TaxTMI 
TaxTMI 
2018 (9) TMI 457
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent for issuing summons against the applicants. Therefore, by such impugned order below Exhibit-1, the Sessions Judge, Ahmedabad (Rural) being Special Judge under PMLA has taken a cognizance of alleged offence by passing following order. "ORDER BELOW EXH-1 OF P.M.L.A. COMPLAINT NO. 3 OF 2014 Complainant Shri Jain as well as his advocate are present. I have heard learned advocate Shri Sudhir Gupta, for Complainant. I have perused the Complaint as well as gone though all the documents. Considering above all facts in the light of provisions laid down in the PMLA, 2002, I think it just and proper to issue summons to the accused side which will serve the object of filing this Complaint. Hence, I pass the following order.             ORDER Complaint be registered as PMLA case, against all the accused for the offence punishable u/s. 3 and 4 of the Prevention fo Money Laundering Act, 2002. Accused No. 1 and 2 be informed about lodging as well as the next date of hearing of complaint. Issue Summons against accused Nos. 3 to 79, for the above offence, with direction that they shall deposit their passport in the present C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sequential reliefs in such revision petition, such order is not only relied upon by the applicant but it becomes certainly a base for the present revision petition, more particularly, when by such judgment, order to take cognizance against main accused was quashed and set aside and such judgment dated 16-2-2017, is yet not challenged successfully before the higher authority i.e. the Hon'ble Supreme Court of India. Therefore, such judgment is become final and having full force unless it is reversed by the higher authority and when there is no such order by any higher authority viz., the Hon'ble Supreme Court of India had neither stayed the implementation, execution and effect of such judgment nor quashed and set aside such judgment, its effect and validity of judgment is certainly holds the field and it would be applicable to all similarly situated persons including present applicants, who are none but co-accused with those applicants. It is also evident from record that in fact charges levelled against those applicants are similar to charges levelled against present sets of applicants. It would be appropriate to recollect such judgment dated 16-2-2017 in Criminal Revision Applicat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aw. He has contended that the amount was remitted to the Company (Page 431) Para-31 whereby property belonging to his family members were attached, including those of present applicant Rs. 139 crores in the name of applicant No. 2 was attached. This have been confirming by the adjudicating authority. He has submitted that properties are involved in the money laundering and during the investigation in respect of having knowledge and they received the payment and made further payment were in their name and they were signatory and having power to operate account and thereby they are involved in the case of money laundering and, therefore, it is denied that ingredients of offence are lacking. 4. He has further submitted that petitioners miserably failed to prove any sufficient ground as to why the petitioners failed to take any action since July, 2014 though the petitioners were aware of the fact that learned Sessions Judge, Ahmedabad Rural had issued summons against the petitioners on 18-7-2014. The date of aforementioned order is not disputed by the petitioners. He has submitted that petitioners are neither in a position to dispute the fact of knowledge or order of issuance of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3-4-2014 were registered by the detection of Crime Branch. He has submitted that investigation under PMLA, 2002 have been initiated as the offences under Sections 420, 467, 471 and 120B of the Indian Penal Code are scheduled offences in terms of Section 2(1)(y) of the PMLA which have been registered against the Directors of the said companies. 10. He has submitted that during the course of investigation it has been revealed that one of the entities viz. Natural Trading Co., had made RTGS credits to the Companies having accounts in ICICI Bank from which remittances were sent out of India. It was also revealed that the said Company has made payments to the tune of Rs. 7 crores to Shri Afroz Mohammed Hasanfatta and Rs. 3 crores to his brother Shri Jafar Mohammed Hasanfatta during January to March 2014. The investigation further revealed transactions between M/s. Natural Co., and M/s. Gangeshwar Mercantile Pvt. Ltd. It was further seen that on 17-2-2014 M/s. Gangeshwar Mercantile Pvt. Ltd. had made payments to M/s. Nile Trading Corporation, a proprietary concern of Shri Afroz Mohammed Hasanfatta. 