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TMI Blog2016 (5) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... summoning of a person to face trial in respect of an offence, is a serious matter and the court should examine in detail and record a finding that a person, prima facie, is guilty of an offence. In the present case, the opposite parties concealed the material fact in the complaint that the petitioner had already been discharged from the scheduled offence and no trial was pending against him. The impugned summoning order was passed by the learned Sessions Judge assuming that the trial in respect of the schedule offence was pending against him while as a matter of fact, no such trial was pending on the date when the complaint was filed and the summoning order was passed. The impugned summoning order therefore suffers from manifest error of law and is liable to be quashed. - U/S 482/378/407 No. 1914 of 2015 - - - Dated:- 10-5-2016 - Mahendra Dayal, J. For the Appellant : Sanjay Mani Tripathi, Kapil Mishra, Umesh Kumar Yadav For the Opposite Party : A.S.G., Ankit Srivastava, S. B. Pandey, Shiv P. Shukla ORDER Mahendra Dayal, J. The petitioner by means of this petition under section 482 Cr.P.C. has prayed for quashing of the order dated 30.04.2015 passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt departments and funds were also made available to the Society. The funds were deposited in the project related bank account. It was mandatory for the Society to release the payment in respect of a project by account payee cheque only. However, the then Chief Engineer in connivance with the Accountant, released payment under their joint signatures through bearer cheques favouring different departmental engineers. The amount of cheques was fraudulently withdrawn by the accused persons in cash for unlawful gain. It was also stated in the complaint that during investigation it was revealed that the petitioner was the person behind the scam. He became member of LACCFED on 01.04.2010 and was elected as Chairperson on 06.04.2010. He appointed Sri Praveen Kumar Singh as P.R.O. and embezzled government fund by fraudulently withdrawing funds through bearer cheques in the names of the different engineers which were allotted to certain construction work under different government sponsored schemes. It was also revealed during investigation that Sri Praveen Kumar Singh was an Advocate. He came close to the petitioner in a court case. It was further revealed that during the relevant period Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in respect to them was malafide and was initiated due to political rivalry. The petitioner had opted to approach the trial court with an application for discharge on the ground that no offence is made out against him and the trial court by a very detailed order dated 17.03.2015 discharged the petitioner from all the scheduled offences except the offence under section 174-A IPC. The offence under section 174-A IPC, is not a scheduled offence and the trial court found him guilty for this offence for the reason that the petitioner had not appeared before the court, in response to proclamation issued under sections 82 Cr.P.C. it has also been submitted by the learned counsel that against the order refusing to discharge the petitioner under section 174-A IPC, the petitioner approached this Court by way of filing application under section 482 Cr.P.C. and this Court after a detailed hearing found that the offence of section 174-A IPC is not made out against the petitioner. It also needs mention here that the revision filed by the State against the discharge order bearing Crl. Revision No. 348 of 2015 was also dismissed by this Court on 19.02.2016. The submission on behalf of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner remained Chairman of the Society during the period April 2010 to February 2011. However, it is not disputed that the period of the offence of embezzlement of funds of the Society, is between February 2011 to September 2011. It is admitted by the informant during trial of scheduled offences. It has also been submitted on behalf of the petitioner that the prosecution has failed to prove that the petitioner acquired any immovable property during this period. In these circumstances, when it was not proved that the petitioner received any proceeds of crime during this period, the offence under section 3 of the Prevention of Money Laundering Act cannot be said to have been made out against him. There is also no evidence to the effect that the petitioner received any amount either in cash or by way of cheque. The entire prosecution case rests on the presumption that being Chairman of the Society, the petitioner must have received the proceeds of crime. The petitioner was neither authorised to issue any cheque nor any financial power vested with him. The learned court below has, therefore, rightly discharged him from the scheduled offences on the ground that there was no credibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusal of the deeds of purchase, would make it clear that all the properties were either agreed to be purchased or purchased prior to February 2011. Since the petitioner has been illegally summoned, he has approached this Court for quashing of the summoning order as well as the