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TMI Blog2025 (1) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019, in the United Kingdom on extradition request of the US authorities on drug trafficking and money laundering charges. The applicant entered into a plea agreement with the US authorities on 05.01.2024. He was convicted, but his sentence was reduced to 60 months. On 19.04.2024, the applicant was released. On his arrival in India, he was interrogated and finally arrested. It has been the case of the Enforcement Directorate ("ED") that as per the information received from the US authorities, the applicant along with his brother Parvinder Singh was operating an international drug trafficking group named as the Singh DTO (Drug Trafficking Organization). That used vendor marketing sites on the dark web, numerous free advertisements on clear websites, and a network of narcotic and controlled-substance distributors and distribution cells to sell drugs. In exchange, the Singh Organization received drug trafficking proceeds in the form of crypto currency and laundered these proceeds through crypto currency wallets. The Singh Organization received the drug trafficking proceeds through the sales on dark web markets, then laundered those proceeds through crypto currency transactions. Both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant case i.e. 4250 Bitcoins is still untraceable and is suspected to be in possession of the Banmeet Singh or Parvinder Singh, investigation in respect of the same is undergoing." 5. Heard learned counsel for the parties and perused the record. 6. Learned counsel for the applicant would submit that the applicant has already been tried and convicted by the US authorities with regard to all BTC, which he had. It is argued that, in fact, the applicant had been prosecuted and convicted for drug trafficking as well as money laundering. The applicant, it is argued, cannot be prosecuted in India again. 7. Reference has been made to Article 14 sub-clause 7 of the International Covenants of Civil and Political Rights, 1966 and Section 2 of the Protection of Human Rights Act, 1993, which reads as follows:- "Article 14 sub-clause 7. No one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of each country." Human Rights Act, 1993 "2. Definition.- (1) In this Act, unless the context otherwise requires,-- ................................................................ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be readily believable, unless there is independent corroboration of certain material aspects of the said statements, through independent sources. The nature of the corroboration required, would depend on the facts of each case. In the present case, it is apparent that the appellant A. Tajudeen and his wife T. Sahira Banu at the first opportunity resiled from the statements which are now sought to be relied upon by the Enforcement Directorate, to substantiate the charges levelled against the appellant. We shall now endeavour to examine whether there is any independent corroborative evidence to support the above statements." (g) In the case of Kunal Gupta (supra), it is observed as follows:- "8. ...................................................Also, it is trite law that statement under section 50 of the PMLA cannot be treated as substantive piece of evidence and can at best lend corroboration to the material available against the accused in course of investigation." (h) In the case of Sujay Krishna Bhadra (supra), the principles of law as laid down in the case of A. Tajudeen (supra) have been followed. (i) In the case of Ganpati Overseas (supra), the Hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f it has reason to believe, which is required to be recorded in writing that the person is in possession of "proceeds of crime". Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a stand-alone process. (l) The proffer statement made by the applicant before the US authorities is not a substantive piece of evidence. It cannot be made basis for conviction. (m) In support of his averment, learned counsel for the applicant has placed reliance on the principles of law, as laid down in the No. 92-2205 United States Courts of Appeals, Tenth Circuit, in US Vs. Acosta-Ballardo, 8F.3d 1532 (10th Cir. 1993) Decided Nov 9, 1993, in which the Court observed as follows:- "Statements made by a defendant in connection with a plea or an offer to plead may not be used substantively or for impeachment in any civil or criminal proceeding against the person who made the plea or offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar considerations. It has also to be kept in mind that for the purpose of granting bail, the legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt." 11. Learned counsel for the ED would also raise the following points in his submission:- (i) The applicant has not been prosecuted and convicted for 8131 BTC, which he had. In United States, the applicant has been prosecuted and convicted with regard to 3838 BTC, which he had surrendered. (ii) Before the US authorities, the applicant had given a statement that he had split his illegal business with his