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TMI Blog2022 (5) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... made out against the petitioners. As per Section 44 of PMLA, it is clearly provided that the trial of the scheduled offence of money laundering is to be tried together by the same Special Court, which is to try offence under the Code of Criminal Procedure, therefore, once in the scheduled offence , the petitioners are cited as witness, their prosecution under the PMLA with the same set of allegations, is nothing but misuse of process of law. In the present case, neither there is anything to raise a presumption of fact or law that any of the petitioners were aware that the purchase of land by their companies, sale consideration of which was paid by another company and duly accounted for in their Income-tax returns and later on, the sale of the entire share in the company to M/s. A.B.W. Group through banking channels were proceeds of crime deriving from any scheduled offence - Even there is nothing on record to show that the petitioners were intentionally projecting or claiming any proceeds of crime as untainted one. Therefore, in the absence of the same, merely because in the scheduled offence, the CBI investigation suggest that the other accused who had applied for ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited, Progressive Buildtech Private Limited and Ecotech Buildcon Private Limited. All the 03 companies were land owning companies. The shareholding of the petitioners and Raj Kumar Arora was equally divided and the companies were to engage in land aggregation. Lalit Modi was having shareholding of 10% in all the 03 companies as he was having vast experience in that field and was the sole responsible person to manage the affairs of the 03 land owning companies. The decision relating to sale and purchase of the land on behalf of the companies were exclusively taken by him. Thereafter, the shareholding of the petitioners and Raj Kumar Arora were reduced to 30% each in the aforesaid companies. Subsequently, Lalit Modi purchased the entire shareholding of Raj Kumar Arora and became 40% shareholder whereas the petitioners remain shareholder of 30% each as shareholding in the said companies. It is also submitted that from 25.11.2004 to 25.11.2005, Lalit Modi was solely managing the 03 land owning companies and he purchased certain land in Manesar, District Gurugram on the prevalent market rate which was much higher than the circle rate fixed by the Collector. The sole purpose of pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in favour of A.B.W. Group. It is also submitted that later on, on 24.08.2007, acquisition proceedings were dropped and FIR No.510 dated 12.08.2015 under Sections 420, 465, 467, 468, 471, 120-B IPC and Section 13 of the Prevention of Corruption Act, at Police Station Manesar, District Gurugram, with the allegations that due to issuance of notification by the State Government under Section 4 of the Act of 1894, many land owners in haste, under threat of acquisition, sold their land to private persons and companies and they were under threat to sell their land at throw away prices to the company or their agents and the land was purchased on a much lower price than the prevalent market land rate causing Rs.1500 crores loss to the land owners. Later on, the State Government on 14.08.2015 transferred the investigation to CBI and RC No.RCCHG2015A0019 dated 15.09.2015 was registered. Learned senior counsel for the petitioners has laid much emphasis on the fact that neither in the State FIR nor in the FIR registered by CBI, the petitioners were named as an accused nor any overt act or covert act is attributed to them. It is also submitted that during the investigation, CBI called t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and purchased and sold to M/s. A.B.W. Group, the time upto which the petitioners were holding the share in the company, the details of the other companies held by the petitioners, the source of purchasing the land of the company. The petitioners replied that through a joint company of both the petitioners DSL Properties Private Limited, they have purchased the land. With regard to a question about the detail of the business relation with Atul Bansal or his company, the petitioners have also given the details of the previous transaction at different places. Questions No.7 to 10, along with their reply, reads as under:- Ques:7 Whether you applied for licence to the office of DTCP vide application dated 26.12.2006? Ans: Neither we applied for any licence nor we authorised any person to file the application for seeking licence and we never paid any licence fee from out account. Ques: 8 Are you aware that an application seeking licence on behalf of 15 companies including your three companies was filed on 26.12.2006 to the office of DTCP at Chandigarh? Ans: This fact came to our knowledge when we were called by the Investigating Officer of CBI during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Enforcement Directorate, the petitioners were summoned again by the Enforcement Directorate on 22.07.2019 and again, Saurav Aggarwal, authorized agent of the petitioners appeared and supplied all the relevant documents. It is also submitted that on 05.06.2020, the impugned second supplementary prosecution complaint was filed by the Enforcement Directorate, in which the petitioners, for the first time, were arraigned as accused Nos.5 and 6. The trial Court issued the process and summoned the petitioners vide impugned order dated 30.06.2020, passed by the Special Judge, PMLA, Panchkula. The petitioners have appeared before the trial Court and were granted bail on 28.08.2020. It is next submitted that the co-accused of the petitioners filed CWP No.2204 of 2021, titled as M/s. T.D.I. Infrastructure Limited and another vs Union of India and others , in which on 15.02.2021, while issuing notice of motion, the trial Court was directed not to frame the charge. The petitioners have filed the present petition, in which notice of motion was issued on 07.12.2021 and vide order dated 11.02.2022, the trial Court was also directed to adjourn the case beyond the date fixed before this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners as accused or even in the supplementary statement again, did not arraign them as an accused and