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Money Laundering - Case Laws
Showing 1 to 20 of 1575 Records
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2024 (5) TMI 837 - SUPREME COURT
Money Laundering - Denial of benefit of anticipatory bail - whether power to arrest vesting in the officers of the Directorate of Enforcement (ED) under Section 19 of the PMLA cannot be exercised after the Special Court takes cognizance of the offence punishable under Section 4 of the PMLA? - order of the Court accepting bonds under Section 88 - HELD THAT:- There is no provision therein which is in any manner inconsistent with Section 205 of the CrPC. Hence, it will apply to a complaint under the PMLA. A summons is issued on a complaint to ensure attendance of the accused before the Criminal Court. If an accused is in custody, no occasion arises for a Court to dispense with the personal attendance of the accused - If the accused who appears pursuant to the summons issued on a complaint were deemed to be in custody, the lawmakers would not have provided for Section 205.
After examining the provisions of the PMLA, it is apparent that Section 88 is in no manner inconsistent with the provisions of the PMLA. Therefore, Section 88 will apply after filing of a complaint under Section 44(1)(b) of the PMLA. If Section 88 is to apply even before a summons is issued or served upon a complaint, there is no reason why it should not apply after the service of summons. A discretionary power has been conferred by Section 88 on the Court to call upon the accused to furnish bonds for his appearance before the Court. It does not depend on the willingness of the accused - when an accused appears before the Special Court under a summons issued on the complaint, if he offers to submit bonds in terms of Section 88, there is no reason for the Special Court to refuse or decline to accept the bonds. Executing a bond will aid the Special Court in procuring the accused's presence during the trial.
If a warrant of arrest has been issued and proceedings under Section 82 and/or 83 of the CrPC have been issued against an accused, he cannot be let off by taking a bond under Section 88. Section 88 is indeed discretionary. But this proposition will not apply to a case where an accused in a case under the PMLA is not arrested by the ED till the filing of the complaint. The reason is that, in such cases, as a rule, a summons must be issued while taking cognizance of a complaint. In such a case, the Special Court may direct the accused to furnish bonds in accordance with Section 88 of the CrPC.
Whether an order of the Court accepting bonds under Section 88 amounts to grant of bail? - HELD THAT:- When an accused furnishes a bond in accordance with Section 88 of the CrPC for appearance before a Criminal Court, he agrees and undertakes to appear before the Criminal Court regularly and punctually and on his default, he agrees to pay the amount mentioned in the bond. Section 441 of the CrPC deals with a bond to be furnished by an accused when released on bail. Therefore, an order accepting bonds under Section 88 from the accused does not amount to a grant of bail.
Contingency where after service of summons issued on a complaint under the PMLA, the accused does not appear - HELD THAT:- While cancelling the warrant, the Court can always take an undertaking from the accused to appear before the Court on every date unless appearance is specifically exempted. When the ED has not taken the custody of the accused during the investigation, usually, the Special Court will exercise the power of cancellation of the warrant without insisting on taking the accused in custody provided an undertaking is furnished by the accused to appear regularly before the Court. When the Special Court deals with an application for cancellation of a warrant, the Special Court is not dealing with an application for bail. Hence, Section 45(1) will have no application to such an application.
Once cognizance is taken of the offence punishable under Section 4 of the PMLA, the Special Court is seized of the matter - after cognizance of the complaint under 44(1)(b) of the PMLA is taken by the Court, the ED and other authorities named in Section 19 are powerless to arrest an accused named in the complaint. Hence, in such a case, an apprehension that the ED will arrest such an accused by exercising powers under Section 19 can never exist.
The impugned orders declining to grant anticipatory bail set aside - appeal allowed.
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2024 (5) TMI 788 - CALCUTTA HIGH COURT
Money Laundering - Grant of bail - presumption of innocence and its appreciation in respect of the offences under the Prevention of Money Laundering Act - provisions of Article 21 of the Constitution of India and its overriding effect over Section 45 of PMLA - HELD THAT:- In this Case amount transpired in course of investigation initially is recovering of the seized cash amount and the same was at the behest of a complaint lodged by a nationalised bank in respect of transactions/debit credit taking place in some of the accounts and the same being routed through another nationalised bank. The holder of the main five companies were found to have a single address which was rented for two months and so far as shell-companies are concerned which were from Jamshedpur, Jharkhand mainly in those case on scrutiny of the records which were furnished for opening the accounts the same were found to be fake or non-existent. Going by the allegations against the present petitioner in the complaint the petitioner was applying his mind, knowledge and conscience for routing out the money which was illegally acquired by Tushar Patil, Prasenjit Das, Viraj Suhas Patil. The role of the petitioner was for concealment and projecting proceeds of crime as untainted money.
Delay and long detention in custody have never been accepted by the constitutional courts and wherever there has been unreasonable delay the Courts have favoured the constitutional mandate of liberty. However, there are cases where the statute is built in such a manner that the complicity simpliciter is not a criteria but the detention is on the basis of guilt and the present case is one of such nature.
It is a fact that the petitioner is in custody for more than 14 months but the nature of the offence complained of requires time for investigation as the procedure adopted in concealment and its unearthing both are time consuming. It has been submitted by the Enforcement Directorate that not only investigation is continuing but immovable assets which have been the outcome of such proceeds of crime are being traced to countries or abroad and for which time is being consumed.
Having regard to the fact that although complaint has been filed in this case but yet further investigation is at a crucial stage, the petitioner cannot be released on bail only on the ground of delay having regard to the fact that he has not been able to overcome the twin conditions under Section 45 of the PMLA, 2002.
The prayer for bail of the petitioner is rejected.
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2024 (5) TMI 778 - MADRAS HIGH COURT
Money Laundering - 'possession' of properties as envisaged under Section 8(4) of the Prevention of Money Laundering Act, 2002 - symbolic/constructive possession - HELD THAT:- Section 8(4) of the PMLA Act would envisage that the Director or any other officer authorised by him on confirmation of a provisional attachment can take possession of the property attached. It could also be seen that subsection (4) of Section 8 provides that the attachment or retention of the seized property shall continue during the pendency of the proceedings relating to any scheduled offence and would become final, if the guilt of a person is proved in trial. The learned Single Judge had interpreted the term 'possession' under Section 8(4) to be only constructive possession by holding that the rights of the person whose properties available under any other enactment would be affected, if they are physically dispossessed of the property. This is the main bone of the reasoning that had been assigned by the learned Single Judge in coming to such a conclusion.
