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2011 (3) TMI 1703 - SUPREME COURT

2011 (3) TMI 1703 - SUPREME COURT - 2011 (4) SCR 646, 2011 (11) SCC 463, 2011 (4) JT 114, 2011 (4) SCALE 109 - Civil Appeal No. 2689 of 2011 - Dated:- 29-3-2011 - Dalveer Bhandari And Deepak Verma JJ. JUDGMENT Dalveer Bhandari, J. 1. Leave granted. 2. This appeal is directed against the judgment and order dated 04.08.2010 passed in Writ Petition (PIL) No.4700 of 2008 by the High Court of Jharkhand at Ranchi. 3. In the impugned judgment, it is mentioned that the basic allegation is amassing of il .....

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e under the Prevention of Corruption Act and under the Indian Penal Code, the persons by whom this has been done, the amount which has been so earned and places where it has been invested. 5. The amount is alleged to run into several hundred crores. The investigations done so far allege that the amount unearthed so far in one case is about one and a half crore and in another case is about six and a half crores, which would appear to be merely the tip of the iceberg. The investments having been m .....

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Bangkok (Thailand), Dubai (UAE), Jakarta (Indonesia), Sweden and Libya. It is also mentioned that there are several companies in other countries in which there are huge investments by the accused or with the help of their accomplices in foreign countries. The list of countries and companies indicate prima facie that the amount involved could not be a mere few crores, but would be nearer a few hundred crores. 7. The High Court in the impugned judgment has also mentioned that it is neither possib .....

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d that the Central Government should exercise the powers under section 45(1A) of the Prevention of Money Laundering Act, 2002 (for short "the PML Act") for transferring investigation from the Enforcement Directorate to the CBI. If such an order is not passed by the Central Government, any material found by the CBI during investigation, which leads to an inference of money laundering within the PML Act will be shared by the CBI with the Enforcement Directorate from time to time, to enab .....

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n 45(1A) read with Sections 43 and 44 of the PML Act, the CBI has any authority to investigate offences which are the sole domain of the Enforcement Directorate? 3. Whether the High Court was right in brushing aside all the allegations against the PIL and directing investigation by the CBI?" 9. According to the learned counsel for the appellant, the offence of money laundering, under section 4 of the PML Act may be investigated only by the Enforcement Directorate and tried only by the Speci .....

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submitted that the Delhi Special Police Establishment Act, 1946 ( DPSE Act') is limited to investigating offences in Delhi and the Union Territories. 13. Mr. Venugopal submitted that the PML Act was enacted pursuant to Article 253 of the Constitution and would prevail over any inconsistent State enactment. Reliance has been placed on Maganbhai Ishwarbhai Patel Etc. v. Union of India and Another (1970) 3 SCC 400 at para 81 and S. Jagannath v. Union of India and Others (1997) 2 SCC 87 at para .....

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al arrangements (Chapter IX). 15. Mr. Venugopal contended that the Act establishes a specialized agency which consists of Police Officials, Revenue Officials, Income Tax Officials and various specialized officials drawn from various departments. It also empowers the Enforcement Directorate under Section 54 to call on assistance of officials from: (a) Customs and Excise Department; (b) Under the NDPS Act; (c) Income Tax' (d) Stock Exchange; (e) RBI; (f) Police; (g) Under FEMA; (h) SEBI; or (i .....

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state. The CBI does not possess such an advantage. 17. Mr. Venugopal placed reliance on the judgment of this Court in Central Bureau of Investigation v. State of Rajasthan & Others (1996) 9 SCC 735 where the identical issue arose of the CBI seeking to investigate offences under the FERA, which was the sole domain of the ED, the Court held as follows: (i) The officers of the ED are empowered to exercise the powers under the FERA as per Sections 3 & 4, and no other authority has been empow .....

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DSPE under Sections 1 and 2 are authorized only to investigate offences inside India, the DSPE member is "not clothed with the authority to investigate offences committed outside India". 18. Learned counsel further submitted that in addition to the above, this court in Enforcement Directorate and Another v. M. Samba Siva Rao and Others (2000) 5 SCC 431 at para 5 reiterated that the provisions of the FERA constitute a complete code. The provisions of the PML Act are identical, and in s .....

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are the sole domain of the Enforcement Directorate. 21. Mr. Venugopal referred various sections of the PML Act to demonstrate that only the Enforcement Directorate can investigate the matter. He also submitted that the conduct of investigation by the CBI is therefore contrary to both the intent of the Legislature as well as the Executive and further if the plea of CBI is put to test it leads to absurdity. It is submitted that in order to convict a person of an offence punishable under section 4 .....