11. He has submitted that statement of Shri Afroz Mohammed Hasanfatta was reco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0/- during January, 2014 to March, 2014 towards purchase of a flat in Mumbai. He has made payment of Rs. 68,53,457 to M/s. Muskan Realities on 15-1-2014 as his contribution for becoming a partner of the said firm whereby he has acquired 22.7272% share in the firm. He has also made payment of Rs. 31 lacs to Shri Abdul Karim Jana on 24-3-2014. He has also made an investment of Rs. 16,00,000/- on 28-2-2014 in M/s. Oasis Developers for becoming a partner of the said firm. Thus he has knowingly involved himself in the process of money laundering. 15. He has further submitted that Shri Fazaleumer Aziz Pothiawala has received the proceeds of crime from Shri Afroz Mohammed Hasanfatta in his bank account and made further payment to Shri Abdul Karim Jaka. He has invested Rs. 16,00,000/- in M/s. Oasis Developers on 28-2-2014. Thus he has knowingly involved himself in the process of money laundering. 16. He has also submitted that Smt. Foziya Samir Godil has received the proceeds of crime amounting to Rs. 1,15,00,000/- in her bank account from M/s. Nile Trading Corporation, proprietory concern of Shri Afroz Mohammed Hasanfatta and she has made investment in the stock market. She ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ived by Shri Afroz Mohammed Hasanfatta by further transfer/use of the funds on his instructions and thus they are involved in the process of money laundering which is substantiated by the bank account statements as well as statements recorded under Section 50 of the PMLA, 2002. 22. He has also submitted that all the petitioners have knowingly allowed the use of their bank accounts and knowingly involved themselves in this activity having full knowledge of the purpose and intent of the transactions. Thus they have helped in the process of laying and thereby they are involved in the process of money laundering. He has submitted that though the amounts were received in the bank accounts of the petitioners on the instructions of Shri Afroz Mohammed Hasanfatta the fact remains that they were operating these accounts and they alone were capable of carrying out any transaction in these accounts. 23. He has further submitted that the scheduled offence relates to the commission of crime whereas investigation under PMLA, 2002 is related to the proceeds of crime generated as a result of commission of the scheduled offence. The proceeds of crime may be found in the possession of an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the Revision shall be maintainable. 29. I have seen that the Hon'ble Supreme Court in Urmila Devi (supra) has clearly declared the legal position in regard to maintainability of a Revision Petition against an order taking cognizance and issuance of summons under Sections 200 to 204 Cr PC as follows - 21. Having regard to the said categorical position stated by this Court in innumerable decisions resting with the decision in Rajendra Kumar Sitaram Pande, as well as the decision in K.K. Patel, it will be in order to state and declare the legal position as under : 21.1. The order issued by the Magistrate deciding to summon an accused in exercise of his power under Sections 200 to 204 Cr PC would be an order of intermediatory or quasi-final in nature and not interlocutory in nature. 21.2. Since the said position viz. such an order is intermediatory order or quasi-final order, the revisionary jurisdiction provided under Section 397, either with the District Court or with the High Court can be worked out by the aggrieved party. 21.3. Such an order of a Magistrate deciding to issue process or summons to an accused in exercise of his power under Sections ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sp; 7. Aggrieved by the order dated 4-8-2000 passed by the IVth Additional CMM, the appellant-accused preferred a criminal revision under Section 401 Cr PC praying the High Court to set aside the said order. The said revision was dismissed by the High Court by the impugned order dated 17-2-2004. In our view, the complaint does not disclose the ingredients of Section 415 Cr PC and, therefore, we have no hesitation to set aside the order passed by the Magistrate taking cognizance of the offence alleged. It is also not clearly proved that to hold a person guilty of cheating, it is necessary to show that he had a fraudulent or dishonest intention at the time of making the promise. The order of the Magistrate and of the High Court requiring Accused 1-appellant herein to face trial would not be in the interest of justice. On the other hand, in our considered opinion, this is a fit case for setting aside the order of the Magistrate as confirmed by the High Court for issuance of process and the proceedings itself. ii. Indseam Services Ltd. v. Bimal Kum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e contentions raised by the accused applicant in the revision petition and finding recorded. 9. We are constrained to observe that there has been an avoidance of the function of judicial determination of the question of acceptability or otherwise of the plea raised by the accused persons for setting aside the cognizance order and for quashing the criminal proceedings. 