TMI Blog2017 (2) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... either aware of the commission of the Schedule Offence or the generation of the alleged proceeds of crime by or out of such Schedule Offence. As per the material adduced, it cannot be even prima facie held that the petitioners had any reason to even have any reasonable doubt regarding commission of alleged schedule offence and generation of any proceeds of crime in relation thereto. The same is also fortified by the fact that none of the petitioners were made an accused in the scheduled offence. Even though the accused petitioners received in their bank accounts certain amounts at the instance of or from their close relative Shri Afroz Hasanfatta, the statements if taken on their face value, do not satisfy even on prima facie basis the pre-requisite for trying any person on allegation of money laundering i.e. 'mens rea' or culpable 'knowledge' of the 'Scheduled Offence' and 'Proceeds of Crime' derived therefrom, and projection of such proceeds of crime as untainted. Even on prima facie basis no offence is made out against any of the accused petitioners. Therefore, find merit in the submissions made on behalf of the accused Petitioners and have no hesitation in holding that the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely not being an accused of Scheduled Offence would not absolve the petitioners, if there is any material to show the involvement of any of the accused petitioners in knowingly projecting proceeds of crime as untainted. 3. Mr. Devang Vyas, learned Assistant Solicitor for the respondent No. 1 has submitted that present revision is not maintainable at law. He has contended that the amount was remitted to the Company (Page 431) Para-31 whereby property belonging to his family members were attached, including those of present applicant ₹ 139 crores in the name of applicant No. 2 was attached. This have been confirming by the adjudicating authority. He has submitted that properties are involved in the money laundering and during the investigation in respect of having knowledge and they received the payment and made further payment were in their name and they were signatory and having power to operate account and thereby they are involved in the case of money laundering and, therefore, it is denied that ingredients of offence are lacking. 4. He has further submitted that petitioners miserably failed to prove any sufficient ground as to why the petitioners failed to take a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that complaint was received by the Crime Branch, Surat from ICICI Bank against M/s. R.A. Distributors Pvt. Ltd., and its Directors alleging that the Company had prepared 17 fake bills of entry and presented the same before ICICI Bank for outward remittances based on which FIR No. I-16 of 2014 dated 11.4.2014 and FIR No. I-17 of 2014 dated 13.4.2014 were registered by the detection of Crime Branch. He has submitted that investigation under PMLA, 2002 have been initiated as the offences under Section 420, 467, 471 and 120(B) of the Indian Penal Code are scheduled offences in terms of Section 2(1) (y) of the PMLA which have been registered against the directors of the said companies. 10. He has submitted that during the course of investigation it has been revealed that one of the entities viz. Natural Trading Co., had made RTGS credits to the Companies having accounts in ICICI Bank from which remittances were sent out of India. It was also revealed that the said Company has made payments to the tune of ₹ 7 crores to Shri Afroz Mohammed Hasanfatta and ₹ 3 crores to his brother Shri Jafar Mohammed Hasanfatta during January to March 2014. The investigation furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of money laundering. 14. He has submitted that Shri Ahmed Mohammed Hasanfatta has received the proceeds of crime from his brothers Shri Afroz Mohammed Hasanfatta and Shri Jafar Mohammed Hasanfatta in his bank account and has made further payment of ₹ 2 crores to M/s. Fancy Builders Pvt. Ltd., for purchase of a flat in Mumbai. He has made payments totalling ₹ 47,50,000/- during January, 2014 to March, 2014 towards purchase of a flat in Mumbai. He has made payment of ₹ 68,53,457 to M/s. Muskan Realities on 15.1.2014 as his contribution for becoming a partner of the said firm whereby he has acquired 22.7272% share in the firm. He has also made payment of ₹ 31 lacs to Shri Abdul Karim Jana on 24.3.2014. He has also made an investment of ₹ 16,00,000/- on 28.2.2014 in M/s. Oasis Developers for becoming a partner of the said firm. Thus he has knowingly involved himself in the process of money laundering. 15. He has further submitted that Shri Fazaleumer Aziz Pothiawala has received the proceeds of crime from Shri Afroz Mohammed Hasanfatta in his bank account and made further payment to Shri Abdul Karim Jaka. He has invested ₹ 16,00,000/- in M/s. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. 20. He has also submitted that learned Judge has taken cognizance after perusing the complaint, documents as well as legal provisions and passed the impugned order dated 18.7.2014. It is, therefore, denied that ingredients of Section 3 of the PMLA are lacking. 21. He has further submitted that petitioners have allowed the use of their bank accounts for layering of the proceeds of crime received by Shri Afroz Mohammed Hasanfatta by further transfer/use of the funds on his instructions and thus they are involved in the process of money laundering which is substantiated by the bank account statements as well as statements recorded under Section 50 of the PMLA, 2002. 