TMI Blog2019 (1) TMI 1859X X X X Extracts X X X X X X X X Extracts X X X X ..... Act in an expansive locus as comprehending direct or indirect attempt to indulge; assist, be a party to or actually involved knowingly in any process or activity connected with the proceeds of the crime and projecting it as untainted property and on proof of guilt for punishment of the offenders of Money-Laundering, as provided in Section 4 of the Act, that would follow after a due cognizance of the offence with pre-trial enquiry if any and trial by the Special Court; which is conferred exclusive jurisdiction qua Section 44, Chapter VII of the Act. The prosecution, trial and conviction for the offence of Money-laundering are thus the criminal sanction administered by the Legislation and effectuated by a deprivation of personal liberty as a disincentive to a malfeasant. Section 71 of the Act clearly speaks that the provisions of the Act shall have effect notwithstanding inconsistent therewith contained in any other law for the time being in force. It has the overriding effect to the provisions of the Act over any other law for the time being in force provided it is shown that other law is inconsistent with the provisions of the Act. It is to be seen therefrom whether the Act not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of requirement of sanction under Section 197 Cr.P.C. and it's marked difference with Section 19 of PC Act, this Court in LV Subrahmanyam supra dealt with in detail particularly at Paras 44 45 and negated as untenable the contention of the learned Special Public Prosecutor for CBI of validity or otherwise of sanction and requirement or not is a matter to be considered in trial, by answering the scope of law in this regard from Paras 47 to 49 in saying once it is noticed about the sanction is required and it is brought to the notice of the Court of the prosecution no way sustains for want of sanction the continuation of the proceedings is nothing but abuse of process and to sub serve the ends of justice the inherent power or writ jurisdiction has to be invoked in saying ends of justice are more important and Court cannot shut its size when brought to the notice of the Court any abuse of process leading to injustice, but for invoking the inherent power or writ jurisdiction which have no limitations but self imposed that too mainly to sub serve the ends of justice having its roots in necessity and its breadth thereby is coextensive with necessity. All the three criminal petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC. No. 2 of 2017 on the file of learned Principal Special Judge for trial of CBI Casescum- Special Court under PML Act, 2002 at Nampally, Hyderabad, which is in ECIR. No. 9/HYZO/2011 of Directorate of Enforcement, taken cognizance for the offences allegedly committed under Sections 4 r/w 3 of PML Act in the prosecution maintained by the complainant Director of Enforcement through its Assistant Director, Ministry of Finance, Department of Revenue, Hyderabad. The prayer in the petition is to quash the proceedings in SC. No. 2 of 2017 against him. 2. SC. No. 92 of 2016 is outcome of the private complaint of the Assistant Director, Directorate of Enforcement, Hyderabad referred supra under Section 200 Cr.P.C. r/w 45 of the PML Act with array of 19 accused by names Sri YS Jagan Mohan Reddy-A1, Sri V. Vijay Sai Reddy-A2, M/s. Jagati Publication Limited-A3. M/s. Janani Infrastructure Private Limited-A4, Sri M. Srinivasa Reddy-A5, M/s. Hetero Drugs Limited-A6, Ms/. Hetero Labs Limited-A7, M/s. Hetero Health Care Limited-A8, Sri K. Nityananda Reddy-A9, M/s. Aurobindo Pharma Limited-A10, M/s. APL Health Care Limited-A11, Sri P. Sarath Chandra Reddy-A12, M/s. Trident Life Sciences Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to them as the 10% of EMD was also paid by them. When enquired about development of Green Industrial Park/SEZ at Jadcherla, he stated that in Jadcherla is a backward area in Mahaboob Nagar District; that APIIC acquired 955 acre of land in 2004-05 under the Industrial Growth Centre Scheme of Government of India; that in collaboration with the Green Business Centre of Confederation of Indian Industries (CII), there was a proposal to locate eco-friendly non-polluting green industry in Jadcherla Area and it was called Green Industrial Park by APIIC; that, as the land was lying unutilized for a long time, a proposal was mooted by the Bulk Drugs Manufacturers Association (BDMA) to APIIC to create an Industrial cluster for promoting export oriented nonpolluting pharmaceutical formulation industry by developing a formulation SEZ at Jadcherla; that, accordingly, the proposal was sent by APPIC with the approval of the state Government for notification of SEZ by the Ministry of Commerce, Government of India; that Hyderabad, being the Bulk Drugs Manufacturing Hub of the country, there was a possibility of attracting large scale investments in this sector, thereby generating employment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st resolution passed in January, 1974; that more often than not, the Managing Director uses the price recommended by price fixation committee as an indicative price and takes a decision about the price keeping in view several factors such as current state of development of internal/external infrastructure, importance of investment and the possibility of attracting further investments to the cluster; that as per the normal practice, in the rate recommended by price fixation committee, the land cost accounts for 30% and development cost of infrastructure contributes to 70% of the price fixed; that the price fixation committee recommended the rate of ₹ 15 Lakh Per Acre in August 2006 in respect of Green Industrial Park where land can be allotted on Out-right sale or freehold basis and not for the formulation SEZ in which land can be allotted only on lease basis as per the SEZ Act, 2005; that for SEZs, it was decided to adopt the practice of collecting a lease premium initially to be paid upfront by the lessee and annual lease rental thereon for a period of 33 years and that this system was applicable to the allotments made to M/s. Hetero Drugs Limited and M/s. Aurubindo Pharma L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 250 acre SEZ at Jadcherla; that, in order to maximize returns to APIIC by allotting to other investors in future at higher rate, a decision was taken to restrict the allotment to 75 acre of land to each which was quite justified in view of the environmental requirements of retaining open area, etc. When enquired about various steps taken in safeguarding the interest of M/s. APIIC Limited as VC MD of M/s. APIIC Limited in allotment of land to M/s. Hetero Drugs Limited and M/s. Aurobindo Pharma Limited and transfer of lands to M/s. Trident Life Sciences in SEZ, Jadcherla, Shri Acharya stated that all steps were taken