9911796707
TMI Blog2023 (6) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ) included other persons, who, according to Devasagayam, had no connection with the case. Devasagayam also stated in his petition seeking de novo investigation that Baskar and Kesavan against whom he made a specific complaint, are not shown as accused. In fact, the allegation made by Gopi in his petition before the High Court that Devasagayam had been won over by the accused, was not without substance, as can be seen from a few averments made by Devasagayam - It is not known whether Devasagayam was referring to the persons against whom he made a specific complaint as fictitious persons or whether he was calling the Minister and the person alleged to be his Secretary, named as accused in the Final Report as fictitious persons. The fact that Devasagayam s petition was intended to help the accused is also borne out by one more fact. His original complaint dated 29.10.2015 which led to the registration of FIR in Crime No.441 of 2015 was against ten persons and the offences registered therein were only under Sections 406 and 420 read with Section 34 IPC. On this complaint, a Final Report was filed under Section 173(2) of the Code on 13.06.2017 and this resulted in the registration of Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Drugs and Crime (UNODC). Whether without identifying the proceeds of crime or a property representing the proceeds of crime and without identifying any process or activity connected to proceeds of crime as required by Section 3, which constitute the foundational/jurisdictional fact, ED can initiate an investigation and issue summons? - HELD THAT:- It is true that there are some offences, which, though scheduled offences, may or may not generate proceeds of crime. For instance, the offence of murder punishable under Section 302 is a scheduled offence. Unless it is a murder for gain or murder by a hired assassin, the same may or may not generate proceeds of crime. It is in respect of such types of offences that one may possibly argue that mere commission of the crime is not sufficient but the generation of proceeds of crime is necessary. In the case of an offence of corruption, the criminal activity and the generation of the proceeds of crime are like Siamese twins. Therefore, even if an intangible property is derived as a result of criminal activity relating to a scheduled offence, it becomes proceeds of crime under Section 2(1)(u). In view of the above, we are not impressed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court protects them only till the other proceedings are kept at bay. The accused is not entitled at all either to seek a reference to a larger Bench or to seek to defer the matter till a decision is rendered in the matters involving larger issues - Appeal allowed on this issue. Permission to ED to inspect the records of the Special Court trying the predicate offences - HELD THAT:- The grievance of the appellant in this appeal is that the High Court has overlooked the provisions of Rule 231(3) of the Rules, 2019 and also Section 65B of the Indian Evidence Act, 1872 (the Evidence Act). But both the above contentions are without substance. Rule 231 primarily deals with the grant of certified copies of certain other documents to the accused, before filing of the Final Report. Rule 231(3) states that certified copies of unmarked documents shall not be given. The High Court has not passed any order directing the grant of certified copies of unmarked documents. All that the High Court has done is permitting the ED to have an inspection of the documents under Rule 237 and thereafter to file a proper copy application. This is not contrary to Rule 231(3). It is not understood how an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, Adv. Mr. Scv Vimal Pani, Adv. Mr. A. Lakshminarayanan, AOR Mr. C. A Sundaram, Sr. Adv. Ms. Misha Rohatgi, AOR Mr. Nakul Mohta, Adv. Ms. Riya Dhingra, Adv. Mr. Devansh Srivastava, Adv. Mr. Bharat Monga, Adv. Ms. Rohini, Adv. Mr. Zafar, Adv. Mr. Gopalshankarnayanan, Sr. Adv. Mr. Balaji Srinivasan, AOR Ms. Aakriti Priya, Adv. Ms. Gauri Pasricha, Adv. Mr. Rohan Dewan, Adv. Mr. Shiva Krishnamurthi, Adv. Mr. Devamshu Behl, Adv. Mr. Venugopala Gowda, Sr. Adv. Mr. K. Balambihai, Adv. Mr. Nar Hari Singh, AOR Mr. Balaji Srinivasan, Adv. Ms. Garima Jain, AOR Ms. Lakshmi Rao, Adv. Ms. Pallavi Sengupta, Adv. Ms. Jhanvi Dubey, Adv. Mr. Gopal Sankaranarayanan, Sr. Adv. Mr. N Subramaniyan, Adv. Mr. Pranav Sachdeva, AOR Ms. Jatin Bhardwaj, Adv. Ms. Jhanvi Dubey, Adv. Mr. Prashant Bhushan, Adv. Mr. N Subramaniyan, Adv. Mr. Pranav Sachdeva, AOR Mr. Jatin Bhardwaj, Adv. Ms. Neha Rathi, Adv. Mr. Tushar Mehta, Ld. S.G. Ms. Aishwarya Bhati, ASG Ms. Poornima Singh, Adv. Mr. Pratham Sagar, Adv. Mr. Abhijeet Singh, Adv. Mr. Aman Sharma, Adv. Mr. Mukesh Kumar Maroria, AOR Mr. Senthil Jagadeesan, AOR Mr. Kapil Sibal, Sr. Adv. Dr. Ram Sankar, Adv. Mr. N. Bharani Kumar, Adv. Ms. Anusha Nagarajan, Adv. Ms. Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nior counsel appearing for the de facto complainants and Shri Ranjit Kumar, learned senior counsel appearing for the State of Tamil Nadu. Background Facts 6. The background facts necessary to understand the complexities of the batch of cases on hand are as follows: (i) In November 2014, the Metropolitan Transport Corporation, wholly owned by the State of Tamil Nadu issued five Advertisements, in Advertisement Nos.1/2014 to 5/2014, calling for applications for appointment to various posts such as Drivers (746 posts), Conductors (610 posts), Junior Tradesman (Trainee) (261 posts), Junior Engineer (Trainee) (13 posts) and Assistant Engineer (Trainee) (40 posts); (ii) After interviews were held on 24.12.2014 and the Select List got published, one Devasagayam lodged a complaint on 29.10.2015 with the Chennai PS CCB against 10 individuals, alleging that he paid a sum of Rs.2,60,000/- to a Conductor by name Palani for getting the job of Conductor in the Transport Corporation for his son. However, his son did not get a job and when he confronted Palani, he was directed to several persons. When he demanded at least the refund of money, he did not get it. Therefore, he lodged a complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the lower level minions to find out where the money had gone. After so holding, the Court directed the Assistant Commissioner of Police, Central Crime Branch (Job Racketing) to take over the investigation in FIR No.441 of 2015 and also directing the Deputy Commissioner of Police to monitor the same. The Court also held that since a FIR has already been registered at the behest of Devasagayam, it is not necessary to have another FIR registered on the complaint/representation made by Gopi. (vi) Despite the direction issued by the High Court on 20.06.2016 to the Police to go beyond lower level officers and find out where the money trail ends (more than about 2 crores allegedly given to the Minister during January and March, 2015) and despite Gopi making specific averments against the brother and brother-in-law of the Minister, the Police filed a Final Report on 13.06.2017 under Section 173(2) of the Code, only against 12 individuals including those 10 persons named by Devasagayam. Upon the filing of the Final Report, the case got numbered as Calendar Case No.3627 of 2017 in FIR No.441 of 2015. Neither the Minister nor his brother or brother-in-law, were cited as accused, in the Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R No.344 of 2018, again for offences only under Section 406, 420 and 506(1) IPC. We do not know why the State Police were averse to the idea of including the offences punishable under the PC Act, in any of the three FIRs. While one may be averse to corruption, one cannot be averse to the PC Act. (ix) As had happened in respect of the other two complaints, the complaint in FIR No.344 of 2018 was also investigated (or not investigated) and a Final Report was filed on 12.04.2019. Even this Final Report, taken on record in Calendar Case No.25 of 2021 did not include the offences under the PC Act. (x) At this juncture, a person by name R.B. Arun Kumar, working as a Driver in the Metropolitan Transport Corporation and who was cited as witness LW 47 in the Final Report in CC No.3627 of 2017 arising out of FIR No.441 of 2015 (Devasagayam's complaint) moved the Madras High Court by way of a petition under Section 482 of the Code in Crl. O.P No.32067 of 2019, seeking further investigation in the case, on the ground that the State Police have not acted as per the directions issued by the High Court in its order dated 20.06.2016 in Crl. O.P. No.7503 of 2016 to go beyond the lower level offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O.P No.13374 of 2021 on the file of the High Court seeking to quash CC No.25 of 2021. He claimed in the said petition that a compromise had been reached between the victims (Arulmani and others and the accused) and that, therefore, the complaint may be quashed. Following suit, R. Sahayarajan who was Accused No.3 in CC No.19 of 2020 also filed a quash petition in Crl.O.P No.13914 of 2021, enclosing a joint compromise memo seeking to quash CC No.19 of 2020. Similarly, one Vetrichelvan (Accused No.10) filed Crl. O.P No.6621 of 2021 for quashing the proceedings in CC No.24 of 2021. (xvi) By an order dated 30.07.2021, the High Court quashed CC No.25 of 2021 on the basis of the Joint