9911796707
TMI Blog2023 (4) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... as a result of criminal activity relating to a scheduled offence would amount to Proceeds of Crime. Every commercial activity where an outstanding arises would not fall within the ambit of Section 3 of the Act. It is not merely criminal activity relating to commission of a predicate offence but property has to be derived directly or indirectly as a result of such criminal activity to be tried and prosecuted under Section 3 of the Act - In the present case, no such property is derived or obtained either directly or indirectly by the petitioner herein either involving in criminal activity or handling any such property derived as a result of criminal activity. The question of concealing or being in possession or acquiring such property does not arise. The amount accrued as discussed earlier is on account of dollar- rupee fluctuation and it cannot in any manner be held that the petitioner had derived or obtained any property. Though, it was agreed that differential amount of rupee dollar fluctuation would be paid, at most it can be termed as an outstanding which can be recovered in a civil suit and by no stretch of imagination can it be called as Proceeds of Crime or the outstanding a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g falls within the definition of 'proceeds of crime'. In the said circumstances, when the basis for prosecution under PML Act is projecting proceeds of crime as untainted money, the following point arises for consideration. 12. POINT: On account of any agreement or condition in an MOU between parties, with respect to forex fluctuation (depending on crashing or gaining of rupee value) results in an outstanding or liability payable by one of the parties, whether such an accrual of 'outstanding' or 'liability' amounts to 'Proceeds of Crime' as defined under the Act. 13. In the scenario of the rupee value gaining in the process of forex fluctuation, the petitioner would have gained and MMTC would have been liable to whatever extent. 14. In the said circumstances, when the alleged outstanding by the Petitioner prima facie is not on account of any criminal activity but on account of accepting liability with regard to forex fluctuation, this Court deems it appropriate to stay all further proceedings in the present case ECIR/05/HYZO/2014, until the point for consideration is determined." 5. Heard Sri S.Niranjan Reddy, Sri Avinash Desai, Sri Ravi Kiran Rao, learned Senior Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tallments seeking remedy in the very same case by withholding part of his case and filing another petition with similar relief. Reliance was also placed on the judgment of Division Bench of Madras High Court in the case of N.Dhanraj Kochar and others v. The Director, Directorate of Enforcement, New Delhi and another Crl.O.P.No.SR 46376 of 2021, wherein it was held that the ECIR is not registered under the Code of Criminal Procedure and it is not akin to FIR registered under Section 154 of Cr.P.C. Accordingly, the ECIR registered by the Enforcement Directorate cannot be the subject matter of judicial review under Section 482 of Cr.P.C. 9. The Hon'ble Supreme Court in the judgment reported in the case of Anil Khadkiwala v. State (Government of NCT of Delhi) (2019) 17 Supreme Court Cases 294 held that the second application for quashing the complaint cannot be refused only for the reason of dismissal of earlier application. It was further held that the second application filed will not fall within the bar under Section 362 Cr.P.C. 10. According to the learned counsel for the petitioner, after dismissal of the earlier Criminal Petition, properties were attached under Section 5 of Pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grievance, has to consider the nature and extent of the breach and pass appropriate orders as may be called for without leaving the citizens to the mercy of police echelons since human dignity is a dear value of our Constitution." The three Judge bench of Hon'ble Supreme Court in the case of State of Karnataka v. M.Devendrappa (2002) 3 Supreme Court Cases 89 held that the powers under Section 482 of Cr.P.C envisages three circumstances under which the inherent jurisdiction may be exercised, namely, (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice. It is neither possible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction. No legislative enactment dealing with procedure can provide for all cases that may possibly arise. Courts, therefore, have inherent powers apart from express provisions of law which are necessary for proper discharge of functions and duties imposed upon them by law. It was further held as follows: "Inherent power is to be exercised ex debito justitiae to do real and substantial justice for the administration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. 18. Penal liability is indicated in the maxim actus non facit reum nisi mens sit rea which means the act does not alone amount to guilt, but it must be accompanied by a guilty mind. However, there can be an exemption made in a statute and unless the statute expressly or by necessary implication rules out Mens rea, the element of Mens rea has to be read into all penal provisions. 19. Even Indian Penal Code does not define 'Crime'. However, under Section 40 of IPC, the word 'offence' denotes a thing punishable under the Code. 20. The Act of 2002 was enacted to prevent money laundering and to provide for confiscation of the property derived there from. 21. Learned Senior Counsel Sri A.R.M.Sundaresam, appearing for the Enforcement Directorate would submit that the property obtained in any manner either directly or indirectly would fall within the definition of 'Proceeds of Crime' as defined under Section 2(1)(u) when read with 2(1)(v) of the Act. 'Property' is defined under Section 2(1)(v), which means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minal activity is satisfied, the question of invoking Section 3 of the Act does not arise. 23. The outstanding arose on account of the MOU that has been entered into in between the MMTC and MBS jewelers regarding dollar-rupee fluctuation. It is an understanding between two entities doing business. It is not in dispute that MMTC has not given any gold which was not paid for by the petitioner/MBS jewelers. There is no property that is generated on account of the dollar-rupee fluctuation. The petitioner or his firm can do nothing about the devaluation of the rupee vis-a-vis US dollar. In fact, in business terms the outstanding that had to be paid by the petitioner's firm would be termed as a loss occurred during the normal course of business transaction. 24. Further, the contention of the learned senior counsel for ED is that since the charge sheet is already filed for the predicate offence, the ED is justified in proceeding with the investigation. The ED can as well investigate to find out whether an offence has been made out or not. The said power is not in dispute. On the basis of any suspicion that a criminal activity has resulted in accrual of crime proceeds in the form of eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of "proceeds of crime". 27. The Hon'ble Supreme Court in the case of R.Nagender Yadav v. The State of Telangana in Criminal Appeal No.2290 of 2022 held that a complaint disclosing civil transaction may also have a criminal texture. But the High Court must see whether the dispute which is in substance of a civil nature is given a cloak of a criminal offence. In such a situation, if civil remedy is available and is in fact adopted, the High Court should have quashed the criminal proceeding to prevent abuse of process of Court. In the case of Indian Oil Corporation v. NEPC India Limited and others (2006) 6 Supreme Court Cases 736 the Hon'ble Supreme Court held- "12. ….. (v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a crimin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
