TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 665
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....f 2020 in S.C.No.1 of 2016, Crl.M.P.No.1414 of 2020 in S.C.No.2 of 2016, Crl.M.P.No.1412 of 2020 in S.C.No.1 of 2016, Crl.M.P.No.1421 of 2020 in S.C.No.2 of 2018 respectively, by the Principal Special Judge for CBI Cases, Hyderabad. Criminal Revision Case No.83 of 2021 is filed under Sections 397 & 401 of Cr.P.C., challenging the order, dated 11.01.2021 passed in Crl.M.P.No.1416 of 2020 in S.C.No.2 of 2017 by the Principal Special Judge for CBI Cases, Hyderabad. 3. Heard the submissions of Sri S.Niranjan Reddy, learned senior counsel representing Sri N.Naveen Kumar, learned counsel for the petitioners in Crl.P.Nos.1073, 1074, 1076, 1077, 1079, 1080 and 3119 of 2021; Sri Gyanendra Kumar, learned counsel, appearing for Ms. K.Rachana Reddy, learned counsel for the petitioner in Crl.R.C.No.83 of 2021; Sri T.Surya Karan Reddy, learned Assistant Solicitor General of India and Sri B.Narasimha Sarma, learned Standing Counsel for Enforcement Directorate, for respondents in Criminal Petition Nos.1073, 1074, 1076, 1077, 1079, 1080 and 3119 of 2021 and respondent No.1 in Criminal Revision Case No.83 of 2021 respectively and perused the record. 4. The petitioner in Criminal Petition Nos.1073 ....
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....83 of 2021 is M/s.Bharathi Cement Corporation Private Limited. The prayer in the said Criminal Revision Case is to call for the records pertaining to Crl.M.P.No.1416 of 2020 in S.C.No.2 of 2017, on the file of the Court below and set aside the common order, dated 11.01.2021, passed by the Court below and direct the Court below to hold simultaneous trial of scheduled offences and offences under PML Act or in the alternative, in immediate succession with the trial of scheduled offences preceding the trial of offences under PML Act in terms of Section 44(1) of PML Act. 5. Sri S.Niranjan Reddy, learned senior counsel appearing for the petitioners in all the Criminal Petitions would contend that the impugned orders are contrary to law and settled legal position. The Court below erred in holding that the offence under PML Act is a stand-alone offence, which is not inextricably linked to predicate/scheduled offences. Proceeding with the trial of offences under PML Act without proving the guilt of the accused under the predicate/scheduled offence at the first instance is impermissible, since it amounts to presumption that the accused are guilty of predicate/scheduled offences, which is gr....
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....under PML Act. Unless and until a predicate/scheduled offence exists, there is no money laundering offence. Predicate/scheduled offence is foundation and offence under PML Act is the structure/framework thereon. If foundation is removed, then the structure/framework standing thereon would fall. Money laundering offence starts at the end of predicate offence. Money laundering offence necessarily depends upon the predicate/scheduled offence. The ideal way is that the predicate/scheduled offence has to be tried at the first instance, or there can be simultaneous trial of predicate/scheduled offences and offences under PML Act. If it is accepted that the offence under PML Act is a stand-alone offence, the very scope of Section 44(1)(a) & (c) of PML Act, which prescribes jurisdiction and committal of cases relating to scheduled offences, gets defeated. Further, Under Section 44(1)(d) of PML Act, a Special Court, while trying the scheduled offence or the offences under PML Act, shall hold trial in accordance with the provisions of Code of Criminal Procedure, as it is applied to a trial before a Court of Session. The Explanation to the said section contemplates that the Special Court, dur....
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....f money laundering is a stand-alone offence. A person who has not committed a scheduled offence, can well be prosecuted for an offence of money laundering. In such a situation, the prosecution need not wait for the scheduled offence to be established. The offence of money laundering under Section 3 of PML Act is an independent offence and the said view is fortified by a catena of judgments. Further, the trial of offences under PML Act is completely different from the trial of scheduled offences. The subject Sessions Cases and miscellaneous petitions are filed with a malice intention, to procrastinate the pending proceedings by adopting dilatory tactics. PML Act is a special legislation incorporating a complete code, and the cases being investigated under PML Act shall be proceeded further in accordance with the statutory scheme of the Act. Further, Section 44(1)(c) of PML Act provides for transfer of a case for scheduled offence to the Court where the proceedings for money laundering is tried. This provision entirely takes away the submission of the petitioners that money laundering offence necessarily depends upon the predicate/scheduled offence. If the said submission of the peti....
