TMI Blog2022 (9) TMI 1427X X X X Extracts X X X X X X X X Extracts X X X X ..... the goodwill of the parties, the same cannot be compensated. Whereas if the Department waits for the final outcome of the proceedings, no prejudice would be caused to them - since the ECIR itself was only on the basis of the said three First Information Reports, when the proceedings pursuant to the said First Information Reports have been stayed by the High Court, whether the ECIR, which is also pursuant to the First Information Reports, can be proceeded with, is a question that stares at open. The considered answer is in the negative. Generally, the summons are issued for appearance of a party on a particular date. If a party does not appear on the given date, fresh summons demanding the appearance of the person have to be issued. In the present cases, in view of the reasonings and the findings as stated, the last of the summons issued to the petitioners for their appearance on 09.05.2022 have elapsed. Petition allowed. - W.P. Nos. 12159, 18209 & 18213 of 2022 - - - Dated:- 1-9-2022 - THE HONOURABLE MR. JUSTICE T. RAJA AND THE HONOURABLE MR. JUSTICE K. KUMARESH BABU For Petitioners : Mr.Sriram Panchu Senior Counsel for Mr.K.S.Arivazhagan in W.P.No.12159 of 2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will and on minimum consultation charges. In the year 2014, when the Department of Transport of the State of Tamil Nadu announced the recruitment process, the petitioner informed one Rajkumar and other people about the vacancies existed then and the requisite qualification to participate in the selection process. Based on the said information, Mr.Rajkumar introduced Mr.Arulmani, the de-facto complainant in FIR No.344 of 2018. Again Mr.Arulmani introduced about 13 people for the valid services to be provided by the petitioner, for which the petitioner collected consultation charges from the said Arulmani, the defacto complainant. When the candidates who had participated in the selection process were unable to get the jobs, for the reason that the Department has chosen meritorious candidates who secured more marks than the unsuccessful candidates, they insisted the said Arulmani to return the consultation charges, for which the petitioner refused saying that the consultation charges are part and parcel of his profession. When the petitioner denied the return of consultation charges, a dispute arose between the de-facto complainant and the petitioner. After sometime, the petitioner an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated for the reasons best known to the CCB, Chennai. A similar complaint lodged by one Mr.Devasagayam against various others was registered in Crime No.441 of 2015 dated 25.10.2015. But when the First Information Report does not involve the petitioner herein in any manner, as he was unconnected to the entire dispute, the CCB, Chennai filed the final report in C.C.No.24 of 2021 showing the petitioner as Accused No.2. But there was no allegation or complaint and not even a statement against the petitioner. In the meanwhile, one witness R.B.Arunkumar filed a petition for further investigation in C.C.No.3627 of 2017, wherein also it has been stated that the petitioner was not connected to the occurrence, though specific complaints were raised against others in C.C.No.24 of 2021. The de-facto complainant Mr.Devasagayam also filed Criminal Original Petition No.15122 of 2021 seeking for de novo investigation, on the ground that the investigation culminated in the final report in C.C.No.24 of 2021 dated 18.03.2021 is contrary to the complaint of the de-facto complainant and this Court had granted interim stay of further proceedings in C.C.No.24 of 2021 observing that a prima facie case has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re levelled against the petitioner that he received money for appointment of Drivers and Conductors in the Transport Department through the other accused in the calendar cases. Due to the dispute cropped up in this regard, Mr.Devasagayam, Mr.Arulmani and Mr.V.Ganesh Kumar filed criminal cases, which came to be registered by the Central Crime Branch, Chennai for the alleged offence under Sections 406, 420 read with 34 of IPC in FIR No.441 of 2015; for the offence under Sections 406, 420 and 506(i) of IPC in FIR No.298 of 2017 and for the offence under Sections 406, 420 506(i) of IPC in FIR No.344 of 2018, respectively. Consequent to the registration of the above First Information Reports, investigation agency proceeded with the investigation and the final reports were filed on various dates. So far as the petitioner is concerned, he was arrayed as Accused No.2 only in Crime No.344 of 2018 for the offence under Sections 406, 420 506(i) of IPC. One of the co-accused, Mr.B.Shanmugam challenged the final report filed in C.C.No.25 of 2021 before this Court in Criminal Original Petition No.13374 of 2021, however, the matter was settled amicably between the de-facto complainant and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est in the eye of law. Mr.Aryama Sundaram again pleaded that when three criminal cases were registered in Crime No.441 of 2015 dated 29.10.2015, Crime No.298 of 2017 dated 09.09.2017 and Crime No.344 of 2018 dated 13.08.2018 by the Central Crime Branch, Chennai, which culminated in the proceedings under C.C.No.24 of 2021, C.C.No.19 of 2020 and C.C.No.25 of 2021 respectively before the Additional Special Court for Trial of Cases related to Members of Parliament and Members of Legislative Assembly of Tamil Nadu, Chennai, the proceedings in C.C.No.25 of 2021 were quashed by this Court in Criminal Original Petition No.13374 of 2021 vide order dated 30.07.2021 and in respect of the proceedings in the other two calendar cases in C.C.No.19 of 2020 and C.C.No.24 of 