TaxTMI 
TaxTMI 
2026 (1) TMI 656
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....MLA, 2002 and punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (in short PMLA, 2002), whereby and whereunder, the aforesaid petition filed by the petitioner seeking discharge, has been rejected. 4. Criminal Revision No. 529 of 2025 is directed against the order dated 03.03.2025 passed by the learned Additional Judicial Commissioner-XVIII-cum-Special Judge, PML Act, Ranchi in connection with ECIR Case No. 03 of 2023, arising out of ECIR/05/PAT/2012 dated 13.03.2012, whereby and whereunder, the learned Special Court has framed the charge against the petitioner under Section 3 of the PMLA, 2002 punishable under Section 4 of the PMLA. Factual Matrix: 5. The brief facts of the cases as per the pleadings made in the instant petitions required to be enumerated herein, read as under: (i) The case of the prosecution, in nutshell, is that CBI, ACB, Ranchi registered a FIR bearing No. RC-19(A)/09-R dated 22.10.2009 pursuant to the order of Hon'ble Jharkhand High Court passed in W.P. (PIL) No. 803 of 2009 for violation of Section 120B read with 420, 467, 468 and 471 of Indian Penal Code and Section 13(2) read with 13(1)(d) of Prevention of Corrup....
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.... in ECIR bearing No. ECIR/05/PAT/2012 dated 13.03.2012. (iii) Subsequent to filing of said ECIR/ Complaint, the learned Special Judge, PML, Ranchi, vide an order dated 06.04.2023, has been pleased to take cognizance of offences defined under Section 3 read with Section 70 of PMLA, 2002 and punishable under Section 4 of the said Act against all the accused persons and directed for issuance of summon to the petitioner. (iv) Thereafter, the petitioner filed a discharge petition praying for discharge as there was no sufficient ground for proceeding against the petitioner under Section 3 of the PMLA, 2002 and punishable under Section 4 of the Act, 2002. (v) It is the case of the petitioner that the learned Special Court of Addl. Judicial Commissioner-XVIII-cum-Special Judge, PML Act, Ranchi without appreciating the materials available on record, has rejected the discharge petition preferred by the petitioner vide order dated 17.02.2025 and vide order dated 03.03.2025 has framed the charge for the offence under Section 3 of the PMLA punishable under Section 4 of the PMLA against the petitioner. (vi) Being aggrieved with the aforesaid orders dated 17.02....
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....sociate entities, which is founded solely on assumptions and is not substantiated by credible or admissible evidence. The entire calculation of the alleged "proceeds of crime" is based on selective reading and picking up of data. It is noteworthy to state herein that none of the subsidiaries associate companies were named in the F.I.R. or charge sheeted in the predicate offence. (ix) It has further been submitted that M/s Kaushalya Township Private Limited, M/s Bengal KDC Housing Development Limited and M/S Kaushalya Nirman Private Ltd are separate legal and business entities having their independent business altogether. It is a matter of record that none of the above legal entities had connection whatsoever with the alleged scheduled offence and at no point of time dealt with the project and the related cash flows or transactions of M/s KIDCL. (x) It is well settled that the trial court while considering the discharge application is not to act as a mere post office but has to sift through the evidence in order to find out whether there are sufficient grounds to try the suspect. (xi) It has been submitted that the prosecution has failed to collect any mat....
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....n course of the trial. 13. Learned counsel for the Opposite Party-ED, based upon the aforesaid grounds, has submitted that it is, therefore, not a fit case where the impugned orders need to be interfered with. Analysis: 14. This Court has heard the learned counsel for the parties at length and has also gone through the finding recorded by the learned trial Court in the impugned orders as also the counter affidavit. 15. Now, this Court, deems it fit and proper first to refer the prosecution case for proper adjudication of the case. (i) It is evident from the prosecution case that the CBI, ACB, Ranchi registered a FIR bearing No. RC-19(A)/09-R dated 22.10.2009 pursuant to the order of this Court passed in W.P. (PIL) No. 803 of 2009 for violation of Section 120B read with 420, 467, 468 and 471 of Indian Penal Code and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988 against the Company M/s Kaushalya Infrastructure Development Corporation Limited (hereinafter "M/s KIDCL") and other entities. Pursuant thereto, an ECIR bearing No. ECIR/05/PAT/2012 dated 13.03.2012 was registered by the Directorate of Enforcement. (ii) The C.B.I. submitt....