30. I therefore have no hesitation in holding that it is not only within the jurisdiction but is an obligation of this Court to look into as to whether the taking of cognizance and issuance of process was mechanical without there being any prima facie case for bringing home the charge of the offence punishable under Section 3 of PMLA from the averments in the Complaint, and whether the Complaint discloses or not, the necessary ingredients of Section 3 of PMLA qua each of the petitioners. 32. The Ld. Senior Counsel appearing for the petitioners had rightly relied upon the judgment in Pepsi Foods Ltd. v. Special Judicial Magistrate, (1998) 5 SCC 749, wherein the Hon'ble Supreme Court delineated the duties and obligations cast while summoning of an ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Jain, Shri. Afroz Mohammed Hasanfatta and Shri Bilal Haroon Gilani and others. However, none of the petitioners are arraigned as accused in the said Scheduled Offence. ii. Since the Offences under Sections 420, 467, 471 and 120B of IPC are scheduled offences in terms of Section 2(1)(v) of the PMLA, upon scrutiny of the said two FIRs, investigation under PMLA, 2002 was initiated by the office of the Respondent vide ECIR 1/SRT/2014-15, dated 17-4-2014. iii. The investigations under PMLA revealed that Indian Entities had received amounts through RTGS Credits in their respective bank accounts with ICICI Bank primarily from certain other Indian firms from their accounts with Axis Bank held at Mumbai and Surat which included amongst others one M/s. Natural Trading Co., which had transferred some of the above said amounts. These firms in turn had received RTGS Credits into their bank accounts from various other firms based in New Delhi, Mumbai and Surat. There is absolutely no evidence whatsoever to show role of any of the petitioners in arranging or sending these RTGS credits or in making fraudulent remittances on the strength of fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equently seen Shri Afroz Mohammed Hasanfatta visiting the office of Shri Madanlal Jain at 416A & 417A, Panchratna Tower, Opera House, Mumbai in the last couple of months. He however has not implicated any of the accused petitioners including Shri Jafar Mohammad Hasanfatta. Some further evidence was gathered against Shri Afroz Mohd. Hasanfatta. x. All the petitioners are admittedly close relatives of said Shri Afroz Mohd. Hasanfatta. Shri Afroz Hasanfatta is real brother of Petitioner No. 1 and 2. Other petitioners are also amongst his close relatives. It is alleged that from his Bank Accounts, Shri Afroz Hasanfatta transferred money to the Bank Accounts of Petitioner Nos. 2 to 4 for further investments or payments to others. However, there is no allegations of any transfer of money out of the said amount of Rs. 16,31,19,941/- to the petitioner No. 5. xi. Statements of each of the accused petitioners were recorded under PMLA. None of the petitioners gave any inculpatory statement. Their statements recorded under PMLA, do not even reflect any knowledge of commission of any Scheduled Offence, much less about any proceeds of....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Ltd. and M/s. Natural Trading Co. nor from Shri Pukhraj Anandmal Mutha. I further state that I am not aware whether Shri Hasan Fatta Afroj Mohammed has taken any loan from M/s. Natural Trading Co. and M/s. Gangeshwar Mercantile Pvt. Ltd. and Shri Pukhraj Anandmal Mutha. Thus, although in the question No. 5 reference was made to accused petitioner No. 1 or family members of Shri Afroz Hasanfatta, in his answer Shri Madanlal Jain had neither shown any acquaintance nor alleged any dealings with any of the accused petitioners. (xv) That the petitioner No. 2 in his statement had stated that he had an account with Union Bank of India, Nanpura, Surat and the transactions were made on the directions of his brother Shri Afroz Mohamed Hasanfatta. He further stated that payments made to Shri Abdul Karim Jaka and M/s. Fancy Builders Pvt. Ltd. were made as per the directions of Shri Afroz Mohamed Hasanfatta. (xvi) The petitioner No. 3 who is the brother-in-law of Shri Afroz in his statement had stated that Shri Afroz had made a payment of Rs. 3,00,00,000/- in his savings account with the Union Bank of India, Nanpura, Surat ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s apparent from the fact that he had received Rs. 3 Crore from M/s. Natural Trading Co. and has invested the same on the directions of his brother Shri Afroz in the Stock Market and Real estate 2. Ahmed Hasanfatta (Petitioner No. 2) : Shri Ahmed Hasanfatta, brother of Shri Afroz Mohamed Hasanfatta has knowingly involved himself in the process and activity connected with the proceeds of crime including its concealment and possession and has therefore projected the same as untainted. He received the funds from Shri Afroz Mohamed Hasanfatta and Shri Jafar Mohamed Hasanfatta and has invested Rs. 2,00,00,000/- with Fancy Builders Pvt. Ltd., Mumbai. The flat at 1101 on the 11th floor at Hicon Grande, Bandra (W) was purchased on 6-3-2014 with the amount so received from his two elder brothers. In this case, the POC has been invested in an immovable property thereby projecting the same as untainted. Shri Ahmed Fatta, therefore, is also guilty of money laundering under the PMLA' 3. Fazaleumer Pothiawala (Petitioner No. 3) : Shri Fazaleumer Pothiawala, brother-in-law of Shri Afroz Mohamed Hasanfatta, has knowingly involved himself in the process and activity connected with the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nnected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. 