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2024 (3) TMI 132
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....-51250-2023 & CRM-M-37710-2023 1. The instant petitions shall be decided by way of a common judgment as the relief sought in both the petitions is identical. The petitioners have knocked the doors of this Court praying for the following substantive relief:- 1. Quash the ECIR/GNZO/20/2021 and all consequential proceedings arising therefrom as the same does not sustain the test of law, equity or justice in the sake of the Orders dated 05.07.2023 (Annexure P-13) passed by this Hon'ble Court in CRM-M No. 3823 of 2021 thereby setting at naught the directions issued by the Chief Judicial Magistrate, Gurugram on 07.01.2021 in exercise of jurisdiction under Section 156 (3) Cr.P.C. for the registration of FIR (scheduled/predicate offence in the present case) and thereby rendering the said FIR No. 11 dated 14.01.2021 (Annexure P-10) under Section 406, 420, 467, 468, 471, 120-B IPC, 1860 registered at Police Station Sushant Lok (i.e. scheduled/predicate offence) to be rendered non-est; terminated and unworthy of being acted upon for any purpose whatsoever; 2. Quash the order dated 29.09.2023 (Annexure P-23) passed by Special Judge, Gurugram in CRM-627-2023, vide which arbitrarily and....
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.... Allegations were also of furnishing of fake bank guarantees, collaboration agreement, special power of attorney etc. 3(ii) Vide order dated 07.01.2021 (Annexures P-7 & P-8), the Court of the Chief Judicial Magistrate, Gurugram exercising powers under Section 156 (3) Cr.P.C. issued a direction to the police to register FIRs. FIR Nos. 10 & 11 dated 14.01.2021 were thereafter registered at Police Station Sushant Lok, Gurugram, under Sections 120-B, 406, 420, 467, 468, 471 IPC (Annexures P-9 & P-10). 3(iii). Aggrieved by the orders dated 07.01.2021, passed by the Court of the Chief Judicial Magistrate, Gurugram, directing registration of FIRs, CRM-M-3823-2021 and CRM-M-3826-2021 titled as "Ashok Punia alias Ashok Kumar and others versus State of Haryana and another" (Annexures P-11 & P-12), were preferred before this Court. Initially, vide orders dated 27.01.2021 (Annexures P-11 & P-12), a Single Bench of this Court stayed the operation of the orders dated 07.01.2021 as also the further proceedings in the consequential FIRs. 3(iv). CRM-M-3832-2023 & CRM-M-3826-2023 were finally decided by a Single Bench of this Court vide judgments/orders dated 05.07.2023 (Annexures P-13 & P-14) wh....
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.... provided to the accused 5(iii). It has been averred that at the stage of issuance of summons etc., the petitioners cannot even be said to be accused and, therefore, the petitions would not be maintainable. 5(iv). It has been averred that it is settled law that non-bailable warrants can be issued by a Magistrate under Section 73 Cr.P.C. even during investigation for his production in aid of the Investigating Agency. It has been averred that despite issuance of multiple summons, the petitioners have not cooperated and have not appeared before the respondents. 5(v). It has been averred that home-buyers fund have been siphoned off in the garb of loan to group companies in which the petitioners were directors and the said proceeds of crime have been used for personal gains as a result of which, the offence of money laundering, prima facie, stands committed. 5(vi). Giving the factual background and the reply on merits, it has been averred that the petitioners Dharam Singh Chhoker and his two sons namely Sikandar Singh and Vikas Kumar Chhoker are said to be the promoters of M/s Sai Aaina Farms Private Limited (presently M/s Mahira Infratech Private Limited) (hereinafter referred to a....
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....nce was, therefore, passed by the DTCP and a direction was issued to the Company to complete the project within a period of 06 months from 05.09.2022 and to hand over the possession of the flats to the allottees. Despite this, the deadline was missed and the project remained incomplete. 5(xiv). Apart from the FIRs referred to above, other FIRs were also registered against various companies and the Mahira Group which were also taken on record by the Directorate of Enforcement in the ECIR since the promoters directors were common and the respondents-ED intended to investigate with regard to inter-mingling of proceeds of crime and there being a larger conspiracy. Apart from the FIRs, several complaints were also received from home buyers. 5(xv). The respondents-ED, during its inquiry in the ECIR detected siphoning off of funds by diverting by non-intended purposes to group companies/personal accounts and also by reflecting bogus expenditure/personal expenditure to give inflated figures. It was found that the bogus expenditure reflected in the accounts was received back in cash. 5(xvi). The Income Tax Department also conducted search operations on the Mahira Group which also came un....
