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TMI Blog2023 (2) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 the accused person and persons said to connected to the accused person would be the natural consequence. 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. In view of the settled legal position in Vijay Madanlal Choudhary and the subsequent decisions and orders thereafter, the properties of M/s Omkar Realtors and Developers Pvt. Ltd., which were attached by the impugned PAO, shall be released. The PAO deserves to be quashed in view of the legal position as held in the above judgments - Petition disposed off. - JUSTICE PRATHIBA M. SINGH For the Petitioner : Mr. Siddharth Aggarwal, Sr. Adv, Mr Ashwani Taneja, Mr. Amit Khemka, Mr. Udit Atul Kokanthankar, Ms. Arshiya Ghose, Mr. Abhishek Chandravanshi, Advocates (M- 9711530305) For the Respondents : Mr. Anurag Ahluwalia, CGSC PRATHIBA M. SINGH, J. (OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Counsels for the Petitioners have relied on the orders dated 24th August, 2022 passed by the Special Court under the PMLA, Greater Mumbai by which two of the directors/shareholders of the Petitioner Company, namely, Sh. Babulal Mulchand Varma and Sh. Kamalkishor Gokalchand Gupta have been discharged. 7. It is further submitted that pursuant to this order of discharge, the Special Court under the PMLA vide its order dated 18th October, 2022 has also discharged the Petitioner-Company- M/s Omkar Realtors and Developers Private Limited. The submission on behalf of the Petitioner relying upon the judgments in Vijay Madanlal Choudhary Ors. v. UOI Ors., 2022 SCC OnLine SC 929 and the recent judgment of this Court in order dated 10th January, 2023 in EMTA Coal Limited and Ors. v. The Deputy Director of Directorate of Enforcement, 2023/DHC/000277 is that the present impugned PAOs can no longer continue and the same deserve to be quashed. Ld. Senior Counsel for the Petitioner also places reliance on the order of the Supreme Court in W.P.(C) 368/2021 titled Indrani Patnaik Anr. v. Enforcement Directorate and Ors. 8. Mr. Anurag Ahluwalia, ld. CGSC on the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heduled Offence and PMLA offence have to be conducted by the Special Judge after commitment of the case relating to the Scheduled Offence. In that event also the instant trial cannot proceed as the Scheduled Offence is not in existence. Hence, I am of the opinion that, the PMLA case relating to both accused in the background of peculiar facts referred above cannot continue to their extent. Therefore, both accused (A3,A4) made out strong prima-facie case that there is not sufficient ground for proceeding against them in respect of trial of the instant PMLA case. Hence, both of them shall have to be discharged. With this, Points No.1 and 2 are answered in the affirmative and following order is passed :- ORDER 1. Applications (Exh.145 and 146) along with Discharge Applications (Exh.149 and 150) are allowed. 2. The initial common order dt.08.08.2022 below Exh.145 and 146 is hereby made absolute. 3. Babulal Mulchand Varma (A3) and Kamalkishor Gokalchand Gupta (A4) are hereby discharged as per Sec.227 Cr.P.C. from PMLA Special No.377 of 2021 (ECIR No: ECIR/MBZO-II/20/2020) from offences under Section 3 punishable under Section 4 of the PML Act. 4. PML ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 against the accused persons. Hence, I am of the opinion to discharge them for the detailed reasons referred above for doing so, as per Sec.227 Cr.P.C. Hence, Point No.1 is answered in the affirmative and following order is passed. ORDER 1 Applications Exhibits 166 to 173 preferred on behalf of Accuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the concerned Court trying the scheduled offence to pronounce on that matter. xxxx xxxx xxxx 290. As a matter of fact, prior to amendment of 2015, the first proviso acted as an impediment for taking such urgent measure even by the authorised officer, who is no less than the rank of Deputy Director. We must hasten to add that the nuanced distinction must be kept in mind that to initiate prosecution for offence under Section 3 of the Act registration of scheduled offence is a prerequisite, but for initiating action of provisional attachment under Section 5 there need not be a pre-registered criminal case in connection with scheduled offence. This is because the machinery provisions cannot be construed in a manner which would eventually frustrate the proceedings under the 2002 Act. Such dispensation alone can secure the proceeds of crime including prevent and regulate the commission of offence of money laundering. The authorised officer would, thus, be expected to and, also in a given case, justified in acting with utmost speed to ensure that the proceeds of crime/property is available for being proceeded with appropriately under the 2002 Act so as not to frus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The procedural safeguards provided in respect of provisional attachment are effective measures to protect the interest of the person concerned who is being proceeded with under the 2002 Act, in the following manner as rightly indicated by the Union of India: XXXX XXXX XXXX xiii. However, under Section 8(6) if the Special Court on the conclusion of the trial finds that no offence of money-laundering has taken place or the property is not involved in money-laundering it will release the property which has been attached to the person entitled to receive it. XXXX XXXX XXXX 307. It is unfathomable as to how the action of confiscation can be resorted to in respect of property in the event of his acquittal or discharge in connection with the scheduled offence . Resultantly, we would sum up by observing that the provision in the form of Section 8 (4) can be resorted to only by way of an exception and not as a rule. The analogy drawn by the Union of India on the basis of decisions of this Court in Divisional Forest Officer v. G.V. Sudhakar Rao , Biswanath Bhattacharya , Yogendra Kumar Jaiswal v. State of Bihar , will be of no avail in the context of the scheme of atta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the accused person and persons said to connected to the accused person would be the natural consequence. The relevant portion of the said judgment reads as under: 2. The Appellants herein have questioned the judgment and order dated 17.12.2020 as passed by the High Court of Karnataka at Bengaluru in Criminal Revision Petition No. 590 of 2019 whereby, the High Court allowed the revision petition filed by the Respondent and set aside the discharge order passed by the IIIrd Additional District and Sessions Judge, D.K., Mangaluru (Karnataka) for the offence Under Section 3 of the Prevention of Money-Laundering Act, 2002 (hereinafter referred to as the Act of 2002 ). 3. The Appellants herein are wife and son of the accused No. 1 against whom the allegations had been that during his tenure as Deputy Revenue Officer, he amassed assets disproportionate to his known source of income to an exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted 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 criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him. 8. Learned ASG appearing for the Respondent, in all fairness, does not dispute the above position of law declared by this Court. 9. The result of the discussion aforesaid is that the view as taken by the Trial Court in this matter had been a justified view of the matter and the High Court was not right in setting aside the discharge order despite the fact that the accused No. 1 had already been acquitted in relation to the scheduled offence and the present appellants were not accused of any sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-laundering in relation to the said offence for which, the petitioners have already been discharged. Learned Additional Solicitor General appearing for the respondents though has not disputed the order dated 27.11.2020 passed by the High Court, discharging the petitioners from the scheduled offence but has submitted that he has not received further instructions as to whether the prosecuting agency has challenged the said order or not. The record as it stands today, the petitioners stand discharged of the scheduled offence and therefore, in view of the law declared by this Court, there could arise no question of they being prosecuted for illegal gain of property as a result of the criminal activity relating to the alleged scheduled offence. That bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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