2022 (4) TMI 1549 - HC - Money Laundering

Repetition of proceedings by ED - accused was already discharged by the Special Court - Money Laundering - attachment of properties - scheduled offences/predicate offence - illegal extraction of mines from the area which comes to 1.43 crores metric tons - case of Revenue is that the order passed by the appellate Tribunal will not come in the way of conducting prosecution against the petitioners and release of the property will not be a reason for closing the offence. HELD THAT - After the amendment of the Act in the year 2012, Sub-section (5) of Section (8) provides where on conclusion of a trial, an offence under this Act, the Special Court finds that the offence of money-laundering has been committed, it shall order that such property involved in the money-laundering or which has been used for commission of the offence of money-laundering shall stand confiscated to the Central Government. Sub-section (6) of Section 8 states where on conclusion of a trial under this Act, the Special Court finds that the offence of money-laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it. That means, prior to the amendment, the power of confiscation and releasing the property to the holder was within the jurisdiction of the adjudicating authority under the PML Act, whereas in the Amendment Act, 2012 (Act 2 of 2013), the power was entrusted with the Special Court. Admittedly, alleged offence by the petitioners was said to have committed prior to the amendment to the PML Act w.e.f. from 15.2.2013. As per the allegation against the petitioners and as per the proceedings of the CEC dated 02.07.2011, the CBI filed charge sheet as on 02.08.2013, i.e. much prior to the amendment of Section 8. Therefore, the old Amendment Act, 2009 (Act 21 of 2009) will applicable to the case on hand. Once the ED submitted no objection before the appellate Tribunal for release of the property in favour of the petitioners stating that no offence was made out against them in view of the discharge of the petitioners in criminal case, and without challenging the order of the appellate tribunal, now the ED cannot blow hot and cold at the same time. Therefore, the contention of the respondent's counsel cannot be accepted. As per the judgment of the Hon'ble Supreme Court in Radheshyam Kejriwal's case 2011 (2) TMI 154 - SUPREME COURT , the Hon'ble Supreme Court has categorically held at paragraph 38(vii) that in case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases. Here, in this case the, adjudication proceedings were concluded and attained finality and it was ordered to release the property seized under the alleged crime under the PML Act. That apart, the Special Court has already discharged the accused holding that absolutely there is no material against the petitioners for framing charge. After analysing the documents produced by the CBI and after the conclusion of the criminal case, the trial Court has also released the property in question for interim custody which was not challenged by the ED before the Hon'ble Supreme Court or before this Court. The order of the appellate Tribunal also was not appealed before this Court or the Hon'ble Supreme Court, which has attained the finality - Therefore, the standard of proof in criminal prosecution is higher degree than the standard of proof required before the adjudicating authority, when the adjudicating authority themselves stated that no offence is committed and disposed the appeal and ordered to release the property. Thus, conducting the criminal proceedings against petitioners-accused No. 1 and 2 is abuse of process of law and is liable to be quashed - petition allowed.

Issues Involved:
1. Quashing of proceedings under the Prevention of Money Laundering Act (PML Act).
2. Validity of attachment orders and subsequent proceedings.
3. Impact of discharge in predicate offences on PML Act proceedings.
4. Jurisdiction and applicability of amendments to the PML Act.

Detailed Analysis:

1. Quashing of Proceedings under the Prevention of Money Laundering Act (PML Act):
The petitioners sought to quash the proceedings in Spl.C.C. No. 134/2015, arguing that the proceedings initiated by the Enforcement Directorate (ED) were illegal and void ab initio. The petitioners contended that the scheduled offences had been discharged by the trial court, and hence, the basis for the ED's case under the PML Act no longer existed. The court noted that the ED's case was based on the charge sheet filed by the CBI, which included offences under the IPC and the Prevention of Corruption Act, both of which are scheduled offences under the PML Act.

2. Validity of Attachment Orders and Subsequent Proceedings:
The petitioners argued that the attachment orders were unsustainable in law, as the scheduled offences had been discharged. They highlighted that the appellate tribunal had ordered the release of attached properties, acknowledging the discharge of the scheduled offences. The court observed that the provisional attachment order dated 28.03.2014 was confirmed by the adjudicating authority under Section 8 of the PML Act. However, the appellate tribunal had later allowed the release of the attached properties, which was not challenged by the ED.

3. Impact of Discharge in Predicate Offences on PML Act Proceedings:
The petitioners contended that the discharge in the predicate offences should result in the quashing of the PML Act proceedings. They relied on the Supreme Court's judgment in Radheshyam Kejriwal's case, which held that if a person is exonerated on merits in adjudication proceedings, criminal prosecution on the same set of facts cannot continue. The court noted that the Special Court had discharged the accused, and the appellate tribunal had ordered the release of the attached properties, indicating that no offence was made out against the petitioners.

4. Jurisdiction and Applicability of Amendments to the PML Act:
The petitioners argued that the amendments to Section 8 of the PML Act, which came into effect on 15.02.2013, were not applicable to their case, as the alleged offences occurred prior to the amendment. The court observed that the old Amendment Act, 2009 (Act 21 of 2009) would be applicable, as the alleged offences occurred before the 2013 amendment. The court also noted that the ED had submitted no objection to the release of the properties before the appellate tribunal, which had attained finality.

Conclusion:
The court concluded that conducting criminal proceedings against the petitioners under the PML Act was an abuse of process of law, given that the scheduled offences had been discharged, and the appellate tribunal had ordered the release of the attached properties. The court quashed the criminal proceedings against the petitioners in Spl.C.C. No. 134/2015.

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