TaxTMI 
TaxTMI 
2025 (12) TMI 946
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....er Section 4 of the Prevention of Money Laundering Act, 2002 (in short PMLA,2002) whereby and whereunder, the Miscellaneous Criminal Application No.526 of 2024 filed by the petitioner seeking discharge, has been rejected. 4. Criminal Revision No. 495 of 2025 is directed against the order dated 14.03.2024 passed by the learned Additional Judicial Commissioner-XVIII-cum-Special Judge, PML Act, Ranchi in connection with ECIR Case No. 04 of 2022(B) (also referred to as ECIR Case No.0010004/2022) in ECIR/RNZO/03/2022 registered for the offence under Section 3 punishable under Section 4 of the Prevention of Money Laundering Act, 2002, whereby and whereunder, the charge has been framed against the petitioner. Factual Matrix: 5. The brief facts of the case as per the pleadings made in the instant petitions which requires to be enumerated herein, read as under: (i) An ECIR bearing number 03/2022 (RUD No. 1 of PC dated 16.09.2022) was recorded based on FIR number 85/2020 dated 22.06.2020 (RUD No. 2 of PC dated 16.09.2022). The FIR was filed by the Barharwa Police Station, Sahebganj District, Jharkhand, under Sections 147, 149, 341, 342, 323, 379, 504, 506 r/w 120-B of the I....
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.... damage is also being investigated considering the observation of the NGT and various FIRs registered related to the issue of illegal mining. (iv) The investigation has revealed that illegal mining activities are largely unreported. The resulting proceeds are often handled in cash and are subject to money laundering through the associates of the accused individuals. In connection with PMLA, the investigation has disclosed Pankaj Mishra's (Accused No.1) engagement in widespread illegal mining activities in Sahebganj, Jharkhand. On 08.07.2022 searches were conducted at the premises under the occupation of Pankaj Mishra and those of his associates, leading to the seizure of approximately Rs. 5,34,44,400/- in cash. Additionally, the bank balances of Pankaj Mishra and his associates, including Krishna Kumar Saha, were frozen, having total frozen balances amounting to Rs.13,32,26,570/-. (v) Thus, the investigation revealed a large-scale illegal mining syndicate operating in Sahebganj and adjoining districts under the patronage of accused Pankaj Mishra and his close associates. The proceeds generated from such illegal mining were systematically laundered through a ne....
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....be said to even remotely be associated with the scheduled offence as mentioned in the ECIR. (iii) The petitioner has been prosecuted on the basis of assumptions and surmises, and the officials of the Investigating Agency has totally overlooked the principle that there must be 'reason to believe' rather than mere assumptions that the offences alleged against the petitioner have actually been committed by him. (iv) It has further been submitted that from the records it is evident that there is no cogent material to show the petitioner's involvement in the alleged offence and the case of the prosecution is also not supported with any material to show the petitioner's involvement. (v) It has further been submitted that carrying out any mining operation under the MMDR Act cannot be considered to be predicate offence. (vi) Even as per the allegation, the allegation is of exceeding the carrying out of mining operations from the lease hold area and there is no evidence that money of Pankaj Mishra was used by the petitioner. (vii) Only on the basis of Section 120B of IPC, no predicate offence will be said to be committed since herein,....
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....so contains another predicate offence, i.e., Section 307 of IPC. 12. It has been contended by referring to paragraph 9.8, 9.14, 9.15, 9.16, 10.5 & 13 (ii) of the supplementary prosecution complaint that there is direct evidence available against the present petitioner ad thus it is the onus upon the petitioner, in view of the provision of Section 24 of the PML Act to disprove the same on the principle of reverse onus. 13. It has been contended by referring to the ECIR that the petitioner was closely associated with Pankaj Mishra who was carrying out the illegal mining operations and the money which was accumulated by the said Pankaj Mishra, was being used for the purpose of its concealment and laundering leading to laundering of money as would be evident from paragraphs of the 2nd prosecution complaint. 14. Learned counsel for the opposite party-ED has submitted that the order impugned in Cr. Rev. No. 459 of 2024 is refusal of the prayer of discharge and it cannot be said to suffer from an error since ample materials are available based upon which it cannot be said that no prima facie case is available against the petitioner leading to quashing of the entire criminal proce....
