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TMI Blog2024 (11) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... ther any property of the petitioner can be attached which were acquired prior to the scheduled offence and cannot be said to have any connection with the proceeds of crime in view of the Hon'ble Supreme Court judgment in Pavana Dibbur vs. Directorate of Enforcement 2023 SCC Online 1586 as well as the Division Bench judgment in Seema Garg vs. Deputy Director, Directorate of Enforcement 2020 (2) RCR (Criminal) 701 upheld by the Hon'ble Supreme Court and followed by various High Courts? B. Whether the impugned PAO is also without jurisdiction on account of non-compliance of mandatory provisions of Section 5 (1) i.e. "reason to believe" as was held by the Hon'ble Supreme Court in Vijay Madanlal Choudhary & others v. Union of India & others 2022 SCC Online SC 929 and Radha Krishan Industries Vs. State of Himachal, 2021 (6) SCC 771? C. Whether the impugned order is liable to be set-aside on account of non-compliance of various provisions of PMLA Act: i. In gross violation of First Proviso to Section 5 (1) as no final report was submitted in 3 of the 8 FIRs coupled with the fact that cancelation report was presented in 2 FIRs and the petitioner was not charge sheeted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court on 08.02.2024, whereas the special leave petition filed to challenge the order was withdrawn. On 09.08.2024, the Deputy Director passed a 'Provisional Attachment Order' (in short 'PAO'), attaching the property of the petitioner and others after observing that the investigation reveals that total proceeds of crime worth Rs. 337,12,74,800/- through illegal mining activities till date have been found and the beneficiaries were the petitioner, his brother Rajinder Singh, Manoj Wadhwa, Kulwinder Singh etc. These six writ petitions have been filed under Article 226/227 of the Constitution of India, challenging the correctness of the aforesaid PAO in which Enforcement Directorate (in short 'ED') has already filed its reply. 2. Submissions made by the rival parties: 2.1 Learned counsel representing the parties have also filed their written submissions apart from oral arguments. 2.2 The Petitioner's counsel while referring to the definition of proceeds of crime in Section 2 (1) (u) of Prevention of Money Laundering Act, 2002 (in short '2002 Act'), relying upon judgments in Pavana Dibbur Vs. Directorate of Enforcement, 2023 SCC (online) 1586, Seema Garg Vs. Deputy Director, Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt of criminal activity relating to the scheduled offence or the value of any such property "proceeds of crime, means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to the 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]" proceeds of crime, means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to the 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] "proceeds of crime, means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to the 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 removal of doubts, it is hereby clarified that "proceeds of crime" including p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raceable, then any property of equivalent value falls within the scope of the expression 'proceeds of crime'. In 2015, the amendment restructured the definition into three parts to cover the property taken or held outside the country. The concept of the property of equivalent value was introduced with respect to the aforementioned properties. The amendment enabled the authorities to go after any other property of a person of equivalent value. In 2019, the scope of the phrase 'proceeds of crime' was further expanded so as to include other properties which were not directly or indirectly the proceeds of crime, but were held abroad, to be liable to attachment. In 2019, the explanation has been added so as to give a wider scope to the authorities. From the objects and reasons of the '2002 Act', it becomes evident that the money laundering posed a serious threat not only to the financial system of the countries but also to their integrity and sovereignty. The '2002 Act' was enacted to prevent money laundering and connected activities. The act of money laundering is a multi-layered, complex and complicated diversion of the property, which is required to be prevented. Consequently, the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute are of utmost significance. The Court cannot widen or restrict the provisions on its own whims and fancies. When a statute's language is clear and unambiguous, the general rule of interpretation of statute is to read the provision as a whole and the Court must adhere strictly to the ordinary, plain meaning of the words used. The words in a statute are used precisely, not loosely, and efforts must be made to interpret them in a literal manner to give effect to the objective of the Act. This approach of interpretation is based on the idea that the legislature's intent is best reflected in the exact words of the statute. 3.8 Moreover, the reasoning adopted in Seema Garg's case (supra) to the effect that there was no need to insert third part in the definition of the 'proceeds of crime' and that 'value of such property' is superfluous does not appear sound. It appears that transformative journey of the definition of phrase 'proceeds of crime' was not brought to the notice of the Division Bench in Seema Garg's case (supra). In Abdullah Ali Balsharaf's case (supra), Delhi High Court inadvertently overlooked the sub-category (i) of second part of definition of 'proceeds of crime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending that involve scheduled offences, out of which final reports under Section 173 Cr.P.C. have already been filed in three. 