to protect the interest of APIIC Limited and land leased could be resumed as per lease conditions if the lessee failed to implement the project. When enquired the persons who gave directions/suggestions for fixing the land cost @ ₹ 7 lakh per acre for allotment to M/s. Hetero Drugs Limited and M/s. Aurobindo Pharma Limited, Shri Acharya stated that based on the prevailing status of the development of infrastructure and the price of land available in the surrounding areas, the development wing of the office arrived at a reasonable lease the promoter of the ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of land and transfer of 30.33 Acre land in the name of M/s. Trident Life Sciences Limited from M/s. Aurobindo Pharma Limited, by violating the existing norms, regulations and procedures and caused wrongful loss of ₹ 21.50 Crore to M/S APIIC Limited. It is pertinent to mention that the Price Fixation Committee, which is the competent authority to fix the land prices, fixed the price as ₹ 20.23 Lakh per acre, However, he reduced the price to ₹ 7 Lakh per acre on his own and allotted land of 150 acres at Jadcherla to companies of Aurobindo group and Hetero group at the reduced price of ₹ 7 Lakh per acre. Shri B.P Acharya also reduced the transfer price from ₹ 500/- sq.mtr to ₹ 150/- sq.mtr for transfer of 30.33 acre of land from M/s. Aurobindo Pharma Limited to M/s. Trident Life Sciences Limited at EPIP, Pashamylaram against which M/s. Aurobindo Pharma Limited and M/s. Hetero Drugs Limited and the persons related to the above companies paid bribe money in the guise of investments to the tune of ₹ 10 Crore and ₹ 19.5 Crore, respectively, in M/s. Jagathi Publications Limited and M/s. Janani Infrastructure Private Limited of Shri Y.S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 409, 477-A r/w 120-B and Sections 13(2) r/w 13(1)(c) and (d) of the Prevention of Corruption Act against Mr. Y.S. Jagan Mohan Reddy and others and in as much as the offence of Money Laundering under Section 3 of P.M.L. Act, 2002 is commissioned since the offences alleged under Sections 120-B r/w 420 IPC and Section 13 of the Prevention of Corruption Act are scheduled offences under P.M.L. Act, vide., enforcement case information report, E.C.I.R. No. ECIR/09/HYD/2011 to register on 30.08.2011 against all those accused for investigation under the provisions of the P.M.L. Act that was initiated by the Directorate of Enforcement; and for that there is no basis as there is no worth allegation against the petitioner Sri BP Acharya as A. 18, for he being a public servant at the relevant time of the transactions and was working as the Vice Chairman Managing Director of APIIC. The allegation that in pursuance of so called conspiracy with other accused, made allotment of land to M/s. Aurobindo Group of Companies and M/s. Hetero Group of companies to an extent of 75 acres each in Special Economic Zone at Zedcherla without placing the same before the allotment committee and said allotment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner under Sections 3, 5, 8(5) of the P.M.L. Act and the cognizance ought not to have been taken against the petitioner. Therefore from want of sanction and the State Government vide. Lr. No. 59/SC.D/A1/2012-10, dated 08.10.2013, conveyed the fact of refusal of sanction under Section 197 Cr.P.C. to the Secretary, DoPT, while recommending the same to the Government of India to refuse sanction of prosecution under the Prevention of Corruption Act. The Apex Court in Prof. N.K. Ganguly v. C.B.I., New Delhi, by referring to a plethora of judgements has held that 'When the alleged offences are committed in the discharge of official duty, previous sanction U/Sec. 197 of Cr.P.C is required before taking cognizance and for passing an order of issuing summons consequence thereto. In Baijnath Gupta v. State of Madhya Pradesh, the Apex Court held that 'It is the quality of the act that is important and if it falls within the scope and range of his official duties, the protection contemplated by Sec. 197 of Cr.P.C will be attracted. Therefore it is contended that taking of cognizance against the petitioner and issuing summons is unsustainable and liable to be quashed. 2(f). The counte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one Private Limited-A5, M/s. SPR Properties Private Limited-A6, Ms/. Walden Properties Private Limited-A7, M/s. Bhoomi Real Estates Investments Private Limited-A8, M/s. Carmel Asia Holdings Private Limited-A9, Sri Nimmagadda Prasad-A10, M/s. G2 Corporate Services LLP (formerly known as M/s. G2 Corporate Services Limited)-A 11, Smt. P. Sabita Reddy-A12, Sri B.P. Acharya-A13, Sri D. Paradhasarhi Rao-A14, Sri C.V. Koteswara Rao-A15, M/s. Veen Promoters Private Limited- A16 and M/s. Beta Avenues Private Limited-A17. The alleged offences committed are under Section 3 punishable under Section 4 of the PML Act. So far as the petitioner-BP Acharya concerned, the private complaint at Para 33 speaks that: 33. Shri B.P. Acharya, IAS, in his statement dated 03.08.2015 given under Section 50 (2) (3) of PMLA, 2002, inter-alia stated that a decision was taken by the Government to develop IT SEZs near the new International Airport at Shamshabad and accordingly a proposal was sent by the APIIC to Government of India for in-principle approval to develop IT SEZ on 1582.28 acres available in Mamidipally and Raviryala Villages, Saroor Nagar Mandal, Ranga Reddy District; that in the 34th meeting o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learances under SEZ rules, which would be facilitated by the Government; that the very purpose of taking of the project was to facilitate notifications of IT SEZs near the new International Airport so as to attract investments and the Government as well as its nodal agency (APIIC) were expected to achieve SEZ status for this area as early as possible; that Rule 7 (1) of the Government of India, SEZ rules, stipulates that the developer shall furnish a certificate to Government of India from the state government or its authorised agency stating that the developers have legal possession and irrevocable rights to develop the said area; that the project could have been a non starter and the very purpose of MoU would have been defeated without transferring the land to developer; that Clause 5(3) of the MoU regarding Sale Deed for the project land has to be interpreted with reference to Clauses 1.3 and 2.14 of the MoU that make the terms of transfer of land subject to SEZ Rules and also the overriding effect of the SEZ Act, 2005 under Section 51; the proposal of M/s. Indu Tech Zone Private Limited for permission for investment in the project was scrutinised by the technical staff of APIIC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Shri I. Syam Prasad Reddy, by violating the existing norms, regulations and procedures and caused wrongful loss to M/S