TaxTMI 
TaxTMI 
2024 (5) TMI 203
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....t nos. 1 and 2 under Sections 419/420/467/468/471 IPC read with Section 120B IPC at PS Birsanagar, Jamshedpur (Jharkhand). 3. All the offences invoked in the said FIR are scheduled offences under the PMLA and based on the same, a criminal case under Sections 3 and 4 of the PMLA was initiated by the petitioner/ED on 05.05.2017 bearing ECIR No. 06/HIU/2017, against the respondent nos. 1 and 2. However, later on, the petitioner/ED filed supplementary complaint dated 31.08.2021, whereby the respondent no. 3 namely, Amit Kumar Singh was also arraigned as an accused. 4. In the predicate offence i.e. FIR No. 21/2017, the chargesheet was filed by the police on 30.12.2017 before the learned Chief Judicial Magistrate, Jamshedpur. The charges were framed in the said case and after the trial, the learned Chief Judicial Magistrate, Jamshedpur vide his judgment dated 14.08.2023 acquitted both the accused under Sections 419/420/467/468/471 IPC read with Section 120B IPC. 5. Sequel to above, the respondents herein, who had been arraigned as an accused in the criminal case under the PMLA, filed an application before the Special Court under Section 227 read with Section 239 CrPC seeking dis....
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....d ordering to defreeze/release all the bank accounts. The operative part of the order dated 07.11.2023 reads as under: "Vide order dated 09.10.2023, Akhilesh Singh and Garima Singh were discharged from all the offences alleged in the complaint. The properties attached by the ED cannot be said to be the proceeds of crime and thus liable to be released. Thus immovable properties as mentioned in para no. 2.18 of complaint (also mentioned in the list filed by the Enforcement Directorate) are released. Necessary information be sent to the concerned Sub Registrars/Registrars as mentioned in Column No. 5 of the list filed by the ED as well as to ED for compliance. Further, the bank accounts as mentioned in para 2.18 of complaint and 3.2 of supplementary complaint (also mentioned in the list filed by the ED) are defreezed/released. Intimation be sent to bank authority along with copy of this order and list of details of bank accounts filed by ED for compliance. The ED shall release the amount in the respective bank accounts from which it was taken into possession." 9. Originally, when the present petition was filed, no appeal had been preferred by the State of....
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....ed Special Counsel for the petitioner/ED submits that though the respondents have been discharged from the offence of money laundering on the ground that they have been acquitted in the predicate offence registered vide FIR No. 21/2017 under Sections 419/420/467/468/471 IPC read with Section 120B IPC at PS Birsanagar Jamshedpur (Jharkhand) but the said judgment of acquittal has not attained finality, inasmuch as an appeal being Crl.A. 252/2023 has been preferred by the State of Jharkhand before the learned District and Sessions Court, Jamshedpur, Jharkhand and the same is still pending. It is contended that the acquittal of the respondent in predicate offence shall attain finality only after it has been affirmed by the appellate court, as well as, by the Courts in the higher hierarchical tiers. In support of his contention, the learned counsel places reliance on para 467(d) of the decision of the Hon'ble Supreme Court in Vijay Madanlal Choudhry vs. UOI: 2022 SCC OnLine SC 929. 14. It is also urged by the learned counsel for the petitioner that criminal appeal/revision is a continuation of the proceedings before the learned Trial Court and for this reason as well, the order of di....
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....nce the respondents have been acquitted in the predicate offence, the criminal proceedings under the PMLA will not survive, therefore, the learned Special Judge had rightly passed the impugned order discharging the respondents from the offences under the PMLA. In support of his contention, the learned counsel has placed reliance on the decision in, (i) Parvathi Kollur vs. Enforcement of Directorate, 2022 SCC OnLine SC 1975; (ii) Emta Coal Limited & Ors. vs. The Deputy Director Directorate of Enforcement, 2023 SCC OnLine Del 6177; (iii) Adjudicating Authority vs. Shri Ajay Kumar Gupta & Ors., 2022 SCC OnLine SC 2091; and (iv) Directorate of Enforcement vs. M/s Obulapuram Mining Company Pvt. Ltd., 2022 SCC OnLine SC 2198. 19. Next, it is argued by the learned counsel for the respondents that the pendency of an appeal in a predicate offence against acquittal does not bar the Special Court to release the properties attached under the PMLA case as pursuant to the acquittal of the accused in predicate offence, attached properties could no more be treated as proceeds of crime or properties obtained from criminal activity. 20. He submits that if an....
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.... 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. XXXX XXXX XXXX 281. The next question is : whether the offence under Section 3 is a standalone offence? Indeed, it is dependent on the wrongful and illegal gain of property as a result of criminal activity relating to a scheduled offence. Nevertheless, it is concerning the process or activity connected with such property, which constitutes offence of money-laundering. The property must qualify the definition of "proceeds of crime" under Section 2(1)(u) of the 2002 Act. As observed earlier, all or whole of the crime property linked to scheduled offence need not be regarded as proceeds of crime, but all properties qualifying the ....
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....uled offence was the basic condition for giving rise to "proceeds of crime" and that commission of scheduled offence was a pre-condition for proceeding under the PMLA. However, the said order of discharge was set aside by the High Court on a revision filed by the Directorate of Enforcement. In an appeal, the order of the High Court was set aside by the Hon'ble Supreme Court referring to the three Judge Bench decision in Vijay Madanlal Choudhry (supra). It was held as under: "5. Thereafter, the Trial Court, by its judgment and order dated 04.01.2019, allowed the application and discharged the appellants from the offences pertaining to the Act of 2002 while observing that occurrence of a scheduled offences was the basic condition for giving rise to "proceeds of crime"; and commission of scheduled offence was a pre-condition for proceeding under the Act of 2002. 6. Aggrieved by the said discharge order, the Directorate preferred a revision petition before the High Court. The High Court proceeded to set aside the discharge order while observing that the allegations made in the complaint and the material produced, prima facie, made out sufficient ground for proceeding ....
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....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 accused in the PMLA case who comes into the picture after the scheduled offence is committed by assisting in the concealment or use of proceeds of crime need not be an accused in the scheduled offence. Such an accused can still be prosecuted under PMLA so long as the scheduled offence exists. Thus, the second contention raised by the learned senior counsel appearing for the appellant on the ground that the appellant was not shown as an accused in the chargesheets filed in the scheduled offences deserves to be rejected." (Emphasis Supplied) 26. In Nik Nish Retail Ltd.....
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....ffense or proceedings quashed. When the offense of money laundering is described as a stand-alone offense, all that is sought to be conveyed is that it is to be tried separately in accordance with the procedure prescribed under the Act. It is evident from a reading of the Act that while the commission of a predicate offense constitutes the trigger for initiation of proceedings under the Act, the offense of money laundering must be tried and established separately. However, the Court finds itself unable to hold that a charge of money laundering would survive even after the charges in respect of the predicate offense are quashed or the accused is discharged upon the competent court finding that no offense is made out. The predicate offense does not merely represent the trigger for a charge of money laundering being raised but constitutes the very foundation on which that charge is laid. The entire edifice of a charge of money laundering is raised on an allegation of a predicate offense having been committed, proceeds of crime generated from such activity and a projection of the tainted property as untainted. However, once it is found on merits that the accused had not indulged in any....