2022 (2) TMI 620 - HC - Money Laundering

High Court allows petition under Section 482 Cr.P.C., finds lack of new evidence in PMLA case

The court held that the petition under Section 482 Cr.P.C. was maintainable, as the High Court's inherent jurisdiction could be invoked. It found the ... Money Laundering - Maintainability of petition - invocation of inherent jurisdiction of this Court - abuse of official position by not taking proper care and precaution in verifying the entries and bills - offences or not - HELD THAT:- The Orissa High Court in SMT. JANATA JHA AND ANOTHER VERSUS ASSISTANT DIRECTOR, DIRECTORATE OF ENFORCEMENT, GOVERNMENT OF INDIA AND ANOTHER. [2013 (12) TMI 1588 - ORISSA HIGH COURT] has not held that the petitioner under Section 482 Cr.P.C. is not maintainable as the petitioners of that petition have not availed the remedy of revision, rather it has been observed that for quashing the proceeding initiated under the Act, 2002 the High Court may examine as to whether the inherent powers are to be invoked or not - the inherent jurisdiction of this Court enshrined under Section 482 Cr.P.C. may be invoked and, therefore, the present petition is maintainable. As per provision of Section 44 (1) of PMLA Act, further investigation is permissible but that may be conducted to bring any 'further evidence', oral or documentary, against any accused person involved in respect of offence, for which, the complaint has already been filed, whether he is named in the original complaint or not - So as to examine the authenticity or legality of the impugned Supplementary Prosecution Complaint in the instant case, this Court has to examine as to whether the Supplementary Prosecution Complaint has been filed on the basis of any 'further evidence' . On the basis of material available on record, the prosecution has not considered any 'further evidence', rather the statements of various persons, which have been recorded under Section 50 of the Act, 2002 prior to the date when the first complaint was filed on 30.06.2018, have been considered. The question as to whether the allegation of abuse of official position by not taking proper care and precaution in verifying the entries and bills would be treated as an offence under the Act, 2002, may be considered after exchange of affidavits - the impugned Supplementary Prosecution Complaint against the petitioner alleges the same allegation as has been levelled by the C.B.I. At running page 133 of the petition, the conclusion of investigation by the ED has been indicated verbatim the same allegation with the same language has been levelled which has been levelled by the C.B.I. Since the impugned Supplementary Prosecution Complaint was filed before the learned trial court of ED, therefore, before taking cognizance on the aforesaid Supplementary Prosecution Complaint the provisions of Section 44 (1) (ii) of the Act, 2002 should have been considered. The learned trial court must ask from the prosecution as to what 'further evidence', oral or documentary has been collected after filing the first prosecution complaint to prosecute the petitioner in the present case inasmuch as the further investigation may only be conducted to bring any 'further evidence', oral or documentary, against the accused person - In the present case, the learned trial court of ED vide the impugned order dated 11.08.2021 (Annexure No.6) has taken cognizance against of the second Supplementary Prosecution Complaint and issued summon against the petitioner without adverting to the relevant factual and legal aspects. List this petition in the week commencing 29.11.2021 as fresh. Issues Involved:1. Maintainability of the petition under Section 482 Cr.P.C.2. Legality of the Supplementary Prosecution Complaint.3. Application of Section 44 (1) (ii) of the Prevention of Money Laundering Act, 2002.4. Prima facie satisfaction for interim relief.Detailed Analysis:1. Maintainability of the Petition under Section 482 Cr.P.C.:The primary issue addressed was whether the petition filed under Section 482 Cr.P.C. is maintainable. The petitioner argued that the High Court has discretionary power under Section 47 of the Prevention of Money Laundering Act, 2002, which supplements Section 65 of the Act and includes the provisions of Section 482 Cr.P.C. The petitioner cited several judgments from the Hon'ble Apex Court, including *State of Haryana vs. Bhajan Lal* and *Pepsi Foods Ltd. vs. Special Judicial Magistrate*, asserting that the inherent powers of the High Court can be invoked to prevent abuse of the process of the court or to secure the ends of justice. The court found that the inherent jurisdiction under Section 482 Cr.P.C. could be invoked in this case and thus, the petition is maintainable.2. Legality of the Supplementary Prosecution Complaint:The petitioner contended that the Supplementary Prosecution Complaint filed on 29.06.2020 was illegal and unwarranted, as it was based on statements recorded before the original complaint was filed on 30.06.2018. The petitioner argued that the Enforcement Directorate (ED) did not conduct an independent investigation and merely copied the findings of the Central Bureau of Investigation (CBI). The court noted that the ED should have presented new evidence in the supplementary complaint rather than relying on previously recorded statements. The court found that the supplementary complaint appeared to lack independent investigation and was not justified under the given circumstances.3. Application of Section 44 (1) (ii) of the Prevention of Money Laundering Act, 2002:The court examined whether the supplementary complaint was filed in accordance with Section 44 (1) (ii) of the Act, which allows for further investigation to bring new evidence against any accused person. The court observed that the supplementary complaint did not present any new evidence but relied on statements recorded before the original complaint was filed. The court emphasized that further investigation should bring new evidence, which was not the case here. The court found that the trial court should have inquired about the new evidence before taking cognizance of the supplementary complaint.4. Prima Facie Satisfaction for Interim Relief:The court analyzed the prima facie satisfaction for granting interim relief by examining the prosecution complaints and the statements recorded under Section 50 of the Act. The court noted that the petitioner was not accused in the original prosecution complaint and was only included in the supplementary complaint based on previously recorded statements. The court found that the trial court did not apply its mind to the facts and law before summoning the petitioner. The court referred to the judgment in *Pepsi Foods Ltd. vs. Special Judicial Magistrate*, which mandates that the summoning order must reflect the application of mind by the magistrate. The court concluded that the matter required further consideration and granted interim relief by staying the operation and implementation of the impugned cognizance order dated 11.08.2021.Conclusion:The court found that the petition under Section 482 Cr.P.C. is maintainable, the supplementary prosecution complaint lacked independent investigation and new evidence, and the trial court did not properly apply the law before summoning the petitioner. The court granted interim relief by staying the cognizance order and scheduled further hearings for detailed examination.