APIIC Limited as well as to the Government of Andhra Pradesh to the tune of ₹ 80 Crore/- by decreasing the Land cost from ₹ 1 Crore to ₹ 20 Lakh per acre. It is pertinent to mention that the directions of Shri B.P Acharya to handover physical possession of lands before entering into the Sale Agreement without obtaining any permission/prior approval of the Government of Andhra Pradesh is in violation of the Cabinet Decision and the conditions of the MOU approved by the Cabinet. Shri B.P Acharya also permitted to register land of 250 Acres in the name of M/s. Indu Tech Zone Limited before the implementation of the Project against the norms of APIIC Limited and also permitted to transfer of 100 acres of land from M/s. Indu Techzone Private Limited to M/s. SPR Properties Private Limited by violating the conditions of MOU. Shri B.P Acharya also willfully ignored the facts such as M/s. Indu Projects Limited did not meet eligibility criteria for allotment of lands, SEZ status, etc., on its own and without any representation from other consortium mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cific or separate procedure for taking cognizance and conducting trial thereby provisions of Cr.P.C. to be followed with the procedure thereunder. It is also contended that the Apex Court three Judge Bench in State of UP v. Paras Nath Singh, it was observed that so far as the public servants concerned, cognizance of any offence by any Court is barred by Section 197 Cr.P.C. unless sanction is obtained from competent authority if the offences alleged to have been committed was in discharge of official duties. No Court thereby shall take cognizance of any such offence except with previous sanction which is.mandatory. 3(d). In addition to what is referred supra in the previous counter affidavit with vacate petition in Crl.P. No. 3988 of 2016, the further contest in opposing the quash petition is that by reiteration of the contentions are untrue and untenable and no sanction is required to launch the prosecution and to take cognizance for the offences by the Special Court under PML Act and Section 197 Cr.P.C. has no application and a combined reading of Section 4(2) 5 of Cr.P.C. makes it clear for the PML Act is a complete code providing the procedure and as per Section 44(1)(b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal Procedure and such a course if permitted to be made that would certainly conflict with the deemed fiction power created Under Section 48 of the 1974 Act. 9. In this context, when we refer to Section 5 Code of Criminal Procedure, the said Section makes it clear that in the absence of specific provisions to the contrary, nothing contained in the Code of Criminal Procedure would affect any special or local laws providing for any special form or procedure prescribed to be made applicable. There is no specific provision providing for any sanction to be secured for proceeding against a public servant under the 1974 Act. If one can visualise a situation where Section 197 Code of Criminal Procedure is made applicable in respect of any prosecution under the 1974 Act and in that process the sanction is refused by the State by invoking Section 197 Code of Criminal Procedure that would virtually negate the deeming fiction provided Under Section 48 by which the Head of the Department of Government Department would otherwise be deemed guilty of the offence under the 1974 Act. In such a situation the outcome of application of Section 197 Code of Criminal Procedure by resorting to reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and prosecution to demoralise a public servant. The nexus between the discharge of the public duty and the offending act or omission must be inseparable. The obvious reason is to balance the public good and efficiency of the performance of the public duty by a public servant and the legitimate and bona fide grievance of an aggrieved person. Sometimes while discharging or purported to discharge the public duty, the officer may honestly exceed his limit or pass an order or take a decision which may later be found to be illegal, etc. Therefore, the prior sanction by the appropriate Government is an assurance to a public servant to discharge his official functions diligently, efficiently and honestly without fear or favour, without having haunt of later harassment and victimization, so that he would serve his best in the interest of the public. The offending act must be integrally connected with the discharge of duty and should not be fanciful or pretended. If the act complained of is directly, and inextricably connected with the official duty, though it was done negligently, or in dereliction of duty or in excess thereof, Section 197 and similar provisions operate as a canopy again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Code. Sub-section (2) of Section 4, however, specifically provides that offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, tried or otherwise dealing with such offences. TOHO being a special Act and the matter relating to dealing with offences thereunder having been regulated by reason of the provisions thereof, there cannot be any manner of doubt whatsoever that the same shall prevail over the provisions of the Code... 3(e). In view of the above, the learned counsel for the Directorate of Enforcement sought for dismissal of the quash petition. 4. The writ petitioner is A. 10-Adityanath Das in SC. No. 2 of 2017 on the file of learned Principal Special Judge for trial of CBI Cases-cum-Special Court under PML Act, 2002 at Nampally, Hyderabad, in his seeking to quash said SC proceedings against him as A.10, now Principal Secretary Government of Andhra Pradesh. A.10 out of 10 accused including Sri YS Jagan Mohan Reddy-A1, Sri V. Vijay Sai Reddy-A2, Sri N. Srinivasan-A3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96,99,555/- and Immovable Properties - ₹ 6,30,56,251/-) confirm to the definition of proceeds of crime as defined under Section 2(1)(u) of PMLA, 2002 as 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 . 27. It is submitted that from the statements of the Accused herein and documents collected during the course of investigation under PMLA, 2002, it is well established that Accused Persons A-1 and A-10 have acted in concert with a view to conceal the proceeds of crime i.e. bribe amount in the guise of investment, proceeds of crime in the form of lands, etc., and tried to project the same as untainted. It is also humbly submitted that the accused persons have tried to project the Proceeds of crime i.e. bribe amount as investment in the form equity in the companies with exorbitant premium without any substantiation and by submitting antedated valuation reports, etc., and thereby they committed an offence under the provisions of Section 3 of PMLA, 2002 which is punishable under Section 4 of the PMLA, 2002. 