement in money laundering. Conclusion: The court dismissed both writ petitions, concluding that there was sufficient evidence of money laundering against the petitioners. The court imposed a cost of Rs. 50,000 on the petitioners for filing frivolous petitions, to be deposited with the Rajasthan High Court Legal Services Authority. The petitions were dismissed with costs, and all pending applications were disposed of.
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