TMI Blog2014 (3) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances, the submissions, which had been made on behalf of the petitioners that the transaction entered into by the petitioners in the year 2008, cannot be subject matter of the prosecution under Section 3 of the PML Act, is not worth acceptable. Enforcement Directorate seems to be that when the claim was laid by petitioner no. 1 that he had taken loan from M/s Bhawesh Metal and M/s Ketan Metal, the documents submitted by those firms never disclosed any loan being given to petitioner no. 1. However, subsequently, some documents were placed showing advancement of the loan to petitioner no. 1, but those documents in view of the case of the Enforcement Directorate become quite suspicious. In that event, any finding recorded by the Adjudicating Authority would not be binding and, thereby, order passed by the Adjudication Authority, would have no adverse effect upon the case of the Enforcement Directorate whereby the petitioners are being prosecuted for commission of the offence under Section 3 of the PML Act. Going further into the matter, it be stated that the question has been raised over the maintainability of the supplementary complaint on the premise that the provisions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently, this Court passed an order on 04/08/2011 in WP (PIL) No. 4700 of 2008, directing the CBI to take up the Vigilance Case No. 9 of 2009 for its further investigation. In compliance of the order passed by this Court, the CBI re-registered the case as RC Case No. 5(A)/2010/AHD/ Ranchi. On completion of investigation, charge sheet was submitted on 26/03/2012, against the accused persons including Kamlesh Kr. Singh on the charge that he has acquired assets during the period from March, 2005 to July, 2009 to the tune of ₹ 5,46,07,597/- which is disproportionate to his known sources of income. Before the charge sheet was submitted, the Enforcement Directorate had lodged an ECIR case against the accused persons. After investigation of the case, a complaint was filed against Kamlesh Kr. Singh under Section 45 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as PML Act) on 14/02/2011. After the charge sheet was submitted by the CBI, when further facts came to light in the investigation of the CBI, the Enforcement Directorate took up the matter for further investigation in the said ECIR case, whereby culpability of these petitioners and other accused perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons, charged, should have directly or indirectly attempted to indulge or knowingly assisted or knowingly been a party or actually involved in any process or activity connected with proceeds of crime. Whereas, in terms of Section 2(u) of PML Act, proceeds of crime means property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence and the scheduled offence in terms of definition given under Section 2(1)(y) of the PML Act, happens to be the offence under Part A, Part B and Part C of the schedule, but allegation against the petitioners of projecting a sum of ₹ 1 crore as untainted money, is never the subject matter of the charge sheet submitted by the CBI and, therefore, any prosecution under Section 3 of the PML Act against the petitioners would not be maintainable as for prosecuting a person under PML Act, precondition is that one should involved himself in the process or activities connected with the proceeds of crime and the proceeds of crime be derived or obtained as a result of criminal activity relating to scheduled offence. But, here in the case as has been stated above, the charge upon which cognizance has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a process connected with the proceeds of the crime by projecting it as untainted money generated by Kamlesh Kr. Singh by committing scheduled offence falls flat on the ground and, thereby, it is liable to be quashed in view of the decision rendered in a case of Radheshyam Kejriwal-versus-State of West Bengal and Another, [(2011) 3 SCC 581 , wherein it has been held that the charges against Sri Radheshyam Kejriwal for contravening the provisions of Section 9(1)(f)(i) and Section 8(2) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973, cannot be sustained. In the face of the finding given by the Enforcement Directorate in adjudication proceeding that there is no contravention of any of the provisions of the Act. Thus, it was held that it would be unjust and an abuse of the process of the Court to permit the enforcement Directorate to continue with the criminal prosecution. 4. Incidentally, it was also submitted that the provisions as contained in Section 44 (1)(b) of the PML Act, 2002 does empower a Special Court to take cognizance of the offence under Section 3 upon a complaint made by the authority authorized in this behalf and at the same time proviso to Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, had never reflected about those transactions and that a new plea has been taken on behalf of the petitioners, which though had never been taken at the time of giving statements that he had taken loan from Bhawesh Metal Private Limited and M/s Dynamix Reality, but on verification, the claim made by petitioner no. 1, has been found to be false. Under the circumstances, a supplementary complaint has been filed and filing of which has never been prohibited under the PML Act nor under the Code of Criminal Procedure. 6. Further, it was submitted that the provision as contained in section 3 of the Prevention of Money Laundering Act, never does stipulate that only when one commits scheduled offence particularly offence under Section 13 of the Prevention of Corruption Act, when it was incorporated in the statute by way of amendment, projection of the proceeds of the crime by the person would be liable to be prosecuted, rather the offence of money laundering is committed on the date when the proceeds of crime is being projected as untainted property, which proposition has been laid down by this Court in a case of Hari Narayan Rai- versus- Union of India Other [ W.P.(Cr.) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty or assets, wherever located. 9. Further, it be stated that in part B of the scheduled to the Prevention of Money Laundering Act, 2002, Section 13 of the Prevention of Corruption Act, was incorporated by money laundering Amendment Act, 2009, which came into forece w.e.f. 01/06/2009. From reading of the provision as contained in Sections 3, 2(u) and 2(v), it would appear that any person who involves himself directly or indirectly with any process or activity connected with the proceeds of crime and projects it as untainted money can very well be prosecuted under Section 3. Therefore, it would be that date when one person is found involved in any process or activity connected with the proceeds of crime and projected it as untainted property would be relevant for the purpose of prosecution under Section 3 of the P.M.L. Act and not the date when the scheduled offence was committed. This proposition has been laid down by this Court in a case of Hari Narayan Rai- versus- Union of India Other (supra). 10. Further, in this regard, I may refer to a decision rendered in a case of Sajjan Singh-versus-State of Punjab (supra), wherein the appellant was put to trial for the charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears 2008 to 2012, when he invested the proceeds of crime in the Real Estate at Gurgaon, but all of them have been found projecting it as untainted money much after incorporation of Section 13 as scheduled offence. Moreover, one may find there had been inter connected transaction of the proceeds of crime starting from the year 2008 to 2012. If the prosecution has found Surya Sonal Singh to have involved himself in the activity or process of the proceeds of crime, any transaction entered into in between petitioner nos. 1, 2 and Surya Sonal Singh would be presumed to be interconnected transaction in terms of the provisions as contained in Section 23 of PML Act, which reads as follows:- 23. Presumption in inter-connected transaction.- Where money-laundering involves two or more inter-connected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under section 8, it shall, unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the remaining transactions form part of such inter-connected transaction. 12. Under the circumstances, the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating Authority as contained in Annexure-9 to the petitioners' reply to the supplementary counter affidavit, it does appear that Adjudication Authority came to the conclusion for the reason that the CBI having investigated the matter, did not find any illegality or irregularity in the transaction of ₹ 1 crore took place between the petitioner nos. 1, 2 and Surya Sonal Singh and the said transaction get reflected from the I.T. Returns and balance sheet of those persons, but the case of the Enforcement Directorate as has been made out here, is different, wherein the stand of the Enforcement Directorate is that when the Enforcement Directorate, after investigation made by the CBI, did find that there may be involvement of these petitioners and Surya Sonal Singh, issued notice in terms of the provisions as contained in Section 50 of PML Act, in response of which, it has been stated by petitioner no. 2 that she had taken loan from her husband petitioner no. 1 and gave it to her brother as loan. The petitioner no. 2 also admitted that he had transferred the said amount to the account of his wife after taking loan, but at that point of time he never disclosed as to from whom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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