brother Parvinder Singh and 4250 BTC were transferred to Parvinder. It is argued that this act of transferring or splitting BTC, per se, amounts to offence under Section 3 read with 2(ra) of the Act. (iii) It is argued that even if for the sake of ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies in India while exercising their judicial and quasi-judicial powers, it will amount to directly or indirectly enforcing the judgment of the foreign Court. What is the effect of such order of conviction, would depend upon variety of factors such as, nature of the proceedings, purpose for which the said order of conviction needs to be taken into consideration, nature of conviction and effect thereof on the proceedings, nature of consequences of the ultimate decision to be taken in the said proceedings, are some of the factors which will have to be taken into consideration while deciding as to how much and what weightage has to be given to such judgment and order of conviction. We are of the FA-922-13.sxw considered view that, no hard and fast rule can be laid for that purpose. The Courts and authorities, while exercising their judicial and quasi-judicial powers will have to take a call on the facts and circumstances of each case and take a decision as to what is the effect of such judgment and order of conviction. The question No.(1)(b) is answered accordingly." (v) Any case pertaining to crypto currency may be determined where a person or company, who owns it is domiciled. He wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are being appreciated with the caveat that any observation made in this order shall have no bearing at any subsequent stage of the trial or in any other proceedings. 13. Admittedly, in the United States indictment of the applicant was for three charges as follows:- (i) Conspiracy to Distribute and Possesss with Intent to Distribute Controlled Substances (21 U.S.C.§ 846). (ii) Conspiracy to Import Controlled Substances (21 U.S.C. §§ 952 (a), 960 (b) (2) and (b) (3), and 963) (iii) Money Laundering Conspiracy (18 U.S.C. 1956 (h) ). 14. Thereafter, the appellant entered into plea agreement in the United States which, inter alia, records as follows:- "Defendant agrees to turn over all seed phrases and passwords and to assist in the transfer to U.S. Government crypto currency wallets, all of the 8,131.80350145 BTC; 8,199.31047036 BCH;8,131.80114469 BSV;8,131.80312935 Bitcoin Gold (BTG); and 8,131.801,544.42 eCash (XEC), and currently stored on the lock-chain, remote or cold storage devices, and/or at the above listed public addresses which constitute the ill-gotten gains from the offences described in Counts One and Three of the Indictment." 15. The statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in or transferring the money or cryptocurrency etc. within the Southern State of Ohio or elsewhere. Does not elsewhere qualifies other adjoining States of Ohio? Can this word "elsewhere" be extended to include India? If the word "elsewhere" does not indicate India, does not it mean the applicant was not convicted for transferring the proceeds of crime from outside India to India? These and many more related questions may fall for scrutiny during trial 20. The question is, even if a person is convicted in the United States can he be prosecuted in India again? In the case of Probodh (supra), the Full Bench of the Hon'ble Bombay High Court had considered the principles of law, as laid down by the Hon'ble Supreme Court in the case of Jitendra Panchal (supra) and answered the reference which has already been quoted hereinabove. According to the settled law now that judgment and order of conviction of a foreign court for the offence committed in that country can be noticed/looked into and recognized by judicial and quasi judicial authorities in India. But, it has been held in the case of Prabodh (supra) that if the judgment of the foreign court is held binding on the courts and auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther such statement finds independent corroboration or not? 23. Not only this, on behalf of the ED it is being argued that the act of splitting per se attracts the provisions of Section 3 of the Act. This aspect would also require examination. The Court restrains to make any conclusion on it, at this stage. 24. It is the case of the ED that huge amounts were transmitted by the applicant in his or his family members in India through foreign accounts. The applicant did not have any other source of income from 2011 to 2017 and the applicant did not reveal as to how he got the money. It is argued that during the same period, the applicant was into a drug trafficking business. To some part he has accepted it. Therefore, remaining transactions are also from drug trafficking and money laundering. It may be presumed under Section 23 of the Act. Section 23 of the Act is as follows:- "23. Where money-laundering involves two or more interconnected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under Section 8, it shall, unless otherwise proved to the satisfaction of the Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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