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.... and punishable under Section 4 of the said Act against all the accused persons and directed for issuance of summon to the petitioner. (iv) Thereafter, the petitioner filed a discharge petition praying for discharge as there was no sufficient ground for proceeding against the petitioner under Section 3 of the PMLA, 2002 and punishable under Section 4 of the Act, 2002. (v) The learned Special Court of Addl. Judicial Commissioner-XVIII-cum-Special Judge, PML Act, Ranchi after appreciation of the materials available on record, has rejected the discharge petition preferred by the petitioner vide order dated 17.02.2025 and vide order dated 03.03.2025 has framed the charge for the offence under Section 3 of the PMLA punishable under Section 4 of the PMLA against the petitioner, against which the present revision applications have been filed. (vi) It is further appears from record that petitioner had preferred an application for discharge being Misc. Criminal Application No.102 of 2025 in connection with said ECIR Case No. 03 of 2023 in ECIR/05/PAT/2012 registered for commission offence u/s 3 of the Prevention of Money Laundering Act, 2002 to discharge him from ....
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.... 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. 24. 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. 25. It needs to refer herein the definition of "proceeds of crime" as provided under Section 2(1)(u) of the Act, 2002 which reads as under: "2 (1) (u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside ....
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....ring 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." 31. 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. 32. 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 indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the [proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence....
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....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. 38. 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 "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable ....
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....by the accused. 43. 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. 44. Section 245 Cr.P.C. deals with warrant cases instituted otherwise than on a police report. Section 245 CrPC corresponds to 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 has the power of discharging the accused at any previous stage of the case under section 245(2) Cr.P.C. Sections 227 and 239 Cr.P.C. provide for discharge before the recording of evidence on the b....
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....asis 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) No. 528 of 2009, order dated 10-12-2010 (Mad)] suffers from grave error and calls for rectification. 33. Any observation made by us in this judgment is for the purpose of disposal of these a....
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....nce 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 emerging from the material, taken on its face value, disclose the existence of the ingredients necessary to constitute the offence. In State of T.N. v. N. Suresh Rajan [State of T.N. v. N.....
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....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 such jurisdiction. It may even be weaker than a prima facie case. There is a fine distinction between the language of Sections 227 and 228 of the Code. Section 227 is the expression of a....
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....g 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 framing of charge affects a person's liberty substantially, need for proper consideration of material warranting such order was emphasised. 14. In a later decision in State of....
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....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 grave suspicion, the trial Judge will be empowered to discharge the accused and at this stage, he is not to see whether the trial will end in conviction or acquittal." 53. In the....
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.... 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 warranting the trial court to discharge the accused. 29. It is not open to the accused to rely on the material by way of defence and persuade the court to discharge him....
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.... 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. 56. 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 accus....
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....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. 61. 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. 62. 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. 63. It is settled position of law that the accused is entitled in law to know with precision what is the law on which they are put to trial. Charges are framed against the accused only when the Court finds that the accused is not entitled to discharge under the relevant provision of CrPC/BNSS.....
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....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. 71. 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. 72. In State of Uttar Pradesh vs. Paras Nathi Singh, 2009 INSC 669, the Hon'ble Supreme Court after considering the language of Section 464 Cr.P.C. 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. 73. Thus, framing of charge is not a mere empty formality. Every endeavour must be made in a criminal trial to ensure that appropriate charge is framed against ....
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....t 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. 77. 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 in the case. Further the trial Court is not required to discuss the evidence for the purpose of conducting a trial but the discussion of the mater....
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.... 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." 81. 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 Judge considers that there is no sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for....
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....than mere assumptions that the offences alleged against the petitioner have actually been committed by him and further the learned Special Judge, PML Act, Ranchi has failed to appreciate that the prosecution has not produced material which would show that the petitioner has, in any manner, dealt with "proceeds of crime". 87. Per contra, the learned counsel for ED has contended by referring to the various paragraphs of the ECIR that that orders impugned in these Cr. Revisions are refusal of the prayer of discharge and subsequently framing of charge and both the orders 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 discharge of the petitioner rather all these aspects are to be adjudicated in course of the trial. 88. In order to appreciate the contention of the learned counsel for the parties, this Court has gone through the various paragraphs of the ECIR which has been annexed with the main petition, for ready reference, the various paragraphs of the said ECIR are being quoted as under: Brief Facts of the offence/allegation/allegation/c....
