TMI Blog2021 (3) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... established that the intention of the Legislature must be found by reading the statute as a whole. It is thus absolutely clear that, for initiation/registration of a crime under the PMLA, the only necessity is registration of a Predicate/Scheduled Offence as prescribed in various Paragraphs of the Schedule appended to the Act and nothing more than it. In other words, for initiating or setting the criminal law in motion under the PMLA, it is only that requirement of having a predicate/Scheduled crime registered prior to it. Once an offence under the PMLA is registered on the basis of a Scheduled Offence, then it stands on its own and it thereafter does not require support of Predicate/Scheduled Offence. It further does not depend upon the ultimate result of the Predicate/Scheduled Offence. Even if the Predicate/Scheduled Offence is compromised, compounded, quashed or the accused therein is/are acquitted, the investigation of ED under PMLA does not get affected, wiped away or ceased to continue. It may continue till the ED concludes investigation and either files complaint or closure report before the Court of competent jurisdiction - The PMLA itself, does not provide for any con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .201 of 2021 and BA No.974 of 2021, Mr. Anil Singh, learned Additional Solicitor General for the Respondent No.1-ED and Mr. Palkar, learned APP for the Respondent No.2-State. 4. The facts giving rise for filing the present Applications, can be briefly stated as under:- (i) Mr. Mahendra S. Surana, lodged a Crime bearing No.109 of 2020 on 7th March, 2020 with City Chowk Police Station, Aurangabad under Sections 406, 420 read with Section 34 of the Indian Penal Code (for short, the IPC ) against the Applicants and other accused persons. It is stated therein that, the informant is one of the Directors of M/s. Aurangabad Gymkhana Club Private Limited, (for short, Aurangabad Gymkhana ). It is alleged therein that, all the accused persons in the said crime jointly connived with each other and committed the act of criminal breach of trust and cheated the Aurangabad Gymkhana and it s Directors for an amount of ₹ 12,17,84,451/-by issuing cheques from blocked/ freezed account. The detailed narration of facts mentioned in the said FIR are not necessary for decision of the present Applications and therefore, its reproduction is hereby avoided. (ii) On 10th July, 2020, the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2nd February 2021, the Applicants were again produced before the Special Court for seeking their further custody with a Remand Application. The Special Court, by its Order dated 2nd February 2021, rejected the request of the Respondent No.1 for further custodial interrogation and directed that, the Applicants be remanded to judicial custody till 15th February 2021. The said Order dated 2nd February 2021, was impugned before this Court by the Respondent No.1 by way of Criminal Revision Application No.22 of 2021. This Court, by its Order dated 8th February 2021, upheld the Order of Special Court dated 2nd February 2021 and dismissed the said Revision Application. (vi) The record further indicates that, on 6th February 2021, the Complainant in CR No.109 of 2020, Mr. Mahendra S. Surana, submitted a letter of even date, to the Investigating Officer of the said crime, stating therein that, he filed the said Complaint out of misunderstanding. That, the accused persons therein personally went to his office on 9th February, 2021 and paid an amount of ₹ 14,73,84,361/- after deducting TDS of ₹ 15,10,991/- from the amount due to the Complainant in consideration of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in para No.24 has categorically held that, Scheduled offence is a sine qua non for the offence of money-laundering which would generate money that is being laundered. He submitted that, in the Frequently Asked Questions (FAQs) on the PMLA, published by the Enforcement Directorate, Government of India and in particular question Nos.6, 10 to 13, the Respondent No.1 has given information about what is money laundering?, what is the offence of money laundering?, proceeds of crime, Scheduled Offence and Predicate offence. He submitted that, to question No.13 i.e. what is a predicate offence?, the answer given by the ED to it is, every Scheduled Offence is a predicate offence. The Scheduled Offence is called predicate offence and the occurrence of the same is a pre-requisite for initiating investigation into the offence of money laundering. He also drew my attention to Annexure-4, Format No.1 i.e. the Form prescribed by the Respondent No.1 for lodgment of ECIR. He further submitted that, the then Finance Minister, who was the presenting Minister of the Finance Act in Rajya Sabha on 17th December, 2012 has said that, we must remember that money-laundering is a very technically-def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the Applicants is compromised/compounded by the Complainant therein, the structure of the present crime registered by ED falls on ground, as it does not survive and is non-est. He submitted that, in view thereof, the offence registered by the Respondent No.1 under the PMLA now stands wiped out from the record and therefore, there is no question of Applicants being remanded to further custody and therefore, the Applicants are entitled to be released on bail. He further submitted that, in the case of Om Prakash Nogaja Anr. Vs. K. Nageshwar Rao Anr. decided by the learned Single Judge of this Court, on 10th August, 2009, in Criminal Application No.3360 of 2009 , it is held that, it is only when property is derived or obtained as a result of criminal activity relating to the Scheduled Offence, then and then alone the offence under Section 3 of PMLA could be committed by indulging any process or activity connected with the proceeds of crime and by projecting it, as untainted property. He therefore, at the cost of repetition submitted that, as the Scheduled Offence in the present case, has been compounded and the learned Magistrate has accepted C Summary Report, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal Complainant and the Applicants herein, in the said Predicate/Scheduled Offence, the ED continues to investigate the aspect as to, where the laundered money has gone. He submitted that, the object behind enacting the present Act is laudable. It is the prime intention of the Legislature to investigate into the offence of money-laundering. He submitted that, for removal of doubts, the Legislature has inserted Explanation to Sub-Section (d) of Section 44 by Finance (No. 2) Act, 2019 (23 of 2019), which has come into effect from 1 st August, 2019. That, in view of the explanation to Sub-Section (d) of Section 44, the