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2013 (2) TMI 904 - HC - Money LaunderingPrevention of Corruption Act - Allegations against Chief Minister - Vigilance Case - Prevention of Money Laundering Act (PMLA) - Transferring money through Hawala - Investigation done by CBI - Scheduled offences in terms of sub-section (x) of Section 2 are the offences specified either under Part (A) Part (B) or Part (C) of the schedule of the PMLA. A complaint was lodged against Chief Minister Shri Madhu Koda and other 2 members. Whether the Special Court can proceed simultaneously with the trial of the scheduled offence as well as trial of the offence punishable u/s 4 of the PMLA. HELD THAT - That the Special Court may proceed with the trial for the scheduled offence as well as trial of the offence punishable under the PMLA simultaneously. the provision as is enshrined in Section 3 postulating therein that whoever is connected with the proceeds of the crime projecting it as untainted property would be committing offence of Money Laundering Act and further that the proceeds of crime must have been derived or obtained directly or indirectly by any person as a result of criminal activity relating to scheduled offence in terms of sub-section (u) of Section 2 of the PMLA there has been no doubt that unless one is held guilty for the scheduled offences he cannot be held guilty of the offence punishable under Section 4 of the PMLA but hardly there appears to any embargo for the special court to proceed with the trial of the scheduled offences as well as offence under Section 4 of the PMLA simultaneously particularly when there has been nothing in the Act nor intention of the legislator seem to be there of taking of the trial of the offence punishable under Section 4 after one is found guilty for the scheduled offence.
Issues Involved:
1. Whether the prosecution for scheduled offences under the Prevention of Money Laundering Act, 2002 (PMLA) must precede the trial for the offence under Section 3/4 of the PMLA. 2. Whether the Special Court can proceed with the trial of scheduled offences and the offence under Section 4 of the PMLA simultaneously. Issue-Wise Detailed Analysis: 1. Prosecution for Scheduled Offences Preceding the Trial under PMLA: The primary argument presented by the petitioners was that the trial for the offence under Section 3 of the PMLA is dependent on the establishment of scheduled offences under the Indian Penal Code (IPC) or the Prevention of Corruption Act (PCA). The petitioners contended that without a conviction for the scheduled offences, the trial under the PMLA would be premature and futile. They emphasized that the definition of "proceeds of crime" under Section 2(u) of the PMLA necessitates that the property must be derived from criminal activity related to a scheduled offence. Therefore, they argued that the trial for scheduled offences must precede the trial under the PMLA to establish the proceeds of crime. 2. Simultaneous Trial by Special Court: The petitioners also argued that the procedures for investigation and trial under the PMLA and the scheduled offences are distinct, making it impractical to conduct simultaneous trials. They highlighted that the PMLA requires investigation by the Directorate of Enforcement, while the scheduled offences are investigated by the police. Additionally, they pointed out that the PMLA mandates that only a Special Court constituted under Section 43 can try offences under the PMLA, whereas the scheduled offences under the PCA must be tried by a Special Judge appointed under Section 3 of the PCA. Counter-Arguments by the Enforcement Directorate: The Enforcement Directorate countered that the PMLA was enacted to fulfill international obligations to prevent money laundering and to provide mechanisms for confiscation of property derived from money laundering. They argued that the PMLA has overriding provisions, as stated in Section 71, which allow the Special Court to try both the scheduled offences and the offences under the PMLA simultaneously. They asserted that there is no legal requirement for the trial of scheduled offences to precede the trial under the PMLA. Court's Analysis and Conclusion: The court analyzed the provisions of the PMLA, particularly Sections 3, 4, 43, and 44, which outline the definitions, punishments, and trial procedures for money laundering offences. The court noted that Section 44 of the PMLA is a non-obstante clause, giving it overriding effect over the Code of Criminal Procedure (CrPC). The court also observed that Section 71 of the PMLA provides that the Act will have an overriding effect over any other law. The court concluded that the Special Court designated under Section 43 of the PMLA has the authority to try both the scheduled offences and the offences under the PMLA simultaneously. The court reasoned that while the procedures for investigation and trial under the PMLA and the scheduled offences are different, this does not preclude simultaneous trials. The court emphasized that the Special Court must wait for the result of the trial for the scheduled offences before concluding the trial under the PMLA, ensuring that the accused is not presumed guilty of the scheduled offences prematurely. Final Judgment: The court dismissed all three applications, affirming that the Special Court may proceed with the trial for the scheduled offences and the trial of the offence punishable under the PMLA simultaneously. The court found no merit in the petitioners' arguments and upheld the trial court's decisions to reject the applications for staying the proceedings and for discharge.
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