2021 (6) TMI 1181 - HC - Money Laundering

Seeking a direction to the Respondents to supply a copy of the ECIR registered under Section 3 4 under the Prevention of Money Laundering Act 2002 - HELD THAT - Issue Notice. Mr. Mahajan appears and seeks and is granted 2 weeks to file the Reply.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions presented and considered in this judgment include:

• Whether the Petitioners are entitled to receive a copy of the Enforcement Case Information Report (ECIR) registered under the Prevention of Money Laundering Act (PMLA), 2002.
• Whether the failure to provide the ECIR violates the Petitioners' rights under Article 21 of the Constitution of India.
• Whether the registered FIR under sections 406, 420, and 120-B of the Indian Penal Code (IPC) should be quashed on the grounds that no offence is made out.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to a Copy of the ECIR

• Relevant legal framework and precedents: The Prevention of Money Laundering Act, 2002, particularly Sections 3 and 4, and the Code of Criminal Procedure, 1973. The court also considered precedents such as the case of Virbhadra Singh v. Enforcement Directorate.
• Court's interpretation and reasoning: The court noted the Petitioners' argument that the ECIR should be supplied as it is a part of the statutory framework and is essential for the Petitioners to understand the allegations against them. The Respondents argued that there is no concept of an ECIR within the PMLA, and the Petitioners are attempting to circumvent the provisions of Section 438 of the Cr.P.C.
• Key evidence and findings: The Petitioners highlighted that the Enforcement Directorate has provided ECIRs in other cases, suggesting a selective approach. The court referenced the order in Virbhadra Singh, where the ECIR was provided.
• Application of law to facts: The court considered the Petitioners' cooperation in the investigation and the ongoing nature of the investigation, weighing these against the Respondents' arguments regarding the absence of a statutory requirement to provide the ECIR.
• Treatment of competing arguments: The court balanced the Petitioners' right to information under Article 21 with the Respondents' procedural arguments, ultimately leaning towards protecting the Petitioners from coercive action.
• Conclusions: The court directed that no coercive action be taken against the Petitioners until the next hearing, indicating a provisional protection while the matter is further considered.

Issue 2: Quashing of FIR under IPC Sections 406, 420, and 120-B

• Relevant legal framework and precedents: Indian Penal Code sections 406 (criminal breach of trust), 420 (cheating), and 120-B (criminal conspiracy). The court considered the requirements for establishing these offences.
• Court's interpretation and reasoning: The court examined whether the allegations in the FIR, on their face, constituted the offences alleged. The Petitioners argued that the FIR did not disclose any offence under the mentioned sections.
• Key evidence and findings: The court did not delve into specific evidence at this stage but focused on the prima facie reading of the FIR.
• Application of law to facts: The court issued a notice for a counter-affidavit, indicating a need to further scrutinize the claims and counterclaims before making a determination.
• Treatment of competing arguments: The court acknowledged the Petitioners' claim of no offence being made out but deferred a final decision pending further submissions from the Respondents.
• Conclusions: The court did not quash the FIR but allowed the proceedings to continue with further examination of the facts and legal arguments.

3. SIGNIFICANT HOLDINGS

• Preserve verbatim quotes of crucial legal reasoning: "Relying on the observation of the Hon'ble Supreme Court in Sushila Aggarwal case, it is directed that till the next date of hearing no coercive action shall be taken against the Petitioners."
• Core principles established: The judgment emphasizes the importance of balancing procedural requirements with the fundamental rights of individuals under Article 21, particularly in the context of anticipatory bail and the provision of investigation-related documents.
• Final determinations on each issue: The court provided temporary relief to the Petitioners by preventing coercive action related to the ECIR issue and deferred the decision on the FIR quashing pending further proceedings.