after 02 years of the initiation of the prosecution, in the 2nd complaint, the petitioners were referred to as accused Nos.5 and 6, which is contrary to the investigation conducted by CBI. (f) Learned senior counsel for the petitioners has next argued that the Amendment to Schedule 3 of the PMLA Act, has come into force w.e.f. 01.06.2009 whereas, the sale deeds, in question relates to November, 2004 to November, 2005 and in the year 2006, the petitioners company have sold the entire share in favour of M/s. A.B.W. Group, therefore, the prosecution of the petitioners only on the premise that they have earned some profit, while doing the business of sale and purchase of land, do not constitute any offence. (g) Learned senior counsel for the petitioners has also submitted that neither the petitioners had any knowledge about the pendency of any land acquisition proceedings, nor they were authorized persons for the day-to-day business dealings of the 03 land owning companies, for which Lalit Modi was authorized, to conduct the business and it has come in the investigation of CBI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) and (vii) aptly applicable in the facts of the present case. 19. As discussed above, looking to the facts of this case, it is clear by a detailed order of acceptance of the closure report of the schedule offence in RC MA1 2016 A0040 and the quashment of two FIRs by the High Court of the schedule offence and of the letter dated 16.5.2019 of I.T. Department and also the observations made by the Adjudicating Authority in the order dated 25.2.2019, the evidence of continuation of offence in ECR CEZO 19/2016 is not sufficient. The Department itself is unable to collect any incriminating material and also not produced before this Court even after a lapse of 5 V2 years to prove its case beyond reasonable doubt. From the material collected by the Agency, they themselves are prima facie not satisfied that the offence under PMLA can be proved beyond reasonable doubt. The argument advanced by learned ASG regarding pendency of the appeal against the order of Adjudicating Authority is also of no help because against the order of the Appellate Authority also, remedies are available. Thus, looking to the facts as discussed hereinabove and the ratio of the judgments of this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed provisions of the PMLA establishes the pre-requisite relation between the commission of scheduled offence s under the PMLA and the subsequent offence of money laundering. The language of Section 3 clearly implies that the money involved in the offence of money laundering is necessarily the proceeds of crime, arising out of a criminal activity in relation to the scheduled offence s enlisted in the Schedule of the Act. Hence, the essential ingredients for the offence of Section 3 of the PMLA become, first, the proceeds of crime, second, proceeds of crime arising out of the offences specified in the Schedule of the Act and third, the factum of knowledge while commission of the offence of money laundering. In the present matter, at the initial stage of proceedings, the Respondents were charged for offences under Section 21/25/29 of the NDPS Act and 420/468/471/120B of the IPC, however, the learned Additional Sessions Judge, Amritsar, observed that material produced before the Court as well as the allegations made against the Respondents were largely made upon suspicion. Though certain material, properties and cash, were recovered and attached/seized but the fact that such properti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ingredients - A. Re : Direct or Indirect Attempt: In State of Maharashtra v. Mohd. Yakub, (1980) 3 SCC 57, [1983 (13) ELT 1637 (S.C.) ] the Hon'ble Supreme Court observed that - 13. Well then, what is an attempt ? .............. In sum, a person commits the offence of attempt to commit a particular offence when (i) he intends to commit that particular offence, and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence. Thus, an attempt to indulge would necessarily require not only a positive intention to commit the offence, but also preparation for the same coupled with doing of an act towards commission of such offence with such intention to commit the offence. Respondent failed to produce any material or circumstantial evidence whatsoever, oral or documentary, to show any such 'intention' and 'attempt' on the part of any of the petitioners. B. Re : Knowingly Assists or knowingly is a party: In Joti Parshad v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Great emphasis was laid on behalf of the respondent on Section 24 of PMLA which reads after amendment vide Act 2 of 2013 as under - 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. 41. On the basis of the said Section 24 read with Section 3 of PMLA, it was contended on behalf of the respondent that 'knowledge' of the scheduled offence or proceeds of crime is not essential under Section 3, and mere assistance in handling proceeds of crime even without knowledge would attract offence of money laundering, and burden would shift on the accused to prove that he is not involved in money laundering. It was submitted that the petitioners are all adults having knowledge of right and wrong. The bank accounts in which they received payments and made further pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se relatives of Shri Afroz and had banking transaction with him or at his instance would not attract offence of money laundering under Section 3 of PMLA even on prima facie basis. (j) Learned senior counsel for the petitioners has argued that in para No.16.37 and 16.38, the CBI chargesheet has drawn the following conclusions:- 16.37. Investigation has revealed that Sh. Shashi Kant Chaurasia s/o Sh. Kamalkant Chaurasia, r/o R-729, New Rajendra Nagar, New Delhi, Mr. Dilip Kumar Lalwani r/o R-649, New Rajendra Nagar, New Delhi 110060, Mr. Raj Kumar Arora r/o 120/500 (10), Lajpat Nagar, Kanpur and Mr. Lalit Modi r/o E-20, Lajpat Nagar-III, New Delhi 110024, Directors of above companies had purchased around 88 acres land in the above three companies had purchased around 88 acres land in the above three companies from various landowners of village Manesar. 