AI Drafter 
TaxTMI 
TaxTMI 
2024 (8) TMI 1108
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....er also prays for quashing of order dated 18th March, 2020 passed by the Designated Special Court (the Court of Principal Sessions Judge, Srinagar), whereby the charges have been framed against the petitioner. 2. The short point that is raised by the learned counsel for the petitioner is that the complaint is eventually instituted by the respondents for prosecution of the petitioner under Section 3 and 4 of PMLA and what is alleged against the petitioner is misappropriation of funds of JKCA with criminal conspiracy with other accused persons and that the funds so misappropriated have been laundered by layering them into other bank accounts thereby generating proceeds of crime within the meaning of Section 2 (1) (u) of PMLA. 3. It is submitted that with regard to the aforesaid allegation of misappropriation of JKCA funds, the CBI has already registered an FIR for commission of offences under Sections 120-B, 406 and 409 RPC. Both the aforesaid offences i.e. S.406 and S.409 RPC, it is contended, are not the scheduled offences as defined under Section 2 (y) of PMLA. It is, thus, argued that commission of scheduled offence is a sine qua non for offence of money laundering and, the....
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....laundered by the petitioner is not generated/derived from a criminal activity relating to a scheduled offence. 4. As is held in Pavana Dibburr (supra), conspiracy to commit an offence, which is not a scheduled offence, will not make such offence punishable under Section 120-B RPC(IPC) a scheduled offence. Offence under Section 120-B shall become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the schedule. It was, thus, urged that in the instant case the conspiracy alleged is of committing offences under Section 406 & 409 RPC, which are both non-scheduled offences. 5. Per contra, the stand of the respondent, as was articulated by Mr. S.V. Raju, learned Additional Solicitor General of India, is that though the CBI charge-sheet filed before the competent Court of law is in respect of offences under Section 120-B, 406 and 409 RPC, yet a perusal of the CBI charge-sheet would reveal the ingredients of commission of scheduled offences punishable under Section 411 and 424 RPC. It is, thus, argued that in view of the fact that as per the CBI charge-sheet, the scheduled offences under Sections 411 and 424 RPC are also ma....
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....pecifically included in the schedule. Viewed thus, the charge-sheet, which is pending trial before the Chief Judicial Magistrate, Srinagar is not in respect of any offence, which is specifically included in the schedule of PMLA. 9. Going by the charge sheet filed by the CBI, it is evident that offence of money laundering, as defined under Section 3 of PMLA, is not made out. For commission of offence of money laundering under Section 3 of PMLA, it is required to be demonstrated that the accused has directly or indirectly, knowingly or unknowingly involved in any process or activity connected with the proceeds of crime. Such activity could be concealment possession, acquisition or use of the proceeds of crime and projecting it as untainted property. 10. "Proceeds of crime" is defined in Section 2 (1) (u) clearly means any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence. Coming to the charge-sheet presented by the CBI before the CJM, Srinagar, no scheduled offence is disclosed to have been committed. From a plain reading of Section 3 PMLA, it appears that offence under Section 3 PMLA can only be c....
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.... of any scheduled offence. Enquiry by way of complaint before the CJM, Srinagar is also not in respect of any scheduled offence. In the absence of there being any case registered for commission of scheduled offence or any case pending enquiry or trial in respect of scheduled offence, authorities under PMLA have no jurisdiction to register ECIR and launch prosecution for offence of money laundering under Sections 3/4 of PMLA. When there is no scheduled offence having been registered or pending enquiry or trial, there are no proceeds of crime and, thus, there is no offence of money laundering under Section 3 of the Act. 14. Argument of Mr. Raju, learned Additional Solicitor General of India that the Enforcement Directorate is not bound by the conclusions drawn by the CBI and it can independently look into the material contained in the charge-sheet to come to a conclusion that the petitioner has committed a scheduled offence to justify registration of case under PMLA, cannot be accepted for more than one reasons. The Enforcement Directorate is not an authority or investigating agency in any manner superior to CBI, nor is it vested with or conferred the power and jurisdiction to sit....