TMI Blog2023 (3) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... sclose that the accused invited deposits promising exorbitant rate of interest, not subjected such monetary transaction for audit, not returned the amount i.e., due to the investors on time and on the other hand, the amounts were being invested in the landed properties in the name of the accused. Apparently, the petitioner could not justify collection of crores of rupees from thousands of depositors, promising to pay return as high as upto 90%. Prima facie, the intention of the accused may attract Section 420 of IPC, for which a criminal complaint is already lodged way back in the year 2018. To constitute the proceeds of crime as defined under Section 2(u) of PMLA, the prosecution has to prove that the properties derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. As per Section 3 of PMLA, even concealment, possession, acquisition, use of proceeds or claiming the proceeds of crime as untainted property would amount to money laundering - to constitute the offence of money laundering, the prosecution has to establish that the petitioner had indulged in criminal activity relating to scheduled offence, the property referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst M/s Injaz International and its associated group, alleging commission of offences under Section 3, 4 and 5 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, under Section 420 of Indian Penal Code, 1860 and under Section 76 of Chit Funds Act, 1982 with Wilson Garden Police Station and FIR came to be registered in Crime No. 157 of 2018 on 07.09.2018. The offence under Section 420 of IPC is the scheduled offence under PMLA. 3. It is stated that accused No. 2 i.e., the petitioner was apprehended on 15.11.2022 after subjecting him for interrogation. It is specifically stated that no search and survey were conducted, no proceeds of crime have been attached, seized or frozen. However, it is stated that the further investigation is still in progress and the complainant reserves right to attach, freeze such proceeds of crime during further investigation. The complaint also discloses that the petitioner had appeared before the Investigating Officer on 06.12.2021, again on 15.11.2022 and his statements were recorded. Even after his apprehension his statements were recorded. Since prima facie materials were collected for commission of the offence of money laundering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri P Prasanna Kumar, learned Special Public Prosecutor for the respondent. Perused the materials placed on record. 8. Learned counsel for the petitioner submitted that the case of the prosecution is entirely based on the so-called confession made by the petitioner recorded under Section 50 of PMLA. But none of the statements of the petitioner said to have been recorded during investigation disclose the ingredients of Section 420 of IPC. Moreover, the statements were recorded on or after 15.11.2022 i.e., after apprehending the accused and while he was in custody. Those statements are inadmissible in evidence as hit by Article 20(3) of the Constitution of India. 9. Learned counsel further submitted that there are no prima facie materials to constitute any offence as alleged. There are no victims of cheating to constitute the offence under Section 420 of IPC. None of the depositors came forward to contend that they were cheated by the accused. There is no proceeds of crime even according to the complainant and nothing has been attached, seized or frozen. When intention to cheat or mens rea on the part of the accused is absent, no offence is made out. 10. Learned counsel furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conduct. The accused collected huge sums of money under promise to pay huge returns, but instead of returning the amount, the same was invested in the landed properties, which is nothing but cheating under Section 420 of IPC, which is a scheduled offence. At this stage, it is enough to show that the petitioner had obtained or derived the proceeds of crime. 13. He further submitted that the complaint filed by the complainant discloses that the accused instead of repaying the amount, used to invest the proceeds of crime in purchasing the valuable properties and indulged in money laundering as defined under Section 2(u) of PMLA. Explanation to Section 2(u) makes it clear that even the property which may directly or indirectly derived or obtained as a result of such criminal activity relatable to the schedule offence also constitute proceeds of crime. During investigation, the statements of the petitioner were recorded which disclose about the investment of huge amounts in purchase of land and buildings. The list of such assets are appended in the complaint. The details of the bank account is also stated in the complaint. 14. As per Section 24 of PMLA, there is presumption in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of offence and the amount involved, the Enforcement Directorate took up investigation to investigate about the scheduled offence. It is stated that accused Nos. 2 and 3 have appeared before the Investigating Officer on few occasions and thereafter, accused No. 3 remained absent. After questioning accused No. 2 and recording his statements on 15.11.2022, he was apprehended. 18. The grounds of arrest submitted by the Investigating Officer produced at Annexure-B discloses that accused No. 1 being the firm, accused Nos. 2 and 3 being the partners have cheated the depositors and violated RBI guidelines. They are luring the depositors with promise to pay high returns, since 2016. The money so collected was lured through various bank accounts. They have not filed any returns nor it was subjected to audit. The amounts so collected were also not returned to the investors. Therefore, it is stated that Enforcement Directorate is having sufficient materials with reasons to believe that the petitioner is guilty of the offence of money laundering. 19. It is contended that, even though the petitioner has not revealed anything about the possession, concealment, loss or gain from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint. Apparently, the statements of the petitioner recorded by the Investigating Officer disclose that the accused invited deposits promising exorbitant rate of interest, not subjected such monetary transaction for audit, not returned the amount i.e., due to the investors on time and on the other hand, the amounts were being invested in the landed properties in the name of the accused. 22. It is stated that, the statements of the investors are not recorded to constitute the offence of cheating. However, apparently, the petitioner could not justify collection of crores of rupees from thousands of depositors, promising to pay return as high as upto 90%. Prima facie, the intention of the accused may attract Section 420 of IPC, for which a criminal complaint is already lodged way back in the year 2018. To constitute the proceeds of crime as defined under Section 2(u) of PMLA, the prosecution has to prove that the properties derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. As per Section 3 of PMLA, even concealment, possession, acquisition, use of proceeds or claiming the proceeds of crime as untainted property would amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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