PMLA complaint against director upheld where specific role, proceeds of crime allegations, and brief cognizance order were sufficient.

Specific allegations that a company director was responsible for day-to-day affairs and that proceeds of crime were concealed and invested through the company supported the PMLA complaint, so the quashing challenge failed. The Court held that income-tax clearance did not negate the money-laundering allegations or show that proceeds of crime were absent, and authorities on absence of director liability were distinguishable because the present complaint attributed a direct role to the petitioner. It also held that a brief cognizance order was not invalid, as a Magistrate taking cognizance on a complaint or police/material report need not record detailed reasons at that stage. The proceedings were upheld.

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Issues: Whether the supplementary complaint and cognizance order under the Prevention of Money Laundering Act, 2002 against a director of the company were liable to be quashed on the grounds of absence of specific allegations, income-tax clearance, and alleged infirmity in the cognizance order.

Analysis: The complaint contained express allegations that the petitioner was a director responsible for the day-to-day affairs of the company and that proceeds of crime were concealed and invested through the company with his connivance. The Court noted that the company's quashing challenge had already failed in earlier proceedings and that the petitioner's reliance on income-tax clearance did not negate the money-laundering allegations, since such clearance did not establish that proceeds of crime were absent from the return or that the PMLA allegations were rendered ineffective. The authorities cited on absence of director liability were distinguished on facts because, unlike those cases, the present complaint contained a specific role attributed to the petitioner. The Court also held that the cognizance order was not vitiated merely because it was brief, since in a case instituted on a complaint or police/material report the Magistrate is not required to record detailed reasons at the stage of taking cognizance.

Conclusion: The petition for quashing was not maintainable on merits and the proceedings against the petitioner were upheld.

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