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.... (authorized signatory of M/s Nagraj Constructions) representative of M/s Kaushalya Infrastructure Development Corporation Limited; (e) Shri Baleshwar Baitha, the then Executive Engineer, RCD, Daltonganj: (f) Shri Hiraman Mahto, the then Executive Engineer, RCD Road Division, Daltonganj; (g) Shri Ajay Bahadur, the then Assistant Engineer, RCD, Daltonganj; (h) Shri Shivmuni Ram, the then Junior Engineer, RCD, Daltonganj; (i) Shri Anwar Ali Ansari, the then Junior Engineer, RCD, Daltonganj; (j) Shri Birendra Kumar Singh, the then Junior Engineer, RCD, Daltonganj; &(b) Shri Sidh Nath Mehra, Director of M/s Kaushalya Infrastructure Development Corporation Limited (from 04.06.1992 to 01.07.2012); As Sidh Nath Mehra died on 01.07.2012 in Kolkata, Hon'ble Special Court, CBI, Ranchi subsequently dropped all proceedings of scheduled offence against him in FIR No. RC-19(A)/09-R dated 22.10.2009; Shri Mahesh Mehra, Director of M/s Kaushalya Infrastructure Development Corporation Limited (from 04.06.1992 till date); Shri Nagwant Pandey, (authorized signatory of M/s Nagraj Constructions) representative of M/s K....
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....f the quality of bitumen, before its use. The documents like bitumen invoices were important as proof of "purchase of bitumen, rate of bitumen and grade of bitumen" for the passing of the bills for payment to the contractor; c) As per the above agreements, total 1257.122 MT of packed bitumen of grade 60/70 was required for the aforesaid road work. Authority letters were issued by the then Executive Engineers of RCD, Government of Jharkhand, namely Chakradhar Tiwari (now deceased) and Shri Baleshwar Baitha, to the Government Oil Companies for sale of bitumen in the following manner: (i) for the work strengthening of Parwa-Garhwa Road of Km 0-20, authority letter No. 1249 dated 27.10.2004 was issued for sale of 861.931 MT of packed bitumen of grade 60/70; (ii) for the rest part of the work i.e. from Km 20-30, authority letter No. 198 dated 06.05.2005 was issued for sale of 426.2509 MT of packed bitumen of grade 60/70; and (iii) another letter No. 116 dated 06.02.2006 was also issued to three Government Oil Companies for sale of 463.686 MT of packed bitumen of grade 60/70 for the said work of Km 0-20. Upon execution of the contract....
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....to any vehicle for registration. 8.2.8 Shri Karan Mehra, S/o Shri Mahesh Mehra, Director of M/s Kaushalya Township Private Limited (Accused No. 4), in course of his statements recorded under Section 50 (2)&(3) of PMLA, 2002, inter-alia stated that:- (i) he is one of the Directors of M/s Kaushalya Township Private Limited since 2006. M/s Kaushalya Township Private Limited was incorporated in year 2006. The Directors at the time of incorporation of the company were Karan Mehra, Srishty Mehra and Rahul Mehra. The company is engaged in the business of real estate and land trading. He is just a signatory of the company. The decisions towards the day-to-day affairs and all other decisions of the company have always been taken by his father Shri Mahesh Mehra and other family members, (1) Tall the investment made by M/s KIDCL in its associate and subsidiary companies could be explained by his father Mahesh Mehra only. The decision regarding the investments made and received as well as that of allotment of shares of M/s Kaushalyan Township Private Limited has been taken by his father Mahesh Mehra and other family members: the amount of Rs. 8,78,98,262/ re....
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....s parent company Le. M/s Kaushalya Infrastructure Development Corporation Limited which is chaired by the Chairman of Kaushalya Infrastructure Development Corporation Limited for the purpose of consolidation of accounts; (iv) he accepted that M/s KIDCL made investment of Rs. 10.20 Lakhs in the shares of M/s Bengal KDC Housing Development Limited. The details of source of such investment would be with M/s KIDCL and its whole time director, Shri Mahesh Mehra;(A) M/s Bengal KDC Housing Development Limited was formed for undertaking LIG, MIG and HIG residential projects in joint venture with West Bengal Government. However, since the Government has decided to exit all such joint ventures, the company has no project in its hand currently, (vi) M/s Kaushalya Infrastructure Development Corporation Limited had made investment of Ra 1097.33 Lakhs as advance to M/s Bengal KDC Housing Development Limited. This amount was subsequently converted into Preference Shares. The process of conversion of advances to preference shares was followed as per the method prescribed in the Companies Act; (vii) M/s Kaushalya Infrastructure Development Corporation Limited being a reci....
