2024 (1) TMI 336 - HC - Money Laundering

Money Laundering - provisional attachment order - economic offences can be quashed at the investigation stage on the ground that the matter had been settled between the parties as they were public wrongs committed against the society? HELD THAT - In the case of Ram Kishan Fauji 2017 (3) TMI 1780 - SUPREME COURT , the Apex Court had not accepted the view expressed by a full Bench of the Andhra Pradesh High Court, wherein it held that, when the power was exercised under Article 226 of the Constitution for quashing of a criminal proceeding, there was exercise of criminal jurisdiction. A distinction was sought to be made between proceedings for quashing of the FIR under Section 482 of the Criminal Procedure Code and the powers exercisable by the High Court under Article 226 of the Constitution for quashing of criminal proceedings. The present writ appeals are not maintainable and are accordingly dismissed.

Summary

Issues involved:
The issues involved in this judgment include the quashing of economic offences at the investigation stage, the authority of proceedings under the Prevention of Money Laundering Act, 2002, and the maintainability of writ appeals in relation to quashing of criminal proceedings.

Issue 1: Quashing of Economic Offences at Investigation Stage
The judgment addresses the quashing of economic offences at the investigation stage based on an agreement between the parties involved. The appellants argued that public wrongs committed against society cannot be quashed merely due to a settlement between the parties. However, the respondents relied on the position of law as established in previous cases, emphasizing that if a scheduled offence is quashed by a competent court, there can be no offence of money laundering against the accused. The court refrained from expressing an opinion on this issue due to the non-maintainability of the present appeal.

Issue 2: Authority of Proceedings under PMLA, 2002
The writ petition filed by respondent No. 1 challenged the proceedings initiated under the Prevention of Money Laundering Act, 2002, contending that they lacked authority or adjudication since the FIRs related to the case had been quashed in previous proceedings. The court referred to the judgment in Vijay Madanlal Choudhary case and allowed the writ petition, quashing the impugned ECIR, Original Complaint, and Provisional Attachment Order. The appellants raised concerns regarding the legality of quashing economic offences at the investigation stage.

Issue 3: Maintainability of Writ Appeals
The judgment also delves into the maintainability of the writ appeals in light of the decision in Ram Kishan Fauji case. The court dismissed the present writ appeals, citing the ruling that when the power is exercised under Article 226 of the Constitution for quashing a criminal proceeding, it does not constitute the exercise of criminal jurisdiction. The court emphasized that the subject of controversy or nature of the proceeding, rather than the specific legal mechanism used, determines the jurisdiction exercised in criminal matters.