3.12 The team of ED carried out search of the petitioner's premises between 04.01.2024 to 08.01.2024, resulting in recovery of INR 5.29 Crores, gold worth Rs.1.89 crore, fake e-Rawana bills, blank signed cheques and various dummy entries have been created including GM company to route the cash proceeds by layering such money into personal accounts to give it the colour of legitimate money. While investigating the case, huge discrepancy has been found in the mined minerals that were sold. It is recorded in the order that more than Rs.337 crores have been laundered and provisional attachment of property worth Rs.122 crores was ordered. 3.13 Dilbag Singh, Rajinder Singh, Manoj Wadhwa, Kulwinder Singh have already transferred some of the properties to their children/spouses or sold to third parties. It is recorded in the impugned order that the proceeds are likely to be concealed, transferred or otherwise dealt with in some manner after the search was conducted. After the search was carried, the vehicles were found transporting mined material without e- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o enable the competent authority to pass the 'PAO'. It is also contented that the petitioner is not named as an accused in any of the first 8 FIRs in the table, which constitute the scheduled offences and cancellation report has been presented in two FIRs, whereas, investigation in three is pending. The final report has been submitted in only three FIRs, but the petitioner is not named as an accused, and the ED has also failed to disclose any material implicating the petitioner, either directly or indirectly, with the scheduled offences or proceeds of crime. 3.17 Section 5 of '2002 Act' does not provide that the property liable to attachment should be in possession of only the accused named in the FIR relating to scheduled offences, Section 5 (1)(a) refers to any person and not only the accused. Secondly, Clause (a) and (b) provide for two conditions namely the person is in possession of any proceeds of crime and such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating the proceedings related to confiscation of such proceeds of crime. 3.18 The first proviso to Section 5 (1) is divided in the following three parts:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f mineral including boulders, gravel and sand in violation of various orders passed by the National Green Tribunal. It was found that the petitioner Dilbag Singh is the kingpin and has substantial share in the business, which is run by creating various fake entities in fictitious names including GM company. Electronic as well as physical record has been seized during the search. Moreover, at this stage only a 'PAO' has been issued, which is subject to decision by the adjudicating authority after granting opportunity as provided in Section 6 of 2002 Act. Hence, the third argument put forth by the petitioner is insubstantial. IV. SIGNIFICANCE OF THE EXPRESSION "IMMEDIATELY" AND ITS INTERPRETATION:- 3.21 The next argument with respect to the failure of the Enforcement Directorate to immediately forward the impugned PAO along with the material in its possession to the adjudicating authority cannot be accepted because the PAO was passed on Friday evening i.e. 09.08.2024. On 10.08.2024 and 11.08.2024, the offices were closed on account of holidays. The POA along with the material in possession was forwarded to the adjudicating authority by Enforcement Directorate on 12.08.2024. Though, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possible, judged in the context of the object sought to be achieved or accomplished. 23. We are of the considered view that the said expression must receive a reasonable construction and in giving such construction, regard must be had to the nature of the act or thing to be performed and the prevailing circumstances of the case. When it is not the mandate of the law that the act should be done within a fixed time, it would mean that the act must be done within a reasonable time. It all depends upon the circumstances that may unfold in a given case and there cannot be a straight-jacket formula prescribed in this regard. In that sense, the interpretation of the word 'forthwith' would depend upon the terrain in which it travels and would take its colour depending upon the prevailing circumstances which can be variable. 24. Therefore, in deciding whether the police officer has properly discharged his obligation under Section 102 (3) Cr.P.C., the Magistrate would have to, firstly, examine whether the seizure was reported forthwith. In doing so, it ought to have regard to the interpretation of the expression, 'forthwith' as discussed above. If it finds that the report was not sent fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion of this Bench, this argument of the learned counsels suffer from a fundamental flaw. It is evident that out of 32 FIRs, one remains open. According to Explanation II to Section 44 of the 2002 Act, any subsequent complaint should be incorporated into the pending complaint for further investigation to gather additional evidence against any accused, as reflected in the statutory language. The legislative intent in cases involving multiple FIRs is thus quite clear. Consequently, it can be concluded that even if all FIRs except one have been resolved through compromise or other means, the investigation under the same ECIR will continue. This is because Explanation II to Section 44 of the 2002 Act mandates that subsequent complaints be considered part of the original complaint by the Special Court. Moreover, sine qua non to proceed under the 2002 Act is the offence of money laundering which is wholly dependent upon the proceeds of crime. It is evident that the proceeds of crime should be the result of criminal activity related to a scheduled offence included in the Schedule attached to the Act which includes offence under Section 420 of the Indian Penal Code, 1860 (hereinafter r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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