Court quashes PMLA proceedings lacking scheduled offences; Enforcement Directorate can revive if new evidence surfaces.

The Court quashed ECIR No. ECIR/PJZO/03/2022 and related proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) as the Petitioners were not named in the FIR and no scheduled offences under PMLA were alleged against them. The Court relied on Supreme Court precedents emphasizing the necessity of scheduled offences for PMLA prosecution. The Enforcement Directorate was given the liberty to revive the proceedings if future investigations revealed the Petitioners' involvement in any scheduled offences under PMLA.

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Issues Involved:
1. Quashing of ECIR No. ECIR/PJZO/03/2022 and related proceedings under the Prevention of Money Laundering Act, 2002 (PMLA).
2. Legality of proceedings initiated when no scheduled offence under PMLA is alleged against the Petitioners.
3. Consideration of Supreme Court precedents on the necessity of scheduled offences for PMLA prosecution.

Summary:

Issue 1: Quashing of ECIR No. ECIR/PJZO/03/2022 and related proceedings under PMLA

The Petitioners sought the quashing of ECIR No. ECIR/PJZO/03/2022 dated 28/1/2022 and the proceedings in PMLA No. 01/2022 pending before the Additional Sessions Judge and Special Court under PMLA 2002, at Mapusa, Goa. They also sought to quash the attachment proceedings initiated under the same ECIR.

Issue 2: Legality of proceedings initiated when no scheduled offence under PMLA is alleged against the Petitioners

The Petitioners argued that since they were not named in FIR No. 10/2022 and no scheduled offences under PMLA were alleged against them, the proceedings should be quashed. The FIR initially included offences under Sections 420, 409, 120-B read with Section 34 of the IPC and Sections 3 and 4 of the Goa Public Gambling Act, 1976, along with Section 66-D of the Information Technology Act, 2000. However, the charge sheet filed later only invoked Sections 3 and 4 of the Goa Public Gambling Act, dropping the scheduled offences under Sections 420 and 120-B of IPC.

Issue 3: Consideration of Supreme Court precedents on the necessity of scheduled offences for PMLA prosecution

The Petitioners relied on the Supreme Court's decision in Vijay Madanlal Choudhary and ors. Vs. Union of India and ors., which held that prosecution under PMLA could not proceed without a scheduled offence being registered. They also cited Indrani Patnaik vs Directorate of Enforcement and ors., where the Supreme Court quashed the prosecution complaint as the Petitioners were discharged of the scheduled offences.

The Court noted that the Petitioners were not named in FIR No. 10/2022, and the charge sheet did not include any scheduled offences under PMLA. The Supreme Court in Vijay Madanlal Choudhary (supra) held that the offence under Section 3 of PMLA is dependent on the illegal gain of property due to criminal activity relating to a scheduled offence. Therefore, the prosecution under PMLA could not proceed in the absence of a scheduled offence.

The Court also referred to the communication dated 20/4/2023 from the Crime Branch, which indicated that further investigation was ongoing. However, no scheduled offences were yet alleged against the Petitioners.

Based on these findings and the precedents, the Court concluded that the impugned ECIR and related proceedings should be quashed. However, the Court granted the Enforcement Directorate the liberty to revive the proceedings if future investigations revealed the Petitioners' involvement in any scheduled offences under PMLA.

Conclusion:

The Court allowed both Petitions, making the Rule absolute in terms of prayer clauses (a), (b), and (c). The impugned ECIR No. ECIR/PJZO/03/2022 dated 28/1/2022 and all proceedings arising from it, including the prosecution complaint dated 3/6/2022 and attachment proceedings, were quashed. The Enforcement Directorate was granted the liberty to revive the proceedings if new material indicated the Petitioners' involvement in any scheduled offences under PMLA.

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