TaxTMI 
TaxTMI 
2022 (2) TMI 1126
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.... by Section 132 of the Income Tax Act, 1961, not only conducted search at the residence of the Petitioner but also at other premises terming it to be illegal and the same put under challenge by the Petitioner in WP(T) No. 1018/2011 before this High Court, which is pending consideration. Since the Petitioner is in employment of Chhattisgarh State Government, on 11.02.2010, an unverified Preliminary Report with unverified facts was submitted by the Income Tax Department to the State Government (C.G.) about his family including the members of the extended family of the petitioner. The said joint report of the search conducted at various premises alleged to have been sent before concluding the statutory assessment proceedings without there being any provision in the law under the Income Tax Act. On 19.02.2010, on the basis of Preliminary Report dated 11.02.2010, Economic Offences Wings Chhattisgarh ('EOW, Chhattisgarh) registered FIR bearing No.06/2010 against the Petitioner under Sections 13(1) and 13(2) of the Prevention of Corruption Act. Pursuant to the said EOW FIR dated 19.02.2010, the Sub Zonal Office Nagpur of the Enforcement Directorate (ED), on 10.01.2011, registered an E....
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....4.05.2018 (Annexure A/12), quashed the Provisional Attachment Order of the Property of the Petitioner amongst other holding that the Petitioner is not involved in the money laundering. Thereafter, being aggrieved by the order of the Adjudicating Authority, the respondent authorities preferred an Appeal No.FPA-PMLA-2377 & 2472/RP/2018 before the Appellate Tribunal, PMLA at New Delhi, which is still pending consideration. 7. On 10.02.2020 i.e. after about 10 years, the respondent authorities through Sub-Zonal Office, Raipur, filed an addendum to the impugned ECIR registering predicate offences via different FIRs, which was initially registered only for the purpose of investigation for predicate offence by EOW in Crime No.06/2010 (EOW FIR). Thereafter, on 27.11.2020 the respondent authorities again issued another Provisional Attachment Order (Annexure A/17) under Section 5(1) of PMLA, 2002, and on 18.12.2020, the respondents filed an Original Complaint bearing OC No.1380/2020 (Annexure A/18) under Section 5(5) of PMLA, 2002, before the learned Adjudicating Authority. Further case of the prosecution is that addendum ECIR has been registered for the predicate offence registered by CBI,....
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.... Authority, the respondents in absence of any fresh/new material on record, without any cogent reason issued another Provisional Attachment Order dated 27.11.2020 under Section 5(1) of PMLA, 2002 against the petitioner. The respondent authorities have completely failed to produce any material or facts to proceed with the attachment order after the order of the learned Adjudicating Authority not confirming the Attachment Order dated 04.04.2017. It has been submitted by learned counsel that the POA-II issued by the Respondent No.1 and the proceedings emanating therefrom are ex-facie perverse, illegal and vitiated by non-application of judicial mind since these proceeding are in breach of the provisions of the PMLA and natural justice. It has been also submitted by learned counsel that addendum to ECIR has been registered for the predicate offence by CBI, EOU-VII, New Delhi for commission of offence under Section 120-B, 420 and 471 of IPC and Section 13(2) and 13(1)(d) of the P.C. Act, bearing number RC-1(E)/2010/EOU-VII dated 04.01.2010, but no offence has been made out in the said RC against the Petitioner. He further submits that the prosecution launched under PMLA, 2002 is nothing....
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....No.1119/2019] filed by the Petitioner on the parity ground, is pending consideration. He also submits that since the income tax proceeding and PAO-I has culminated in favour of the Petitioner, no offence under Section 3 of PMLA, 2002 is made out against the Petitioner and in view of law laid down by the Hon'ble Supreme Court in the matter of State of Haryana and Ors. V. Bhajan Lal and Ors. 1992 Supp (1) 335, any further prosecution is violative of Article 21 of the Constitution of India. Further, in the matter of P.S. Rajya Vs. State of Bihar (1996) 9 SCC 1, Hon'ble Supreme Court held that an officer of the Income Tax Department despite being exonerated by the Central Vigilance commission was being prosecuted by the CBI for offence under Section 13(2) & 13 (1) (b) of the Prevention of Corruption Act and observed that the standard of proof required to be established in a criminal case is far higher than the standard of proof required to be established the guilt in departmental proceedings. It is also submitted that since the Petitioner has been exonerated from all the charges in the proceedings before the ITAT vide order dated 09.01.2017, in departmental inquiry vide order d....
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....head of personal or private wrong, having the potential to usher in economic crisis. The present criminal proceedings have been initiated against the Petitioner under PMLA, 2002, and burden of proof under Section 24 of the PMLA, 2002 with regard to the said tainted money is upon the accused persons to prove it otherwise. He further submits that in the instant case the main contention of the Petitioner that the investigation is pending for more than 11 years, is imprecise and the Petitioner has a long history of non-cooperation in the investigation proceedings and filling of frivolous petitioners/applications in various judicial forums around the country. Right from the inception of investigation by the respondents, the modus operandi of the Petitioner has been to dodge the investigation by filing frivolous litigations and then withdrawing them in order to affect the investigation of the respondent authorities. The Petitioner and his family members have a chequered history of continuous non- cooperation during the investigation by not appearing against Letters and Summons issued to him by respondent authorities under Section 50(2) & (3) of PMLA, 2002 on one pretext or the other. 12....
