TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 931
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....e, and M/s.Zvezda AD, Bulgaria entered into four commercial agreements for the export of crude sunflower oil, refined sunflower oil and sugar. As per the terms of the agreements, the goods were to be exported by M/s.Trade International and payment for the goods thus exported was to be effected by M/s.Zvezda AD. The payment by M/s.Zvezda AD was guaranteed by UniCredit Bulbank, a Bulgarian entity, by issuing seven Standby Letters of Credit (SBLC) in favour of M/s.Trade International. The SBLCs covering the purchase amount were thus issued to the State Bank of India, the advising bank in the seller's country. A portion of the amount covered by the SBLCs was credited to the account of M/s.Trade International through the advising bank. The payments under the remaining SBLCs were withheld by the State Bank of India, since the documents produced by M/s.Trade International to prove shipment of the consignments were suspected to be forged. Subsequent enquiry revealed that M/s.Trade International had not shipped even a single consignment covered by the agreements to the buyer. Therefore, the Enforcement Officer in the Directorate of Enforcement lodged an FIR at the Harbour Police Station....
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....petitioner herein. By the agreement, M/s.Finlease AD sold the receivables claimed against M/s.Trade International, arising out of the four concluded agreements for supply of sugar and sunflower oil under which seven letters of credit had been drawn for BGN 9000 (approximately Rs.4,22,730/-). On the strength of the agreement, the petitioner approached the Special Court seeking release of the amount under attachment, by filing a petition under Section 8(8) of the PMLA. The Special Court having dismissed the petition, this Crl.M.C. is filed seeking the following reliefs; "(A) quash the entire proceedings emanating from ECIR No. KCZO/5/2016 and consequentially, restore the Attached Monies (as defined hereinabove) to the Petitioner; or (B) alternatively and without prejudice to the foregoing prayer, set aside the Impugned Order passed by the Hon'ble Special Court for the trial of PMLA Cases, at Ernakulam in Crl. M.P. No.7 of 2022 in S.C. No. 653 of 2018 and direct restoration of the Attached Monies [as defined hereinabove] to the Petitioner." 2. Heard, Adv. Guneet Sidhu for the petitioner and Addl. Solicitor General of India, Senior Advocate A.R.L.Sundaresan for the Enforcement....
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....used in the predicate offence, the offence under Section 3 of the PMLA being a stand alone offence. Moreover, abatement of criminal proceedings does not amount to acquittal and would not erase the foundational facts which had given rise to the prosecution under another enactment. Here, the foundational facts remain the same and the prosecution under Section 3 against the remaining accused can be continued irrespective of the death of the first accused. If the contention of the petitioner that the proceedings under the PMLA cannot be continued is accepted, then the petition under Section 8(8) of the PMLA is also not maintainable, since the finding of commission of the offence of money laundering is sine qua non for restoration of the attached property. Section 8(8) and its second proviso are beneficial provisions intended to mitigate the losses that might have been suffered by a person on account of the offence of money laundering. Therefore, only persons who had interest in the attached property prior to the offence of money laundering and who have suffered on account of the commission of the offence can seek restoration of the attached property. The petitioner did not suffer any q....
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....that crime." ( underline supplied ) 7. The following findings in Pavana Dibbur v. Directorate of Enforcement [(2023) 15 SCC 91] provide further clarity to the legal position; "17. Coming back to Section 3 PMLA, on its plain reading, an offence under Section 3 can be committed after a scheduled offence is committed. For example, let us take the case of a person who is unconnected with the scheduled offence, knowingly assists the concealment of the proceeds of crime or knowingly assists the use of proceeds of crime. In that case, he can be held guilty of committing an offence under Section 3 PMLA. To give a concrete example, the offences under Sections 384 to 389 IPC relating to "extortion" are scheduled offences included in Para 1 of the Schedule to PMLA. An accused may commit a crime of extortion covered by Sections 384 to 389 IPC and extort money. Subsequently, a person unconnected with the offence of extortion may assist the said accused in the concealment of the proceeds of extortion. In such a case, the person who assists the accused in the scheduled offence for concealing the proceeds of the crime of extortion can be guilty of the offence of money-laundering. Therefore, i....
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....generation of the funds, i.e., proceeds of crime, is not proved. In the case at hand, even though only Jose George was made accused in the predicate offence, his wife and daughter are arrayed as accused in the prosecution complaint filed by the Enforcement Directorate, alleging their involvement in the processes or activities connected with the proceeds of crime. In the light of such an allegation, prosecution for the offence under Section 3 of the PMLA can be continued against them. As the proceedings under Section 3 are found to be maintainable, the question whether abatement of the offence upon death of the accused is equivalent to acquittal or not, has lost its relevance. 8. The other contention is with respect to the petitioner's right to get the attached amount released. Here, it is pertinent to note that, going by the scheme of the PMLA, if, on conclusion of the trial of an offence under the Act, the Special Court finds that the offence of money-laundering has been committed, the property involved in the money-laundering shall stand confiscated to the Central Government. If, on the other hand, the court finds that the offence of money-laundering had not taken place or t....