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....residence of the Petitioner was also searched on 08.07.2022. From the search of the residence of the petitioner, mobile phones, loose sheets, and a cash amount of Rs.28,50,000/-was seized. On the very day of the search, i.e., 08.07.2022, the Petitioner tendered a statement to the Respondent, explaining that the recovered cash amount was proceeds from the sale of stone by the Petitioner to retail customers, which proceeds were yet to be deposited in the bank. 22. The Petitioner was eventually arrested on 07.07.2023 when he had appeared before the Respondent in due compliance of summons issued to him. As many as 8 statements of the Petitioner were recorded under Section 50 of the PMLA, including those recorded post the arrest of the Petitioner. 23. After the arrest of the Petitioner, the Respondent filed a second Supplementary Prosecution Complaint (Second SPC) in ECIR Case No. 4 of 2022, on 02.09.2023 arraying the Petitioner as an accused levelling allegation of illegal mining. The Second SPC was also filed against three accused persons namely, Krishna Kumar Saha (Accused No. 5), the Petitioner (Accused No. 6), and Tinkal Kumar Bhagat (Accused No. 7) and thereafter the learned....
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....ral other FIRS lodged in the matter of the Illegal mining in Sahebganj and Its adjoining areas but such illegal activities have not stopped. The investigation has revealed about huge illegal mining activities in Sahebganj, Jharkhand along with the transportation of such stolen minerals through roads, railways, and inland vessels. A huge quantity of explosives is being used to break rocks/stones illegally into unleased mining sites. The above activities are also evident and corroborated by several FIRs lodged for offences under sections 411, 414 along with various other sections of IPC, as well as for offences under sections 3, 4, and 5 of the Explosive Substances Act, 1908 and Section 8 of the Environment Protection Act, 1986 into the matter of illegal mining which are also scheduled offences under PMLA, To unearth the larger picture and for carrying out a comprehensive investigation, the above-discussed FIRs were merged into the existing investigation. Further, the issue of illegal mining & environmental damage is also being investigated considering the observation of the Hon'ble NGT and various FIR(s) registered related to the issue of illegal mining. Brief Facts of ....
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....eing laundered. The derived proceeds from these illicit activities are controlled by the accused parties, particularly Pankaj Mishra and his associates, directly or indirectly. To comprehend the broader context, this office merged the FIRS mentioned in Paragraph 3.8 of PC dated 16.09.2022 with the existing ECIR related to illegal mining. Further, the issue of illegal mining & environmental damage is also being investigated considering the observation of the Hon'ble NGT and various FIRS registered related to the issue of illegal mining. 3.4/ The investigation has revealed that illegal mining activities are largely unreported. The resulting proceeds are often handled in cash and are subject to money laundering through the associates of the accused individuals. In connection with PMLA, the investigation has disclosed Pankaj Mishra's (Accused No.1) engagement in widespread illegal mining activities in Sahebganj, Jharkhand. On 08.07.202 searches were conducted at the premises under the occupation of Pankaj Mishra and those of his associates, leading to the seizure of approximately Rs. 5,34,44,400 in cash. Additionally, the bank balances of Pankaj Mishra and his associat....
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....iven for mining on a total area of of 13.13 acres acres at block Patna. However, the inspection revealed that the total mining has been done on an area of 21 acres. The mining exceeded in adjacent plots no. 135P, 138P, 137P, 136, 129P, 120, 119, 118P, 89P, 111P and 110P of Mauja Borna. It revealed that from April, 2019 to June, 2022, total mining challan obtained by Bhagwan Bhagat was around 23908985 CFT whereas the actual mining done by him was several times the quantity for which the mining challan was obtained. Thus, about 7.8 acres of excess mining by Bhagwan Bhagat was identified which was entirely illegal. 9.14 Investigation reveals that Pankaj Mishra (Accused No.1) has several financial transactions with Bhagwan Bhagat (Accused No.6) and has also deposited Proceeds of crime amounting to Rs. 5,68,96,067.00 crores during the period 29.10.2021 to 18.05.2022 in HDFC bank account of Pankaj Mishra bearing no. 50200062737102 (RUD No.). Investigation reveals that Pankaj Mishra has laundered the proceeds of crime by way of projecting purported trading of stone chips, with the assistance of Bhagwan Bhagat. 9.15 The bank accounts of Bhagwan Bhagat (Accused No.6) were ....
