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2023 (4) TMI 1257 - HC - Money LaunderingArrest without jurisdiction - Violation of principles of natural justice - Non-speaking order - non-application of mind - issuance of summons to appear before the respondent based on the impugned proceedings - arrest of petitioner on appearance before respondent - no valid reason given for such arrest - HELD THAT - From a reading of Paragraph 325 of the Judgment of the Hon'ble Supreme Court in VIJAY MADANLAL CHOUDHARY ORS. VERSUS UNION OF INDIA ORS. 2022 (7) TMI 1316 - SUPREME COURT the position is understood that mere stating of ingredients or language employed in Section 3 under the Prevention of Money Laundering Act, 2002, may not be sufficient to connect the petitioner with the offence. Since the writ petitioner is not one of the accused in the case registered for the offences punishable Sections 120-B, 420 and 471 under the Indian Penal Code, 1860, the prosecution of the writ petitioner as a person involved in the commission of the offence of money laundering under the provisions of the Prevention of Money Laundering Act, 2002, cannot be justified. Interim stay granted in respect of all further proceedings - List the matters after two weeks.
Issues involved:
The judgment involves the interpretation of legal provisions of the Prevention of Money Laundering Act, 2002, and the rights of the parties during the pendency of a writ petition. Details of the judgment: Issue 1: Arrest and Custodial Remand The petitioner, an investor, was arrested by the respondent under the Prevention of Money Laundering Act, 2002, without proper communication of grounds for arrest. The petitioner challenged the remand order, alleging a lack of proper application of mind by the trial court. The petitioner's name was included as an accused based on a new case introduced during the arrest, contrary to the original complaint. Issue 2: Jurisdiction and Proceedings The petitioner contended that the respondent arrested him without jurisdiction, and the registration of the Enforcement Case Information Report (ECIR) based on a stayed First Information Report (FIR) amounted to contempt of court. The petitioner argued that he cannot be prosecuted under the Prevention of Money Laundering Act, 2002, as he was not involved in the scheduled offences mentioned in the complaint. Issue 3: Legal Interpretation Referring to a Supreme Court judgment, the petitioner's counsel emphasized that the offence under Section 3 of the Prevention of Money Laundering Act, 2002, is dependent on illegal gain of property as a result of criminal activity related to a scheduled offence. The court concurred that the petitioner cannot be prosecuted for money laundering unless his involvement in a predicate offence is registered. Conclusion: Considering the legal arguments and the lack of evidence linking the petitioner to money laundering offences, the court granted an interim stay on further proceedings related to the ECIR dated 23.03.2020. The petitioner was advised to file a fresh application for bail under the Prevention of Money Laundering Act, 2002. The case was listed for further hearing after two weeks.
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