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2021 (4) TMI 287 - DSC - Money LaunderingExtension of judicial custody of both the accused - alleged crime of money laundering done by both the accused - HELD THAT - It is proceeds of crime which construes an offence of money laundering under Section 3 punishable under Section 4 of P.M.L.Act, if such a person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following process or activities connected with proceeds of crime namely concealment or possession or acquisition or use or projecting as untainted property or claiming as untainted property in any manner whatsoever, the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. Merely the fact that FIR of scheduled offence on which ECIR was registered has been compounded by accepting C report by concerned J.M.F.C at Aurangabad, in my view cannot be derooted the commission of offence of money laundering, as described in Section 3 punishable under Section 4 of PMLA. Because sub-clause (i) of the explanation of Section 3, which elaborates the activities connected with proceeds of crime i.e may be concealment, may be possession, may be acquisition, may be use, may be projecting as untainted property or may be claiming as untainted property in any manner whatsoever - accepting C summary final report or compounding of scheduled offence will not give automatic nullification of the acts done by the accused under PMLA. There are no hesitation to extend judicial custody of both the accused till ED may file final report. Further, under Section 167 of Cr.P.C., there is adequate grounds, for authorize detention of the accused. Hence, judicial custody of both the accused is extended for next 14 days. The accused has to be remanded to judicial custody. Therefore, question of releasing them on any bond, as prayed does not arise - Application dismissed.
Issues Involved:
1. Extension of judicial custody of the accused. 2. Application for the release of the accused on bond. 3. Validity of the ECIR following the compounding of the scheduled offence. 4. Authority of the Special Court under PMLA to proceed with the case. Detailed Analysis: 1. Extension of Judicial Custody of the Accused: The complainant/ED filed an application (Exh.7) for the extension of judicial custody of the accused, arguing that the investigation into the ECIR is ongoing. The ED has collected substantial documentary evidence indicating the accused's involvement in money laundering related to the Worli 1973 project and the Mahalaxmi SRA project. The ED contended that releasing the accused could lead to tampering with evidence, thus impeding the investigation. 2. Application for Release of the Accused on Bond: The accused filed an application (Exh.8) opposing further remand and seeking immediate release on bond. They argued that the closure report filed by the City Chowk Police Station, Aurangabad, in FIR No.109/2020, which led to the ECIR, has been accepted, rendering the scheduled offence non-existent. Consequently, they claimed that there is no basis for further judicial custody under Section 167(2) of Cr.P.C. The accused were willing to execute bonds to secure their presence as required. 3. Validity of the ECIR Following the Compounding of the Scheduled Offence: The accused argued that the acceptance of the closure report nullifies the basis of the ECIR, citing precedents from the Supreme Court and Bombay High Court, which state that if the initial action is not in accordance with the law, all subsequent proceedings fall through. They relied on cases such as P. Chidambaram vs. Directorate of Enforcement and State of Punjab vs. Davinder Pal Singh Bhullar to support their claim that the ECIR should be invalidated. 4. Authority of the Special Court under PMLA to Proceed with the Case: The prosecution argued that even if the scheduled offence is compounded, the Special Court under PMLA still has the authority to proceed with the case. The Finance Act, 2019, allows the Special Court to take cognizance of offences under Section 3 of PMLA independently of the scheduled offence. The prosecution highlighted that the offence of money laundering is distinct and continues until the proceeds of crime are no longer enjoyed by the accused. Conclusion: The court concluded that the mere acceptance of the closure report for the scheduled offence does not nullify the offence of money laundering under PMLA. The activities connected with proceeds of crime are considered a continuing offence. Therefore, the judicial custody of the accused is extended for another 14 days to allow the ED to complete its investigation. The application for release on bond (Exh.8) is rejected. Order: 1. Both accused are remanded to judicial custody until 01.03.2021. 2. The application for bail on any type of bond (Exh.8) is rejected. 3. Inform the concerned authorities accordingly. Adjourned for appearance on 01.03.2021.
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