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2022 (9) TMI 1625 - HC - Money LaunderingMoney Laundering - predicate offence - Continuance of proceedings under the PML Act post-acquittal - offences punishable under Sections 3 and 4 of Prevention of Money Laundering Act 2002 - HELD THAT - The petitioners who were alleged of offences punishable under the PC Act i.e. Section 13(1)(e) read with Section 13(2) of the Act has been acquitted after a full blown trial in the year 2021. By then the judgment of the Apex Court in the case of VIJAY MADANLAL CHOUDHARY 2022 (7) TMI 1316 - SUPREME COURT was yet to be pronounced. The Apex Court rendered its judgment in the aforesaid case on 27.07.2022. The issue in the case at hand stands completely covered by the judgment rendered by the Apex Court in the case of VIJAY MADANLAL CHOUDHARY. The issue in the case at hand need not detain this Court or delve into the matter. In the teeth of the facts narrated hereinabove permitting further proceedings to continue would run foul of the law laid down by the Apex Court and would become an abuse of the process of law resulting in miscarriage of justice. The complaint registered against the petitioners by the Directorate of Enforcement Bengaluru Zone Bengaluru and the proceedings against the petitioners pending before the III Additional District and Sessions Judge D.K. Mangaluru in Spl.C. No. 74/2018 stand quashed - Criminal Petition is allowed.
Issues Involved:
1. Registration of ECIR No. 70/BGZO/2009-10 under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002. 2. Acquittal of petitioners in the predicate offence under the Prevention of Corruption Act, 1988. 3. Continuance of proceedings under the PML Act post-acquittal. 4. Applicability of the Supreme Court judgment in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. 5. Quashing of proceedings under the PML Act based on acquittal in the predicate offence. Detailed Analysis: 1. Registration of ECIR No. 70/BGZO/2009-10 under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002: The petitioners challenged the registration of ECIR No. 70/BGZO/2009-10, which was based on offences punishable under Sections 3 and 4 of the PML Act. This registration stemmed from a complaint registered by the Lokayukta on 01.12.2009 for offences under Sections 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988. 2. Acquittal of petitioners in the predicate offence under the Prevention of Corruption Act, 1988: The Police, after investigating the Lokayukta case, filed their final report on 30.06.2015. The concerned Court, after a full trial, acquitted the petitioners on 05.01.2021. This acquittal became final as no further appeals were made. 3. Continuance of proceedings under the PML Act post-acquittal: Despite the acquittal in the predicate offence, the Enforcement Directorate sought to continue the case under ECIR No. 70/BGZO/2009-10, which had become Special Case No. 74/2018. The petitioners argued that continuing proceedings under the PML Act was without jurisdiction given their acquittal in the predicate offence. 4. Applicability of the Supreme Court judgment in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors: The Court referred to the Supreme Court's judgment in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors., which clarified the scope of Section 3 of the PML Act. The Supreme Court held that the offence under Section 3 is dependent on the illegal gain of property as a result of criminal activity relating to a scheduled offence. If a person is acquitted or the criminal case against them is quashed, there can be no offence of money laundering against them. 5. Quashing of proceedings under the PML Act based on acquittal in the predicate offence: Given the acquittal of the petitioners in the predicate offence and the Supreme Court's ruling, the High Court concluded that continuing proceedings under the PML Act would be an abuse of process and result in a miscarriage of justice. Therefore, the Court quashed the complaint registered in ECIR No. 70/BGZO/2009-10 and the proceedings in Special Case No. 74/2018. Conclusion: The High Court allowed the criminal petition, quashing the complaint and proceedings against the petitioners. The Court discharged the petitioners and ordered the release of all properties attached by the Enforcement Directorate. However, the Court reserved the liberty for the Enforcement Directorate to reopen proceedings if the order of acquittal is set aside by a superior judicial forum.
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