TaxTMI 
TaxTMI 
2026 (5) TMI 1029
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....er section 3 punishable under section 4 of Prevention of Money Laundering Act, 2002(in short PMLA,2002) has been rejected. 4. Criminal Revision No. 440 of 2026 is directed against the order dated 25.03.2026passed by the learned Additional Judicial Commissioner-1 cum Special Judge, PML Act, Ranchi in connection with ECIR Case No. 07 of 2023 in ECIR/RNZO/04/2021 registered for the offence under sections 3 and 4 of the Prevention of Money Laundering Act, 2002, whereby and whereunder, the charges have been framed against the petitioner. Factual Matrix: 5. The brief facts of the case as per the pleadings made in the instant petitions which require to be enumerated herein, read as under: (i) An FIR was registered by the CBI-ACB, Ranchi bearing No. RC 08(A)/17-R dated 30.10.2017 under section 120B of IPC, 1860, and sections 7 and 12 of the Prevention of Corruption Act, 1988 against Upendra Nath Mandal, the then Senior Manager Meteorological Wing, MECON India Ltd., Ranchi, M/s Zeal India Chemicals Ranchi (represented through its partners Shri Ajay Jalan) and M/s Shiv Machine Tools, Chennai (represented through its partner Sri Hitesh V. Shah). (ii) After investiga....
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....artners participated and got selected in Durgapur Steel Plant Project Medium Structure Mill Laboratory Facilities and Bokaro Steel Plant Cold rolling Mill (CRM-III) Project respectively in which MECON India Ltd. was appointed consultant. (vii) The learned Special Judge PML Act, Ranchi vide order dated 23.11.2023 took cognizance of offence under section 3 punishable under section 4 of the PML Act, 2002 against the petitioner and other accused persons. (viii) Subsequent to filing of said ECIR/ prosecution Complaint dated 11.10.2023, cognizance of offences defined under Section 3 of PML Act, 2002 and punishable under Section 4 of the said Act has been taken against the petitioner. (ix) 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. (x) It is the case of the petitioner that the learned Special Judge, PML Act, Ranchi without appreciating the materials available on record, has rejected the discharge petition preferred by the petitioner vide order dated 06.08.2025 and vide....
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....Ltd. It is beyond imagination that only one person would be responsible for the preparation of TAR and he favoured the applicant enabling him to get the contract. The entire allegations are void of material truth and are absurd and improbable. (v) It is further submitted that the said Upendra Nath Mandal informed the applicant about the miserable conditions of his relatives and need for some loan to meet their educational and medical need. In order to avoid continuing requests for loan, the applicant thought it apt to meet the loan payment through staff and distant relatives. The entire loan amount of about over Rs. 20 Lakh was supported with promissory notes issued in favour of the staff/relative and was duly repaid by relatives of Upendra Nath Mandal with interest. The payments were made through banking channels and amount received back were deposited in bank accounts. The payment through banking channel cannot be bribe as alleged. (vi) It has been further contended that the ED has refused to take note of the explanation tendered by the applicant with regard to the loan and its repayment on frivolous grounds like the applicant has failed to produce travel record....
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.... Mining and Fuel Research (CIMFR), which aims to provide R&D inputs for the entire coal energy chain in compassing exploration, mining and utilization cannot be relied upon as the same is not competent to deal with the job which was assigned to the applicant, i.e., to say not related to the Steel industry at all. The applicant has been proceeded against simply on the basis of assumptions and surmises, and by overlooking the stringent and higher standard of responsibility that has been casted over the officials of the Investigating Agency before proceeding against any person. Thus, there must be more of a 'reason to believe' rather than mere assumptions that the offences alleged against the applicant have actually been committed by him. (viii) A perusal of the entire PC and the statements of witnesses and accused persons make it aptly clear that the applicant is not involved in any criminal activity relatable to the schedule offence from the commission of which any proceeds of crime was generated and the same was ever dealt with by the applicant. Thus, there is no material to show that the applicant ever paid any illegal gratification. (ix) It is vital to p....
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....chinery from M/s Naskar Ceramics. However, investigation revealed that the invoice relied upon was backdated to 14.12.2016, subsequent to the initiation of the CBI's Preliminary Enquiry, and that the said entity did not possess the business capacity to undertake such a transaction. 10. The laundering process was further carried out through the device of so-called "friendly loans." The petitioner caused funds to be routed through the bank accounts of his employees and relatives and thereafter disbursed as purported loans to the immediate relatives of Shri U.N. Mandal, including Smt. Sova Gayen and Shri Manabendra Nath Mandal. This structuring was undertaken to avoid a direct financial trail between the bribe giver and the recipient. Additionally, the petitioner participated in depositing unaccounted cash, including a sum of Rs. 4,14,000/- deposited into the bank account of Smt. Binny Kumari, acting on the instructions of the co-accused. 11. During the course of investigation, the petitioner was confronted with the financial trail and documentary material. However, he failed to discharge the burden placed upon him under Section 24 of the PMLA. No credible or verifiable expl....
