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TMI Blog2022 (12) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... ame, D.Sridhar, against whom the local police had registered 26 criminal cases covering almost all the provisions of the Penal Code, including murder, attempt to murder, abduction, extortion, criminal intimidation, kidnapping, cheating, etc. It appears that he had fled to the Middle East, but, the investigation of the cases against him proceeded and they are at various stages now. We are told at the bar that Sridhar died in Cambodia on 04.10.2017. 2.2. Since the cases registered against him disclosed the commission of scheduled offences under the Prevention of Money Laundering Act, 2002 [hereinafter referred to as 'PMLA'] viz., 120- B, 302, 307, 364, 384 and 385 IPC and section 3 r/w 25 of the Indian Arms Act, 1959, the Enforcement Directorate registered a case in ECIR No.CEZO/03/2016 on 09.03.2016 and took up investigation under the PMLA. 2.3. It is the case of the Enforcement Directorate that D.Sridhar, by committing various criminal activities, had acquired wealth and purchased various properties in and around Kanchipuram. During the course of investigation, the Enforcement Directorate identified a property measuring 12945 sq.ft. in survey No.557/1A1A batch (for avoiding pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property". When the same immovable property is sold, it cannot lose the characteristics of a proceeds of crime, though the purchaser may claim that he had legally purchased it through lawful sources. Of course, it is open for the purchaser to take a plea of lawful acquisition before the adjudicating authority and it is now too preposterous to hazard a guess on the outcome of such a plea.' 2.6. On 29.12.2016, the adjudicating authority confirmed the order of provisional attachment u/s.8(3) of the PMLA. Challenging the order of the adjudicating authority, the Pothy brothers approached the appellate Tribunal u/s.26 of the PMLA. The Pothy brothers contended that they were innocent purchasers and they did not know that their vendors had acquired the property via criminal activities of her father D.Sridhar. The Enforcement Directorate resisted the claim. However, the Tribunal, by order dated 11.01.2019, gave the following findings: '51. As mentioned earlier, the Appellants are bonafide purchasers and they have not done anything against law. Furthermore, the Appellants are not involved in any crime or money laundering and the Appellants are law abiding citizens running an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reed upon: (i) The respondents shall not alienate or encumber the property sought to be attached; (ii) The respondents are at liberty to use the property as a pathway; (iii)Any road is to be laid by them would be at their own cost, for which, no equity can be claimed; (iv)Any temporary shed put up by them also shall be at their own costs. 9. All these arrangements are subject to the result of the adjudication in S.C.No.74 of 2017 by the Special Court, Chennai. The respondents shall pay a sum of Rs.2 lakhs (Rupees two lakhs only) without prejudice to the contentions in the pending case. These arrangements also subject to the result in S.C.No.74 of 2017 on the file of the Special Court, Chennai. 10. It is made clear that all the issues are left open to be decided by the Special Court. The Special Court, viz., the Principal Judge, City Civil Court, Chennai, shall dispose of S.C.No.74 of 2017 within a period of six months from the date of receipt of a copy of this order. The common order passed by the Appellate Tribunal stands modified to the extent indicated above. Consequently, the respondents shall not alienate and encumber the property sought to be attached and the cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had stated that the provisional attachment order cannot be quashed at the threshold as the said property prima facie appeared to have been acquired through proceeds of crime. However, the appellate Tribunal had set aside the attachment proceedings by rendering a finding of fact in paragraph No.51, extracted above, that the Pothy brothers were not involved in any crime or money laundering. 8. Mrs.G.Hema, learned Special Public Prosecutor [ED], further contended that in paragraph No.53 of the order of the appellate Tribunal, it is stated that the Pothy brothers have given an undertaking that they would have no objection for the criminal proceedings to continue as per law. In view of this undertaking, she stated that they cannot challenge the criminal proceedings in this petition u/s.482 Cr.P.C. 9. We are afraid, we cannot countenance this submission, because there cannot be any estoppel against statute. When a person has a statutory remedy, he cannot contract it out. That apart, the Pothy brothers have filed C.M.A.Nos.3336 of 2019 batch challenging paragraph Nos.53 and 54, extracted above, before a Division Bench of this Court, which has been alluded to above. 10. Now, the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to Ms.Dhanalakshmi Sridhar, who sold the subject property and for safer side, he has settled the balance sale consideration amount of Rs.5,00,00,000/- to Smt.S.Kumari, who was not a seller in the said transaction. Further, to escape from the clutches of law, he has misused the Company and made the payment in the name of "balance sale consideration" through the company that too, not to the seller, but to Smt.S.Kumari who is wife of Sridhar, the Accused 1 herein. The above narrated sale transactions made, within short span of time, between Sridhar, Smt.S.Kumari, Ms.Dhanalakshmi Sridhar, Shri S.Ramesh Pothy and his brothers and M/s.Pothys Private Ltd are very well within the ambit of the provision viz. "Interconnected Activities" under Section 23 of the PMLA, 2002. Keeping the above in view, it stands to reason that Shri S.Ramesh Pothy has indirectly involved and knowingly as a party in the offence of money laundering by way of acquiring the part of proceeds of crime which involved in money laundering in his name and his brothers name, from Sridhar (Accused 1 herein) through Smt.S.Kumarai (Accused 3 herein) and Ms.Dhanalakshmi Sridhar (Accused 4 herein) and made sale consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or activity connected with "proceeds of crime" as defined, which would include concealing, possessing, acquiring or using such property, would be guilty of the offence, provided such persons also project or claim such property as untainted property. Section 3, therefore, contains all the aforesaid ingredients, and before somebody can be adjudged as guilty under the said provision, the said person must not only be involved in any process or activity connected with proceeds of crime, but must also project or claim it as being untainted property. ' (emphasis supplied) 13. A reading of the above clearly shows that for mulcting criminal liability u/s.3 and 4 of the PMLA, the prosecution should place materials before the Court to show that the person has not only acquired the property by committing a scheduled offence, but, he should have projected that property as untainted. 