9911796707
TMI Blog2021 (12) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... eld against the petitioner. In the subject complaint, the respondent herein pray for two reliefs. One to proceed against the accused persons for money-laundering and second to confiscate the proceeds of crime. As far as the punishment for money-laundering is concerned, Section 4 of the Act prescribes rigorous imprisonment for a period of not less than three years, but which may extend to seven years and shall also be liable to fine. Provided the proceeds of crime involved in money-laundering relating to offences under the Narcotic Drugs and Psychotropic Substances Act, the period of imprisonment may extend to ten years. The finding of the adjudicating authority is not a clean chit to the petitioner herein for the offence of money-laundering. In the opinion of this Court a prima facie satisfaction of the adjudicating authority in a preventive proceedings regarding certain properties, no way stand in the way of prosecuting the person accused of the offence of money-laundering, which covers not only possession but also use or concealment - even assuming the finding of the adjudicating authority has reached finality, the summons issued to the petitioner herein cannot be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo others for the offences under Section 120-B read with Sections 447, 379, 430, 420, 465, 467, 468, 471, 116, 202, 409, 304, 511, 109, 114 and Section 34 of I.P.C. and Section 3(1)(ii) of TNPPDL Act, 1992 and Section 6 read with Sections 3(a) and 4(a) of the Explosive Substances Act. After completion of investigation, final report before the learned Judicial Magistrate filed in P.R.C. No. 30 of 2018. 5. Since the offences registered by the Keelavalavu Police in Crime No. 161 of 2012 discloses commission of scheduled offence by the accused persons, the Enforcement Directorate being satisfied that there is a prima facie case of an offence of money-laundering as defined under Section 3 of the PMLA and punishable under Section 4 of the said Act, registered ECIR/CEZO/11/2013, dated 18.09.2013 and took up the investigation as per the provisions of the PMLA. Consequently, the Enforcement Directorate issued the Provisional Attachment Order [PAO], dated 23.04.2019 and submitted a complaint dated 01.05.2019 before the adjudicating authority along with copies of relied upon documents. The complaint was taken on file by the adjudicating authority as Original Complaint (OC) No. 1141 of 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, the complaint filed by the Enforcement Directorate before the Special Court to proceed against the petitioner and two others was taken on file and summons were issued. 8. In the said complaint filed by the Enforcement Directorate, Rep. by its Assistant Director, M/s. Olympus Granites Private Limited, Madurai, Rep. by its Managing Director S. Nagarajan is the first accused, S. Nagarajan is the second accused and A. Dhayanidhi [the petitioner] is the third accused. 9. The complaint is filed under Section 45 read with Sections 70 and 8(5) of the PMLA, on the premise that the case in Crime No. 161 of 2012 on the file of Keelavalavu Police Station is the predicate offences under Section 120-B, 411, 420, 471 and 304(ii) of I.P.C. and Sections 3(a) and 4(a) of the Explosives Substances Act, 1908 committed by the first accused, represented by its shareholders viz., the second and the third accused. The alleged offences are offences mentioned in the schedule to the PMLA. The evidence available since indicated prima facie case of an offence of money-laundering, the Enforcement Case Information Report [ECIR] No. 11/2013, dated 18.09.2013, was recorded and investigation co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led reply, would contend that the proceedings initiated for provisional attachment of the property under Chapter - III of the PMLA is independent to the criminal prosecution initiated under Chapter - II of the PMLA. In the instant case, no doubt, the adjudicating authority being not satisfied with the records, had set aside the order of provisional attachment of the proceeds of crime held in the name of the petitioner herein. However, this will not enure any immunity on the petitioner herein from being prosecuted under Chapter - II of the PMLA. Further, the learned Assistant Solicitor General of India would submit that the order of the adjudicating authority relied by the petitioner herein is subjected to appeal and not reached finality. Therefore, the observation and finding of the adjudicating authority have no relevance to the prosecution launched against the petitioner herein under Section 45 read with Sections 70 and 8(5) of the PMLA. The evidence collected in the course of investigation reveals that the first accused Company, in which, the petitioner herein was the Director/shareholder and had interest in the Company while it was making wrongful gain by illegal and unauthoriz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion proceedings for provisional attachment is set aside. Prosecution under Section 45 of the PMLA not dependant on the action of Provisional Attachment or the result of the Provisional Attachment initiated under Section 5 of the PMLA. 15. The learned Assistant Solicitor General would also submit that the provisional attachment of the crime proceeds is a preventive action to secure the proceeds of crime, in case, if it is proved that the accused have involved in money-laundering and the proceeds of crime, which is to be confiscated, should not be concealed/transferred or screened or diluted. To ensure the confiscation of the fruits of the crime, provisional attachment order is sought for. Order passed by the adjudicating authority refusing to confirm the Provisional Attachment shall have no bearing in the judicial process of prosecuting the accused under Chapter - II of the PMLA. 16. Heard the learned counsel for the petitioner and the learned Assistant Solicitor General of India for the respondent. 