2024 (9) TMI 1664 - HC - Money Laundering

Money Laundering - postponement of commencement of trial - respondent would mainly contend that the Criminal Revision Petition is not maintainable and beyond the scope of Section 397 (2) of Cr.P.C. - HELD THAT - Sub-Section (2) to Section 309 of Cr.P.C stipulates that If the Court after taking cognizance of an offence or commencement of trial finds it necessary or advisable to postpone the commencement of or adjourn any inquiry or trial it may from time to time for reasons to be recorded postpone or adjourn the same on such terms as it thinks fit for such time as it considers reasonable any may by a warrant remand the accused if in custody. In the present case an application filed under Section 309 Cr.P.C. was allowed. The powers conferred on the High Court under Section 397 (1) would be sufficient to entertain the criminal revision petition against the order passed under Section 309 Cr.P.C. When the High Court is conferred with the powers to verify the correctness and legality of the order the revision petition would lie. Thus the maintainability point raised deserves to be rejected. Proceeds of Crime is the focal point for an ECIR whereas scheduled offence is dealt with under the FIR. Further reliance may be relevant with reference to the judgment in the case of Vijay Madanlal Choudhary vs. Union of India and Others 2022 (7) TMI 1316 - SUPREME COURT and Rajinder Singh Chada vs. Union of India 2023 (11) TMI 1085 - DELHI HIGH COURT . Both these judgments have noted the distinction between FIR and ECIR. More so ECIR is treated as an internal document. In the present case PMLA proceedings are set in motion and prima facie findings have already made investigation completed and complaint was filed. The Court has to frame charges and proceed with the trial. At this stage it is not a viable ground to take a view that pendency of criminal appeal against an order of conviction is a bar for the continuance of trial with reference to offence under PMLA - A blanket application of the observations made by the Apex Court in Vijay Madhanlal Choudhary s case 2022 (7) TMI 1316 - SUPREME COURT will not advance the object set out under PMLA 2002 and in turn will defeat its primary object. The Vijay Madhanlal Choudhary s case is a binding precedent for all Courts below and on careful application of the judgement analysing on a case to case basis the output shall defer for each case and not render the same result. The impugned order dated 30.04.2024 in Crl.M.P.No.4236 of 2023 in Special C.C.No.02 of 2022 on the file of the learned Principal Sessions Judge Puducherry is quashed and the criminal Revision Petition stands allowed.

Summary

Issues Involved:

1. Maintainability of the Criminal Revision Petition.
2. Interplay between the proceedings under the Prevention of Money Laundering Act (PMLA) and the pendency of a criminal appeal in a scheduled offence.
3. The scope and application of Section 309 and Section 397 of the Criminal Procedure Code (Cr.P.C.).
4. Distinction between ECIR and FIR in the context of PMLA proceedings.
5. The impact of pending criminal appeals on PMLA trials.

Detailed Analysis:

1. Maintainability of the Criminal Revision Petition:

The respondent contended that the Criminal Revision Petition is not maintainable under Section 397(2) of Cr.P.C., as the impugned order is interlocutory and does not constitute a final order. The court analyzed the powers conferred by Section 397(1) of Cr.P.C., which allows the High Court to examine the correctness, legality, or propriety of any order from an inferior criminal court. The court concluded that the powers under Section 397(1) are sufficient to entertain the revision petition against the order passed under Section 309 Cr.P.C., thus rejecting the maintainability objection.

2. Interplay between PMLA Proceedings and Scheduled Offence Appeals:

The respondent argued that the PMLA proceedings should be postponed due to the pending criminal appeal in the scheduled offence, as an acquittal in the appeal could exonerate the respondent from PMLA charges. However, the court emphasized that PMLA proceedings are distinct and independent, as per Sections 65 and 71 of PMLA, which assert the Act's supremacy over conflicting provisions in other laws. The court held that the pendency of a criminal appeal is not a valid ground to delay PMLA trials, as both proceedings are separate and the PMLA process is a standalone mechanism.

3. Scope and Application of Section 309 and Section 397 of Cr.P.C.:

The court examined Section 309 of Cr.P.C., which allows for the postponement or adjournment of trials. The trial court had postponed the PMLA trial pending the outcome of the criminal appeal. However, the High Court found this to be an error, as the PMLA trial should proceed independently. The court clarified that the powers under Section 397(1) allow for the revision of such orders, and the interlocutory nature of the order does not preclude the High Court's intervention.

4. Distinction between ECIR and FIR:

The court elaborated on the distinction between an Enforcement Case Information Report (ECIR) and a First Information Report (FIR). The ECIR is an internal document used by the Enforcement Directorate for initiating PMLA proceedings and is not equivalent to an FIR. The court referenced the Supreme Court's judgment in Vijay Madanlal Choudhary's case, which highlighted this distinction and affirmed that ECIRs do not require formal registration like FIRs and are used for administrative purposes within the PMLA framework.

5. Impact of Pending Criminal Appeals on PMLA Trials:

The court addressed the concern that a pending criminal appeal could affect the PMLA trial. It was asserted that the mere pendency of an appeal does not justify postponing the PMLA trial, as the proceedings under PMLA are separate and have their own legal framework. The court emphasized that the objectives of PMLA, aimed at protecting the economic integrity of the country, necessitate the continuation of trials irrespective of pending appeals in scheduled offences.

Conclusion:

The High Court quashed the trial court's order postponing the PMLA trial, allowing the criminal revision petition and directing the trial court to proceed with the PMLA trial uninfluenced by the pending criminal appeal. The court reiterated the distinct nature of PMLA proceedings and underscored the importance of upholding the Act's objectives without undue delay.