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TMI Blog2023 (2) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... minality is ascertainable and the respective PAOs as well as the ECIRs are liable to be quashed. In view of the settled legal position in Vijay Madanlal Choudhary and the subsequent decisions and orders thereafter, the properties of Mr. Sachin Joshi and M/s. Muktanand Agro Farming Pvt. Ltd. which were attached by the impugned PAOs shall be released - Petition disposed off. - W.P.(C) 11472/2022 and CM APPL. 33898/2022, 7732/2023 with W.P.(C) 11474/2022 and CM APPL. 33902/2022 - - - Dated:- 16-2-2023 - JUSTICE PRATHIBA M. SINGH For the Petitioner : Mr. Amit Khemka, Mr. Ashwani Taneja, Mr. Sandeep Dash, Mr. Aditya Agarwal and Ms. Himani Singh, Advocates (M: 9920427458). For the Respondents : Mr. Anurag Ahluwalia, CGSC (M: 9811418995). PRATHIBA M. SINGH, J. (ORAL) 1. This hearing has been done through hybrid mode. 2. The present two petitions are connected to each other. Mr. Sachin Joshi, the Petitioner in W.P. (C) 11472/2022 titled Sachin Joshi v. Adjudicating Authority, Prevention of Money Laundering through its Registrar and Ors. is the shareholder/Director of M/s. Muktanand Agro Farming Pvt. Ltd., which is the Petitioner Company in W.P. (C) 11474/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Document No. 3579/2008 dated 12.05.2008. 4. The present petitions were first listed before this Court on 2nd August, 2022, where Mr. Ahluwalia, Ld. Counsel for the Respondents made a preliminary objection with regards to the maintainability of the petition on the ground of lack of territorial jurisdiction. The said preliminary objection was dismissed, placing reliance on order dated 2nd June, 2022 passed in W.P. (C) 6354/2022 titled M/S Incred Financial Services Ltd. vs. Deputy Director, Directorate of Enforcement . In addition, on the said date, status quo was directed. The relevant extract of the order directing status quo is extracted as under: 6. 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. 5. It is the submission of ld. Counsel for the Petitioners that by order dated 18th October, 2022 which has been passed by the Special Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis. d. Omkar Group utilized Rs.410 Crore received from YES Bank for the redevelopment of Wadala, Worli Project as stated by both accused (A3 A4) in their statements under Sec.50 PMLA. e. Utilization of 410 Crores is explained in the statement given by Surana Developers (Wadala) LLP, clearly indicating that none of the amounts under the term loan of Rs.410 Crores was ever given to Accused No.5 and the said term loan was properly utilized by Surana/Omkar Groups. f. Not a single rupee from the alleged Proceeds of Crime Rs.410 Crores had come to the applicant. g. The Prosecution Complaint itself has details of utilization of Rs.410 Crores loan taken from YES Bank by ORDPL and further indicates that the amounts disbursed by YES Bank were spent on specific jobs/works/purposes and the list clearly shows the entities to whom the said payments have been made. Therefore, question of Accused No. 5 even being recipient of a penny thereof does not arise. h. Alleged sum of approximately Rs.87 Crores ie. received by Accused No.5 and his group companies associated with him (A6 to All) from the group companies of M/s. Omkar Realtors and Developers Pvt. Ltd. (ORDP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edge of POC. Hence, there is absolutely nothing nor there are sufficient grounds for proceeding against Accused No.5. All this, entitles Sachin Joshi (A5) and companies associated with him i.e. Accused No.6 to 11 for discharge as per Sec.227 of Cr.P.C. Therefore, on Merits he (AS) and companies associated with him i.e., Accused No.6 to 11 are entitled to get discharge. 30. In this way, I hold that, Accused No.5 and companies associated with him (A6 to A11) are not only entitled to get discharge on Merits but also entitled for the same in view of law laid down by the Hon'ble Supreme Court in Vijay Choudhary (Supra). He (A5) and his companies are also entitled to the parity. Basically, persons who allegedly generated, placed, layered, integrated Proceeds of Crime Rs.410 Crore, were already discharged vide Common Order dt.24.08.2022 below Exh.145, 146, 149 and 150 and companies a associated with them (A1, A2, A12 to A17) are being discharged herewith. Question of continuation of prosecution of PMLA case against the alleged recipient of Rs.80/87 Crore POC out of Rs.410 Crore, that too in the absence of Predicate Offence, does not arise. Hence, I hold that, upon conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he submits that the PAO against the assets of M/s. Muktanand Agro Farming Pvt. Ltd. would be liable to be quashed/set aside. 8. The Court has perused the order dated 18th October, 2022 passed by the Special Court in the ECIR. A perusal of the same would show that Mr. Sachin Joshi has been clearly being discharged in the said PMLA case. Paragraph 6.5 of the PAO also makes it clear that the assets of M/s. Muktanand Agro Farming Pvt. Ltd. were attached on the premise that the Mr. Sachin Joshi is the majority shareholder and ultimate beneficiary of M/s. Muktanand Agro Farming Pvt. Ltd. Owing to this connection, the assets of M/s. Muktanand Agro Farming Pvt. Ltd. were attached. 9. In Vijay Madanlal Choudhary Ors. v. UOI Ors., 2022 SCC OnLine SC 929 the Supreme Court has held that if the person accused has been discharged or acquitted of the scheduled/predicate offence, then there can be no offence of money laundering against the said accused person. The relevant portions of Vijay Madanlal Choudhary (supra) reads as: 467. In light of the above analysis, we now proceed to summarise out conclusion on seminal points in issue in the following terms: XXXX XXXX XXXX ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 extent of Rs. 42,25,859/-. For this, the Lokayukta Police registered a case Under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 (hereinafter referred to as the Act of 1988 ). During the pendency of trial, the Directorate of Enforcement registered a case against the accused No. 1 and the Appellants under the Act of 2002 and filed a complaint on 08.06.2016 before the Special Court for trial of the offence Under Section 3 thereof. 4. In the meantime, the Special Judge (Lokayukta) acquitted the accused No. 1 of the offences aforesaid under the Act of 1988 while observing that the evidence produced by the prosecution was insufficient to hold him guilty. Then, the accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 scheduled offence. 10. In view of the above, this appeal succeeds and is allowed. The impugned judgment and order dated 17.12.2020 is set aside and the order dated 04.01.2019 as passed by the Trial Court, allowing discharge application of the appellants, is restored 12. The Ld. Division Bench of this Court in Harish Fabiani and Ors. v. Enforcement of Directorate and Ors., 2022 SCC OnLine Del 312 has also taken a similar view and observed as under: 22. The Hon'ble Supreme Court has been clear and categorical in its reasoning as evident from the para extracted above. The undeniable sequitur of the above reasoning is that firstly, authorities under the PMLA cannot resort to action agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uled 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 being the position, we find no reason to allow the proceedings against the petitioners under PMLA to proceed further. 14. 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/DHC/000277. 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 the respective PAOs as well as the ECIRs are liable to be quashed. 15. In view of the fact that Mr. Sachin Joshi himself has been discharged in the ECIR and in view of the settled legal position as discussed above, the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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