2024 (5) TMI 1406 - HC - Money Laundering

Money Laundering - proceeds of crime - petitioners are aggrieved of their booking by the Directorate of Enforcement (ED) for alleged commission of offences u/s 3 read with Section 70 and punishable u/s 4 of the Act of 2002 - invocation of inherent jurisdiction of this Court vested in terms of Section 482 of the Code of Criminal Procedure, 1973 - HELD THAT - In the backdrop of an over view of the complaint so derived hereinabove, the petitioners came forward complaining that when in none of the aforesaid FIRs and the chargesheets borne out of them they were and/or are related with alleged commission of any alleged offences to figure as accused persons investigated and chargesheeted by the CBI, Chandigarh, then the jurisdiction exercised by the Directorate of Enforcement (ED) to implicate the petitioners in the case is nothing but usurpation of the jurisdiction of booking the petitioners without any statutory basis leaving the petitioners clueless as to by reference to which culpable statement of facts they have been booked in the company of nineteen (19) other accused persons with whom they have no privity of transaction. With reference to recovery of movable properties during search and seizure conducted under Section 17 of the Act of 2002, the reference with respect to the petitioner No. 2 is in para 9.2 wherein gold jewellery weighing 1765 gms is said to be recovered from the residential house of the petitioner No. 2 and seven (07) arms licences in original were found and seized during search thereby relating it to the petitioner No. 2. The petitioner No. 2 is alleged to have directly indulged in criminal activities related to scheduled offences under Section 2(1) (x) 2(1) (y) of the Act of 2002 and committed the offence of money laundering under Section 3 of the Act of 2002 punishable under Section 4 of the Act of 2002. Prima facie case made out particularly in the manner the court of Special Judge Anti-Corruption (CBI Cases) Jammu has, in a very cryptic order of one and half page, has come to take cognizance of the complaint against the petitioners figuring in the array of twenty one (21) accused persons/concerns without undertaking any examination of the complaint as to in which manner and on what basis the petitioners are being subjected to prosecution at the instance of the complaint-Enforcement Directorate (ED). Issue notice to the respondent - the proceedings in the complaint against the petitioners shall remain stayed till next date of hearing.

Summary

Issues Involved:
1. Legitimacy of the Directorate of Enforcement's (ED) complaint against the petitioners.
2. Jurisdiction and procedural compliance by the Special Judge Anti-Corruption (CBI Cases), Jammu.
3. Involvement of petitioners in the alleged offenses under the Prevention of Money Laundering Act, 2002 (PMLA).

Issue-wise Detailed Analysis:

1. Legitimacy of the Directorate of Enforcement's (ED) Complaint Against the Petitioners:

The petitioners, M/s Madan Bhargav and Sons and Madan Mohan Bhargav, are listed as accused in a criminal complaint by the Directorate of Enforcement (ED), Jammu, based on ECIR/JMSZO/04/2020 dated 13.03.2020. The complaint was filed under Sections 44 and 45 of the PMLA for offenses under Section 3 read with Section 70 and punishable under Section 4 of the Act. The petitioners contend that they were not named in any of the FIRs or chargesheets related to the original offenses, questioning the basis for their inclusion in the ED's complaint. The complaint details various searches and seizures at the petitioners' premises, including the seizure of Rs. 93,50,000/- in Indian currency, gold items weighing 1765 grams, and multiple bank accounts and documents. The petitioners argue that there is no inculpatory evidence against them in the complaint, and their inclusion is unwarranted.

2. Jurisdiction and Procedural Compliance by the Special Judge Anti-Corruption (CBI Cases), Jammu:

The complaint was initially submitted to the Principal Sessions Judge, Jammu, on 06.09.2023, but was returned for presentation before the competent court. It was then presented to the Special Judge Anti-Corruption (CBI Cases), Jammu, on 04.11.2023, and entertained on 05.12.2023. The petitioners challenge the retrospective dating of the complaint's institution to 06.09.2023, arguing that this prejudices their legal status regarding the seizure of assets. They also assert that the Special Judge's cognizance of the complaint was taken in a "very cryptic order of one and half page" without proper examination of the complaint's basis for prosecuting the petitioners.

3. Involvement of Petitioners in the Alleged Offenses Under the Prevention of Money Laundering Act, 2002 (PMLA):

The complaint by the ED names twenty-one accused, including the petitioners, alleging their involvement in money laundering activities. The petitioners argue that they are not implicated in any of the original FIRs or chargesheets related to the offenses under the Indian Penal Code and Arms Act. The ED's complaint accuses petitioner No. 2 of illegally issuing arms licenses for monetary benefits and using various bank accounts to receive illegal funds, which were then integrated into movable and immovable properties. The petitioners dispute these allegations, citing the absence of inculpatory content in the complaint and questioning the jurisdiction of the ED to implicate them without any statutory basis.

Conclusion:

The court issued notice to the respondent and stayed the proceedings in the complaint against the petitioners until the next hearing date, subject to objections from the respondent. The petitioners are required to furnish a registered postal cover for service of the respondent within ten days. The case is listed for further hearing on 07.06.2024.