TMI Blog2024 (3) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Courts to separate the grain from the chaff with a view to ensure that whereas the rights of citizens are not harmed, litigation also does not flood the Courts. The first argument that once the operation of the impugned order dated 07.01.2021, passed by the Chief Judicial Magistrate, Gurugram and further proceedings in the consequential FIRs Nos. 10 11 dated 14.01.2021 respectively had been stayed, the ECIR could not have been recorded, is devoid of merit - It has been categorically held by the Hon ble Supreme Court of India in the case of MANIK BHATTACHARYA VERSUS. RAMESH MALIK AND ORS. [ 2022 (10) TMI 1196 - SUPREME COURT] that a restraint order passed in a criminal matter would not affect proceedings under the PMLA especially once the Enforcement Directorate was not a party to the same and also because the offence of money laundering is an independent offence wherein, an accused would have independent remedies in case of violation of the statutory provisions. The second argument that once, vide orders dated 05.07.2023, the Chief Judicial Magistrate, Gurugram had been directed to pass a fresh order on the complaint filed under Section 156 (3) Cr.P.C., the orders dated 07.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther FIRs referred to therein. It is also clear from a perusal of the aforesaid judgment that since there were other FIRs also, proceeds of crime cannot be ruled out and, therefore, it cannot be said that no offence of money laundering can be said to have been committed - The reality would emerge only once the concerned Investigating Agencies conclude the investigation/inquiry. The petitions are devoid of merit and accordingly, the same are dismissed. - HON'BLE MR. JUSTICE ARUN PALLI AND HON'BLE MR. JUSTICE VIKRAM AGGARWAL Present : For the Petitioner : Mr. Ashok Aggarwal, Senior Advocate with Mr. Hari Pal, Mr. Mukul Aggarwal and Mr. Shrenik Jain, Advocate in CRM-M-51250-2023. For the Petitioners : Mr. Vikram Chaudhari, Senior Advocate with Mr. Hargun Sandhu, Advocate in CRM-M-37710-2023 For the Respondents : Mr. S.V. Raju, Additional Solicitor General of India with Mr. J.S. Lalli, Deputy Solicitor General, For the Respondents-Enforcement Directorate : Mr. Lokesh Narang Mr. Shobit Phutela, Senior Panel Counsel, VIKRAM AGGARWAL, J CRM-47079-2023, CRM-47080-2023 CRM-47985-2023 in CRM-M-51250-2023 and CRM-35285-2023 CRM-35305-2023 CRM-35308-2023 CRM-48105-2023 in CRM-M-37710 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een sought, for, at the time of filing of the said petition, the order (ibid) had not been passed. FACTUAL MATRIX 2. The facts, germane to the issue in hand, are being extracted from CRM-M-51250-2023. 3(i) One Neeraj Chaudhary submitted two complaints bearing Nos. 486 of 2020 487 of 2020 (Annexures P-5 P-6) in the Court of Chief Judicial Magistrate, Gurugram under Section 200 of the Code of Criminal Procedure (for short Cr.P.C. ) read with Section 156(3) Cr. P.C. seeking directions for registration and investigation of the complaints (ibid) at Police Station Sushant Lok, Gurugram, under Sections 120-B, 406, 420, 467, 468, 471 IPC. The petitioners Sikandar Singh and Vikas Chhoker were arraigned as accused in the said complaints apart from 13 other persons by name and other accused, if found involved after investigation. Broadly, the allegations were that the petitioners and other persons named in the complaint alongwith other unnamed persons were in construction business and had duped the investors after having obtained licence to develop a housing project in Sector 68, Gurugram which also had been obtained on submission of forged and fabricated documents. It was alleged that about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent-ED is alleged to have raided the house of the petitioners on 25.07.2023 in their absence when only women members were present. A representation dated 26.07.2023 (Annexure P-15) was also submitted by the counsel for the petitioners protesting against the said search/raid. Certain documents were seized during the said raid as per the Panchnama (Annexure P-16). REPLY 5(i). The petitions have been opposed by the respondents-ED by way of separate replies, though on the same lines. 5(ii). Certain preliminary submissions have been made. It has been averred that the investigation and inquiry against the petitioners was only at the initial stage. The petitioners cannot be said to be aggrieved of the same and, therefore, the petitions are pre-mature. Reference has been made to paragraph 457 of the judgment of the Hon ble Apex Court in the case Vijay Madanlal Choudhary and Others Vs. Union of India and Others , 2022 SCC OnLine SC 929. It has been averred unlike an FIR, there is no requirement of formally registering an ECIR. An ECIR is an internal document created by the department before initiating penal action and there is no requirement to furnish a copy thereof to the accuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry Planning, Haryana (hereinafter referred to as the DTCP ) multiple times for obtaining licences in respect of the housing project. 