36. The proceeds of crime is defined in Section 2(u) of PMLA as under - (u) proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property; 37. A holistic reading of this definition of proceeds of crime and the penal provision under Section 3 of PMLA, which uses conjunctive and, makes it luminous that any persons concerned in any process or activity connected with such proceeds of crime relating to a scheduled offence including its concealment, possession, acquisition or use can be guilty of money laundering, only if both of the two prerequisites are satisfied i.e. i. Firstly, if he - 1. directly or indirectly attempts to indulge, 2. knowingly either assists or is a party, or 3. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the instant case where there is absolutely no material or circumstantial evidence whatsoever, oral or documentary, to show that any of the petitioners, knowingly, assisted or was a party to, any offence. 3. Actually involved : Actually involved would mean actually involved into any process or activity connected with the proceeds of crime and thus scheduled offence, including its concealment, possession, acquisition or use. There is absolutely no material or circumstantial evidence whatsoever, oral or documentary, to substantiate any such allegation qua the petitioners. D. Neither any of the petitioners is arraigned as accused in the Scheduled Offences punishable under Indian Penal Code for direct or indirect involvement, abetment, conspiracy or common intention, nor is any such case made out even on prima facie basis against any of them. 38. The second of the two pre-requisite to attract Section 3 of PMLA would be satisfied only if the person also projects or claims proceeds of crime as untainted property. For making such claim or to project proceeds of crime as untainted, the knowledge of tainted nature i.e. the property being proceeds of crime derived or ob....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eds of crime under PMLA that such proceeds of crime are involved in money-laundering. Burden would be on the person concerned to show to the contrary. However, as rightly pointed out by the Learned Senior Counsel for the petitioners, there is no legal presumption in this Section 24 that 1. The concerned property is proceeds of crime, 2. The person accused has knowledge that the property is proceeds of crime, and 3. The person is involved in or is guilty of money-laundering merely for possessing or having any concern with the proceeds of crime. In fact this Section 24 clearly indicates that even a person in possession or connected with any proceeds of crime may or may not be charged with the offence of money laundering. Whether a person shall be charged with money laundering or not shall thus depend only upon satisfying the requirements of Section 3 of PMLA as already explained above. 42. In the instant case, neither there is anything to raise a presumption of fact or law that any of the petitioners was aware that the monies received in their bank accounts through....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uisite knowledge with each of them, of commission of Scheduled offence to derive or generate any proceeds of crime and of knowingly attempting or indulging in projecting the same as untainted. 47. So far as the judgment in Gautam Kundu (supra) is concerned, the observations regarding Section 45 and limitations in grant of bail do not help the Respondent in the instant petition where challenge is against the Order taking cognizance and issuing process by way of summons. 48. On behalf of the Respondent great emphasis was laid on the statements of main accused Shri Madanlal Jain recorded under Section 50 of PMLA on 22-7-2014 (Pages 287 to 297), 23-7-2014 (Pages 283 to 286) and 24-7-2014 (Pages 298 to 300) i.e. after taking cognizance of the offence vide the impugned Order. It was submitted that in view of these statements of the co-accused, though recorded subsequent to taking cognizance, there is sufficient evidence against the petitioner No. 1 Shri Jafar Hasanfatta to bring home the charge against him. The Learned Senior Counsel appearing for the petitioners have fairly shown the said statements annexed with the petition even before the said contention was advanced on be....