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TMI Blog2023 (5) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... g of these provisions and disregarding express language of the definition clause proceeds of crime , as it obtains now. Based upon Vijay Madanlal Choudhary, a case is made out for a grant of relief to the Petitioners now that it is clear that there is no prosecution against the Petitioners for any scheduled offence under the PMLA 2002. Based upon the communication dated 20/4/2023, addressed by the Crime Branch to the Enforcement Directorate, no case is made to dismiss these Petitions or defer hearings therein - As and when investigations are completed, and further, if the Petitioners are implicated for their involvement in any of the scheduled offences, the Respondent will have the liberty to seek revival of the PMLA proceedings by taking appropriate steps. However, based on the communication dated 20/4/2023, no case has been made to deny relief to the Petitioners. The Division Bench found that a 'C' summary report had been filed regards the scheduled offences. The Division Bench relied upon State of Maharashtra vs. Bhimrao Vithal Jadhav [ 1974 (9) TMI 137 - BOMBAY HIGH COURT ], where it had been observed that granting of a 'C' summary amounts to an acquittal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IR No. 10/22, the Directorate of Enforcement, Panaji Zonal Office registered Enforcement Case Information Report (ECIR) bearing No. ECIR/PJZO/03/2022 against the three persons in FIR No. 10/2022. Out of the offences alleged against the three accused persons in FIR No. 10/2022 and the impugned ECIR, only Sections 420 and 120-B of IPC are scheduled offences under the PMLA. 7. However, on 6/4/2022, the Petitioners' premises were raided, and the Petitioners were placed under arrest on 7/4/2022. Bail applications filed by both the Petitioners were rejected by the PMLA Court on 25/4/2022. On 6/5/2022, the Petitioners took out proceedings before this Court for bail. However, on 3/6/2022, a prosecution complaint under Section 45 of the PMLA was filed against the Petitioners for the commission of money laundering as defined under Section 3 and punishable under Section 4 of the PMLA. On 17/6/2022, the PMLA Court took cognizance of the offence under Section 3, read with Section 4 of the PMLA against the Petitioners. On 22/6/2022, this Court rejected the Petitioners' bail application by observing that the investigations were still in progress. 8. However, on 23/12/2022, the Inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closure report regarding the scheduled offence, and given the settled law that in the absence of any scheduled offence, no prosecution under the PMLA 2002 could be launched. 14. Based upon the above, Mr Lawande submitted that the impugned ECIR must be quashed. 15. Mr Karpe learned Standing Counsel referred to the reply on behalf of the Assistant Director, Directorate of Enforcement, Panaji Zonal Office, Goa, and urged that these Petitions may be dismissed. He submitted that even though the charge sheet filed against the accused persons under FIR No. 10/2022 may not have referred to any scheduled offence under the PMLA, the Crime Branch, vide communication dated 20/4/2023, had informed the Enforcement Directorate that further investigation has been taken up in Porvorim P.S. Cr. No. 10/2022 and C.C. No. AOA/572/P.G./22/F and an appropriate report will be filed after the completion of the investigation. Mr Karpe, based upon the communication dated 20/4/2023, submitted that the present Petitions were premature because, if, after investigation, the complicity of the Petitioners in the commission of any scheduled offence was to be discovered, an anomalous situation would, perhap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it depends on the wrongful and illegal gain of property due to criminal activity relating to a scheduled offence. Therefore, in the event of acquittal of the person concerned or being absolved from the allegation of criminal activity relating to a scheduled offence, the property attached cannot be regarded as either proceeds of crime or crime property. The Court then would be obliged to return such property. The Hon'ble Supreme Court also held that nuanced distinction must be kept in mind that to initiate prosecution for an offense under Section 3 of the PMLA 2002, registration of scheduled offense is a prerequisite. Still, for initiating provisional attachment action under Section 5, there need not be a preregistered criminal case concerning the scheduled offence. 21. Finally, the Hon'ble Supreme Court has recorded its conclusions in paragraph 187. The conclusion recorded in paragraph 187(v)(d) is relevant to the present context and, therefore, the same is transcribed below for the convenience of reference : 187(v)...(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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n up in Porvorim P.S. Cr. No. 10/2022 and C.C.No. AOA/572/P.G./22/F. The communication also states that an appropriate report will be filed after the completion of the investigation. However, it is clear that at least the Petitioners are not yet charged with commissioning any scheduled offences under the PMLA 2002 . 25. As and when investigations are completed, and further, if the Petitioners are implicated for their involvement in any of the scheduled offences, the Respondent will have the liberty to seek revival of the PMLA proceedings by taking appropriate steps. However, based on the communication dated 20/4/2023, no case has been made to deny relief to the Petitioners. 26. In Indrani Patnaik (supra), the Hon'ble Supreme Court, by relying upon the conclusion in paragraph 187(v)(d) of the decision in Vijay Madanlal Choudhary ors. (supra), held that the record as it stood, disclosed that the Petitioners stand discharged of the scheduled offence and, therefore, because of the law declared in Vijay Madanlal Choudhary ors. (supra), no question could arise of their being prosecuted for the illegal gain of property due to the criminal activity relating to the alleged sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osure report filed by the Police, the impugned FIR registered by the Enforcement Directorate would not survive, and the said ECIR would have to be quashed, and set aside. 31. The position in the present proceedings is not very different from that of Naresh Goyal (supra) or Indrani Patnaik (supra). The observations and conclusions in Vijay Madanlal Choudhary (supra) also support the Petitioners. Mr Karpe's apprehension can be addressed by granting the Enforcement Directorate liberty similar to the one granted by the Hon'ble Supreme Court in Indrani Patnaik (supra). 32. Therefore, for all the above reasons, both these Petitions are allowed, and the Rule is made absolute in terms of prayer clauses (a), (b), and (c) thereof. This means that the impugned ECIR No. Accordingly, ECIR/PJZO/03/2022, dated 28/1/2022, concerning the Petitioners, is quashed, and all proceedings arising therefrom are also quashed. In particular, the prosecution complaint dated 3/6/2022 pending on the file of Additional Sessions Judge and Special Court under the PMLA 2002, at Mapusa, Goa, is also quashed. Attachment proceedings under the impugned ECIR are also quashed. 33. However, liberty is gra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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