TaxTMI 
TaxTMI 
2018 (9) TMI 457
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....medabad Zonal Office of Director of Enforcement 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....
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....order is quashed and set aside qua each of the applicants with consequential 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 r....
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....pondent No. 1 has submitted that present revision is not maintainable at law. 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 nei....
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....based on which FIR No. I-16 of 2014, dated 11-4-2014 and FIR No. I-17 of 2014, dated 13-4-2014 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 Hasanfat....
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....uilders Pvt. Ltd., for purchase of a flat in Mumbai. He has made payments totalling Rs. 47,50,000/- 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, proprieto....
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....mitted that petitioners have allowed the use of their bank accounts for layering of the proceeds of crime received 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 genera....
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....h all these judgments relied upon by the Respondents amongst various other judgments were considered in detail, while declaring the legal position 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....
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....nce alleged against the accused is taken under Section 190(1)(b) Cr PC. Office to register the case in CC register and issue SS to accused by 30-9-2000. sd/- 4-8-2000 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....
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.... been able to make out a prima facie case for the offence of cheating on the averments in the complaint petition and his statement on oath. The matter should have been examined in the light of the 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 r....
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....Dubai on the basis of the such fake Bills of Entry. After investigations Charge Sheet has been filed against several persons. The main accusations in the Scheduled Offence are inter alia against Shri Madanlal 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 i....
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....total amount of Rs. 16,31,19,941/- is alleged as proceeds of crime relatable to Shri Afroz Hasanfatta and the petitioners, and laundering thereof is alleged by the petitioners. ix. One Shri Trivedi, an accountant of Shri. Madanlal Jain, has on 28-3-2014, during the search operations, stated that he had frequently 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....
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....M/s. Natural Trading Co. And M/s. Gangeshwar Mercantile Pvt. Ltd. For Shri Hasan Fatta Afroj Mohammed, Shri Jafar Mohammed Hasanfatta, Nile Trading Co. or family members of Shri Hasan Fatta Afroj Mohammed? iii. A. 5 In this regard, I state that neither I had arranged any fund as loan from M/s. Gan Gangeshwar Mercantile Pvt. 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 paym....
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....criminal complaint the following is alleged against each of the petitioners : 1. Sh. Jafar Mohammed Hasanfatta (Petitioner No. 1) : Shri Jafar Mohamed Hasanfatta has knowingly involved himself in the process and the activity connected with the proceeds of crime including its concealment and possession and has therefore projected the same as untainted. It is 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 ....
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....tion against each of the petitioner is of commission of offence under Section 3 of PMLA, which is punishable under Section 4 of PMLA. Section 3 of PMLA reads as under : 3. Offence of money laundering. Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected 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 schedu....
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....is not the same thing as suspicion or doubt and mere seeing also cannot be equated to believing. Reason to believe is a higher level of state of mind. Likewise knowledge will be slightly on a higher plane than reason to believe. A person can be supposed to know where there is a direct appeal to his senses and a person is presumed to have a reason to believe if he has sufficient cause to believe the same. The same test therefore applies 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, abet....
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....involved in the process of money laundering. 41. I find no merit in this stand of the Respondent. I am of the view that this amended Section 24 shows legislative intent of attachment and confiscation of proceeds of crime by presuming involvement of proceeds of crime in money laundering irrespective of whether the person concerned is or not charged with the offence of money laundering. Thus, there shall be a legal presumption in any proceeding relating to proceeds 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 indicate....
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.... Enforcement, (2015) 16 SCC 1. 46. I am of the view that prima facie findings of adjudicating authority are not substitute for the requisite satisfaction required by the Special Court for taking cognizance. Final confiscation of proceeds of crime or value thereof under PMLA would always be subject to final outcome of trial and is not final merely by Adjudication. Moreover, the Respondent failed to point out any prima facie material against each of the petitioner even at this stage to show requisite 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) ....
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..../ AIR 1964 SC 1184 has clearly laid down the law in this regard with the following observations - 13. As we have already indicated, this question has been considered on several occasions by judicial decisions and it has been consistently held that a confession cannot be treated as evidence which is substantive evidence against a co-accused person. In dealing with a criminal case where the prosecution relies upon the confession of one accused person against another accused person, the proper approach 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....