22. He has also submitted that all the petitioners have knowingly allowed the use of their bank accounts and knowingly involved themselves in this activity having full knowledge of the purpose and intent of the transactions. Thus they have helped in the process of laying and thereby they are involved in the process of money laundering. He has submitted that though the amounts were received in the bank accounts of the petitioners on the instructions of Shri Afroz Mohammed Hasanfatta the fact remains that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel appearing on behalf of the petitioners relied upon the judgment of the Hon'ble Supreme Court in Urmila Devi v. Yudhvir Singh, (2013) 15 SCC 624, in which all these judgments relied upon by the Respondents amongst various other judgments were considered in detail, while declaring the legal position that the Revision shall be maintainable. 29. I have seen that the Hon'ble Supreme Court in Urmila Devi (supra) has clearly declared the legal position in regard to maintainability of a Revision Petition against an order taking cognizance and issuance of summons under Sections 200 to 204 Cr.P.C. as follows- 21. Having regard to the said categorical position stated by this Court in innumerable decisions resting with the decision in Rajendra Kumar Sitaram Pande, as well as the decision in K.K. Patel, it will be in order to state and declare the legal position as under: 21.1. The order issued by the Magistrate deciding to summon an accused in exercise of his power under Sections 200 to 204 Cr.P.C. would be an order of intermediatory or quasi-final in nature and not interlocutory in nature. 21.2. Since the said position viz. such an order is intermediatory or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Section 190(1)(b) Cr.P.C. Office to register the case in CC register and issue SS to accused by 30-9-2000. sd/- 4-8-2000 7. Aggrieved by the order dated 4-8-2000 passed by the IVth Additional CMM, the appellant-accused preferred a criminal revision under Section 401 Cr.P.C. praying the High Court to set aside the said order. The said revision was dismissed by the High Court by the impugned order dated 17-2-2004. 11. ...In our view, the complaint does not disclose the ingredients of Section 415 Cr.P.C. and, therefore, we have no hesitation to set aside the order passed by the Magistrate taking cognizance of the offence alleged. It is also not clearly proved that to hold a person guilty of cheating, it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise. The order of the Magistrate and of the High Court requiring Accused 1-appellant herein to face trial would not be in the interest of justice. On the other hand, in our considered opinion, this is a fit case for setting aside the order of the Magistrate as confirmed by the High Court for issuance of process and the proceedings itself. (ii) Indseam Services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... setting aside the cognizance order and for quashing the criminal proceedings.... 31. I therefore have no hesitation in holding that it is not only within the jurisdiction but is an obligation of this Court to look into as to whether the taking of cognizance and issuance of process was mechanical without there being any prima facie case for bringing home the charge of the offence punishable under Section 3 of PMLA from the averments in the Complaint, and whether the Complaint discloses or not, the necessary ingredients of Section 3 of PMLA qua each of the petitioners. 32. The Ld. Senior Counsel appearing for the petitioners had rightly relied upon the judgment in Pepsi Foods Ltd. v. Special Judicial Magistrate, (1998) 5 SCC 749, wherein the Hon'ble Supreme Court delineated the duties and obligations cast while summoning of an accused in a criminal case as follows- 28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the office of the Respondent vide ECIR 1/SRT/2014-15 dated 17.04.2014. (iii) The investigations under PMLA revealed that Indian Entities had received amounts through RTGS Credits in their respective bank accounts with ICICI Bank primarily from certain other Indian firms from their accounts with Axis Bank held at Mumbai and Surat which included amongst others one M/s. Natural Trading Co., which had transferred some of the above said amounts. These firms in turn had received RTGS Credits into their bank accounts form various other firms based in New Delhi, Mumbai and Surat. There is absolutely no evidence whatsoever to show role of any of the petitioners in arranging or sending these RTGS credits or in making fraudulent remittances on the strength of fake bills of entry. (iv) It was also revealed that from the bank account of the said Natural Trading Co., payments to the tune of ₹ 7 crore to Shri. Afroz Mohammed Hasanfatta and ₹ 3 crore to his brother Shri. Jafar Mohammed Hasanfatta were made during January to March 2014 as under: Sr. No. Date Amount Rs. Name of the benefici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Scheduled Offence in Para (8) at Page 356, however, merely on that basis none of the accused petitioners have been arraigned as a co-accused in the Scheduled Offence. (viii) In PMLA proceedings this total amount of ₹ 16,31,19,941/- is alleged as proceeds of crime relatable to Shri Afroz Hasanfatta and the petitioners, and laundering thereof is alleged by the petitioners. (ix) One Shri Trivedi, an accountant of Shri. Madanlal Jain, has on 28/03/2014, during the search operations, stated that he had frequently seen Shri Afroz Mohammed Hasanfatta visiting the office