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2023 (9) TMI 1462 - HC - Money LaunderingMoney Laundering - seeking quashing of ECIR - Continuance of investigation for the offence under the PML Act - pending adjudication of the petitioner s prayer for discharge from the scheduled offence by the Supreme Court - invocation of inherent jurisdiction - Section 482 of Cr.P.C. - HELD THAT - Section 482 envisages three circumstances under which the inherent jurisdiction may be exercised (i) to give effect to an order under the Code (ii) to prevent abuse of the process of Court and (iii) to otherwise secure the ends of justice. Obviously such power is to be exercised in relation to a proceeding which is criminal in nature. It would now be proper to examine whether the proceeding purportedly emanating from the ECIR registered against the petitioner can be treated as criminal proceedings so as to come within the sweep of the power under Section 482 of Cr.P.C. Be it noted that under the scheme of Cr.P.C. the criminal law is set into motion after registration of the FIR under Section 154 of Cr.P.C. and/or filing of a complaint under Section 200 of Cr.P.C. The PML Act 2002 also prescribes for filing of complaint before the Special Court under Section 44 thereof. Scope of ECIR - HELD THAT - The ECIR is an internal document created by the Department before initiating penal action or prosecution against the person involved with process or activity connected with the proceeds of crime. In other words registration of ECIR is not akin to launching of prosecution which can only be done by way of lodging a complaint under Section 44 of the PML Act. Thus a document or an act which is administrative in nature cannot partake the nature of criminal prosecution so as to attract judicial review. In the case of STATE OF WEST BENGAL AND ORS. VERSUS SUJIT KUMAR RANA 2004 (1) TMI 684 - SUPREME COURT the Supreme Court held Once it is held that the criminal court had no power to deal with the property seized under the Act the question of the High Court exercising its jurisdiction under Section 482 of the Code of Criminal Procedure would not arise. In so far as the case laws cited at the bar particularly by learned Senior Counsel appearing for the petitioner this Court finds that in the case of Sukesh Gupta 2023 (4) TMI 263 - TELANGANA HIGH COURT the Telengana High Court held on the facts of the case before it that since there is no evidence of criminal activity nor any property being derived as a consequence of such criminal activity the proceedings in the concerned ECIR cannot be permitted to continue. In arriving at such finding learned Single Judge of Telengana High Court relied upon the observations of the Supreme Court in the case of State of Harayana v. Bhajanlal 1992 (12) TMI 234 - SUPREME COURT State of Karnataka v. M. Devendrappa 2002 (1) TMI 1340 - SUPREME COURT and Anil Khadkiwala v. State (NCT of Delhi) 2019 (7) TMI 1455 - SUPREME COURT were relied upon. This Court is however unable to agree with the reasoning of the learned Single Judge for the reason that the nature of the proceedings emanating from registration of ECIR short of filing of the complaint under Section 44 of the PML Act was not specifically taken into account vis- -vis the distinction made between the ECIR and FIR by the Supreme Court in Vijay Madanlal Choudhury 2022 (7) TMI 1316 - SUPREME COURT . The act of registration of ECIR is an administrative act in contradistinction with a penal act and therefore the ratio of Sujit Kumar Rana would be squarely applicable. This Court is of the considered view that the act of registration of ECIR against the petitioner and the investigation/enquiry said to be in progress on such basis are not amenable to judicial review by this Court in exercise of its inherent power under Section 482 of Cr.P.C. - Further the present motion which is at a stage when the investigation/enquiry initiated on the basis of the ECIR registered against the petitioner has not culminated in lodging of a complaint under Section 44 of the PML Act is premature. In view of such finding the contentions raised by the parties touching upon the merits of the case are not required to be gone into. The CRLMC is dismissed being not maintainable in the eye of law.
Issues Involved:
1. Maintainability of the application under Section 482 Cr.P.C. 2. Nature and implications of ECIR in the context of PML Act. Summary: Issue 1: Maintainability of the application under Section 482 Cr.P.C. The petitioner sought to quash ECIR No. BSZO/ECIR/13/2021 and all proceedings initiated by the Enforcement Directorate (ED) under Section 482 Cr.P.C. The petitioner argued that pending adjudication of the predicate offence by the Supreme Court, the continuance of the investigation under the PML Act would be an abuse of the process of the Court. The ED raised a preliminary objection regarding maintainability, arguing that an ECIR is not akin to an FIR and does not give rise to a criminal action that can be reviewed under Section 482 Cr.P.C. The Court noted that Section 482 envisages three circumstances for exercising inherent jurisdiction: (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of Court, and (iii) to secure the ends of justice. It emphasized that such power is exercised in relation to a criminal proceeding. The Court concluded that the act of registering an ECIR is administrative and not penal, thus not subject to judicial review under Section 482 Cr.P.C. The Court cited the Supreme Court's ruling in Vijay Madanlal Choudhary v. Union of India, which clarified that an ECIR is an internal document and not equivalent to an FIR. Issue 2: Nature and implications of ECIR in the context of PML Act The Court examined whether the proceeding emanating from the ECIR could be treated as criminal proceedings. It referenced the Supreme Court's decision in Vijay Madanlal Choudhary, which stated that the ECIR is an internal document created by the department before initiating penal action or prosecution. The ECIR does not equate to launching a prosecution, which can only be done by lodging a complaint under Section 44 of the PML Act. The Court held that the act of registering an ECIR does not partake the nature of criminal prosecution and thus cannot be quashed under Section 482 Cr.P.C. The Court also reviewed various case laws cited by both parties. It disagreed with the Telengana High Court's reasoning in Sukesh Gupta v. Directorate of Enforcement, Hyderabad, which did not consider the distinction between ECIR and FIR as outlined by the Supreme Court. The Court found that the decisions of the Sikkim High Court in Smt. Usha Agarwal and the Delhi High Court in Emta Coal Ltd. were not applicable to the present context. Conclusion: The Court concluded that the act of registering an ECIR and the ongoing investigation/enquiry based on it are not amenable to judicial review under Section 482 Cr.P.C. The motion was deemed premature as the investigation had not culminated in lodging a complaint under Section 44 of the PML Act. Consequently, the CRLMC was dismissed as not maintainable in the eye of law.
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