When an Act by a non obstante clause makes it clear that the said provision of the Act will have effect notwithstanding anything inconsistent contained in any other law, then the said enactment would prevail over all the existing laws. Therefore, the reasoning assigned by the learned Single Judge that the term 'possession' if would mean taking actual physical possession would affect the existing right available under any other law would have to fall, in view of Section 71 of the PMLA Act.
Similarly under the Rule making power clauses (ee) to subsection (2) of Section 73, had been introduced and pursuant to the said Rule Making Power, the Central Government had also notified the Prevention of Money Laundering (taking possession of attachment or property confirmed by the Adjudicating Authority) Rules 2013, under Rule 5 of the said rules manner of taking possession of immovable property had also been enumerated - In view of the subsequent amendment, the PMLA Act empowers the authority under the said enactment can take physical possession of an immovable property, which had been attached under Section 8(3).
The order passed by the learned Single Judge in reading down the term “possession” under Section 8(4) of the PMLA Act would have to be interfered with by us and the direction issued by the learned Single Judge to put back the respective Writ Petitioners in actual possession of the property would have to be set aside - Appeal allowed.
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2024 (5) TMI 725 - CALCUTTA HIGH COURT
Money Laundering - territorial jurisdiction - Validity of seizures, freezing, orders and of the consequential actions - power to the High Courts to entertain a Writ Petition, wherein full or a part of cause of action arose, within its jurisdiction - HELD THAT:- Article 226 (2) of the Constitution of India confers the power to the High Courts to entertain a writ petition wherein full or a part cause of action arises within its jurisdiction - it is not in doubt that this Court has the power to maintain such a writ petition although the original case might have been generated in another State. Afterall, the fundamental rights of the petitioner/claimant were allegedly violated within the jurisdiction of this Court.
On merits, the investigating-in-question under the PML Act, 2002 revealed that huge sums of money were collected from the public by floating different online games at the Mahadeve Book App by the alleged offenders and such illegally gotten ‘proceeds of crime’ had been diverted/siphoned off through several associates which constitutes offence of money-laundering u/s 3 of the said Act. About 88 (Eighty eight) searches at 8 (Eight) different States of India including search, seizure and freezing in West Bengal. However, the entire investigation was conducted by the Enforcement Directorate at Raipur. Therefore, the search, seizure and freezing of property in Calcutta was a part of the entire investigation that was being carried out by the Enforcement Directorate, Raipur.
Under Section 17 (1) of the PML Act, it was primarily the Director who was required to have the reason to believe for the search and seizure and thereafter, he could authorise any subordinate officer to execute the Act. Hence, the format of Form II appended to the Rules of 2005 was providing for such option - In the instant case, the Director had authorised the Deputy Director and after having the reason to believe the Deputy Director duly authorised the Assistant Director, being subordinate to him, to execute the acts of search, seizure and freezing at the office premises. In fact, the Assistant Director so authorised issued the freezing order dated 10.09.2023 and the seizure Memo dated 10.09.2023 - Besides, the authority of the so authorised Assistant Director was derived from the statutory provision of Section 17 (1) and/or 17 (1A) of the said Act and even if there was any apparent inconsistency with the Rules, it is the Act that would prevail.
Apparently, the copies of recorded reason were provided to the petitioners by the adjudicating authority. The RUDs to the SCN were annexed to the writ petition. Thus, there is hardly any merit in the contention that the show cause notice dated 13.10.2023 issued by the adjudicating authority under Section 8(1) of the PML Act was bad in law - Therefore, it does not appear that the above referred sequence of steps taken by the Enforcement Directorate is at all inconsistent with the statutory provisions.
There are no merit in the application. Accordingly, the same is dismissed.
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2024 (5) TMI 724 - ALLAHABAD HIGH COURT
Seeking grant of bail - Money Laundering - proceeds of crime - scheduled offence - partners of M/s Vikas Construction had encroached on public property by falsification of records - Whether the applicant had any direct or indirect involvement in M/s. Vikas Construction, which allegedly generated proceeds of crime - HELD THAT:- There is nothing to indicate that the applicant knowingly committed any offence as provided in Section 3 of the PMLA nor the applicant was in any way involved in the commissioning of the predicate offence and in case if the predicate offence is not made out against the applicant then proceeding under the PMLA will also fall.
In the instant case, from the perusal of the complaint which has been brought on record as annexure no.2 including the supplementary complaint which has been brought on record as annexure no.9, prima faice, it reflects the involvement of the present applicant. Even though this Court is conscious of the fact that at this stage a mini trial is not be held nor the court is required to enter into the merits or the depth of the evidence to return a finding of guilt but what is required is to prima facie, consider the material available on record for the Court to satisfy itself and to enable it to reasonably form an opinion, to believe, that the applicant is not guilty of the offence and that he is not likely to commit any offence on bail as enshrined in Section 45 of the PMLA.
Considering the material available on record including the flow charts which clearly demonstrates the origin of funds and it also explains how it finds its way into the accounts of the applicant and its use by the applicant, and there is material against the applicant to link him with the movement and trail of funds to and from the two firms M/s. Vikas Construction and M/s. Aaghaaz.
Considering the family antecedents of the applicant including the statement which is contained in the ECIR that the applicant initially was not co-operative rather evaded the summons and only when the lookout notice was issued and in furtherance thereof the applicant was apprehended and during custody he gave his statements but nevertheless many of the transactions could not be explained by him by taking a plea that he did not know from where the fund was coming rather whenever he wanted the funds he asked his mother and maternal uncle and grand father who would arrange the funds.
This Court is unable to persuade itself to form a, prima facie, satisfaction in terms of Section 45 of the PMLA, at this stage, that the applicant is not guilty or that he may not commit an offence on bail. Thus, for all the aforesaid reasons, the bail application is rejected.