proceedings of the complaint on the ground that no prosecution can proceed against him when he has been discharged from the scheduled offences and it has not been proved that the petitioner received any proceeds of crime during the period February 2011 to September 2011. Shri Shiv P. Shukla learned counsel appearing on behalf of Union of India and Enforcement Directorate has, on the other hand, submitted that by the amendment in the Prevention of Money Laundering Act, 2002 which was enforced on 03.01.2013, the ingredients to attract the offence of section 3 of the Act, have undergone considerable change and as per the substituted section, the proceeds of crime includes its concealment, possession, acquisition or dues and projecting or claiming it as untainted property. After the amendment, this aspect of the matter has been examined by various High Courts. It has been held that after the amendment in secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to wait for the scheduled offence to be established. It can independently prosecute and place material to show that he had knowingly assisted or was responsible for laundering of the illicit wealth. Learned counsel for the opposite parties has also placed reliance upon a judgment of Hon'ble Karnataka High Court rendered in the case of K. Sowbaghya v. Union of India. In this case the Hon'ble Karnataka High Court has examined it in detail as to whether a person against whom scheduled offence is not alleged, can be prosecuted for the offence of money laundering. The Hon'ble Karnataka High Court has observed that in such a situation in which the petitioner contemplates that a person who is acquitted of the scheduled offence cannot be prosecuted for an offence of money laundering, is also not correct since the judgment of the court acquitting for a scheduled offence would be relevant evidence for the proceedings of money laundering offences. There could also be a situation where a person accused of a scheduled offence may not be available on account of his death or if he absconds. There would also be cases where the accused may be acquitted on technical grounds. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing huge loss to the government exchequer. It was found during investigation that these funds were invested in acquiring immovable properties and were laundered in an attempt to project it as untainted in the form of immovable properties. The wife of the petitioner was also examined during investigation and her statement was also recorded in which she clearly stated that she was a house wife and the income of her husband is the only source of her income. She also admitted having signed several documents on the instruction of her husband. She has also shown her ignorance about the source of income. It has also been found during investigation that the petitioner formed several companies in his name as well as in the name of his wife and other family members to acquire various properties in the names of these companies. Many of these companies were not found doing any business but the property was acquired in the name of these companies. These facts prove beyond reasonable doubt that these properties were acquired by the petitioner out of the proceeds of the crime. Learned Sessions Judge after examining the entire material and the contents of the complaint has passed the summoning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eds of crime has been defined in section 2(1)(u) of the Act, which is reproduced as under:- (u) proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property. The definition of proceeds of crime reveals that proceed of crime means any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence or the value of any such property. Thus, the proceeds of crime is any property obtained as a result of criminal activity relating to a scheduled offence. Thus, unless there is criminal activity relating to a scheduled offence, there can be no proceeds of crime. Now it has to be examined in the light of the law laid down by the Hon'ble Supreme Court as well as various other High Courts as to whether a person can be prosecuted for the offence of money laundering in the absence of any scheduled offence and in the absence of any proof that the property was acquired by him as a result of criminal activity relating to scheduled offence. Learned counsel for the opposite parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39; is used in section 3 so as to ensure that an element of mens rea is present to attract the offence of money laundering. In these circumstances, the question of any innocent person being prosecuted for the said offence does not arise. At any rate, even if in a given case, a person who is not guilty of money laundering is prosecuted erroneously then the remedy is to move the appropriate forum, for termination of such prosecution and not for striking down the section itself. The Hon'ble Karnataka High Court with the aforesaid findings came to the conclusion that striking down the amendment made under section 3 of the PML Act is not at all needed but it is open for a person who claims himself innocent, to approach the appropriate forum for termination of his prosecution. So far as the power to attach the property provisionally is concerned, the Hon'ble Karnataka High Court