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....120, 119, 118P, 89P, 111P and 110P of Mauja Borna. The lease was given for mining on a total area of 13.13 acres at block Patna. However, the inspection revealed that the total mining has been done on an area of 21 acres. It revealed that from April 2019 to June 2022, the total mining challan obtained by Bhagwan Bhagat was around 23908985 CFT whereas the actual mining done by him was several times the quantity for which the mining challan was obtained. 26. Further, it is revealed that the accused Bhagwan Bhagat has assisted Pankaj Mishra in carrying out illegal stone mining activities and subsequent illegal activities connected thereto including day-to-day management of his bank accounts, supplying illegally mined stone materials and carrying out illegal activities under his patronage. Further, after deducting day-to-day expenses borne in cash, the petitioner Bhagwan Bhagat is in possession of proceeds of crime to the tune of Rs.2,70,64,300/- which has been deposited in five of his bank accounts. He has also assisted Pankaj Mishra in laundering proceeds of crime amounting to Rs. 4.87 crores in his HDFC bank account no. 50200062737102 during the period 29.10.2021 to 18.05.2022. ....
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....e interlinked as such, they are taken up together. 34. This Court, before appreciating the argument advanced on behalf of the parties deems it fit and proper to discuss herein some of the provisions of law as contained under the Act, 2002 with its object and intent. 35. The Act 2002 was enacted to address the urgent need to have a comprehensive legislation inter alia for preventing money-laundering, attachment of proceeds of crime, adjudication and confiscation thereof including vesting of it in the Central Government, setting up of agencies and mechanisms for coordinating measures for combating money-laundering and also to prosecute the persons indulging in the process or activity connected with the proceeds of crime. 36. It is, thus, evident that Act 2002 was enacted in order to answer the urgent requirement to have a comprehensive legislation inter alia for preventing money-laundering, attachment of proceeds of crime, adjudication and confiscation thereof for combating money-laundering and also to prosecute the persons indulging in the process or activity connected with the proceeds of crime. 37. It needs to refer herein the definition of "proceeds of crime" as provi....
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....ery description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located. 42. The schedule has been defined under Section 2(1)(x) which means schedule to the Prevention of Money Laundering Act, 2002. The "scheduled offence" has been defined under Section 2(1)(y) which reads as under: "2(y) "scheduled offence" means- (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B of the Schedule if the total value involved in such offences is [one crore rupees] or more; or (iii) the offences specified under Part C of the Schedule." 43. It is evident that the "scheduled offence" means the offences specified under Part A of the Schedule; or the offences specified under Part B of the Schedule if the total value involved in such offences is [one crore rupees] or more; or the offences specified under Part C of the Schedule. 44. The offence of money laundering has been defined under Section 3 of the Act, 2002 which reads as under: "3. Offence of money-laundering.-Whosoever directly or indire....
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....f three Hon'ble Judges of the Hon'ble Supreme Court has decided the issue by taking into consideration the object and intent of the Act, 2002. 49. It is evident that the purposes and objects of the 2002 Act for which it has been enacted, is not limited to punishment for offence of money-laundering, but also to provide measures for prevention of money-laundering. It is also to provide for attachment of proceeds of crime, which are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceeding relating to confiscation of such proceeds under the 2002 Act. This Act is also to compel the banking companies, financial institutions and intermediaries to maintain records of the transactions, to furnish information of such transactions within the prescribed time in terms of Chapter IV of the 2002 Act. 50. The predicate offence has been considered in the aforesaid judgment wherein by taking into consideration the explanation as inserted by way of Act 23 of 2019 under the definition of the "proceeds of crime" as contained under Section 2(1)(u), whereby and whereunder, it has been clarified for the purpose of removal of doubts that, the "pro....