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....ffered to developer in this manner only. 10.4.3 The Proceeds of Crime of Rs. 1,08,95,583/- generated during the period 2004-07 in the hands of M/s Kaushalya Infrastructure Development Corporation Limited through submission of fake bills towards procurement of bitumen got credited into its various bank accounts and subsequently got intermingled in the business activities of the company including investments made by it into its sister concerns. The details of the investment by M/s Kaushalya Infrastructure Development Corporation Limited as on 31.03.2022 into the shares of its sister concerns are as under: 10.4.6 Therefore, all the three companies ie. M/s Kaushalya Township Private Limited, M/s Kaushalya Nirman Private Limited and M/s Bengal KDC Housing Development Limited were subsidiary companies of Accused No. 1 i.e. M/s Kaushalya Infrastructure Development Corporation Limited as on 31.03.2008. The Proceeds of Crime of Rs. 1,08,95,583/-generated into the hands of the Accused No. 1 i.e. M/s Kaushalya Infrastructure Development Corporation Limited (M/s KIDCL) through submission of fake bills towards procurement of bitumen got intermingled with the business activitie....
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....time Director and key person looking after its day-to-day operations and decisions related to investments, etc. 11.3.2. Role of Accused No.2 Mahesh Mehra in offence of money laundering under Section 3 of PMLA, 2002: a) Shri Mahesh Mehra, one of the directors of M/s Kaushalya Infrastructure Development Corporation Limited, signed the tender documents, agreements etc. on behalf of the contractor company (M/s KIDCL). b) He entered into a criminal conspiracy with others and in pursuance to the said criminal conspiracy, 26 forged/fake bitumen invoices worth Rs.1,08,95,583/ were submitted and claimed against purported execution of "Strengthening of Parwa-Garhwa Road from Km 0 to 30" awarded by RCD, Daltonganj during 2004 to 2006. c) The Proceeds of Crime thus was acquired by his company, i.e. the Accused No. 1, through payments received from the RCD, Daltonganj on the account of submission of such fake/forged invoices of bitumen purchase. d) Day to day operations of the Accused No. 1 are handled by the Accused No. 2. Shri Mahesh Mehra and Accused No. 1 are key persons in committing the offence of money laundering. Shri Nagwant Pandey ....
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....ely during the course of search dated 07.12.2022. i) Hence, Shri Mahesh Mehra (Accused No. 2), as a Director of the Accused No. 1,has knowingly assisted and was a party to the activities(i.e. acquisition, use, possession, concealment and projecting or claiming as untainted property) connected with the offence of the money laundering as defined under section 3 of the PMLA, 2002, committed by the Accused No. 1, accordingly, Shri Mahesh Mehra is guilty of the offence of money laundering u/s 3 read with section 70 of the PMLA, 2002 and punishable u/s 4 of the PMLA, 2002. j) Further, Shri Mahesh Mehra (Accused No. 2), as a person responsible to the conduct of business of the Accused No. 4 to Accused No. 6, has also knowingly assisted and was a party to the activities(i.e. acquisition, use, possession, concealment and projecting or claiming as untainted property) connected with the offence of the money laundering as defined under section 3 of the PMLA, 2002, committed by the Accused No. 4 to Accused No. 6, accordingly, Shri Mahesh Mehra is guilty of the offence of money laundering u/s 3 read with section 70 of the PMLA, 2002 and punishable u/s 4 of the PMLA, 2002. 89....
