TMI Blog2021 (6) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... int case, the Magistrate may not have any materials dehors the sworn statement of the complainant to take cognizance of the offences alleged in the complaint. In such cases, it will be desirable, if the Magistrate passes an order giving reasons for taking cognizance of the offence and issuing process. In this case, along with the complaint, the Enforcement Directorate has filed 56 documents and also the statements recorded under the PML Act, in support of the allegations in the complaint - The prosecution has to prove the offence, by adducing evidence and this opportunity has to be given to the prosecution in this case too. The prosecution of MJPL (A3) and Suresh Khatri (A4) cannot be said to be unfounded - Petition dismissed. - CRL.O.P.NOS.20127 & 25688 OF 2018 AND CRL.M.P. Nos.10736 & 14642 of 2018 - - - Dated:- 23-2-2021 - THE HONOURABLE MR. JUSTICE P.N. PRAKASH AND THE HONOURABLE MR. JUSTICE V. SIVAGNANAM For Petitioners : Mr. A. Ramesh Senior Counsel for Mr. Jayesh B. Dolia For Respondent : Mr. R. Sankaranarayanan Additional Solicitor General assisted by Mr. N. Ramesh Special Public Prosecutor for ED COMMON ORDER P.N. PRAKASH, J. For the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted into the account of MJPL (A3) and that the amounts so diverted, being proceeds of crime, was projected as untainted money. 5. In the complaint in C.C.No.13 of 2018, the Enforcement Directorate has given the following flowcharts : CHART ON ILLUSTRATION OF FLOW OF FUND GENERATED OUT OF PROCEEDS OF CRIME Consortium of Banks Credit Cash Limits extended favouring M/s.Kanishk Gold P. Ltd. into their various accounts held with the consortium of banks Amount transferred in the name of purchase of Gold in spite of no Physical Transport of Consignment (PLACEMENT OF PROCEEDS OF CRIME) Cash Credit Limit A/c.No.00040460000335 of M/s.Mohanlal Jewellers P. Ltd. held with M/s.HDFC Bank @ R.K.Salai, Chennai The Generated Proceeds of Crime is transformed into (LAYERING THE PROCEEDS OF CRIME) Various Fixed Deposits drawn at different dates between February 2018 and March 2018 aggregating to ₹ 143,58,41,369.90 and marked as lien to Gold Loan and lying with Bank @ R.K. Sali, Chennai and Diverting funds into the bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the above, the crux of the allegations against MJPL (A3) and its Managing Director, Suresh Khatri (A4) is that, from the loans given to KGPL (A1), a sum of ₹ 318.75 crores was transferred into the account of MJPL (A3) for the alleged purchase of gold bullions, but actually, no purchase was made and out of ₹ 318.75crores. A sum of ₹ 143 crores was found to be parked in the HDFC Bank in the form of 22 fixed deposits. The Enforcement Officer passed an order of interim attachment of the said 22 fixed deposits under Section 5 of the PML Act. But, the Adjudicating Authority, by order dated 17.10.2018, set aside the order of interim attachment under Section 8 of the PML Act. Challenging the same, the Enforcement Directorate has filed an appeal in the Appellate Tribunal at New Delhi in FPA-PMLA-2731/CHN/2018 MP-PMLA-5309/CHN/2018, wherein, an order of status quo has been passed on 11.02.2018, which reads as under : ... ... In the meanwhile, notice be issued to respondent No.4 i.e. Mohanlal Jewellers Pvt. Ltd. for the next date. 'Status quo' shall be maintained by the appellant and respondent no.4 with regard to the attached properties. 8. Mr.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1988, based on the report of the Chief Vigilance Commissioner. Thus, relying upon the aforesaid rulings and other connected rulings, Mr. A. Ramesh contended that in the teeth of the findings of the Adjudicating Authority exonerating MJPL (A3) and Suresh Khatri (A4) that the 22 fixed deposits are not proceeds of crime, the prosecution of MJPL (A3) and Suresh Khatri (A4) deserves to be quashed. 13. Per contra, Mr. R. Sankaranarayanan refuted the aforesaid contentions and stated that when the Directorate has taken the order of the Adjudicating Authority on appeal, this Court cannot quash the prosecution. He further contended that the scheme of adjudication under the PML Act is substantially different from the scheme that obtains in enactments like the FERA, the Customs Act, the Central Excise Act, etc. He also placed strong reliance on Section 48 of the Evidence Act, 1872 and submitted that, any custom or usage or right etc. has to be proved by the person who asserts it, in the manner known to law before the criminal Court and a finding by an Adjudicating Authority on such a matter is not conclusive and is not binding with criminal Court. 14. This Court gave its anxious consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Authority exonerates a person, its findings are binding on the criminal Court. In both the cases, the Supreme Court went deeply into the adjudication order and thereafter, quashed the prosecutions by holding that no useful purpose would be served by prosecuting the offender, in the light of the findings of the Adjudicating Authority. 19. In the case at hand, the picture is totally different. The criminal Court can independently come to a conclusion that the 22 fixed deposits were proceeds of crime and they were projected as untainted money from MJPL (A3) and Suresh Khatri (A4). The other distinguishing feature in this case is that, the total proceeds of crime is ₹ 318.75crores, out of which, the 22 fixed deposits represent only ₹ 143crores and for the balance amount which has gone into the kitty of MJPL (A3), they can be prosecuted as abettors of the offence of money laundering committed by KGPL (A1). Lastly, the order of the Adjudicating Authority in this case, has not attained finality and the same is pending before the Tribunal and therefore, on this ground too, the criminal prosecution cannot be quashed. 20. Mr.A.Ramesh placed strong reliance on the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no reason is given therein while coming to the conclusion that there is prima facie case against the accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect. The above passage should be seen from the context it was stated. It was stated in the context in which, Sunil Bharti Mittal was not an accused in the charge sheet and he was included as an accused by the Special Judge, while taking cognizance of the offence disclosed in the charge sheet. Similarly, in Mehmood Ul Rehman (supra), the Supreme Court dealt with a private complaint for defamation. It may be pertinent to extract paragraph 21 of the said judgment : 21. Under Section 190(1)(b) CrPC, the Magistrate has the advantage of a police report and under Section 190(1)(c) CrPC, he has the information or knowledge of commission of an offence. But under Section 190(1)(a) CrPC, he has only a complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in the complaint. 25. The Supreme Court was aware that in a private complaint, apart from the complaint, there will not be any other material before the Magistrate, while taking cognizance. This is clear from the underlined portion in paragraph 21 of Mehmood Ul Rehman (supra). Superadded, we cannot lose sight of the following judgments of the Supreme Court, wherein, it has been held in no uncertain terms that failure of the Magistrate to pass a detailed cognizance order, will not vitiate the act of taking cognizance: U.P. Pollution Control Board Vs. Mohan Meakins Ltd. and others [(2000) 3 SCC 745] Kanti Bhadra Shah and another Vs. State of West Bengal [(2000) 1 SCC 722] Dy. Chief Controller of Imports Exports Vs. Roshanlal Agarwal and others [(2003) 4 SCC 139] Jagdish Ram Vs. State of Rajasthan and another [(2004) 4 SCC 432] Bhushan Kumar and another Vs. State (NCT of Delhi) and another [(2012) 5 SCC 424] In Bhushan Kumar (supra), the Supreme Court has held in unequivocal terms that the summoning order under Section 204 Cr.P.C. requires no explicit reasons to be stated because, it is imperative that the Magistrate must have taken n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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