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2022 (9) TMI 1626 - HC - Money LaunderingMoney Laundering - proceeds of crime - predicate offences - schedule offences - offences punishable under Section 13(1)(e) r/w 13(2) of Prevention of Corruption Act, 1988 - HELD THAT - This Court, while considering an identical issue, in the case of VIJAY MADANLAL 2022 (7) TMI 1316 - SUPREME COURT , has held ' The solitary circumstance which would enure to the benefit of the accused in both these cases is acquittal of accused 1 and 2 in Criminal Appeal No. 414 of 2016 and the said acquittal becoming final and all the allegations of offences under the Act being linked to the offence under the IPC against accused 1 and 2. Therefore, if the proceedings under the PML Act are permitted to be continued in the teeth of the undisputed facts and the judgments of the Apex Court (supra), it would become an abuse of the process of the law and would result in miscarriage of justice.' In the light of the facts obtaining in the case at hand and the judgment rendered by this Court, if the proceedings under the PMLA are permitted to be continued qua the petitioners, it would become an abuse of the process of law and would result in miscarriage of justice. The impugned proceedings in Special Case No. 59/2016 pending before the III Additional District and Sessions and Special Judge, D.K., Mangaluru stand quashed - The Criminal Petition is allowed.
Issues Involved:
1. Continuation of proceedings under the Prevention of Money Laundering Act (PMLA) after acquittal in predicate offences. 2. Interpretation of Section 3 of the PMLA. 3. Impact of the Supreme Court's judgment in Vijay Madanlal Choudhary on ongoing cases under the PMLA. 4. Application of the principle of abuse of process of law. Detailed Analysis: Issue 1: Continuation of Proceedings under PMLA after Acquittal in Predicate Offences The petitioners challenged the proceedings in Special Case No. 59/2016 under the PMLA, arguing that the 1st petitioner had been acquitted of offences under the Prevention of Corruption Act, 1988. The acquittal had become final, and as per the Supreme Court's judgment in Vijay Madanlal Choudhary, proceedings under the PMLA cannot continue if the accused is acquitted of the predicate offences. Issue 2: Interpretation of Section 3 of the PMLA The court examined the interpretation of Section 3 of the PMLA, which defines the offence of money laundering. The Supreme Court in Vijay Madanlal Choudhary clarified that Section 3 captures every process and activity in dealing with proceeds of crime, not limited to the final act of integrating tainted property into the formal economy. The explanation inserted in 2019 clarified that the word "and" preceding "projecting or claiming" should be read as "or," indicating that any activity connected with proceeds of crime constitutes money laundering. Issue 3: Impact of the Supreme Court's Judgment in Vijay Madanlal Choudhary on Ongoing Cases under the PMLA The court relied heavily on the Supreme Court's judgment in Vijay Madanlal Choudhary, which held that if a person is acquitted or the criminal case against them is quashed, there can be no offence of money laundering against them or anyone claiming such property linked to the scheduled offence. This judgment was reiterated in the case of Parvathi Kollur, where the Supreme Court quashed proceedings under the PMLA following the acquittal of the accused in the predicate offence. Issue 4: Application of the Principle of Abuse of Process of Law The court concluded that continuing proceedings under the PMLA against the petitioners, given the acquittal of the 1st petitioner in the predicate offence, would amount to an abuse of the process of law and result in a miscarriage of justice. The court emphasized that the proceedings under the PMLA are linked to the predicate offence, and with the acquittal becoming final, the continuation of the PMLA proceedings would be unjust. Conclusion: The court allowed the criminal petition and quashed the proceedings in Special Case No. 59/2016 pending before the III Additional District and Sessions and Special Judge, D.K., Mangaluru. The court held that allowing the PMLA proceedings to continue would be an abuse of the process of law and result in a miscarriage of justice, given the final acquittal of the 1st petitioner in the predicate offence. Order: 1. The Criminal Petition is allowed. 2. The impugned proceedings in Special Case No. 59/2016 pending before the III Additional District and Sessions and Special Judge, D.K., Mangaluru stand quashed. 3. Consequently, I.A.No. 1/2022 stands disposed.
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