TMI Blog2012 (7) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... 56 of 2010 (Annexures VII to X). Keeping in view of the above facts, this Court is also of opinion that since the properties 51 in numbers, described in Annexure-I, have been provisionally attached so as to prevent the petitioners from transferring them in favour of the third parties, the question of sending a final report under Section 173 Cr.P.C., does not arise at this stage. - Crl.O.P. No. 2240 of 2011 - - - Dated:- 13-7-2012 - T. Mathivanan, J. For the Petitioners : K. S. Viswanathan, S. Sivakumar For the Respondents : M. Dhandapani ORDER Invoking the inherent jurisdiction of this Court under Section 482 Cr.P.C., the petitioners have preferred this petition seeking the relief of quashing the criminal proceedings in Original Complaint (O.C.) No.73 of 2010 in Provisional Attachment Order No.07/2010 in the case file No.ECIR/53/CZ/PMLA/2010, on the file of the first respondent. 2. The petitioners are the director and managing director of M/s.D.R.Logistics Pvt., Ltd., a company incorporated under the Indian Companies Act, 1956. 3. It is manifested from the records that the following cases viz., crime Nos.277 of 2010, dated 26.05.2010; 349 of 2010, da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel appearing for Mr.S.Sivakumar, learned counsel, who is on record for the petitioners and Mr.M.Dhandapani, learned Central Government Standing Counsel for Enforcement Directorate. 10. Mr.K.S.Viswanathan, learned counsel, while advancing his arguments, has submitted that the petitioners being the Director and the Managing Director of the Company under the name and style of M/s.D.R.Logistics Private Limited, had been doing real estate business for the past several years. Out of the profit earned from the business, they had purchased certain lands at Vallur and at Edaiyanchavadi Village, Ponneri Taluk, Thiruvallur District in the name of their family members. 11. He has submitted further that on account of downfall in their real estate business, their company had defaulted in repayment of the loan amount, which was availed from the Bank of India and in view of this fact, the Bank of India exercising its power under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, had issued notice to the petitioners threatening to take over the possession and management of the Company. 12. Only under this circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sections 406, 419, 420, 447, 294(b), 465, 468, 471 and 506(ii) I.P.C., the offences under Sections 419, 420 and 471 I.P.C., are the scheduled offences and hence prima facie case is made out to presume that the petitioners shall be guilty of offence of Money-Laundering as contemplated under Section 3 of P.M.L.A., 2002. 19. Chapter-II of P.M.L.A., encompasses Sections 3 and 4. Section 3 defines the offence of Money-Laundering. It 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 and projecting it as untainted property shall be guilty of offence of Money-Laundering. Section 4 is the penal provision to punish the offender. It reads as under: 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 rupees: Provided that where the proceeds of crime involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to Section 5 of P.M.L.A., 2002. It reads as under: 5. Attachment of property involved in money-laundering.-(1) Where the Director, or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; (b) such person has been charged of having committed a scheduled offence; and (c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding (one hundred and fifty days) from the date of the order, in the manner provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or the other officer so authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that schedule. 24. From the provisions of Section 5(1) of P.M.L.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to that the Prevention of Money-Laundering Act was enacted in the Parliament only in the year 2002 and subsequently it was notified and came into effect from July, 2005. The Act, therefore, cannot have retrospective application in respect of the offences that are alleged to have been committed in the year 1999-2000. 30. He has also submitted that even assuming that the allegations levelled against the petitioners, in the first information report, were correct, still the provisions of P.M.L.A., would not be made applicable for the simple reason that the alleged offences were said to have been taken place well before the enactment of the Act. 31. Mr.K.S.Viswanathan, learned counsel, has also argued that P.M.L.A., is not an expost facto law. An expost facto or retroactive law is a law that retroactively changes the legal consequences (or status) of actions committed or relationships that existed prior to the enactment of the law. 32. He has also maintained that in reference to criminal law, it may criminalise actions that were legal when committed or it may aggravate a crime by bringing it into a more severe category than it was in at the time it was committed or it may cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een committed by the accused, no action under P.M.L.A., could be taken. 39. Placing reliance upon the following decisions viz., i. Ritesh Agarwal and another vs. Securities and Exchange Board of India and others, reported in (2008) 8 SCC 205; and ii. Ganesh Gogoi vs. State of Assam, reported in (2009) 7 SCC 404. Mr.K.S.Viswanathan, learned counsel has argued that the aforesaid two decisions had clearly laid down the proposition that a criminal law could not be retrospective in operation as the same would violate the Article 20(1) of the Constitution of India. 