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2024 (5) TMI 675 - SUPREME COURT
Seeking grant of Interim bail - challenge to arrest of Arvind Kejriwal by the Directorate of Enforcement - scope and violation of Section 19 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Power to grant interim bail is commonly exercised in a number of cases. Interim bail is granted in the facts of each case. This case is not an exception.
The prosecution has rightly pointed out that the appellant – Arvind Kejriwal had failed to appear in spite of nine (9) notices/summons, first of which was issued in October 2023. This is a negative factor, but there are several other facets which we are required to take into consideration. The appellant – Arvind Kejriwal is the Chief Minister of Delhi and a leader of one of the national parties. No doubt, serious accusations have been made, but he has not been convicted. He does not have any criminal antecedents. He is not a threat to the society. The investigation in the present case has remained pending since August 2022. Arvind Kejriwal was arrested, as noted above, on 21.03.2024. More importantly, legality and validity of the arrest itself is under challenge before this Court and we are yet to finally pronounce on the same. The fact situation cannot be compared with harvesting of crops or plea to look after business affairs.
Once the matter is subjudice and the questions relating to legality of arrest are under consideration, a more holistic and libertarian view is justified, in the background that the 18th Lok Sabha General Elections are being held.
A coordinate Bench of this Court in THE STATE OF ANDHRA PRADESH VERSUS NARA CHANDRA BABU NAIDU [2024 (5) TMI 611 - SC ORDER], in an appeal filed by the State, by an interim order has deleted the condition restraining the respondent therein from organising or participating in public rallies and meetings, thereby permitting him to participate in the political process. This petition seeking special leave to appeal is still pending.
The appellant – Arvind Kejriwal will be released on interim bail till 1st of June 2024, that is, he will surrender on 2nd of June 2024 on fulfilment of conditions imposed - bail application allowed.
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2024 (5) TMI 674 - SC ORDER
Money Laundering - grant of Interim bail - HELD THAT:- After issuance of warrant, the petitioner surrendered and thereafter applied for bail. Even without surrendering also, the petitioner could have applied for cancellation of warrant by giving an undertaking to the Special Court to remain present on the dates fixed before the Special Court. The petitioner has undergone incarceration for a period of 1 year and 1 month. Considering these facts, the petitioner is entitled to be enlarged on interim bail.
The documents annexed to the counter affidavit, create an impression that though a complaint under Section 44(1)(d) of the PMLA Act was filed, a separate charge-sheet was presented by the Assistant Director of Enforcement Directorate to the special public prosecutor Mr. Goel which was ordered to be registered as a Criminal Miscellaneous Case. It needs to be verified whether cognizance was taken on the basis of the charge-sheet.
The learned Additional Solicitor General, on instructions, points out that in the State of Uttarakhand, a complaint is referred as a charge-sheet and in fact there was no such charge-sheet. Though there are no reason to disbelieve the responsible statement made by the learned Additional Solicitor General, the fact remains that page 96 mentions that there was a charge-sheet presented to the special public prosecutor.
The Registry is directed to call for a soft copy of the entire record of Criminal Case No. 2 of 2021 from the Court of the learned Special Judge, PMLA, Dehradun, Uttarakhand - List on 10th May, 2024.
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2024 (5) TMI 673 - BOMBAY HIGH COURT
Money Laundering - Seeking quashing and setting aside of the Look Out Circular (LOC) - detention on the ground of non-cooperation - HELD THAT:- It appears that the petitioner after completing his education moved to Bahrain and has been working in Bahrain, since then. It also appears that the petitioner was issued summons by the respondent No. 1-ED, pursuant to which, he replied to the said summons, however, he could not come to India due to Covid-19 pandemic. It is also not in dispute that subsequently, in November 2020 the petitioner came to India and that he had informed the ED office of his return to India. It is also not in dispute that the petitioner appeared before the respondent No. 1-ED on seven occasions commencing from 22nd December 2020. The petitioner was last summoned by the ED on 21st February 2023. It appears that thereafter, the petitioner has not been summoned by the respondent No. 1-ED.
It is well settled that a person cannot be detained merely because he is not cooperating. Non-cooperation also can be a result of a person not having any information with respect to the case in question and as such there is no merit in the said submission. The ED has been investigating the case since 2019 and till date, despite the petitioner having appeared before the ED, the ED has not found any material qua the petitioner. The petitioner has been deprived of his livelihood since December 2020. The petitioner has been working in the Middle East for more than two decades, and as such, having regard to the fact, that the respondent No. 1-ED has not found any material, qua the petitioner till date, it would not be appropriate to detain the petitioner any further.
The impugned LOC issued as against the petitioner on 17th January 2020 by the respondent No. 1-ED, is quashed and set aside - Petition allowed.
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2024 (5) TMI 569 - DELHI HIGH COURT
Seeking grant of Regular bail - Money Laundering - proceeds of crime - predicate offences - scheduled offences - loan was declared as fraud on account of fudging of balance sheets - diversion of funds and related party transactions - bogus transactions relating to inventories and receivables - proceeds from the sale of inventory and realization of receivables were diverted - misappropriation of legitimate fund obtained for working capital from the bank - HELD THAT:- The Hon’ble Supreme in Pavana Dibbur [2023 (12) TMI 49 - SUPREME COURT] was adjudicating upon an issue wherein the appellant had not been arrayed as accused in the chargesheet filed with respect to alleged scheduled offences, but was made an accused for offence punishable under Section 3 of the PMLA. The appellant therein relied upon the aforesaid paragraph of the Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT] and it was submitted that the case of the appellant therein was on a better footing as she was not shown as accused in the scheduled/predicate office.
In any case, since the present applicant has been granted pardon in the scheduled/predicate offences, the evidence sought to be given at his instance in those proceedings cannot be used for the purposes of present proceedings under the PMLA. Even in the scheduled/predicate offence the status of the present applicant remains as a witness subject to his full and complete disclosure in terms of the Section 308 of the CrPC - This Court agrees with the judgment given by the learned Single-Judge of Allahabad High Court in Mohan Lal Rathi [2023 (9) TMI 1069 - ALLAHABAD HIGH COURT], that the grant of pardon would bring an accused in the category of witness however, the same, as pointed out hereinabove, is subject to certain conditions enshrined under Sections 306 and 307 of the CrPC and cannot be considered as absolute absolvement in the predicate offence.