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.... money belonging to the Petitioner, which was laundered by investing in Equity Shares of M/s Prime Ispat Ltd. and the same should be termed/treated as proceeds of crime. Learned counsel further added that the investigation in the matter is continued in relation to other FIRs and from 2015 to 2020 various Letters and Summons were issued to the proposed accused to co-operate in the investigation but the Petitioner gave various frivolous replies to the said letters and summons and did not join the investigation. Subsequently, due to non co-operation in the investigation conducted by the Directorate of Enforcement, the Petitioner was arrested by the Investigating Agency on 09.11.2020 and on 12.11.2020 he was sent to judicial custody by the learned 4th Additional Sessions Judge (Special Judge, PMLA), Raipur (C.G.). 13. Further submission of learned counsel for respondents is that PAO-II bearing No.03/2020 dated 27.11.2020 issued by the respondents is pending adjudication before the learned Adjudicating Authority. The argument of learned counsel for the Petitioner to the extent that the Petitioner has been exonerated from various offences, is not correct as all the orders are pending co....
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.... that whether the Petitioner is entitled for interim relief based on any distinct circumstances or as an exceptional case, much particular that since he has been exonerated by the Income Tax authority, by the Adjudicating Authority and by the State of Chhattisgarh where the Petitioner is in employment ? 16. The Prevention of Money Laundering Act, 2002 was introduced as its statement of objects and reasons mentioned, to make money laundering an offence and to attach property involved under money laundering, so that serious threat to the financial system of India is adequately dealt with. It is worth setting out the statement of objects and reasons of the Act in full. Some of the important provisions, with which this Court directly concerned, are set out herein below: "Section 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 [proceeds of crime including its concealment, possessions, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money- laundering. Section 4. Attachment of property inv....
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.... the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) 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 subsection (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority. Section 24. Burden of Proof. - in any proceeding relating to proceeds of crime under this Act,- (a) in the case of a person charged with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and (b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-la....
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....etermine whether these criminal proceedings could still continue. If the exoneration in departmental adjudication/Tribunal is on technical ground or by giving benefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If, on the other hand, the exoneration in the adjudication proceedings is on merits and it is found that allegations are not substantiated at all and the concerned person(s) is/are innocent, and the criminal prosecution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue. The reason is obvious that criminal complaint/case is filed by the departmental authorities alleging violation/contravention of the provisions of the specific Act on the part of the accused persons. However, if the departmental authorities themselves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such departmental authorities to continue with the criminal complaint and say that there is sufficient evidence to foist the accused persons with criminal l....
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....of its inherent powers under Section 482 Cr.P.C. and/or Article 226 of the Constitution of India, may quash the FIR/complaint/criminal proceedings and even may stay the further investigation. However, the High Court should be slow in interfering the criminal proceedings at the initial stage, i.e., quashing petition filed immediately after lodging the FIR/complaint and no sufficient time is given to the police to investigate into the allegations of the FIR/complaint, which is the statutory right/duty of the police under the provisions of the Code of Criminal Procedure. There is no denial of the fact that power under Section 482 Cr.P.C. is very wide, but as observed by this Court in catena of decisions, referred to hereinabove, conferment of wide power requires the court to be more cautious and it casts an onerous and more diligent duty on the court. Therefore, in exceptional cases, when the High Court deems it fit, regard being had to the parameters of quashing and the self-restraint imposed by law, may pass appropriate interim orders, as thought apposite in law, however, the High Court has to give brief reasons which will reflect the application of mind by the court to the relevant....
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....re satisfied. At the same time, it is to be noted that arrest is not a must whenever an FIR of a cognizable offence is lodged. Still in case a person is apprehending his arrest in connection with an FIR disclosing cognizable offence, as observed hereinabove, he has a remedy to apply for anticipatory bail under Section 438 Cr.P.C. As observed by this Court in the case of Hema Mishra v. State of Uttar Pradesh, (2014) 4 SCC 453, though the High Courts have very wide powers under Article 226, the powers under Article 226 of the Constitution of India are to be exercised to prevent miscarriage of justice and to prevent abuse of process of law by the authorities indiscriminately making pre-arrest of the accused persons. It is further observed that in entertaining such a petition under Article 226, the High Court is supposed to balance the two interests. On the one hand, the Court is to ensure that such a power under Article 226 is not to be exercised liberally so as to convert it into Section 438 Cr.P.C. proceedings. It is further observed that on the other hand whenever the High Court finds that in a given case if the protection against pre-arrest is not given, it would amount to gross m....
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....or investigation and then seek relief by an interim order. It is further observed that it is the obligation of the court to keep such unprincipled and unethical litigants at bay. In the aforesaid decision, this Court has further deprecated the orders passed by the High Courts, while dismissing the applications under Section 482 Cr.P.C. to the effect that if the petitioner-accused surrenders before the trial Magistrate, he shall be admitted to bail on such terms and conditions as deemed fit and appropriate to be imposed by the Magistrate concerned. It is observed that such orders are de hors the powers conferred under Section 438 Cr.P.C. That thereafter, this Court in paragraph 25 has observed as under: 25. Having reminded the same, presently we can only say that the types of orders like the present one, are totally unsustainable, for it is contrary to the aforesaid settled principles and judicial precedents. It is intellectual truancy to avoid the precedents and issue directions which are not in consonance with law. It is the duty of a Judge to sustain the judicial balance and not to think of an order which can cause trauma to the process of adjudication. It should be borne in ....