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....achment 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. 20. 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 the country, then the property equivalent in value held within the country] [or abroad]; [Explanation.-For the removal of doubts, it is hereby clarified that "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 to the scheduled offence;]" 21. It is evident from the aforesaid provision that "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of cr....
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....if the total value involved in such offences is [one crore rupees] or more; or the offences specified under Part C of the Schedule. 26. 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 of money-laundering. [Explanation.- For the removal of doubts, it is hereby clarified that,- (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) cla....
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....ibed time in terms of Chapter IV of the 2002 Act. 32. 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 to the scheduled offence, meaning thereby, the words "any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence" will come under the fold of the proceeds of crime. 33. In the judgment rendered by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) it has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in....
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....should for discharge should be filed by the accused. 38. 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 basis of the police report, the documents sent along with it and examination of the accused after giving an opportunity to the parties to be heard. But the stage of discharge under section 245 Cr.P.C., on the other hand, is reached only after the evidence referred in section 244 is taken. Despite the difference in the language of the provisions of sections 227, 239 and 245 Cr.P.C. and whichever provision may be applicable, the Court is required to see, at the time of framing of charge, that there is a prima facie case for proceeding against the accused. The main intention of granting a chanc....
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.... 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 appeals and shall have no bearing on the trial. The surviving respondents are directed to appear before the respective courts on 3-2-2014. The Court shall proceed with the trial from the stage of charge in accordance with law and make endeavour to dispose of the same expeditiously. 34. In the result, we allow these appeals and set aside the order of discharge with the aforesaid observations. 40. It is further settled position of law that defence on merit is not to be considered at the time of stage of framing of charge and that cannot be a ground of discharge. A reference may be ....
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.... 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. Suresh Rajan, (2014) 11 SCC 709 : (2014) 3 SCC (Cri) 529: (2014) 2 SCC (L&S) 721], adverting to the earlier decisions on the subject, this Court held : (SCC pp. 721-22, para 29) '29. ... At this stage, probative value of the materials has to be gone into and the court is not expected to go deep into the matter and hold that the materials would not warrant a conviction. In our opinion, what needs to be considered is whether there is a ground for presuming that the offence has been committed and not whether a ground for convicting the accused has been made out. To put it differently....
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....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 definite opinion and judgment of the Court while Section 228 is tentative. Thus, to say that at the stage of framing of charge, the Court should form an opinion that the accused is certainly guilty of committing an offence, is an approach which is impermissible in terms of Section 228 of the Code. 30. We have already noticed that the legislature in its wisdom has used the expression "there is ground for presuming that the accused has committed an offence". 43. This has an inbuilt element of presumption once the ingredients of an offence with reference to the allegations made are....
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....stify 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 M.P. v. Mohanlal Soni [(2000) 6 SCC 338 : 2000 SCC (Cri) 1110] this Court, referring to several previous decisions held that : (SCC p. 342, para 7) "7. The crystallised judicial view is that at the stage of framing charge, the court has to prima facie consider whether there is sufficient ground for proceeding against the accused. The court is not required to appreciate evidence to conclude whether the materials produced are sufficient or not for convicting the accused." The Hon'ble Apex Court in the case of Palwinder Singh v. Balvinder Singh, (2009) 2 SCC (Cri) 8....
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....alue 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. 46. In the judgment passed by the Hon'ble Supreme court in the case of M.E. Shivalingamurthy v. CBI, reported in (2020) 2 SCC 768, the above principles have been reiterated in para 17, 18, 28 to 31 and the Hon'ble supreme court has explained as to how the matters of grave suspicion are to be dealt with. The aforesaid paragraphs are being quoted as under: "17. This is an area covered by a large body of case law. We refer to a recent judgment which has referred to the earlier decisions viz. P. Vijayan v. State of Kerala and discern the following principles: 17.1. If two vie....
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.... 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. 30. However, what is the meaning of the expression "materials on the basis of which grave suspicion is aroused in the mind of the court's", which is not explained away? Can the accused explain away the material only with reference to the materials produced by the prosecution? Can the accused rely upon material which he chooses to produce at the stage? 31. In view of the decisions of this Court that the accused can only rely on the materials which are produced by the prosecution, it must be understood that the grave suspicion, if it is established on the materials,....
