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TMI Blog2022 (9) TMI 1449X X X X Extracts X X X X X X X X Extracts X X X X ..... d complaint in C.C.No.62 of 2016 that has been filed by the Enforcement Directorate. 3. The minimum facts that are required for deciding this quash petition are as under: 3.1. One G.Srinivasan [A1] and R.Manoharan [A2] entered into a criminal conspiracy to cheat M/s.Global Trade Finance Limited [hereinafter referred to as "GTFL"], a subsidiary of Global Trust Bank, pursuant to which, R.Manoharan [A2], in collusion with S.Arivarasu [A5], Manager of GTFL, applied for a loan with fake documents. S.Arivarasu [A5] sanctioned a loan of Rs.15 crores on 16.05.2008 to a shell company by name M/s.Bhagavthi Textile Mills [in short "BTM"] purportedly owned by R.Manoharan [A2], which was actually siphoned off by G.Srinivasan [A1]. 3.2. Out of the said sum of Rs.15 crores so siphoned off, G.Srinivasan [A1] used Rs.1.07 crores to purchase 166 acres of land in Pudukottai Village in the names of P.Venkatachalapathy [A4], P.Rajendran [A6] and K.Vignesh [A7] from K.Gunasekaran, R.Sivakumar, Chinnakkannu and G.Selvarani through various documents. The details of the sale deeds under which the lands were purchased with the money provided by G.Srinivasan [A1] to the buyers viz., P.Venkatachalapathy [A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10], K.Kalimuthu [A11], V.Kuppusamy [A12], R.Natarajan [A13], V.Nattuthurai [A14] and S.Kuppusamy [A15] on the short ground that these persons were innocent purchasers, in that, they had purchased the said property from P.Venkatachalapathy [A4], P.Rajendran [A6] and K.Vignesh [A7]. 4. While so, P.Rajendran [A6] has filed the present quash petition to quash the prosecution against him in C.C.No.62 of 2016. 5. Heard Mr.Sharath Chandran, learned counsel for the petitioner and Mr.N.Ramesh, learned Special Public Prosecutor [ED] for the respondent. 6. The crux of the allegation against P.Rajendran [A6] is that, G.Srinivasan [A1] and R.Manoharan [A2] had committed the criminal activity of cheating GTFL and had obtained a loan of Rs.15 crores from GTFL, out of which, G.Srinivasan [A1] had purchased a property by a sale deed dated 09.09.2009 in the name of P.Rajendran [A6], which, P.Rajendran [A6] had subsequently sold to the accused, against whom, this Court has quashed the prosecution, as stated above. 7. At this juncture, it may be relevant to extract the following paragraphs from the impugned complaint: "6.3. Inasmuch as Shri G.Srinivasan during the inquiry has acceded that out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived nor paid any money; that later, in the last week of September 2009, the said Shri G.Srinivasan told him to give power for the above said land of 5 acres and 76 cents land held in his name to one Shri.R.Ayyappan; that Shri G.Srinivasan prepared a Power Document and obtained his signature on it, which was registered in the SRO, Kaniyur as Document No.184/2009, that as was arranged by Shri G.Srinivasan, he gave power to the aforesaid Shri R.Ayyappan, S/o.Ramdas, a resident of No.57-B, Vinayaka Apartment, Padmavathi Nagar Main Road, Virugambakkam, Chennai - 92; that even for this he neither received nor gave any money either from / to the above said Shri G.Srinivasan or any other person, as the aforesaid land was not his and belonged only to Shri G.Srinivasan; that further, as requested by Shri G.Srinivasan he had been to Sub-Registrar's Office and signed as a witness in another document relating to power given by one Shri Vignesh to the aforesaid Shri Ayyappan for another land and that he did not have any connection or dealings with the above said Shri G.Srinivasan except the above. 12.8. S/Shri P.Rajendran and K.Vignesh the other associates of Shri G.Srinivasan connived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for moneylaundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2(1)(u) read with Section 3. Taking any other view would be rewriting of these provisions and disregarding the express language of definition clause "proceeds of crime", as it obtains as of now." 467 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment in Vijay Madanlal's case [supra], which is extracted below: "271. As mentioned earlier, the rudimentary understanding of 'money-laundering' is that there are three generally accepted stages to money-laundering, they are: (a) Placement : which is to move the funds from direct association of the crime. (b) Layering : which is disguising the trail to foil pursuit. (c) Integration : which is making the money available to the criminal from what seem to be legitimate sources." 12. That apart, paragraph No.467(d) of the Vijay Madanlal's case [supra] only speaks about the discharge/ acquittal or quashment of proceedings of the accused in the predicate offence and the consequences that will follow for him in the PMLA prosecution. In that context, the Supreme Court has held that such an accused cannot be prosecuted under the PMLA if the case against him in the predicate offence has been quashed or he has been discharged/acquitted. To be noted, a case is only an authority for what it decides, as observed by Lord Halsbury in Quinn v. Leathem [1901 AC 495], as follows: "... that every judgment must be read as applicable to the particular facts proved or assum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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