TaxTMI 
TaxTMI 
2024 (6) TMI 194
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....iefly are that information was received by the respondent Directorate from the Superintendent of Police, Economic Offences Unit (EOU), Patna vide a letter dated 09.10.2013 which revealed that 28 FIRs had been registered against Shri Makhru Singh @ Anil Singh, resident of Balgudar, P.S. Lakhisarai, District Lakhisarai, Bihar and others, for various offences punishable under the Indian Penal Code, 1860 and the Arms Act, 1959. 3. A perusal of the charge sheets revealed that Makhru Singh @ Anil Singh (the appellant in Appeal No. FPA NO.1110/PTN/2025 herein) had been charged inter alia, for murder, attempt to murder, robbery and dacoity, extortion, providing assistance in concealment of stolen properties, cheating and using as genuine forged documents, and possession of illegal arms and ammunitions in Lakhisarai District, Bihar. The offences under Sections 302, 307, 387 and 120B of Indian Penal Code, 1860 and Section 27 of the Arms Act, 1959 are Scheduled Offences as mentioned in Part "A" of the Schedule to PMLA, 2002. Accordingly, out of the aforesaid 28 FIRs, 7 FIRs were in respect of offences which constitute 'Scheduled Offences" under the Prevention of Money Laundering Act, 2....
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....e seven FIRs which constituted the basis of the ECIR and the prosecution had not gone for further appeal in those cases. In the remaining three FIRs, the evidence had been concluded and none of the prosecution witnesses had named the appellant as accused. The appellant was expected to be acquitted in those cases too. Copies of relevant judgments wherein he stood acquitted were also filed. It was contended that if the appellant stood acquitted in the scheduled offences, then action under PMLA, 2002 would not be attracted. 7. It was also contended that the impugned order was illegal as the Act does not permit a single Member/Acting Chairman to pass the order; that Ld. AA failed to appreciate the fact that the appellant is a whistle-blower and raises his voice against the discriminatory and corrupt political system; that the appellant was engaged in contractual works as contractor; that the appellant was also doing agriculture on a large-scale for commercial purposes and the appellant is income-tax payee as well; that the appellant had stated before the respondent under Section 50 of the Act that he purchased five acres of land before 2005 and 10 acres of land after 2005 and inheri....
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....rse of her statement under Section 50 of the PMLA. Further, the ITRs filed in the name of Smt. Pammi Devi for the period AY 2009-10 to 2013-14 revealed that the income declared by her was not genuine and was not substantiated by documentary evidence. A conscious attempt was made by Shri Makhru Singh @ Anil Singh to generate income in the name of his wife Smt. Pammi Devi for utilization of proceeds of crime available with him in cash in the garb of such income for the purpose of acquisition of properties. Having no substantial income of his own, the accused had acquired properties worth Rs. 87,50,922/- out of undisclosed income which appears to have been acquired out of proceeds of crime. The income so acquired through undisclosed sources has been utilized to purchase the properties in his name, in the name of his wife, and in the names of his minor sons so as to project them as untainted. In view of the above, these properties can only be treated as acquired by Shri Makhru Singh @ Anil Singh out of the proceeds of crime. 10. The respondents also submitted that proceeds of crime were also found to have been transferred from one account to another for the purpose of "layering" of ....
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....he basis of the ECIR recorded filed by the respondent Directorate. 13. In his response, the learned counsel for the respondent advanced various arguments on facts and law. It was pointed out by him that a prosecution complaint had been filed under the PMLA, 2002 in this case before the Ld. District and Sessions Court-cum-Special PMLA Court, Patna, Bihar, cognizance thereof had been taken by the Court, charges had been framed, and the present stage is that the trial is going on and witnesses are being examined. He further contended that the investigation conducted by the Directorate had clearly established that the appellants had no licit sources of income to explain the assets; that the existence of a prima facie case, which is the key requirement for attachment of properties under Section 5(1) is evident from the very fact that the Ld. Special Judge has taken cognizance of the case. However, he was not in a position to controvert the basic fact that the appellant Shri Makhru Singh @ Anil Singh, stood acquitted of all the seven scheduled offences on the basis of which the PMLA case was initiated. 14. It is a settled position of law by now that in the absence of a scheduled of....
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....uty Director Directorate of Enforcement and Ors. [MANU/DE/0181/2023], Vijay Madanlal Choudhary, has held as follows: "24. In the facts of the present case, the Trial Court, in the complaint case which was pending before it, has clearly come to a conclusion that the closure report deserves to be accepted and no criminality is ascertainable as the documents in respect thereof were not available. 25. In view of the settled legal position in Vijay Madanlal Choudhary (supra) and the subsequent decisions and orders thereafter, the impugned attachment orders dated 14th February, 2022 and 20th June, 2022 as also the ECIRs. are quashed." 16. The above order passed by the Hon'ble High Court of Delhi was challenged by the Respondent Directorate before the Hon'ble Supreme Court in SLP (Civil) Diary No. 15235/2023. The Respondents, however, admitted before the Apex Court that since there is a closure report in the predicate offence, no further proceedings under the PMLA Act could be continued. Hence, the Hon'ble Supreme Court vide Order dated 06.07.2023 has disposed of the said matter, as follows:- "Delay condoned. Learned Additional Solicitor ....
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.... 19. Similarly, in Manturi Shashi Kumar and Ors. v/s. The Director, Directorate of Enforcement and Ors. [MANU/TL/ 0641/2023], the Hon'ble Telangana High Court held as follows: "28. Thus, according to Supreme Court, the offence under Section 3 of PMLA is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. If the person is finally discharged or acquitted of the scheduled offence or the criminal case against him is quashed by the court, there can be no offence of money laundering against him or anyone claiming such property being the property linked to the scheduled offence. It is immaterial for the purpose of PMLA whether acquittal is on merit or on composition. 30. Adverting to the facts of the present case, it is evident that upon closure of the criminal case and acquittal of appellant No. 1 on discharge, there is no scheduled offence against the appellants. In the absence of any crime, question of any proceeds of crime would not arise." 20. In The Directorate of Enforcement v/s. Hemal Arun Mehta, in SLP(Crl) Diary No. 28128/2023, the respondent Directorate admitted that when a predicate offence has been qua....
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...., corollary to it is that the attachment of the property does not survive and that the prosecution complaint has been quashed before the commencement of Trial so, the property has to be released. However the aforesaid order like any other order of the Tribunal is subject to the order passed under Section 42 of PMLA, 2002. In view of the above, we are of the considered view that in the present facts and circumstances of the case this Tribunal has power to give directions for release of the property." 22. In Pulkit Garg and Ors. v/s. The Deputy Director, Directorate of Enforcement, Delhi FPA-PMLA- 2342/DLI/2018 etc. vide Order dated 16.03.2023, the Appellate Tribunal has held as below: "6. It is pointed out in the miscellaneous application that vide order dated 12.12.2019 passed by Learned Special Judge (PC Act) CBI, closure report filed by CBI pertaining to schedule offence under Section 13(2) of Prevention of Corruption Act was accepted and further vide order dated 23.12.2021 passed by Learned Special Judge (PMLA), Learned ASJ-2 (East), Karkardooma Court, accused were discharged in the complaint case for commission of offence under section 3 of PMLA. In view of the abov....