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<h1>Judicial custody extended in money laundering case, PMLA investigations to continue despite closure report.</h1> <h3>Babulal Verma, Kamal Kishore Gupta Versus Enforcement Directorate, Mumbai, State of Maharashtra</h3> Babulal Verma, Kamal Kishore Gupta Versus Enforcement Directorate, Mumbai, State of Maharashtra - TMI Issues Involved:1. Legality of the extension of judicial custody.2. Impact of the 'C' Summary Report on the proceedings under the Prevention of Money Laundering Act (PMLA).3. Validity of the proceedings under PMLA after the predicate/scheduled offence is compromised/compounded.4. Interpretation of Section 44 of PMLA and its implications on the ongoing investigation by the Enforcement Directorate (ED).Issue-wise Detailed Analysis:1. Legality of the Extension of Judicial Custody:The applicants challenged the order dated 15th February 2021, by the Special Judge, which extended their judicial custody and denied bail. The court examined the detailed remand application filed by the ED, which highlighted the serious nature of the economic offence involving money laundering of Rs. 410 Crores. The court found that the Special Judge did not err in extending the judicial custody, as the investigation required systematic and thorough analysis due to the complex nature of money laundering involving multiple stages like placement, layering, and integration.2. Impact of the 'C' Summary Report on the Proceedings under PMLA:The applicants argued that the acceptance of the 'C' Summary Report by the Judicial Magistrate in the predicate offence (FIR No.109 of 2020) should result in the termination of proceedings under PMLA. However, the court noted that the filing of a closure report in the predicate offence does not affect the ongoing investigation under PMLA. The court emphasized that the PMLA investigation is independent and can continue irrespective of the outcome of the predicate offence.3. Validity of the Proceedings under PMLA after the Predicate/Scheduled Offence is Compromised/Compounded:The applicants contended that once the predicate offence is compromised or compounded, the PMLA proceedings should cease. The court rejected this argument, stating that the PMLA investigation stands on its own and is not dependent on the predicate offence's outcome. The court referred to the legislative intent and the provisions of PMLA, which indicate that the investigation under PMLA continues independently to track and investigate money laundering offences.4. Interpretation of Section 44 of PMLA and its Implications on the Ongoing Investigation by ED:The court analyzed Section 44 of PMLA, particularly the explanation to Sub-Section (d), which clarifies that the jurisdiction of the Special Court and the ED is not dependent on any orders passed concerning the predicate offence. The court upheld that once an offence under PMLA is registered based on a scheduled offence, the investigation under PMLA continues independently. The court cited various judgments, including those from the Supreme Court and High Courts, affirming that the PMLA is a self-contained statute and the offence of money laundering is an independent offence.Conclusion:The court concluded that the ongoing investigation by the ED under PMLA is valid and independent of the outcome of the predicate offence. The extension of judicial custody was found to be proper, and the applicants' request for release from confinement or bail was denied. The applications were dismissed, and the bail application was disposed of accordingly.