TaxTMI 
TaxTMI 
2021 (3) TMI 753
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....irection to release the Applicants from confinement from Jail in ECIR No.ECIR/MBZO-III/20/2020. Application No.974 of 2021 is for seeking bail by Applicants. 2. By the impugned Order dated 15th February, 2021, learned Special Judge has allowed the Application of Respondent No.1 filed below Exh-7 for extension of judicial custody of the Applicants and has rejected Application preferred by the Applicants below Exh-8 for grant of bail on any type of bond. 3. Heard Mr. Aggarwal learned counsel for the Applicants in APL No.201 of 2021 and BA No.974 of 2021, Mr. Anil Singh, learned Additional Solicitor General for the Respondent No.1-ED and Mr. Palkar, learned APP for the Respondent No.2-State. 4. The facts giving rise for filing the present Applications, can be briefly stated as under:- (i) Mr. Mahendra S. Surana, lodged a Crime bearing No.109 of 2020 on 7th March, 2020 with City Chowk Police Station, Aurangabad under Sections 406, 420 read with Section 34 of the Indian Penal Code (for short, "the IPC") against the Applicants and other accused persons. It is stated therein that, the informant is one of the Directors of M/s. Aurangabad Gymkhana Club Private Limited, (for short, "Aur....
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....f investigation of the present crime, the Applicants were produced before the Special Court from time to time for their remand, which was granted by the impugned Orders. It is to be noted here that, after the impugned Order dated 28th January 2021 was passed, thereby remanding Applicants to ED custody till 30th January 2021, by a subsequent Order dated 30th January, 2021, the Special Court, extended custody of the Applicants for further period of 3 days i.e. upto 2nd February, 2021. That, on 2nd February 2021, the Applicants were again produced before the Special Court for seeking their further custody with a Remand Application. The Special Court, by its Order dated 2nd February 2021, rejected the request of the Respondent No.1 for further custodial interrogation and directed that, the Applicants be remanded to judicial custody till 15th February 2021. The said Order dated 2nd February 2021, was impugned before this Court by the Respondent No.1 by way of Criminal Revision Application No.22 of 2021. This Court, by its Order dated 8th February 2021, upheld the Order of Special Court dated 2nd February 2021 and dismissed the said Revision Application. (vi) The record further indicat....
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....-8. 5. Mr. Aggarwal, learned counsel for the Applicants submitted that, Amendment to Sub-Section (b) of Section 44 of the PMLA by way of insertion of proviso came into effect from 1st August, 2019. He submitted that, the Hon'ble Supreme Court pronounced its judgment in the case of P. Chidambaram Vs. Directorate of Enforcement, reported in (2019) 9 S.C.C. 24 on 5th September, 2019. That, after taking into consideration the said Amendment, the Hon'ble Supreme Court in para No.24 has categorically held that, "Scheduled offence" is a sine qua non for the offence of money-laundering which would generate money that is being laundered. He submitted that, in the Frequently Asked Questions (FAQs) on the PMLA, published by the Enforcement Directorate, Government of India and in particular question Nos.6, 10 to 13, the Respondent No.1 has given information about what is money laundering?, what is the offence of money laundering?, proceeds of crime, Scheduled Offence and Predicate offence. He submitted that, to question No.13 i.e. what is a predicate offence?, the answer given by the ED to it is, every Scheduled Offence is a predicate offence. The Scheduled Offence is called predicate offence....
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.... case of Sanjaysingh Ramrao Chavan Vs. Dattatray Gulabrao Phalke & Ors. reported in (2015) 3 S.C.C. 123 and in particular para No.17, Mr. Aggarwal submitted that, therefore once the 'crux' goes, the superstructure also falls, lacking in legs. Hence, prosecution becomes a futile exercise, as the materials available do not show that an offence is made out as against the accused. He therefore, vehemently submitted that, once the Scheduled Offence lodged against the Applicants is compromised/compounded by the Complainant therein, the structure of the present crime registered by ED falls on ground, as it does not survive and is non-est. He submitted that, in view thereof, the offence registered by the Respondent No.1 under the PMLA now stands wiped out from the record and therefore, there is no question of Applicants being remanded to further custody and therefore, the Applicants are entitled to be released on bail. He further submitted that, in the case of Om Prakash Nogaja & Anr. Vs. K. Nageshwar Rao & Anr. decided by the learned Single Judge of this Court, on 10th August, 2009, in Criminal Application No.3360 of 2009, it is held that, it is only when property is derived or obtained....
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....ation would make it abundantly clear that, the offence which is being investigated by the Respondent No.1 is a very serious economic offence, with an allegation of money-laundering of Rs. 410 Crores by the Applicants. He submitted that, as per the Respondent No.1, the firm of the Applicants has more than Rs. 2000 Crores of loan of Yes Bank as outstanding. He submitted that, even if a settlement has taken place between the Original Complainant and the Applicants herein, in the said Predicate/Scheduled Offence, the ED continues to investigate the aspect as to, where the laundered money has gone. He submitted that, the object behind enacting the present Act is laudable. It is the prime intention of the Legislature to investigate into the offence of money-laundering. He submitted that, for removal of doubts, the Legislature has inserted Explanation to Sub-Section (d) of Section 44 by Finance (No. 2) Act, 2019 (23 of 2019), which has come into effect from 1st August, 2019. That, in view of the explanation to Sub-Section (d) of Section 44, the jurisdiction of the Investigating Agency and Special Court under PMLA, is not dependent on any Orders passed in respect of the Scheduled Offence. ....