16.38. Investigation has further revealed that the above land was purchased at the rate of Rs.7,70,000/- to Rs.37,51,000/- per acre. The average purchase price of per acre land was around Rs.18.50 lacs. Thereafter, Sh. Atul Bansal, Director of ABW Infrastructure Ltd. And his associate companies had taken over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly allegations as referred to in Para 16.14. (m) Learned senior counsel for the petitioners has submitted that in view of the CBI charge-sheet and other facts, the prosecution of the petitioners by the Enforcement Directorate is liable to be quashed. (n) Learned senior counsel for the petitioners has further referred to a judgment of the Hon ble Supreme Court Nikesh Tarachand Shah vs Union of India , 2018(11) SCC 1 . The operative part of the said judgment, reads as under:- 7. Having heard learned counsel for both sides, it is important to first understand what constitutes the offence of money laundering. Under Section 3 of the Act, the kind of persons responsible for money laundering is extremely wide. Words such as whosoever , directly or indirectly and attempts to indulge would show that all persons who are even remotely involved in this offence are sought to be roped in. An important ingredient of the offence is that these persons must be knowingly or actually involved in any process or activity connected with proceeds of crime and proceeds of crime is defined under the Act, by Section 2 (u) thereof, to mean any property derived or obtained directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nforcement Directorate has without any further evidence, which is of documentary evidence, has nominated the petitioners as an accused. In reply, learned senior counsel for the respondent CBI has not disputed the factual position and has not opted to file reply on behalf of CBI. Separate reply by way of Assistant Director, Directorate of Enforcement, Chandigarh is filed in which, after verifying the detailed investigation conducted by CBI as well as Enforcement Directorate, it is submitted that the offence under the PMLA Act is an independent offence of the predicate offence and to launch prosecution under Section 3 of the Act, it is not necessary that a predicate offence should have been committed. It is also submitted that the Hon ble Supreme Court in Rameshwar vs State of Haryana , 2018(6) SCC 215 , has observed that the role of the middlemen, who have been unjustly enriched at the expense of the landholders and public interest, which was to be achieved by acquisition, should be investigated by CBI and the petitioners are middlemen and therefore, the offence is made out. Learned counsel for respondent No.2 has referred to a judgment of the Sikkim High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint filed under the PMLA as well as the impugned supplementary prosecution complaint, this Court find merit in the case on the following grounds:- (a) Initially the FIR was registered by the State Police and later on, the same was transferred to CBI in view of the direction of the Hon ble Supreme Court in Rameshwar s case (supra). The CBI, on conclusion of the investigation, submitted its report under Section 173(2) Cr.P.C. before the Special Judge, CBI as well as under PMLA, in which both the petitioners were arraigned as a witness Nos.300 and 301. As noticed above, in the CBI charge-sheet, in paragraph 16.37 and 16.38, the CBI did not find any cogent evidence to arraigned the petitioners as an accused in those proceedings. In Para 16.54, Atul Bansal, Director of Aditya Buildwell Private Limited was arraigned as an accused by CBI as he has applied for grant of licence to set up a township and in para 16.136, the CBI investigation suggest that Atul Bansal, in conspiracy with public servants has got the wrongful gain, therefore, as per the CBI investigation, no evidence has come on record against the petitioenrs and thus, they were only cited as witness No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the farmers and then, sold it to Atul Bansal/ABWIL Group of companies and earned huge profits. There is no mention in the entire complaint that the 03 land owning companies, in which the petitioners were shareholders with one Lalit Modi, who was the Incharge of the working of the company, had ever applied for obtaining any licence from any department of the State of Haryana. Even, there is no allegation that the petitioners were found indulged in conspiracy with the State functionaries, who were competent to grant such licence and the only allegation is that the petitioners have purchased the land, which was later on, sold to M/s. A.B.W. Group of Companies through Atul Bansal and in that process, they have earned huge profits. (e) This Court find force in the arguments of learned senior counsel for the petitioners that the petitioners through their companies have only made investment of money and purchased the land, in a legalized manner through registered sale deeds from November, 2004 to November, 2005 and later on in the year 2006, the said 03 land owning companies were purchased by Atul Bansal of M/s. A.B.W. Group, therefore, there is no evidence on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (h) In the first two complaints filed by the Enforcement Directorate, the petitioners were not arraigned as an accused and in the impugned second supplementary statement, the only allegations as per para 16.14(vii) are that the petitioners have purchased the land through their companies, which amounts to proceeds of crime under Section 2(1)(u) read with Sections 3 and 17 of the PMLA. From the perusal of the impugned complaint, on the face of it, it cannot be held that the alleged proceeds of crime as stated in the impugned complaint is a property derived from the criminal activity relatable to a particular schedule or predicate offence, which is not proved as per the CBI investigation. (i) From the bare perusal of the CBI chargesheet, the statement of the petitioners under Section 161 Cr.P.C. as well as 50 of the PMLA, no offence is made out against the petitioners. (j) In view of the judgment of the Hon ble Supreme Court in Joti Parshad s case (supra), from the perusal of the impugned complaint, there is no material to show that the petitioner was a party knowingly or had reason to believe that he is party in an offence committed by the other accused ..... X X X X Extracts X X X X X X X X Extracts X X X X
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