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TMI Blog2023 (3) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... operty in question was involved in money laundering. In cases involving large scale embezzlement of public fund, if after the death of the principal accused, crime proceeds are released in favour of his heirs and legal representatives, the very object of the Act will be defeated to a large extent. In view of the express provision of confiscation in the event of death of the accused, the argument that there is a general presumption of innocence in favour of the accused and therefore death should be deemed to be acquitted is not tenable in view of the special provisions of the Act. Further, there is a reverse burden of proof against a person accused of an offence under Section 3 and unless the contrary is proved it shall be presumed that such proceeds of crime were involved in money laundering. It has been held in Vijay Madan Lal Choudhary Vs. Union of India [[ 2022 (7) TMI 1316 - SUPREME COURT] ] that the legal presumption in the context of Section 24(b) of the 2002 Act is attracted once the foundational fact of existence of proceeds of crime and the link of such person therewith in the process or activity is established by the prosecution. The stated legal presumption can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Vinay Prakash Niranjan Kumar, Advocates For the ED : M/s Amit Kr. Das, Rishabh Dubey Saurav Kumar, Advocates ORDER 1. The instant criminal misc. petition has been filed for quashing the order dated 15.09.2022 by which the application of the Enforcement of Directorate under Section 8(7) of the Prevention of Money Laundering Act (hereinafter referred to PMLA) for confiscation of property has been allowed and the application of the petitioner under Section 8(8) of PMLA for release of property has been dismissed in ECIR No. 06/Pat/2009. 2. The prosecution complaint under Section 45 of PML Act in ECIR No. 06/Pat/2009 was filed on 13.03.2012 against the firm M/s Nav Nirman Builders and Developers Pvt. Ltd. (A1) and Mr. Dharmveer Bhadoria (A2) (since dead) under Sections 3 and 4 of PML Act and also for confiscation of the provisionally attached property. 3. The order of confiscation was passed on account of death of main accused Dharmveer Bhadoria in ECIR No. 06/Pat/2009. 4. The case of the prosecution in brief is that FIR No. RC-20(A)/2009 was registered by the CBI, Ranchi on 22.10.2009 under Section 120B read with Sections 420, 467, 468, 471 of IPC and Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, 63 and 64 (763 m) of Seraikella Chaibasa Bypass Road. Out of 37 invoices, 6 were not found to be issued by IOCL Depot, Tatanagar and it was alleged that these were forged and fabricated and had been dishonestly and fraudulently submitted by M/s Nav Nirman Builders. The then executive engineer, RCD, Chaibasa by abusing his official position certified the bills of the contractor on the basis of which payment of Rs. 89,68,966/- was released to the said contractor. 11. During investigation under the provisions of PMLA statement of Dharamveer Bhadoria was recorded under Section 50 of PMLA in which he admitted that the Executive Engineer did not issue any authority letter for the procurement of the same from Govt. Oil Companies. It also came to light during investigation that although bitumen was not purchased from Govt Oil Companies, but Rs 49,21,738/- was cost of bitumen with carriage from HPCL Godown to the Hot Mix Plant. 12. From the scrutiny of the accounts of M/s Nav Nirman Builders maintained with the State Bank of India, it is apparent that the proceeds of crime to the tune of Rs 79,11,559.00/- was credited thereafter the same was layered and laundered by way of making o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (supra) was with respect to Criminal Law Amendment Ordinance, 1944, which has no provision pari materia to Section 8(7) of PMLA to permit the confiscation of the property on the death of the accused. 21. Section 8(7) specifically provides that where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3) of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of money-laundering after having regard to the material before it. Section 8(8) provides that where a property stands confiscated to the Central Government under sub-section (5), the Special Court, in such manner as may be prescribed, may also direct the Central Government to restore such confiscated property or part thereof of a claimant with a legitimate interest in the property, who may have suffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deemed to be acquitted is not tenable in view of the special provisions of the Act. Further, there is a reverse burden of proof against a person accused of an offence under Section 3 and unless the contrary is proved it shall be presumed that such proceeds of crime were involved in money laundering. It has been held in Vijay Madan Lal Choudhary Vs. Union of India (2022 SCC Online 929) that the legal presumption in the context of Section 24(b) of the 2002 Act is attracted once the foundational fact of existence of proceeds of crime and the link of such person therewith in the process or activity is established by the prosecution. The stated legal presumption can be invoked in the proceeding before the Adjudicating Authority or the Court, as the case may be. The legal presumption is about the fact that the proceeds of crime are involved in money-laundering which, however, can be rebutted by the person by producing evidence within his personal knowledge. 25. In the above stated position of law, order of confiscation cannot be set aside merely on the ground that the accused had died before the trial could be held and the accused convicted of the charges. Whether there was merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Total area 4.00 Acre Rs 25,00,000+Rs 1,14,000/- 28. At the time confiscation order was passed by the learned Court below, the appeal was pending under Section 26 before the appellate authority. 29. As discussed above accused no.2 Dharamveer Bhadoria died on 2.5.2021 during the pendency of the trial before the special court for offences under PMLA Act. He was also an accused before the Special Court CBI, Ranchi in RC 20/2009. The learned court below has noted that sufficient opportunity was given by the adjudicating authority to discharge the burden of proof u/s 24 of PMLA which it failed to discharge. The present petitioner Naveen Singh S/o of B.P. Singh claiming to the Managing Director of M/s Nav Nirman Builders and Developers Pvt Ltd was a third party failed to provide legitimate source of income or the receipts derived by the company from various sources. Accused no.2 was the person principally dealing with and control of the affairs of the company. 30. Admittedly the confiscated properties are not proceeds of crime but are in lieu of the value of crime proceeds. Main contention of the petitioner is that the property in question was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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