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TMI Blog2021 (8) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... case [ 2018 (10) TMI 330 - MADRAS HIGH COURT ] relied by the respondents, wherein, it was held that adjudication, prosecution and trial under PML Act is independent of scheduled offence. Further, a reading of the provisions of PML Act makes it clear that though the commission of scheduled offence is a fundamental pre-requisite for initiating proceedings under the PML Act, the offence of money laundering is independent of the scheduled offences. The scheme of the PML Act indicates that it deals only with laundering of money acquired by committing the scheduled offence. In other words, the PML Act deals only with the process or activity of proceeds of crime, including its concealment, possession, acquisition or use and it has nothing to do with the launch of prosecution for scheduled offence and continuation thereof - Once an offence under the PML Act is registered on the basis of a predicate/scheduled offence, then it stands on its own and it does not require support of predicate/scheduled offence. As per the scheme of the PML Act, it does not depend upon the ultimate result of the predicate/scheduled offence. Even if the predicate/scheduled offence is compromised, compounded, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and the points that arise for determination in all these cases are similar, all these cases are taken up together and are being disposed of by this common order. 2. Criminal Petition Nos.1073, 1074, 1076 of 2021 are filed under Section 482 of Cr.P.C., seeking to quash the order of even date dated 11.01.2021, passed in S.C.Nos.1 of 2016, 2 of 2017, 2 of 2018 respectively by the Principal Special Judge for CBI Cases, Hyderabad. Criminal Petition Nos.1077, 1079, 1080 and 3119 of 2021 are filed under Section 482 of Cr.P.C., seeking to quash the order of even date dated, 11.01.2021, passed in Crl.M.P.No.1411 of 2020 in S.C.No.1 of 2016, Crl.M.P.No.1414 of 2020 in S.C.No.2 of 2016, Crl.M.P.No.1412 of 2020 in S.C.No.1 of 2016, Crl.M.P.No.1421 of 2020 in S.C.No.2 of 2018 respectively, by the Principal Special Judge for CBI Cases, Hyderabad. Criminal Revision Case No.83 of 2021 is filed under Sections 397 401 of Cr.P.C., challenging the order, dated 11.01.2021 passed in Crl.M.P.No.1416 of 2020 in S.C.No.2 of 2017 by the Principal Special Judge for CBI Cases, Hyderabad. 3. Heard the submissions of Sri S.Niranjan Reddy, learned senior counsel representing Sri N.Naveen Kumar, lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner under Section 362 Cr.P.C. requesting the Court below to take up the hearing on charges in scheduled offence, i.e., C.C.No.9/2012 before S.C.No.1/2016, was dismissed. The petitioner in Criminal Petition No.3119 of 2021 is M/s.Caramel Asia Holdings Pvt Ltd. It is challenging the order, dated 11.01.2021, passed in Crl.M.P.No.1421 of 2020 in S.C.No.2 of 2018 by the Court below, whereby, the petition filed by the petitioner under Section 362 Cr.P.C. requesting the Court below to take up the hearing on charges in scheduled offence, i.e., C.C.No.27/2013 before S.C.No.2/2018, was dismissed. The petitioner in Crl.R.C.No.83 of 2021 is M/s.Bharathi Cement Corporation Private Limited. The prayer in the said Criminal Revision Case is to call for the records pertaining to Crl.M.P.No.1416 of 2020 in S.C.No.2 of 2017, on the file of the Court below and set aside the common order, dated 11.01.2021, passed by the Court below and direct the Court below to hold simultaneous trial of scheduled offences and offences under PML Act or in the alternative, in immediate succession with the trial of scheduled offences preceding the trial of offences under PML Act in terms of Section 44(1) of PML Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be stand-alone offences, it cannot be held that those offences can be tried regardless of the consequences of scheduled offences. In comparable legislations and offences, Courts have consistently held that the consequential offences must await or must be tried along with the predicate/scheduled offences. A person who is not at all arrayed as an accused in a scheduled offence or even if he is acquitted of the scheduled offences, he can still be prosecuted under PML Act. In the scheduled offences, if all the accused are acquitted, it is deemed that no crime is committed by them and hence, none of them can be convicted under PML Act. Unless and until a predicate/scheduled offence exists, there is no money laundering offence. Predicate/scheduled offence is foundation and offence under PML Act is the structure/framework thereon. If foundation is removed, then the structure/framework standing thereon would fall. Money laundering offence starts at the end of predicate offence. Money laundering offence necessarily depends upon the predicate/scheduled offence. The ideal way is that the predicate/scheduled offence has to be tried at the first instance, or there can be simultaneous trial of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rden of proof in Scheduled offences and the offences under PML Act is different. 