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....ed Senior Counsel representing the petitioners that the action of the respondent-ED in registering the ECIR after order dated 27.01.2021 having been passed and continuing with the proceedings after the order dated 07.01.2021 having been set aside by the Single Bench of this Court vide order dated 05.07.2023 is illegal, arbitrary and de hors the settled law and accordingly the said ECIR deserves to be quashed. 7(iii). Detailed reference was made by learned Senior Counsel to the order dated 27.01.2021 passed by a Single Bench of this Court vide which the operation of the order dated 07.01.2021, passed by the Chief Judicial Magistrate, Gurugram had been stayed alongwith further proceedings in the consequential FIRs. It was submitted that once the operation of the impugned orders and further proceedings in the consequential FIRs had been stayed the ECIR could not have been registered and the registration of the same despite the said orders cannot sustain. 7(iv). It was further submitted that once the order dated 07.01.2021, passed by the Chief Judicial Magistrate was quashed on 05.07.2023 and the Chief Judicial Magistrate was called upon to pass a fresh order, the FIRs would also be ....
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....ion. 7(vii). Reference was also made to the provisions of Section 154 Cr.P.C. and it was submitted that the provisions are not identical and that it cannot be said that the FIR was registered under Section 154 Cr.P.C. Learned Senior counsel submitted that the FIRs in question had been registered in pursuance to the order passed by the concerned Court under Section 156 (3) Cr.P.C. which is entirely different from Section 154 Cr.P.C. which gives power to the police to register an FIR once a cognizable offence is disclosed. 7(viii). In so far as the petitioner Dharam Singh Chhoker is concerned, it was submitted that he had spent his entire life in his constituency and had no knowledge about the nature of business or transaction carried out in the Company of which the elder son of Dharam Singh Chhoker namely Sikandar Singh was the principal shareholder and was managing the affairs. It was submitted that though both Dharam Singh Chhoker and Vikas Kumar Chhoker remained directors in one or more companies for a short duration, the same was largely for taxation purposes and they had not handled the conduct of any business much less being aware of the nature of transactions being carried o....
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....bmitted that even if, the FIRs were registered in pursuance to the order passed on the complaint under Section 156 (3) Cr.P.C., it cannot be said that the FIRs had been set aside or quashed merely because the Court concerned was asked to pass a fresh order on the complaint under Section 156 (3) Cr.P.C. It was submitted that there was a prayer to quash the FIRs in the petitions filed before this Court but the Single Bench of this Court, taking a conscious decision, did not quash the FIRs but simply directed the Court of the Chief Judicial Magistrate to pass a fresh order on the complaint under Section 156 (3) Cr.P.C. giving reasons. In essence, it was submitted that mere setting aside of an order passed on the complaint under Section 156 (3) Cr.P.C. would not mean that the FIRs had been quashed. Reference was made to the provisions of Section 154 Cr.P.C. and it was submitted that once a cognizable offence is disclosed, an FIR had to be registered. Reference was made to a decision of this Hon'ble Supreme Court in Lalita Kumari versus Government of U.P. and others 2014 AIR (Supreme Court) 187 and State of West Bengal and others versus Swapan Kumar Guha and others 1982 AIR (Supreme....
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.... already been registered properly. It was also submitted that even this order stands challenged by the petitioners, arguments in the same had already been heard by a Single Bench and judgment had been reserved. (These petitions have been decided in the interrugnum, as has been mentioned in the preceeding paragraphs). 8(iv). It was also submitted that apart from the FIRs in question, there are a number of other FIRs against the petitioners. Reference was made to the list of FIRs referred to in paragraph 27 of the reply submitted by the respondents-ED. It was contended that the ECIR was investigating even offences in the FIRs and not only in the FIRs which were the subject matter of the present dispute. Reference was made to the findings recorded in paragraph 457 of the judgment of the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and Others Vs. Union of India and Others (supra). 8(v). It was further submitted that quashing of an ECIR cannot be sought without appending a copy of the ECIR and accordingly the prayer would not be maintainable. 8(vi). It was contended by Sh. S.V. Raju learned Additional Solicitor General of India that both the petitions are even oth....