held that this provision is not at all unconstitutional and the property of a person can be provisionally attached by the competent authority even if there is no FIR against such person and no prosecution is pending against him. It was held by the Hon'ble Karnataka High Court that the provision reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the offence of Money-Laundering would also come to an end. It has also been kept open by the Karnataka High Court that a person against whom complaint under section 3 of the PML Act has been filed and he is being prosecuted for the offence of money-laundering, he can show before the court that he is innocent and has not received any proceeds of crime. In the present case, the opposite parties have filed the complaint after the discharge of the petitioner from the scheduled offence alleging therein that the petitioner has received proceeds of crime by committing scheduled offences. The opposite parties by filing supplementary-affidavit have given details of the properties which have been allegedly acquired by the petitioner during his tenure as Chairman of the society. The petitioner in his supplementary-affidavit has also given details of the properties which have been acquired by him. It has been contended by the learned counsel for the petitioner that there is only one property in respect of which the sale-deed was executed during the period of offence. This property is a house situated in Mohalla Kakadev Kanpur and the sale-deed of this house was executed in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Enforcement Crl. Misc. Case No. 5581 of 2014 decided on 09.04.2014, the petitioner had approached the Hon'ble Delhi High Court by filing a petition under section 482 Cr.P.C. for quashing of the proceedings under sections 3 and 4 of the PML Act. This petition was allowed on the ground that the Enforcement Directorate could not produce any legally admissible evidence against the petitioner. In this case also the proceedings pending in the court of Special Judge Anti Corruption, Dehradoon were quashed by the Uttrakhand High Court and after that Delhi High Court held that there was no evidence to initiate the proceedings under section 3 of the PML Act. In a similar case, the Hon'ble Delhi High Court in the case of Arun Kumar Misra v. Directorate of Enforcement Crl. Misc. Case No. 5508 of 2014 decided on 09.04.2015 while considering the petition under section 482 Cr.P.C. for quashing of the proceedings under section 3 of the Act, came to the conclusion that closure report had been filed by the C.B.I. which was accepted by the Special Judge C.B.I. The Hon'ble Delhi High Court also held that prior to the amendment in section 3, the presence of mens rea was a necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty, have been convicted while some of the chargesheeted accused persons against whom no evidence was found, have been acquitted of the charges. The relevant period of crime as alleged is between February 2011 to September 2011, according to the own showing of the respondents. The immovable properties acquired by the petitioner, relate back to the year 2010, except the one of which the sale-deed was executed on 25.05.2011. In respect of this property, the petitioner has stated that this property was agreed to be purchased in the year 2009 and a considerable amount of sale consideration was paid to the seller in the year 2009 itself. The remaining amount of sale consideration was paid at the time of execution of sale deed in the year 2011 and the said amount was paid by way of demand draft of nationalized bank. Thus, prima facie, there is absolutely no evidence on record to show that the petitioner acquired any property during the crime period except the one of which sufficient explanation have been given by the petitioner. The case of the petitioner was that after his discharge from the scheduled offences, his prosecution cannot be done for the offence of Money-Laundering under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence under section 3 of the Money-Laundering Act is made out against the petitioner in view of the fact that the petitioner has been discharged from the scheduled offences and except the present complaint in which the impugned summoning order has been passed, no case is pending against him. The learned Sessions Judge while passing the impugned summoning order has not taken into account this fact that the petitioner has already been discharged of all the scheduled offences. The properties which were allegedly acquired by the petitioner during crime period, were also not acquired during the offence period, except the one of which sufficient explanation has been given by the petitioner. There was, thus, no sufficient ground to have summoned the petitioner for facing trial under section 3 of the Prevention of Money-Laundering Act. It is a settled law that summoning of a person to face trial in respect of an offence, is a serious matter and the court should examine in detail and record a finding that a person, prima facie, is guilty of an offence. A serious responsibility rests upon the courts before passing of the summoning order and the court must be satisfied that there is sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X
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