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TMI Blog2019 (11) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... y such offences, as has happened in this case. The High Court held that the main object of constituting a special court under Money Laundering Act was for a speedy trial of offences under the Act. Hence, it was held that, merely because a complaint was filed by the 2nd respondent before the special court with regard to money-laundering, it cannot be stated that the case investigated by CBI with regard to the aforesaid crime also has to be tried by the special court under the Act. Hence, inasmuch as an offence of money-laundering was not charged by CBI, the proceedings before the CBI cannot be transferred on the mere fact that aforesaid offence was the basis of money-laundering. If such a view was adopted, all the cases pertaining to predicate offences should be stayed once the complaint under Money Laundering Act is filed in special court, it was held - Court opined that since the offence of money-laundering was inextricably linked to the predicate offence, it will be in the ultimate interest of the prosecution to see that charges for predicate offence are proved, so as to bring the amounts involved in the cases for the predicate offence, within the ambit of definition of proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had amassed wealth disproportionate to his known source of income and invested it in the name of his family members. Pursuant to the crime registered, investigation was conducted and final report was laid. Cognizance was taken by the Special Court and pursuant to the summons issued, accused appeared. 3. In the meanwhile, the Assistant Director, Directorate of Enforcement (PMLA) filed Crl. M.P. No. 1106 of 2017 before the Special Court, invoking Section 44(1)(c) of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as Money Laundering Act ). 4. It was claimed that the offence involved in the present case was a scheduled offence under the Money Laundering Act, and that the Directorate of Enforcement had registered crime ECIR/l/KCZO/15 for offences punishable under Sections 3 and 4 of the Money Laundering Act. After completion of investigation, complaint was laid before the designated Court under the Money Laundering Act, which is the Principal Sessions Court, Ernakulam. Cognizance was taken. The matter is now pending as S.C. No. 329 of 2017. 5. It was stated in the above application that, as per the scheme of the Money Laundering Act, the Special Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y under the Act. On the other hand, final report under Section 173 Cr.P.C is filed by the CBI officer conducting investigation into the offences under the PC Act and cognizance is taken without any committal proceedings, in the light of Section 5 of the PC Act. 7. Another contention advanced by the Learned Special Prosecutor was that, Sections 44 and 71 of the Money Laundering Act do not indicate that the Act overrides the PC Act. Hence, the special court under Section 43 of the Money Laundering Act, is not competent to try the offences under the PC Act, as the trial of a case involving an offence under the PC Act can be conducted only by a Special Judge appointed under Section 3 of the PC Act. Learned Counsel contended that the present case cannot be clubbed with the complaint under the Money Laundering Act. The trial of the scheduled offence under the PC Act has to be completed before the Special Judge and that under the Money Laundering Act before the principal sessions court, simultaneously. It was contended by the Learned Counsel that, Section 44(1)(c) of the Money Laundering Act does not oblige the authority under the Money Laundering Act, to seek for committal of the sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laint of the offence of money laundering under sub-clause (b), it shall, on an application by the authority authorized to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed. (d) a Special Court while trying the scheduled offence or the offence of money laundering shall hold trial in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), as it applies to a trial before a Court of Session. 9. An argument advanced by the Special Prosecutor for the CBI was that, both courts involved being sessions courts, no committal proceeding from one sessions court to another was not legally possible. That was negatived by the court below itself, by the impugned order in the light of Section 44(1) which gives an overriding effect over other provisions of Cr.P.C. Further, Section 44(1)(c) specifically provides for an order of committal by one Court to another. Yet another contention of the CBI was that, to attract Section 44(1)(c) of the Money Laundering Act, special court under the PC Act, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 4(3) of the PC Act. 12. Essentially the scheme of the Act, indicates that the offence under the Money Laundering Act is to be tried by the special courts constituted under that Act and the predicate offences are to be tried by the Court competent under the Statute, which had made the predicate offence punishable. The offences under the Money Laundering Act, are to be investigated by the competent authorities under the concerned statute and tried by the Court competent under that Act. Since the sine quo non for a prosecution of an offence under the Money Laundering Act is the existence of proceeds of a predicate offence, it can be said that, conviction of an offence under the Money Laundering Act depends on the establishment of predicate offence and the generation of proceeds of that crime. 13. Evidently, Money Laundering Act does not contemplate that offence under the Money Laundering Act and the predicate offence shall both be tried by the same Special Court under the Money Laundering Act. There is no specific provision in the Money Laundering Act, which prescribes so. In fact, existence of Section 44(1)(c) visualizes the existence of two separate proceedings be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision cannot support the contention that Section 44(1) overrides the substantive law in relation to Statutes covering the predicate offence. 