TMI Blog2021 (2) TMI 1262X X X X Extracts X X X X X X X X Extracts X X X X ..... evisional jurisdiction of this Court. The legislation of PMLA had been enacted with the objective to prevent and control money laundering and to confiscate and seize the property obtained from the laundered money. The PMLA is a specific and special enactment to combat the menace of laundering of money, keeping in view the illegal practices that have been surfacing with respect to transfer and use of tainted money and subsequent acquisition of properties by using the same - The offence of money laundering under the PMLA is therefore, layered and multi-fold and includes the stages preceding and succeeding the offence of laundering money as well. No scheduled offence was made out against the Respondents, this Court finds that an investigation and proceedings into the PMLA could not have been established against them at the first instance - This Court in its revisional jurisdiction will not proceed into the enquiry of the records, documents and other evidence in consideration before the learned Trial Court, but shall constrain itself to the findings of the learned Court below in the impugned order and to the question whether there is any patent illegality, error apparent on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47 of the Prevention of Money Laundering Act, 2002 (hereinafter PMLA ) seeking setting aside of Order dated 15th May, 2017, passed by the learned Special Judge, New Delhi District, Patiala House Courts, in CC No. 158/2014 titled as Enforcement Directorate vs Gagandeep Singh Ors , whereby all the accused persons were discharged on the ground that no prima facie case was made out against them. FACTUAL MATRIX 2. It is the background of the case that criminal proceedings under PMLA were initiated against Respondents by the Petitioner on the basis of independent intelligence gathered by them regarding money laundering activities. An FIR bearing No. 29/2011 under Section 21/25/29/61 of the Narcotic Drugs and Psychotropic Substance Act, 1985, (hereinafter NDPS Act ) and 420/468/471/120B of the Indian Penal Code, 1860 (hereinafter IPC ) was registered by the State Special Operation Cell, Amritsar against the Respondents alongwith other accused, and a Mutual Assistance Request (MAR) Note Verbale No. 458/2014 dated 27th August, 2014 (Letter of Request), was also issued by the Australian Competent Authority regarding the involvement of the Respondents in criminal activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 22nd November, 2014, a Criminal Complaint under Section 45 of the PMLA was filed by the ED against all the Respondents for commission of offence under Section 3 of the PMLA, on the basis of investigation carried out for the alleged money laundering activities of the Respondents. Investigation conducted by the ED supported with the documents received and collected clearly establishes the involvement of Respondents in commission of offence of money laundering under Sections 3 and 4 of the PMLA. Letters of request were also sent to Australia, Hong Kong, USA and Canada under Section 57 of the PMLA requesting for the details of the accounts and transactions done by and on behalf of the Respondents. 6. Vide Order dated 3rd August, 2015, the Respondents were acquitted of charges framed against them by the learned Additional Sessions Judge/Exclusive Court at Amritsar in FIR No. 29/2011 holding that the prosecution failed to lead any cogent or trustworthy evidence to prove that the accused, Respondents herein, entered into a criminal conspiracy and observed as under: - 46. I have given my thoughtful consideration to the arguments advanced on behalf of accused Paramdeep Singh and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y document which can be said to have been forged by these accused namely Paramdeep Singh and Gagandeep Singh nor it is alleged in evidence that any such forged document was used as genuine. In this regard, crossexamination of Investigating Officer is very much relevant wherein he admitted that no forged document was recovered from the possession of accused, meaning thereby that as far as charge under section 420/468/471 IPC is concerned, the same are also not proved on file. 49.These two accused namely Paramdeep Singh and Gagandeep Singh are also served with charge-sheet under section 29 of NDPS Act. However prosecution in the present case has failed to lead any cogent or trustworthy evidence to prove on file that these accused had entered into a criminal conspiracy with all other accused to send the drug money to Pakistan. Hence, as there is nothing on file on the basis of which it can be held that these two accused namely Paramdeep Singh and Gagandeep Singh had in any manner indulged in any act falling under NDPS Act, they stand acquitted of the charge under section 29 of NDPS Act also. 50. In view of above detailed discussion, this court is of the considered view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king in Australia. They have, also, been chargesheeted by the Special State Operation Cell, Amritsar, under the NDPS Act. It is submitted that the learned Additional Sessions Judge erred in concluding that prima facie case was not made out against the Respondents and as such the Order dated 15th May, 2017, is illegal and deserves to be set aside. 11. It is submitted that the learned Additional Sessions Judge, while passing the impugned Order has not appreciated that the documents relied upon, and the supplementary complaints filed corroborated that the accused persons/ Respondents No. 1 to 3 have committed the offence of money laundering under Section 3 of PMLA by laundering the ill-gotten funds, dealing with proceeds of crime generated through drugs and acquiring and concealing untainted property. It is further submitted that the Respondent No. 4 Company, operated by the Respondents No. 1 and 2, is registered as a money changer, whereas, investigation has revealed that the company has been used for laundering proceeds of crime made punishable by the PMLA. 12. Learned counsel for the Petitioner submitted that during investigation and searches carried out by the Petitioner, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. It is submitted that the statements of the Respondents No. 1 to 3 were recorded under Section 50 of the PMLA on several occasions from 27th-30th September, 2014. It is submitted that the Respondent No. 1 inter alia stated that he was dealing in sale and purchase of foreign exchange and also involved in money transfer from India to other countries illegally and that he was aware about the source of money that were being transferred between him and his counterparts abroad. Respondent No. 1 further stated that 30 per cent of the amount being transferred to him were relating to proceeds from drawn from illegal activities being carried out in other countries. Further, Respondent No. 2, in his statement further disclosed the information regarding his companies and the status of cases pending against him. Respondent No. 2 stated that he directed one Mr. Sanjeev Saini to deposit Australian money in his company s account, that is, SK Trading Private Limited, in Australia, and AVS Trading Limited in Hong Kong, in such a way that the legal authorities do not notice such deposits. Respondent No. 3, in his statement under Section 50 of the PMLA, stated that he was doing illegal business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case made by the Petitioner. 