jurisdiction of the Investigating Agency and Special Court under PMLA, is not dependent on any Orders passed in respect of the Scheduled Offence. By referring to Explanation to Section (2)(1)(u), he submitted that, proceeds of crime include property not only derived or obtained from the Scheduled Offence but, also any property which may directly or indirectly be derived or obtained, as a result of any criminal activity relatable to the Scheduled Offence. He submitted that, the said Explanation is wide enough to interpret and constricted or narrow interpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffence. That, the said view has been followed by the Division Bench of the Madras High Court in the case of VGN Developers P. Ltd Ors. Vs. The Deputy Director, Directorate of Enforcement reported in MANU/TN/6087/2019. He submitted that, the PMLA is self contained and the offence registered under it, can stand alone, independent of Predicate Offence. He submitted that, similar view has been expressed by the Sikkim High Court in the case of Eastern Institute for Integrated Learning in Management University Vs. The Joint Director, Directorate of Enforcement and Ors. dated 17th September, 2015 and Smt. Usha Agarwal Vs. Union of India Ors. dated 29th August, 2017. He therefore, submitted that, there are no merits in the Applications and it may be dismissed summarily. 7. In rejoinder to the arguments of the learned Additional Solicitor General, Mr. Aggarwal submitted that, in the present case, the Complainant in the Predicate crime himself states that, he lodged the said Complaint out of misunderstanding and therefore, the Investigating Agency has filed C Summary Report before the Trial Court, which has been accepted by the learned Magistrate. He submitted that, the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any enacting provision therein must be so construed as to make it effective and operative. The Courts should therefore reject that construction which will defeat the plain intention of the Legislature even though there may be some inaccuracy or inexactness in the language used in a provision. Every provision and word must be looked at generally and in the context in which it is used. Elementary principle of interpreting any word while considering a statute is to gather the intention of the legislature. The Court can make a purposeful interpretation so as to effectuate the intention of the legislature and not a purposeless one in order to defeat the intention of the legislature wholly or in part. 10. At the time of debate in Rajya Sabha, while introducing Amendment to the Finance Act on 17th December, 2012, the then Finance Minister has categorically made the aforestated statements as reproduced in para No.5 page No.8 above. From the statement of the Finance Minister, it can be clearly discerned that, for lodgement for an offence under the PMLA, there must be a Predicate Offence and it is dealing with the proceeds of a crime. The information published by Respondent No.1-ED perta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot have bearing to the proceedings under the PMLA. From the reading of the said decision it is clear that, mere filing of closure report by the Investigating Agency will not create any impediment or hurdle in the process of investigation by the ED of an offence registered under PMLA and being investigated by it. 11. It is thus absolutely clear that, for initiation/registration of a crime under the PMLA, the only necessity is registration of a Predicate/Scheduled Offence as prescribed in various Paragraphs of the Schedule appended to the Act and nothing more than it. In other words, for initiating or setting the criminal law in motion under the PMLA, it is only that requirement of having a predicate/Scheduled crime registered prior to it. Once an offence under the PMLA is registered on the basis of a Scheduled Offence, then it stands on its own and it thereafter does not require support of Predicate/Scheduled Offence. It further does not depend upon the ultimate result of the Predicate/Scheduled Offence. Even if the Predicate/Scheduled Offence is compromised, compounded, quashed or the accused therein is/are acquitted, the investigation of ED under PMLA does not get affecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ED i.e. money laundering or the trail of proceeds of crime by him, either in the Predicate/Scheduled Offence or any of the activities revealed therefrom. And, if the aforestated contention of the learned counsel for the Applicants is accepted, it will put to an end to the independent investigation of ED i.e. certainly not the intention of Legislature in enacting the PMLA. Therefore, if the contention of the learned counsel for the Applicants is accepted, in that event, it would be easiest mode for the accused in a case under PMLA to scuttle and/or put an end to the investigation under the PMLA. Therefore, the said contention needs to be rejected. 14. In view of the aforesaid discussion, it is clear that, even if the Investigating Agency investigating a Scheduled Offence has filed closure report in it and the Court of competent jurisdiction has accepted it, it will not wipe out or cease to continue the investigation of Respondent No.1 (ED) in the offence of money-laundering being investigated by it. The investigation of Respondent No.1 will continue on its own till it reaches the stage as contemplated under Section 44 of the PMLA. The contention for the learned counsel for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in and interrogation i.e. funds used to acquire various assets , it requires systematic and analysed investigation which would be of great advantage. The further remand of Applicants to judicial custody is therefore proper on all counts. This Court finds that, the Special Court has not committed any error while passing impugned Order thereby remanding the Applicants to further judicial custody. In view of the above discussion, it is not necessary to interfere with the impugned Order dated 15th February, 2021 passed below Exhs-7 and 8 in PMLA RA No.117 of 2021 by learned Special Judge, Mumbai. 17. Coming to prayer clause (b) of the Application, whereby the Applicants have impugned Order dated 28th January, 2021 in Remand Application No.117 of 2021, thereby remanded them further to the custody of ED till 30th January, 2021. It is to be noted here that, after the impugned Order dated 28th January 2021 was passed, remanding Applicants to ED custody till 30th January 2021, by an Order dated 30th January, 2021, the Special Court, extended custody of the Applicants for a further period of 3 days i.e. upto 2nd February, 2021. That, on 2nd February 2021, the Applicants were again produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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