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....2) BNSS corresponds to section 227 CrPC. Section 250(1) BNSS stipulates a time limit of 60 days from the date of committal of the case within which an application for discharge should be filed by the accused. 55. Section 239 CrPC provides for discharge of accused in warrant cases instituted upon a police report. The power under section 239 Cr.P.C. is exercisable when Magistrate considers the charge against the accused to be groundless. Section 262(2) BNSS is similar to section 239 CrPC but section 262 BNSS provides an opportunity to the learned Magistrate to examine the accused either physically or through audio - video electronic means. Section 262(1) BNSS stipulates a time limit of 60 days from the date of supply of documents under section 230 BNSS within which an application should for discharge should be filed by the accused. 56. Section 245 Cr.P.C. deals with warrant cases instituted otherwise than on a police report. Section 245 CrPC corresponds t.o section 268 of BNSS. The power under section 245 (1) Cr.P.C. is exercisable when the Magistrate considers that no case against the accused has been made out which, if unrebutted would warrant his conviction. The Magistrate h....
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.... offence has been committed and not whether a ground for convicting the accused has been made out. To put it differently, if the court thinks that the accused might have committed the offence on the basis of the materials on record on its probative value, it can frame the charge; though for conviction, the court has to come to the conclusion that the accused has committed the offence. The law does not permit a mini trial at this stage. 32.4. While passing the impugned orders [N. Suresh Rajan v. Inspector of Police, Criminal Revision Case (MD) No. 528 22 of 2009, order dated 10-12-2010 (Mad)], [State v. K. Ponmudi, (2007) 1 Mad LJ (Cri) 100], the court has not sifted the materials for the purpose of finding out whether or not there is sufficient ground for proceeding against the accused but whether that would warrant a conviction. We are of the opinion that this was not the stage where the court should have appraised the evidence and discharged the accused as if it was passing an order of acquittal. Further, defect in investigation itself cannot be a ground for discharge. In our opinion, the order impugned [N. Suresh Rajan v. Inspector of Police, Criminal Revision Case (MD)....
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....ne whether a case for trial has been made out by the prosecution, it is not necessary for the court to enter into the pros and cons of the matter or into a weighing and balancing of evidence and probabilities which is really the function of the court, after the trial starts. 11.2. In the recent decision of this Court in M.R. Hiremath [State of Karnataka v. M.R. Hiremath, (2019) 7 SCC 515 : (2019) 3 SCC (Cri) 109 : (2019) 2 SCC (L&S) 380], one of us (D.Y. Chandrachud, J.) speaking for the Bench has observed and held in para 25 as under : (SCC p. 526) "25. The High Court [M.R. Hiremath v. State, 2017 SCC OnLine Kar 4970] ought to have been cognizant of the fact that the trial court was dealing with an application for discharge under the provisions of Section 239 CrPC. The parameters which govern the exercise of this jurisdiction have found expression in several decisions of this Court. It is a settled principle of law that at the stage of considering an application for discharge the court must proceed on the assumption that the material which has been brought on the record by the prosecution is true and evaluate the material in order to determine whether the facts e....
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....humal Chordia, (1989) 1 SCC 715. 60. Further, the difference between the approach with which the Court should examine the matter in the discharge has been explained by the Hon'ble Supreme Court in Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460, in the following words:- "17. Framing of a charge is an exercise of jurisdiction by the trial court in terms of Section 228 of the Code, unless the accused is discharged under Section 227 of the Code. Under both these provisions, the court is required to consider the "record of the case" and documents submitted therewith and, after hearing the parties, may either discharge the accused or where it appears to the court and in its opinion there is ground for presuming that the accused has committed an offence, it shall frame the charge. Once the facts and ingredients of the Section exists, then the court would be right in presuming that there is ground to proceed against the accused and frame the charge accordingly. This presumption is not a presumption of law as such. The satisfaction of the court in relation to the existence of constituents of an offence and the facts leading to that offence is a sine qua non for exercise of ....
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.... "11. It is trite that at the stage of framing of charge the court is required to evaluate the material and documents on record with a view to finding out if the facts emerging therefrom, taken at their face value, disclosed the existence of all the ingredients constituting the alleged offence. At that stage, the court is not expected to go deep into the probative value of the material on record. What needs to be considered is whether there is a ground for presuming that the offence has been committed and not a ground for convicting the accused has been made out. At that stage, even strong suspicion founded on material which leads the court to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged would justify the framing of charge against the accused in respect of the commission of that offence. 12. In State of Karnataka v. L. Muniswamy [(1977) 2 SCC 699 : 1977 SCC (Cri) 404], a three-Judge Bench of this Court had observed that at the stage of framing the charge, the Court has to apply its mind to the question whether or not there is any ground for presuming the commission of the offence by the accused. As framin....