17. Section 71 of the Money Laundering Act envisages an overriding effect. It reads as follows : 71 - Act to have overriding effect. - The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Section 71 itself clarifies that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law. Evidently, the Money Laundering Act has primacy in the field of operation to which the Act extends and within that domain, it will have overriding effect over any other inconsistent provisions in other Statutes. This is the natural and the limited extent of the scope of Section 71 and not an omnibus overriding effect over all other Statutes, as argued by the respondent. This has been consistently laid down by various authorities. The Company Law Appellate Tribunal, in Anil Goel v. Ramanjit, Deputy Director in CP(IB) 70/ALD/2017, resolving the dispute as to whether Money Laundering Act has supremacy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed offences must precede the trial of offence under Money Laundering Act or both the offences being tried simultaneously or trial of offence under the Money Laundering Act should precede trial under Prevention of Corruption Act. The Court was of the definite view that the trial of offence under the Money Laundering Act can never precede the trial of scheduled offences as the prosecution needs to establish that, one having committed scheduled offences has acquired property through proceeds of crime and unless that is established, any trial which proceeds under the Money Laundering Act would be pre-mature and that, if it proceeds, the Court will have to assume that the accused is guilty for the scheduled offences, which would be against the spirit of the Act, and therefore, that option never lies with the Court. 21. The other option available to the special court was to proceed with the trial under the scheduled offences as well as under the Money Laundering Act simoltaneously. As mentioned earlier, the scheme of the Money Laundering Act beyond doubt indicates that, it does not contemplate a trial of predicate offences and the offence under the Money Laundering Act by the special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall wait for the result of the trial relating to scheduled offence. It was held that, this was the practical solution of the matter and that would also expedite the trial. 24. The Learned Special Prosecutor for CBI invited my attention to the decision of the Madras High Court in R. Subramanian v. CBI (Crl. O.P. No. 6703 of 2019). In that case, crime was registered against the officials of bank and a company for offences punishable under Section 120B r/w 420 of IPC and Section 13(2) r/w 13(l)(d) of the Prevention of Corruption Act. After investigation, final report was laid and cognizance was taken by the Additional Metropolitan Magistrate as C.C. No. 9635 of 2014. In the meanwhile, complaint was laid by Enforcement Directorate under Section 43(1) of the Money Laundering Act, against the accused as C.C. No. 4 of 2018, before the special court. One of the accused approached the Madras High Court under Section 482 of Cr.P.C with a prayer to adjourn the proceedings in C.C. No. 9655 of 2014 of ACJM, till it was transferred to the Special Court constituted under Money Laundering Act. 25. The contention of the petitioner therein was that, proceedings in C.C. No. 9635 of 2014 relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, it was held. 27. It is true that, Section 44(1)(a) of the PMLA provides that, an offence under Section 4 of the Act and scheduled offence connected to the offence under Section 4 shall be triable by the special court under the Act. This read with Section 71 of the Act which gives an overriding effect over all other law in force, may at first blush, give an impression that, there is substance in the contention that the offences under Money Laundering Act and their scheduled offences shall be tried by the special court constituted under the said Act. As indicated earlier, Section 71 of the Act does not create an absolute overriding effect of Money Laundering Act over all other statutes. It applies only in a limited sense that the Act will override to the extent of inconsistency of other statutes over Money Laundering Act. The interpretation given to Section 44(1)(a) that, by virtue of it, all the predicate offences and the offences under Money Laundering Act shall be tried by the special court constituted under the Money Laundering Act does neither stand to reason, nor does it get its support from the scheme of that Act. If such an interpretation is given, Section 44(1)(c) whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation that may arise if it is provided that scheduled offences shall simultaneously be tried by the special court under Money Laundering Act. As referred earlier, it may be possible that scheduled offences can be tried only by notified or designated courts, which power, cannot be exercised by the special court under the Money Laundering Act. If such a case is committed to a special court under the PMLA, invoking Section 44(1)(c), the special court will be without jurisdiction to try that case. Necessarily the trial has to fail. Consequently, the prosecution under Money Laundering Act should also fail. Statute cannot be interpreted to lead to such incongruous situation. As referred in Anosh Ekka s case, in such situation, the interpretative tool of reductioad absurdness which means that, whichever procedure under the scheme of Act would appear as absurd is to be discarded and only that procedure which would fulfill the aim and object of the Act is to be adopted. Section 44(1)(c) cannot be interpreted to authorize the Court to commit a case relating to scheduled offence to an incompetent court and thereby defeat the purpose of Act. Section 44(1)(c) also cannot be interpreted to au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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