The Hon’ble Supreme Court in Vijay Madanlal Choudhary has held that the Court at the stage of grant of bail is expected to consider the issue as to whether the accused had requisite ‘mens rea’. It was further observed by the Hon’ble Supreme Court that the Court is not required to record a positive finding that the accused has not committed an offence under the Act. In other words, the Court at the stage of bail can examine the case on the basis of broad probabilities and can give a finding on the basis of material on record for the purposes of bail.
In the present case, admittedly the applicant was not a key managerial personnel and was not holding any designation in M/s SBBEL which would indicate that he was responsible or in-charge of running day-to-day affairs of the said company. The thrust of allegation in the prosecution complaint is that the present applicant was involved in creating paper companies by allegedly inducing indigent persons in order to show sham sale and purchase of goods thereby diverting the loan amount received by the said company.
Whether the present applicant has the requisite mens rea demonstrating that he was having knowledge that the funds which are being routed through the paper companies were part of the loan amount extended to M/s SBBEL by the consortium of bank headed by SBI? - HELD THAT:- As per the case of the prosecution, the applicant was not key managerial personnel or person responsible for running day-to-day affairs of the company.
The applicant, like the other proprietors of the paper entities, have given the statement that all these transactions were being done on commission basis of 50 paise per quintal (out of Re. 1 per quintal) with some entities and on a fixed commission on monthly basis ranging between Rs. 7,000/- to Rs. 20,000/- with other entities. In the statements relied upon by prosecution, applicant has stated that all the actions taken by him were on the instructions of Shri Amar Chand Gupta and others and nowhere has it been stated that he was privy to the alleged objective behind the sham transactions. In other words, whether the applicant had the requisite knowledge that the transactions in which he is involved relates to proceeds of crime cannot be presumed at this stage. So far as the transactions from the applicant’s sister concerns are concerned, the same are similar to that of other paper entities and their proprietors who are either being arrayed as co-accused without arrest or cited as witnesses.
In the considered opinion of this Court, the applicant has been able to make out a case under Section 45 of the PMLA. Apart from the above, complaint in the present has been filed. The applicant has been in judicial custody since 25.08.2022 and has undergone incarceration for approximately one year and nine months. It is also not disputed that the applicant has been granted bail in the predicate/scheduled offence apart from the fact that he has now become an approver. It is a matter of record that the applicant had joined investigation as and when directed by the Investigating Officer till he was arrested in the present ECIR.
The applicant is directed to be released on bail upon his furnishing a personal bond in the sum of Rs. 50,000/- alongwith two sureties of like amount to the satisfaction of the learned Trial Court/Link Court, further subject to the conditions imposed - application allowed.
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2024 (5) TMI 568 - ORISSA HIGH COURT
Money Laundering - Declination to allow exemption from personal attendance of the Petitioner by rejecting the application filed by the Petitioner under Section 205 Cr. P.C. - HELD THAT:- This Court has no hesitation in coming to a conclusion that although an application under Section 205 Cr. P.C. is maintainable in a case involving offences under the PMLA Act, 2002 and the bar under Section 45 would not be attracted to such an application, however, while exercising the discretion conferred upon the Court by Section 205 Cr. P.C., the Trial Court has to take a decision with lot of circumspection and caution. Particularly, while considering such application, the learned Trial Court is to satisfy itself with regard to availability of sufficient and cogent reasons and inability of the Petitioner to appear before the Trial Court. The learned Trial Court, in such eventuality, is duty bound to consider such application on its own merit and in accordance with law.
From the reading of the order passed by the Hon’ble Apex Court in CHINTAN JOSHI VERSUS NIRANJANA BEHERA [2023 (8) TMI 1458 - SC ORDER], it is clear that the Bar under Section 45 of the PMLA Act, 2002 shall not stand in the way of the Trial Court while considering an application under Section 205 Cr. P.C. filed by the accused petitioner.
Reverting back to the facts of the present case and on a plain reading of the complaint, it appears that the alleged amount involved in the present crime is Rs. 35 lakhs. Therefore, the same is admittedly less than Rs. 1 crore. In the present case, the accused-Petitioner filed an application under Section 205 Cr. P.C. to dispense with his personal attendance before the Court. It has been stated that the accused-Petitioner is now posted at Berhampur Municipal Corporation in Ganjam district under deputation in Foreign Service terms and conditions for which he is unable to appear before the Trial Court at Bhubaneswar in Khurda district on each date of posting.
This Court is of the considered view that the impugned order passed by the learned Trial Court is unsustainable in law. Accordingly, the same is hereby set aside - matter is remanded back to the Court of Sessions Judge-cum-Special Judge, Khurda at Bhubaneswar to consider the application afresh by taking into consideration the grounds raised by the Petitioner in his application.
Petition disposed off by way of remand.
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2024 (5) TMI 525 - JHARKHAND HIGH COURT
Grant of bail - Money Laundering - proceeds of crime - scheduled offences - illegal mining - principles of parity - Section 45 of PML Act - HELD THAT:- It is evident that the reason for giving explanation under Section 2(1)(u) is by way of clarification to the effect that whether as per the substantive provision of Section 2(1)(u), the 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 but by way of explanation the proceeds of crime has been given broader implication by including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence - It is evident that 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.
The present petitioner directly looks transportation of over the illegal stone chips through inland vessels. These inland vessels are indirectly operated by Pankaj Mishra through his accomplices Rajesh Yadav, Rahul Yadav, Bachhu Yadav and present petitioner. Several trucks laden with stone chips/aggregates are crossed through these inland vessels without mining challans - Thus, the investigation has revealed that there is connivance of the petitioner with Pankaj Mishra and Rajesh Yadav & Dahu Yadav in the illegal activities connected with the proceeds of crime derived out of illegal mining activities and the said petitioner is facilitating the accused person Pankaj Mishra to run the business of extortion illegal mining and transportation activities in Sahebganj. Besides this, heavy levy is extorted forcefully from transport vehicles operating in these mining areas, for allowing them to transport the mined stones and other items.
