TMI Blog2021 (6) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... (petitioner herein) are replica of the allegations made in the impugned complaint filed before the Special Court by the ED under the PML Act. This Court finds reasons to accept the contentions of Sri Mukul Rohatgi, learned Senior Counsel for the Petitioner that according to the findings in Crl.P. No. 3995 of 2016, the scheduled offences are not made out and the Charge Sheet is quashed against the Petitioner and therefore, and in consequence thereof, there cannot exist any more scheduled offences for the purpose of prosecution under Sections 3 and 4 of PML Act, 2002 (as amended) - there is no material to proceed against the petitioner under Sections 3 and 4 of Prevention of Money Laundering Act, 2002 and that there are no schedule offences committed by him to proceed under the provisions of PML Act in view of the Order of this Court in Crl.P. No. 3935 of 2016 dated 5.1.2018. Whether the amendment of PML Act in the year 2009 so far as schedule offences is concerned, can be applied to an act committed prior to amendment? - HELD THAT:- Certain High Courts have already taken a view that the amendment to PML Act in 2009 has no retrospective effect. Those decisions are challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were issued under Section 50 of the P.M.L. Act to several persons and recorded their depositions, obtained financial accounts and bank statements of M/s. Stylish Holmes, Tirumala Ranga Rao, M/s. Southend Projects and Foundations Private Limited, N.Sunil Ressy and Koneru Rajendra Prasad and also from other persons, who were associated with the transactions and their voluntary statements. From the statements of the accused and the documents collected during the course of investigation under P.M.L. Act, according to the respondent authorities, it is well established that A-1 to A-13 have committed the offences under P.M.L. Act. As such, the respondent herein had filed a complaint under Section 200 of Cr.P.C. read with Section 45 (1), 3, 4 and 8 (5) of the Prevention of Money Laundering Act, 2002 (for short the P.M.L. Act ) punishable under Section 4 of the Act and Section 70 of the said Act, against the petitioner and others. The role of the petitioner as alleged in the complaint is that he is an N.R.I. and his father Koneru Rajendra Prasad was a Director of M/s. Emaar Hills Township Private Limited. He received an amount of USD 1,40,000 from one Challa Suresh and USD 2,50,000 from P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime and is still holding some of it. He further submits that the petitioner is a resident of Dubai since 1992 and is engaged in the business of real estate, trading and mining in the UAE and he has no business with any companies based in India or with M/s. Emaar PJSC, Dubai. The petitioner received the amounts from Parthasarathy and Challa Suresh for investment in the Dubai real estate market and thereafter returned the said amounts subsequently. The fact that the money was received for investment in the real estate market is clear from the statement of Challa Suresh under Section 50 of the P.M.L. Act. He further submits that the amount received from Parthasarathy was returned on 14.10.2011, which is evident from the documents filed along with the complaint itself. He also submits that the amount from Challa Suresh was received on 12.04.2005 pursuant to an Investment Agreement dated 14.03.2015 and a copy of the agreement was submitted by the petitioner at the time of recording his statement under Section 50 of the P.M.L. Act, but the same was not made as part of the documents filed along with the complaint. The petitioner has subsequently refunded the amount to Challa Suresh, along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the allegations do not show that the petitioner had any knowledge of the nature of amount deposited in his account. He also submits that the contention of the respondent that the offence under P.M.L. Act is a distinct offence from the predicate offence does not support the case of the respondent in any manner. The contention that the offence under P.M.L. Act is an independent offence cannot take away from the fact that this Court vide order, dated 05.01.2018 in Criminal Petition No.3935 of 2016 has specifically recorded a finding that the allegations and material against the petitioner do not in any manner show his knowledge. The judgments relied upon by the respondent in Neeharika Infrastructure Private Limited v. State of Maharashtra and others Crl.A.No.330 of 2021 (SC) ; Gautam Kundu v. Directorate of Enforcement (2015) 15 SCC 1 ; M/s. V.G.N.Developers v. The Deputy Director, Directorate of Enforcement (2019) SCC Online Mad. 13270 ; Radha Mohan Lakhotia v. Deputy Director, P.M.L.A., Directorate of Enforcement, Ministry of Finance (2010) SCC Online Bom.116 ; Sachin Narayan v. Income Tax Department and another (2019) SCC Online Kar. 1726 and Babulal Verma v. Enforcem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is the recipient of proceeds of crime knowingly . Mere usage of the word knowingly is not sufficient to attribute knowledge to the petitioner in the absence of any statement or material in the complaint made under P.M.L. Act that shows as to how the petitioner is alleged to have knowledge of receipt of proceeds of crime. In the absence of such allegations and material attributing knowledge to the petitioner, the proceedings against the petitioner are liable to be quashed and the petitioner ought not to be