Compromise Memo. This order was passed completely overlooking the nature of the allegations, the offences for which the accused ought to have been charged as well as the previous orders passed by the High Court itself. (xvii) Just a day before the High Court passed orders quashing CC No.25 of 2021, the ED registered an Information Report on 29.07.2021 in ECIR/MDSZO/21/2021 and issued summons to the Minister Senthil Balaji. (xviii) At this stage, Devasagayam who filed the first complaint in FIR No.441 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. (xxii) An NGO by name Anti-Corruption Movement also filed a special leave petition against the order of the High Court quashing CC No.25 of 2021. (xxiii) Aggrieved by one portion of the order of the Trial Court refusing to grant certified copies of unmarked documents, the ED filed petitions before the High Court. By an order dated 30.03.2022 the High Court permitted ED to conduct an inspection under Rule 237 of the Criminal Rules of Practice, 2019 For short "Rules, 2019" and thereafter to make third party copy applications for supply of copies of documents. The High Court also noted that under Rule 238, ED was entitled even to take extracts and thereafter file a fresh third party copy application before the Special Court. Challenging the limited relief granted by the High Court to ED in its order dated 30.03.2022, a person who is Accused No.3 in CC No.3627 of 2017 (CC No.24/2021) has come up with a special leave petition which forms part of the present batch of cases. (xxiv) Thereafter, three writ petitions came to be filed, one by Minister Senthil Balaji and another by Shanmugam, alleged to be his Secretary and the third by Ashok Kumar (brother of the Minister), challenging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by ED, six of them challenging the order for de novo investigation, one of them challenging an order permitting ED to have inspection of documents and the last arising out of the order refusing to grant further time for completion of investigation. (xxxii) Other than the appeals, we also have two contempt petitions filed by the Anti-Corruption Movement, complaining willful disobedience by the State of the directions issued by this Court in the order dated 08.09.2022 in Criminal Appeal Nos.1515-1516 of 2022. (xxxiii) We also have an application in IA No.26527 of 2023 filed by the appellant in one of these appeals, who is an unsuccessful candidate. The prayer in this application is for the constitution of a Special Investigation Team to undertake a comprehensive investigation into the entire scam and for the appointment of a senior lawyer of repute as the Special Public Prosecutor to prosecute the accused. This application is taken out on the ground that a similar prayer made in Criminal Appeal Nos.1514-1516 of 2022 was turned down by this Court, in the order dated 08.09.2022, in the hope that the State Police would act fairly and impartially. According to the applicant/appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e offences under the PC Act were not included. 11. But fortunately, pursuant to the order passed by the High Court in the petition filed by Gopi, another Calendar Case came to be registered in CC No.24 of 2021, on a further Report submitted by the Police under Section 173(8) of the Code. In this CC No.24 of 2021, the Minister and his accomplices were included as accused and the offences under the PC Act were included. 12. This further Report under Section 173(8) of the Code which culminated in the registration of CC No.24 of 2021 was filed on 08.03.2021. 13. The inclusion of the name of the Minister and his accomplices in the Final Report submitted under Section 173(8) and the inclusion of the offences under the PC Act seems to have bothered Devasagayam more than the Minister himself. Therefore, Devasagayam filed a petition in Criminal O.P. No.15122 of 2021 in CC No.24 of 2021 seeking a direction to the Investigating Officer to conduct a de novo investigation. 14. The grounds on which Devasagayam sought de novo investigation were quite strange. In his petition seeking de novo investigation, Devasagayam stated that though his specific complaint was against one Baskar and nine ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge." 17. It appears that Devasagayam, originally seems to have had a genuine grievance against the culprits at the bottom of the layer, but he later turned out to be a Trojan horse, willing to sabotage the investigation against influential persons. This fact is borne out more by his pleadings in paragraph 31 of the petition in Criminal O.P. No.15122 of 2021. The relevant portion of paragraph 31 reads as follows: "31. …Where criminal proceedings