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....nt Directorate, Ministry of Finance', decided on 23.01.2023, SLP (Crl.) No. 4212-4213 of 2019 titled as 'State of Gujarat Vs. Choodamani Parmeshwaran Iyer and Another', decided on 17.07.2023, 'Special Director Vs. Mohd. Gulam Ghouse', AIR 2004 SC 1467, 'Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and Another', (2010) 4 SCC 772, State Bank of Travancore Vs. Mathew K.C.', (2018) 3 SCC 85, 'Genpact India Private Limited Vs. Deputy Commissioner of Income Tax and Another', 2019 SCC Online SC 1500, LPA 381/2023 titled as 'RBL Bank Ltd. Vs. Directorate of Enforcement and Others', decided on 26.04.2023, WP (C) 17784/2022 titled as 'Sanjay Jain (In JC) Vs. Directorate of Enforcement', decided on 04.01.2023, WP (C) 11661/2022 titled as 'Rui Chuang Technologies Pvt. Ltd. Vs. Directorate of Enforcement and Another', decided on 08.08.2022, WP (C) 10382/2022 titled as 'Vivo Mobile India Pvt. Ltd. Vs. Directorate of Enforcement', decided on 28.03.2023, 'Rai Foundation Thr. Its Trustee Mr. Suresh Sachdev Vs. The Director, Directorate of Enforcement and Others' 2015 SCC OnLine Del 7626, 'Rose Valley Hotels and Entertainments Ltd. Vs. The Secretary, Department of Revenue, M....
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....t is for the Courts to separate the grain from the chaff with a view to ensure that whereas the rights of citizens are not harmed, litigation also does not flood the Courts. We shall now proceed to test the arguments advanced by both sides on the aforesaid touchstone. 12(i). The first argument that once the operation of the impugned order dated 07.01.2021, passed by the Chief Judicial Magistrate, Gurugram and further proceedings in the consequential FIRs Nos. 10 & 11 dated 14.01.2021 respectively had been stayed, the ECIR could not have been recorded, is devoid of merit. It has been held by the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and Others Vs. Union of India and Others (supra) that there is no necessity to formally register an ECIR unlike the registration of an FIR. It was held that the ECIR is an internal document created by the department before initiating penal action or prosecution against the person involved with the process or activity connected with proceeds of crime. It was also held that there is no necessity to furnish a copy of the same to the accused. It was also held that the offence of money laundering is an independent offence regarding t....
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....d in the considered opinion of this Court, there was no bar to record the said ECIR. Still further, the Enforcement Directorate was nowhere in the picture, in the complaints or in the petitions filed before this Court when the orders dated 07.01.2021 were challenged. That being so, the respondent-Enforcement Directorate was not bound by the orders dated 27.01.2021. 12(iv). It has been categorically held by the Hon'ble Supreme Court of India in the case of Dr. Manik Bhattacharya vs. Ramesh Malik and others (supra) that a restraint order passed in a criminal matter would not affect proceedings under the PMLA especially once the Enforcement Directorate was not a party to the same and also because the offence of money laundering is an independent offence wherein, an accused would have independent remedies in case of violation of the statutory provisions. In that case, certain orders were passed by a Division Bench of High Court of Calcutta in a controversy relating to allegations of illegalities in recruitment of primary school teachers through the Teacher's Eligibility Test, 2014. Several directions were given against Dr. Bhatacharya including a direction to the CBI to start his inte....