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.... process of law. In the material before the Special Court for PMLA, none of the statements of any witness even remotely referred to the petitioners. None of the statements either of the petitioners, or of any witness or even of any co-accused imputed on any of the petitioners even remote knowledge of commission of Schedule Offence and knowingly laundering of any Proceeds of Crime. Moreover, there is not even any circumstantial evidence garnered in the entire investigation to remotely impute such pre-requisite knowledge or mens rea, 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 allega....
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....r was rightly quashed by the High Court and the criminal appeal in which Vijaya Satardekar is the respondent is dismissed. 39. However, as indicated by my Learned Brother, the complaint made does make out a prima facie case against accused Ranjit Satardekar and the cognizance taken by the Learned Magistrate cannot be faulted and the appeal as far as he is concerned, must be allowed. However, even prima facie, none of the offences referred to in the charge-sheet can be made out against accused Vijaya Satardekar and she 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, whi....
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....o Rs. 16,31,19,941/- received by Shri Afroz Hasanfatta directly or indirectly is involved in money laundering. These issues are subject matter of different proceedings and trial. The issues decided in the instant petition is limited to the legality or otherwise of the impugned Order dated 18-7-2014 taking cognizance and issuing process by way of summons qua each of the petitioners herein. 55. The instant Revision Petition is accordingly allowed and the impugned Order dated 18-7-2014 is set aside qua each of the petitioners with consequential reliefs. 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 im....
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....ayed by each and every accused is different with respect to its severity and effect on the economic and there is no parity applicable. Therefore, the said order cannot be considered as proceeded. Even otherwise the said order is not final and department is entitled to avail remedy as is available under law. In this regard, the department has already initiated the process of filing Special Leave Petition before the Hon'ble Supreme Court and the matter is pending to the Department of Revenue, Government of India". 10. Therefore, even if there is substance in 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....
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....the facts, circumstances and evidence are common amongst them, though the factual details like the name of the companies and amount involved are different. 14. In support of such submission, the Learned Advocate for the applicant has relyed upon the judgment, in case of Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association reported in (1992) 3 SCC 1, wherein it has been made clear that the stay of operation of order does not lead to consider that such order is quashed, it only means that the order which has been stayed could not be operative from the 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 seekin....
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....essed before different Court and thereby Court has to dictate such lengthy judgment at the cost of adjourning other matters, more particularly when there is shortage of judges and huge pendency of old cases in all Courts. At the same time such matters needs to be disposed of at the earliest instead of keeping it pending for year together, which would simply increase the pendency and arrears. 18. It is also surprising to note that though such revisions are to be dealt with based upon the documentary evidence produced before the Trial Court with the complaint or charge-sheet, 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 practical....
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....d Act cannot attract the ambit of Article 20(2) of the Constitution. Whereas there is no such issue raised by either side in the present petitions and therefore, only because once such petition by some accused under the PMLA has been rejected by one of the Hon'ble High Court, it cannot be said that all the complaint registered or filed under the PMLA can never be dismissed, even if there is no proper evidence to proceed further. Issue before Hon'ble Madras High Court was to the effect that when the proceeding under Sections 419 and 420 of the Indian Penal Code has been initiated, there 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....
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....t should follow the prior view unless it is shown that the same is per incuriam. That aspect has not been highlighted. Even otherwise, the matter being pending before the Supreme Court, it would not be proper to brush aside the judgment of the learned Single Judge. More so, when it is followed by Punjab and Haryana High Court and a Special Leave Petition from its decision is summarily dismissed. I would therefore proceed to decide the matter on the touchstone of the law laid down by the learned Single Judge of this Court (Shri Khanwilkar, J.) ... xxx xxx xxx" 23. As against that the applicants 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....
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....ence may well be discovered much later in the hands of Mr. X, who now becomes charged with the crime of money laundering under the 2002 Act. The predicate or scheduled offence has already been tried and the accused persons convicted/acquitted in this illustration, and Mr. X now applies for bail to the Special Court/High Court. The Special Court/High Court, in this illustration, would grant him bail under Section 439 of the Code of Criminal Procedure - the Special Court is deemed to be a Sessions Court - and can, thus, enlarge Mr. X on bail, with or without conditions, under Section 439. It is important 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 ....