The offence of money laundering as contemplated in Section 3 of the PMLA has been elaborately dealt with by the three Judge Bench in Vijay Madanlal Choudhary (supra), in which it has been observed that Section 3 has a wider reach. The offence as defined captures every process and activity in dealing with the proceeds of crime, directly or indirectly, and is not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money laundering - The property must qualify the definition of “Proceeds of Crime” under Section 2(1)(u) of the Act. As observed, in all or whole of the crime property linked to scheduled offence need not be regarded as proceeds of crime, but all properties qualifying the definition of “Proceeds of Crime” under Section 2(1)(u) will necessarily be the crime properties.
It is pertinent to mention here that the process envisaged under Section 50 of PMLA is in the nature of an inquiry against the proceeds of crime and it is not an investigation and the authorities who are recording the statements are not police officers and therefore, these statements can be relied upon as admissible piece of evidence before the Court. The summons proceedings and recording of statements under PMLA are given the status of judicial proceedings under Section 50(4) of PMLA. When such is the sweep of Section 50 of PMLA, the statements that have been recorded and which has been relied upon in the complaint must be taken to be an important material implicating the petitioner. The statements that were recorded during the investigation has been dealt with in prosecution complaint and many of the statements clearly implicate the petitioner.
This Court while considering the prayer for regular bail has taken into consideration that though the Court is not sitting in appeal on the order passed by learned court since this Court is exercising the power of Section 439 Cr.P.C but only for the purpose of considering the view which has been taken by learned court while rejecting the prayer for bail, this Court is also in agreement with the said view based upon the material surfaced in course of investigation.
Principles of parity - HELD THAT:- The law is well settled that the principle of parity is to be applied if the case of the fact is exactly to be similar then only the principle of parity in the matter of passing order is to be passed but if there is difference in between the facts then the principle of parity is not to be applied - It is further settled connotation of law that Court cannot exercise its powers in a capricious manner and has to consider the totality of circumstances before granting bail and by only simple saying that another accused has been granted bail is not sufficient to determine whether a case for the grant of bail on the basis of parity has been established.
The Hon’ble Apex Court in TARUN KUMAR VERSUS ASSISTANT DIRECTOR DIRECTORATE OF ENFORCEMENT [2023 (11) TMI 904 - SUPREME COURT] wherein at paragraph-18, it has been held that parity is not the law and while applying the principle of parity, the Court is required to focus upon the role attached to the accused whose application is under consideration.
The main allegation against the Pashupati Yadav @ Pashupat Yadav with whom parity is claimed, was hand in glove and working as a close associate with the other co-accused persons who were running and trading of mining of stone chips illegally without paying any royalty amount. The crime proceeds to tune of Rs.1.23 Crores was deposited in the account of the said Singhvahani Transport Pvt. Ltd. from 22.04.2021 to 16.03.2022 on different dates - Applying the principle of parity, this Court is of the view as per the judgment rendered by the Hon'ble Apex Court rendered in Tarun Kumar that the benefit of parity is to be given if the facts/involvement of the petitioner, is identical to the persons with whom parity is being claimed.
Having regard to the entirety of the facts and circumstances of the case, this Court is of the opinion that the petitioner has miserably failed to satisfy this Court that there are reasonable grounds for believing that he is not guilty of the alleged offences. On the contrary, there is sufficient material collected by the respondent-ED to show that he is prima facie guilty of the alleged offences - since the petitioner has failed to make out a special case to exercise the power to grant bail and considering the facts and parameters, necessary to be considered for adjudication of bail, this Court does not find any exceptional ground to exercise its discretionary jurisdiction to grant bail.
This Court is of the view that it is not a case where the prayer for bail is to be granted, as such, the instant application stands dismissed.
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2024 (5) TMI 468 - SUPREME COURT
Money laundering - scheduled offences or not - proceeds of crime - offences under various sections of the Income-tax Act, 1961, read with Sections 120B, 191, 199, 200 and 204 of the Indian Penal Code, 1860 - offences are scheduled offences within the meaning of clause (y) of sub-Section (1) of Section 2 of the PMLA or not - HELD THAT:- The offence punishable under Section 120B of the IPC could become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule to the PMLA. In this case, admittedly, the offences alleged in the complaint except Section 120-B of IPC are not the scheduled offences. Conspiracy to commit any of the offences included in the Schedule has not been alleged in the complaint. ECIR/RPZO/11/2022, which is the subject matter of the complaint, is based on the offences relied upon in the complaint. As the conspiracy alleged is of the commission of offences which are not the scheduled offences, the offences mentioned in the complaint are not scheduled offences within the meaning of clause (y) of sub-Section (1) of Section 2 of the PMLA.
There is no provision in the PMLA which overrides the provisions of Sections 200 to Sections 204 of Cr.PC. Hence, the Special Court will have to apply its mind to the question of whether a prima facie case of a commission of an offence under Section 3 of the PMLA is made out in a complaint under Section 44(1)(b) of the PMLA. If the Special Court is of the view that no prima facie case of an offence under Section 3 of the PMLA is made out, it must exercise the power under Section 203 of the Cr.PC to dismiss the complaint. If a prima facie case is made out, the Special Court can take recourse to Section 204 of the Cr. PC.
In this case, no scheduled offence is made out the basis of the complaint as the offences relied upon therein are not scheduled offences. Therefore, there cannot be any proceeds of crime. Hence, there cannot be an offence under Section 3 of the PMLA. Therefore, no purpose will be served by directing the Special Court to apply its mind in accordance with Section 203 read with Section 204 of the Cr.PC. That will only be an empty formality.
Petition disposed off.