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.... established that accused above named were involved in the process and activity of dealing with proceeds of crime and tried to project it as untainted property and thereby, they have committed the offence of Money Laundering under Section 3 and 70 of PMLA and therefore liable to be punished under Section 4 of PMLA. 91. There are specific allegations against the petitioner and the entities managed and controlled by him that they committed the offence of money laundering with respect to the proceeds of crime obtained through predicate offence. 92. Thus, it is revealed that the petitioner entered into a criminal conspiracy with others and in pursuance to the said criminal conspiracy, 26 forged/fake bitumen invoices worth Rs.1,08,95,583/ were submitted and claimed against purported execution of "Strengthening of Parwa-Garhwa Road from 0 to 3 Km. awarded by RCD, Daltonganj during 2004 to 2006.The Proceeds of Crime thus was acquired by his company, i.e. the Accused No. 1, through payments received from the RCD, Daltonganj on the account of submission of such fake/forged invoices of bitumen purchase. 93. It has come on record that day to day operations of the Accused No. 1 is han....
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.... responsible to the conduct of business of the Accused No. 4 to Accused No. 6, has also knowingly assisted and was a party to the activities(i.e. acquisition, use, possession, concealment and projecting or claiming as untainted property) connected with the offence of the money laundering as defined under section 3 of the PMLA, 2002, committed by the Accused No. 4 to Accused No. 6, accordingly, Shri Mahesh Mehra is guilty of the offence of money laundering u/s 3 read with section 70 of the PMLA, 2002 and punishable u/s 4 of the PMLA, 2002 98. Thus, prima facie it appears that the investigation conducted by the ED has revealed a deep-rooted. criminal conspiracy wherein the Petitioner in his capacity as a director at the company M/s Kaushalya Infrastructure Development Corporation Limited (M/s KIDCL) was instrumental in the generation and laundering of Proceeds of Crime amounting to Rs. 1,08,95,583/- These proceeds were criminally derived from a scheduled offence involving the submission of fake and forged invoices to the Road Construction Department, Government of Jharkhand, in connection with a road construction project. 99. Thus, it would be evident from the material collecte....
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...." under Section 2(1)(u) of the Act. As observed, in all or whole of the crime, property linked to scheduled offence need not be regarded as proceeds of crime, but all properties qualifying the definition of "Proceeds of Crime" under Section 2(1)(u) will necessarily be the crime properties. 104. The Hon'ble Apex Court in the case of Pavana Dibbur vs. The Directorate of Enforcement (supra) has considered the effect of the appellant not being shown as an accused in the predicate offence by taking into consideration Section 3 of the Act, 2002. 105. Based upon the definition Clause (u) of sub-section (1) 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. 106. 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 prop....
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....counts of M/s KIDCL, a company controlled by the Petitioner. Thus, 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. 111. Further, the argument that there was no criminal intent (mens rea) is not tenable because the submission of 26 forged invoices and the subsequent laundering of the funds derived therefrom are clear indicators of a criminal and dishonest intent to cause wrongful gain and further at this stage criminal intent (mens rea) cannot be appreciated and the same can be appreciated in the full blown trial by leading the evidences by the parties. 112. It needs to refer herein that the offence of money laundering under Section 3 of the PMLA is extremely wide and includes not just 'acquisition' but also possession', 'use', or projecting the proceeds of crime as untainted. The Petitioner's company used these very forged invoices to acquire proceeds of crime and the Petitioner, its director, was knowingly a party to this activity. The statement of the then Executive Engineer that bills were submitted by Mr. Nagwant Pandey does not exoner....
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....l transactions, and culpability of the accused, therefore the material submitted by the respondent, coupled with the broad legislative framework of the PMLA, indicates the necessity of allowing the trial to proceed and not discharging the appellant at the nascent stage of charge framing and discharging the appellant at this stage would be premature and contrary to the principles governing the prosecution in money laundering cases, for ready reference the relevant paragraphs are being quoted as under: "30. The PMLA was enacted with the primary objective of preventing money laundering and confiscating the proceeds of crime, thereby ensuring that such illicit funds do not undermine the financial system. Money laundering has far-reaching consequences, not only in terms of individual acts of corruption but also in causing significant loss to the public exchequer. The laundering of proceeds of crime results in a significant loss to the economy, disrupts lawful financial transactions, and erodes public trust in the system. The alleged offences in the present case have a direct bearing on the economy, as illicit financial transactions deprive the state of legitimate revenue, disto....
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....atements of witnesses, materials available on record and in view of law laid down by the Hon'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. 117. 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. 118. Thus, it is evident that the revisional power can only be exercised to correct patent error of law or procedure which would occasion....
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....nts before the investigating officer as to his alleged sources of income, but the same, strictly, would 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." 121. It require....