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....e Chandan Mondal @ Ranjan and unknown office bearers of the West Bengal Board of Primary Education and others. 6. In an affidavit filed on behalf of the Enforcement Directorate affirmed by one Devranjan Mishra on 17th October 2022, a copy of the remand application of the Enforcement Directorate has been annexed. We find in this application, there is broad reference to the allegations which are being investigated by the CBI. Enforcement Directorate's case, however, is that various incriminating documents were seized during the course of the search conducted at the premises of the petitioner and evidence has surfaced as regards the role of the petitioner in money-laundering activities and proceeds of crime. 7. We cannot hold that arrest of the petitioner by the Enforcement Directorate illegal as the issue of money- laundering or there being proceeds of crime had not surfaced before the Single Bench of the High Court. Before us, however, it had been brought to our notice by Mr. Rohatgi in course of hearing on the question of interim order passed in the instant special leave petitions, that the petitioner had been cooperating with investigation by the Enforcement Directorate and th....
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....become non-est and would be deemed to have been quashed or set aside is also devoid of merit. At the first blush, the argument does seem to be attractive. Ordinarily, it is true that once the very foundation goes, the super-structure or the subsequent proceedings would have to go. However, before we arrive at such a conclusion, it would be appropriate to refer to the findings recorded by the Single Bench vide orders dated 05.07.2023. If one peruses the orders dated 05.07.2023 (Annexures P-13 & P-14), the very first paragraph lays down as to what had been prayed for by the petitioners therein. Paragraph 1 of the said judgment dated 05.07.2023 (Annexure P- 13), passed in CRM-M-3823-2021 states as under:- "The petitioners have preferred this petition under Section 482 Cr.P.C. for quashing of complaint No. 486/2020 dated 17.12.2020 (Annexure P-20) titled 'Neeraj Chaudhry vs. M/s Sai Aaina Farms Private Limited & others', order dated 07.01.2021 (Annexure P-25) passed by the Chief Judicial Magistrate, Gurugram directing registration of FIR against the petitioners and consequential FIR bearing No. 11 dated 14.01.2021 under Sections 120-B, 406, 420, 467, 468, 471 IPC, Police Stat....
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....in accordance with law without being influenced by any statement of fact recorded in this order. Needless to say that the order of the Chief Judicial Magistrate must exhibit the application of mind as required under Section 156(3) Cr.P.C. in the light of the judgments discussed in the preceding part of the order. [30]. At this stage, this Court does not wish to opine anything on merits of the case, lest it may prejudice the case of the parties. The impugned order dated 07.01.2021 passed by the Chief Judicial Magistrate, Gurugram appears to be nonspeaking in the light of legal requirement for that the Chief Judicial Magistrate shall be under legal obligation to reconsider the issue afresh strictly in accordance with law and thereafter pass speaking order exhibiting due application of mind after grasping the facts of the case and law on the subject with reasoned order. All other grounds are still left open. [31]. In view of aforesaid, this petition is disposed of. All other civil misc. applications, if pending are also disposed of accordingly." 13(iv). This order was not challenged any further and has thus become final qua the parties. This order would not be open to interpretat....
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.... reasons mentioned hereinbefore. 14(i). The 3rd argument that non-bailable warrants could not have been issued in aid of investigation is also devoid of merit. Firstly, it has come on record that the petitioners had not been cooperating with the respondents and that while they initially appeared in pursuance to the notices issued, they gave evasive answers and now they have not been appearing in pursuance to the summons/notices issued by the respondents. If this argument was to be accepted, an Investigating Agency, be it the jurisdictional police, the Enforcement Directorate, CBI or any other agency would have no remedy if an accused chose not to cooperate with the investigation. It cannot be accepted that an Investigating Agency would be rendered without any remedy. Even otherwise, it is now well settled that an accused can very well be summoned or his presence can be compelled by way of non-bailable warrants by the Court at the instance of the Investigating Agency. The only safeguard which has been laid down is that after the non-bailable warrants are executed, the accused cannot be produced before the Investigating Agency but he has to be produced before the Court which shall, ....