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.... 1. Smt.Soodamani Dorai Vs. Joint Directorate of Enforcement 2018 SCC Online Mad 3138 2. Babulal Verma and another Vs. Enforcement Directorate and another 2021 SCC Online Bom 392 3. J.Sekar @ Sekar Reddy Vs. Directorate of Enforcement Decided on 04.02.2021 in Crl.O.P.Nos.24200 & 24202 of 2017 by the High Court of Madras 8. In view of the above rival contentions, the points that arises for determination in these Criminal Petitions and the Criminal Revision Case is as follows: 1. Whether hearing on charges and trial proceedings can go on in subject Sessions Cases registered for the offences under PML Act before commencement of hearing on charges and trial proceedings in the subject Calendar Cases registered for the predicate/scheduled offences? 2. Whether trial proceedings of predicate/scheduled offences and offences under PML Act be conducted simultaneously? 3. Whether the impugned orders of even date dated 11.01.2021, passed in S.C.Nos.1 of 2016, 2 of 2017, 2 of 2018, Crl.M.P.Nos.1411 of 2020 in S.C.No.1 of 2016, 1414 of 2020 in S.C.No.2 of 2016, 1412 of 2020 in S.C.No.1 of 2016, 1421 of 2020 in S.C.No.2 of 2018 and 1416 of 2020 in S.C.No.2 of 2017, by the Principal Spec....
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.... 10(a). The CBI, Hyderabad, has filed charge sheet in R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1 and five others and the same is numbered as C.C.No.10/2012. Sri V.Vijay Sai Reddy is shown as A-2 and M/s. Jagati Publications Ltd. is shown as A-3 in the above said CC. The Enforcement Directorate, basing on the scheduled offences, filed a private complaint against A1 to A-6 under Section 200 Cr.P.C r/w Sections 45, 3, 4, 8(5) of PML Act before the Court below and the same is numbered as S.C.No.2/2016. A-1 to A-3 in the said S.C.No.2/2016 have filed three separate applications under Section 309 of Cr.P.C requesting to defer all further proceedings in the above said SC till the conclusion of the adjudication of the scheduled offence (C.C.No.10/2012) vide Crl.M.P.No.1958/2017, Crl.M.P.No.1959/2017 and Crl.M.P.No.1960/2017, and the said applications were dismissed by the Court below, vide common order, dated 17.01.2020. 10(b). The CBI, Hyderabad, has filed charge sheet in R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1 and eight others and the same is numbered as C.C.No.24/2013. Sri V.Vijay Sai Reddy is shown as A-2 and M/s. Jagati Publications Ltd. is sho....
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....; if the offences under the Indian Penal Code are not established, 'proceeds of crime' cannot be determined and unless 'proceeds of crime' is not established, any prosecution of the person under PML Act would be premature and would be futile exercise; Unless and until a predicate/scheduled offence exists, there is no money laundering offence; Predicate/scheduled offence is foundation and offence under PML Act is the structure/framework thereon and if foundation is removed, then the structure/framework standing thereon would fall; Money laundering offence starts at the end of predicate offence; Money laundering offence necessarily depends upon the predicate/scheduled offence; If it is accepted that the offence under PML Act are stand-alone offences, the very scope of Section 44(1)(a) & (c) of PML Act, which prescribes jurisdiction and committal of cases relating to scheduled offences, gets defeated. 12. By way of amendment to Section 44 of PML Act in the year 2013, it has been explicitly brought out that the proceedings in both the offences, i.e., scheduled offence and money laundering offence are to be tried by the Special Court constituted under PML Act, if the same is connected ....
