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2022 (2) TMI 1126 - HC - Money LaunderingMoney Laundering - attachment of property - Seeking grant of interim relief - whether the Petitioner is entitled for interim relief based on any distinct circumstances or as an exceptional case, much particular that since he has been exonerated by the Income Tax authority, by the Adjudicating Authority and by the State of Chhattisgarh where the Petitioner is in employment? - HELD THAT - The Prevention of Money Laundering Act, 2002 was introduced as its statement of objects and reasons mentioned, to make money laundering an offence and to attach property involved under money laundering, so that serious threat to the financial system of India is adequately dealt with. It is worth setting out the statement of objects and reasons of the Act in full - The PMLA , being a Special Act, has provided certain mandatory provisions in order to ensure the effective investigation of the offence of money laundering. The economic offences not only affect individuals alone but damage the economy as well. Chanakya once said that the king who steals from the Rajkosh (treasury-public money) should be punished by the harshest sentence for he not only steals from an individual but the citizens of the Nation. It is high time where we as a society should take charge of it and sharp tools like PMLA to eradicate corruption once and for all. It is our responsibility that no one can take advantage of grey areas and loopholes. The provisions of the PMLA indicate that it is a Special Act and is a complete code itself, which does not come into the purview of other criminal law statutes. The provision of Code of Criminal Procedure do not prevail over the PMLA except in exceptional circumstances. The documents on record would show that the investigation under PMLA, 2002, is at very initial stage and, though, the Petitioner has been exonerated in other proceeding, but, at this stage, it would not be proper to arrive at conclusion that no offence under PMLA, 2002 is made out. The reply filed by the respondent authorities would show that under the PMLA, they have only got two opportunities to inquire from the Petitioner. The Petitioner is bound to submit his statements, documents to the respondent authorities to establish his innocence at the first instance, so as to avoid further proceedings under the provisions of the PMLA, 2002 - this Court does not find any sufficient ground where further proceeding of the impugned ECIR and addendum to the ECIR can be stayed. The Petitioner is not entitled to get any interim relief as prayed for. Application dismissed.
Issues Involved:
1. Quashing of proceedings and setting aside of ECIR. 2. Interim relief to set aside proceedings of impugned ECIR. 3. Legality of the Provisional Attachment Orders under PMLA. 4. Relevance of exoneration in Income Tax and other proceedings to PMLA charges. 5. Application of the Code of Criminal Procedure to PMLA proceedings. 6. Allegations of delay and harassment in investigation. 7. Validity of the investigation and prosecution under PMLA. Issue-wise Detailed Analysis: 1. Quashing of proceedings and setting aside of ECIR: The petitioner filed a writ petition under Section 482 of the Code of Criminal Procedure to quash the proceedings and set aside the ECIR bearing No. ECIR/01/NGR/2011 and its addendum dated 10.02.2020. The petitioner argued that the initial ECIR was registered based on an unverified preliminary report by the Income Tax Department, which led to an FIR by the Economic Offences Wing (EOW) and subsequent proceedings by the Enforcement Directorate (ED). The petitioner had been exonerated by the Income Tax Appellate Tribunal (ITAT) and the State Government, which dropped departmental proceedings against him. 2. Interim relief to set aside proceedings of impugned ECIR: The petitioner sought interim relief to stay the proceedings of the impugned ECIR until the final disposal of the case. The petitioner argued that the prolonged investigation and repeated provisional attachment orders, despite exoneration in other proceedings, amounted to harassment. The court, however, found that the economic offences involved serious allegations and the investigation was ongoing. Thus, the interim relief was denied. 3. Legality of the Provisional Attachment Orders under PMLA: The petitioner challenged the Provisional Attachment Orders (PAO) issued under Section 5(1) of the Prevention of Money Laundering Act (PMLA), 2002. The petitioner contended that the PAOs were issued without any fresh material and were based on the same set of allegations already adjudicated by the Adjudicating Authority, which had quashed the initial PAO. The court noted that the investigation under PMLA was at an initial stage and the petitioner was required to provide statements and documents to establish his innocence. 4. Relevance of exoneration in Income Tax and other proceedings to PMLA charges: The petitioner argued that since he had been exonerated in Income Tax proceedings and departmental inquiries, the PMLA proceedings should not continue. The court referred to the decision in Radheyshyam Kejriwal v. State of West Bengal, which held that exoneration in adjudication proceedings on merits could impact criminal prosecution on the same facts. However, the court distinguished the PMLA proceedings as involving different facts and a higher standard of proof, thus allowing the continuation of the PMLA investigation. 5. Application of the Code of Criminal Procedure to PMLA proceedings: The petitioner argued that the provisions of the Code of Criminal Procedure (Cr.P.C.) should apply to PMLA proceedings, citing Section 218 of Cr.P.C., which bars joint trials for separate offences. The court acknowledged that PMLA is a special act with mandatory provisions ensuring effective investigation of money laundering offences. The court emphasized that the PMLA provisions take precedence over Cr.P.C. except in exceptional circumstances. 6. Allegations of delay and harassment in investigation: The petitioner claimed that the investigation had been unduly prolonged for over 11 years, causing harassment. The respondents countered that the petitioner had a history of non-cooperation and filing frivolous petitions to delay the investigation. The court found that the petitioner had not cooperated with the investigation and the delay was partly due to his actions. The court emphasized the seriousness of economic offences and the need for thorough investigation. 7. Validity of the investigation and prosecution under PMLA: The court evaluated whether the petitioner was entitled to interim relief based on his exoneration in other proceedings and the ongoing PMLA investigation. The court referred to the Supreme Court's guidelines in Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra, which emphasized caution in granting interim relief in criminal proceedings. The court concluded that the petitioner was not entitled to interim relief as the PMLA investigation was ongoing and involved serious allegations of money laundering. Conclusion: The court denied the interim relief sought by the petitioner, allowing the PMLA investigation to continue. The court emphasized the seriousness of economic offences and the need for thorough investigation, despite the petitioner's exoneration in other proceedings. The court left all contentions open for final adjudication at the time of the final hearing.
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