2024 (3) TMI 1138 - HC - Money Laundering

Special Judge cannot take cognizance twice on same PMLA offence despite supplementary complaint under Section 44

HC quashed Special Judge's order taking cognizance of PMLA offences for second time based on supplementary complaint. Court held that while Enforcement ... Supplementary complaint - power of further investigation under Section 173(8) Cr.P.C. - investigation under PMLA - applicability of Cr.P.C. to PMLA investigations - taking of cognizance - cognizance is of the offence and not of the offenderSupplementary complaint - investigation under PMLA - applicability of Cr.P.C. to PMLA investigations - Maintainability of a supplementary complaint filed by the Enforcement Directorate in respect of further investigation arising out of an earlier complaint under PMLA. - HELD THAT: - The Court held that proceedings conducted by the Enforcement Directorate for collection of evidence fall within the definition of 'investigation' under Section 2(h) Cr.P.C. read with Section 2(na) of the PMLA, and that Section 65 of the PMLA makes Cr.P.C. provisions applicable insofar as they are not inconsistent with PMLA. Consequently, the power conferred by Section 173(8) Cr.P.C. to conduct further investigation applies to investigations under PMLA, and the Explanation to sub section (1) of Section 44 PMLA recognises that a complaint may include subsequent complaints to place further evidence on record. Relying on precedent, the Court concluded that where further investigation yields additional material, the investigating agency may file a supplementary complaint (with leave of the court where necessary) and prosecute additional accused or add material against previously accused; such a course is not alien to law and avoids multiplicity of proceedings. [Paras 9, 10, 11, 14]A supplementary complaint by the Enforcement Directorate consequent to further investigation is maintainable in proceedings under the PMLA.Taking of cognizance - cognizance is of the offence and not of the offender - power of further investigation under Section 173(8) Cr.P.C. - Whether the Special Judge could take cognizance afresh and issue process again on the supplementary complaint where cognizance had already been taken earlier on the initial complaint. - HELD THAT: - The Court explained that 'taking of cognizance' denotes the court's application of mind to the alleged commission of an offence and is taken in relation to the offence (not the offender). Reliance on Supreme Court authority established that cognizance of an offence, once taken, cannot be taken again. While supplementary material may disclose fresh offences or additional accused, cognizance (insofar as the same offence is concerned) need not be 'taken again'; if no new offence is made out, no fresh cognizance is required. Applying these principles to the facts, since cognizance under Sections 3/4 PMLA was already taken by the Special Judge on 16.07.2018 in respect of the same offences, the learned Special Judge erred in taking cognizance afresh and issuing process again on the supplementary complaint; the proper course was to take the supplementary complaint on record and proceed with the existing prosecution, or, if new offences are disclosed, frame appropriate charges subject to the accused's right to seek discharge. [Paras 18, 20, 21, 22, 23]Cognizance of the same offence cannot be taken a second time; the Special Judge should have taken the supplementary complaint on record and proceeded with the existing prosecution rather than purporting to take fresh cognizance and issue process anew.Supplementary complaint - taking of cognizance - Direction to the Special Judge on further proceedings after setting aside the impugned order. - HELD THAT: - Having concluded that the Special Judge's order taking cognizance again and issuing process on the supplementary complaint was legally unsustainable, the Court set aside that order and directed the learned Special Judge to pass a fresh order in accordance with law. The correct procedural course, as indicated, is to take the supplementary complaint on record and proceed with the prosecution in the manner permissible under law, including consideration of whether any new offence is disclosed and the accused's rights to seek discharge. [Paras 23, 24]Impugned order set aside; matter remitted to the Special Judge to pass fresh order and proceed in accordance with law, taking the supplementary complaint on record and following the procedure indicated.Final Conclusion: The petition is allowed: a supplementary complaint consequent to further investigation under PMLA is maintainable, but where cognizance of the same offence has already been taken the court cannot 'take cognizance' of that offence again and issue process; the Special Judge's order is set aside and the matter is remitted for fresh order and further proceedings in accordance with law. Issues Involved:1. Whether the supplementary complaint could have been filed by the respondent against the petitioner and co-accused in respect of the same occurrence, which is the subject matter of the initial complaint.2. Whether the learned Special Judge was justified in taking cognizance of the offence on the second occasion and issuing process against the petitioner on the basis of the supplementary complaint.Summary:Issue 1: Filing of Supplementary ComplaintThe petitioner challenged the order dated 25.08.2023 by the Principal Sessions Judge (Special Court, Designated under PMLA), Jammu, which took cognizance of offences based on a supplementary complaint and issued process against him. The petitioner argued that filing a supplementary complaint is not permissible as there is no provision akin to \u/s\ 173 (8) of the Cr.P.C. for complaint cases. However, the court noted that \u/s\ 2(h) of the Cr.P.C. and \u/s\ 2(na) of the PMLA define 'investigation' broadly, including proceedings conducted by the Enforcement Directorate. \u/s\ 65 of the PMLA, the provisions of the Cr.P.C. apply to PMLA investigations, making \u/s\ 173 (8) applicable. The court cited the Supreme Court's judgment in Amit Banerjee vs. Majoj Kumar, which supports the filing of supplementary complaints in PMLA cases. Additionally, the court referenced the Division Bench of the Himachal Pradesh High Court in Khekh Ram vs. Narcotics Central Bureau, which upheld the legality of supplementary complaints after obtaining court leave. Therefore, the court concluded that a supplementary complaint is permissible.Issue 2: Taking Cognizance AgainThe petitioner contended that the Special Judge could not take cognizance of the offences a second time based on the supplementary complaint. The court explained that 'taking cognizance' means the judicial notice of an offence with a view to initiating proceedings. Citing various Supreme Court judgments, including Fakhruddin Ahmad vs. State of Uttaranchal and Anr. and Mona Panwar Vs. High Court of Judicature at Allahabad and ors., the court clarified that cognizance is taken of the offence, not the offender, and it occurs when the Magistrate applies his mind to the allegations. The court emphasized that cognizance can only be taken once. Referring to the Supreme Court's decision in State of West Bengal vs. Salap Service Station and others, the court noted that further investigation may disclose fresh offences, but cognizance is not taken again. The Delhi High Court's judgment in Yogesh Mittal vs. Enforcement Directorate further supported this view. Consequently, the court held that the Special Judge erred in taking cognizance again and issuing process based on the supplementary complaint. The proper course was to take the supplementary complaint on record and proceed with the ongoing prosecution.Conclusion:The impugned order by the Special Judge was set aside, with directions to pass a fresh order in accordance with the law. The Special Judge should take the supplementary complaint on record and continue with the prosecution based on the initial complaint.