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....ate/Scheduled Offence is totally irrelevant. He submitted that, otherwise the basic purpose of enacting PMLA will be frustrated. He submitted that, the Division Bench of this Court in the case of Radha Mohan Lakhotia Vs. Deputy Director, PMLA, Directorate of Enforcement reported in 2010 SCC Online Bom. 1116, has held that, the offence of money-laundering under Section 3 of the Act is an independent offence. That, the said view has been followed by the Division Bench of the Madras High Court in the case of VGN Developers P. Ltd & Ors. Vs. The Deputy Director, Directorate of Enforcement reported in MANU/TN/6087/2019. He submitted that, the PMLA is self contained and the offence registered under it, can stand alone, independent of Predicate Offence. He submitted that, similar view has been expressed by the Sikkim High Court in the case of Eastern Institute for Integrated Learning in Management University Vs. The Joint Director, Directorate of Enforcement and Ors. dated 17th September, 2015 and Smt. Usha Agarwal Vs. Union of India & Ors. dated 29th August, 2017. He therefore, submitted that, there are no merits in the Applications and it may be dismissed summarily. 7. In rejoinder to ....
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.... 'true meaning' of the statutory provision. The statute must be read as a whole in its context. It is now firmly established that the intention of the Legislature must be found by reading the statute as a whole. The statute to be construed to make it effective and workable and the Courts strongly lean against a construction which reduces a statute to futility. A statute or any enacting provision therein must be so construed as to make it effective and operative. The Courts should therefore reject that construction which will defeat the plain intention of the Legislature even though there may be some inaccuracy or inexactness in the language used in a provision. Every provision and word must be looked at generally and in the context in which it is used. Elementary principle of interpreting any word while considering a statute is to gather the intention of the legislature. The Court can make a purposeful interpretation so as to effectuate the intention of the legislature and not a purposeless one in order to defeat the intention of the legislature wholly or in part. 10. At the time of debate in Rajya Sabha, while introducing Amendment to the Finance Act on 17th December, 201....
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.... thus, independent of predicating offence. It has been held that, it cannot be stated that, a mere closure by the CBI would provide a death knell to the proceedings of the Respondent (i.e.ED therein). That, in a given case, the complaint may emanate from a registration of a case involving scheduled offence. But the fate of the investigation in the said scheduled offence cannot have bearing to the proceedings under the PMLA. From the reading of the said decision it is clear that, mere filing of closure report by the Investigating Agency will not create any impediment or hurdle in the process of investigation by the ED of an offence registered under PMLA and being investigated by it. 11. It is thus absolutely clear that, for initiation/registration of a crime under the PMLA, the only necessity is registration of a Predicate/Scheduled Offence as prescribed in various Paragraphs of the Schedule appended to the Act and nothing more than it. In other words, for initiating or setting the criminal law in motion under the PMLA, it is only that requirement of having a predicate/Scheduled crime registered prior to it. Once an offence under the PMLA is registered on the basis of a Scheduled O....
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.... applied to the case in hand which arises out of a special statute namely PMLA enacted by the Legislature with an avowed object. Hypothetically, 'an accused' in a Predicate/Scheduled Offence is highly influential either monetarily or by muscle power and by use of his influence gets the base offence, compromised or compounded to avoid further investigation by ED i.e. money laundering or the trail of proceeds of crime by him, either in the Predicate/Scheduled Offence or any of the activities revealed therefrom. And, if the aforestated contention of the learned counsel for the Applicants is accepted, it will put to an end to the independent investigation of ED i.e. certainly not the intention of Legislature in enacting the PMLA. Therefore, if the contention of the learned counsel for the Applicants is accepted, in that event, it would be easiest mode for the accused in a case under PMLA to scuttle and/or put an end to the investigation under the PMLA. Therefore, the said contention needs to be rejected. 14. In view of the aforesaid discussion, it is clear that, even if the Investigating Agency investigating a Scheduled Offence has filed closure report in it and the Court of competen....
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....for further judicial custody of the Applicants below Exh-7 as noted earlier. The Trial Court, by its impugned Order has allowed the said Application. 16. It is the settled position of law that, in a case of money-laundering where it involves many stages of "placement", "layering i.e. funds moved to other institutions to conceal origin" and "interrogation i.e. funds used to acquire various assets", it requires systematic and analysed investigation which would be of great advantage. The further remand of Applicants to judicial custody is therefore proper on all counts. This Court finds that, the Special Court has not committed any error while passing impugned Order thereby remanding the Applicants to further judicial custody. In view of the above discussion, it is not necessary to interfere with the impugned Order dated 15th February, 2021 passed below Exhs-7 and 8 in PMLA RA No.117 of 2021 by learned Special Judge, Mumbai. 17. Coming to prayer clause (b) of the Application, whereby the Applicants have impugned Order dated 28th January, 2021 in Remand Application No.117 of 2021, thereby remanded them further to the custody of ED till 30th January, 2021. It is to be noted here that,....