TMI Blog2023 (8) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in Vinubhai Haribhai s case [ 2019 (10) TMI 1428 - SUPREME COURT ] that What is not given any importance at all in the recent judgments of this Court is Article 21 of the Constitution and the fact that the Article demands no less than a fair and just investigation. To say that a fair and just investigation would lead to the conclusion that the police retain the power, subject, of course, to the Magistrate s nod under Section 173(8) to further investigate an offence till charges are framed, but that the supervisory jurisdiction of the Magistrate suddenly ceases mid- way through the pre-trial proceedings, would amount to a travesty of justice, as certain cases may cry out for further investigation so that an innocent person is not wrongly arraigned as an accused or that a prima facie guilty person is not so left out. There is no warrant for such a narrow and restrictive view of the powers of the Magistrate, particularly when such powers are traceable to Section 156(3) read with Section 156(1), Section 2(h), and Section 173(8) of the CrPC Reverting back to this case, it is apt to reiterate that the so called proceeds of the crime was not specifically described ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, cognizance was taken under Section 4 of the Prevention of Money Laundering Act, 2002, (PMLA for short). On 29.12.2021, a formal charge was framed and this case was posted for evidence. As trial had already commenced, petition with prayer for further investigation was rejected by the learned trial Court. 4. It is submitted on behalf of the petitioner that on the basis of the FIRs registered by the Assam Police, which was later transferred to the Central Bureau Investigation, Guwahati, and re-registered by CBI, vide FIRs bearing No. RC 0172015A0007 and RC 0172015A0008, under Sections 120B 420 of IPC, 1860, and ECIR bearing No. ECIR/GWZO/03/2014 was recorded on 16.12.2014, as the Sections incorporated in the FIRs are Scheduled Offences within the meaning of Section 2(1)(y) of PMLA, 2002 for investigating the said matter under the Provisions of PMLA, 2002. After recording of ECIR, several properties worth Rs. 4.63 Crores were attached to the State of Assam. The prosecution complaint was filed before the learned Court of Special Judge, Assam, Guwahati on 12.07.2018, as per the statutory mandates, with rider that the investigation in this case is still continuing . 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntil trial commences, the power of further investigation can be directed and this power can also be exercised suo motu by the Magistrate himself, depending on the facts of each case. It is submitted that it was erroneously held by the trial Court that in the case at hand, the charge has already been framed and the trial of the case has already commenced and the Investigating Agency cannot be directed to proceed with further investigation of the case. It is also submitted by the petitioner that Section 45 of the PMLA Act refers only to the term Special Court and therefore has to be given restricted meaning, that Section 45 of the PMLA Act begins with a non obstante clause which indicates that the provisions laid down in Section 45 of the PMLA will have an overriding effect on the general provisions of the Code of Criminal Procedure, in case of conflict between them. Section 5 of the Code of Criminal Procedure, also provides that the provisions of the Code of Criminal Procedure will not affect any special statute or any local law; implicating that any special statute will prevail over the general provisions of the Cr.P.C in case of any conflict. 10. It is averred that the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crime, which allegedly surfaced during the course of the trial has not been specifically described. The evidence of PW-1 has already been recorded. No property was attached under Section 5 of the Act. Without mentioning the quantum of the proceeds of crime, further investigation relating to the same offence is debarred under Article 20 (3) of the Constitution of India. No property has been attached under Section 5 of the PML Act. 15. Both parties have also deliberated on the ingredients and the meaning of Section 3 of the PMLA of 2002. The petition No. 363/2022 was filed on 10.03.2022. This case was initiated against the respondents in the year 2018, when the FIRs No. RC 0172015A0007 and RC 0172015A0008 was registered on 22.08.2018. The case was thereafter, registered as Special PMLA case No. 18/2018. The scanned copies of the LCR reveals that charge was framed on 29.12.2021. On 17.08.2022, the evidence of PW-1 Shri Kishore Kumar Nath was recorded. The trial has commenced. It has been held by the Hon ble Supreme Court in Vinubhai Haribhai s case (supra) that:- There is no good reason given by the Court in these decisions as to why a Magistrate s powers to order further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments in Amrutbhai Shambubhai Patel (supra), Athul Rao (supra) and Bikash Ranjan Rout (supra) have held to the contrary, they stand overruled. Needless to add, Randhir Singh Rana v. State (Delhi Administration) (1997) 1 SCC 361 and Reeta Nag v. State of West Bengal and Ors. (2009) 9 SCC 129 also stand overruled. 16. The so called proceeds of the crime alleged to have been amassed by the respondents came to the notice of the petitioner at a later stage. Trial has already commenced. It is true that, if there are any proceeds of the crime, the same may have to be attached, but at this stage, no order can be passed for further investigation as evidence of PW-1 has already been recorded. 17. It is submitted that it has been held in Vijay Madanlal Choudhary and Others Vs. Union of India and Others reported in 2022 SCC OnLine SC 929 that:- 246. We would now elaborate upon the meaning of investigation in Clause (na) of Section 2(1). It includes all proceedings under the Act conducted by the Director or an authority authorised by the Central Government under this Act for collection of evidence. The expression all the proceedings under this Act unquestionably re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 5 deserves to be confirmed and to direct confiscation of the property in question. The expression investigation , therefore, must be regarded as interchangeable with the function of inquiry to be undertaken by the authorities for submitting such evidence before the Adjudicating Authority. 248. In other words, merely because the expression used is investigation which is similar to the one noted in Section 2(h) of the 1973 Code, it does not limit itself to matter of investigation concerning the offence under the Act and Section 3 in particular. It is a different matter that the material collected during the inquiry by the authorities is utilised to bolster the allegation in the complaint to be filed against the person from whom the property has been recovered, being the proceeds of crime. Further, the expression investigation used in the 2002 Act is interchangeable with the function of inquiry to be undertaken by the Authorities under the Act, including collection of evidence for being presented to the Adjudicating Authority for its consideration for confirmation of provisional attachment order. We need to keep in mind that the expanse of the provisions of the 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating to or relatable to scheduled offence, must be regarded as proceeds of crime for the purpose of the 2002 Act. It must follow that the Explanation inserted in 2019 is merely clarificatory and restatement of the position emerging from the principal provision [i.e., Section 2(1)(u)]. 251. The proceeds of crime being the core of the ingredients constituting the offence of money-laundering, that expression needs to be construed strictly. In that, all properties recovered or attached by the investigating agency in connection with the criminal activity relating to a scheduled offence under the general law cannot be regarded as proceeds of crime. There may be cases where the property involved in the commission of scheduled offence attached by the investigating agency dealing with that offence, cannot be wholly or partly regarded as proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act so long as the whole or some portion of the property has been derived or obtained by any person as a result of criminal activity relating to the stated scheduled offence. To be proceeds of crime, therefore, the property must be derived or obtained, directly or indirectly, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the 2002 Act or any of the scheduled offences. In the earlier part of this judgment, we have already noted that every crime property need not be termed as proceeds of crime but the converse may be true. Additionally, some other property is purchased or derived from the proceeds of crime even such subsequently acquired property must be regarded as tainted property and actionable under the Act. For, it would become property for the purpose of taking action under the 2002 Act which is being used in the commission of offence of money-laundering. Such purposive interpretation would be necessary to uphold the purposes and objects for enactment of 2002 Act. 253. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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