2018 (7) TMI 2296 - HC - Money Laundering

Money Laundering - criminal conspiracy - preparing the banker s cheques/demand drafts in bulk in the name of the different kotedars for lifting PDS foodgrains and subsequently by selling the same in black market in connivance with other co-accused for wrongful gains to themselves and causing wrongful loss to the Government exchequer - HELD THAT - The PMLA 2002 was promulgated/came into force on 01.07.2005 vide G.S.R. 436(E) dated 1stJuly 2005 published in the Gazette of India Extra Pt. II Sec. 3(i) dated1st July 2005. Therefore the following was position as on 1st July 2005as regards inclusion of offences in Part A or Part B of the schedule appended to the PMLA 2002. (Only such sections are being taken into consideration of I.P.C. and P.C. Act which are alleged to have been committed by applicant/accused) - In Part B of the schedule one of sections of I.P.C. in question only i.e. Section 467 I.P.C. which pertained to forgery of a valuable security will or authority to make or transfer any valuable security or to receive any money etc. was made punishable under PMLA 2002. It is apparent that the offence under Section467 was punishable under PMLA of 2002 with effect since 1st July 2005while the allegations against the present accused relate to the period2004-05 and 2005-06 hence the argument of the learned counsel for the applicant that the cognizance taken against the accused applicant could not have been taken for his having committed offence under Section 467 I.P.C. does not hold water as the same was already made punishable under the PMLA of 2002 way back in 2005. It is settled law that if eve none of the offences under which the charge is found to have been made out then it cannot be denied that cognizance could have been taken by the Court concerned for having committed an offence under PMLA of 2002. If offence under certain other sections of I.P.C. or P.C. Act are found not made out in respect of the present accused during the period in question due to penal provision not being available then the said fact maybe taken into consideration by the Trial Court at the time of trial and take appropriate decision in that regard. As regards other objections that the appeal against the attachment of the properties of the applicant/accused was pending before a Appellate Authority and that the order passed by the learned Judge of C.B.I. Court had been stayed by the High Court Lucknow Bench hence the cognizance under PMLA ought to have postponed by the learned Trial Court till final decision in that case does not hold good as there is no legal bar to initiating proceedings under PMLA under such a situation. Application dismissed.

Summary

Issues Involved:
1. Quashing of Impugned Summoning Order.
2. Allegations under the Prevention of Money Laundering Act (PMLA), 2002.
3. Retrospective application of PMLA.
4. Pending appeals and stays in related proceedings.

Issue-wise Detailed Analysis:

1. Quashing of Impugned Summoning Order:
The applicant sought to quash the Summoning Order dated 02.04.2018, issued by the Learned Sessions Judge, Allahabad, in Complaint Case No. 4 of 2018, and to stay the proceedings of the said case. The applicant argued that the allegations do not indicate the commission of a crime, and that the applicant was not a shopkeeper/kotedar during the relevant period. Furthermore, it was contended that the applicant, being a private person, could not be charge-sheeted under the Prevention of Corruption Act.

2. Allegations under the Prevention of Money Laundering Act (PMLA), 2002:
The complaint alleged that the applicant, in connivance with others, diverted Public Distribution System (PDS) food grains to the black market, causing a loss to the government exchequer and wrongful gains to themselves. The applicant was implicated under Sections 120B, 406, 409, 420, 467, 468, 471 IPC, and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act. The role of the applicant included preparing banker’s cheques/demand drafts for lifting PDS food grains and selling them in the black market. The applicant admitted to receiving proceeds from the crime and using them for personal gains, such as purchasing trucks and plots.

3. Retrospective application of PMLA:
The applicant argued that the offences alleged were committed before the PMLA came into force on 01.07.2005, and the scheduled offences under IPC were included in the PMLA only from 01.06.2009. The applicant contended that applying PMLA retrospectively would violate Article 20(1) of the Constitution of India, which prohibits ex post facto penal laws. The court examined the inclusion of offences in the PMLA schedule and found that Section 467 IPC was already punishable under PMLA from 01.07.2005. Therefore, the argument that the applicant could not be prosecuted under PMLA did not hold water.

4. Pending appeals and stays in related proceedings:
The applicant highlighted that an appeal against the attachment of properties was pending before the Appellate Authority, and a stay order had been passed by the High Court, Lucknow Bench, in related proceedings. The applicant argued that the trial court should have postponed the PMLA proceedings until the final decision in the related cases. However, the court found no legal bar to initiating proceedings under PMLA despite the pending appeals and stays.

Conclusion:
The court dismissed the application, holding that the impugned order did not suffer from any infirmity. The court found that the offences under Section 467 IPC were already punishable under PMLA from 01.07.2005, and the applicant could be prosecuted for the alleged offences. The court also rejected the argument that the trial court should have postponed the PMLA proceedings due to pending appeals and stays in related cases.