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....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. 49. 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 doing so and if, after such consideration and hearing as aforesaid, the Judge is of the opinion that there is ground for presuming that the accused has committed an offence, the trial Court shall frame the charge. However, the defence of the accused cannot be looked into at the stage of discharge. The accused has no right to produce any document at that stage. The application for discharge has to be con....
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.... 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. 56. 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. 57. In Sessions case the Court shall frame a charge in writing against the accused when the Court is of the opinion that there is ground for presuming that the accused has committed an offence as can be seen from Section 252 of the BNSS. In warrant cases, a charge shall be framed when a prima facie case has been made out against the accused as is evident from sections 263 and 269 of BNSS. 58. The Hon'ble Supreme Court of India in State of Maharastra vs. Som Nath Thapa, (1996) 4 SCC 659 has been pleased to hold that if the Court were to think that the accused might have committed ....
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....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. 65. 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. 66. 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 the accused. Even though mere omission, error or irregularity in framing charges does not ipso facto vitiate trial, the accused should be made fully aware of the specific accusations against him in order to defend himself properly. Apart from safeguarding the interests of the accused, framing of proper charge also ensures that the interests of the victims and the society at large are safeguarded and no guilty person goes unpunished only on account of error in framing the charge. 67. The Hon'ble Supreme Court of India in Dipakbhai Jagdhishchandra Patel vs. State of Gujarat, (2009) 16 ....
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....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. 70. 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 materials on record is required to reflect the application of judicial mind for finding that a prima-facie case is made out against the petitioner. 71. It is settled connotation of law that at the stage of framing of charge, the probable defence of the accused is not to be considered and the materials, which are relevant for consideration, are the allegations made in the First Information Report/complaint, the statement of the witnesses recorded in course of investigation, the documents on which the prosecution relies and the report of investigation submitted by the prosecuting agency. Th....
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....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." 74. 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 doing so and if, after such consideration and hearing as aforesaid, the Judge is of the opinion that there is ground for presuming that the accused has committed an offence, the trial Court shall frame the charge. 75. Therefore, the stage of discharge is a stage prior to framing of the charge and once the Court rejects the discharge application, it would proceed for framing of charge. At the stage of discharge, the Judge has merely to sift and weigh the evidence in order to find out whether or not there is sufficient ground for proceeding against the accused and in other words, the ....
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....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. 81. 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 instant petition being Cr. Revision, for ready reference, the various paragraphs of the said ECIR are being quoted as under: Movable property That from the scrutiny of different bank accounts, Documents received from Additional Registrar of Assurances, Kolkata, Income Tax Authorities, LIC, submissions made by related persons, and investigation under the provisions of PMLA, 2002, the above properties (Movable & Immovable) were found to be derived/obtained out of proceeds of crime generated by Upendra Nath Mandal and subsequently the same was layered with an intention to use and project it as untainted property. Movable property (vehicle) of the value of Rs. 3,71,848/- and immovable property as the value of Rs. 1,25,00,000/- totaling Rs. 1,28,7....
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....maining amount as stated by U.N.Mandal was paid in cash and source of which could not be explained with documentary evidences. Thus, the said property was found to be acquired from Proceeds of crime. Further, the said property was transferred by Smt. Supriti Mandal to Mintu Naskar vide sale deed no 5261/2019 on 30.08.2019 to claim the amount of Rs 70 lakhs which was received from Mintu Naskar (which was received by him from M/s Shiv Machine Tools) in FY 2015-16 & 2016-17 as untainted. Thus, the "sale" of such property acquired from proceeds by U.N. Mandal to Mintu Naskar was nothing but asham transaction to show the illegal gratification as untainted received by U.N. Mandal from M/s Shiv Machine tools through Mintu Naskar, the whole money trail and the matter is discussed in detail in paras below. Thus, the said property was not only acquired from the proceeds of crime but also used for the commission of an offence under the PMLA as defined u/s 2(1)(v) of PMLA, 2002. Thus, the said property was found to be acquired from Proceeds of crime and used in the commissioning of the offence of Money laundering and thus attached vide PAO No. 7/2023 dated 10/10/2023 u/s 5(1) of PMLA,....