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2024 (5) TMI 420 - BOMBAY HIGH COURT
Seeking grant of bail on medical grounds - money laundering - Petitioner's severe health condition (duodenal cancer) and his wife’s terminal illness, exacerbating his mental distress - invocation of first proviso to Section 45 (1) of PMLA - HELD THAT:- In the light of the medical record and opinions, it would be audacious to hold that the applicant is not sick. The applicant is suffering from cancer. Given the situation in life of the applicant, including his age and other ailments that he is suffering from, as well as the critical condition of the applicant’s wife Anita, the applicant has not opted for the preferred treatment, which is also fraught with risk. The applicant claims to be 72 years of age. Advanced age brings in its trail associated ailments and infirmities. The physical ailments, in the instant case, seem to have been compounded by the critical condition of the applicant’s wife.
The matter cannot be looked at from the perspective as to whether the applicant is getting adequate treatment at the hospital. Undoubtedly, the applicant is getting the treatment at the hospital of his choice. The medical opinions/reports do not indicate that the applicant requires further specialised treatment at even more specialised centre/hospital. However, to evaluate the prayer for bail on the said consideration alone, would be taking a very constricted view of the matter. There is a qualitative difference between the treatment which a person gets as an under trial prisoner and as a citizen under no restraint.
The upshot of aforesaid consideration is that the peculiar facts of the case: the age of the applicant, the disease he is suffering from, the treatment recommended for the said disease, other ailments the applicant is suffering from and the situation in life brought about by the life threatening disease the wife of the applicant is suffering from, cumulatively justify exercise of discretion vested in the Court under the proviso to section 45 (1) of PMLA. The applicant can be released on bail for a limited period to avail the treatment for the cancer he is suffering from and attend to his wife, who is also suffering from cancer of an advanced grade.
Application allowed in part.
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2024 (5) TMI 203 - DELHI HIGH COURT
Money Laundering - scheduled offences - predicate offence - respondent nos. 1 and 2 in the scheduled offence acquitted - continuation of proceedings under the PMLA - release of properties attached by the petitioner/ED on the premise that the same are proceeds of crime - pendency of appeal preferred against the order of acquittal in the scheduled offence - HELD THAT:- The controversy articulated in the above noted two questions is no more res integra. The Hon’ble Supreme Court with reference to the relevant provisions of PMLA in Vijay Madanlal Choudhry [2022 (7) TMI 1316 - SUPREME COURT] has observed The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum.
In Parvathi Kollur [2022 (8) TMI 1256 - SC ORDER], the appellants therein were acquitted from the predicate / scheduled offence under the Prevention of Corruption Act, 1988 and premised on the said acquittal, the appellants were discharged from the offence under the PMLA by the Special Court observing that the occurrence of a scheduled offence was the basic condition for giving rise to “proceeds of crime” and that commission of scheduled offence was a pre-condition for proceeding under the PMLA. However, the said order of discharge was set aside by the High Court on a revision filed by the Directorate of Enforcement.
In Prakash Industries Ltd. v. Directorate of Enforcement, [2022 (7) TMI 877 - DELHI HIGH COURT], a Coordinate bench of this Court dealing with an identical question held that charge of money laundering will not survive after the charges in respect of the predicate offence are quashed or the accused is discharged. It was further observed that when it has been found that the accused had not indulged in any criminal activity, the property cannot be treated as proceeds of crime.
Once a person is discharged or acquitted from the scheduled offence, the very foundation gets knocked out and the charge of Money Laundering will not survive as there will be no proceeds of crime. Concomitantly, the properties attached under the PMLA cannot legally be treated as proceeds of crime or be viewed as property derived or obtained from criminal activity - till the judgment of acquittal predicate offence is reversed in an appeal, all the effects of acquittal will continue to operate and mere filing of an appeal against acquittal in a predicate offence would not mean that the respondents will continue to suffer the rigors of criminal proceedings or attachment under the PMLA.
The upshot of above discussion is that no proceedings under the PMLA could be sustained after the acquittal of the respondent nos. 1 and 2 in the predicate offence. Accordingly, the learned Special Judge vide order dated 09.10.2023 has rightly discharged the respondents herein from the offences under the PMLA. Likewise, there is no infirmity in the order dated 07.11.2023 whereby the attached movable and immovable properties were directed to be released by the learned Special Judge.
The petition is dismissed.
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2024 (4) TMI 865 - PUNJAB AND HARYANA HIGH COURT
Maintainability of the instant petition - Money Laundering - scheduled offences - predicate offence - scope and spirit of Section 482 of the Cr.P.C. - whether the ECIR can be quashed in the exercise of its inherent jurisdiction under Section 482 Cr.P.C. by this Court? - HELD THAT:- On a minute perusal of the observations of Hon’ble the Supreme Court in Vijay Madanlal Choudhary’s case [2022 (7) TMI 1316 - SUPREME COURT], it can be safely culled that an ECIR cannot be kept at the same pedestal as an FIR. It is crucial to note that an ECIR is not registered under the Cr.P.C., unlike a First Information Report (FIR), which is mandatorily registered under Section 154 of the Cr.P.C., and subsequently forwarded to the Illaqa Magistrate as per the provisions of Section 157 of the Cr.P.C.. Additionally, there exists no legal obligation to provide a copy of the ECIR to an accused, and the absence of such provision does not in any manner impinge upon any constitutional or statutory rights of a person. Thus, an ECIR is an administrative document prepared by the officers of the ED. It precedes the commencement of the prosecution against individuals involved in the offence of money laundering, which in turn is governed by special statute i.e. PMLA.
This Court unhesitatingly concurs with the contentions made by the learned counsel for the respondent-ED that the ECIR is an internal administrative document of the ED. Consequently, in the considered opinion of this Court, since the ECIR precedes the stage of criminal prosecution and proceedings, it thus falls outside the purview of the inherent jurisdiction conferred upon this Court by Section 482 of the Cr.P.C. Therefore, the prayer of the petitioner for quashing of the ECIR under Section 482 of the Cr.P.C. cannot be entertained.
The present petition fails on grounds of maintainability itself, and is dismissed as such.