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ng projected as untainted. The appellant prayed that the investigation by the CBI of Vigilance FIR No.09/09 registered at Ranchi be set aside and the appellant be released from illegal detention forthwith. 22. The written submissions have also been filed on behalf of the CBI and the Directorate of Enforcement. It is mentioned in the written submissions that the Vigilance P.S. Case No.09/2009 dated 02.07.2009 is instituted inter alia alleging commission of offence under sections 409, 420, 423, 42 .....

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aint by the Vigilance, P.S., State of Jharkhand, involvement of the appellant Binod Kumar Sinha had surfaced. The FIR also contains clear allegations against the appellant. The Central Bureau of Investigation is investigating into the commission of these offences alone and is not investigating any offence under the PML Act, 2002 since the investigation under the said Act is solely and exclusively within the jurisdiction and domain of the Enforcement Directorate, which is of course subject to the .....

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nce P.S. No. 09/2009 to the CBI deserves to be dismissed. 25. It is also incorporated that the appellant is involved in a multi crore scam - corruption in the matter of grant of iron ore mine leases and other acts as more particularly set out. It is incorporated in the affidavit that a perusal of various provisions of the Act would show that the said Act does not empower the Enforcement Directorate to investigate offences under IPC or Prevention of Corruption Act, 1988 or any of the scheduled of .....

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order implications and the same is reproduced hereunder:- "offence of cross border implications", means- (i) any conduct by a person at a place outside India which constitutes an offence at that place and which would have constituted an offence specified in Part A, Part B or Part C of the Schedule, had it been committed in India and if such person remits the proceeds of such conduct or part thereof to India; or (ii) any offence specified in Part A, Part B or Part C of the Schedule whic .....

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n of Money-laundering (Amendment) Act, 2009. 28. Section 2(u) defines proceeds of crime and the same is reproduced hereunder: (u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property; 29. Section 2(x) defines Schedule and the same is reproduced hereunder : "Schedule" means the Schedule to this Act". 30. Section 2(y) defines Sched .....

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gly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering. "4. Punishment for money-laundering.- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh .....

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ar that the offence of money laundering is a stand alone offence within the meaning of the said Act and its investigation alone is in the exclusive domain of the Enforcement Directorate. 33. He also submitted that the provisions of the said Act do not contemplate the investigation of any of the Indian Penal Code, Prevention of Corruption Act or any of the scheduled offences by the Enforcement Directorate. 34. Mr. Raval contended that having regard to the terminology of section 3, any process or .....

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such proceeds of crime are likely to be conceded, transfer or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under Chapter III of the said Act, then by an order in writing such property may be provisionally attached for a period not exceeding 150 days. 36. According to Mr. Raval, a bare reading of the said provision makes it clear that the jurisdiction to initiate action of attachment has to be founded on a reasonable .....

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duled offence. 37. Mr. Raval contended that if the contentions of the appellant were true, then the sections of the said Act would have been differently worded. He also submitted that the contention of the appellant on the basis of provisions of sections 43 to 45 that any of the scheduled offences can only be investigated exclusively by the Enforcement Directorate is not justified and tenable at law. 38. Mr. Raval submitted that the embargo from taking cognizance by the Special Court of any offe .....

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urisdiction to investigate any of the scheduled offences. 40. Mr. Raval contended that the contention of the appellant that merely because under section 44 of the PML Act, the Special Court constituted in the area in which the offence has been committed, has been authorized statutorily to try the scheduled offence and the offence punishable under section 4 is equally unsustainable in law since nothing in the said provision of section 44 of the said Act envisages the exclusive investigation of th .....

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section (1) of section 43 with which the accused under the Code of Criminal Procedure be charged at the same trial. 42. He contended that the scheme of the Act would, therefore, not construe the submission of the appellant that in case of there being an allegation of offence of money laundering, the scheduled offence also has to be exclusively investigated by the Enforcement Directorate. Such a contention is not supported by the provisions of the Act since there is no provision restricting the .....

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ded that therefore the basic investigation requires determining whether money has been acquired by abuse of official position amounting to an offence under the Prevention of Corruption Act and under the Indian Penal Code and persons by whom the same has been done the amount of money which has been so earned and the places where it has been invested. 44. According to the learned counsel for the respondents, the High Court in the impugned order has recorded cogent reasons for directing the investi .....

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