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2022 (9) TMI 1124 - HC - Money LaunderingMoney Laundering - proceeds of crime - scheduled offence - presumption in interconnected transactions - burden of proof - HELD THAT - The Court has gone through the materials on record and finds that there are allegations against the petitioners, the company as well as the Directors who are the petitioners in the respective petitions. In paragraph no.17 of the complaint it has been disclosed that their transactions were limited to provide accommodation entries in lieu of cash only that on receipt of cash, cheques were issued to the companies either as share application or loan. One of the witness Shri Mridul Bhowmick at paragraph no.18 of the complaint has stated that he is not knowing that whether any share certificate is in possession and he was not aware whether any share certificate has been issued at all. Vivek Kumar Goenka has said so in paragraph no.19 of the complaint. Thus, prima facie it appears that intentionally the proceed of the crime has been transferred in the name of share to the petitioners and the petitioners firm. For issuance of process against the accused it has to be seen only whether there is sufficient ground for proceeding against the accused and for that the Court is not required to weigh the evidentiary value on the basis of materials on record and the only thing the Court is required is to apply its judicial mind and in the case in hand the learned court has taken cognizance by a speaking order. There is no illegality in the order taking cognizance. Admittedly, section 23 of the Prevention of Money Laundering Act, 2002 speaks of presumption in interconnected transactions and the burden of proof is on the accused in light of section 24 of the said Act which can be proved in the trial - The complaint does base on the certain statement evidence of certain persons it is not necessary to obey the factual prosecution which is said out of running proceeds of crime and the Court is not required to go into the details of that statement while will hamper or embarrass the learned trial court. Petition dismissed.
Issues Involved:
1. Challenge to the supplementary complaint under sections 44 and 45 of the Prevention of Money Laundering Act, 2002. 2. Allegations regarding proceeds of crime and involvement of petitioners. 3. Mens rea and the role of directors in the alleged crime. 4. Presumption in interconnected transactions under section 23 and burden of proof under section 24 of the Prevention of Money Laundering Act, 2002. 5. Validity of the supplementary complaint and the order taking cognizance. Issue-wise Detailed Analysis: 1. Challenge to the Supplementary Complaint: The petitioners challenged the supplementary complaint dated 3.5.2019 under sections 44 and 45 of the Prevention of Money Laundering Act, 2002, and the order taking cognizance dated 3.5.2019, as well as the cognizance order regarding the supplementary complaint dated 17.7.2018. These complaints were connected to E.C.I.R 02/PAT/2009/AD, pending in the court of the Additional Judicial Commissioner XVI cum Special Judge, PMLA, Ranchi. The Enforcement Directorate alleged that illegally earned properties were converted into various assets, becoming proceeds of crime. 2. Allegations Regarding Proceeds of Crime: The Enforcement Directorate's investigation revealed that proceeds of crime generated by an individual were concealed, transferred, and invested by accomplices in various companies. The modus operandi involved delivering cash to certain individuals who would then arrange accommodation entries through companies engaged in investment, trading, and non-banking financial transactions. These companies would issue cheques to other companies where investments were intended to be made, either as share capital or unsecured loans. 3. Mens Rea and Role of Directors: The petitioners argued that there was no allegation that they knowingly participated in the proceeds of the crime, and thus the Prevention of Money Laundering Act was not applicable to them. They contended that there was no mens rea, and the role of the directors in the alleged crime was not specified. They relied on the case of Dayle De'souza v. Government of India, which emphasized that liability under similar provisions required the person to be in overall control of the company's day-to-day business. 4. Presumption in Interconnected Transactions and Burden of Proof: The Enforcement Directorate countered that section 23 of the Prevention of Money Laundering Act prescribes a presumption in interconnected transactions, and the burden of proof lies on the accused under section 24 of the Act. This was supported by the Supreme Court's decision in Vijay Madanlal Choudhary v. Union of India, which upheld the legality of these sections. The court noted that the presumption and burden of proof would be addressed during the trial. 5. Validity of the Supplementary Complaint and Cognizance Order: The court found that there were sufficient allegations against the petitioners, including the company and its directors. It was noted that intentionally, the proceeds of the crime were transferred in the form of shares to the petitioners. The court emphasized that at the stage of issuing process, it is not necessary to apply a strict standard of proof or examine the probable defense. The court concluded that the order taking cognizance was valid and did not suffer from any illegality. Conclusion: The court dismissed the petitions (Cr.M.P. No.2507 of 2019, Cr.M.P. No. 779 of 2019, Cr.M.P. No. 1861 of 2019, and Cr.M.P. No. 2503 of 2019), vacated the interim orders, and disposed of any I.A. The proceedings, including the order taking cognizance, were upheld.
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