5(x). The respondents-Directorate of Enforcement (in short 'the respondents-ED') also came to examine the FIR and accordingly ECIR No. GNZO/20/2021 dated 16.11.2021 (hereinafter referred to as the ECIR ) was recorded against the Company and other persons. 5(xi). In internal investigations conducted by the DTCP, it was found that the Company had submitted fake/forged bank guarantees. Accordingly, the licence issued to the Company for development of the project in Sector 68, Gurugram was cancelled on 09.05.2022. 5(xii). The DTCP office initiated a complaint to register an FIR under Section 10 of the Haryana Development and Regulation of Urban Areas Act, 1975 (hereinafter referred to as the 1975 Act ) and the relevant provisions of IPC against the Company. Other companies of the Mahira Group were also black-listed by the DTCP. Another FIR No. 0175 dated 18.05.2022 was registered by the Gurugram Police under Section 10 of the 1975 Act and subsequently Sections 120-B, 201, 420, 467, 468, 471 IPC were also added. 5(xiii). These developments led to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Single Bench of this Court on 05.07.2023 (Annexures P-13 P-14) and again allowed the application filed under Section 156 (3) Cr.P.C. and directed the Station House Officer of Police Station Sushant Lok, Gurugram to conduct proper investigation in the FIRs registered earlier. Still further, though, during the course of arguments, it was pointed out that even the order dated 26.10.2023 has been challenged again and that the matter having been heard by a Single Bench of this Court, the judgment stands reserved for pronouncement. After arguments in the present case had been heard by us and judgment had been reserved, the judgment has now been pronounced on 16.01.2024 vide which CRM-M-56495-2023 and CRM-M-56496-2023 titled as Aditya Beri and another versus State of Haryana and another have been allowed and the order dated 26.10.2023 has been set aside. ARGUMENTS (PETITIONERS) 7(i). We have heard Sh. Ashok Aggarwal, learned Senior Counsel, who represented the petitioner Sikandar Singh, Sh. Vikram Caudhary, Senior Counsel, who represented the petitioners Dharam Singh Chhoker and Vikas Kumar Chhoker and Sh. S.V. Raju learned Additional Solicitor General of India who represented the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reference was made to paragraph 281 of the judgment rendered by the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and Others Vs. Union of India and Others , 2022 SCC OnLine SC 929. It was submitted that the offence under Section 3 of the PMLA is dependent upon illegal gain of property as a result of criminal activity relating to a scheduled offence. It was submitted that the authorities under the PMLA cannot prosecute any person on notional basis or on the assumption that a scheduled offence had been committed, unless it is so registered with the jurisdictional police and/or is pending inquiry/trial before the competent forum. It was submitted that if the accused is finally discharged/acquitted of the scheduled offence, there can be no offence of money laundering against him. 7(vi). It was further submitted that in any case, the Court below had no authority to issue non-bailable warrants to procure the presence of the petitioners once the order passed on the complaint filed under Section 156 (3) Cr.P.C. had been quashed and the non-bailable warrants would, therefore, be not sustainable. It was submitted that Section 73 Cr.P.C. would not empower a Court to issue n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.02.2023, CRLMC No.3059 of 2019 titled as Debendra Kumar Panda Vs. Union of India and Others , decided on 13.01.2023, CRR No.2752 of 2018 titled as M/s Nik Nish Retail Ltd. And Another Vs. Assistant Director, Enforcement Directorate, Government of India and Others , decided on 28.11.2022, Writ Petition No.10854 of 2020 titled as S. Jagathrakshakan Vs. The Deputy Director, Directorate of Enforcement, decided on 01.11.2022, State of Punjab Vs. Davinder Pal Singh Bhullar , (2011) 14 SCC 770, State Through CBI Vs. Dawood Ibrahim Kaskar and Others Gurjeet Singh Johar Vs. State of Punjab and Another , 2019 SCC OnLine P H 2606, Narayan @ Narayan Sai @ Mota Bhagwan Vs. State of Gujarat , 2014 (5) GLR 4165 and Raghuvansh Dewanchand Bhasin Vs. State of Maharashtra and another , (2012) 9 SCC 791. ARGUMENTS (RESPONDENTS) 8(i). Per contra, Sh. S.V.Raju, Addl. Solicitor General of India opposed the petitions with equal vehemence. It was submitted that the FIRs in question had been registered on the basis of cognizable offences having been committed and not solely on the directions issued by the Court of Chief Judicial Magistrate. Reference in this regard was made to the police proceedings in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ECIR since the offence of money laundering is an independent offence and registration of ECIR could not be construed to be proceedings in the FIRs. It was submitted that even FIRs, once registered could go only if no cognizable offence was disclosed. It