of Shri Madanlal Jain at 416A 417A, Panchratna Tower, Opera House, Mumbai in the last couple of months. He however has not implicated any of the accused petitioners including Shri Jafar Mohammad Hasanfatta. Some further evidence was gathered against Shri Afroz Mohd Hasanfatta. (x) All the petitioners are admittedly close relatives of said Shri Afroz Mohd. Hasanfatta. Shri Afroz Hasanfatta is real brother of Petitioner No. 1 and 2. Other petitioners are also amongst his close relatives. It is alleged that from his Bank Accounts, Shri Afroz Hasanfatta transferred money to the Bank Accounts of Peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether you had arranged loan from M/s. Natural Trading Co. And M/s. Gangeshwar Mercantile Pvt. Ltd. For Shri Hasan Fatta Afroj Mohammed, Shri Jafar Mohammed Hasanfatta, Nile Trading Co. or family members of Shri Hasan Fatta Afroj Mohammed? (iii) A.5 In the regard, I state that neither I had arrange any fund as lone from M/s. Gan Gangeshwar Mercantile Pvt. Ltd. and M/s. Natural Trading Co. nor from Shri Pukhraj Anandmal Mutha. I further state that I am not aware whether Shri Hasan Fatta Afroj Mohammed has taken any loan from M/s. Natural Trading Co. and M/s. Gangeshwar Mercantile Pvt. Ltd. and Shri Pukhraj Anandmal Mutha. Thus, although in the question No. 5 reference was made to accused petitioner No. 1 or family members of Shri Afroz Hasanfatta, in his answer Shri Madanlal Jain had neither shown any acquaintance nor alleged any dealings with any of the accused petitioners. (xv) That the petitioner No. 2 in his statement had stated that he had an account with Union Bank of India, Nanpura, Surat and the transactions were made on the directions of his brother Shri Afroz Mohamed Hasanfatta. He further stated that payments made to Shri Abdul Karim Jaka and M/s. Fancy Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hammed Hasanfatta (Petitioner No. 1): 62. ...Shri Jafar Mohamed Hasanfatta has knowingly involved himself in the process and the activity connected with the proceeds of crime including its concealment and possession and has therefore projected the same as untainted. It is apparent from the fact that he had received ₹ 3 Crore from M/s. Natural Trading Co and has invested the same on the directions of his brother Shri. Afroz in the Stock Market and Real estate.... (b) Ahmed Hasanfatta (Petitioner No. 2): 62. ...Shri Ahmed Hasanfatta, brother of Shri Afroz Mohamed Hasanfatta has knowingly involved himself in the process and activity connected with the proceeds of crime including its concealment and possession and has therefore projected the same as untainted. He received the funds from Shri Afroz Mohamed Hasanfatta and Shri Jafar Mohamed Hasanfatta and has invested ₹ 2,00,00,000/- with Fancy Builders Pvt. Ltd., Mumbai. The flat at 1101 on the 11th floor at Hicon Grande, Bandra (W) was purchased on 6/3/2014 with the amount so received from his two elder brothers. In this case, the POC has been invested in an immovable property thereby projecting the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner is of commission of offence under Section 3 of PMLA, which is punishable under Section 4 of PMLA. Section 3 of PMLA reads as under: 3. Offence of money-laundering.--Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. 36. The 'proceeds of crime' is defined in Section 2(u) of PMLA as under- (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; 37. A holistic reading of this definition of 'proceeds of crime' and the penal provision under Section 3 of PMLA, which uses conjunctive 'and', makes it luminous that any persons concerned in any process or activity connected with such proceeds of crime relating to a scheduled offence including its concealment, possession, acquisition or use can be guilty of mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed to know where there is a direct appeal to his senses and a person is presumed to have a reason to believe if he has sufficient cause to believe the same. The same test therefore applies in the instant case where there is absolutely no material or circumstantial evidence whatsoever, oral or documentary, to show that any of the petitioners, 'Knowingly', assisted or was a party to, any offence. C. Actually involved: Actually involved would mean actually involved into any process or activity connected with the proceeds of crime and thus scheduled offence, including its concealment, possession, acquisition or use. There is absolutely no material or circumstantial evidence whatsoever, oral or documentary, to substantiate any such allegation qua the petitioners. D. Neither any of the petitioners is arraigned as accused in the 'Scheduled Offences' punishable under Indian Penal Code for direct or indirect involvement, abetment, conspiracy or common intention, nor is any such case made out even on prima facie basis against any of them. 39. The second of the two pre-requisite to attract Section 3 of PMLA would be satisfied only if the person als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng irrespective of whether the person concerned is or not charged with the offence of money laundering. Thus, there shall be a legal presumption in any proceeding relating to proceeds of crime under PMLA that such proceeds of crime are involved in money-laundering. Burden would be on the person concerned to show to the contrary. However, as rightly pointed out by the Learned Senior Counsel for the petitioners, there is no legal presumption in this Section 24 that - (a) The concerned property is proceeds of crime , (b) The person accused has knowledge that the property is proceeds of crime , and (c) The person is involved in or is guilty of money-laundering merely for possessing or having any concern with the proceeds of crime. In fact this Section 24 clearly indicates that even a person in possession or connected with any proceeds of crime may or may not be charged with the offence of money laundering. Whether a person shall be charged with money laundering or not shall thus depend only upon satisfying the requirements of Section 3 of PMLA as already explained above. 