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to adopt is to consider the other evidence against such an accused person, and if the said evidence appears to be satisfactory and the court is inclined to hold that the said evidence may sustain the charge framed against the said accused person, the court turns to the confession with a view to assure itself that the conclusion which it is inclined to draw from the other evidence is right. The result, therefore, is that in dealing with a case against an accused person, the court cannot start with the confession of a co-accused person; it must begin with other evidence adduced by the prosecution and after it has formed its opinion with regard to the quality and effect of the said evidence, then it is permissible to turn to the confession in order to receive assurance to the conclusion of guilt which the judicial mind is about to reach on the said other evidence. 15. The statements contained in the confessions of the co-accused persons stand on a different footing. In cases where such confessions are relied upon by the prosecution against an accused person, the court cannot begin with the examination of the said statements. The stage to consider the said con....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... existence of which is essential at least on prima facie basis for taking cognizance of offence against the petitioners. 52. The Learned Senior Counsel for the petitioner has rightly pointed out that the judgment in Pepsi Foods Ltd. (supra), was applied in Rukmini Narvekar v. Vijaya Satardekar, (2008) 14 SCC 1, and the Hon'ble Supreme Court while upholding the Order passed by the High Court which allowed a petition against dismissal of Criminal Revision Petition filed against order taking cognizance and issuing process, observed in favour of Respondent accused Smt. Vijaya Satardekar as follows - 7. The allegation in the FIR was that Ranjit Satardekar had falsely misrepresented to the complainant and her husband that the document which was being executed by them was for enabling Ranjit to represent them in the inventory proceedings in progress on the death of Andre Andrade, although what was actually executed by them was a power of attorney. This power of attorney was used by the accused for executing a sale deed in favour of his wife Vijaya Satardekar and Sadiq Sheikh in the year 1991, but the said sale deed was presented for registration ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e has been roped in only with the aid of Section 120B which is also not substantiated. The appeal as far as she is concerned, must be dismissed. Thus, in a case of executing sale deed in favour of wife by deceit and misrepresentation, the Hon'ble Supreme Court upheld the interference with the cognizance order in Revision Jurisdiction as there was no material whatsoever either mentioned in the FIR or produced by the prosecution to show that the wife Vijaya Satardekar was in any way involved in the alleged criminal offence committed by her husband Ranjit Satardekar. The only allegation against her was that the sale deed was in her favour, which in the opinion of the Hon'ble Supreme Court did not prima facie make out any offence. 53. The same test is applicable in the facts of the instant case. By the impugned order dated 18-7-2014, the Special Court for PMLA mechanically took cognizance of the alleged offence punishable under Section 4 of PMLA qua each of the accused petitioner, without even prima facie material showing existence of any mens rea or culpable knowledge with all or any of them, of the subject Scheduled Offence investigated separately by Crime Branch, Surat in FIR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eliefs. Rule is made absolute to the aforesaid extent. Bail bond, if any, shall stand cancelled.                          (Z.K. SAIYED, J.) KKS After pronouncement of the judgment Mr. Amin, learned advocate appearing for Mv. Vyas, learned Assistant Solicitor General for the respondent No. 1 has requested to stay this judgment and order for a period of six weeks. Mr. Buch, learned advocate for the applicants has objected to such request. Looking to the facts and circumstances of the case, operation and implementation of present judgment and order shall stand stayed for a period of four weeks from today." 7. Pursuant to above decision when facts are very much available on record in the form of Courts order, I do not wish to reproduce the factual details which would nothing but reproduction of the same facts. Therefore, factual details should be considered from the above quoted final details in Criminal Revision Application No. 926 of 2016. However, factual details with reference to the present petitions would be referred while considering the rival sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....such submissions, though there is not, facts remain that instead of simple disclosing the factual details about challenging the order dated 16-2-2017 in Criminal Revision Application No. 926 of 2016, whereby similar situated co-accused were discharged from the charges under the PMLA, the Assistant Director of the Department of Revenue viz., K.S.R.L. Dixitkumar has an audacity to say, even after a year, that such order has not been challenged before the Hon'ble Supreme Court and the matter is pending with their department. 