TaxTMI 
TaxTMI 
2021 (12) TMI 432
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...., the petitioner contends that there is a statutory infirmity in taking cognizance of the Enforcement Directorate complaint by the learned Special Judge without registering F.I.R. at the commencement of its investigation as provided under Section 154 of Cr.P.C. (ii) Secondly, the adjudicating proceedings initiated under the PMLA against the petitioner herein for provisional attachment of his property was held to be unsustainable by the adjudicating authority, vide order dated 11.10.2019. While a competent authority has held that the property possessed by the petitioner herein does not fall within the meaning of 'proceeds of crime' as defined under the PMLA, under the same proceedings i.e., in ECIR/CEZO/11/2013, the Enforcement Directorate cannot continue the prosecution against the petitioner under Section 45 read with Sections 70 and 8(5) of the PMLA. The background of the case:- 4. Based on the complaint given by the Village Administrative Officer, Keelavalavu Village, Madurai District, a case in Crime No. 161 of 2012 was registered against this petitioner and two others for the offences under Section 120-B read with Sections 447, 379, 430, 420, 465, 467, 4....
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.... materials to substantiate the contentions of the respondents justifying the provisional attachment of the properties of the petitioner, vide P.A.O., dated 23.04.2019 and the properties standing in the name of the petitioner are not involved in money-laundering. (b) The Enforcement Directorate failed to annex the translated version in English while filing the relied upon documents [RUD] before him. None of the said statements have referred to the name of the petitioner herein in relation to the business activities of the first accused. All of them have referred to the name of the second accused in relation to the activities of the first accused. Significantly, none of them have assigned any role or involved in relation to the quarrying activities referred to in the charge sheet and as referred to by the Enforcement Directorate in the course of investigation. Nothing is deposed by the named witnesses, who have given statements under Section 50 of the PMLA against the petitioner herein, in relation to any activity of laundering of the proceeds of crime.'' 7. In the above said circumstances, the complaint filed by the Enforcement Directorate before the Special Cour....
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....viduals, seeking to take cognizance of the offence of money-laundering and pass an order of confiscating the properties involved in money-laundering. The said complaint was taken cognizance by the Special Court, numbered as C.C. No. 3 of 2020. The causation of summon in the said complaint is the subject matter of this Petition. 11. The learned counsel appearing for the petitioner vehemently argued that when the adjudicating authority had held that the properties sought to be provisionally attached does not fall within the meaning of proceeds of crime, the plea to confiscate the same by virtue of Section 8(5) of the PMLA, is premature, illegal and beyond the scope of Sections 45 and 70 of the Act. Further, it was submitted that issuance of summons based on the complaint on the assumption that the petitioner had involved in the activity of money-laundering is contrary to the finding of the adjudicating authority recorded after giving due opportunity to the parties concerned. 12. Per contra, the learned Assistant Solicitor General of India appearing for the respondents besides filing a detailed reply, would contend that the proceedings initiated for provisional attachment of the....
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..... The crime of money-laundering is prosecuted under Chapter - II of the PMLA, which is punitive in nature. Whereas the possession of Corpus delicti is adjudicated under Chapter - III of the PMLA. The said adjudication is preventive in nature. As far as the offence of money-laundering is concerned, it commences from commission of crime and end with laundering the illicit money by layering and moving it into a system to show it as if it is a licit income or untainted property. For launching prosecution, the proceeds of crime derived out of the predicate offence may be available or may not be available. If available, it may in the hands of the person, who has commissioned the scheduled crime or by any third party. Even assuming the authorities unable to establish the fact that the assets available in the hands of the petitioner herein is proceeds of crime, it will not take away the rigour of prosecuting him for the commission of crime. Therefore, the crime of money-laundering, which is now the subject matter of C.C. No. 3 of 2020, cannot be whittle down or quashed for the reason that the adjudication proceedings for provisional attachment is set aside. Prosecution under Section 45 of ....
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....ecting it as untainted property or claiming it as untainted property in any manner whatsoever. 4. Punishment for money-laundering.- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine. Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words ''which may extend to seven years'', the words ''which may extend to ten years'' had been substituted. 5. Attachment of property involved in money-laundering.- (1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that-- (a) any person is in possession of any proceeds of crime; and (b) such proceeds of crime are likely to be ....
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....or on the date of an order made under sub-section (3) of section 8, whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment. Explanation.-- For the purposes of this sub-section ''person interested'', in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property. (5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. 8. Adjudication.-- (1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of section 18, if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3 or is in possession of proceeds of crime, it may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of hi....
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....tion is passed under sub-section (5) or sub-section (7) of Section 8 or Section 58-B or sub-section (2-A) of Section 60 by the Special Court. Explanation.- For the purposes of computing the period of three hundred and sixty five days under clause (a), the period during which the investigation is stayed by any Court under any law for the time being in force shall be excluded. (4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the property attached under Section 5 or frozen under sub-section (1-A) of Section 17, in such manner as may be prescribed: Provided that if it is not practicable to take possession of a property frozen under sub-section (1-A) of Section 17, the order of confiscation shall have the same effect as if the property had been taken possession of. (5) Where on conclusion of a trial of an offence under this Act, the Special Court finds that the offence of money-laundering has been committed, it shall order that such property involved in the money-launde....
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....ntinue to try such scheduled offence; or; (b) a Special Court may upon a complaint made by an authority authorised in this behalf under this Act take cognizance of offence under Section 3, without the accused being committed to it for trial: Provided that after conclusion of investigation, if no offence of money-laundering is made out requiring filing of such complaint, the said authority shall submit a closure report before the Special Court; or (c) if the Court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money-laundering under sub-clause (b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed; (d) a Special Court while trying the scheduled offence or the offence of money-laundering shall hold trial in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), as it applies to a trial before a Co....
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....lf by the Central Government by a general or a special order made in this behalf by that Government. (1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed. (2) The limitation on granting of bail specified in sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. Explanation.- For the removal of doubts, it is clarified that the expression ''Offences to be cognizable and non-bailable'' shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (2 of 1974), and accordingly, the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the ful....
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....revent money-laundering and next to provide for confiscation of property derived from or involved in money-laundering. While Chapter - II of the PMLA deals with prosecuting the Company and persons involved in money-laundering and thereby, prevent money-laundering, Chapter - III provides for preventing the proceeds of crime being further diluted or disbursed pending trial of the prosecution for money-laundering. The adjudication process under Chapter - III is independent and it is the quasi judicial authority exercising the power to ensure that any person, who is in possession of any proceeds of crime does not conceal, transfer or deal with in any manner which may result in frustrating any proceedings relating to confiscation. 23. In the subject complaint [C.C. No. 3 of 2020], the respondent herein pray for two reliefs. One to proceed against the accused persons for money-laundering and second to confiscate the proceeds of crime. As far as the punishment for money-laundering is concerned, Section 4 of the Act prescribes rigorous imprisonment for a period of not less than three years, but which may extend to seven years and shall also be liable to fine. Provided the proceeds of cr....
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....e mentioned in the Act are, (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property. Clause (ii) of Section 3 of the Act says that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. 25. Therefore, in the opinion of this Court a prima facie satisfaction of the adjudicating authority in a preventive proceedings regarding certain properties, no way stand in the way of prosecuting the person accused of the offence of money-laundering, which covers not only possession but also use or concealment. 26. Now, coming to the plea raised by the petitioner herein that he is no way connected with the first accused Company, this Court finds that this plea is a self-serving statement, contrary to the statement of the witnesses recorded by the respondent and the records....