2021 (12) TMI 432 - HC - Money Laundering

Money Laundering - provisional attachment of property - proceeds of crime - scheduled offences - offences under Section 45 read with Sections 70 and 8(5) of the Prevention of Money-Laundering Act, 2002 - HELD THAT - The complaint by the Authorised Officer is akin to a private complaint under Section 200 of Cr.P.C. and it is not a final report by Police Officer under Section 173(2) of Cr.P.C. It is clearly stated in the complaint that it is filed by the Officer, who is duly authorized by the Central Government to file complaint in writing in tune with the second proviso to Section 45(1) of the PMLA. Both the Sections 44 and 45 of the PMLA commence with the non-obstante clause, indicating the complaint in writing by a duly Authorised Officer to be taken cognizance by the learned Special Judge without the accused being committed, notwithstanding anything contained in the Cr.P.C. - this Court has no hesitation to hold that the plea of the petitioner/A3 regarding locus of the respondent to file the complaint without registering F.I.R. under Section 154 of Cr.P.C. is unfounded and held against the petitioner. In the subject complaint, the respondent herein pray for two reliefs. One to proceed against the accused persons for money-laundering and second to confiscate the proceeds of crime. As far as the punishment for money-laundering is concerned, Section 4 of the Act prescribes rigorous imprisonment for a period of not less than three years, but which may extend to seven years and shall also be liable to fine. Provided the proceeds of crime involved in money-laundering relating to offences under the Narcotic Drugs and Psychotropic Substances Act, the period of imprisonment may extend to ten years. The finding of the adjudicating authority is not a clean chit to the petitioner herein for the offence of money-laundering. In the opinion of this Court a prima facie satisfaction of the adjudicating authority in a preventive proceedings regarding certain properties, no way stand in the way of prosecuting the person accused of the offence of money-laundering, which covers not only possession but also use or concealment - even assuming the finding of the adjudicating authority has reached finality, the summons issued to the petitioner herein cannot be treated as premature or illegal, since the petitioner is liable to face the trial both in his individual capacity as well as a person in-charge and responsible for the conduct of the business of A1 Company, which has alleged to have contravened the provisions of the PMLA. Petition dismissed.

Summary

Issues Involved:
1. Statutory infirmity in taking cognizance without registering an FIR.
2. Effect of adjudicating authority's finding on provisional attachment of property.

Issue-wise Detailed Analysis:

1. Statutory Infirmity in Taking Cognizance Without Registering an FIR:

The petitioner challenged the summon issued under Section 61 of Cr.P.C., contending that the Enforcement Directorate's complaint was taken cognizance by the Special Judge without registering an FIR as required under Section 154 of Cr.P.C. The court analyzed Sections 44 and 45 of the PMLA, which include non-obstante clauses, indicating that the Special Court can take cognizance of a complaint in writing by a duly authorized officer without the accused being committed, notwithstanding anything in the Cr.P.C. The court held that the plea regarding the locus of the respondent to file the complaint without registering an FIR is unfounded. The complaint by the authorized officer is akin to a private complaint under Section 200 of Cr.P.C. and not a final report by a police officer under Section 173(2) of Cr.P.C. Thus, the court concluded that the petitioner's argument lacks merit and held against the petitioner.

2. Effect of Adjudicating Authority's Finding on Provisional Attachment of Property:

The petitioner argued that since the adjudicating authority found the provisional attachment of his property unsustainable, the prosecution under Section 45 read with Sections 70 and 8(5) of the PMLA should not continue. The court clarified that the adjudication process under Chapter III of the PMLA is independent and preventive, ensuring that proceeds of crime are not concealed or transferred pending trial. The finding of the adjudicating authority that the properties are not proceeds of crime does not equate to a clean chit for the offence of money-laundering. The court emphasized that the offence of money-laundering includes activities such as concealment, possession, acquisition, use, and projecting or claiming as untainted property. The process or activity connected with proceeds of crime is a continuing activity. Therefore, the court held that the adjudicating authority's finding does not prevent the prosecution of the petitioner for money-laundering.

The court also addressed the petitioner's claim of no connection with the first accused company, finding it a self-serving statement contrary to the evidence collected. The court noted that the adjudicating authority confirmed the provisional attachment order regarding the company in which the petitioner had pecuniary interest. Under Section 70 of the PMLA, the petitioner, as a person in charge and responsible for the conduct of the business of the company, is liable to face trial.

Conclusion:

The court dismissed the petition, stating that the plea regarding the locus of the respondent to file the complaint without registering an FIR is unfounded and the adjudicating authority's finding on provisional attachment does not prevent the prosecution for money-laundering. The trial court is directed to proceed with the complaint expeditiously.