was reiterated that merely because the order passed on the complaint under Section 156 (3) Cr.P.C. had been set aside, it would not mean that the FIRs also stood quashed. It was submitted that predicate offence did not arise out of the order dated 07.01.2021 but arose out of the FIRs and once the FIRs were in existence, the ECIR could very well have been registered. It was submitted that the present petitions infact seek review of the order dated 05.07.2023 which would not be permissible. Sh. S.V. Raju learned Additional Solicitor General of India submitted that pursuant to the orders dated 05.07.2023, the matter was considered afresh by the trial Court and order dated 26.10.2023 was passed allowing the complaint under Section 156 (3) Cr.P.C. It was submitted that even in the said order, the Court of Chief Judicial Magistrate, Gurugram did not issue any direction to register FIRs afresh and instead simply directed the police to inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Gujarat , 2022 SCC Online SC 952, Criminal Original Petition No.19880 of 2022 titled as P. Rajendran Vs. The Assistant Director, Directorate of Enforcement , decided on 14.09.2022, Radha Mohan Lakhotia Vs. Deputy Director, PMLA, Directorate of Enforcement , 2010 SCC Online Bom 1116, J. Sekar Vs. Union of India and Others , 2018 SCC Online Del 6523, Siddharth Mukesh Bhandari Vs. State of Gujarat , 2022 SCC Online SC 952, Union of India Vs. Padam Narain Aggarwal and Others , (2008) 13 SCC 305, SLP (Crl.) No. 9092/2022 titled as Vijay Kumar Gopichand Ramchandani Vs. Amar Sadhuram Mulchandani and Others , decided on 05.12.2022, The King Emperor Vs. Khawaja Nazir Ahmad , AIR 1945 PC 18, Dukhishyam Benupani, Asst. Director, Enforcement Directorate (FERA) Vs. Arun Kumar Bajoria , (1998) 1 SCC 52, WP (Crl.) No.109/2013 titled as Kirit Shrimankar Vs. Union of India and Others , Commissioner of Customs, Calcutta and Others Vs. M/s M.M. Exports and Another , (2010) 15 SCC 647, C.M. Raveendran Vs. Union of India , 2020 SCC Online Ker 7555, Virbhadra Singh and Another Vs. Enforcement Directorate and Another , 2017 SCC Online Del 8930, WP (Crl) No. 2392/2021 titled as Raghav Bahl Vs. Enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no allegation against the petitioner Dharam Singh Chhoker and accordingly proceedings against him cannot continue. 9(ii). It was also submitted that once he was not an accused in the FIRs Nos. 10 11 dated 14.01.2021 and once the ECIR had been registered on the basis of these FIRs, there would be no predicate offence. In so far as petitioner Dharam Singh Chhoker is concerned, the ECIR, therefore, would not be in a position to sustain qua him. ANALYSIS AND FINDINGS 10. We have given our thoughtful consideration to the arguments addressed by learned counsel for the parties. The numerous and voluminous judgments relied upon by both sides as also the voluminous pleadings have been perused. 11. It is common knowledge that of late, economic offences, which strike at the very economy of a country have spiralled. Scams running into hundreds and thousands of crores of rupees no longer surprise the common citizen as they seem to have become a norm. Litigation pertaining to these disputes are consuming substantial time of the Courts. Where there is an illegality, the same has to be struck down. At the same time, frivolous and luxury litigation needs to be discouraged. It is for the Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question. Details of such FIRs have been given in the reply itself and these FIRs are FIR No. 175/2022 dated 18.05.2022, registered under Section 120-B, 201, 420, 467, 468, 471 IPC and Section 10 of the Haryana Development and Regulation of Urban Areas Act, FIR No.0151 dated 31.05.2023 the FIR No. 0152 dated 01.06.2023, both registered under Sections 420, 467, 468, 471 IPC, at Police Station Rajendra Park, Gurugram, and FIR No. 0151 dated 05.07.2022, registered under Sections 120-B, 420, 467, 468, 471 IPC, at Police Station Sushant Lok, Gurugram. Merely because these FIRs were registered subsequently would not make a difference as presently, they are being investigated in the ECIR. 12(iii). Going further, stay of proceedings in the FIRs would, at best, mean no further investigation in the FIRs during operation of the interim order but cannot be stretched to mean that even an ECIR could not have been recorded. It would be essential to notice here that at the relevant time i.e. when the orders dated 27.01.2021 were passed, there was no ECIR and accordingly there was no stay order with regard to the ECIR. The same was recorded much later in November, 2021 and in the considered opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over of the order passed by this Court, his arrest by the Enforcement Directorate was illegal, being in violation of that Order of this Court. His submission has been that the protection granted by this Court was in relation to a particular offence and the Enforcement Directorate had arrested him in relation to the same offence, which was unwarranted. 