11. Similar statement is made by another Assistant Director viz., Gigimon Philip while filing his affidavit, in similarly situated and connected Criminal Revision Application No. 10207 of 2017, wherein, with reference to the case of Jafar Mohammed Hasanfatta applicant in Criminal Revision Application No. 926 of 2016, it is stated that, "a proposal for filing an appeal against said order before Hon'ble Supreme Court is under consideration of Government. Therefore, the order of Jafar Mohammed Hasanfatta has not obtained finality. Further in compliance of the affidavit, the status against the order dated 16-2-2017 of Hon'ble High Court in Criminal Revision Appl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e date of passing stay order and it does not mean that the said order is wiped out from existence. Therefore, when there is no stay against the judgment and order dated 16-2-2017 in Criminal Revision Application No. 926 of 2016 and even if the respondents were not able to challenge the operation of such judgment pending this revision, even then the existence of order under reference would remains as such and it would be applicable and binding to similarly situated person. Whereas in the present case, as already admitted by the respondents, they have yet not filed Special Leave Petition challenging the order seeking stay against the said order and therefore, there is no substance in the submission by the respondents that judgment and order dated 16-2-2017 in Criminal Revision Application No. 926 of 2016 cannot be relied upon. Similarly when the order dated 3-5-2017 in Criminal Revision Application No. 264 of 2017, discharging the main accused from the Scheduled Offence has not been challenged till date by the respondents, there is reasons to believe that the such order also obtained finality thereby when no case for scheduled offence is made out against the main accused, prima facie....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., and thereby though no additional documents can be looked into at such revisional stage, and attempt is made to rely upon some documents without making it clear that those documents are part of the record of the trial Court or not. However, before examining further factual details pursuant to submission by the respondent, it would be appropriate to recollect settled law on the subject by referring judicial pronouncement referred by both the sides. 19. Learned Advocate for the respondents is relying upon decision in the case Bholu Ram v. State of Panjab reported in 2008 (9) SCC 140, it is practically a judgment based upon the provision of Sections 319 and 258 of the Code of Criminal Procedure, 1973, wherein Hon'ble Supreme Court of India has considered that whether the magistrate has power to recall an order of summoning an accused and held that once an order is passed by a competent Court issuing summons or process, it cannot be recalled. However, the respondent has failed to read further since in the same judgment, the Hon'ble Supreme Court has also clarify that such order can be questioned by aggrieved party before the Hon'ble High Court which can invoke inherent jurisdict....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e cannot be proceedings under the PMLA against the same person from the same transaction since it may amounts to double jeopardy, whereas there is no such issue in the present case inasmuch as in the present case the applicants have specifically came forward with specific facts and evidence that in fact they are nowhere involved in any illegal activity and they have not committed any offence as prescribed under the PMLA. Thus, when the applicants are not accused for the Scheduled Offences registered against the main accused, such judgment would not help the respondents, because the judgment in Criminal Revision Application No. 926 of 2016 so also submission by the applicants herein make its clear that there is no prima facie evidence to proceed further against the present applicants under the PMLA and therefore, when the applicant in Criminal Revision Application No. 926 of 2016 were discharged on such ground, the present applicants are praying to discharge them on same ground. Therefore, the cited judgment would not help the respondents. 21. The respondents have also relied upon the decision in the case of Basawaraj and Anr. v. Special Land Acquisition Officer reported in 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplicants have relied upon the decision in case of Nikesh Tarachand Shah v. Union of India reported in 2017 SCC Online 1355, wherein recently the Hon'ble Supreme Court, while dealing with the PMLA cases observe as under in Para-7 of the judgment which needs to be referred, it reads thus : "7. Having heard learned counsel for both sides, it is important to first understand what constitutes the offence of money laundering. Under Section 3 of the Act, the kind of persons responsible for money laundering is extremely wide. Words such as "whosoever", "directly or indirectly" and "attempts to indulge" would show that all persons who are even remotely involved in this offence are sought to be roped in. An important ingredient of the offence is that these persons must be knowingly or actually involved in any process or activity connected with proceeds