2021 (3) TMI 753 - HC - Money Laundering

Seeking grant of Bail - Scheduled Offence - Explanation inserted to Section 44(1)(d) of PMLA - it is submitted that once the Scheduled Offence lodged against the Applicants is compromised/compounded by the Complainant therein, the structure of the present crime registered by ED falls on ground, as it does not survive and is non-est - HELD THAT - It is the settled position of law by a catena of judgments that, a statute is an edict of the Legislature and the conventional way of interpreting or construing a statute is to seek the 'intention' of its maker. A statute is to be construed according to the intent of them, that make it and the duty of judicature is to act upon the true intention of the Legislature. If a statutory provision is open to more than one interpretation the Court has to choose that interpretation which represents the true intention of the Legislature, in other words the 'legal meaning' or 'true meaning' of the statutory provision. The statute must be read as a whole in its context. It is now firmly established that the intention of the Legislature must be found by reading the statute as a whole. It is thus absolutely clear that, for initiation/registration of a crime under the PMLA, the only necessity is registration of a Predicate/Scheduled Offence as prescribed in various Paragraphs of the Schedule appended to the Act and nothing more than it. In other words, for initiating or setting the criminal law in motion under the PMLA, it is only that requirement of having a predicate/Scheduled crime registered prior to it. Once an offence under the PMLA is registered on the basis of a Scheduled Offence, then it stands on its own and it thereafter does not require support of Predicate/Scheduled Offence. It further does not depend upon the ultimate result of the Predicate/Scheduled Offence. Even if the Predicate/Scheduled Offence is compromised, compounded, quashed or the accused therein is/are acquitted, the investigation of ED under PMLA does not get affected, wiped away or ceased to continue. It may continue till the ED concludes investigation and either files complaint or closure report before the Court of competent jurisdiction - The PMLA itself, does not provide for any contingency like the case in hand and argued by the learned counsel for the Applicants. Section 44(b) only provides for filing of a complaint or submission of a closure report by the Investigating Agency under PMLA and none else. Even if the Investigating Agency investigating a Scheduled Offence has filed closure report in it and the Court of competent jurisdiction has accepted it, it will not wipe out or cease to continue the investigation of Respondent No.1 (ED) in the offence of money-laundering being investigated by it. The investigation of Respondent No.1 will continue on its own till it reaches the stage as contemplated under Section 44 of the PMLA. The contention for the learned counsel for the Applicants in that behalf is accordingly answered. There are no merits in the present Application and is accordingly dismissed.

Issues Involved:
1. Legality of the extension of judicial custody.
2. Impact of the "C" Summary Report on the proceedings under the Prevention of Money Laundering Act (PMLA).
3. Validity of the proceedings under PMLA after the predicate/scheduled offence is compromised/compounded.
4. Interpretation of Section 44 of PMLA and its implications on the ongoing investigation by the Enforcement Directorate (ED).

Issue-wise Detailed Analysis:

1. Legality of the Extension of Judicial Custody:
The applicants challenged the order dated 15th February 2021, by the Special Judge, which extended their judicial custody and denied bail. The court examined the detailed remand application filed by the ED, which highlighted the serious nature of the economic offence involving money laundering of ?410 Crores. The court found that the Special Judge did not err in extending the judicial custody, as the investigation required systematic and thorough analysis due to the complex nature of money laundering involving multiple stages like placement, layering, and integration.

2. Impact of the "C" Summary Report on the Proceedings under PMLA:
The applicants argued that the acceptance of the "C" Summary Report by the Judicial Magistrate in the predicate offence (FIR No.109 of 2020) should result in the termination of proceedings under PMLA. However, the court noted that the filing of a closure report in the predicate offence does not affect the ongoing investigation under PMLA. The court emphasized that the PMLA investigation is independent and can continue irrespective of the outcome of the predicate offence.

3. Validity of the Proceedings under PMLA after the Predicate/Scheduled Offence is Compromised/Compounded:
The applicants contended that once the predicate offence is compromised or compounded, the PMLA proceedings should cease. The court rejected this argument, stating that the PMLA investigation stands on its own and is not dependent on the predicate offence's outcome. The court referred to the legislative intent and the provisions of PMLA, which indicate that the investigation under PMLA continues independently to track and investigate money laundering offences.

4. Interpretation of Section 44 of PMLA and its Implications on the Ongoing Investigation by ED:
The court analyzed Section 44 of PMLA, particularly the explanation to Sub-Section (d), which clarifies that the jurisdiction of the Special Court and the ED is not dependent on any orders passed concerning the predicate offence. The court upheld that once an offence under PMLA is registered based on a scheduled offence, the investigation under PMLA continues independently. The court cited various judgments, including those from the Supreme Court and High Courts, affirming that the PMLA is a self-contained statute and the offence of money laundering is an independent offence.

Conclusion:
The court concluded that the ongoing investigation by the ED under PMLA is valid and independent of the outcome of the predicate offence. The extension of judicial custody was found to be proper, and the applicants' request for release from confinement or bail was denied. The applications were dismissed, and the bail application was disposed of accordingly.

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