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....r. Y, who is charged with the same offence under Part A of the Schedule and is also charged with possession of the proceeds of crime, which he now projects as being untainted. Mr. X applies for bail to the Special Court/High Court. Despite the fact that Mr. X is not involved in the money laundering offence, but only in the scheduled offence, by virtue of the fact that the two sets of offences are being tried together, Mr. X would be denied bail because the money laundering offence is being tried along with the scheduled offence, for which Mr. Y alone is being prosecuted. This illustration would show that 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 o....
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....tion 3 of the PMLA and dealing with Section 45 only, the facts remains that in Para-7 of the judgment, which is quoted hereinafter, the Hon'ble Supreme Court has categorically observe that under Section 3 of the Act, kind of persons responsible for money-laundering is extremely wide and words used in such Section would show that all persons who are even remotely involved in this offences are sought to be roped in. However, it is made clear in this judgment that Section 3, confirms that any persons must not only involved in any process or activity connected with proceeds of crime but also project or claim such property 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....
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..../s. Sudar Industries (Deepak Shenoy), M/s. Jyoti Structure (Santosh Naik), M/s. GT Traders, M/s. Aarzoo Enterprises, M/s. Jash Traders, M/s. MD Enterprises, M/s. Maruti Trading, M/s Millennum & Co., M/s. Vandana & Co., M/s. Natural Trading Co., M/s. Sidh Corporation, M/s. Saloni Enterprises, M/s. Saibaba, M/s. Pushpa Enterprises, M/s. RA Distributors Pvt. Ltd., M/s. Agni Gems Pvt. Ltd., M/s. Harmony Diamonds PL, M/s. M.B. Offshores Distributors Pvt. Ltd., M/s. Hem Jewels Pvt. Ltd., M/s. Riddhi Exim Pvt. Ltd., M/s. Trinetra Trading Pvt. Ltd., M/s. Maa Mumba Devi Gems Pvt. Ltd., M/s. Ramshyam Exports Pvt. Ltd., between India, 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 pe....
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....e. for the scheduled offence and also under PMLA, the facts remain that there has been no doubt that unless one is held guilty for the scheduled offences, he cannot be held guilty of the offence punishable under the PMLA. If it is so, there is no reasons to continue the proceeding simultaneously or in any case unless the proceeding for scheduled offence are over either by conviction or even by acquittal, but leaving prima facie evidence that though accused cannot convicted for scheduled offence, there is prima facie evidence that the proceeds of the crime has been deprived and obtained, directly or indirectly as a result of criminal 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 he....
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....the applicant either directly or indirectly in the commission of either scheduled offences or offence under the PMLA and when there is lack of evidence regarding actual involvement or knowledge of all the applicants, with reference to concealment of proceed or direct involvement in any scheduled offence any manner whatsoever, only possession of huge amount with its transaction through Bank, cannot considered as an evidence so as to initiate the proceeding under the PMLA. On the contrary, due to such huge transaction through Bank, there is least chance of concealing such fact by anyone. Therefore, there may be an irregularity in dealing 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 appl....
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....the judgment dated 16-2-2017. Therefore, when there is no substance in the complaint itself, it becomes clear that the respondents have dragged the matter unnecessarily for no valid reasons. 35. If we perused the documents attached with the affidavit in rely, it becomes clear that the transaction are through bank and therefore, there is no reason to say that such transaction are illegal, at the most, if such transaction are not disclosed then Income Tax Department may imposed liability of tax upon concerned party but it does not amount to commission of either scheduled offence or offence under PMLA. 36. The respondent are 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....
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....ence from judgment could not be considered as a binding decision but entire judgment needs to be checked so as to rely upon ratio of such judgment with reference to law involves in such cited case. 40. In view of above facts and circumstance, it becomes clear that 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 applicants, without even prima facie material showing existence of any mens rea or culpable knowledge with all or any of them, or of any proceeds of crime emanating from the said scheduled offences. Neither 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 proc....