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2024 (4) TMI 718 - DELHI HIGH COURT
Seeking grant of pre-arrest bail - Money Laundering - predicate offence - proceeds of crime - illegal gratification - section 45 of PMLA - HELD THAT:- In the case of ROHIT TANDON VERSUS THE ENFORCEMENT DIRECTORATE [2017 (11) TMI 779 - SUPREME COURT], three-judge bench of the Hon'ble Apex Court has held that such statements are admissible in nature and can make out a formidable case about involvement of accused in the offence of money laundering.
Furthermore, the challenge to Section 50 of PMLA was rejected by the Hon'ble Apex Court in case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT], wherein it was held that the statements recorded under Section 50 of PMLA cannot be compared to statements under Section 67 of NDPS Act, and that such statements were not in violation of Article 20(3) of the Constitution of India - thus, at the stage of adjudicating an anticipatory bail application, the statements recorded under Section 50 of PMLA, will be relevant to be considered and appreciated, alongwith other evidence collected by the investigating agency, for the purpose of ascertaining whether the offence of money-laundering is prima facie made out against an accused or not.
There is no doubt that a person is entitled to all remedies, reliefs and fundamental rights available to him under the Constitution and law, such as to seek anticipatory bail, when apprehending arrest by the investigating agency or to file a petition challenging validity of summons issued to him. However, to hold that filing of a petition or an application, which is not diligently pursued, would amount to a justification for not joining investigation despite repeated summons and notices being received from the law enforcement agency, will be a dangerous proposition.
The Courts of law cannot allow a legal strategy, commonly used by a person, to obstruct investigation or join investigation as that would amount to stripping the investigating agency of their valuable right to summon a person under the law, to give information about a suspected crime especially under the law, which has been upheld by the Hon'ble Apex Court as constitutional and not illegal.
The investigating agencies are involved in investigating offences, as per law, and rather it is the boundened duty of every citizen to join investigation when called for. Needless to say, this Court should not be laying down that a citizen will not have a right to seek anticipatory bail, however, to make that a ground for not appearing before the investigating agency cannot be permitted by Courts.
Whether non-co-operation with the investigation agency will come in way of grant or refusal of anticipatory bail? - HELD THAT:- The State has a right to summon a person, through the investigating agencies, to ensure rule of law and bring those who are in conflict with law and in violation of law, within the confines of law. The power of Directorate of Enforcement to summon a person is circumscribed under Section 50 of PMLA and as held by Hon'ble Apex Court in case of Vijay Madanlal Choudhary and Directorate of Enforcement v. State of Tamil Nadu [2024 (4) TMI 667 - SC ORDER], a person so summoned under Section 50 is bound to respect the same - Not responding to or attending to the notices or summons of an investigating agency would amount to non-cooperation with investigation.
As a public servant i.e. a person who is in service of public, especially the one who professes that his whole life is for public service, he should have cooperated with the investigation. Moreso, since the allegations are also of misuse of public funds to his own use by purchasing properties through his associates as well as other irregularities committed by him as Chairman of the Delhi Waqf Board, it becomes crucial that he joins and cooperates with investigation.
When this Court analyzes the material available on record and the investigation conducted so far, it appears that the basic purpose for calling or summoning the applicant herein in the present ECIR is that the evidence collected so far, be it the diaries seized during investigation or the statements recorded under Section 50 of PMLA, have revealed that the properties in questions were purchased from money, including cash amount of about Rs. 27 crores, which is the proceeds of crime generated by the applicant - Non-joining of investigation on this ground therefore, cannot be held in the favour of the applicant/accused since the assessment of evidence gathered by the investigating agency will ultimately be put before the Court of law.
Balancing the right of accused and right of investigating agency - HELD THAT:- Right to life, liberty and security of a person is paramount under the Constitution of India and in the criminal law in India. However, at the same time, the powers of the investigating agency to investigate an offence wherein the joining and providing information by a person is required, sending of summons cannot amount to infringing one's right to freedom and personal liberty on the pretext that the person concerned has apprehension of being arrested. For that, he has a separate remedy to take recourse too, in the form of anticipatory bail as well as regular bail before the Court of law or quashing of summons on whatever ground he deems appropriate - Thus, a person in India has a fundamental right to liberty and life, and the shield of law remains available even to an accused against whom an offence is alleged and his liberty can be curtailed only, as per law. His right against arbitrary detention or arrest to be informed of specific offence, he is accused of, at appropriate stage of investigation, protection against self incrimination, presumption of innocence till held guilty, bail not jail being a rule etc. remain available to an individual who is suspected accused.
Undoubtedly, every such person as any other citizen of India is entitled to the protection of law, however, the law will also equally apply to him, subject to any privilege if at all, in a case applicable to him. Needless to say, the protection as per law which is available to all citizens is also available to such members and public figures. Their standing in lives or being an elected representative of the people does not create a class or elite class entitling them to different treatment being extended under the same law - an MLA or a public figure is not above the law of the land.
In the realm of governance and public service, the role of an elected official carries significant weight and responsibility. As an MLA, the applicant stands as a figure of authority and influence, entrusted with representing the interests and aspirations of their constituents. It is crucial to acknowledge that the actions of such public figures are observed closely by those they serve, often looking up to them for guidance and leadership. Thus, the applicant's failure to cooperate with the investigating agency sets a perilous precedent.
The seizure of diary by the investigating agency which reveals that the properties in question were purchased for about Rs. 36 crore out of which Rs. 27 crores were paid in cash, and out of the total amount of Rs. 36 crores, an amount of Rs. 8.33 crores was paid by the present applicant - Recovery of one Sale Agreement which shows the sale consideration as Rs. 36 crore, as against one alleged false and fabricated agreement which shows the sale consideration as Rs. 13.40 crore which has been allegedly prepared at the behest of present applicant to conceal the proceeds of crime and misguide the investigating agency.
The material evidences so gathered during the course of investigation under PMLA revealed that the applicant Amanatullah Khan has acquired huge cash amounts, being the proceeds of crime out of criminal activities relating to his corrupt and illegal activities relating to illegal recruitment of the persons in Delhi Waqf Board, leasing out the properties of Delhi Waqf Board in unfair & illegal manner, misappropriation of Delhi Waqf Board funds including others while being the public servant i.e. Chairman of Delhi Waqf Board and MLA from Okhla Legislative Assembly of Delhi during the period from 2015 onwards. In order to launder the same, he had hatched a criminal conspiracy along with his close associates and others and in pursuant thereupon, he had invested his ill-gotten money i.e. proceeds of crime, in the immovable properties through his associates namely Zeeshan Haider, Daud Nasir and others.
