2022 (9) TMI 1478 - HC - Money Laundering

Impugned criminal petition dismissed; trial court instructed to proceed; connected petitions closed.

The court dismissed the Criminal Original Petition, stating that the impugned complaint contained prima facie materials and should not be quashed. The ... Money Laundering - scheduled offence - illicit money or not - inclusion of Sections 467, 468 and 471 of IPC subsequently in the FIR, can be a cause of action for the Enforcement Directorate to maintain the complaint or not - HELD THAT:- It may be relevant to state that the an officer of the Enforcement Directorate is not a police officer within the meaning of Section 25 of The Evidence Act. As observed by the Supreme Court in a catena of decisions including Ramesh Chandra Mehta vs State of West Bengal [1968 (10) TMI 50 - SUPREME COURT], a person becomes an accused in an economic offence investigated by non-police officials so as to avail of the protection under Article 22(1) of the Constitution of India only when there is a formal accusation laid against him. In this case, the Enforcement Directorate registered the case on 19.03.2012 and Nagarajan (A1) was only considered as a suspect. No formal accusation was laid against him as the enquiry had only then begun. Applicability of Section 420 IPC, in the absence of any person complaining that he was cheated - HELD THAT:- On a scrutiny of the facts alleged in the police case, it is seen that this group appears to have printed the lottery tickets of other States and sold to public in Tamil Nadu. Are not the ingredients of cheating and dishonestly inducing delivery of property inbuilt in this allegation? True, that those who had purchased the lottery tickets from this group have not been identified by the police. But, that cannot be a reason to hold that there is no material in the police case to prosecute the offenders under Section 420 IPC. The impugned complaint is bereft of prima facie materials for quashing the same - this Criminal Original Petition is dismissed. Issues Involved:1. Quashing of proceedings in C.C. No. 21 of 2016.2. Legitimacy of the Enforcement Directorate's complaint under PMLA.3. Admissibility of statements made to Enforcement Directorate officials.4. Inclusion of additional IPC sections in the FIR.5. Evidence sufficiency and witness credibility.Detailed Analysis:1. Quashing of Proceedings in C.C. No. 21 of 2016:The petitioners sought to quash the proceedings in C.C. No. 21 of 2016. The court noted that the petitioners had previously filed a quash petition which was dismissed as withdrawn. Despite this, the court decided not to dismiss the current quash petition on procedural grounds, allowing it to be heard on its merits.2. Legitimacy of the Enforcement Directorate's Complaint under PMLA:The Enforcement Directorate registered a case on 19.03.2012 under the Prevention of Money Laundering Act (PMLA) following the seizure of Rs. 7,20,05,000/- and based on the FIR in Crime No. 304 of 2012 which disclosed a 'scheduled offence' under Section 420 IPC. The court found that the subsequent act of fabricating a sale agreement by the accused to prove the legitimacy of the seized amount did not affect the primary fact that the cash was seized on 12.03.2012 and should be shown as 'proceeds of crime'.3. Admissibility of Statements Made to Enforcement Directorate Officials:The court discussed the admissibility of the statements made by Nagarajan to the Enforcement Directorate officials. It was argued that such statements are inadmissible under Section 25 of the Evidence Act and Articles 20 and 22 of the Constitution. However, the court clarified that an officer of the Enforcement Directorate is not a police officer within the meaning of Section 25 of the Evidence Act. The statement made by Nagarajan while in judicial custody and under the watchful eyes of prison authorities was deemed admissible. The court referenced the Supreme Court's ruling in K.I. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, which held that a retracted confession retains its value if it is voluntary and unimpeachable.4. Inclusion of Additional IPC Sections in the FIR:The court addressed the inclusion of Sections 467, 468, and 471 of IPC in the FIR. It was argued that these sections were added subsequently to the original FIR and should not give cause for the Enforcement Directorate's complaint. The court agreed that the subsequent acts of fabricating a sale agreement were irrelevant to the primary issue of whether the seized amount was 'proceeds of crime'.5. Evidence Sufficiency and Witness Credibility:The petitioners contended that there was no material evidence to support the charge under Section 420 IPC and that the Enforcement Directorate's complaint was based on insufficient witness testimony. The court found that the statement of Nagarajan, which implicated the accused in printing and selling lottery tickets illegally, provided prima facie material for the case. The court also noted that the trial court has the power to summon additional witnesses under Section 311 of Cr.P.C. if necessary.Conclusion:The court dismissed the Criminal Original Petition, stating that the impugned complaint contained prima facie materials and should not be quashed. The trial court was instructed to proceed with the trial uninfluenced by the observations made in the judgment. Consequently, connected miscellaneous petitions were also closed.