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2019 (11) TMI 1499 - HC - Money LaunderingMoney Laundering - Scheduled Offence or not - Section 44(1)(c) of the Prevention of Money Laundering Act, 2002 - whether, it is obligatory on the part of the competent officer to seek a committal of the predicate offence in every case and even if such an option is available to the officer and if in exercise of such option, an application is filed, is the Court, as a matter of course, bound to allow it? - HELD THAT - It is clear that Parliament did not intend to make it obligatory on the authorized officer under the Money Laundering Act, to invariably make an application under Section 44(1)(c) of the Act. Otherwise, there is no reason as to why the committal under Section 44(1)(c) should be dependent on an application by the competent officer under the Money Laundering Act. The Parliament could not have been oblivious of the fact that at least in some cases, the predicate offences may be triable by special courts authorized for the specific purpose and that the Special Court under the Money Laundering Act may not be competent to try such offences, as has happened in this case. The High Court held that the main object of constituting a special court under Money Laundering Act was for a speedy trial of offences under the Act. Hence, it was held that, merely because a complaint was filed by the 2nd respondent before the special court with regard to money-laundering, it cannot be stated that the case investigated by CBI with regard to the aforesaid crime also has to be tried by the special court under the Act. Hence, inasmuch as an offence of money-laundering was not charged by CBI, the proceedings before the CBI cannot be transferred on the mere fact that aforesaid offence was the basis of money-laundering. If such a view was adopted, all the cases pertaining to predicate offences should be stayed once the complaint under Money Laundering Act is filed in special court, it was held - Court opined that since the offence of money-laundering was inextricably linked to the predicate offence, it will be in the ultimate interest of the prosecution to see that charges for predicate offence are proved, so as to bring the amounts involved in the cases for the predicate offence, within the ambit of definition of proceeds of crime . That was the reason why the Legislature in its wisdom has given the option to the department to seek for a committal, rather than to give the option to the accused, so that delay may not be caused in the trial of offence for the predicate offence, it was held. Section 44(1)(c) cannot be interpreted to authorize the Court to commit a case relating to scheduled offence to an incompetent court and thereby defeat the purpose of Act. Section 44(1)(c) also cannot be interpreted to authorize a court to commit a case pending before it to a court which lacks jurisdiction and to confer jurisdiction on a Court which inherently lacks it - Section 44(1)(c) should receive a reasonable interpretation which will augment the purpose of Act. Necessarily, it has to held that, Section 44(1)(c) does not imply that, in every case contemplated under that sub-section, the competent authority shall make application for committal of case relating to scheduled offence to a special court under the Money Laundering Act. The authorized officer competent to lay the complaint is vested with a solemn discretion to carefully apply his mind and only in appropriate cases where the committal to special court will not defeat the prosecution and on the other hand, will enable a speedy disposal of case and achieve purpose of Statute should file an application. If the Court which has taken cognizance of scheduled offence is other than the special court which has taken cognizance of the complaint of offence of money-laundering, the competent authority under the Money Laundering Act to file a complaint, is given a discretion to make application under Section 44(1)(c) in appropriate cases, in the interest of justice and for a speedy trial. The Court also has to duly apply its mind and take a proper decision in accordance with law - Application allowed.
Issues Involved:
1. Committal of cases under Section 44(1)(c) of the Prevention of Money Laundering Act (PMLA). 2. Jurisdiction and competence of special courts under the PMLA and the Prevention of Corruption Act (PC Act). 3. The overriding effect of the PMLA over other statutes, including the PC Act. 4. Simultaneous trials of predicate offences and money laundering offences. 5. Interpretation of Section 44(1)(c) and Section 71 of the PMLA. Detailed Analysis: 1. Committal of Cases under Section 44(1)(c) of the PMLA: The main issue in this case revolves around the scope of Section 44(1)(c) of the PMLA. The provision allows for the committal of cases involving scheduled offences to the special court under the PMLA upon application by the authorized officer. The court examined whether it is obligatory for the competent officer to seek committal in every case and if the court is bound to allow such applications as a matter of course. The judgment clarified that it is not mandatory for the authorized officer to seek committal in every case, and the court must apply its mind and decide based on the merits of each case. 2. Jurisdiction and Competence of Special Courts: The judgment discussed the jurisdictional competence of special courts under the PMLA and the PC Act. It was argued that the special court under the PMLA cannot try offences under the PC Act as it is not a notified court under Section 3 of the PC Act. The court affirmed that the special court under the PMLA is incompetent to try offences under the PC Act, which must be tried by a Special Judge appointed under the PC Act. 3. Overriding Effect of the PMLA: Section 71 of the PMLA provides that the Act shall have an overriding effect over other laws to the extent of inconsistency. However, the court clarified that this overriding effect applies only within the domain of the PMLA and does not create an absolute supremacy over all other statutes. The court referenced various authorities, including decisions from the Company Law Appellate Tribunal and the National Company Law Appellate Tribunal, to support this interpretation. 4. Simultaneous Trials of Predicate Offences and Money Laundering Offences: The court addressed whether the trial of predicate offences must precede the trial of money laundering offences or if they can be conducted simultaneously. The judgment referenced the Jharkhand High Court's decision in Anosh Ekka v. Enforcement Directorate, which held that the trial of money laundering offences cannot precede the trial of predicate offences. The court concluded that both trials could proceed independently unless an application for committal is made by the authorized officer under the PMLA. 5. Interpretation of Section 44(1)(c) and Section 71 of the PMLA: The court provided a detailed interpretation of Section 44(1)(c) and Section 71 of the PMLA. It emphasized that Section 44(1)(c) does not mandate the committal of cases in every instance and that the authorized officer has the discretion to seek committal only in appropriate cases. The court must also apply its mind and decide based on the merits. The judgment highlighted that Section 71's overriding effect is limited to procedural matters and does not extend to substantive law. Conclusion: The court concluded that the impugned order allowing the committal of the case under Section 44(1)(c) of the PMLA was not legally sustainable. The Criminal Miscellaneous Case (Crl. M.C.) was allowed, and the impugned order in Crl. M.P. No. 1106 of 2017 was set aside, dismissing Crl. M.P. No. 1106 of 2017.
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