28. It is humbly submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this Act', Scheduled offence is defined under Section 2(1)(y) of the PMLA, 2002 as follows: Scheduled Offence means- (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B or the Schedule if the total value involved in such offences is thirty lakh rupees or more; or [deleted vide amendment act, 2013] (iii) the offences specified under Part C of the Schedule Person as defined under section 2(1)(s) of the PMLA includes: (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and (vii) any agency, office or branch owned or controlled by any of the above persons mentioned in the preceding sub-clauses; Section 8(5) of PMLA. 2002. (5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of money laundering has been committed, it shall order that such property involved in the money laundering or which has been used for commission of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l person shall be contingent on the prosecution or conviction of any individual. Section 71 of PMLA. 2002 Section 71: Act to have overriding effect. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. 30. It is humbly submitted that from the statements of the Accused herein and documents collected during the course of investigation under PMLA, it is well established that Accused 1 to 10 have committed the offence of Money-Laundering under the provisions of Section 3 of PMLA, 2002 which is punishable under Section 4 of the PMLA, 2002 and hence, this complaint. 4(a). The contentions in the quash petition impugning the cognizance order are that the allegation in the charge sheet by the CBI against the petitioner as Secretary to Irrigation, I CAD Department, Government of AP, is of criminal conspiracy with other accused of party to criminal conspiracy with other accused in facilitating to obtain additional allocation of water in favour of M/s. India Cements-A7 and by G.O. Ms. No. 146, 1 CAD dated 22.07.2008 and G.O. Ms. No. 94, 1 CAD dated 12.08.2009 issued by him allocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izance order saying perused the records and complaint taken on file as SC. No. 2 of 2017 against A. 1 to A. 10 under Section 4 r/w 3 of the Act in ordering to issue summons is untenable, that he is innocent and unnecessarily charge sheeted by filing complaint to take cognizance supra by Special Court that is liable to be quashed. He referred Sections 2, 3, 4 24 of the PML Act in saying to attract the offence of money laundering knowledge of indulgence of a person is necessary and said person who also project proceeds of crime as untainted property and those are lacking even otherwise on merits as for the complaint that too against the petitioner to take cognizance there is absolutely no semblance to attract any crime from the so called water allocation made by the orders of the Government for same was done as policy of the Government as explained by the Hon'ble Minister in the affidavit referred supra as no irregularity nor procedural lapse therein and the bald allegations made in the complaint as if involved in money laundering in assisting A.7 in creation of proceeds of crime are baseless and the learned Special Judge also erred in taking cognizance against the petitioner w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No. 17525 of 2014 filed before this Court by some of the accused therein that was allowed on 22.12.2014 and even the Directorate of Enforcement preferred appeal before the Supreme Court against said writ petition went unsuccessful therein also, thereby estopped from questioning of maintainability of the writ petition and it is also stated the contention of he was not discharging official duties is not correct so also of the allegation of he is responsible for the alleged illegal benefits to the India Cements in the form of allocation of water without referring to the Inter State Water Resources Authority for same is factually incorrect as in case of water for Krishna river due consultation was done with CE, ISWR and so far as Kagna river (not a tributary of Krishna) when queried of necessity of such consultations in the absence of rule/order mandating reference to ISWR and getting no reply of existence of any rule or order of compulsory consultation with ISWR and in view of the fact of State policy to adopt single window through State Investment Promotion Board (SIPB) reserving 10% water for industrial use coupled with deemed to have approved provisions if any approved in 7 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d back on technical matters constituted and the petitioner followed by the procedure laid down by the SIPB and the industrial policy enumerated in G.O. Ms. No. 178 dated 21.06.2005 and contra allegations in the counter are baseless. The counter affidavit by the Assistant Director to the additional ground on want of sanction is nothing new to what is there in the counter affidavit averments in the other 2 quash petitions referring to proposition and provisions in saying no sanction is required for the contention of requirement of sanction as a pre-requisite is untenable and thereby the writ petition is liable to be quashed. 5. Heard both sides at length the common arguments in all the three matters in several sittings and perused the provisions, propositions and factual matrix from the entire material available on record. 6. Leave apart for the time being the respective contentions of Adityanath Das (writ petitioner) and BP Acharya (petitioner in the two quash petitions) respectively of they are not involved in any offence of money laundering in discharge of their official duties and coming to Adityanath Das with further contentions in particular that in issuing G.O. Ms. Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney laundering defined in Section 3 of the Act which speaks 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 or claiming it as untainted property shall be guilty of offence of money-laundering that is punishable under Section 4 of the Act with different punishments for the advance specified in Part-A of the schedule or other than those respectively, similar is the contention of Shri BP Acharya and further that the decisions taken not by him, much less exclusively, that too the other departments involved and the Minister concerned or the cabinet committee that have taken the decisions and there is no any offence of money laundering committed by him and the cognizance order and prosecution are unsustainable and the State Government also after careful consideration of the report of the CBI and the version given by the member of service has come to the conclusion that the member of service has not taken any unilateral decision as he has forwarded his comments/observations to the State Government for orders on issues concerning APIIC an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to take