9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (12) TMI 1307 - HC - Money LaunderingOffence under PMLA - allegation of forgery - Held that - In the instant case the alleged incidents occurred prior to June 2009. Prior to June 2009 the relevant provisions of Indian Penal Code were not included in schedule appended to the Act 2002. These provisions were not listed as offences under the Act admittedly when the alleged incidents have taken place. The only provision that is invoked which was in the schedule to the Act is Section 467. The illegal activities committed by the persons in the helm of affairs cannot be attributed to petitioner company more particularly the allegation of forgery as all those illegalities were committed by them behind the back and without the involvement of the petitioner company. Thus if the allegations made are taken at their face value and accepted in their entirety they do not prima facie constitute any offence or make out a case against the petitioner company. In accordance with the principles laid down by the Supreme Court in Bajan Lal 1990 (11) TMI 386 - SUPREME COURT the petitioner company cannot be proceeded against under Section 3 of Act 2002. Thus filing of complaint and taking cognizance thereof is unsustainable. In view of the above findings the writ petition is allowed.
Issues Involved:
1. Liability of the successor company for crimes committed by the previous management. 2. Applicability of amended provisions of the Prevention of Money Laundering Act, 2002. 3. Maintainability of the writ petition under Article 226 of the Constitution of India. Detailed Analysis: I. Liability of the Successor Company for Crimes Committed by the Previous Management: The primary issue was whether the petitioner company, as a successor to Satyam Computer Services Limited (SCSL), could be held liable for the alleged crimes committed by the previous management of SCSL. The court noted that the illegal activities were committed by individuals at the helm of SCSL without the knowledge of the company. The court emphasized that the company itself did not have knowledge of the alleged money laundering activities and could not be held liable for the actions of individuals who were not acting within the scope of their employment. The court cited several precedents, including *Reliance Natural Resources Limited*, *Delhi Development Authority*, and *Mr. Radha Mohan Lakhotia*, to support the principle that a company cannot be held liable for the unauthorized and illegal acts of its employees or agents if those acts were not within the scope of their employment or authority. II. Applicability of Amended Provisions of the Prevention of Money Laundering Act, 2002: The court examined whether the amended provisions of the Act, 2002, which were introduced by the Amendment Act of 2009, could be applied retrospectively to prosecute the petitioner company. The court held that penal provisions cannot be applied retrospectively. The court cited the Supreme Court's decisions in *Soni Devrajbhai Babubhai*, *Kaliar Koil Subramaniam Ramaswamy*, and *Ganesh Gogoi*, which established that no person can be tried and punished for a new offence created subsequent to the commission of the offence. The court concluded that since the alleged illegal activities occurred prior to the amendment in 2009, the petitioner company could not be prosecuted under the amended provisions. III. Maintainability of the Writ Petition under Article 226 of the Constitution of India: The court addressed the objection raised by the learned counsel for the Enforcement Directorate regarding the maintainability of the writ petition. The court referred to the Supreme Court's decisions in *Rajasthan State Industrial Development and Investment Corporation* and *ABL International Ltd.*, which established that the High Court has the discretion to entertain a writ petition under Article 226 of the Constitution if there is a legal bar against the institution or continuance of criminal proceedings. The court held that the writ petition was maintainable as it raised substantial questions of law regarding the applicability of penal provisions and the liability of the successor company for the actions of the previous management. Conclusion: The court allowed the writ petition, holding that the petitioner company could not be held liable for the alleged crimes committed by the previous management of SCSL. The court also held that the amended provisions of the Act, 2002, could not be applied retrospectively to prosecute the petitioner company. The court quashed the complaint filed by the Enforcement Directorate and the cognizance taken by the Special Court against the petitioner company. The court clarified that its observations and findings were limited to the maintainability of the complaint against the petitioner company and did not affect the proceedings against other accused individuals.
|