forced to undergo the rigmarole of a long criminal trial. He further submits that the complaint made under P.M.L. Act does not allege that the petitioner was directly involved in the sale/purchase of plots or that he had any knowledge whatsoever of the sale of plots to Challa Suresh and Parthasarthy. The petitioner is not alleged to be in any manner connected to the companies/entities that are alleged to have engaged in sale/purchase of plots leading to generation of proceeds of crime. It is not even alleged in the complaint that the petitioner had asked Challa Suresh or Parthasarathy to deposit the amounts in his account or that there was any interaction of the petitioner w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action. Therefore, it is not open for the respondent to rely on 164 Cr.P.C. statements recorded by C.B.I. Further, the very fact that Challa Suresh and Parthasarathy, who are alleged to have paid proceeds of crime to the petitioner, have not been implicated as accused in the complaint shows that the petitioner has been wrongly implicated as an accused without any basis and for the sole reason that he is the son of accused No.7. It is further submitted that the sole basis for the respondent authorities to raise allegations with respect to the aforesaid amount is the bank account statement of the petitioner shows receipt and return of the amount. Mere entries in the bank statement can never show knowledge of the petitioner or establish the purpose for which the money was given to the petitioner. In view of the above, even from the allegations in the complaint, no knowledge can be attributed to the petitioner that the amounts received by him were proceeds of crime. There is no statement or material to show that the money received by the petitioner was tainted and it was proceeds of crime. Even if it is assumed that the money received by the petitioner was tainted, there is nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly misinterpreted and contrary to the law declared by this Court in Tech Mahindra v. Joint Director, E.D. Manu/AP/2921/2014 . The aforesaid decision of this Court has become final as the Special Leave Petition (SLP(Crl) No.010250 of 2017) has been dismissed by the Apex Court, vide order dated 08.12.2017. In view of the judgment of the Apex Court in S.Kasi v. State 2020 SCC Online SC 529 , the decision of the coordinate Bench of the High Court would be binding on another coordinate bench. Reiterating the allegations made against the petitioner in the complaint made under P.M.L. Act, learned Assistant Solicitor General of India, appearing for the respondent would submit that the petitioner is guilty of the offence of money laundering. In view of amended Sections 8 (5) and 8 (6) of the P.M.L. Act, the confiscation of property and commission of offence of money laundering has to be decided by the trial Court and, therefore, filing of prosecution complaint before the Special Court is mandatory and the trial proceedings are standalone proceedings. It is further submitted that in his deposition given under Section 50 (2) and (3) of the P.M.L. Act, the petitioner had admitted that he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Crl.O.P.Nos.24200 of 2017 of Madras HC 3. Neeharika Infrastructure Private Limited v. State of Maharashtra and others (4 supra) 4. Gautam Kundu v. Directorate of Enforcement (5 supra) 5. M/s. V.G.N.Developers v. The Deputy Director, Directorate of Enforcement (6 supra) 6. Radha Mohan Lakhotia v. Deputy Director, P.M.L.A., Directorate of Enforcement, Ministry of Finance (7 supra) 7. Sachin Narayan v. Income Tax Department and another (8 supra) 8. Babulal Verma v. Enforcement Directorate (9 supra. This Court has given fastidious consideration to the points raised by both sides and verified the material documents in order to appreciate the contentions raised by both sides. In short, the following points are surfaced before this Court for consideration. 1) Whether there is material to constitute the offence amounting money laundering under the PML Act against the Petitioner (Accused No. 12)? 2) Whether there is schedule offence to be proceeded with against the Petitioner under the provisions of Prevention of Money Laundering Act in view of the Order of this Court in Crl. Petition 3935 of 2016 dated 05.01.2018? 3) Whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Substituted by the Prevention of Money-laundering (Amendment) Act, 2012 (No. 2 of 2013) w.e.f. 15.02.2013 for the following: - proceeds of crime and projecting. it as untainted property shall be guilty of offence of money-laundering. [Explanation 2. Inserted by Finance (no. 2) Act, 2019: For the removal of doubts, it is hereby clarified that-- (i) a person shall be guilty of offence of moneylaundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely: -- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 420 of IPC and Sec. 13 of PC Act are the Scheduled offences under PMLA, 2002, Directorate of Enforcement has registered ENFORCEMENT CASE INFORMATION REPORT (ECIR) No. 08/HZO/2011 dt. 30.08.2011 (Annexure-A4) and took up the investigation. 