cognizance for the offences against the officials as accused, it is thereby taken up to decide. For that it is to be seen whether the Act is a complete code covering all areas as contended and if not to what area with reference to Sections 4 5 Cr.P.C. the provisions of Cr.P.C. as general law either specially made applicable by the special provisions or from its silence so to apply unless shown deemed not applicable and then how far the contentions of the respective petitioners of the requirement of sanction is a pre-requisite to take cognizance by the special court is sustainable. In this regard and for more clarity, it is necessary to have overall idea of the provisions of the PML Act: The Preamble with statement of objects and reasons of the Prevention of Money-Laundering Act, 2002 (Act, No. 15 of 2003) is as follows: The Statement of Objects and Reasons: It is being realized, world over, that money-laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. Some of the initiatives taken by the international community to obviate such threat are outlined below: (a) The U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;of Standing Committee accepted by the Central Government are: (a) the expressions ' banking company' and 'person' may be defined; (b) in Part I of the Schedule under Indian Penal Code, the word, 'offence'. under section 477A relating to falsification of accounts should be omitted; (c) 'knowingly' be inserted in clause 3(b) relating to the definition of money-laundering; (d) The banking companies, financial institutions and intermediaries should be required to furnish information of transactions to the director instead of Commissioner of Income tax; (e) The banking companies should also be brought within the ambit of clause II relating to obligations of financial institutions and intermediaries; (f) a definite time-limit of 24 hours should be provided for producing a person about to be searched or arrested before the gazetted officer or Magistrate; (g) the words 'unless otherwise provide to the satisfaction of the authority concerned' may be inserted in clause 22 relating to presumption on inter-connected transactions; (h) vacancy in the office of the Chairperson of the Appellate Tribunal, by reason of his death, resig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legitimate money and its species like movable and immovable property. Thus certain economic offences, commercial frauds, crimes like murder, extortion have contributed to money-laundering in a significant manner. The perpetrators of such heinous crimes should not be allowed to enjoy the fruits of the money that passed under the activity and therefore the present enactment is intended to deprive the property which is related to the proceeds of specific crimes listed in the Schedule to the Act. Coining to the relevant provisions of the Act for purpose of the case from the subject index of all sections in the table format given supra: IN CHAPTER I: PRELIMINARY: Sec. 2 Definitions: 2(1)(a) Adjudicating Authority means an Adjudicating Authority appointed under sub-section (1) of Section 6; 2(1)(b) Appellate Tribunal means the Appellate Tribunal established under Section 25; 2(1)(c) Assistant Director means an Assistant Director appointed under sub-section (1) of section 49; 2(1)(d) attachment means prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter-III; 2(1)(n) intermediary means,- (i) a stock-broker, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any person, or if such date cannot be determined, the date on which such property is possessed by such person. IN CHAPTER II: OFFENCE OF MONEY-LAUNDERING (Sections 3 4) Sec. 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. Sec. 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 [***]. PROVIDED that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part-A of the Schedule, the provisions of this section shall have effect as if for the words which may extend to seven years , the words which may extend to ten years had been substituted. IN CHAPTER III:ATTACHMENT, ADJUDICATION CONFISC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of Section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation: for the purposes of this sub-section, person interested, in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any order officer who provisionally attaches any property under sub-section (1), shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. Sec. 8 adjudication: (1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (1) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3 or is in possession of proceeds of crime, it may serve a notice of not less than thirty days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (3), the Director or any other officer authorized by him in this behalf shall forthwith take the possession of the property attached under Section 5 or frozen under sub-section (1A) of Section 17, in such manner as may be prescribed: Provided that if it is not practicable to take possession of property frozen under sub-section (1A) of Section 17, the order of confiscation shall have the same effect as if the property had been taken possession of. (5) Where on conclusion of a trial of an offence under this Act, the special Court finds that the offence of money laundering has been committed, it shall order that such property involved in the money laundering or which has been used for commission of the offence of money laundering shall stand confiscated to the central Government. (6) Where on conclusion of a trial under this Act, the special Court finds that the offence of money laundering has not taken place or the property is not involved in money laundering, it shall order release of such property to the person entitled to receive it. (7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person or which may reasonably be assumed to have been signed by. or to be in the handwriting of 'any particular person, are in that person' handwriting, and in the case of a record-stamped. executed or attested, that it was executed or attested by the person by whom it purports to have been so stamped. executed or attested. 