40. In the first case viz., Ritesh Agarwal and another vs. Securities and Exchange Board of India and others, reported in (2008) 8 SCC 205, the Division Bench of the Hon'ble Supreme Court of India headed by His Lordship Hon'ble Mr.JUSTICE S.B.SINHA has held that: Where the commission of offence in question was complete prior to enforcement of the 1995 Regulations, the appellants could not have been proceeded against for violation of the said Regulations. Thus, since the said Regulations were not attracted, imposition of ban on appellants from having access to capital market for a period of 10 years, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istry of Finance, Department of Revenue, Mumbai with Radha Mohan Lakhotia (HUF), through its Karta, Radha Mohan Lakhotia vs. The Deputy Director, PMLA, Directorate of Enforcement, Ministry of Finance, Department of Revenue, Mumbai. This Court has gone through the above quoted decisions and after giving it's due consideration, is of view that the above quoted decisions are also not made applicable to the instant case on hand. 46. Mr.M.Dhandapani, learned Central Government Standing Counsel for Enforcement Directorate, has vehemently opposed the arguments advanced by Mr.K.S.Viswanathan. 47. Mr.M.Dhandapani has argued that in accordance with the second proviso to Section 5(1)P.M.L.A., the provisions of P.M.L.A., are made applicable even to the properties, which were acquired by the proceeds of crime prior to the enactment of P.M.L.A., and that the confiscation proceedings under Chapter-III could very well be initiated and that there might not be any doubt in regard to the retrospective penalisation of P.M.L.A., 2002. 48. The proviso one and two to Section 5(1) P.M.L.A., 2002 have been substituted by Act 21 of 2009 by Section 3(b), with effect from 01.06.2009. 49. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision or if interpreted as being retrospective, the provision itself must be invalidated for arbitrary retrospective operation is therefore without substance or force. 47.The above contention does not merit acceptance even otherwise. Article 20 of the Constitution of enacts an injunction only in respect of ex post facto laws resulting in conviction for offences or imposition of penalties greater than which might have been inflicted under the law enforceable at the time of commission of the offence. No provision of the Constitution has been brought to our notice which prohibits a legislative measure which targets for attachment and confiscation proceeds of crime. On the text and authority of our Constitution while it may perhaps gainfully be contended that conviction for the offence of money-laundering cannot be recorded if the said offence is committed prior to the enforcement of Section 3 of the Act, such a contention cannot be advanced to target proceedings for attachment and confiscation, as these fall outside the pale of the prohibitions of the Constitution, in particular Article 20(1). 52. The Division Bench of Andhra Pradesh High Court, while penning down the Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abric of our society and to determine the appropriate remedy for the pathology. 53. In the light of the above quoted decision and based on the provisions to Clause (c) of Sub-Section (1) to Section 5 and the second proviso to Sub-Section (1) to Section 5 of P.M.L.A., 2002, this Court finds that the provisions of the second proviso to Section 5(1) are unambiguously applicable to the property acquired even prior to the coming into force of P.M.L.A., 2002. 54. As rightly observed by the Division Bench of Andhra Pradesh in the above cited decision, the act itself is not invalid for retrospective penalisation. Ground No. III: 55. As observed herein before, in Ground No.II, the first proviso to Section 5(1) has been substituted by Act 21 of 2009 by Section 3(B), for the proviso with effect from 01.06.2009. 56. The first proviso to Section 5(1) of P.M.L.A., 2002 reads as follows: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised to investigate the of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n without forwarding a report under Section 173 Cr.P.C., 63. He has also submitted that based on the language coined in second proviso to Section 5(1)P.M.L.A., 2002 in sofar as forwarding a report to the Magistrate is concerned, when the attachment of a property involved in P.M.L.A., was to be effected immediately based on the materials and adequate reasons, the question of forwarding the report to the Magistrate with regard to the provisional attachment would not arise. 64. He has also added that the proceedings, which are sought to be quashed in this criminal original petition, was only relating to the provisional attachment and as such the final stage was not yet arisen and consequently the requirement of forwarding the report to the Magistrate under the first proviso did not arise at this juncture. 65. Mr.M.Dhandapani, learned Central Government Standing Counsel for Enforcement Directorate has also quoted an unreported decision of this Court dated 18.11.2010 and made in W.P.Nos.24444 and 24445 of 2010, which were filed by the petitioner herein. In this Order, the question relating to the forwarding of a report under Section 173 Cr.P.C., to the Magistrate, has been elab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd made in W.P.Nos.24444 and 24445 of 2010. 71. The above two writ petitions were filed by the petitioners seeking the relief of quashing the attachment Order dated 11.10.2010 in the Proceedings in File No.ECIR/53/CZ/PMLA/2010. These two writ petitions were heard together by the learned single Judge of this Court and decided finally as against the petitioners with an observation that this Court did not find any merits in these writ petitions and hence these two writ petitions were dismissed. 72. Having been failed in their attempt in the above said W.P.Nos.24444 and 24445 of 2010, which were filed under Article 226 of the Constitution of India to quash the above said proceedings, now the petitioners by way of second innings have approached this Court after invoking the inherent jurisdiction of this Court under Section 482 Cr.P.C., 73. Article 226 of the Constitution of India deals with the extra-ordinary jurisdiction of this Court. Whereas, Section 482 Cr.P.C., deals with the inherent jurisdiction of this Court. The exercise of power, under Section 482 Cr.P.C., or under Article 226 of the Constitution of India, is discretionary to be exercised in the facts of each case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
