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2024 (7) TMI 115 - HC - Money LaunderingMoney Laundering - amassing substantial assets through corrupt and illegal means - seeking issuance of necessary directions including ad-interim ex-parte order restraining the respondent from contemplating any proceedings including criminal proceedings against the petitioner - HELD THAT - The Hon ble Apex Court in case of Vijay Madanlal Choudhary 2022 (7) TMI 1316 - SUPREME COURT has held that offence of money laundering can be a continuing offence, irrespective of the date and time of commission of scheduled offence. It has also been held that the criminal activity may have been committed before the same had been notified as scheduled offence under PMLA, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, such person may be liable to be prosecuted for offence of money laundering under PMLA. In response to the aforesaid ratio laid down by the Hon ble Apex Court, the argument of the petitioner is that a review petition titled Karti P. Chidambaram v. Directorate of Enforcement 2022 (8) TMI 1373 - SUPREME COURT has been filed before the Hon ble Apex Court for review of the judgment in Vijay Madanlal Choudhary. However, this argument can be of no help to the petitioner as far as instant applications seeking stay of proceedings are concerned since as on date, the question of law stands answered by the three-judge Bench of the Hon ble Apex Court and even though review of the said judgment is pending, no direction has been passed by the Hon ble Apex Court, nor has the judgment been stayed. Thus, the proposition of law laid down by the Hon ble Apex Court shall be binding upon this Court. Considering the aforesaid observations of the Hon ble Apex Court, and the fact that Section 13 of PC Act is a scheduled offence under PMLA, which has not been declared as unconstitutional or violative of any fundamental right by any court of law, this Court is of the opinion that the contention raised on behalf of petitioner that trial court proceedings in this case should be stayed since continuation of the same would amount to double jeopardy is also devoid of any merit. This Court finds no reason to allow the present applications seeking stay of trial court proceedings - Application dismissed.
Issues Involved
1. Stay of proceedings in the PMLA complaint case pending before the Special Court. 2. Validity of prosecution under PMLA when the appeal against the predicate offence conviction is pending. 3. Existence of 'proceeds of crime' under Section 2(1)(u) of PMLA. 4. Retrospective applicability of PMLA provisions. 5. Alleged double jeopardy due to prosecution under both PC Act and PMLA. 6. Whether the continuation of trial under PMLA would cause irreparable injury to the petitioner. Detailed Analysis 1. Stay of Proceedings in the PMLA Complaint Case The petitioner sought a stay of the proceedings in the PMLA complaint case pending before the Special Court. The Court noted that the trial had reached the stage of recording the statement of the accused under Section 313 of Cr.P.C. The petitioner argued that the trial should not proceed due to the pending appeal against his conviction in the predicate offence. However, the Court found no merit in this argument, as the petitioner's conviction had not been stayed, thus the commission of the predicate offence stood established. 2. Validity of Prosecution under PMLA with Pending Appeal The petitioner argued that the trial under PMLA should not proceed as his appeal against the conviction in the predicate offence was pending. The Court held that since the petitioner had already been convicted for the predicate offence and his conviction had not been stayed, the proceedings under PMLA could not be stayed. The establishment of the predicate offence was considered a mandatory prerequisite for proceedings under PMLA. 3. Existence of 'Proceeds of Crime' The petitioner contended that there were no identified 'proceeds of crime' as defined under Section 2(1)(u) of PMLA, making prosecution under Sections 3 and 4 of PMLA unsustainable. The Court opined that whether there were any proceeds of crime and whether an offence under PMLA was made out were matters to be decided during the trial. The Special Court had already taken cognizance of the offence and framed charges, noting that the petitioner had purchased properties and assets worth Rs. 3,37,02,592/- projecting them as bought with untainted money. 4. Retrospective Applicability of PMLA Provisions The petitioner argued against the retrospective application of PMLA, as the check period for the predicate offence was from 1971 to 2007, while the offence under Section 13 of the PC Act was included in the PMLA schedule in 2009. The Court referred to the Supreme Court's decision in Vijay Madanlal Choudhary v. Union of India, which held that money laundering could be a continuing offence irrespective of the date of the predicate offence. The Court noted that the review petition against this judgment was pending, but no stay had been granted, making the Supreme Court's decision binding. 5. Alleged Double Jeopardy The petitioner contended that prosecuting him under both PC Act and PMLA would amount to double jeopardy, as the ingredients of both sections were identical. The Court referred to the Supreme Court's observation that money laundering is an independent offence related to the process or activity connected with the proceeds of crime derived from a scheduled offence. The Court found that Section 13 of the PC Act being a scheduled offence under PMLA had not been declared unconstitutional, and thus, the argument of double jeopardy was devoid of merit. 6. Potential Irreparable Injury to the Petitioner The petitioner argued that allowing the trial to conclude in the PMLA case without adjudicating the pending appeal could cause irreparable damage. The Court noted that the petitioner's conviction for the predicate offence stood, and the trial under PMLA had progressed significantly. The Court dismissed the argument, emphasizing that the trial court proceedings should not be stayed. Conclusion The applications seeking stay of trial court proceedings were dismissed. The Court found no reason to stay the proceedings and held that the petitioner could raise all issues before the trial court at the appropriate stage. The judgment emphasized that nothing expressed should be construed as an opinion on the merits of the case.
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