14. In this case, it is the definite case of the prosecution that the impugned property was acquired by Sridhar in the name of his wife by committing various criminal activities. Of course, a name lender to the principal accused can also be brought within the net of section 3 r/w 4 of the PMLA as abettors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of registration. 16. This sale deed is a registered document, which the prosecution themselves rely upon. At this juncture, pertinent it is to point out that as per the judgment of the Supreme Court in State of Orissa vs. Debendranath Padi (2011) 3 SCC 351, u/s.482 Cr.P.C., documents of unimpeachable character of sterling quality can be looked into and relied upon by the Court for the purpose of deciding a quash petition in order to secure the ends of justice. A perusal of the above averments in the sale deed shows that the petitioner had paid various amount by RTGS to Kumari, the mother of Dhanalakhmi Sridhar on 31.12.2015, 13.01.2016 and 23.02.2016 and has also deducted TDS for that. This payment to the mother of Dhanalakshmi Sridhar, which has been reflected in the sale deed itself, cannot amount to an offence u/s.3 r/w 4 of the PMLA. 17. In view of the foregoing discussions, we are of the opinion that the prosecution of the petitioner u/s.3 and 4 of the PMLA in S.C.No.74 of 2017 is an abuse of process of law. Ergo, this Criminal Original Petition is allowed and the prosecution qua the petitioner herein in S.C.No.74 of 2017 on the file of the learned Principal Sessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tracted supra. The order dated 25.09.2019 in the 12 Civil Miscellaneous Appeals were further modified on 11.11.2019 and the Pothys were directed to deposit Rs.10,00,000/- instead of Rs.6,47,25,000/- in S.C.No.74 of 2017, which they have complied with. 6. Since the prosecution against Ramesh Pothy in S.C.No.74 of 2017 was quashed by this Court in Crl.O.P.No.2342 of 2022 by order dated 18.02.2022, Ramesh Pothy filed a petition in Crl.M.P.No.9157 of 2022 in S.C.No.74 of 2017 u/s.8 (7) of the PMLA before the trial Court for releasing his property from attachment. After hearing either side, the trial Court, by the impugned order dated 14.07.2022, has dismissed the same, aggrieved by which, the present revision has been filed. 7. Heard Mr.Nithyaesh Natraj, learned counsel appearing for the petitioners and Mr.P.Sidharthan, learned Special Public Prosecutor [ED] appearing for the first respondent. 8. The Enforcement Directorate has filed a counter strongly objecting to the claim of Ramesh Pothy and praying for sustaining the order of the trial Court. 9. This Court gave its anxious consideration to the rival submissions. 10. Admittedly, the Pothys had paid Rs.5,30,74,500/- as sale cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) of the PMLA is a stand alone section and is not governed by the proviso to Section 8(8) of the PMLA, as the latter would come into effect only after the culmination of the trial, but, whereas the former could be invoked during the pendency of the trial, if it is found that the trial is not progressing "for any other reason". In this case, there was no progress in the trial from 2017 onwards for various reasons. 16. That apart, as alluded to above, the property in question, which belongs to the Pothys cannot be confiscated in lieu of Rs.5,30,74,500/- in the hands of their vendors, to wit, Kumari and Dhanalakshmi. Of course, it would be open to the Enforcement Directorate to attach other properties of Kumari and Dhanalakshmi, if they are not able to trace the sum of Rs.5,30,74,500/-, but, that can, by no stretch of imagination, empower them to attach the buyers' properties for the sin of having purchased the same for a valid consideration from a tainted seller. 17. In fact, the appellate authority himself had questioned the Enforcement Directorate as to why they had not gone behind the sale consideration that was paid by the Pothys to Dhanalakshmi and Kumari, for which, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and the present one passed would certainly be subject to the final orders to be passed by the Special Court, Chennai." 20 As adverted to above, the conditional order in C.M.A. No.2904 of 2019 was passed on 25.09.2019 and more than three years have rolled over since then, despite which, the trial in S.C. No.74 of 2017 has not even progressed to the stage of framing of charges. Since this Court has quashed the prosecution of Ramesh Pothy in S.C. No.74 of 2017 on the file of the Special Court for CBI Cases in Crl.O.P. No.2342 of 2022 by order dated 18.02.2022, the Pothys would be entitled to the sum of Rs.10 lakhs also. It is worth pointing out at this juncture that the Enforcement Directorate has not appealed against the order passed in Crl.O.P. No.2342 of 2022 quashing the proceedings against Ramesh Pothy in S.C. No.74 of 2017. The relevant portion to this effect from the counter affidavit filed by the Enforcement Directorate is extracted: ".... It is learnt that no appeal has been filed by the Department against the quash order of the High Court." In view of the above, the order passed by the Principal Sessions Court, Chennai, dated 14.07.2022 in Crl.M.P.No.9157 of 2022 in S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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