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2023 (10) TMI 1170 - HC - Money LaunderingMoney Laundering - proceeds of crime - Changing hands of settlement money - requirement of impleadment of petitioner - HELD THAT - It is noticed that Soshit Karamchari case 1980 (11) TMI 160 - SUPREME COURT , Fertilizer Corporation case 1980 (11) TMI 158 - SUPREME COURT as well as R.Rathinam case 2000 (2) TMI 881 - SUPREME COURT were rendered prior to 31.12.2009 before the aforementioned amendments kicked in qua Cr.PC. In this view of the matter also, they do not come to the aid of the petitioner. However, as regards Jagjeet Singh case 2022 (4) TMI 1519 - SUPREME COURT , it is post amendment i.e., rendered in 2022 and what Jagjeet Singh case deals with is, right of a victim. This has been elucidatively articulated by Hon'ble Supreme Court in paragraph Nos.14 and 15 of Jagjeet Singh case, holding that Until recently, criminal law had been viewed on a dimensional plane wherein the Courts were required to adjudicate between the accused and the State. The 'victim' - the de facto sufferer of a crime had no participation in the adjudicatory process and was made to sit outside the Court as a mute spectator. However, with the recognition that the ethos of criminal justice dispensation to prevent and punish 'crime' had surreptitiously turned its back on the 'victim', the jurisprudence with respect to the rights of victims to be heard and to participate in criminal proceedings began to positively evolve.' This Court has no hesitation in saying that victimology has no application to implead petitioner. Whether the settlement money has not changed hands? - HELD THAT - This is a case where there is nothing to demonstrate that there is 'proceeds of crime'. This is a private transaction between private individuals / entities and the two individuals /entities have chosen to resort to ADR Alternative Disputes Resolution i.e., arbitration by SIAC Singapore International Arbitration Centre . In the course of arbitration by SIAC, the private entities / individuals have chosen to give a closure to the dispute by entering into a Memorandum of Understanding / Settlement. This Court is also acutely conscious of the position that an Arbitration Tribunal (SIAC) is a Private Tribunal and as far as this Court is concerned, the paramount consideration is, this is not a matter where it is anybody's case, much less the case of prosecution that public money is involved. Paragraph No.467 of Vijay Madanlal 2022 (7) TMI 1316 - SUPREME COURT case is the ratio. It is instructive and we respectfully follow paragraph No.467 of Vijay Madanlal case. In the case on hand, to state with specificity, what is applicable is paragraph No.467(v)(d) of Vijay Madanlal case. This is a case where there is a closure of the predicate offence and therefore, we say that paragraph No.467(v)(d) of Vijay Madanlal case is applicable in all force to the case on hand. In any event, this paragraph No.467(v)(d) of Vijay Madanlal case is now subject to the caveat in Emta Coal case 2023 (7) TMI 885 - SC ORDER , i.e., caveat that if predicate offence is resuscitated or opened, the entire matter will get revived. The rights are preserved as done in Emta Coal case by Hon'ble Supreme Court. Therefore, we make it clear that we respectfully follow the ratio in Vijay Madanlal case paragraph No.467(v)(d) and Emta coal case paragraph No.16 which we have followed in Anil Jain case 2023 (9) TMI 1379 - MADRAS HIGH COURT . Law is well settled that in a Section 482 of Cr.PC quash legal drill, what the Section 482 Court would look into is, uncontraverted averments in the complaint without adding or subtracting to the same. In the case on hand, this legal drill becomes extremely simple as quash prayer turns on the legal point that on closure of predicate offence, ECIR cannot proceed. In this view of the matter, there are no hesitation in saying that the inevitable conclusion is that prayers need to be answered in the affirmative i.e., acceded to. Applications disposed off.
Issues Involved:
1. Quashing of Summons Issued Under PMLA. 2. Standalone ECIR Proceedings Post Closure of Predicate Offence. 3. Implead Petition by a Journalist. Summary: 1. Quashing of Summons Issued Under PMLA: The petitioner sought to quash the summons issued under the Prevention of Money-Laundering Act, 2002 (PMLA), arguing that there can be no Enforcement Case Information Report (ECIR) under PMLA when the predicate offence has been closed. The predicate offence, registered under various sections of the Indian Penal Code (IPC), was closed by the Metropolitan Magistrate based on a closure report dated 02.06.2023, which referred to ongoing arbitration proceedings before the Singapore International Arbitration Centre (SIAC). The petitioner relied on the Supreme Court's decision in Vijay Madanlal Choudhary, which held that there can be no offence of money-laundering if the person is acquitted or the criminal case is quashed. The court found a prima facie case and issued an interim order to stay the ECIR proceedings. 2. Standalone ECIR Proceedings Post Closure of Predicate Offence: The central issue was whether ECIR proceedings could continue under PMLA when the predicate offence had been closed. The court referred to the Supreme Court's decision in Vijay Madanlal Choudhary, which stated that the offence under Section 3 of PMLA is dependent on the illegal gain of property as a result of criminal activity relating to a scheduled offence. The court also cited similar judgments from the Delhi High Court and another Division Bench of the Madras High Court, which quashed ECIR proceedings when the predicate offence was closed. The court concluded that the ECIR proceedings could not continue as the predicate offence had been closed, and quashed the summons issued under PMLA. 3. Implead Petition by a Journalist: An individual claiming to be a journalist filed an implead petition to be added as a respondent in the main criminal original petition. The petitioner argued that he had the locus to seek impleadment under Section 301(2) of the Code of Criminal Procedure (Cr.P.C.), which allows a private person to instruct a pleader to prosecute any person in any court. The court examined various judgments, including those from the Supreme Court, and concluded that the concept of victimology under Cr.P.C. did not apply to the implead petitioner. The court dismissed the implead petition, noting that the petitioner's grievance was primarily about the closure of the predicate offence and not the PMLA proceedings. Conclusion: The court quashed the summons issued under PMLA, holding that ECIR proceedings could not continue when the predicate offence had been closed. The implead petition by the journalist was dismissed. The court also added a caveat that if the predicate offence is resuscitated, the rights and liberties of the Enforcement Directorate to take further steps under PMLA are preserved.
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