2. Where any records have been received from any place outside India, duly authenticated by such authority or person and in such manner as may be prescribed. in the course of proceedings under this Act, the Special Court, the Appellate Tribunal or the adjudicating Authority, as the case may be, shall a. presume, that the signature and every other part of such record which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by. or to be in the handwriting of. any particular person, s in that person's handwriting: and in the case of a record executed or attested, that it was executed or attested by the person b. admit the document in evidence-notwithstanding that it is not duly stamped. if such document is otherwise admissible in evidence, Section 23. Presumption in interc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority authorised in this behalf under this Act take cognizance of the offence under section 3, without the accused being committed to it for trial. c. If the Court which has taken cognizance of the scheduled offence is other than the special court which has taken cognizance of the complaint of the offence of money laundering under Sub-Clause (b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the special court and the special court shall, on receipt of such case proceed to deal with it from the stage at which it is committed. d. A special court while trying the scheduled offence or the offence of money laundering shall hold the trial in accordance with the provisions of the Criminal Procedure Code, 1973 (2 of 1974). as it applies to a trial before a Court of Session. 2. Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause (b) of sub-section (1) of that section as if the refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shall be deemed to be a Court of Session and the persons conducting the prosecution before the Special Court, shall be deemed to be a Public Prosecutor: Provided that the Central Government may also appoint for any case or class or group of cases a Special Public Prosecutor. 2. A person shall not be qualified to be appointed as a Public Prosecutor or a Special Public Prosecutor under this section unless he has been in practice as an advocate for not less than seven years, under the Union or a State, requiring special knowledge of law. 3. Every person appointed as a Public Prosecutor or a Special Public Prosecutor under this section shall be deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal Procedure, 1973 (2 of 1974) and the provisions of that Code shall have effect accordingly. IN CHAPTER X- MISCELLANEOUS: (Sections 62 to 75) Section 65: Code of Criminal Procedure, 1973 to apply:- The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply. in so far as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation investigation, prosecution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Union of India, Mini...the Division Bench of the then Composite Andhra Pradesh High Court on 4th March, 2011 in Writ Petition Nos. 10765, 10769, 23166 of 2010 (6) 2011 (3) ALT 443 (DB) held as follows: While the offence of money-laundering comprises various degrees of association and activity with knowledge and information connected with the proceeds of crime and projection of the same as untainted property with mensrea; for the purposes of attachment and confiscation (imposition of civil and economic and not penal sanctions) neither mensrea nor knowledge that a property has a lineage of criminality is either constitutionally necessary or statutorily enjoined. Proceeds of crime is defined to include not merely property derived or obtained as a result of criminal activity relating to a scheduled offence but the value of any such property as well. The bogey of apprehensions propounded on behalf of the petitioners is that where proceeds of crime are sequentially transferred through several transactions, in favour of a series of individuals having no knowledge or information as to the criminality antecedent to the property; the authorities may proceed against each and all of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge the burden (Section 24) that the property does not constitute proceeds of crime. Where a transaction of acquisition of property is part of inter-connected transactions, the onus of establishing that the property acquired is not connected to the activity of money-laundering, is on the person in ownership, control or possession of the property, though not accused of a Section 3 offence, provided one or more of the interconnected transactions is or are proved to be involved in money-laundering (Section 23). It further requires to be noticed that not only from the second proviso to Section 9 of the Act but on general principles of law as well, a person deprived of the property in his ownership, control or possession on account of confiscation proceedings under the Act, has a right of action against the transferor of such property to recover the value of the property. In the context of the fact that money-laundering is perceived as a serious threat to financial systems of countries across the globe and to their integrity and sovereignty as well; in view of the fact that targeting the proceeds of crime and providing for attachment and confiscation of the proceeds of crime is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s away or otherwise transfers his properties in favour of any of his relatives or associates, or purports to sell them to any of his relatives or associates - in all such cases, all the said transactions will be ignored and the properties forfeited unless the convict/detenu or his relative/associate, as the case may be, establishes that such property or properties are not illegally acquired properties within the meaning of Section 3(c). In this view of the matter, there is no basis for the apprehension that the independently acquired properties of such relatives and associates will also be forfeited even if they are in no way connected with the convict/detenu. So far as the holders (not being relatives and associates) mentioned in Section 2(2)(e) are concerned, they are dealt with on a separate footing. If such person proves that he is a transferee in good faith for consideration, his property - even though purchased from a convict/detenu - is not liable to be forfeited. It is equally necessary to reiterate that the burden of establishing that the properties mentioned in the show-cause notice issued under Section 6, and which are held on that date by a relative or an associate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iced in interpreting the provisions thereof. The nexus of huge amount of money generated by drug trafficking and the purpose for which they are spent is well known... Necessity was felt for introduction of strict measures so that money earned from the drug trafficking by the persons concerned may not continue to be invested, inter alia, by purchasing moveable or immoveable properties not only in his own name but also in the names of his near relatives. In Heena Kausar (supra) interpreting similar provisions in Chapter VA of the NDPS Act, 1985, the Apex Court pointed out that the property sought to be forfeited must be one which has a direct nexus with the income, etc, derived by way of contravention of any of the provisions of the Act or any property acquired therefrom. The Court explained that the meaning of identification of such property (a phrase employed in Section 68 - E of Chapter VA), is that the property was derived from or used in the illicit traffic. The SAFEMA; The NDPS Act, 1985; The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988; and