20. Learned senior counsel for the Respondents submitted that the primary and principal condition for initiation of investigation under the PMLA and to make out a case under Section 3 of the Act, is the commission of a scheduled offence from which the proceeds of crime are culminating. It is submitted that there is an umbilical cord connection between the scheduled offence and the offence of money laundering. Learned senior counsel for the Respondents relied upon Nikesh Tarachand Shah vs. Union of India, (2018) 11 SCC 1, wherein the Hon ble Supreme Court observed as under: - 11. Having heard the learned counsel for both sides, it is important to first understand what constitutes the offence of money laundering. Under Section 3 of the Act, the kind of persons responsible for money laundering is extremely wide. Words such as whosoever , directly or indirectly and attempts to indulge would show that all persons who are even remotely involved in this offence are sought to be roped in. An important ingredient of the offence is that these persons must be knowingly or actually involved in any process or activity connected with proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f crime been derived or obtained therefrom, no proceedings/trial under PMLA can continue. 24. With reference to the offences under Part C of the Schedule to the PMLA, that is, offences having cross-border implications, it is submitted by the learned senior counsel for the Respondents that there are two contingencies that need to be considered while establishing an offence under Part C, first, that the offence is committed outside India the proceeds of the crime are transferred into India or, second, that the offence is committed in India and the proceeds of crime are transferred outside India. It is submitted that in absence of either of the two, mere investigation or trial of any scheduled or predicate offence in India cannot ipso facto result in invocation of the provisions under PMLA. 25. It is submitted by learned senior counsel that the learned Special Judge has rightly discharged the Respondents in view of the fact that the only scheduled offence which was alleged against the Respondents was under NDPS Act, and even with respect to the alleged schedule offences, the Special Court (NDPS), Amritsar, held that there was no involvement of the Respondents in the same and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified under Part C of the Schedule. 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. Explanation . -For the removal of doubts, it is hereby clarified that, - (i) a person shall be guilty of offence of money-laundering 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the essential ingredients for the offence of Section 3 of the PMLA become, first, the proceeds of crime, second, proceeds of crime arising out of the offences specified in the Schedule of the Act and third, the factum of knowledge while commission of the offence of money laundering. In the present matter, at the initial stage of proceedings, the Respondents were charged for offences under Section 21/25/29 of the NDPS Act and 420/468/471/120B of the IPC, however, the learned Additional Sessions Judge, Amritsar, observed that material produced before the Court as well as the allegations made against the Respondents were largely made upon suspicion. Though certain material, properties and cash, were recovered and attached/seized but the fact that such properties were obtained through proceeds of crime of drug trafficking could not be established. 31. In view of the observation that the no scheduled offence was made out against the Respondents, this Court finds that an investigation and proceedings into the PMLA could not have been established against them at the first instance. 32. Further, the essential consideration is the extent of powers that may be exercised by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidence for coming to a different finding on facts. Revisional power is not and cannot be equated with the power of reconsideration of all questions of fact as a court of first appeal. Where the High Court is required to be satisfied that the decision is according to law, it may examine whether the Order impugned before it suffers from procedural illegality or irregularity. 34. This Court, in view of the aforesaid findings and the law laid down by the Hon ble Supreme Court, in its revisional jurisdiction will not proceed into the enquiry of the records, documents and other evidence in consideration before the learned Trial Court, but shall constrain itself to the findings of the learned Court below in the impugned order and to the question whether there is any patent illegality, error apparent on record or incorrectness. 35. At this stage in revisional jurisdiction, the question to be assessed is whether in the observations made by the learned Additional Sessions Judge there was gross illegality, incorrectness or apparent impropriety while discharging the Respondents. It is deemed necessary to establish the degree of consideration to be given to the material on record as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the commission of that offence. 39. The observations and findings of the Hon ble Apex Court elucidates that a Court need not go into deep and elaborate consideration of the material and evidence on record while framing charges against the Accused. The extent of exercise of discretion by the Court is limited to the prima facie satisfaction of the Court and if the Court does not find reasonable grounds of suspicion against the Accused, it may discharge him of the offences alleged against him. 40. In the present matter, the Petitioner had filed a Supplementary Complaint based on certain additional documents received by it against the Respondents, including, the Prosecution Report of Commonwealth Director of the Public Prosecution by the Australian Federal Police. The Petitioner based its findings against the Respondents on the said documents and alleged certain facts based on the apprehension that the amount being transferred from the business accounts of the Respondents were proceeds of drug trafficking and hence, was laundered money. Keeping in view all the material, including the abovementioned document, the Additional Sessions Judge was not satisfied that the apprehensi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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