of crime and "proceeds of crime" is defined under the Act, by Section 2(u) thereof, to mean any property derived or obtained directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence (which is referred to in our judgment as the predicate offence). Thus, whosoever is involved as aforesaid, in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tant to note that Mr. X would not have to satisfy the twin conditions mentioned in Section 45 of the 2002 Act in order to be enlarged on bail, pending trial for an offence under the 2002 Act. 30. The second illustration would be of Mr. X being charged with an offence under the 2002 Act together with a predicate offence contained in Part B of the Schedule. Both these offences would be tried together. In this case, again, the Special Court/High Court can enlarge Mr. X on bail, with or without conditions, under Section 439 of the Code of Criminal Procedure, as Section 45 of the 2002 Act would not apply. In a third illustration, Mr. X can be charged under the 2002 Act together with a predicate offence contained in Part A of the Schedule in which the term for imprisonment would be 3 years or less than 3 years (this would apply only post the Amendment Act of 2012 when predicate offences of 3 years and less than 3 years contained in Part B were all lifted into Part A) . In this illustration, again, Mr. X would be liable to be enlarged on bail under Section 439 of the Code of Criminal Procedure by the Special Court/High Court, with or without conditions, as Section 45 of the 2002 Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a person who may have nothing to do with the offence of money laundering may yet be denied bail, because of the twin conditions that have to be satisfied under Section 45(1) of the 2002 Act. Also, Mr. A may well be prosecuted for an offence which falls within Part A of the Schedule, but which does not involve money laundering. Such offences would be liable to be tried under the Code of Criminal Procedure, and despite the fact that it may be the very same Part A scheduled offence given in the illustration above, the fact that no prosecution for money laundering along with the said offence is launched, would enable Mr. A to get bail without the rigorous conditions contained in Section 45 of the 2002 Act.......... xxx xxx xxx" In addition to the above illustration, it is also observed that when we go to Part A of the Schedule as it now exists, it is clear that there are many sections under the Indian Penal Code punishable with life imprisonment which are not included in Part A of the Schedule, and which may yet lead to proceeds of crime. For example, Sections 232 and 238 of the Indian Penal Code, which deal with counterfeiting of Indian coin and import or export of counterfeited Ind....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erty as untainted property. 27. Therefore, in absence of prima facie and sufficient evidence as discussed by the Hon'ble Supreme Court in above para, it cannot be said that there is sufficient material before the Trial Court/Special Court to proceed further against anyone/everyone who is even remotely connected with prime accused for Scheduled offence under the Act. For the sake of argument, the assumption can be made that if section is read in the way in which the respondents have acted in filing complaint against numbers of persons, it seems that probably all the counsels who are appearing for prime accused who have committed Scheduled offences or any other accused in such connected cases may also be terms as a co-accused because they would certainly receive legal fees from such accused who would have paid it from some money which is alleged to be the money transacted for illegal purpose by illegal means since that is the basic ingredient of PMLA. In that case, probably wherever such accused spent some money which may be for petrol, grocery, cloths, travelling and transporting, etc., basically every money spent by such accused is to be termed as tainted money and everyone h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a, Hong Kong and Dubai when all such transactions are through bank, unless it is proved that all such amount is collected or earn by anyone by indulging in any Scheduled Offences, only because, huge money transaction between different companies, more particularly through bank, would not amount to commission of any offence either under the Indian Penal Code or under the PMLA. It seems that the respondents have failed to realize the requirement of business house for requisite fund even for short period and getting such fund from friends and known persons for short period so as to avoid administrative difficulties in managing such fund, more particularly when such fund are transferred through bank only and return was also through bank transaction. So far as receiving money from one company and paying to another company is concerned, when such transaction is through bank, law does not restrict such transaction, inasmuch as if 'A' received money from 'B' and at the time of returning such money if 'B' has to pay some money to 'C' and therefore, 'B' directs 'A' to remit the money directly to 'C', it cannot be said to be an illegal transaction. 