are initiated based on illicit material collected on search and arrest which are per se illegal and vitiate not only a conviction and sentence based on such material but also the trial itself, the proceedings cannot be allowed to go on as it cannot but amount to abuse of the process of the court; in such a case not quashing the proceedings would perpetuate abuse of the process of the court resulting in great hardship and injustice to the accused. In our opinion, exercise of power under section 482 Cr.P.C. to quash proceedings in a case like the one on hand, would indeed secure the ends of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41 of 2015 was against ten persons and the offences registered therein were only under Sections 406 and 420 read with Section 34 IPC. On this complaint, a Final Report was filed under Section 173(2) of the Code on 13.06.2017 and this resulted in the registration of Calendar Case in CC No.3627 of 2017. Devasagayam was happy with the fact that the Report filed under Section 173(2) did not include the offences under the PC Act. Devasagayam was not bothered at that time about the fact that the register for entering the interview marks, sent to the Forensic Department had not been received. Suddenly, he became worked up after the filing of the Report under Section 173(8) leading to the registration of Calendar Case No.24 of 2021 including the offences under the PC Act. 21. What is shocking is that the High Court directed reinvestigation to be started ab initio, wiping out the earlier investigation altogether. One saving grace in this case is that even the learned senior counsel appearing for Devasagayam and the learned senior counsel appearing for the accused could not support the operative portion of the impugned order dated 31.10.2022, in Criminal O.P. No.15122 of 2021. Paragraphs 79 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ped out. 24. It is true that English is not our mother tongue. It is also true that some allowance (or discount ranging from 0 to 90%) can be given at times to the use of certain loose expressions. But the expressions used in paragraphs 79 to 81 of the impugned order do not reflect a mere deficiency in language or law, but something more. As rightly pointed out by Shri Gopal Sankaranarayanan, learned senior counsel, the High Court has used in the impugned order, several words and expressions such as, (i) reinvestigation to be started ab initio, (ii) wiping out the earlier investigation altogether; (iii) collect fresh evidence and material; and (iv) without reference to the earlier investigation on record. 25. Apart from the usage of the above words and phrases, which in our opinion, not merely opened up a small loophole in the law but opened up a huge black hole in the galaxy, the High Court issued one more direction in paragraph 80. This direction is to the investigating agency to find out whether the offences under the PC Act are made out against the accused or not. Such a direction stares at what this Court has said in paragraph 45 of the decision dated 08.09.2022 in Criminal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter back to the Sessions Court. It is the said order of remand that was challenged by the Investigating Officer before this Court. This Court framed two questions as arising for consideration in Vinay Tyagi. They read as follows:- "Question 1 1.1. Whether in exercise of its powers under Section 173 of the Code of Criminal Procedure, 1973 (for short "the Code"), the trial court has the jurisdiction to ignore any one of the reports, where there are two reports by the same or different investigating agencies in furtherance of the orders of a court? If so, to what effect? Question 2 1.2. Whether the Central Bureau of Investigation (for short "CBI") is empowered to conduct "fresh"/ "reinvestigation" when the cognizance has already been taken by the court of competent jurisdiction on the basis of a police report under Section 173 of the Code?" 28. While dealing with the First Question, this Court pointed out that investigation can be of three kinds namely, (i) initial investigation; (ii) further investigation; and (iii) fresh or de novo or reinvestigation. After exploring the meaning of "initial investigation" in paragraph 21 and the meaning of "further investigation" in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he records of the case; or (ii) to direct the report already prepared or the investigation so far conducted to form part of the record. If the superior court is silent on this aspect, the report already prepared or the investigation so far conducted will form part of the record. In other words, if the superior court intended that the investigation so far conducted and the report already filed should not form part of the record, it should specifically say so. 30. In the order impugned in these appeals, the High Court has indicated by using four different expressions and phrases that the investigation so far conducted shall not form part of the record. But even according to the learned senior counsel for Devasagayam and learned senior counsel for the accused, the operative portion of the impugned order of the High Court need not be understood in such a manner. If that is so, all those phrases and expressions deserve to be removed. If they are removed, the life gets ebbed out of the impugned order, which in our opinion, it richly deserves. 