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2013 (8) TMI 1025 - ALLAHABAD HIGH COURT

2013 (8) TMI 1025 - ALLAHABAD HIGH COURT - TMI - Money-Laundering - Enforcement Directorate has not filed the final report - Held that:- Section 65 of the Money-Laundering Act takes care of such a situation and the Enforcement Directorate is duty bound to submit final report or charge sheet, as the case may be, before the Court which is designated as Special Court by the Central Government in consultation with the Chief Justice of the High Court under Section 43 of the Money-Laundering Act. In t .....

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, the Enforcement Directorate will submit the Final Form before the designated Court so that the designated Court shall be in a position to examine the efforts made by way of investigation, the evidence collected during the investigation and find out as to whether the final report was justified or not. The complainant shall also get an opportunity to look into the report and submit a protest petition, if he desires. - Dispose of this writ petition directing the Enforcement Directorate, in ca .....

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on of offences under Sections 420/467/471/120-B of the Indian Penal Code read with Sections 7/8/9/10/13(I)(e) of the Prevention of Corruption Act, 1988 (hereinafter referred to as 'the Act') and Sections 3/4 of the Prevention of Money-Laundering Act, 2002 (hereinafter referred to as 'the Money-Laundering Act') in police station Babu Purwa, District Kanpur Nagar, and for a direction in the nature of Mandamus directing the Special Cell, Economic Offences Wing as also the Enforcemen .....

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ore the designated Court or not. But before deciding the issue raised in this writ application, it is necessary to refer to the brief history of the case. The petitioner Shiv Kant Tripathi lodged an F.I.R. at P.S. Babu Purwa, District Kanpur Nagar, alleging commission of certain scheduled offences, certain offences under the Prevention of Corruption Act, 1988 as well as commission of offences under Sections 3 & 4 of the Money-Laundering Act. The said F.I.R. was lodged on 15.10.2009 and was r .....

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by him and he also received kickbacks in the form of commission. It was also alleged in the F.I.R. that Amar Singh indulged in Money-Laundering business by creating a web of shell companies. His wife was the major shareholder of M/S Pankaja Arts & Credit Private Ltd. and M/S Sarvottam Caps Ltd. It was further alleged that in all, there are 6 companies which were under the control of Amar Singh but at the same time they were not involved in any active business. As many as 41 companies merged .....

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position by indulging in Money-Laundering business by conspiring with other Directors, officials and statutory authorities. Amar Singh filed Criminal Misc. Writ Petition No. 24225 of 2009 before this Court for quashing the above F.I.R. The present writ petition was filed by the complainant Shiv Kant Tripathi for the relief mentioned in the beginning of the judgement. Both the writ petitions were heard by a Division Bench of this Court. Criminal Misc. Writ Petition No. 24225 of 2009 filed by Ama .....

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orough probe by Special Cell as the matter of has national ramifications. Regard being had to the fact that the companies which are alleged to be shell companies are registered in various States and therefore, the Enforcement Directorate being Central Agency shall be the appropriate Cell capable of carrying out thorough probe. It is therefore directed that the entire papers relating to this matter shall be entrusted to the Enforcement Directorate within 2 weeks and immediately after receipt of t .....

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unsel appearing for the Enforcement Directorate was also directed to inform the Court about the progress of the investigation. Thereafter the case suffered some adjournments and ultimately came up before the larger Bench on 12.09.2012. It appears that so far as the scheduled offences are concerned, the State police was permitted to investigate it whereas the offences alleged under the Money-Laundering Act were investigated by the Enforcement Directorate. At the time of hearing of this writ petit .....

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om the proviso to section 17(1) and more importantly the proviso to section 18 (1) of the Prevention of Money-Laundering Act, 2002 that the Directorate of Enforcement comes into action in respect of the money laundering allegations only after a charge-sheet is submitted by the police/agency investigating the question whether any of the 'scheduled offences' has been committed. We will assume that even if the police submits a final report, alleging that no scheduled offence has been commit .....

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t Directorate that the investigation has been completed but on the basis of materials made available during investigation, the Directorate did not find any thing against Amar Singh to submit a charge sheet and therefore, the investigation has been closed but no report has been submitted in any Court. So far as the scheduled offences are concerned, Final Form having been submitted before the concerned Magistrate, this Court need not pass any further order as it is open for the Magistrate to eithe .....

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on of the Directorate will assume relevance. So far as the investigation conducted by the Enforcement Directorate is concerned, it was specifically submitted on behalf of the Enforcement Directorate that there being no provision under the Money-Laundering Act for submission of Final Form, in case where the materials collected during the investigation do not constitute or are not sufficient to prove an offence under the Money-Laundering Act, the file is to be closed after investigation and no rep .....

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Final Form when after investigation no material is found against an accused for submission of a charge sheet. We are unable to accept such contention considering the provision contained in Section 65 of the Money-Laundering Act, which is quoted below: "65. Code of Criminal Procedure, 1973 to apply.- The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, insofar as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, c .....

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has been defined in the Code. With reference to the said definition of the term 'investigation' appearing in the Code, it was contended on behalf of the Enforcement Directorate that the investigation as defined in the Code, only includes the proceedings for the purpose of collection of evidence conducted by the police officer and does not include submission of final report, which is provided under Section 173 of the Code. It is true that the term 'investigation' has not been defi .....

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se of H.N.Rishbud and another vs. State of Delhi reported in (A.I.R. 1955 SC 196). The relevant finding of the Supreme Court in paragraph 5 of the judgement is quoted below: "Thus under the Code investigation consists generally of the following steps: (1) Proceeding to the spot, (2) Ascertainment of the facts and circumstances of the case, (3) Discovery and arrest of the suspected offender, (4) Collection of evidence relating to the commission of the offence which may consist of (a) the exa .....

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Similar view has also been expressed by the learned Single Judge of Orissa High Court in the case of Smt. Sabita Praharaj vs. Smt. Gitarani Praharaj and others reported in (2004 Crl. L.J. 3975). Section 173 of the Code makes it obligatory on the part of the Officer in charge to submit the report of completion of investigation before the concerned Court. Section 173 (2) of the Code provides that as soon as the investigation is completed, the Officer in charge of the police station, shall file a r .....

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ort the allegations during the investigation, Final Form is also submitted under Section 173 of the Code. Therefore, there is no reason why the term 'investigation' shall not include submission of final report when in course of investigation no material is found against the accused for submission of the charge sheet. Apart from above, it can never be the intention of the Legislature while legislating the Money-Laundering Act to empower the Directorate of Enforcement to sit over the recor .....

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ss to the nature, manner and extent of investigation by the Directorate. We cannot overlook the fact that generally persons engaged in money laundering are likely to be rich and powerful. This should not be seen as doubting the personnel presently serving in the directorate, but then there would be others who would occupy these positions in future. For avoiding undesirable consequences it is open in statutory interpretation to read it down or read it wide. However, we are of the view that Sectio .....

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