The Benami Transactions (Prohibition) Act, 1988 are illustrations of statutes that incorpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular case, may shift the onus of proof. Such a shifting of onus is a continuous process in the evaluation of evidence. ***************** Thus, but for Section 45(1)(ii) of the Act, where from the Public Prosecutor on notice once opposes the application for bail, bail cannot be granted to accused of the offence under Section 3 of the Act unless the court is satisfied that there are reasonable grounds believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail, is struck down to the above extent by the Apex Court in Nikesh Tarachand Shah supra as per law as on date, all other provisions of the Act with amendments in 2005 and 2009 are held constitutionally valid. It is also made clear from the discussion supra that for the offence under Section 3 of the Act, mensrea is an essential component from attribution of knowledge and there from burden to prove his innocence and of acted in good faith and without knowledge. 9. From this now coming back to the specific provisions among all those of the Act relevant to answer the issue, in this regard Section 71 of the Act clearly speaks that the provisions of the Act shall have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealt with according to the same provisions (of Cr.P.C.) but subject to any enactment for the time being in force regulating the manner or place of investigation, inquire into, or try or otherwise dealing with such offence. It is incorporated clearly particularly in the expression at Para 5 in use of the words otherwise deal with it is not necessarily mean something which is not included in the Act but for points out to the fact that the expression deal with is of comprehensive and that the investigation inquiry and trial some of the aspects dealing with offences. Consequently the provisions of Cr.P.C. shall be applicable in so far as they are not inconsistent with NDPS Act including to warrants, searches, seizure or arrest etc., made under this Act. Further with reference to the provisions of the SC ST (POA) Act 1989 the Apex Court in Gangula Ashok v. State of AP 2000 (1) ALT (Crl.) 174 (SC) : (2000) 2 SCC 504 by quoting with approval the expression of the Division Bench of this Court in Referring Officer represented State of AP v. Shekar Nair 1999 (3) ALT 533 and by quoting the constitution bench expression of the Apex Court in AR Antulay supra and Director of Enforcement v. De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact from the silence in the provisions for nothing in the Act provisions inconsistent to the code from the reading of Section 4(2) of the code with the provisions supra. Section 197 Cr.P.C. sanction for taking cognizance is a pre-requisite to proceed against a public servant. Thus it does not mean if at all sanction to prosecute otherwise is required to take cognizance, no way required because not specifically provided by Section 44(1)(b) of the Act. Even from the very wording of Section 45 no need to reproduce herein supra only the non-absentee clause is in relation to cognizance making the offence cognizable and non-bailable to say Section 4(2) r/w schedule II of Cr.P.C. cannot be looked into because of the contrary specific provision herein. Even from Section 45(1)(a) of the amended Act the non-absentee clause is against police officers power to investigate under Cr.P.C. without authorization by special or general order of the Central Government. 12. Now from this coming to the contention of the learned counsel of the Directorate of Enforcement in this regard to answer concerned what they stated of cognizance is under Section 44 of the Act and not under Section 190 Cr.P.C. t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d all other proceedings not specifically provided in the Act the provisions of the code specifically made applicable by virtue of this Section 65 of the Act. Thus once there is no procedure specifically provided for prosecution but for simply saving on the complaint to take cognizance under Section 44(1)(b) of the Act it cannot be contended no sanction to take cognizance is required if otherwise sanction is required from the provisions of the Code as taking of cognizance is part of prosecution for which by virtue of Section 65 also to read with otherwise even in the absence of Section 65 from the wording of Section 46 of the Act. Section 197 Cr.P.C. is applicable. 14. There is no quarrel on the proposition placed reliance by the learned counsel for the Directorate of Enforcement from the expression of the Apex Court in Rohtas supra with reference to Sections 4 5 of the code and Harayana Children Act 1974 as a special law that was in force even by the time the Code 1973 came into force and that special law provided procedure and that is saved by clearly as exception carved out by Section 5 of the Code. 15. Coming to the other expression placed reliance by the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to constitute an offence under Section 3 of the Act that to be established by prosecution and as such the proposition has no application to say by the learned counsel for the Directorate of Enforcement of no sanction of the public servant to prosecute under the PML Act is required to take cognizance or to proceed for post cognizance enquiry and trial for the offence under Section 3 4 of the Act. In fact the expression in VC Chinnappa supra did not refer any of the earlier binding expressions on the scope of the Section 4(2) of the Code including from the Constitution Bench expression of the Apex Court in AR Antulay supra leave apart Section 65 of the PML Act clearly says the provisions of the Code are applicable for prosecution and so far as the prosecution concerned, there is no other provision and even for investigation the provisions of the Code made applicable save to some extent who are the authorities to investigate provided by the provisions of the Act. 16. Coming to the expression in B. Rama Raju v. Union of India, Ministry of Finance, Department of Revenue, rep. by its Secretary (Revenue), New Delhi (supra) that is already discussed supra of the Act is observed as co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prosecution to rebut the said evidence and in view of that said provision no way can be called unconstitutional including making the special penal provision a non-bailable offence by Section 45 of the Act by referring to the provisions of the NDPS Act in this regard to that conclusion. 