31. Before we wind up our discussion in Part-I, it may be necessary to deal with a few preliminary objections raised on behalf of the accused to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compromise. 32. Shri Mukul Rohatgi, Shri Kapil Sibal, Shri Sidharth Luthra, and Shri C.A. Sundaram, learned senior counsel appearing for different accused, uniformly raised a chorus, vociferously objecting to the maintainability of the appeals by each of those appellants, against the order of de novo investigation. Their contention is that investigation of a criminal offence cannot be a free-for-all exercise and that one must have locus to challenge the proceedings. According to the learned counsel, some of the appellants who are strangers, have not only come to court without any locus, but are also guilty of coming with unclean hands as can be seen from the fact that they have managed even to obtain copies of the confession statements recorded under Section 164 of the Code. It is also contended that some of the appellants before us are obviously set up by a rival political party and that therefore, this Court should not entertain the appeals filed by persons who have no locus standi. 33. It is true that criminal jurisprudence recognizes a limited role for victims and it is the State which is entrusted with the onerous responsibility of prosecuting the accused and getting them pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady filed a writ petition seeking further investigation, does not have locus standi, we do not know who else will have. 36. The investigation and trial of a criminal case cannot be converted by the complainant and the accused into a friendly match. If they are allowed to do so, it is the Umpire who will lose his wicket. 37. Much ado was made about some of the appellants filing copies of the confession statements under Section 164 of the Code, as part of the paper book in the appeals. It was contended by the learned senior counsel that the confession statements recorded before the Magistrate are sacrosanct and that the copies of the same cannot be made available to third parties and that at any rate, the appellants have not even explained as to whether they filed third party copy applications as stipulated in the Rules, 2019 and obtained these copies officially. 38. Reliance was placed upon Rule 207(12) and Rule 210 of the Rules, 2019 in support of his contention. Rule 207(12) and Rule 210 read as follows:- "207(12) After recording the confession statement of an accused, the Magistrate shall arrange to take two photocopies of the same under his direct supervision and certify t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is futile to contend that the appeals are liable to be thrown out on the ground that the appellants have come up with documents to which they could not have had any access. 42. Though Shri Gopal Sankaranarayanan, learned senior counsel appearing for the appellant in one of these appeals refrained from giving any political colour to the case on hand, it was contended by Shri Kapil Sibal, learned senior counsel that the appellant had been obviously set up by a rival political party. In support of his contention, he relied upon the timeline of events that began after the lodging of the first complaint in FIR No.441 of 2015. Though we did not wish to go into these details, we are compelled at least to touch the peripheries, lest we shall be held guilty of not dealing with an argument advanced across the Bar. The timeline of events provided by Shri Kapil Sibal, learned senior counsel is as follows:- 29.10.2015 Complaint of Devasagayam against 10 individuals but not the Minister. 7/8.03.2016 Complaint of one Gopi alongwith several others alleging that the Minister, his brother and his brother-in-law demanded illegal gratification for making appointments. 20.06.2016 Criminal OP No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical opponents in hot pursuit of the Minister. 