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of <h1>Petitioner's Charges Upheld Under PMLA Sections 3 & 4: Money Laundering, Fraud, Riots</h1> <h3>Tahir Hussain Versus The Assistant Director Enforcement Directorate</h3> Tahir Hussain Versus The Assistant Director Enforcement Directorate - TMI Issues Involved:1. Whether the charges under Section 3 of the PMLA read with Section 4 of the PMLA can be framed in the absence of proceeds of crime from the predicate offence.2. Whether amounts arising from a non-scheduled offence can be treated as proceeds of crime.3. Whether the phrase 'criminal activity relating to the scheduled offence' under Section 2(u) encompasses offences not specified in the Schedule.4. Whether transactions unrelated to the scheduled offence can be treated as interconnected offences under Section 23.5. Whether statements recorded under Section 50 of the PMLA can be used to incriminate despite constitutional and statutory bars.6. Whether the Enforcement Directorate has jurisdiction to investigate non-scheduled offences.7. Whether prosecution under Section 3 and 4 of the PMLA is valid without proceeds of crime.8. Whether incomplete investigation bars framing of charges.Detailed Analysis:1. Charges under Section 3 of the PMLA:The petitioner argued that the provisions of Section 3 of the PMLA cannot be invoked as there is no material suggesting accumulation of proceeds of crime from the predicate offences. The court, however, held that the statements under Section 50 of the PMLA are admissible and the evidence indicates the petitioner's involvement in money laundering. The court referenced the Supreme Court's decision in Vijay Madan Lal Choudhary, which clarifies that the offence of money laundering is independent and involves any process connected with proceeds of crime derived from a scheduled offence. The court concluded that the petitioner's actions fall within the ambit of Section 3 of the PMLA.2. Amounts from Non-Scheduled Offences:The petitioner contended that GST violations are not scheduled offences and thus cannot constitute proceeds of crime under the PMLA. The court rejected this argument, stating that the offence of criminal conspiracy under Section 120B IPC is a standalone scheduled offence. The court noted that the proceeds of crime include property derived from any criminal activity related to a scheduled offence, which in this case involves fraudulent transactions and funding riots.3. Criminal Activity Relating to Scheduled Offence:The court clarified that the definition of proceeds of crime under Section 2(u) of the PMLA includes property derived from any criminal activity related to a scheduled offence. The court emphasized that the process or activity connected with proceeds of crime constitutes money laundering, regardless of the nature of the predicate offence.4. Interconnected Offences:The petitioner argued that transactions unrelated to the scheduled offence cannot be treated as interconnected offences under Section 23. The court, however, held that the conspiracy to commit a scheduled offence (criminal conspiracy) and the subsequent use of proceeds of crime for riots fall within the ambit of interconnected offences under the PMLA.5. Admissibility of Statements under Section 50 of PMLA:The petitioner challenged the admissibility of statements recorded under Section 50 of the PMLA. The court referenced the Supreme Court's decision in Rohit Tandon, which upheld the admissibility of such statements. The court noted that the statements of witnesses, including the petitioner's driver, provided substantial evidence of the petitioner's involvement in money laundering.6. Jurisdiction of Enforcement Directorate:The petitioner questioned the jurisdiction of the Enforcement Directorate (ED) to investigate non-scheduled offences. The court held that the ED has jurisdiction to investigate offences under the PMLA, which includes investigating the proceeds of crime derived from scheduled offences. The court emphasized that the offence of money laundering is independent and involves processes connected with proceeds of crime.7. Validity of Prosecution under PMLA:The petitioner argued that prosecution under Sections 3 and 4 of the PMLA is invalid without proceeds of crime. The court rejected this argument, stating that the process or activity connected with proceeds of crime constitutes money laundering. The court noted that the petitioner's actions of fraudulent transactions and funding riots fall within the ambit of money laundering.8. Incomplete Investigation and Framing of Charges:The petitioner contended that charges could not be framed based on incomplete investigation. The court referred to Explanation (ii) to Section 44(1) of the PMLA, which allows for subsequent complaints in respect of further investigation. The court held that the initial investigation provided sufficient grounds for framing charges, and further investigation would not bar the framing of charges.Conclusion:The court upheld the framing of charges against the petitioner under Section 3 of the PMLA, punishable under Section 4. The court found prima facie evidence of the petitioner's involvement in money laundering, fraudulent transactions, and funding riots, making him culpable under the PMLA. The petition and accompanying application were declined.
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