19. Coming to the other expression placed reliance by them of the Apex Court in Gautam Kundu v. Directorate of Enforcement (Prevention of Money Laundering Act), Government of India through Manoj Kumar, Assistant Director, Eastern Region (2015) 16 SCC 1 it is in relation to grant of bail and questioning the fulfillment of conditions of Section 45 of the Act where Sections 44, 45, 24, 65 71 of the Act referred in saying the rebuttal burden put by Section 24 of the Act is with reverse onus on the accused and the riders provided under Section 45 of the Act are in addition to the riders provided in Sections 437 439 Cr.P.C. thereby held not entitled to the bail. Even from this the presumption is rebuttal with reverse onus clause and provisions of Cr.P.C. also applicable to consider as additional provisions to what is provided in Section 45 of the Act including to bail to an accused involved in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nmadharao by placing reliance on the three judge bench expression of the Apex Court in SS Dhanoa v. Municipal Corporation Delhi AIR 1981 SC 1395, his contention on behalf of Directorate of Enforcement is that the APIIC Managing Director-cum-Chairman is not a public servant under Section 21 IPC. In the expression in SS Dhanoa, what was observed is that employee of super bazaar a cooperative society is not a public servant. In fact the Super bazaar at Connaught place on facts with 12 branches was a society registered under Cooperative Societies Act, 1925 and the employees therein are not public servants under Section 21 IPC to require sanction under Section 197 Cr.P.C. to prosecute them for the misdemeanor. It is observed that the super bazaar is not owned by any Government and not under the control of the Government and not connected with the affairs of the Union or the State but managing only by a private society and thereby sanction not required to prosecute employee of the super bazaar by invoking Section 197 Cr.P.C. In fact who is a public servant is enumerated in Section 21 IPC in deciding whether sanction is required or not to prosecute such public servant. Without any difficu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein. It was discussed in Para 64 of the judgment that from prosecution by taking of cognizance is barred from want of sanction proceeded without sanction. It is however observed that under the PC Act if a special provision is made on a certain matter that matter is excluded from the general provisions in Cr.P.C. and the provisions of Section 19 PC Act will not have an overriding effect on general provision of Section 190 Cr.P.C. There is no dispute on that so far as taking of cognizance, but for what is discussed supra of mere private complaint to take cognizance directly by special Court does not mean from any such provision under the PML Act, exclusion of the requirement of sanction under Section 197 Cr.P.C. that too Section 65 of the Act specifically says for prosecution the provisions of the code are applicable and as submitted supra prosecution including taking of cognizance subject to sanction and Section 197 Cr.P.C. requirement must be fulfilled. What is the contention referring to PK Pradhan supra of the sanction can be required or not to be considered during trial and there is nothing to find fault the cognizance taken by the special Court under PML Act is also untenabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Art. 20. In the course of the judgment, the following observations, which apply with full force to the present case, were made:- .......and the prosecution in this context would mean an initiation or starting of proceedings of a criminal nature before a court of law or a judicial tribunal in accordance with the procedure prescribed in the statute which creates the offence and regulates the procedure. 26. Thus initiation of criminal proceedings under PML Act by the competent authority is by filing private complaint before special Court to take cognizance by the special Court and for that the accused once a public servant and his acts constitutes the offence alleged when in discharge of official duties, sanction must have been obtained and submitted by them with the complaint before the special court for taking cognizance of the offence under the act against said public servant by then the accused. Otherwise the starting of criminal proceedings under PML Act is from taking of cognizance on the private complaint filed before special court, for the offence under the act by the special court, for such taking of cognizance of any offence on the private complaint by the special c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re under Sections 306 307 Cr.P.C. to grant pardon to an accused of the Act offences at any stage of the proceedings. It is observed that as there is no inconsistency or repugnancy between the Act supra and code supra and there is no implead or express repeal of Sections 306 307 of the code and the Act provisions, the Code thereby harmoniously be construed to borrow the legs from the code to the Act to stand in saying neither Section 9 nor Section 13 of the Act in its wording not expressly excluded application of Section 306 307 Cr.P.C. to the proceedings before the special Court thereby those provisions are applicable and for that conclusion referred Section 4(2) of the code and the Constitution Bench expression of the Apex Court in AR Antulay supra. There Sections 8(2 3) of the Act referred saying special provision leaving no one is in doubt that all the provisions of the code shall so far as they are not inconsistent with the Act apply to the proceedings before the special Court and the same was discussed in Para 50 of the expression by referring to Para 27 of AR Antulay supra and at Para 51 by also referring to AR Antulay supra in saying the Special Court being a Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Court of the prosecution no way sustains for want of sanction the continuation of the proceedings is nothing but abuse of process and to sub serve the ends of justice the inherent power or writ jurisdiction has to be invoked in saying ends of justice are more important and Court cannot shut its size when brought to the notice of the Court any abuse of process leading to injustice, but for invoking the inherent power or writ jurisdiction which have no limitations but self imposed that too mainly to sub serve the ends of justice having its roots in necessity and its breadth thereby is coextensive with necessity. 32. Accordingly and in the result, all the three criminal petitions are allowed by setting aside the respective cognizance orders of the learned Special Judge holding that sanction to prosecute the respective petitioners in the respective cases as public servants is mandatory and prerequisite to take cognizance and from its lacking the learned Special Judge should not have been taken cognizance and the cognizance orders thereby are unsustainable, by directing further the learned Special Judge to return said complaints to the complainant/s if at all to submit with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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