PMLA proceedings can continue despite pending predicate offence trial but prosecution must prove accused's connection to tainted property

HC dismissed petition challenging PMLA proceedings. Court held that unconcluded predicate offence trial does not bar PMLA proceedings, citing SC precedent in Vijay Madanlal Choudhary. However, prosecution failed to establish crucial link between accused and property transactions. Complainant could not demonstrate that accused possessed or enjoyed the property allegedly purchased from proceeds of crime. Mere undervaluation in conveyance deed insufficient to prove money laundering without establishing connection between tainted money and predicate offence proceeds. PMLA prosecution requires material evidence linking accused to property possession and proving proceeds originated from scheduled offence.

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Issues Involved:

1. Quashing of complaint under the Prevention of Money Laundering Act, 2002 (PMLA).
2. Allegations of illegal granite quarrying and related offences.
3. Connection of accused with the proceeds of crime.
4. Specific allegations against individual accused and their involvement in money laundering.
5. Legal principles regarding simultaneous prosecution under PMLA and predicate offences.

Summary:

Issue 1: Quashing of Complaint under PMLA

The petitioners, accused in C.C.No.9 of 2018, sought to quash the complaint against them for offences under the PMLA. The predicate offence involved illegal granite mining registered by the Inspector of Police, Keelavalavu, based on a complaint by the Village Administrative Officer, Keelaiyur, Melur Taluk, Madurai. The final report filed on 01.10.2013, charged 22 persons under various sections of IPC, TNPPDL Act, and Explosive Substances Act.

Issue 2: Allegations of Illegal Granite Quarrying and Related Offences

The complaint alleged that the accused indulged in illegal quarrying of granites, causing damage to human life and properties using explosives. The accused unlawfully assembled, trespassed into government land, and carried out mining using deadly explosives, causing a loss of Rs. 277.42 Crores to the Government Exchequer. The offences under IPC and Explosive Substances Act are scheduled offences under PMLA.

Issue 3: Connection of Accused with the Proceeds of Crime

The Directorate of Enforcement registered E.C.I.R. on 30.06.2014, finding that the accused indulged in money laundering by layering crime proceeds into properties, converting them into untainted properties. The complaint detailed the illegal mining by the accused and the presumptive unlawful gain quantified in crores. The accused were alleged to have invested the proceeds of crime in properties in the names of family members.

Issue 4: Specific Allegations Against Individual Accused and Their Involvement in Money Laundering

The complaint detailed transactions involving properties originally held by Manimegalai (A14) and transferred to Siddique Raja (A15), alleging that these transactions were part of the money laundering process. The complaint alleged that Panneer Mohammed (A1) and others conspired to conceal the proceeds of crime through various property transactions, undervaluation, and creation of multiple documents.

Issue 5: Legal Principles Regarding Simultaneous Prosecution under PMLA and Predicate Offences

The court held that an unconcluded predicate offence trial is not a bar for proceeding under PMLA, citing the Supreme Court judgment in Vijay Madanlal Choudhary and others vs. Union of India and others. The PMLA is a standalone Act, and simultaneous investigation or prosecution of both predicate and money laundering offences is permissible. The court emphasized that the PMLA prosecution is independent of the predicate offence trial.

Conclusion:

The petitions filed by Yasar Arabath (A6) and R.Rahuman (A7) were dismissed, while the petitions filed by Manimegalai (A14) and Siddique Raja (A15) were allowed, quashing the prosecution against them in C.C.No.9 of 2018. The court found no material to link the possession or enjoyment of the property with A1, and the inference of the complainant was deemed preposterous. Consequently, the prosecution against A14 and A15 was quashed.

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