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....ds it will be necessary to refer to the relevant provisions of the Code and TADA relating to issuance of processes. Xxx xxx xxx xxx 21. Apart from the above observations of the Law Commission, from a bare perusal of the Section (quoted earlier) it is manifest that it confers a power upon the class of Magistrates mentioned therein to issue warrant for arrest of three classes of person, namely, (i) escaped convict, (ii) a proclaimed offender, and (iii) a person who is accused of a non-bailable offence and is evading arrest. If the contention of Mr. Sibal that Section 204 of the Code is the sole repository of the Magistrate's power to issue warrant and the various Sections of part 'B' of Chapter VI including Section 73 only lay down the mode and manner of execution of such warrant a Magistrate referred to under Section 73 could not - and would not - have been empowered to issue warrant of arrest for apprehension of an escaped convict, for such a person cannot come within the purview of Section 204 as it relates to the initiation of the proceeding and not to a stage after a person has been convicted on conclusion thereof. 22. That Section 73 confers a power upon a Mag....
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....]. 24. Lastly, we may refer to Section 90, which appears in part 'D' of Chapter VI of the Code and expressly states that the provisions contained in the Chapter relating to a summon and warrant, and their issue, service and execution shall, so far as may be, apply to every summons and every warrants of arrest issued under the Code. Therefore, when a Court issues a warrant of arrest, say under Section 155 of the Code, any steps that it may have to subsequently take relating to that warrant of arrest can only be under Chapter VI. 25. Now that we have found that Section 78 of the Code is of general application and that in course of the investigation a Court can issue a warrant in exercise of power thereunder to apprehend, inter alia, a person who is accused of a non-bailable offence and is evading arrest, we need answer the related question as to whether such issuance of warrant can be for his production before the police in aid of investigation. It cannot be gainsaid that a Magistrate plays, not infrequently, a role during investigation, in that, on the prayer of the Investigating Agency he holds a test identification parade, records the confession of an accused or the st....
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....sions of law be that the PMLA or the Cr.P.C. The other judgments relied upon by the petitioners, therefore, would be of no aid to them. 15. Even otherwise, interference in investigation/inquiry has been frowned upon repeatedly by the Hon'ble Apex Court. Reference in this regard can be made to the judgment in the case of Neeharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra and Others (supra). It was held that a blanket interim order affects the powers of the investigating agency to investigate cognizable offences and that such orders should not be passed. In the considered opinion of this Court, interference at this stage with issuance of non-bailable warrants etc. is, therefore, not called for. 16. As regards the argument that petitioner Dharam Singh Chhoker had never been the director and, therefore, no proceedings could have been issued against them, the same is also devoid of merit. The argument that since Dharam Singh Chhoker was not arraigned as an accused in the complaints submitted by Neeraj Chaudhry, no proceedings could have been issued against him is also devoid of merit. Still further, once there were other FIRs pending against the petitioners, it cannot be said....
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....ed that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence." 13. Clause (v) of sub-section (1) of Section 2 of the PMLA defines "property" to mean any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible. To constitute any property as proceeds of crime, it must be derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence. The explanation clarifies that the proceeds of crime include property, not only derived or obtained from scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. Clause (u) also clarifies that even the value of any such property will also be the proceeds of crime. Thus, the existence of "proceeds of crime" is sine qua non for the offence under Section 3 of the PMLA. 14. Clause (x) of sub-section (1) of Section 2 of the PMLA defines "....
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....ding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form - be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence - except the proceeds of crime derived or obtained as a result of that crime. 270. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money-laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and time of commission of the scheduled offence. In other words, t....
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....offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence. What is held in paragraph 270 of the decision of this Court in the case of Vijay Madanlal Choudhary supports the above conclusion. The conditions precedent for attracting the offence under Section 3 of the PMLA are that there must be a scheduled offence and that there must be proceeds of crime in relation to the scheduled offence as defined in clause (u) of sub- section (1) of Section 3 of the PMLA. 18. In a given case, if the prosecution for the scheduled offence ends in the acquittal of all the accused or discharge of all the accused or the proceedings of the scheduled offence are quashed in its entirety, the scheduled offence will not exist, and therefore, no one can be prosecuted for the offence punishable under Section 3 of the PMLA as there will not be any proceeds of crime. Thus, in such a case, the accused against whom the complaint under Section 3 of the PMLA is filed will benefit from the scheduled offence ending by acquittal or discharge of all the accused. Similarly, he will get the benefit of quashing the proceedings of the scheduled offence. However, an accus....