TaxTMI 
TaxTMI 
2026 (7) TMI 1851
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.... 2 - UOI and E.D. and Mrs. Rajeshree Newton, learned APP for the Respondent No. 3 - State. 2. Rule. Rule made returnable forthwith and with consent of the parties, heard finally. 3. Petitioner No. 1 is Accused No. 38 and Petitioner No.2 is Accused No. 48 in PMLA Special Case No. 02 of 2016, pending before the Court of Special Judge for PMLA for Greater Bombay at Bombay ("Special Court"). 4. By this Petition filed under Article 227 of the Constitution of India and Section 482 of the Code of Criminal Procedure, the Petitioners assail two orders: (a) the Order dated 27.04.2016 (Exhibit-E), by which the Special Court ordered the issuance of process against the Petitioners for the offence punishable under Section 3 and 4 of the Prevention of Money Laundering Act 2002 ("PMLA Act"); and (b) the Order dated 14.05.2019 (Exhibit-N), passed by the Special Court in PMLA Case No. 02 of 2016 on Exhibit-967, by which the Application seeking Discharge filed by the Petitioners was dismissed. 5. Material facts relevant to the adjudication of this petition are that Chhagan Bhujbal (Accused No. 1) and others committed the predicate offence. Three FIR's, bearing Nos. 32 of....
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....m Application No. 595 of 2026, seeking leave to produce the orders passed by the Special Court in PMLA Case No. 02 of 2016 and PMLA Case No. 03 of 2018, by which several Accused have been discharged in view of their discharge in the scheduled offence, relying on the decision in the case of Vijay Madanlal Choudhary and others Vs. Union of India and others 2022 SCC OnLine SC 929. In addition to the prayer seeking leave to produce the said orders, the Petitioners, in the alternative, seek the quashing of the orders impugned in this Petition and the remand of the matter to the Special Court for fresh consideration of the discharge Application in light of the decision in Vijay Madanlal Choudhary (supra). 10. Mr. Vikram Nankani, learned Senior Advocate for the Petitioners, submits that the impugned Order dated 14.05.2019 was passed before the decision in the case of Vijay Madanlal Choudhary (supra). He submits that by relying on the decision in the case of Vijay Madanlal Choudhary (supra), the Special Court has discharged forty six (46) accused in PMLA Special Case No. 02 of 2016 and PMLA Case No. 03 of 2018, including M/s. Parvesh Construction Pvt. Ltd. He submits that the decision i....
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....roceeds of crime". He submit that once M/s. Parvesh Construction Pvt. Ltd has been discharged, no offence is disclosed to proceed against the Petitioners. He relies on the decision in Vijay Madanlal Choudhary (supra). 16. Ms. Manisha Jagtap, learned Special Public Prosecutor for the Respondent - ED, in addition to her oral submissions, has tendered brief written notes dated 01 July 2026. Ms. Manisha Jagtap does not dispute that M/s. Parvesh Construction Pvt. Ltd is discharged in the scheduled offence as well as in the PMLA Special Cases. On instructions, she states that the discharge orders are not challenged by Respondent-ED. 17. Ms. Manisha Jagtap learned Special Public Prosecutor for the Respondent - ED does not contest the position of law as propounded in the case of Vijay Madanlal Choudhary (supra). She relies on paragraphs 8 and 9 of her written notes dated 01 July 2026, which are reproduced below in verbatim:- "8. This legal position has been authoritatively settled by the Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India. In particular, paragraphs 52 to 54 of the said judgment unequivocally hold that the offence of money laundering is an....
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....covery of huge volume of undisclosed property, the authorised officer may be advised to send information to the jurisdictional police (under Section 66(2) of the 2002 Act) for registration of a scheduled offence contemporaneously, including for further investigation in a pending case, if any. On receipt of such information, the jurisdictional police would be obliged to register the case by way of FIR if it is a cognizable offence or as a non-cognizable offence (NC case), as the case may be. If the offence so reported is a scheduled offence, only in that eventuality, the property recovered by the authorised officer would partake the colour of proceeds of crime under Section 2(1) (u) of the 2002 Act, enabling him to take further action under the Act in that regard. 54. Even though, the 2002 Act is a complete Code in itself, it is only in respect of matters connected with offence of moneylaundering, and for that, existence of proceeds of crime within the meaning of Section 2(1)(u) of the Act is quintessential. Absent existence of proceeds of crime, as aforesaid, the authorities under the 2002 Act cannot step in or initiate any prosecution." 9. Therefore, the Hon'....
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....rt in the case of Vijay Madanlal Choudhary (supra) in paragraph Nos. 253 and 282, has observed as follows:- "253. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. crime. The authorities under the 2002 Act cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression "derived or obtained" is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through ....