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....essary that a person has to be prosecuted under the PML Act, only in the event of such person having committed scheduled offence. Prosecution can be independently initiated under PML Act only for the offence of money laundering. 13. Further, the word "Explanation to a statutory provision" came up for consideration before a Full Bench of the Hon'ble Supreme Court in S. Sundaram Pillai vs. V.R.Pattabiraman (F.B.) AIR 1985 (SC) 582. The Hon'ble Supreme Court, in para Nos.45 and 52 of the said decision, held as under:- Para 45. It is now well settled that an Explanation added to a statutory provision is not a substantive provision in any sense of the term but as the plain meaning of the word itself shows it is merely meant to explain or clarify certain ambiguities which may have crept in the statutory provision. Para 52. Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is - a) to explain the meaning and intendment of the Act itself. b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to su....
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....shows the offence of money laundering is a continuing offence. Thus, a bare reading of Sections 2(1)(u), 3 and 44(1)(d) of PML Act along with explanations thereof makes it clear that the offence of money laundering is a stand-alone offence and the trial proceedings are completely different to that of the scheduled offence. Trial of money laundering offence is independent trial and it is governed by its own provisions, it will not meddle with the trial of scheduled offence. 16. Similar question came up for consideration before the Hon'ble High Court of Madras in Smt.Soodamani Dorai Vs. Joint Directorate of Enforcement's case (12 supra) relied by the respondents, wherein, it was held that adjudication, prosecution and trial under PML Act is independent of scheduled offence. It was held as follows: "In respect of the question whether criminal proceedings initiated by the police is a bar for proceedings under the Prevention of Money Laundering Act, the provisions of PMLA, 2002 are independent and having self-contained code. Before Amendment Act, 2012, the proceedings of PMLA, 2002 were fully depending upon the scheduled offence. However, after Amendment Act, 2012, with effect from 1....
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.... from proceeding under the PMLA, 2002. 17. Further, a reading of the provisions of PML Act makes it clear that though the commission of scheduled offence is a fundamental pre-requisite for initiating proceedings under the PML Act, the offence of money laundering is independent of the scheduled offences. The scheme of the PML Act indicates that it deals only with laundering of money acquired by committing the scheduled offence. In other words, the PML Act deals only with the process or activity of proceeds of crime, including its concealment, possession, acquisition or use and it has nothing to do with the launch of prosecution for scheduled offence and continuation thereof. As stated above, the explanation to Section 44 of PML Act clearly indicates that the Special Court, while dealing with the offence under the PML Act, shall not be dependent upon any orders passed, in respect of the scheduled offence. It is apt to observe that money laundering, being an economic offence, poses a serious threat to the national economy and national interest and is committed with cool calculation and deliberate design and with motive of personal gain, regardless of the consequences to the society. ....
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....muscle power, and by use of his influence he/she gets the predicate/scheduled offence compromised or compounded to avoid further investigation in the offence under PML Act, it will put to an end to the independent investigation of Enforcement Directorate, which is certainly not the intention of Legislature in enacting the PML Act. Therefore, if the contention of the learned senior counsel for the petitioners that offence under PML Act necessarily depend upon the predicate/scheduled offence and the fate of offence under PML Act depends upon the fate of predicate/scheduled offence is accepted, probably it would be the easiest mode to the accused to put an end to the investigation and trial of offences under PML Act, as the case may be. 20. Another question that requires determination in the instant cases is whether the trial of offences under PML Act can go on without commencement of trial of predicate/scheduled offences. Though the learned senior counsel for the petitioners had placed reliance on as many as 11 decisions cited supra, but a perusal of the impugned order reveals that most of said citations were also cited before the Court below and the Court below, having examined the....
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....on predicate/scheduled offences, it can be proceeded with independently without awaiting the outcome of result of scheduled offences or commencement of trial in the predicate/scheduled offences. Further, there is no requirement under law to conduct trials of both category of cases simultaneously. Therefore, the contention that Money Laundering offence starts at the end of predicate offence and commencement of trial in offence under PML Act shall not precede trial of predicate/scheduled offence, is unsustainable. 22. It is well established that though the powers of this Court under Section 482 Cr.P.C., are very wide, those powers are required to be exercised sparingly and with abundant caution. The said inherent power can be exercised only when there is abuse of process of Court or to secure ends of justice. The Hon'ble Supreme Court, in catena of decisions, deprecated the practice of staying criminal trials and police investigations, except in exceptional cases. The present cases, in my considered view, does not fall under exceptional cases where the inherent power under Section 482 can be exercised. Further, the object of Revisional Jurisdiction is to set right a patent defect or....