TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 1069
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....mmovable worth Rs. 1,75,15,918/-, which was disproportionate to his known sources of income and, thereby, it was alleged that he committed offence punishable under Sections 409, 420, 423, 424, 465 and 120B of the Indian Penal Code and also under Sections 7, 10. 11 and 13(2) read with Section 13(e) of the Prevention of Corruption Act. 2. Subsequently, this Court passed an order on 04/08/2011 in WP (PIL) No. 4700 of 2008, directing the CBI to take up the Vigilance Case No. 9 of 2009 for its further investigation. In compliance of the order passed by this Court, the CBI re-registered the case as RC Case No. 5(A)/2010/AHD/ Ranchi. On completion of investigation, charge sheet was submitted on 26/03/2012, against the accused persons including Kamlesh Kr. Singh on the charge that he has acquired assets during the period from March, 2005 to July, 2009 to the tune of Rs. 5,46,07,597/- which is disproportionate to his known sources of income. Before the charge sheet was submitted, the Enforcement Directorate had lodged an ECIR case against the accused persons. After investigation of the case, a complaint was filed against Kamlesh Kr. Singh under Section 45 of the Prevention of Money Launder....
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....rder dated 12/08/2013, passed in ECIR/02/Pat/2009/AD(B) against these two petitioners, i.e. Narendra Mohan Singh and his wife Ankita Singh. That order is under challenge. 3. Mr. Raval, learned senior counsel appearing for the petitioners submits that to establish an offence of money laundering, it is essential that the persons, charged, should have directly or indirectly attempted to indulge or knowingly assisted or knowingly been a party or actually involved in any process or activity connected with proceeds of crime. Whereas, in terms of Section 2(u) of PML Act, proceeds of crime means property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence and the scheduled offence in terms of definition given under Section 2(1)(y) of the PML Act, happens to be the offence under Part A, Part B and Part C of the schedule, but allegation against the petitioners of projecting a sum of Rs. 1 crore as untainted money, is never the subject matter of the charge sheet submitted by the CBI and, therefore, any prosecution under Section 3 of the PML Act against the petitioners would not be maintainable as for prosecuting a person under PML Act, ....
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....ed Adjudication Authority after thorough consideration of the matter did record that the amount of Rs. 1 crore is a legitimate money and is not connected with the proceeds of crime and, thereby, the entire case of the Enforcement Directorate that the petitioners have indulged themselves in a process connected with the proceeds of the crime by projecting it as untainted money generated by Kamlesh Kr. Singh by committing scheduled offence falls flat on the ground and, thereby, it is liable to be quashed in view of the decision rendered in a case of "Radheshyam Kejriwal-versus-State of West Bengal and Another, [(2011) 3 SCC 581", wherein it has been held that the charges against Sri Radheshyam Kejriwal for contravening the provisions of Section 9(1)(f)(i) and Section 8(2) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973, cannot be sustained. In the face of the finding given by the Enforcement Directorate in adjudication proceeding that there is no contravention of any of the provisions of the Act. Thus, it was held that it would be unjust and an abuse of the process of the Court to permit the enforcement Directorate to continue with the criminal prosecution. 4. In....
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....at those documents reflect the said fact, which has been taken on behalf of those persons, but those documents can be said to be the products of an afterthought as the ITRs submitted by them, which had been obtained by the authority of the Enforcement Directorate from Income Tax authority, had never reflected about those transactions and that a new plea has been taken on behalf of the petitioners, which though had never been taken at the time of giving statements that he had taken loan from Bhawesh Metal Private Limited and M/s Dynamix Reality, but on verification, the claim made by petitioner no. 1, has been found to be false. Under the circumstances, a supplementary complaint has been filed and filing of which has never been prohibited under the PML Act nor under the Code of Criminal Procedure. 6. Further, it was submitted that the provision as contained in section 3 of the Prevention of Money Laundering Act, never does stipulate that only when one commits scheduled offence particularly offence under Section 13 of the Prevention of Corruption Act, when it was incorporated in the statute by way of amendment, projection of the proceeds of the crime by the person would be liable to....
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....r the value of any such property; 2(v) "Property" means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located. 9. Further, it be stated that in part B of the scheduled to the Prevention of Money Laundering Act, 2002, Section 13 of the Prevention of Corruption Act, was incorporated by money laundering Amendment Act, 2009, which came into forece w.e.f. 01/06/2009. From reading of the provision as contained in Sections 3, 2(u) and 2(v), it would appear that any person who involves himself directly or indirectly with any process or activity connected with the proceeds of crime and projects it as untainted money can very well be prosecuted under Section 3. Therefore, it would be that date when one person is found involved in any process or activity connected with the proceeds of crime and projected it as untainted property would be relevant for the purpose of prosecution under Section 3 of the P.M.L. Act and not the date when the scheduled offence was committed. This proposition has been laid down by th....
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....themselves in that process or activity of the proceeds of crime in the year 2008 when they are said to have advanced the money to Surya Sonal Singh, who has been found to have been involved in the activity connected with the proceeds of crime from the years 2008 to 2012, when he invested the proceeds of crime in the Real Estate at Gurgaon, but all of them have been found projecting it as untainted money much after incorporation of Section 13 as scheduled offence. Moreover, one may find there had been inter connected transaction of the proceeds of crime starting from the year 2008 to 2012. If the prosecution has found Surya Sonal Singh to have involved himself in the activity or process of the proceeds of crime, any transaction entered into in between petitioner nos. 1, 2 and Surya Sonal Singh would be presumed to be interconnected transaction in terms of the provisions as contained in Section 23 of PML Act, which reads as follows:- "23. Presumption in inter-connected transaction.- Where money-laundering involves two or more inter-connected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or c....
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....ound on merit that there is no contravention of the provisions of the Act in the adjudication proceedings, the trial of the persons concerned shall be in abuse of the process of court." 14. From perusal of the order passed by the Adjudicating Authority as contained in Annexure-9 to the petitioners' reply to the supplementary counter affidavit, it does appear that Adjudication Authority came to the conclusion for the reason that the CBI having investigated the matter, did not find any illegality or irregularity in the transaction of Rs. 1 crore took place between the petitioner nos. 1, 2 and Surya Sonal Singh and the said transaction get reflected from the I.T. Returns and balance sheet of those persons, but the case of the Enforcement Directorate as has been made out here, is different, wherein the stand of the Enforcement Directorate is that when the Enforcement Directorate, after investigation made by the CBI, did find that there may be involvement of these petitioners and Surya Sonal Singh, issued notice in terms of the provisions as contained in Section 50 of PML Act, in response of which, it has been stated by petitioner no. 2 that she had taken loan from her husband peti....