TaxTMI 
TaxTMI 
2022 (9) TMI 1286
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....d by: Mr. Vikram Nankani, Mr. Sidharth Agarwal, Sr. Advs. with Mr. Dheeraj Nair, Ms. Vishrutyi Sahni, Mr. Abinav Sekhri, Ms. Aishna Jain, Advs. Mr. Mahesh Jethmalani, Sr. Adv. with Mr. Dheeraj Nair, Mr. Hitesh Jain, Ms. Siya Chaudhary, Mr. Subhash Jadhav, Mr. Kapil Sibal, Mr. Rajiv Nayar, Sr. Advs. with Mr. Rishi Agrawala, Mr. Karan Luthra, Mr. Ankit Banati, Mr. Shravan Niranjan, Advs. Mr. Gaurav Mishra, Mr. Jaiyesh Bakshi, Mr. Ravi Tyagi, Mr. Daman Popli, Ms. Mayuri Shukla, Ms. Neetu Devrani, Advs. Respondents Represented by: Mr. S.V. Raju, ASG with Mr. Zoheb Hossain, SPP for ED with Mr. Vivek Gurnani, Adv. with Mr. Rajendra Singh, IO, ED. Mr. Anurag Ahluwalia, CGSC with Mr. Danish Faraz Khan, Adv. for UOI. Mr. Ajay Digpaul, CGSC for UOI with Mr. Kamal R. Digpaul, Ms. Swati Kwatra, Advs. for UOI. Mr. S.V. Raju, ASG Mr. Asheesh Jain, CGSC with Mr. Keshav Mann, Mr. Vedansh Anand, Advs. for R-2/UOI. Mr. Kirtiman Singh, CGSC for UOI with Mr. Waize Ali Noor, Ms. Kunjala Bhardwaj, Mr. Madhav Bajaj, Mr. Yash Upadhyay, Advs. for UOI. Mr. Apoorv Kurup, CGSC with Ms. Nidhi Mittal, Mr. Ojaswa Pathak, Advs. for R-1/UOI. J U D G M E N T ANISH DAYAL, J. 1. These writ petitions were ....
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....gement of the Hon'ble Supreme Court in the matter of Vijay Madanlal Choudhary (supra). Relief sought by the Petitioners 3. The immediate concern of the petitioners relates to prayers in the nature of para 1 (ii) - (vi), whereby the petitioners are concerned about the continuation of proceedings in relation to the ECIR No. ECIR/07/HIU/2021 ("the said ECIR") issued by the Directorate of Enforcement ("ED") despite the predicate offence registered under FIR No. 129/2021 ("the said FIR") having been quashed by the judgment dated 4th May, 2022 of the High Court of Bombay. The petitioners pray for issue of a writ of certiorari setting aside summons issued by the ED to various petitioners in respect of the said ECIR, the Look Out Circular ("LOC") and any other consequential proceedings emanating out of the said ECIR, and quash the same in view of the predicate offence having been quashed by judgment dated 4th May, 2022 passed by the High Court of Bombay in relation to the said FIR. The thrust of the petitioners' contention is based upon the conclusion of the Hon'ble Supreme Court in Vijay Madanlal Choudhary (supra) in para 467 (v)(d) which reads as under: "(v)(d) The offence....
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....stration of a scheduled offence or a complaint is not a precondition. The Hon'ble Supreme Court has stated that "authorised officer can still invoke power of issuing order of provisional attachment and contemporaneously send information to the jurisdictional police about the commission of scheduled offence and generation of property as a result of criminal activity relating to a scheduled offence, which is being made subject matter of provisional attachment." Therefore, even though there may not be any scheduled offence registered, the ED can still move for provisional attachment and therefore the said ECIR may not be quashed. iii) Since the prayer in the writ petitions seeking declaration regarding unconstitutionality of various provisions of the PMLA does not survive due to Vijay Madanlal Choudhary (supra), the basis of these writ petitions being before the Division Bench of this Court also gets eroded and therefore these writ petitions be transferred to a single bench of this Court. iv) Since the ED has filed a Special Leave Petition vide Diary No. 26629 of 2022 on 25th August, 2022 before the Hon'ble Supreme Court which is yet to be adjudicated by the Hon'ble ....
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....information with the appropriate authorities for necessary action. The ED contends that door should remain open for them to trigger action by appropriate authorities in case of any disclosure by the ED to them regarding contravention by the petitioners. To rebut this contention, the petitioners submitted that Section 66 cannot provide an infinite, open ended opportunity to the respondents to sustain the ECIR merely on a possibility of finding some information. viii) Reliance was also placed on State of Bihar & Anr. Vs. P.P Sharma, IAS, & Anr., 1992 Supp (1) 222 at para 23 to contend that even if, as per the petitioners, there were mala fides of the informant/complainant which led to the registration of the said FIR it should not impact investigation by the Investigating Officer. ix) Reliance was also placed on Municipal Corporation of Delhi Vs. Ram Kishan Rohtagi & Ors., (1983) 1 SCC 1 where the FIR was quashed against some of the accused. The Hon'ble Supreme Court in para 19 held that if the prosecution can at any stage produce evidence which satisfies the court that the other accused or those who have not been arrayed as accused against whom proceedings have bee....