5. Mr. Tushar Mehta, learned Solicitor General appeared in these matters on behalf of the Enforcement Directorate and his submission is that in the Writ Petitions, out of which the present proceedings arise, Enforcement Directorate was not a party. The Order of this Court, giving interim protection to the petitioner from coercive steps, was based in the backdrop of the direction of the Single Judge issued on CBI to investigate into the allegations of irregularities pertaining to the recruitment of primary teachers and observations of the Single Judge that CBI could interrogate the petitioner and also arrest him in case of his non-cooperation. His case is that the Enforcement Directorate had initiated an independent investigation into money- laundering allegations based on the aforesaid ECIR against one Chandan Mondal @ Ranjan and unkn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied that the order restraining coercive action being taken against the petitioner passed by us on 27th September 2022, which we have still directed to continue, did not operate to prevent the Enforcement Directorate from carrying on with their investigation into the allegations under the 2002 Act. 9. For the reasons that we have stated above, we are not inclined to add the Enforcement Directorate as a party in the present petitions. The grievance of the petitioner against the Enforcement Directorate would have to be ventilated independently before the appropriate forum. We do not accept the argument of the petitioner that his arrest was illegal because of the interim order passed by us. We make it clear that we have not delved into the question of legality of the petitioner s arrest or initiation of proceeding against him under the 2002 Act. 13(i). The second argument that once, vide orders dated 05.07.2023, the Chief Judicial Magistrate, Gurugram had been directed to pass a fresh order on the complaint filed under Section 156 (3) Cr.P.C., the orders dated 07.01.2021 would be deemed to have been set aside and the consequential FIRs would become non-est and would be deemed to have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tracted herein below for the facility of reference:- [28]. After hearing learned counsel for the parties, this Court finds that the impugned order dated 07.01.2021 passed by the Chief Judicial Magistrate, Gurugram needs to be revisited by the Court itself as the same is non-speaking with reference to the legal requirements arising from the parameters as laid down in Shri Subhkaran Lubharka and Anr.; Priyanka Srivastava; Babu Venkatesh and others and Amit Joshi's cases (supra). This Court does not wish to comment anything on merits of the case and all issues are left open at this stage except to remand this case to the Court of Chief Judicial Magistrate with a direction to pass fresh order in view of mandatory requirement of law and also to consider the stand taken by the respondent No. 2 with reference to any policy provincial/provisional order No. 1/2017 issued by the office of Commissioner of Police, Gururam in respect of functioning and supervision of the Economic Offence Wing. [29]. The Chief Judicial Magistrate shall independently consider the submissions of the petitioners as well as that of the respondent No. 2 in accordance with law without being influenced by any state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inder Pal Singh Bhullar (supra) would not come to the aid of the petitioners. There the issue before the Hon ble Apex Court was whether the High Court can pass an order on an application entertained after final disposal of the criminal appeal or even suo-motu particularly in view of the provisions of Section 362 Cr.P.C. and as to whether, the High Court, in exercise of its inherent jurisdiction under Section 482 Cr.P.C. can ask a particular investigating agency to investigate a case following a particular procedure which is not in consonance with the statutory provisions of Cr.P.C. It was in this context that the Hon ble Apex Court held that once the orders under challenge were a nullity, the very birth of the FIR which is a direct consequence of the said orders would not have any lawful existence. It was also held that if the 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. This judgment was dealing with a particular situation and would not apply to the facts of the present case for the reasons mentioned hereinbefore. 