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.... on the basis of the material on record, the court could form an opinion that the accused might have committed offence, it can frame the charge, though for conviction the conclusion is required to be proved beyond reasonable doubt that the accused has committed the offence. (v) At the time of framing of the charges, the probative value of the material on record cannot be gone into but before framing a charge the court must apply its judicial mind on the material placed on record and must be satisfied that the commission of offence by the accused was possible. (vi) At the stage of Sections 227 and 228, the court is required to evaluate the material and documents on record with a view to find out if the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. For this limited purpose, sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case. (vii) If two views are possible and one of them gives rise to suspicion only, as distinguished from....
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....sed. 18. The defence of the accused is not to be looked into at the stage when the accused seeks to be discharged under Section 227 CrPC (see State of J&K v. Sudershan Chakkar). The expression, "the record of the case", used in Section 227 CrPC, is to be understood as the documents and the articles, if any, produced by the prosecution. The Code does not give any right to the accused to produce any document at the stage of framing of the charge. At the stage of framing of the charge, the submission of the accused is to be confined to the material produced by the police (see State of Orissa v. Debendra Nath Padhi). 28. It is here that again it becomes necessary that we remind ourselves of the contours of the jurisdiction under Section 227 CrPC. The principle established is to take the materials produced by the prosecution, both in the form of oral statements and also documentary material, and act upon it without it been subjected to questioning through cross-examination and everything assumed in favour of the prosecution, if a scenario emerges where no offence, as alleged, is made out against the accused, it, undoubtedly, would ensure to the benefit of the accused w....
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....not supposed to hold a mini trial by marshalling the evidence on record." 67. In the case of Asim Shariff v. NIA, (supra), it has been held by the Hon'ble Apex Court that the words 'not sufficient ground for proceeding against the accused' clearly show that the Judge is not a mere post office to frame the charge at the behest of the prosecution, but has to exercise his judicial mind to the facts of the case in order to determine whether a case for trial has been made out by the prosecution. In assessing this fact, it is not necessary for the court to enter into the pros and cons of the matter or into a weighing and balancing of evidence and probabilities which is really his function after the trial starts. At the stage of Section 227, the Judge has merely to sift the evidence in order to find out whether or not there is sufficient ground for proceeding against the accused. The sufficiency of ground would take within its fold the nature of the evidence recorded by the police or the documents produced before the court which ex- facie disclose that there are suspicious circumstances against the accused so as to frame a charge against him. 68. Thus, from aforesaid legal propositi....
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....2. It is considered view that at this stage of the instant case, the Court was only required to consider whether a prima facie case has been made out or not and whether the accused is required to be further tried or not because at the stage of framing of the charge and / or considering the discharge application, the mini trial is not permissible. 73. It requires to refer herein that the purpose of framing a charge is to provide the accused with detailed information about the allegations against him. Framing of proper charge is one of the basic requirements of a fair trial. Charge is of great significance in a criminal trial as it helps not only the accused in knowing the accusation against him but also helps him in the preparation of his defence. 74. In a criminal trial the charge is the foundation of the accusation and every care must be taken to see that it is not only properly framed. At the initial stage of framing a charge the truth, veracity and effect of the evidence which the prosecution proposes to adduce are not to be considered meticulously. 75. It is settled position of law that the accused is entitled in law to know with precision what is the law on which they....
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.... the accused as against certainty. 82. It needs to refer herein that Sections 215 and 464 CrPC ensure that technicalities do not defeat justice. Both the sections lay that irregularity or error in framing a charge is not fatal unless the accused is able to show that prejudice is caused to him as result of such irregularity or omission. The object of section 238 BNSS is to prevent failure of justice on account of irregularity in framing of charge. 83. In judging a question of prejudice, as of guilt, the Court must act with a broad vision and look to the substance and not to the technicalities, and its main concern should be to see whether the accused had a fair trial, whether he knew what he was being tried for, whether the main facts sought to be established against him were explained to him fairly and clearly and whether he was a full and fair chance to defend himself. 84. In State of Uttar Pradesh vs. Paras Nathi Singh 2009 INSC 669, the Hon'ble Supreme Court after considering the language of section 464 CrPC held that the burden is on the accused to show that a failure of justice has been occasioned on account of error, omission or irregularity of the charge. 85. Thu....