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....omplaint on the basis of FIR bearing No. 0129/2021 registered by the Officer in Charge, Wada Police Station against M/s Indiabulls Housing Finance Ltd. and other persons which was in turn based upon criminal complaint filed by Mr. Ashutosh Vijay Kamble before the Hon'ble Court of Judicial Magistrate First Class, Wada, Dist. Palghar and order dated 7th April, 2021 in Complaint No. 105/2021 under Section 156(3) of Cr.P.C. for registration of FIR. * Para 7 (ii), (iii) of the ECIR elaborate on the nature of the offences which were alleged in the FIR against the accused inter alia for siphoning of huge amount of public money and buying shares in an illegal manner at inflated rates and claiming losses in such companies. * Para 7 (iv) of the ECIR specifically states that the Section 120B, 420, 467, 471 of IPC under which the FIR has been registered falls under paragraph 1 of Part A of the scheduled offences under the Scheduled to PMLA. * Para 8 of the ECIR is prefaced as "on the basis of the above, prime facie case of money laundering u/s 3 punishable u/s 4 of PMLA, 2002 appears to have been made out." vi) Judgement/order dated 4th May, 2022 of the High....
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....chud appearing for Petitioner in WP/6812/2021 that the Respondent No. 2 failed to provide necessary details in the complaint and only vague statements were made. Mr. Chandrachud justified in submitting that if the Petitioner could have failed in repayment of the loan the financial institution certainly would have initiated action against the Petitioner treating him either as defaulter or would have initiated proceedings by taking recourse to SARFEAST Act." xi) Support was also taken of the observations of the Hon'ble Supreme Court in para 467 (v) (d) of Vijay Madanlal Choudhary (supra) that there cannot be mere "notional basis" or "assumption that scheduled offence has been committed". Therefore, submission by the respondents that there could be an offence still subsisting would not be correct or acceptable. xii) Reference was also drawn to the reply filed by the respondent No. 1 in W.P. (CRL) No. 440/2022 from para 6 to 9 where the respondent No. 1 has categorically stated that it was on the basis of the said FIR that the ECIR had been premised. Para 9 of the said reply states that "the sections under which the FIR was registered are Scheduled Offence under the P....
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....irection calling for the records and proceedings of the said FIR bearing No. 129 of 2021 dated 13.04.2021 (Exhibit 'A' hereto) and upon examining the legality, correctness and propriety of the proceedings conducted so far, be pleased to quash and set aside the said FIR;" 12. The High Court of Bombay by the judgment and order dated 4th May, 2022 recorded in para 38 as under: "38. We are of the opinion that the lodgment of the complaint against the Petitioners and continuity of the proceedings, is an abuse of process of law. Thus, these are the fit cases for exercising inherent powers of this Court under Section 482 of Code of Criminal Procedure, 1973 to secure the ends of justice. Accordingly, both Writ Petitions are allowed in terms of prayer clause 'a'. Rule made absolute." (emphasis supplied) 13. It is therefore incontrovertibly clear from a bare perusal of the judgement/order of the High Court of Bombay read in conjunction with prayer clause 'a' extracted above from both the Writ Petitions before the Court, that both the order dated 7th April, 2021 passed by Judicial Magistrate in O.M.A. No. 105 of 2021 and FIR No. 129/2021 dated 13th April, 2021 in P.S....
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....CIR being sustained in isolation against them does not arise. For ease of reference, the list of petitioners before this Court who are not an accused in the said FIR are tabulated below: Sr.No. Petitioner W.P (CRL) No. 1. Sandesh Vilas More 1691/2022 2. Sagar Vasant Mahadik 1691/2022 3. Gagan Banga 443/2022 4. Indiabulls Asset Management Company 919/2022 5. Amber Maheshwari 919/2022 6. I AbenlaAier 1299/2022 7. Niraj Tyagi 1299/2022 8. Sunil Girdharilal Mittal 1316/2022 9. Avi Aggarwal 1316/2022 10. Honest Shelters Private Limited 1316/2022 11. Rajiv Gandhi 1350/2022 It is noted that this Court vide order dated 14th March, 2022 had allowed CRL.M.A. 4803/2022 filed by Sameer Gehlaut, petitioner No. 3 in W.P. (CRL) 443/2022, deleting his name from the array of parties, on the ground that he was not an accused in the FIR. 16. As per the petitioners, the above named persons are various employees of Indiabulls Housing Finance Limited and related companies and have been roped in by the respondents in the said ECIR without there being any underlying predicate offence registere....
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....uiry by way of complaint before the competent forum. For, the expression "derived or obtained" is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2(1)(u) read with Section 3. Taking any other view would be rewriting of these provisions and disregarding the express language of definition clause "proceeds of crime", as it obtains as of now." (emphasis supplied) 20. The Hon'ble Supreme Court has been clear and categorical in its reasoning as evident from the para extracted above. The undeniable sequitur of the above reasoning is that firstly, authorities under the PMLA cannot resort to action ....
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....his Court. In these petitions, this Court is not required to go into the merits of the original complainant or the consequent investigation or the potential cognizance of the complaint regarding those who weren't arrayed as accused. The judgment/order of the Hon'ble High Court of Bombay in this regard is final at this stage and any other allegation against the accused in the said FIR or any other persons not accused in the said FIR is a matter which would be for the appropriate Court of competent jurisdiction to decide in an appropriate proceeding before that Court. Suffice it to say, at this stage nothing has been brought to the attention of this Court of any existing or surviving complaint/inquiry or an FIR against the petitioners before this Court for any of the offences as provided in the Schedule of PMLA. In any event it is clarified that the relief sought in this petition relating to the particular ECIR no. ECIR/07/HIU/2021 which was specifically predicated upon FIR no. 129/2021, in light of the conclusions arrived at in Vijay Madanlal Choudhary (supra) by the Hon'ble Supreme Court, cannot survive. 23. Mr. Zoheb Hossain, advocate for the ED, towards the end of the hearing ....