14(i). The 3rd argument that non-bailab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined as to whether such issuance of warrants could be for production of such a person before the police in aid of investigation. This, the Hon'ble Apex Court held could not be done and it was held that the warrants could be issued for appearance before the Court only and that thereafter it was for the Court to decide as to whether detention is to be given or not. The relevant observations and findings of the Hon'ble Apex Court in the said judgment are extracted as under:- 12. The moot question that now requires to be answered is whether a Court can issue a warrant to apprehend a person during investigation for his production before police in aid of the Investigating Agency. While Mr. Ashok Desai, the learned Attorney General who appeared on behalf of CBI, submitted that Section 73 coupled with Section 167 of the Code bestowed upon the Court such power, Mr. Kapil Sibal, who appeared as amicus curie (the respondents did not appear inspite of publication of notice in newspaper) submitted that Court had no such power. To appreciate the steps of reasoning of the learned counsel for their respective stands it will be necessary to refer to the relevant provisions of the Code and T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 73 of the Code gives a power to the Magistrate to issue warrant of arrest and that too during investigation is evident from the provisions of part 'C' of Chapter VI of the Code, which we have earlier adverted to. Needless to say the provisions of proclamation and attachment as envisaged therein is to compel the appearance of a person who is evading arrest. Now, the power of issuing a proclamation under Section 82 (quoted earlier) can be exercised by a Court only in respect of a person 'against whom a warrant has been issued by it'. In other words, unless the Court issues a warrant the provisions of Section 82, and the other Sections that follow in that part, cannot be invoked in a situation where in spite of its best efforts the police cannot arrest a person under Section 41. Resultantly, if it has to take the coercive measures for the apprehension of such a person it has to approach the Court to issue warrant of arrest under Section 73; and if need be to invoke the provisions of part 'C' of Chapter VI. [Section 8(3) in case the person is accused of an offence under TADA]. 24. Lastly, we may refer to Section 90, which appears in part 'D' of Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusions as above we allow these appeals, set aside the impugned order and direct the Designated Court to dispose of the three miscellaneous applications filed by CBI in accordance with law and in the light of the observations made herein before. 14(iv). This view was reiterated by the Delhi High Court in Ottavio Quattrocchi Vs. CBI (supra). Relying upon the judgment of the Hon'ble Apex Court in State Through CBI Vs. Dawood Ibrahim Kaskar and Others (supra), it was held by the Delhi High Court that the Special Judge was justified and within his jurisdiction in having issued non-bailable warrants of arrest during the course of investigation. In the present case also, no fault can be found with the order dated 29.09.2023 (Annexure P-23) which has been impugned by the petitioners and by way of which non-bailable warrants were ordered to be issued. The order is a well reasoned and speaking order and it nowhere directs the production of the petitioners before the Investigating Agency. It goes without saying that once the warrants are executed, the respondent-ED would be bound by the provisions of law be that the PMLA or the Cr.P.C. The other judgments relied upon by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. 12. On a plain reading of Section 3, unless proceeds of crime exist, there cannot be any money laundering offence. Clause (u) of sub-section (1) of Section 2 of the PMLA defines proceeds of crime , which reads thus: 2. Definition - (1) In this Act, unless the context otherwise requires, - (u) proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad; Explanation .-For the removal of doubts, it is hereby clarified that proceeds of crime include property not only derived or obtained from the scheduled offence but also any property which may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2(1)(u) read with Section 3. Taking any other view would be rewriting of these provisions and disregarding the express language of definition clause proceeds of crime , as it obtains as of now. (underline supplied) 16. In paragraphs 269 and 270, this Court held thus: 269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 3 can be committed after a scheduled offence is committed. For example, let us take the case of a person who is unconnected with the scheduled offence, knowingly assists the concealment of the proceeds of crime or knowingly assists the use of proceeds of crime. In that case, he can be held guilty of committing an offence under Section 3 of the PMLA. To give a concrete example, the offences under Sections 384 to 389 of the IPC relating to extortion are scheduled offences included in Paragraph 1 of the Schedule to the PMLA. An accused may commit a crime of extortion covered by Sections 384 to 389 of IPC and extort money. Subsequently, a person unconnected with the offence of extortion may assist the said accused in the concealment of the proceeds of extortion. In such a case, the person who assists the accused in the scheduled offence for concealing the proceeds of the crime of extortion can be guilty of the offence of money laundering. Therefore, it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence. What is held in paragraph 270 of the decision of this Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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