2021 (8) TMI 404 - HC - Money Laundering

Cheating - proceeds of crime - accused induced gullible victims to invest in a bike and receive monthly pay back, including principle and rental income on that bike for one year under the scheme - accused absconded with the money - accused was not registered as a NBFC with the RBI and hence it was not authorized to initiate any collective investment scheme - HELD THAT - The purpose of enacting the PMLA was to prevent money laundering and to prevent confiscation of property derived from or involved in money-laundering. The purpose of investigation under the PMLA is to unearth the proceeds of crime and attach the same and to punish the offenders who are involved in committing the offence of money-laundering. Section 45 (1A) mandates that no Police Officer shall investigate into an offence under the PMLA unless specifically authorised by a general or special order issued by the Central Government. Just because an investigation for an offence under the PMLA has to be conducted by an officer, unless specifically authorized, it cannot be said that no investigation can be conducted for offences which are mentioned in the schedule of the PMLA by other investigating agencies and that they are precluded from investigating those offences. The offences are distinct and a person can be convicted and sentenced to punishment under the IPC as well as under the PMLA. Since the offence under the IPC and the offence under the PMLA are distinct offences, investigations for offences under the IPC and for offences under Section 3 of the PMLA can be carried out by different agencies. Section 45(1A) of the PMLA does not exclude other agencies from conducting investigations into the offences mentioned in the schedule of the PMLA. The prosecution for the offences under the IPC and other offences mentioned in the schedule of the PMLA, under which the petitioner is charged, are entirely different and mutually exclusive. It cannot be said that the rights of the petitioner under Article 20 (2) of the Constitution of India are infringed. The contention of the learned counsel for the petitioner that conducting two parallel investigations would infringe the rights of the petitioner under Article 20(2) of the Constitution of India is completely unfounded - Petition dismissed.

Summary

Issues Involved:
1. Whether the Economic Offence Wing (EOW) can continue its investigation parallel to the investigation under the Prevention of Money Laundering Act (PMLA).
2. Whether the parallel investigation by EOW infringes the fundamental rights of the petitioner under Article 20(2) of the Constitution of India.
3. Whether Section 45(1A) of the PMLA excludes other agencies from investigating offences mentioned in the schedule of the PMLA.

Issue-wise Detailed Analysis:

1. Parallel Investigation by EOW:
The petitioner argued that the EOW should be prohibited from continuing its investigation in FIR No. 123/2019, PS: EOW, Delhi, due to the ongoing proceedings under the PMLA. The petitioner contended that the EOW’s investigation infringes on their fundamental rights, as it constitutes a parallel proceeding to the one being conducted by the respondent No.2 under the PMLA.

2. Fundamental Rights under Article 20(2):
The petitioner’s counsel argued that the EOW’s investigation amounts to double jeopardy, infringing upon the petitioner’s rights under Article 20(2) of the Constitution of India. This article protects individuals from being prosecuted and punished for the same offence more than once. The petitioner relied on Section 45(1A) of the PMLA, asserting that it excludes the EOW from conducting its investigation when the respondent No.2 is already investigating under the PMLA.

3. Section 45(1A) of the PMLA:
The court examined the provisions of the PMLA, specifically Section 45(1A), which states that no police officer shall investigate an offence under the PMLA unless specifically authorized by the Central Government. The court clarified that this provision does not preclude other investigating agencies from conducting investigations into offences mentioned in the schedule of the PMLA. The court emphasized that the offences under the IPC and the PMLA are distinct, and investigations for these offences can be carried out by different agencies.

Judgment:
The court dismissed the writ petition, stating that the purpose of the PMLA is to prevent money laundering and confiscate property derived from money laundering activities. The court clarified that the EOW’s investigation into the scheduled offences under the IPC is separate and distinct from the investigation under the PMLA. Therefore, the EOW is not precluded from conducting its investigation.

The court further held that the petitioner’s argument of double jeopardy under Article 20(2) is unfounded, as the investigations under the IPC and the PMLA are for different offences. The court concluded that the petitioner’s attempt to stall the investigation by the EOW is untenable and frivolous. Consequently, the writ petition was dismissed.