12. During the investigation summonses were issued under Section 50 of the Act to several persons and recorded their depositions, obtained Financial Accounts and Bank statements of M/s Stylish Holmes, Shri Tummala Ranga Rao, M/s Southend Projects Foundations Pvt. Ltd. Sri N. Sunil Reddy, Sri Koneru Rajendra Prasad and also from other persons who were associated with the transactions and their voluntary statements It is therefore, as rightly contended by the Learned Senior Counsel for the Petitioner, other than the material collected by the CBI, the ED did not collect, nor did any further investigation to collect some more material to charge the petitioner with the offence under sec. 120B and Sec. 420 IPC. This Court in Crl.P.No 3935 of 2016, wherein the present petitioner was figured as Accused No. 13 made a clear observation vide Para 17 at page 40 as below: From the above, when it is not a case of the Petitioner-A13 was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach of trust and cheating much less with any proof of entrustment and any deception since inception of any contract between M/s Emaar and M/s Stylish Holmes in so far as against the petitioner-A13 separately concerned, but for subject to offence of criminal conspiracy made out if any with other accused under sections 120B 107 (2) IPC r/w 10 Evidence Act to petitioner A13 as privy for their committing those offences alleged from any agreement or abetment/instigation from the allegations in the charge sheet that though rate of selling the villa plots was fixed by M/s Emaar at ₹ 5, 000/ per sq. yd. as per the instructions of Shri Koneru Rajendra Prasad -A6, Shri T. Ranga Rao-A14 as Director of M/s Stylish Holmes Real Estates Pvt. Ltd., sold the villa plots by collecting excess amounts from the buyers . Thus, this Court upheld the contentions of the Petitioner herein who is the Petitioner-A13 in Charge sheet filed by CBI that no offences are made out under sec. 120B, 409 and 420 IPC and quashed the charge sheet against him. This Court is called to examine the same facts which were considered by this Court in Crl P. No.3935 of 2016, in this case which are arisen out of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the words one crore rupees or more . It is the case of ED as set out in the impugned Complaint that the money was remitted to the account of the petitioner in Dubai, on 12.4.2005 and 9.8.2007 from Mr. Suresh and Mr. Parthasarathy respectively and therefore, the offence of money laundering, so far as the petitioner is concerned was committed prior to the year 2009. Sec. 120 B, sec. 409 and 420 I.P.C are made scheduled offences for the purpose of Section 3, only from the year 2009. The question whether for the acts amounting to offences punishable under sec. 120B, 409 and 420 I.P.C prior to 2009, the PML Act that was amended in 2009 can be applied. This question was dealt with by the Delhi High Court in Arun Kumar Mishra vs. Directorate of Enforcement (10 supra) in detail. It is held by the Ld. Single Judge of Delhi High Court that :- 19. At the outset it may be mentioned that the ECIR discloses the commission of the alleged offences during the period from November 2005 to December 2006. Section 3 of the PMLA specifically mandates that the act of money laundering should be intentional, therefore, it has to be traced to the point of time when the actual transaction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Division Bench of High Court of Delhi in the case of Directorate of enforcement vs. Mahanivesh Oils and Foods Pvt Ltd (LPA No.144 of 2016) and C.M. No.8046 of 2016 dated 30.11.2016. In the case of Prahlad Krishna vs. The State of Bombay, AIR 1952 Bom 1 (DB) the court observed that immunity is supposed to be provided to a person from being accused of the offence laid down under the present law which had been committed by him before such enactment. Clause 1 of Article 20 of the Constitution of India guarantees right against the operation of ex post facto laws. A seven Judges Bench of the Supreme Court in the case of Jawala Ram vs. The State of Pepsu 1962 SCR (2) 503 (CB) made it clear that it is only in case of criminal laws that there lies a prohibition of the application of retrospective laws whereas civil liabilities have been given the authority to be imposed by retrospective effect. Therefore, laws which make an activity offensive which were initially innocent when the same was committed will not be declared as valid. The above view is fortified from the spirit of Article 20 of the Constitution. In Biswanath Bhattacharya vs. Union of India (2014) 4 SCC 392 , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. These conflicting views are yet to be finally decided by the Apex Court. The argument advanced by the learned Senior Counsel for the Petitioner that there is no commission of schedule offence by the petitioner to proceed under Sections 3 and 4 of P.M.L. Act and the Complaint filed by the Respondent against the petitioner, being Accused No. 12 does not indicate any material to prosecute him for the offences under the Prevention of Money Laundering Act, 2002 (as amended) is accepted. But whether the amendment in 2009 would make the acts committed in the period earlier to amendment falls within the purview of the PML Act or not cannot be answered because the question is pending for final decision before the Apex Court. The learned Assistant Solicitor General for the Respondent contends that invocation of powers under sec. 482 Cr.P.C by this Court is highly unwarranted. The power vested in this Court by Sec. 482 Cr.P.C is to prevent abuse of process of criminal law. Where it appears from the record that there is no reason and material to charge the petitioner for the offences under the PML Act, the Complaint is evidently vexatious. The principles relating to exercise of jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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