The material brought before this Court at this stage is sufficient to attract bar under Section 45 of PMLA, and it prima facie shows the offence of money laundering being committed by the present accused/applicant - this Court does not find it a fit case for grant of pre-arrest bail to the present applicant Amanatullah Khan.
The present bail application stands dismissed.
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2024 (4) TMI 689 - SC ORDER
Money Laundering - summons issued by the petitioner, ED under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA) - HELD THAT:- From the documents produced on record today, it appears that the said respondents – Collectors instead of respecting this Court’s order, did not appear in person and filed their replies to the summons dated 01.03.2024 issued by the ED, stating inter alia that the information and data sought for is maintained by the other executive wings and would be required to be collected from different departments and offices located at various places and the process will require some time.
When the Court had passed the order directing them to appear in response to the summons issued by the ED, they were expected to obey the said order and remain present before the ED. By not following the order, they have created an impression that they do not have respect either for the Court, or for the law, much less for the Constitution of India. Such an approach is strongly deprecated.
It is directed that the respondents – District Collectors shall remain personally present and appear before the ED on 25.04.2024 and respond to the summons issued under Section 50 of the PMLA in respect of the information /data sought therein, failing which, strict view shall be taken in the matter.
List on 06.05.2024 for reporting the compliance.
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2024 (4) TMI 688 - CHHATTISGARH HIGH COURT
Seeking grant of anticipatory bail - Money Laundering - twin conditions of Section 45 of the PMLA Act satisfied or not - main accused was exonerated on identical allegations by the Adjudicating Authority - HELD THAT:- It is not in dispute that the FIR was registered on 19.02.2010 whereas the respondent filed a complaint arraying the applicant as accused in ECIR on 04.01.2021 i.e. after 10 years. From the summons issued to the applicant, it is quite vivid that she was permitted to appear through an authorized person and it cannot be said that she did not cooperate in the investigation. According to the proviso appended to Section 45 of the PMLA Act, a woman may be granted anticipatory bail.
The judgment passed by the Hon’ble Supreme Court in the matter of Satender Kumar Antil [2022 (8) TMI 152 - SUPREME COURT] cannot be lost sight of as the applicant is a lady and she cooperated in the investigation of the matter and other co-accused persons against whom similar allegations were made, have already been granted anticipatory bail by the Hon’ble Supreme Court and by this Court, therefore, in the considered opinion of this Court, the present is a fit case to extend the benefit under Section 438 of Cr. P.C. to the applicant.
The anticipatory bail application is allowed and it is directed that in the event of arrest of the applicant in connection with the aforesaid offence, she shall be released on anticipatory bail on her furnishing a personal bond for a sum of Rs. 50,000/- with one surety in the like sum to the satisfaction of the arresting officer on the fulfilment of conditions imposed - bail application allowed.
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2024 (4) TMI 687 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
Money Laundering - Proceeds of crime - attachment of moveable property of the appellant - HELD THAT:- The perusal of the provision of Section 5 of PMLA reveal that the attachment of the property is warranted when it is involved in money laundering and the person is in possession of the 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 any proceedings relating to confiscation. The attachment of the property thus pre-supposes not only it to be proceeds of crime but apprehension of its concealment or transfer, etc.
In the instant case, it is not in dispute that Bund Garden Police Station has frozen the bank account No.920020062949058 of TIET on 29.08.2021. It is for the amount of proceeds of crime to the tune of Rs.7.96 crores and additional amount is of Rs.1.5 crores for which a property of the appellant in the connected appeal has been attached. Till the order of Competent Authority of police remains in force, there cannot be any likelihood of transfer or alienation of the said amount by the appellant. In view of the above, there was no reason for the respondent to attach the TIET Bank account and accordingly we find that attachment was caused by the respondent without there being an element of any apprehension or alienation or to deal with the property in a manner to frustrate the confiscation.
The proceeds of crime involved in this case is for a sum of Rs.8,67,98,250/- and the amount available in the TIET account is of Rs.7.96 crore, however attachment was to bemade to the extent of Rs.8,67,98,250/-and accordingly a property worth of Rs.1.50 crores of the appellant in the connected appeal was attached. The attachment of the amount in this case is of Rs.7,17,98,250/- - Since we have caused interference in the order of attachment and its confirmation in reference to Section 5(1) of the Act of 2002 as a greater amount than attached has been frozen by the Bund Garden Police Station, Pune, our order in favour of the appellant would operate till amount of Rs.7.96 crores remains frozen with the Bund Garden Police Station and is not interfered or withdrawn.
Appeal disposed off.
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2024 (4) TMI 686 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
Money Laundering - provisional attachment order - Without there being any evidence to prove a case of money laundering by the appellant, the order of attachment has been confirmed by the Adjudicating Authority - violation of principles of natural justice - HELD THAT:- As per the accounting system, payment towards the supply of material has to be made by the firm to whom supplies have been made. It cannot by a stranger firm unless proper arrangements in writing are made. The facts of this case are quite alarming. The transaction to deposit the amount in the bank account of the appellant was not under normal circumstances but was at the time of demonetization of money by the Govt. of India. Although the appellant is not an accused but the proceeds of crime has been channelized to him, thus attachment cannot be held to be illegal.
The detailed charge sheet has not been quoted which otherwise refers further facts as to how demonetized money was channelized in the bank accounts of the companies and ultimately it came in the account of appellant.
The appellant no doubt submitted the invoices to show supply of cloths to Ajay Kumar Jain but he has not produced any material to show arrangement for payment towards the supply to Ajay Kumar Jain through the bank account of three non-existing companies. The appellant has shown his innocence for receipt of the money towards its supply to Ajay Kumar Jain but it cannot be accepted. The appellant was knowing receipt of money through the firms to whom he never supplied any material.
There are no illegality in the impugned order - appeal dismissed.
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