2021, the same have been stayed until further orders by this Court in Criminal Revision Case No.224 of 2021 vide order dated 18.04.2022 and in Criminal Original Petition No.15122 of 2021 vide order dated 01.10.2021 respectively, therefore, as per the ratio laid down by the Apex Court in Arun Kumar and others v. Union of India and others, (2007) 1 SCC 732, the existence of jurisdictional fact being a sine qua non or condition pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y maintainable. Taking support from the judgment of the Apex Court in the case of State of Punjab v. Davinder Pal Singh Bhullar and others, (2011) 14 SCC 770, Mr.Luthra submitted that if a foundation is being removed, structure/work falls. In the cases on hand, as canvassed already, the proceedings in one of the calendar cases came to be quashed and the proceedings in the remaining two calendar cases have been stayed by this Court, besides, when there are no fundamental jurisdictional facts, the proceeds of crime and links are not even available, the legal maxim sublato fundamento cadit opus, meaning thereby that foundation being removed, structure/work falls, comes into play in the present cases. 6. Mr.Luthra, referring to paragraphs 107, 108 109 of the said judgment explained that it is a settled legal proposition that if initial action is not in consonance with law, all subsequent and consequential proceedings would fall through for the reason that illegality strikes at the root of the order. Adding further, it was argued that in Badrinath v. Government of Tamil Nadu, (2000) 8 SCC 395 and State of Kerala v. Puthenkavu N.S.S. Karayogam, (2001) 10 SCC 191, the Apex Court obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2021 against C.C.No.25 of 2021, C.C.No.19 of 2020 and C.C.No.24 of 2021 respectively, under Rule 210 of the Criminal Rules of Practice, 2019 for furnishing the certified copies of FIR, the statements of witnesses recorded under Section 161(3) and 164 of Cr.P.C., final report filed by the CCB, Chennai under Section 173(2) of Cr.P.C., copies of the data recorded in digital evidences, relied upon documents and the copies of e-mail correspondences recovered during the course of investigation by the CCB, Chennai. The Additional Special Court partially allowed the petitions in its order dated 09.11.2021 by granting the certified copies of FIR, the statements of witnesses recorded under Section 161(3) and 164 of Cr.P.C., and the final report filed by the CCB, Chennai under Section 173(2) of Cr.P.C., however, the trial Court declined to grant the certified copies of the unmarked documents. Therefore, the respondent Department approached the High Court with Criminal Original Petition Nos.5725 to 5727 of 2022 seeking a direction to the Additional Special Court to grant the certified copies of the unmarked documents. After hearing the cases, the High Court, by order dated 30.03.2022, settin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Additional Solicitor General argued that the degree of proof of the scheduled offence and the offence of money-laundering are altogether different, as the Prevention of Money-laundering Act is a special statute, casting a burden on the person charged with the offence of moneylaundering to prove that such proceeds of crime are untainted. On this basis, learned Additional Solicitor General pleaded that the offence under the Prevention of Money-laundering Act is a standalone offence, therefore, the summons issued under Section 50 of the Prevention of Money-laundering Act have to be obeyed and it cannot be questioned before this Court. Again taking support from the judgment of the Apex Court in Union of India and another v. Kunisetty Sathyanarayana, (2006) 12 SCC 28, Mr.Sankaranarayanan submitted that no writ will lie against the charge sheet or show cause notice. Since the Apex Court has held that a writ will lie when some right of any party is infringed and a mere show cause notice or charge sheet does not infringe the right of any one, these writ petitions are liable to be dismissed. 9. In reply, Mr.Aryama Sundaram, learned Senior Counsel argued that the Prevention of Money-la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of scheduled offence. But if the same are quashed and closed, there is no live proceedings. In none of the cases, there is any proceeds of crime. In the case of the petitioner, there is no live crime, because it has been quashed. Referring to paras 53 to 55 of the Supreme Court judgment in Vijay Madanlal Choudhary and others, at page 297 of the paperbook, he finally referred to the ratio decidendi at page 533, para 187(iv)(d). Concluding his reply, Mr.Aryama Sundaram summed up as follows:- (1) So far as the petitioner is concerned, on the strength of the judgment of the Supreme Court in Vijay Madanlal Choudhary and others, merely on the ground that when the underlying offence is quashed, there cannot be any offence of money laundering. (2) The other three grounds are common with everybody else. According to him, there are no proceeds, leave alone proceeds of crime, atleast they should have proceeds. But there are no proceeds, therefore, the second essential fact is also missing for invoking the jurisdiction. (3) They should identify the proceeds and have reason to believe that there are proceeds of crime. In these cases, they have not identified the proceeds, leave al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order dated 01.10.2021 passed in Criminal Original Petition No.15122 of 2021. The said facts have not been disputed by Mr.R.Sankaranarayanan, learned Additional Solicitor General appearing on behalf of the respondent. 