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TMI Blog2023 (2) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... or the criminal case against the accused person has been quashed, there can be no offence of money laundering against the accused person. Further, in the said judgement it has also been stated that no offence of money laundering can be made out against any person having property linked to the person accused in the scheduled offence. Therefore, in the event that the accused person is discharged in the PMLA case itself, the impugned PAO and the attachment of such property linked to the accused person, from the said PAO, deserves to be quashed. The Supreme Court in Indrani Patnaik Anr. v. Enforcement Directorate and Ors. [[ 2022 (11) TMI 1311 - SUPREME COURT] ] has recently held that there cannot be any prosecution in relation to an offence for which the accused person has already been discharged. This position of law in terms of proceedings under the PMLA has been recently considered by this Court in EMTA Coal Limited and Ors. v. The Deputy Director of Directorate of Enforcement, [[ 2023 (1) TMI 694 - DELHI HIGH COURT] ]. In the said judgement it was held that once the closure report in the offences under respective FIRs has been filed, no criminality is ascertainable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be loaded in Omkar 1973 project, Worli, was mortgaged with the Yes Bank Ltd and therefore, the specific saleable area of 3.5 lakhs sq ft. of M/s Surana Developers (Wadala) LLP for Anand Nagar SRA CHS Scheme was mortgaged only with the Yes Bank Ltd. and the other saleable area of identified units of area 5 lakhs sq ft. in Omkar 1973 Worli was mortgaged with M/s Piramal Realty Pvt. Ltd. only with residual charge on Yes Bank Ltd. and the rest of saleable area of Omkar 1973 project, Worli was mortgaged with both Yes Bank Ltd. and M/s Piramal Realty Pvt. Ltd. She further stated that earlier the saleable area of 3.5 lakhs sq ft of Anand Nagar SRA CHS Scheme was mortgaged only with the Yes Bank Ltd; that by the year 2019, the development right of Surana Developers (Wadala) LLP s LOI for Anand Nagar SRA CHS Scheme, was also cross collateralised for Rs. 1300 crores which was the other loans of Yes Bank Ltd. and therefore, the total saleable area mortgaged for Rs. 1300 crores and the total saleable area of Anand Nagar SRA CHS Scheme were now mortgaged with both Yes Bank Ltd. and M/s Piramal Realty Pvt. Ltd. due to cross collateral; that Yes Bank Ltd. has primary charge on the Omkar 1973 Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 410 crores vide letter dated 31.12.2015 to M/s. Surana Developers, Wadala LLP 3. The petition was first listed before this Court on 27th July, 2022, when status quo was directed. The relevant extract of the said order reads as under: 3. Till the next date of listing, the respondent shall stand restrained from taking further steps as contemplated under Section 8 of Prevention of Money Laundering Act, 2002. The petitioner shall also stand restrained from disposing of or creating any third party rights or encumbering the property which forms subject matter of the provisional order of attachment. 4. It is submitted by ld. Counsel for the Petitioner that on 18th January, 2023, the closure report has been filed by the Mumbai Police has been accepted by the ld. Trial Court and that even the case instituted by the Enforcement Directorate has been closed. 5. The case of the Petitioner is that it was merely one of the lenders to M/s Omkar Realtors and Developers Pvt. Ltd. ( ORDPL ), which extended credit facility to ORDPL for construction of the Worli Project and in a completely improper manner, its flats have been attached by the ED in the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With this, all the applicants in the respective applications Exh.166 to 173 prayed their discharge. xxx xxx xxx 11. The Prosecution Complaint indicates that, companies Accused No.1, 2, 12 to 17 are arrayed by ED for Mr. Babulal Varma (A3) and Mr.Kamalkishor Gupta (A4). These companies allegedly got status of legal entities because of Mr.Babulal Varma (A3) and Mr.Kamalkishor Gupta (A4). Both of them (A3 A4) were discharged after as C Summary acceptance order dt.12.02.2021 passed by the Ld. 3Rd J.M.F.C. became absolute and final. Therefore, the present PMLA case against Accused No.1, 2, 12 to 17 cannot survive continue. These entities cannot be prosecuted for the PMLA offence in the absence of Scheduled Offence. There are no sufficient grounds for proceeding against Accused No.1, 2, 12 to 17 in the instant PMLA case relating to ECIR/MBZO-II/20/2020 based on the FIR No.109/2020 for Predicate Offence . In this way, upon consideration of record of the case and the documents submitted therewith, and after hearing the submissions of the Accused persons (A1,A2, A12 to A17) and the prosecution in this behalf, I consider that there is not sufficient ground for proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the PMLA case itself, the impugned PAO and the attachment of such property linked to the accused person, from the said PAO, deserves to be quashed. 10. This legal position has been subsequently affirmed by the Supreme Court in the following cases. i. Parvathi Kollur v. Enforcement Directorate [Criminal Appeal No. 1254/2022, decided on 16th August, 2022], ii. Adjudicating Authority v. Shri Ajay Kumar Gupta Ors. [Criminal Appeal Nos. 391-392/2018, decided on 2nd December, 2022], iii. Directorate of Enforcement v. M/s Obulapuram Mining Company Pvt. Ltd [Criminal Appeal No.1269/2017, decided on 2nd December, 2022]. 11. Vide order dated 16th August, 2022, in Criminal Appeal No.154 of 2022 titled Parvathi Kollur v. Enforcement Directorate , the Supreme Court also specifically referred to the paragraph as mentioned above in Vijay Madanlal Choudhary (supra) and held that when the accused person has been acquitted in the scheduled offence under the PMLA, the closure of the proceedings under the PMLA against persons said to connected to the accused person would be the natural consequence. The relevant portion of the said judgment reads as under: 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a facie, made out sufficient ground for proceeding against the Appellants for offences under the Act of 2002. 7. Learned Counsel for the Appellants has contended that the issue as involved in this matter is no more res integra, particularly for the view taken by a 3-Judge Bench of this Court in the case of Vijay Madanlal Choudhary and Ors. v. Union of India and Ors. decided on 27.07.2022 where, the consequence of failure of prosecution for the scheduled offence has been clearly provided in the following terms: 187. .......(d) The offence Under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the crimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence for the same, which substratum should legally exist in the form of a subsisting (not quashed) criminal complaint/inquiry or if it did exist the accused has since been discharged or acquitted by a Court of competent jurisdiction. 13. The Supreme Court in W.P.(C) 368/2021 titled Indrani Patnaik Anr. v. Enforcement Directorate and Ors. has recently held that there cannot be any prosecution in relation to an offence for which the accused person has already been discharged. The relevant portion of the said order of the Supreme Court reads as: Learned senior counsel has submitted that in the present case, prosecution of the petitioners in relation to the scheduled offence, on which the proceedings under the Prevention of Money-laundering Act, 2022 (PMLA) were based, have already come to an end with the petitioners having been discharged from V.G.R. Case No. 59 of 2009(T.R. Case No. 80 of 2011) by the order dated 27.11.2020, as passed by the High Court of Orissa in Criminal Revision No. 831 of 2018. Learned counsel would submit that in the given state of facts and the law declared by this Court, there cannot be any prosecution for the alleged offence of money-laund ..... X X X X Extracts X X X X X X X X Extracts X X X X
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