2021 (9) TMI 1283 - HC - Money Laundering

Seeking grant of stay on arrest warrants - Money Laundering - non-speaking order - issuance of non-bailable warrants for the appearance of petitioners - offence punishable under Section 3 read with Section 4 of the PML Act - HELD THAT - Without commenting upon detailed merits of the cognizance order, it would suffice to hold that the petitioners have not been able to demonstrate any prima facie case for staying the impugned order by which cognizance has been taken against them. Looking to the various pronouncements of Hon ble Supreme Court in which it has been held that severity of the offence for which a cognizance has been taken against the petitioners and other relevant factors, the trial court has discretion to issue non-bailable warrants. Keeping in mind that the cognizance has been taken for offences punishable under the PML Act against the petitioners, which is an economic offence and Hon ble Apex Court has consistently held that such offences need to be treated on a different footing. Also keeping in mind the provisions of Section 45 of the PML Act, at this stage it cannot be held that the learned trial court has committed any legal error in passing the order of issuance of non-bailable warrants. The petitioners have not been able to prima facie make out any case for staying the arrest warrants directed to be issued against them - Stay application dismissed.

Summary

Issues Involved:
1. Validity of the cognizance order dated 12.07.2021.
2. Issuance of non-bailable warrants against the petitioners.
3. Applicability of the Prevention of Money Laundering Act, 2002 (PML Act).
4. Petitioners' connection with the alleged offence and company.
5. Prima facie case and burden of proof.
6. Legal precedents and statutory provisions relevant to the case.

Detailed Analysis:

1. Validity of the Cognizance Order Dated 12.07.2021:
The petitioners contended that the cognizance order is "bad in law" as no offence under Sections 3 and 4 of the PML Act is disclosed. They argued that the complaint failed to present any material connecting them with the offence under the PML Act. The court, however, found that the learned Sessions Judge had passed a "reasoned and speaking order" after due application of mind, establishing a prima facie case against the petitioners. The court upheld the validity of the cognizance order, stating that the petitioners failed to demonstrate any prima facie case for staying the impugned order.

2. Issuance of Non-Bailable Warrants Against the Petitioners:
The petitioners argued that non-bailable warrants should not have been issued directly, citing the Supreme Court's decision in "Inder Mohan Goswami v. State of Uttaranchal." They suggested that summons or bailable warrants should have been preferred initially. The court, however, noted that the trial court has the discretion to issue warrants if there is sufficient ground for proceeding. The court emphasized that economic offences, such as those under the PML Act, require a stricter approach due to their impact on the economic fabric of the country. The issuance of non-bailable warrants was deemed justified given the nature of the allegations and the severity of the offence.

3. Applicability of the PML Act:
The petitioners contended that the complaint did not involve any scheduled offence under the PML Act. They argued that contravention of Section 15 of the Environment (Protection) Act, 1986, on a standalone basis, is not a scheduled offence. The court, however, clarified that Section 15 prescribes punishment for contravention of Sections 7 and 8 of the Act of 1986, which falls under paragraph 25 of Part A of the Schedule to the PML Act. The court found the petitioners' argument to be "misconceived and baseless," affirming the applicability of the PML Act in this case.

4. Petitioners' Connection with the Alleged Offence and Company:
The petitioners claimed they had no connection with the company, M/s Agribiotech Industries Ltd, after June 2008. The court, however, did not find this argument sufficient to quash the cognizance order or the issuance of non-bailable warrants. The court held that the statutory body had sought punishment under the relevant provisions of the Environment (Protection) Act, 1986, and the PML Act, indicating the petitioners' involvement in the alleged offence.

5. Prima Facie Case and Burden of Proof:
The petitioners argued that no prima facie case was made against them, and the burden of proof lies on the prosecution. The court, however, emphasized that under Section 24 of the PML Act, the burden of proof is on the accused to show that they were not involved in the offence. The court found that the petitioners failed to demonstrate any legal ground for staying the impugned order or the issuance of the arrest warrants.

6. Legal Precedents and Statutory Provisions Relevant to the Case:
The court referred to several judgments to support its decision. It cited "Kanti Bhadra Shah v. State of W.B." to affirm that detailed orders are not required at the stage of taking cognizance. The court also referred to "P. Chidambaram v. Directorate of Enforcement" and "Y.S. Jaganmohan Reddy v. CBI" to highlight the need for a stricter approach towards economic offences. The court noted that the PML Act is a complete code with overriding provisions, as stated in "Gautam Kundu v. Directorate of Enforcement." The court also considered the statutory remedy under Section 70(2) of Cr.P.C., which the petitioners had not availed.

Conclusion:
The court dismissed the stay applications, upholding the cognizance order and the issuance of non-bailable warrants against the petitioners. The court emphasized the seriousness of economic offences and the necessity of a stricter approach in dealing with such cases. The petitioners failed to demonstrate any prima facie case or legal ground for staying the impugned order or the arrest warrants. The court's decision was based on a thorough examination of the relevant facts, legal precedents, and statutory provisions.