2011 (3) TMI 1789 - SC - Money Laundering

Supreme Court grants stay on Money Laundering Act order, allows detention for interrogation

The Supreme Court granted a stay of the operation of the impugned order passed by the Principal Judge under the Prevention of Money Laundering Act, ... Stay of an interlocutory order - prima facie satisfaction of commission of offence under the Prevention of Money Laundering Act, 2002 - interference in extraordinary circumstances to prevent frustration of investigation - authorisation of custodial detention for custodial interrogation by Enforcement DirectorateStay of an interlocutory order - interference in extraordinary circumstances to prevent frustration of investigation - Grant of stay against the order dated 11.3.2011 passed by the Principal Judge, City Civil and Sessions Court and Special Court under the Prevention of Money Laundering Act, 2002, Mumbai in R.A. No. 1 of 2011 in ECIR/02/MZO/2007. - HELD THAT: - The Supreme Court granted a stay of the impugned order of 11.3.2011 on the ground that the learned Principal Judge's order, if permitted to operate even briefly, would create an extraordinary situation likely to frustrate the ongoing investigation. The Court accepted that the available material prima facie discloses commission of an offence under the Prevention of Money Laundering Act, 2002, and concluded that the extraordinary nature, complexity and magnitude of the case justify immediate interference by this Court to preserve the integrity of the investigation. In view of these considerations the Court stayed the operation of the lower court's order. [Paras 2, 3, 4, 5]Stay of operation of the impugned order dated 11.3.2011 granted.Prima facie satisfaction of commission of offence under the Prevention of Money Laundering Act, 2002 - authorisation of custodial detention for custodial interrogation by Enforcement Directorate - Authorisation of custody of the respondent/accused with the Enforcement Directorate for custodial interrogation for a limited period. - HELD THAT: - Having formed prima facie satisfaction that the material on record discloses an offence under the Prevention of Money Laundering Act, 2002, and noting the extraordinary circumstances, complexity and magnitude of the matter, the Court authorised the detention of the respondent/accused in the custody of the Enforcement Directorate for custodial interrogation. The detention was specifically authorised for a fixed period of four days to enable custodial interrogation by the authorities. [Paras 3, 6, 7]Detention of the respondent/accused in Enforcement Directorate custody authorised for four days.Final Conclusion: The Supreme Court stayed the impugned order dated 11.3.2011 and, having found prima facie satisfaction of an offence under the Prevention of Money Laundering Act, 2002 and extraordinary circumstances risking frustration of the investigation, authorised custody of the respondent with the Enforcement Directorate for four days for custodial interrogation. Issues involved: Stay of impugned order, commission of offence under Prevention of Money Laundering Act, extraordinary situation created by the order, detention for custodial interrogation.In the judgment, the Supreme Court granted a stay of the operation of the impugned order passed by the Principal Judge, City Civil and Sessions Court and Special Court under the Prevention of Money Laundering Act, 2002. The Court found that the material on record prima facie disclosed the commission of an offence by the Respondent under the provisions of the Prevention of Money Laundering Act, 2002. The Court noted that the order passed by the Principal Judge created an extraordinary situation that could frustrate the ongoing investigation if allowed to stand, leading to the decision to interfere with the order at that stage. Due to the extraordinary circumstances and complexity of the issues involved, the Court authorized the detention of the Respondent for custodial interrogation by the authorities of the Enforcement Directorate for a period of four days.