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....rson who gives goods or services to the business in credit or does not receive the payment immediately from the business and is liable to receive the payment from the business in future is called a Sundry Creditor", by this definition U.N. Mandal can't be consider a Sundry Creditor and hence it is an afterthought defence, secondly the land was in the name of Supriti Mandal and thus transferring the amount in the account of U.N. Mandal can't be justify as seller of land. He has also shown that land of Rs 70 lakh as asset in the asset side of Balance sheet of M/s Naskar Ceramics for F.Y. 2015-16, whereas the land was actually purchased in FY 2019-20. Hence, Mintu Naskar has failed to substantiate the money given to U. N. Mandal which was originally sourced from M/s Shiv Machine Tools. That his Proprietorship firm M/s Naskar Ceramic has never sold any good/machinery to M/s Shiv Machine Tools, Chennai earlier or after the sale of these goods worth Rs. 70 Lakhs in 2016; That M/s Naskar Ceramic has never sold the aforesaid goods to any firm/company/individual that he sold to M/s Shiv Machine Tools, Chennai, in any year prior or after F.Y. 2016-17; That he never contacted....
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....ction of U. N. Mandal. Hence, the claim of U. N. Mandal is wrong. (iii) That transactions from M/s Shiv Machine Tools amounting to Rs. 70 lakhs with Shri Mintu Naskar pertains to purchase of machinery vide purchase order No. 6503 dated 07.04.2016 & Invoice No. NCC/12 dated 14.12.2016; That Submission of the documents by Hitesh V Shah relating to purchase of machineries (Pelletiser Machine, Die Face Cutter & 40 mm twin screw extruder machine) from M/s Naskar Ceramics, Howrah (WB), it is noticed from TCI freight challan that the said machineries were delivered to his firm-M/s Shiv Machine Tools in the month of January, 2017 and bill for the same were raised in December, 2016 to which Hitesh V Shah however, the whole payment was already made six months before (approx.). The reason was asked from Hitesh V Shah however he did not give any satisfactorily explanation. That his submission of documents i.e. Ledger summary of M/s Naskar Ceramics & bank account statement show that he has given Rs. 5,00,000/- to Mintu Naskar (Prop of M/s Naskar Ceramic) on 14.03.2016, however he has not shown M/s Naskar Ceramic as Sundry Debtor in the Balance sheet for the respective year. Hence, he c....
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....d, Ranchi in favour of allotment of tender project of Bokaro Steel Plant to M/s Shiv Machine Tools. (b) Hitesh V Shah paid illegal gratification to U. N. Mandal however, he told that he had given the part amount to relatives of U. N. Mandal as loan on interest for educational and medical purpose. In this way, he has not directly paid money to U. N. Mandal, however, he routed the same through the account of his relatives to to claim the same as untainted transactions. Hitesh V Shah had partly paid illegal gratification (Rs. 70,00,000/-) to U. N. Mandal through Mintu Naskar and claiming the same as untainted as discussed in above paras. (c) Hitesh V Shah had partly paid illegal gratification (Rs. 4,14,000/-) in cash to the account of Binny Kumari on instruction of U. N. Mandal as discussed in above paras. (d) Hitesh V Shah, in spite of having given the illegal gratification, tried to conceal the real facts during the proceedings of investigation and claiming the same as untainted. Hence, he is directly indulged, knowingly assisted and is actually involved in the activities connected with the offence of money laundering, as defined u/s 3 of PMLA, 2002. He ha....
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.... was generated and subsequently layered through a transaction which, upon examination of VAT returns, absence of production records, and timing of invoice, has been found to be sham or colourable device for routing funds. This includes routing Rs. 70 Lakhs through M/s Naskar Ceramics under the guise of a machinery advance and channeling funds to the relatives of co-accused Shri U.N. Mandal as "friendly loans." These transactions are corroborated by statements recorded under Section 50 of the PMLA. 86. It requires to refer herein that the statement of the Petitioner was also recorded under Section 50 of the Prevention of Money Laundering Act, 2002, and that the Prosecution Complaint dated 11.10.2023 sets out his specific role in the offence. However, the averments are denied to the extent that the Petitioner seeks to portray his bare denials as proof of innocence or to characterize his conduct as genuine cooperation. A mere denial during examination cannot override the documentary material collected during investigation. 87. Thus, the material on record prima facie indicates that the Petitioner was involved in the generation of Rs. 94.42 Lakhs, and also involved in the routing....
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....ty connected with Proceeds of Crime. Whether the tender underwent scrutiny at multiple levels, whether the contract was executed, or whether milestone payments were released does not legitimize the payment of Rs. 94.42 Lakhs allegedly made as illegal gratification. 94. It is apparent from record that the prosecution case is not based merely on procedural aspects of the tender process, but on the documented financial trail establishing the generation and laundering of bribe money. The material indicates that the petitioner paid illegal gratification to secure favourable Technical Appraisal Reports (TAR) and thereafter engaged in layering through fabricated invoices and a transaction which, upon examination of VAT returns, absence of production records, and timing of invoice, has been found to be colourable device for routing funds. 95. Thus, on the basis of discussion made hereinabove this Court is of the considered view that the contention of the learned counsel for the petitioner that the petitioner is not involved in any criminal activity relatable to the schedule offence from the commission of which any proceeds of crime was generated and the same was ever dealt with by th....