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....eeds to refer herein that ingredients of offences should be seen in the material produced before the court for framing of charges and duty of court at the stage of framing of charges is to see whether the ingredients of offences are available in the material produced before the court. Contradictions in the statements of witnesses or sufficiency or truthfulness of the material placed before the court cannot be examined at the stage of framing of the charge. For this limited purpose, the court may sift the evidence. Court has to consider material only with a view to find out if there is ground for presuming that the accused has committed an offense and not for the purpose of arriving at a definite conclusion. "Presume‟ means if on the basis of materials on record, court can come to the conclusion that commission of the offense is a probable consequence, then a case for framing of charge exists. 89. Thus, it is well settled that at the time of framing of charge meticulous examination of evidence is not required, however the evidence can be sifted or weighed at least for the purpose of recording a satisfaction that a prima facie case is made out for framing charge to proceed i....
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....thout recording brief reasons in support of its opinion is not countenanced by law. However, the material which is required to be evaluated by the court at the time of framing charge should be the material which is produced and relied upon by the prosecution. The sifting of such material is not to be so meticulous as would render the exercise a mini trial to find out the guilt or otherwise of the accused. All that is required at this stage is that the court must be satisfied that the evidence collected by the prosecution is sufficient to presume that the accused has committed an offence. Even a strong suspicion would suffice. Undoubtedly, apart from the material that is placed before the court by the prosecution in the shape of final report in terms of Section 173 CrPC, the court may also rely upon any other evidence or material which is of sterling quality and has direct bearing on the charge laid before it by the prosecution." 93. Thus, from aforesaid legal propositions it can be safely inferred that if, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Ju....
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....l stone mining and the subsequent generation of vast sums as proceeds of crime. While he initially possessed a legitimate lease for stone mining in Mauja Simra, covering a mere 1.70 acres across Plot Nos. 429 and 430, his actions starkly diverged from lawful conduct. Crucially, he flagrantly disregarded the stipulated terms of his lease and immensely flouted environmental regulations by extending his mining operations to an astonishingly larger, unauthorized area of 21 acres. This expansive and unauthorized extraction represents a primary and egregious source of illegal income. Furthermore, between April 2019 and June 2022, despite obtaining mining challans for an approximate volume of 23,908,985 Cubic Feet (CFT), the actual quantity of stone illicitly mined by him was definitively determined to be several times this declared figure. This profound discrepancy underscores the systemic and massive scale of illegal resource extraction under his direct control, which, in turn, directly yielded substantial amounts of unaccounted cash, forming the very essence of the proceeds of crime. 99. It is further evident that beyond his individual illicit mining, Petitioner's role extends t....
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....tive participation in the laundering activities of a key coaccused, thereby contributing significantly to the overall volume of criminal proceeds processed through the scheme. 102. Thus, it would be evident from the material collected that Bhagwan Bhagat had directly indulged and knowingly is a party and is actually involved in all the activities connected with the offence of money laundering. These multifaceted activities explicitly encompass the use or acquisition, possession, concealment, and projecting or claiming as untainted property of the ill-gotten proceeds of crime. Consequently, based on the evidence gathered during the course of the investigation, prima facie, it appears that the petitioner Bhagwan Bhagat has committed offence under Section 3 of the Prevention of Money Laundering Act, 2002. 103. Thus, from the aforesaid it is evident that prima-facie material is available against the present petitioner, as such, charges have rightly been framed under the Section 3 of the Act 2002 against the petitioner. 104. The main thrust of the argument of the learned counsel for the petitioner is that carrying out of any mining operation under the MMDR Act cannot be conside....
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....een inserted and the proceeds accrued from them will come under the fold of proceeds of crime, therefore, it is not that on the basis of the MMDR Act, the predicate offence has been instituted rather on the basis of the allied offences, i.e., committed under Section 307 of IPC, the predicate offence has been instituted. 109. Further, the offence of conspiracy under Section 120B IPC is specifically included as a scheduled offence in the PMLA when read with any other substantive offence. Further it is settled position that conspiracy takes its colour from the underlying offence. In the present case, the ECIR was rightly registered as the conspiracy was integrally connected with the commission of other offences relatable to the Schedule, and therefore validly invoked the jurisdiction under PMLA. Further, multiple scheduled offences exist in relation to the predicate acts forming the basis of the instant case. The ECIR was not registered in isolation but in continuation of offences disclosed in predicate FIRS which disclose cognizable offences under the IPC and other statutes falling within the PMLA Schedule, thus, the contention of the learned counsel for the appellant is not fit t....
