2024 (2) TMI 1090 - SCH - Money Laundering

Money Laundering - predicate offence - manipulation of shares of the Indiabulls Group to benefit their close associates and diverting crores of public money by funding their own entities - HELD THAT - It is not deemed necessary to delve into the question of maintainability of these appeals. This is for the reason that the appellant-ED has got efficacious alternative remedies traceable in law, to proceed against respondent nos.1 to 3 or any other person found to be involved in the alleged offences. The appellant-ED can, for such purpose, initiate appropriate independent proceedings notwithstanding the impugned judgments rendered by the High Courts of Bombay and Delhi. The appellant-ED, besides any other remedy as may be available in law, can resort to two independent proceedings such as (i) approaching the Judicial Magistrate under Section 156(3) of Cr.P.C.; (ii) filing a review petition before the High Court of Bombay to seek clarification of the impugned judgment to the extent that it shall have no effect on the rights of the appellant-ED. Appeal disposed off.

Summary

Issues involved:
The judgment involves the quashing of criminal appeals by the Directorate of Enforcement against judgments passed by the High Courts of Bombay and Delhi, relating to a predicate offence and subsequent proceedings under the Prevention of Money Laundering Act, 2002.

Details of the judgment:

Issue 1: Quashing of predicate offence and subsequent proceedings:
The criminal appeals by the Directorate of Enforcement were directed against judgments quashing the predicate offence and all proceedings arising from it. The Bombay High Court quashed FIR Crime No.0129/2021 and subsequent proceedings, citing questionable conduct of the complainant and abuse of process of law. The Delhi High Court also set aside all proceedings arising from ECIR No.ECIR/07/HIU/2021, following the Bombay High Court's decision. The High Courts found the issue aligned with principles laid down by the Supreme Court in the case of State of Haryana vs. Bhajan Lal.

Issue 2: Locus standi of the appellant-ED to appeal:
A contentious issue raised was the locus standi of the Directorate of Enforcement to appeal. The ED argued that being an affected party due to the annulment of ECIR, it was entitled to challenge the judgments. On the other hand, respondent nos.1 to 3 contended that since the predicate offence was not registered on a complaint by the ED, the High Court was not obligated to hear it before quashing the proceedings.

Judgment and conclusion:
The Supreme Court did not delve into the question of maintainability of the appeals, stating that the ED has alternative remedies to proceed against the respondents. The Court suggested that the ED could initiate independent proceedings, such as approaching the Judicial Magistrate or filing a review petition before the Bombay High Court. The Court clarified that the appropriate forum should determine the issues independently, without being influenced by the observations made by the High Courts. The Court disposed of the appeals without expressing any opinion on the merits of the allegations.