2022 (12) TMI 313 - HC - Money Laundering

Money Laundering - scheduled offences - In the light of the law laid down by the Supreme Court in VIJAY MADANLAL CHOUDHARY ORS. VERSUS UNION OF INDIA ORS. 2022 (7) TMI 1316 - SUPREME COURT , the learned counsel for the petitioner prayed for quashment of the proceedings before the Enforcement Directorate. HELD THAT - It was held in the case of in Vijay Madanlal Choudhary that The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him. This Writ Petition is allowed and impugned order passed by the respondent in his proceedings is quashed.

Summary

Issues:
Petition to quash order passed by respondent in ECIR/05/CEZO-II/2019 dated 12.06.2020.

Analysis:
1. The case originated from a complaint by Quentin Dawson as Power of Attorney of George Joseph Chambers, leading to the registration of a case against the petitioner and others for various offenses under IPC.
2. Central Crime Branch filed a closure report which was accepted by the Judicial Magistrate I, Poonamallee, but further investigation was sought by CBCID, which was initially dismissed but later allowed by the Additional District and Sessions Court, Chengalpattu.
3. The cases were transferred to CBCID, re-numbered, and the petitioner filed quash petitions before the court for quashing the FIRs in Crime Nos.2 and 3 of 2016.
4. Enforcement Directorate registered a case under the Prevention of Money Laundering Act based on the FIRs, leading to the petitioner challenging the summons issued to him under section 50 of the Act through the present writ petition.
5. During the hearing, it was revealed that the court had already quashed the FIRs in Crime Nos.2 and 3 of 2016, prompting the petitioner to seek quashment of proceedings before the Enforcement Directorate.
6. Citing the law laid down by the Supreme Court in Vijay Madanlal Choudhary case, the petitioner's counsel argued for quashment of the proceedings before the Enforcement Directorate.
7. Referring to paragraph No.467(d) from the Supreme Court judgment in Vijay Madanlal's case, the court emphasized that money laundering charges cannot be sustained if the scheduled offense is discharged, acquitted, or quashed by a competent court.
8. Consequently, the court allowed the writ petition, quashed the impugned order passed by the respondent in ECIR/05/CEZO-II/2019 dated 12.06.2020, and closed the connected miscellaneous petition without costs.