7. Per contra, Sri T.Surya Karan Reddy, learned Assistant Solicitor General of India representing the respondents in Criminal Petitions and Sri B.Narasimha Sarma, learned Standing Counsel for Enforcement Directorate appearing for the respondent in Criminal Revision Case would contend that by virtue of amendment to Section 44 in PML Act in the year 2013, the scheduled offences and money laundering offences are to be tried by the same Court. Trial of offences of money laundering and trial of scheduled offence are not joint trial, the fate of the former does not depend on the latter. The offence of money laundering is a stand-alone offence. A person who has not committed a scheduled offence, can well be prosecuted for an offence of money laundering. In such a situation, the prosecution need not wait for the scheduled offence to be established. The offence of money laundering under Section 3 of PML Act is an independent offence and the said view is fortified by a catena of judgments. Further, the trial of offences under PML Act is completely different from the trial of scheduled offences. The subject Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f proving the proceeds of crime and untainted property is on the accused, which burden has not been discharged by the petitioners. Hearing on charges must be taken up without any delay. Stalling of hearing on charges at this stage would not be legally appropriate and it would be against the spirit and object of the provisions of Section 44 of PML Act and the same would cause great hardship to the respondent/complainant and ultimately prayed to dismiss the Criminal Petitions and the Criminal Revision Case. In support of their submissions, the learned Assistant Solicitor General of India and the learned Standing Counsel for Enforcement Directorate relied on the following decisions. 1. Smt.Soodamani Dorai Vs. Joint Directorate of Enforcement 2018 SCC Online Mad 3138 2. Babulal Verma and another Vs. Enforcement Directorate and another 2021 SCC Online Bom 392 3. J.Sekar @ Sekar Reddy Vs. Directorate of Enforcement Decided on 04.02.2021 in Crl.O.P.Nos.24200 24202 of 2017 by the High Court of Madras 8. In view of the above rival contentions, the points that arises for determination in these Criminal Petitions and the Criminal Revision Case is as follows: 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 under Section 200 Cr.P.C r/w Sections 45, 3, 4, 8(5) of PML Act before the learned Metropolitan Sessions Judge, Hyderabad, and it was numbered as S.C.No.106/2015. Subsequently, the said S.C. is transferred to the Court below and re-numbered as S.C.No.1/2016. A-1 to A-3 have filed three separate applications under Section 309 of Cr.P.C before the Court below requesting to defer all further proceedings in the above said S.C., till the conclusion of the adjudication of the scheduled offence (C.C.No.9/2012), vide Crl.M.P.No.1891/2017 (filed by A-3), Crl.M.P.No.1892/2017 (filed by A-2) and Crl.M.P.No.1893/2017 (filed by A-1) and the above said applications were dismissed by the Court below, vide common order dated 17.01.2020. 10(a). The CBI, Hyderabad, has filed charge sheet in R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1 and five others and the same is numbered as C.C.No.10/2012. Sri V.Vijay Sai Reddy is shown as A-2 and M/s. Jagati Publications Ltd. is shown as A-3 in the above said CC. The Enforcement Directorate, basing on the scheduled offences, filed a private complaint against A1 to A-6 under Section 200 Cr.P.C r/w Sections 45, 3, 4, 8(5) of PML Act before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I, Hyderabad, has filed charge sheet in R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1 and 14 others and the same is numbered as C.C.No.27/2013. Sri V.Vijay Sai Reddy is shown as A-2 and M/s. Caramel Asia Holdings Pvt. Ltd. is shown as A-14 in the above said C.C. The Enforcement Directorate, basing on the scheduled offence, filed a private complaint against A-1 to A-17 under Section 200 Cr.P.C r/w Section 45, 3, 4, 8(5) of PMLA, 2002 before the Court below and the same is numbered as S.C.No.2/2018. 11. The core contentions of the learned senior counsel appearing for the petitioners is that the offences under PML Act are not standalone offences and that they are inextricably linked to the predicate/scheduled offences; if the offences under the Indian Penal Code are not established, proceeds of crime cannot be determined and unless proceeds of crime is not established, any prosecution of the person under PML Act would be premature and would be futile exercise; Unless and until a predicate/scheduled offence exists, there is no money laundering offence; Predicate/scheduled offence is foundation and offence under PML Act is the structure/framework thereon and if fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is connected with criminal activity relating to scheduled offence, but may not be the offender of scheduled offence. It is in this background that it has to be necessarily held that offence under PML Act is a stand-alone offence. Keeping in view the same, if we look at sub-section (b) of Section 44 of the PML Act, it would clearly indicate that the Special Court may take cognizance of the offence upon a complaint by authorized signatory, which means that cognizance would be taken of an offence, which is separate and independent. Even in case of a person who is initially not booked for a scheduled offence but booked later, and subsequently acquitted of the said scheduled offence, still such person can be proceeded under PML Act. It is not necessary that a person has to be prosecuted under the PML Act, only in the event of such person having committed scheduled offence. Prosecution can be independently initiated under PML Act only for the offence of money laundering. 