17. For better understanding of the rival submissions made by the respective learned counsels, it is necessary to analyse the relevant Sections of the PMLA, which are extracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed: Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report for complaint has been made or filed under the corresponding law of any other country: Provided further that, notwithstanding anything contained in first proviso, any property of any person may be attached under this Section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this Section has reason to believe (the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized or frozen under section 17 or section 18, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government: Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person: Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property. (2) The Adjudicating Authority shall, after-- (a) considering the reply, if any, to the notice issued under sub- section (1); (b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf, and (c) taking into account all relevant materials placed on record before him, by an order, record a finding whether all or any of the properties referred to in the notice issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all stand confiscated to the Central Government. (6) Where on conclusion of a trial under this Act, the Special Court finds that the offence of money-laundering has not taken place or the property is not involved in money-laundering, it shall order release of such property to the person entitled to receive it. (7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3) of Section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of money-laundering after having regard to the material before it. (8) Where a property stands confiscated to the Central Government under sub-section (5), the Special Court, in such manner as may be prescribed, may also direct the Central Government to restore such confiscated property or part thereof of a claimant with a le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same Court shall not be construed as joint trial; (ii) the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not. (2) Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause (b) of sub-section (1) of that section as if the reference to Magistrate in that section includes also a reference to a Special Court designated under section 43. 45. Offences to be cognizable and non-bailable.-- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l fallacies in the petitioner's submission. Firstly, the impugned complaint filed by the respondent, reads as below:- ''The complainant is the Assistant Director, Directorate of Enforcement, Ministry of Finance, Government of India and the complaint is being filed under Section 45 of the Prevention of Money-Laundering Act, 2002 [hereinafter referred to as PMLA, 2002], for commission of offence defined under Section 3 of the PMLA, 2002 and punishable under Section 4 of the PMLA, 2002, against the aforesaid persons. It is submitted that the complainant is the authorized person for filing the complaint read with Notification vide Notification GSR.441(E), dated 01.07.2005, as amended by GSR.579(E), dated 29.08.2013, issued by Central Government and Order in F. No. 6/14/2008-ES, dated 11.11.2014 of the Government of India, Ministry of Finance, Department of Revenue, New Delhi, Circular Order (Tech.) No. 8/2015, dated 26.08.2015, issued by the Directorate of Enforcement, H. Qrs. New Delhi.'' 19. Thus, the complaint by the Authorised Officer is akin to a private complaint under Section 200 of Cr.P.C. and it is not a final report by Police Officer under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority is not a clean chit to the petitioner herein for the offence of money-laundering. At the most, it is only a finding regarding the properties, which were sought to be provisionally attached are not proceeds of crime. The said finding of the adjudicating authority not to be understood that the petitioner has not committed a crime of money-laundering. At the risk of repetition, the relevant provision regarding the offence of money-laundering again extracted below:- ''3. Offence of money-laundering.- Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. Explanation.- For the removal of doubts, it is hereby clarified that,- (i) 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 assisted or knowingly is a party or is actually involved in one or more of the following process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating authority though found the listed properties, which are in the name of the petitioner, are not proceeds of crime, at the same time, it has confirmed the PAO in respect of the Company viz., M/s. Olympus Granites Private Limited, in which, the petitioner herein has pecuniary interest. 28. At this juncture, it would be appropriate to peruse the provisions of Section 70 of the PMLA, which reads as below:- ''70. Offences by companies.- (1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything c ..... 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