31. With reference to the above submiss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....minal activity relating to scheduled offence, the Special Court can proceed further under PMLA. However, it is also made clear in above observation that the Special Court trying the offence under the PMLA will have to wait for the result of the trial relating to scheduled offence. Therefore, only because of absence of specific provision under PMLA, though Special Court can proceed further for the offence under PMLA, in absence of decision by the trial Court for the scheduled offence, there is no reasons to proceed further under PMLA and as already recorded herein-above when the complaint for scheduled offence against prime accused has already been dismissed by judgment and order dated 3-5-2017 in Criminal Revision Application No. 264 of 2017, there is no reasons to continue the trial against the present applicant, since it would result into nothing but futile exercise in recording of evidence of several witnesses and dealing with huge record and number of transactions by the applicants are considered to be huge amount by the complaint. It cannot be ignored that volume of amount is subjective, it may be huge for some person but it may be routine for well doing business house and if ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ealing with such amount but such activity can never be termed as proof to confirm that offence under the PMLA has been committed. Though it is submitted by the respondent that for such transactions false companies were created and therefore it amount to forgery; when the complaint under scheduled offence against main accused has been quashed, now there is no evidence regarding forgery. Learned Advocate for the respondent has also referred Section 24 of the PMLA regarding burden of proof submitting that presumption is permissible under PMLA and when the applicant has paid for air ticket of main accused, there is reason to believe that all that they have common intention to commit such offence. However, there is no substance in such submission. 33. Learned Advocate for the applicant has also read out several statement of the applicants submitting that there is admission in such statement and such admission is permissible in law since Section 15 of the PMLA Act is equal to Section 108 of the Customs Act and thereby, the statement of accused is permissible and can utilize against him. However, there is no substance in such submission for the simple reason that admitting a stateme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also relying upon the decision in case of Bhushan Kumar & Anr. v. State (NCT of Delhi) & Anr., reported in (2012) 5 SCC 424, wherein, while dealing with Sections 190 and 204 of the Code of Criminal Procedure, on the contrary the Hon'ble Supreme Court had held that such order is challengable but refuse to quash and set aside the order of summons on merit of the case and therefore, inasmuch as merit of that case if scrutinize, only because of such judgment, it cannot be said that order to issue summons cannot be challenged and quashed. It was case of property dispute regarding distribution of the assets left behind by late Shri Gulshan Kumar (of T-Series fame) when aggrieved party has filed complaint for challenging the signature of some of the executor of settlement deed amongst them and therefore, such judgment would not help the respondents. 37. The respondent are also relying upon the decision of Hon'ble Supreme Court of India in case of Sunil Bharti Mittal v. Central Bureau of Investigation reported in (2015) 4 SCC 609, wherein in fact the Hon'ble Supreme Court has quashed and set aside the order summonsing appellant before it and by dismissing complaint filed to prosecut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her there is any tangible evidence, nor even any circumstantial material to impute culpable knowledge to the applicants and to even prima facie conclude that they were either aware of the commission of the Scheduled Offence or the generation of the alleged proceeds of crime by or out of such Scheduled Offence by main or other accused. As per the material produced, it cannot be even prima facie held that the applicants had any reason or even have any reasonable doubt regarding commission of alleged scheduled offence and generation of any proceeds of crime in relation thereto. The same is also fortified by the fact that none of the applicants were made an accused in the scheduled offence. Even though the accused applicants received in their bank accounts certain amounts at the instance of or from Shri Afroz Hasanfatta, the statements if taken on their face value, do not satisfy even on prima facie basis the prerequisite for trying any person on allegation of money laundering i.e. mens rea or culpable knowledge of the Scheduled Offence and Proceeds of Crime derived therefrom, and projection of such proceeds of crime as untainted. Even on prima facie basis no offence is made out agains....