13. We have also gone through the judgment of the Hon'ble Apex Court in Vijay Madanlal Choudhary and others, 2022 (10) SCALE 577, which has dealt with the validity of the Prevention of Money-laundering Act in extenso. The Hon'ble Apex Court, while dealing with the powers of the authority to proceed against a person under the Prevention of Moneylaundering Act, has categorically held that when a person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by a Court of competent jurisdiction, then, there can be no offence of money-laundering against that person. This ratio also has been subsequently followed by the Supreme Court in Parvathi Kollur and another v. State by Directorate of Enforcement, 2022 LiveLaw (SC) 688. For better appreciation, paragraph 187(v)(d) of the judgment of the Apex Court in Vijay Madanlal Choudhary and others, is extracted as follows:- 187. In light of the above analysis, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inally the said cases are allowed, and in the meanwhile, if the respondent is allowed to proceed and take any coercive steps against the petitioners protected by the orders of stay, the prejudice caused to the petitioners cannot be effaced and it would cause severe hardship and irreparable loss to them. Mr.Sidharth Luthra, learned Senior Counsel, persuading us to drive home his point, relied upon an order passed by a learned single Judge of the Calcutta High Court in WPA No.17454 of 2022 dated 10.08.2022 (M/s Rashmi Metaliks Limited and another v. Enforcement Directorate and others), holding that during the subsistence of the order of stay, the respondent Department cannot initiate any action. 15. What is the effect of a stay order? The effect of an order of stay means that the operation of the impugned order is stayed or stands stalled as if the impugned order does not exist. Therefore, to bring the parties to the proceedings from taking further action in relation to the subject matter pending the final adjudication, stay order is granted in the interest of both parties. During the currency of stay order, if any proceedings are permitted to go on and in the meanwhile, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d offence, there is no document or pleading on the side of the respondent to substantiate that there are proceeds of crime as per Section 2(1)(u) of the Prevention of Money-laundering Act and that proceeds had a link with the scheduled offence. According to them, out of three calendar cases, one has been quashed and two Calendar Cases have been stayed. Therefore, in the eye of law, firstly, there is no scheduled offence as per section 2(y) of the Prevention of Money-laundering Act, 2002 as on this date for the respondent to proceed under the said Act. 18. On the contrary, Mr.R.Sankaranarayanan, learned Additional Solicitor General strenuously contended that it is true that the proceedings have been stayed, but that does not mean the offence has been wiped out. Till it is quashed by a competent Court or the person is discharged or acquitted, the offence continues to be alive and the respondent has the authority to proceed under the Act. 19. Let us see what is the jurisdictional fact to be taken into account by a Court before assuming jurisdiction over a particular matter. The Hon'ble Supreme Court explaining the above facts in Arun Kumar and others v. Union of India and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis, namely, the proceedings which culminated through the First Information Reports had been stayed, the respondent should await the result of such proceedings before continuing any further under the Prevention of Money-laundering Act. It is the further case of the learned Additional Solicitor General that the Hon'ble Supreme Court in Vijay Madanlal Choudhary and others has held that the summons issued to the individual is to collect factual evidence as regards to the offence of money-laundering. It is his further case that only after concluding such inquiry, the authorities under the Prevention of Money-laundering Act could proceed any further as provided under the Act, that is, after ascertaining the proceeds of crime and its nexus with the scheduled offence. Till the First Information Report is quashed, the scheduled offence continues to be alive. 22. In our view, the grant of stay of any particular proceedings would amount to eclipsing the proceedings initiated. An order of stay is interim in nature pending the final proceedings. The Hon'ble Apex Court in State of Haryana and others v. Bhajan Lal and others, 1992 Supp (1) SCC 335, in paragraph-5 stated thus: Ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... staying of the proceedings in C.C.No.19 of 2020 C.C.No.24 of 2021 as highlighted above, the scheduled offence for the present is eclipsed, suspended or stop operating during the period of stay, the respondent Department has to await the finality of the said proceedings. Needless to mention, if the proceedings in C.C.No.19 of 2020 and C.C.No.24 of 2021 are quashed pursuant to the orders in the applications filed by the respective persons to quash the proceedings, in which event, the respondent cannot step in or initiate any proceedings under the Prevention of Money-laundering Act, as held by the Hon'ble Supreme Court in Vijay Madanlal Choudhary and others and in Parvathi Kollur and another v. State by Directorate of Enforcement, 2022 LiveLaw (SC) 688 cited supra. Therefore, the respondent is hereby refrained from proceeding any further pursuant to the impugned proceedings in ECIR/MDSZO/21/2021, till the disposal of the Criminal Revision Case No.224 of 2021, Criminal Original Petition No.15122 of 2021 and the SLP (Crl) Diary No.9957 of 2022 (SLP (Crl) No.3841 of 2022). 24. In the light of the above directions, the writ petitions are allowed. Consequently, W.M.P.Nos.11607, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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