2017 (4) TMI 1 - HC - Money Laundering

Prevention of Money Laundering - order of attachment - Held that - It can be seen from the records that all the offences allegedly committed by the writ petitioner were earlier to the insertion of the provision in the schedule of the Prevention of Money Laundering (Amendment) Act, 2009, and as such, they have no application. Therefore, the Enforcement Case Information Report and the order of attachment are without jurisdiction and are liable to be quashed. As we have, already, held that the writ petitioner cannot be prosecuted for the offences alleged, as they are not the scheduled offences under the PML Act. Those offences under the Mines and Geology (Development and Regulation) Act, 1957, the Forest (Conservation) Act, 1980, the Indian Penal Code and the Prevention of Corruption Act, 1988, were included in the PML Act declaring them as scheduled offences only with effect from June 1, 2009. Hence, the Enforcement Directorate could not have invoked the provisions of the PML Act with retrospective effect. The petitioner cannot be tried and punished for the offences under the PML Act when the offences were not inserted in the schedule of offences under the PML Act. This would deny the writ petitioner the protection provided under clause (1) of Article 20 of the Constitution of India. Article 20(1) of the Constitution of India prohibits the conviction of a person or his being subjected to penalty for ex-post facto laws. Consequently, the order of attachment is, also, liable to be set aside. Whether allegation of theft or illegal mining is not a scheduled offence under the PML Act? - Held that - As the offence of theft is not a scheduled offence under the PML Act, by applying the same principles as we have taken above, we find no merit in the initiation of proceedings against the petitioners in these writ petitions under the amended PML Act. Hence, the action taken against them under the said Act is, also, liable to be quashed. An ECIR can, only, be registered once there has been a conviction and a judicial conclusion has been arrived at as to the quantum of proceeds of that crime. It is only upon a conviction by a trial court in the predicate offence the accused could be investigated upon accordingly.We, therefore, allow all these writ petitions and quash the action initiated against all these writ petitioners by the enforcement authorities. We, also, quash the attachment orders passed against the writ petitioners.

Summary

Issues:
Challenge to lodging and enforcing of Enforcement Case Information Report and order of attachment under Prevention of Money Laundering Act, 2002.

Analysis:
The judgment involved multiple writ petitions challenging the actions of authorities in lodging and enforcing an Enforcement Case Information Report (ECIR) and order of attachment under the Prevention of Money Laundering Act, 2002 (PML Act). The main contention raised was that the offenses alleged were not scheduled offenses under the PML Act, thus questioning the jurisdiction to prosecute under the Act.

In the first writ petition, the petitioner argued that the offenses alleged were committed before they were included as scheduled offenses under the PML Act. The petitioner's counsel highlighted that the alleged offenses were not scheduled offenses until June 1, 2009, while the offenses were allegedly committed between June 21, 2007, and May 15, 2009. The court examined the definitions of 'money laundering,' 'proceeds of crime,' and 'scheduled offense' under the PML Act.

The Assistant Solicitor General contended that the proceedings could continue under the PML Act retrospectively for civil offenses. However, the court held that since the offenses were committed before being included in the schedule of the PML Act, the ECIR and order of attachment were without jurisdiction and liable to be quashed. The court emphasized that the petitioner could not be prosecuted for offenses not listed as scheduled offenses under the PML Act.

In another set of writ petitions, the petitioners challenged the actions taken against them under the amended PML Act. The court reiterated that theft or illegal mining were not scheduled offenses under the PML Act, leading to the quashing of the actions initiated against these petitioners as well. The court emphasized the importance of a conviction before registering an ECIR and passing attachment orders.

Ultimately, the court allowed all writ petitions and quashed the actions initiated by the enforcement authorities against the petitioners, including the attachment orders. The judgment highlighted the significance of offenses being listed as scheduled offenses under the PML Act for invoking its provisions and prosecuting individuals accordingly.