13. Further, the word Explanation to a statutory provision came up for consideration before a Full Bench of the Hon ble Supreme Court in S. Sundaram Pillai vs. V.R.Pattabiraman (F.B.) AIR 1985 (SC) 582. The Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and the explanation thereof makes it clear that a wider definition is given to proceeds of crime including property not only derived or obtained from the scheduled offence, but also any property which may directly or indirectly be derived or obtained as a result of criminal activity relatable to a scheduled offence. Section 3 of PML Act further clarifies that a person shall be guilty of offence of money laundering, if such person is found to have directly or indirectly attempted to indulge or knowingly assists or knowingly is a party or is actually involved in concealment, possession, acquisition, use, projecting as untainted property, claiming as untainted property and the process or activity connected with the proceeds of crime is a continuing activity, which itself shows the offence of money laundering is a continuing offence. Thus, a bare reading of Sections 2(1)(u), 3 and 44(1)(d) of PML Act along with explanations thereof makes it clear that the offence of money laundering is a stand-alone offence and the trial proceedings are completely different to that of the scheduled offence. Trial of money laundering offence is independent trial and it is governed by its own provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not involved in money laundering. Therefore, adjudication, prosecution, trial under PMLA is independent of scheduled offence. This is also clear in view of Section 24 of the PMLA, 2002, which deals with burden of proof as it clearly stated that the burden of proof relating to proceeds of crime involved in money laundering is on the accused whereas the burden of proof in the scheduled offences is on the prosecution. Therefore, though the ECIR may have been registered following a scheduled offence, the property in possession of the person, against whom allegations are made, is found to be involved in money laundering, then he can be punished independently of the scheduled offence. Therefore, mere stay of the predicate offence is not a ground for preventing the Directorate of Enforcement from proceeding under the PMLA, 2002. 17. Further, a reading of the provisions of PML Act makes it clear that though the commission of scheduled offence is a fundamental pre-requisite for initiating proceedings under the PML Act, the offence of money laundering is independent of the scheduled offences. The scheme of the PML Act indicates that it deals only with laundering of money acquired by comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: 24. Burden of proof: In any proceeding relating to proceeds of crime under this Act- a) In the case of a person charged with the offence of money-laundering under Section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and b) In the case of any other person the Authority or court, may presume that such proceeds of crime are involved in money-laundering. In view of the aforesaid mandate, the requisite burden of proof in both the cases is different. Further, Section 71 of PML Act mandates that the provisions of PML Act have overriding effect on any other law for the time being in force. 19. Further, if an accused in a predicate/scheduled offence is highly influential, either monetarily or by muscle power, and by use of his influence he/she gets the predicate/scheduled offence compromised or compounded to avoid further investigation in the offence under PML Act, it will put to an end to the independent investigation of Enforcement Directorate, which is certainly not the intention of Legislature in enacting the PML Act. Therefore, if the contention of the learned senior c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kely to get acquittal in the predicate/scheduled offences would not be a ground to stall the proceedings. In the given facts and circumstances of the case, it is difficult to state the result of the case of predicate/scheduled offence and its bearing over the proceedings or decision rendered in the subject offence under PML Act. Therefore, the contention raised that without proving the guilt of the accused in predicate/scheduled offences, trial of offences under PML Act cannot be proceeded with, is unsustainable. In view of the above observations, it cannot be held that unless proceeds of crime are established by putting the accused on trial, any prosecution of the person under PML Act would be premature and would be futile exercise. Since the offence under PML Act is a stand-alone offence and not dependent on predicate/scheduled offences, it can be proceeded with independently without awaiting the outcome of result of scheduled offences or commencement of trial in the predicate/scheduled offences. Further, there is no requirement under law to conduct trials of both category of cases simultaneously. Therefore, the contention that Money Laundering offence starts at the end of predic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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