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....dering activities as legitimate business or personal transactions is untenable and contrary to the material on record. The prosecution complaint prima facie disproves the claim of bona fide business. It reveals that the Petitioner deliberately routed a sum of Rs.70 lakhs as a purported 100% advance for heavy machinery to M/s Naskar Ceramics, a tile vendor with an annual turnover of less than Rs.20 lakhs. In order to create a statutory cover before the tax/VAT authorities, the Petitioner relied upon Invoice No. NCC/12, which was conspicuously fabricated on 14.12.2016, exactly five days after the CBI registered its Preliminary Enquiry on 09.12.2016. 101. Likewise, the so-called "friendly loans" were nothing but bogus layering transactions, wherein the Petitioner used his own employees, namely Shri Suresh J. Shah and Shri Anil Adhyaru, to extend unsecured proxy loans to unrelated family members of the public servant, namely Smt. Sova Gayen and Shri Manabendra Nath Mandal. These circumstances, taken cumulatively, establish deliberate structuring and conscious involvement in the laundering of proceeds of crime. 102. Thus, Routing bribe money through banking channels by employing p....
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....f the appellant in commission of a serious offence of money laundering. It is, therefore, not possible for us to record satisfaction that there are reasonable grounds for believing that the appellant is not guilty of such offence. Further, the courts below have justly adverted to the antecedents of the appellant for considering the prayer for bail and concluded that it is not possible to hold that the appellant is not likely to commit any offence ascribable to the 2002 Act while on bail. Since the threshold stipulation predicated in Section 45 has not been overcome, the question of considering the efficacy of other points urged by the appellant to persuade the Court to favour the appellant with the relief of regular bail will be of no avail. In other words, the fact that the investigation in the predicate offence instituted in terms of FIR No. 205/2016 or that the investigation qua the appellant in the complaint CC No. 700 of 2017 is completed; and that the proceeds of crime are already in possession of the investigating agency and provisional attachment order in relation thereto passed on 13-2-2017 has been confirmed; or that charge-sheet has been filed in FIR No. 205/2016 against....
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....s recorded under the CrPC. The Court underscored that such statements, being recorded during an inquiry rather than an investigation, are not subject to the restrictions under Article 20(3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50(4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA. The Hon'ble Apex Court further clarified that the provisions of Section 50 of the PMLA having an overriding effect by virtue of Sections 65 and 71 of the PMLA prevail over the procedural safeguards under the CrPC. 108. In the case of Tarun Kumar v. Assistant Director 2023 INSC 1006 the Hon'ble Apex Court while relying upon the ratio rendered by the three judge Bench of the Hon'ble Apex Court in the case of Rohit Tandon (supra)has observed thatthe statements of witnesses/ accused are admissible in evidence in view of Section 50 of the said Act and such statements may make out a formidable case about the involvement of the accused in the commission of a serious offence of money laundering. For ready reference the relevant paragraph of the aforesaid judgment is being quoted as under: "14. The first a....
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.... present matter only corroborate the primary and unimpeachable documentary evidence in the form of bank trails. 112. Further it is evident from impugned order that in the present case, the Petitioner has produced no sterling and unimpeachable material. His explanations rest upon demonstrably relied upon documents, including Invoice No. NCC/12 dated 14.12.2016, which the Learned Special Court has found to be prima facie backdated and structured subsequent to registration of the Preliminary Enquiry dated 09.12.2016. 113. Further, at the stage of recording statements during enquiry, it cannot be construed as an investigation for prosecution. The process envisaged under Section 50 of PMLA is in the nature of an inquiry against the proceeds of crime and it is not an investigation and the authorities who are recording the statements are not police officers and therefore, these statements can be relied upon as admissible piece of evidence before the Court. The summons proceedings and recording of statements under PMLA are given the status of judicial proceedings under Section 50(4) of PMLA. When such is the sweep of Section 50 of PMLA, the statements that have been recorded by the r....
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....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, 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 ....
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....e against the present petitioner. 119. 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. 120. 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 appellate power. A Revisional Court cannot undertake meticulous examination of the material on record as it is undertaken by the trial court or the appellate court. T....
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....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." 123. It requires to refer herein that the ambit and scope of exercise of power of discharge, are fairly well settled which has been elaborately discussed in the preceding paragraphs and as per settled proposition of law, no comprehensive assessment of the m....