43. In the instant case, neither there is anything to raise a presumption of fact or law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to point out any prima facie material against each of the petitioner even at this stage to show requisite knowledge with each of them, of commission of Scheduled offence to derive or generate any proceeds of crime and of knowingly attempting or indulging in projecting the same as untainted. 48. So far as the judgment in Gautam Kundu (supra) is concerned, the observations regarding Section 45 and limitations in grant of bail do not help the Respondent in the instant petition where challenge is against the Order taking cognizance and issuing process by way of summons. 49. On behalf of the Respondent great emphasis was laid on the statements of main accused Shri Madanlal Jain recorded under Section 50 of PMLA on 22.7.2014 (Page 287 to 297), 23.07.2014 (Page 283 to 286) and 24.7.2014 (Pages 298 to 300) i.e. after taking cognizance of the offence vide the impugned Order. It was submitted that in view of these statements of the co-accused, though recorded subsequent to taking cognizance, there is sufficient evidence against the petitioner No. 1 Shri Jafar Hasanfatta to bring home the charge against him. The Learned Senior Counsel appearing for the petitioners have fairly shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to consider the other evidence against such an accused person, and if the said evidence appears to be satisfactory and the court is inclined to hold that the said evidence may sustain the charge framed against the said accused person, the court turns to the confession with a view to assure itself that the conclusion which it is inclined to draw from the other evidence is right.... The result, therefore, is that in dealing with a case against an accused person, the court cannot start with the confession of a co-accused person; it must begin with other evidence adduced by the prosecution and after it has formed its opinion with regard to the quality and effect of the said evidence, then it is permissible to turn to the confession in order to receive assurance to the conclusion of guilt which the judicial mind is about to reach on the said other evidence.... 15. The statements contained in the confessions of the co-accused persons stand on a different footing. In cases where such confessions are relied upon by the prosecution against and accused person, the court cannot begin with the examination of the said statements. The stage to consider the said confessional statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on prima facie basis for taking 'cognizance' of offence against the petitioners. 53. The Learned Senior Counsel for the petitioner has rightly pointed out that the judgment in Pepsi Foods Ltd. (supra), was applied in Rukmini Narvekar v. Vijaya Satardekar, (2008) 14 SCC 1, and the Hon'ble Supreme Court while upholding the Order passed by the High Court which allowed a petition against dismissal of Criminal Revision Petition filed against order taking cognizance and issuing process, observed in favour of Respondent accused Smt. Vijaya Satardekar as follows - 7. The allegation in the FIR was that Ranjit Satardekar had falsely misrepresented to the complainant and her husband that the document which was being executed by them was for enabling Ranjit to represent them in the inventory proceedings in progress on the death of Andre Andrade, although what was actually executed by them was a power of attorney. This power of attorney was used by the accused for executing a sale deed in favour of his wife Vijaya Satardekar and Sadiq Sheikh in the year 1991, but the said sale deed was presented for registration only in the year 2001. It is alleged that the complainant came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of executing sale deed in favour of wife by deceit and misrepresentation, the Hon'ble Supreme Court upheld the interference with the cognizance order in Revision Jurisdiction as there was no material whatsoever either mentioned in the FIR or produced by the prosecution to show that the wife Vijaya Satardekar was in any way involved in the alleged criminal offence committed by her husband Ranjit Satardekar. The only allegation against her was that the sale deed was in her favour, which in the opinion of the Hon'ble Supreme Court did not prima facie make out any offence. 54. The same test is applicable in the facts of the instant case. By the impugned order dated 18.7.2014, the Special Court for PMLA mechanically took 'cognizance' of the alleged offence punishable under Section 4 of PMLA qua each of the accused petitioner, without even prima facie material showing existence of any 'mens rea' or culpable 'knowledge' with all or any of them, of the subject Scheduled Offence investigated separately by Crime Branch, Surat in FIR Nos. I-16/2014 dated 11.04.2014 and I-17/2014 dated 13.4.2014, or of any 'proceeds of crime' emanating from the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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