TaxTMI 
TaxTMI 
2026 (7) TMI 1005
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....02 (hereinafter referred to as "the PMLA"), alleging commission of offences under Section 3 read with Section 70, punishable under Section 4 of the PMLA, against the petitioners. 2.2. According to the complaint, the petitioners were lessees of certain survey fields for the purpose of quarrying granite in various villages. However, during the course of investigation, it was alleged that they had indulged in illegal quarrying beyond the leased area, fabricated records, illegally transported and dealt with the quarried minerals, caused wrongful loss to the Government, damaged public properties, and amassed substantial unlawful gains. Based on the said allegations, several criminal cases came to be registered, namely Crime No.618 of 2012 on the file of Melur Police Station, Crime No.120 of 2012 on the file of Keelavalavu Police Station, Crime No.141 of 2013 on the file of Vikramangalam Police Station, and Crime No.20 of 2015 on the file of the District Crime Branch, Madurai. 2.3. The investigations in the aforesaid scheduled offences culminated in the filing of final reports, which are presently pending in P.R.C. No.10 of 2017, P.R.C. No.32 of 2017, Special C.C. No.35 of 2021 and....
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....e deciding the discharge petition and his failure to do so vitiates the impugned order. 4. Submissions of the learned counsel for the respondent: 4.1. Per contra, the learned Special Public Prosecutor appearing for the Directorate of Enforcement submitted that once cognizance has been taken for the offences under the PMLA, the statutory presumptions available under the Act becomes operative. Whether the properties constitute proceeds of crime, whether the accused had independent lawful sources of income, and whether the prosecution has established the offence of money laundering are all matters requiring appreciation of evidence during trial. Such disputed questions cannot be adjudicated at the stage of discharge. 4.2. It is further contended that the validity or otherwise of the prosecution in the scheduled offences cannot be conclusively examined by the Special Court while considering an application for discharge under the PMLA proceedings, so long as the scheduled offence continues to subsist in the manner known to law. The learned Trial Judge has, therefore, rightly confined himself to examining whether a prima facie case exists under the provisions of the PMLA. 4.3....
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....on or use of tainted money as untainted money. 6.4. In the present case, the allegation is that huge proceeds were generated through illegal granite mining constituting the scheduled offences and that such proceeds were utilised for acquisition of immovable properties described in the complaint, thereby projecting the proceeds of crime as legitimate assets. Such allegations, if accepted at their face value, clearly constitute the ingredients of Section 3 of the PMLA. 6.5. Further, Sections 23 and 24 of the PMLA introduce statutory presumptions and place a reverse burden upon the accused in respect of interconnected transactions and the legitimacy of the assets. At the stage of framing of charge or consideration of a discharge petition, the Court is not expected to adjudicate whether the accused has satisfactorily discharged such burden. Those are matters which are to be left in the hands of the trial Judge. 6.6. The Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India reported in (2022) 10 SCC 386, has authoritatively held that the offence under Section 3 is an independent offence relating to the process or activity connected with the proceeds of crime a....
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....dge rightly confined the enquiry to the scope permissible under the PMLA and found that the complaint and accompanying materials disclosed a prima facie case. 6.12. It requires emphasis that a discharge petition under the PMLA cannot be maintained solely on the ground that the scheduled offence is allegedly false or unsustainable when such proceedings are still pending before the competent Court. Unless the accused obtains a final judicial determination resulting in acquittal, discharge or quashing of the scheduled offence in accordance with law, the Special Court under the PMLA cannot foray into the legality of the predicate offence. 6.13.1. More importantly, the petitioner has suppressed a material development. This revision was presented before the Trial Court on 16.04.2026. However, prior thereto, the Hon'ble Supreme Court, while dealing with proceedings arising out of the very same illegal mining allegations, had observed that prima facie materials existed against the petitioner warranting continuation of the prosecution. "IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 495 /2026 [SLP [CRL.] NO.153/2824] THE INSPECTOR OF ....
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....issues are left open to the Trial Court to be decided without being influenced by the observations made in the impugned order which are only prima facie in nature. The appeal stands allowed, accordingly. Pending application(s), if any, shall stand disposed of. ...................................J, [M.M.SUNDRESH] ...................................J, [NONGMEIKAPAM KOTISWAR SINGH] NEW DELHI; JANUARY 29, 2026." 6.13.2. In spite of specific finding and direction by the Hon'ble Supreme Court to proceed the trial relating to the illegal mining (predicate offence), he continued to file discharge petitions and raise ground before this Court that there is no predicate offence made out. Despite such order by the Hon'ble Supreme Court, no disclosure was made before this Court. Such suppression of a relevant judicial order disentitles the petitioner from seeking any discretionary relief. 6.14. In view of the prima facie findings recorded by the Hon'ble Supreme Court regarding the illegal mining allegations, coupled with the materials collected by the Directorate of Enforcement tracing the proceeds of crime into acquisition of pr....