2024 (4) TMI 27 - HC - Money Laundering

Money Laundering - Validity of acquittal of accused - Dismissal of the Complaint - falsification of accounts forgery and cheating - misusing the password and manipulating the data - HELD THAT - This Court is conscious of the fact that an appeal against acquittal cannot be interfered unless and until the reasoning given by the trial Court suffers serious legal infirmity or factual error. If the views expressed are reasonably possible even if another view is possible the appellate Court need not interfere. It is well settled principle of law that an order of acquittal should not be disturbed unless it is perverse or bereft of reasoning or contrary to the evidence on record. Even if an alternate view is probable/possible the view of the trial Court which has acquitted cannot be substituted by this Court with the alternate possible view to reverse the order of acquittal. In this case unfortunately the complainant had proceeded on a presumption that the crime investigated by CBI had generated proceeds of crime and further leading to acquisition of property. Without placing material evidence either about the crime or about the proceeds from that crime the complainant cannot succeed. That is the reason why the trial Court has specifically pointed out that without proving the fundamental fact which is necessary to invoke the provisions of the PMLA the complainant cannot succeed. This Court totally agrees with this view. It is also found that the appellant / complainant had not made any attempt to invoke Section 44(1) of the PMLA as explained under the Statute. Since the predicate offence has also been pending in the same Court the appellant / complainant ought to have asked for simultaneous trial in both the cases to avoid conflicting verdict and to avoid omission in marshalling evidence. For the reasons best known they had allowed the PMLA case to proceed first and while doing so also failed to place all the material documents though available to substantiate the fundamental requirement to proceed under the PMLA. This Court is of the view that the criminal appeal is liable to be dismissed without any interference of the finding of the trial Court - Appeal dismissed.

Summary

Issues Involved:
1. Admissibility of evidence and statements.
2. Prematurity of the prosecution under the PMLA.
3. Independence of PMLA proceedings from the predicate offence.
4. Burden of proof on the prosecution under the PMLA.

Summary:

Admissibility of Evidence and Statements:
The trial court acquitted the accused primarily because the FIR copy of the predicate offence was an attested copy without a date, and the original statements of the accused were not produced, making the photocopies unreliable. Additionally, the statements of the accused were deemed compulsory testimony, prohibited under Article 20(3) of the Indian Constitution. The computer printouts of the bank statements were not certified as per Section 65B of the Indian Evidence Act.

Prematurity of the Prosecution under the PMLA:
The court held that the prosecution for money laundering was premature since the predicate offence registered by the CBI was still pending. The court noted that launching a criminal prosecution for money laundering before the final verdict in the predicate offence was premature. The trial judge also hypothesized that if the accused were acquitted in the predicate offence, the prosecution under the PMLA would become non-est.

Independence of PMLA Proceedings from the Predicate Offence:
The appellant argued that proceedings under the PMLA are independent of the proceedings under the schedule offence. The statements recorded u/s 50(2) and (3) of the PMLA by Revenue Officials are admissible in evidence and not hit by Article 20(3) of the Indian Constitution. The appellant cited Supreme Court judgments to support this view. However, the trial court rejected this argument, leading to the acquittal of the accused.

Burden of Proof on the Prosecution under the PMLA:
The court emphasized that the PMLA is an independent sui generis Act, and the prosecution must prove the case independently without presuming that the accused derived proceeds from the crime. The trial court found that the prosecution failed to provide material evidence about the crime or the proceeds from it. The court also noted that the trial in the predicate offence was pending, and the Prevention of Corruption Act provides for the forfeiture of property acquired through wrongful gain.

Conclusion:
The High Court upheld the trial court's judgment, stating that the prosecution failed to marshall evidence connecting the proceeds of crime, making their case weak. The court also noted that the appellant did not attempt to invoke Section 44(1) of the PMLA for simultaneous trials to avoid conflicting verdicts. Therefore, the criminal appeal was dismissed.