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....) of Section 2 of the Act 2002 which defines "proceeds of crime", the Hon'ble Apex Court has been pleased to observe that clause (v) of sub-section (1) of Section 2 of PMLA defines "property" to mean any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible. 115. 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. 116. It has further been clarified that if 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 of the PMLA. T....
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....e. Further, the petitioner's role has already been discussed herein in detail in the preceding paragraphs, therefore, the averments of the petitioner are unfounded and liable to be dismissed. 121. Be it noted that the legal presumption under Section 24(a) of the Act 2002, would apply when the person is charged with the offence of money-laundering and his direct or indirect involvement in any process or activity connected with the proceeds of crime, is established. The existence of proceeds of crime is, therefore, a foundational fact, to be established by the prosecution, including the involvement of the person in any process or activity connected therewith. Once these foundational facts are established by the prosecution, the onus must then shift on the person facing charge of offence of money- laundering to rebut the legal presumption that the proceeds of crime are not involved in money-laundering, by producing evidence which is within his personal knowledge of the accused. 122. In the instant case, prima facie, the investigation has clearly revealed that the petitioner played an active role in placement and layering of proceeds of crime, including cash deposits of 2.70 ....
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....ences in the present case have a direct bearing on the economy, as illicit financial transactions deprive the state of legitimate revenue, distort market integrity, and contribute to economic instability. Such acts, when committed by persons in positions of power, erode public confidence in governance and lead to systemic vulnerabilities within financial institutions. 31. The illegal diversion and layering of funds have a cascading effect, leading to revenue losses for the state and depriving legitimate sectors of investment and financial resources. It is settled law that in cases involving serious economic offences, judicial intervention at a preliminary stage must be exercised with caution, and proceedings should not be quashed in the absence of compelling legal grounds. The respondent has rightly argued that in cases involving allegations of such magnitude, a trial is imperative to establish the full extent of wrongdoing and to ensure accountability. 32. The PMLA was enacted to combat the menace of money laundering and to curb the use of proceeds of crime in the formal economy. Given the evolving complexity of financial crimes, courts must adopt a strict approa....
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....ble Apex Court as referred hereinabove, this Court is of the considered view that prima-facie sufficient materials are available on record for framing of charge against the present petitioner. 129. It needs to refer herein that the Hon'ble Apex Court in the case of Munna Devi v. State of Rajasthan, (2001) 9 SCC 631 has observed that the revisional power under the Code of Criminal Procedure cannot be exercised in a routine and casual manner. While exercising such powers the High Court has no authority to appreciate the evidence in the manner as the trial and the appellate courts are required to do. Revisional powers could be exercised only when it is shown that there is a legal bar against the continuance of the criminal proceedings or the framing of charge or the facts as stated in the first information report even if they are taken at the face value and accepted in their entirety do not constitute the offence for which the accused has been charged. 130. Thus, it is evident that the revisional power can only be exercised to correct patent error of law or procedure which would occasion unfairness, if it is not corrected. The revisional power cannot be compared with the appella....
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....ould not be evidence in the case. 83. Section 13(1)(e) of the 1988 Act makes a departure from the principle of criminal jurisprudence that the burden will always lie on the prosecution to prove the ingredients of the offences charged and never shifts on the accused to disprove the charge framed against him. The legal effect of Section 13(1)(e) is that it is for the prosecution to establish that the accused was in possession of properties disproportionate to his known sources of income but the term "known sources of income" would mean the sources known to the prosecution and not the sources known to the accused and within the knowledge of the accused. It is for the accused to account satisfactorily for the money/assets in his hands. The onus in this regard is on the accused to give satisfactory explanation. The accused cannot make an attempt to discharge this onus upon him at the stage of Section 239CrPC. At the stage of Section 239CrPC, the court has to only look into the prima facie case and decide whether the case put up by the prosecution is groundless." 133. It requires to refer herein that the ambit and scope of exercise of power of discharge, are fairly well settl....