2021 (8) TMI 665 - HC - Money Laundering

PMLA Allows Independent Trial of Money Laundering Offences - Court Upholds Impugned Orders

The court held that the trial of offences under the PML Act is independent and can proceed without awaiting the outcome of the predicate/scheduled ... Money Laundering - scheduled offences - hearing on charges and trial proceedings in subject Sessions Cases registered for the offences under PML Act before commencement of hearing on charges and trial proceedings in the subject Calendar Cases registered for the predicate/scheduled offences - conduct of trial proceedings of predicate/scheduled offences and offences under PML Act simultaneously or not - HELD THAT:- A bare reading of Sections 2(1)(u), 3 and 44(1)(d) of PML Act along with explanations thereof makes it clear that the offence of money laundering is a stand-alone offence and the trial proceedings are completely different to that of the scheduled offence. Trial of money laundering offence is independent trial and it is governed by its own provisions, it will not meddle with the trial of scheduled offence. Similar question came up for consideration before the Hon’ble High Court of Madras in Smt.Soodamani Dorai Vs. Joint Directorate of Enforcement’s case [2018 (10) TMI 330 - MADRAS HIGH COURT] relied by the respondents, wherein, it was held that adjudication, prosecution and trial under PML Act is independent of scheduled offence. Further, a reading of the provisions of PML Act makes it clear that though the commission of scheduled offence is a fundamental pre-requisite for initiating proceedings under the PML Act, the offence of money laundering is independent of the scheduled offences. The scheme of the PML Act indicates that it deals only with laundering of money acquired by committing the scheduled offence. In other words, the PML Act deals only with the process or activity of proceeds of crime, including its concealment, possession, acquisition or use and it has nothing to do with the launch of prosecution for scheduled offence and continuation thereof - Once an offence under the PML Act is registered on the basis of a predicate/scheduled offence, then it stands on its own and it does not require support of predicate/scheduled offence. As per the scheme of the PML Act, it does not depend upon the ultimate result of the predicate/scheduled offence. Even if the predicate/scheduled offence is compromised, compounded, quashed or the accused therein is/are acquitted, the investigation under PML Act does not get affected, ceased or wiped out. It may continue till the Enforcement Directorate concludes investigation and either files complaint or closure report before the Special Court. PML Act is a special statute enacted with a specific object to track and investigate cases of money-laundering. Therefore, if the contention of the learned senior counsel for the petitioners that when the foundation (predicate/scheduled offence) is removed, the structure/frame work thereon (offence under PML Act) falls is accepted, it will have frustrating effect on the intention of Legislature in enacting the PML Act, so also on its enforcement - Further, the burden of proof in the predicate/Scheduled offences and the offence under PML Act is different. Unless proceeds of crime are established by putting the accused on trial, any prosecution of the person under PML Act would be premature and would be futile exercise. Since the offence under PML Act is a stand-alone offence and not dependent on predicate/scheduled offences, it can be proceeded with independently without awaiting the outcome of result of scheduled offences or commencement of trial in the predicate/scheduled offences. Further, there is no requirement under law to conduct trials of both category of cases simultaneously. Therefore, the contention that Money Laundering offence starts at the end of predicate offence and commencement of trial in offence under PML Act shall not precede trial of predicate/scheduled offence, is unsustainable. It is well established that though the powers of this Court under Section 482 Cr.P.C., are very wide, those powers are required to be exercised sparingly and with abundant caution. The said inherent power can be exercised only when there is abuse of process of Court or to secure ends of justice - there is nothing to say that the order impugned suffers from illegality or impropriety or the Court below had acted beyond its jurisdiction. Criminal Revision Case is dismissed. Issues Involved:1. Whether hearing on charges and trial proceedings can go on in subject Sessions Cases registered for the offences under PML Act before commencement of hearing on charges and trial proceedings in the subject Calendar Cases registered for the predicate/scheduled offencesRs.2. Whether trial proceedings of predicate/scheduled offences and offences under PML Act be conducted simultaneouslyRs.3. Whether the impugned orders of even date dated 11.01.2021, passed in various S.C. and Crl.M.P. cases by the Principal Special Judge for CBI Cases, Hyderabad, are legally sustainableRs.Issue-Wise Detailed Analysis:1. Hearing on Charges and Trial Proceedings Under PML Act:The petitioners contended that offences under the PML Act are not standalone and are inextricably linked to predicate/scheduled offences. They argued that without proving the guilt under the predicate/scheduled offences, any prosecution under the PML Act would be premature and futile. They emphasized that the predicate/scheduled offence is the foundation, and the offence under the PML Act is the structure/framework built upon it. If the foundation is removed, the structure/framework would fall. The petitioners relied on various judgments to support their contention that the trial of predicate/scheduled offences must precede the trial of offences under the PML Act.The respondents countered by stating that the PML Act, being a special legislation, provides for independent proceedings for money laundering offences. They argued that the amendment to Section 44 of the PML Act in 2013, and further clarification through the Finance (No.2) Act, 2019, explicitly state that the trial of money laundering offences is independent and not dependent on the outcome of the predicate/scheduled offences. The respondents cited several judgments to support their argument that money laundering is a standalone offence and can be prosecuted independently.The court held that the offence of money laundering under the PML Act is a standalone offence and can be prosecuted independently of the predicate/scheduled offences. The court emphasized that the PML Act, being a special statute, has its own distinct procedure and is not dependent on the outcome of the predicate/scheduled offences. The court concluded that the trial of offences under the PML Act can proceed without awaiting the outcome of the predicate/scheduled offences.2. Simultaneous Trial of Predicate/Scheduled Offences and Offences Under PML Act:The petitioners argued for simultaneous trials of predicate/scheduled offences and offences under the PML Act, stating that it would fulfill the aim and object of the PML Act. They contended that the trial of predicate/scheduled offences should precede the trial of offences under the PML Act, or both should be tried simultaneously.The respondents maintained that the trial of money laundering offences under the PML Act is independent and does not require simultaneous trials with predicate/scheduled offences. They emphasized that the PML Act provides for independent prosecution and trial of money laundering offences, regardless of the outcome of the predicate/scheduled offences.The court held that there is no requirement under law to conduct simultaneous trials of both categories of cases. The court emphasized that the trial of money laundering offences is independent and can proceed without awaiting the outcome of the predicate/scheduled offences. The court concluded that the contention for simultaneous trials is unsustainable.3. Legal Sustainability of the Impugned Orders:The petitioners challenged the impugned orders dated 11.01.2021, passed by the Principal Special Judge for CBI Cases, Hyderabad, arguing that they are contrary to law and settled legal positions. They contended that the orders failed to recognize the interdependence of the offences under the PML Act and the predicate/scheduled offences.The respondents argued that the impugned orders are legally sustainable and in accordance with the provisions of the PML Act. They emphasized that the PML Act provides for independent prosecution and trial of money laundering offences, and the impugned orders correctly reflect this legal position.The court held that the impugned orders are legally sustainable and in accordance with the provisions of the PML Act. The court emphasized that the PML Act, being a special legislation, provides for independent prosecution and trial of money laundering offences. The court concluded that the contentions raised by the petitioners do not merit consideration, and the impugned orders are upheld.Conclusion:The court dismissed the Criminal Petitions and the Criminal Revision Case, holding that the trial of offences under the PML Act is independent and can proceed without awaiting the outcome of the predicate/scheduled offences. The court emphasized that the PML Act provides for independent prosecution and trial of money laundering offences, and the impugned orders are legally sustainable. The court concluded that the contentions raised by the petitioners are unsustainable and devoid of merit.