44. But all that we could make out of the above timeline of events is that trouble started for the Minister, even when he was a Minister in a different political dispensation and even before he became part of a group of 18 MLAs in August, 2017. It must be remembered that the allegations in Criminal O.P. No.7503 of 2016, disposed of by the High Court on 20.06.2016, were made at a time when he was still a Minister in the previous regime and it happened more than a year before he became part of a splinter group. In the order dated 20.06.2016, it was recorded as a contention of the counsel for the petitioner in paragraph 6 that the Police had seen to it that the name of the Minister did not figure in the complaint, in order to shield him. That the Investigation Officer did not choose to include the offences under the PC Act from the year 2015 till 08.03.2021, cannot be taken to the credit of the Minister, but should be taken as a discredit of the prosecution. If the shield of office protected him from 2015 till he formed part of the splinter group and the shield stood temporarily removed for a brief period of time until he again became a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the PC Act are properly investigated and tried. But the object of V. Ganesh Kumar is not the same. 48. This is why we made repeated queries to Ms. V. Mohana, learned senior counsel appearing for V. Ganesh Kumar as to what V. Ganesh Kumar eventually wants. The only answer that we got to this question was that the power to order de novo investigation should be exercised sparingly and that this is not the case where the power requires to be exercised. Thus, it is clear that V. Ganesh Kumar is in a different camp as of now. 49. Therefore, the appeals challenging the impugned order of the High Court dated 31.10.2022 insofar as they are traceable to Criminal O.P. No.15122 of 2021 are concerned, deserve to be allowed. Accordingly, these appeals are allowed and the order dated 31.10.2022 passed in Criminal O.P.No.15122 of 2021 is set aside. Criminal O.P.No.15122 of 2021 shall stand dismissed. Part-II (Concerning proceedings by Enforcement Directorate) 50. As we have narrated in the sequence of events, ED registered an Information Report on 29.07.2021, only after filing of a Final Report under Section 173(8) of the Code., in CC No.24 of 2021, including the offences punishable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce those complaints are the subject matter of scrutiny in the quash petitions, there is nothing for ED to proceed; (viii) that Section 63 of the PMLA prescribes a punishment for false information or failure to give information and hence the summons issued under Section 50 will force him to give statements incriminating himself in the cases for the predicate offences, thereby infringing upon his rights under Article 20(3) of the Constitution; (ix) that ED had not identified any proceeds of crime with the accused, so as to enable them to proceed with the investigation; (x) that before the Trial Court and the High Court, ED wanted copies of documents available with the State Police, on the ground that without the copies of such documents, it was not possible for ED to proceed; (xi) that the initiation of investigation by the ED is vitiated by malafide; (xii) that without any material being available with the ED either about the proceeds of crime or about the act of money-laundering on the part of the accused, ED cannot proceed; and (xiii) that without having any incriminating material against the accused about money-laundering, ED cannot proceed further. 54. The focus in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey-laundering Act, because the Hon'ble Supreme Court in Vijay Madanlal Chaudhary and others v. Union of India and others, 2022 (10) SCALE 577 has held that in the absence of proceeds of crime, the authorities under the Prevention of Money-laundering Act cannot step in or initiate any prosecution, therefore, the writ petition deserves to be allowed, by quashing the impugned proceedings. 59. Thus, it is seen from the impugned order that at least two out of three accused specifically argued before the High Court that their case was squarely covered by the decision of this Court in Vijay Madanlal Choudhary, but interestingly most of the arguments advanced before us turned out to be an attack on the correctness of the decision in Vijay Madanlal Choudhary. We are not suggesting that this defection from one point of view to the other is covered by Schedule X. We are just recording this fact to show that most of the arguments were actually arguments of convenience. 60. Keeping in mind what the accused argued before the High Court, let us now see what the High Court did. In paragraph 13 of the impugned order, the High Court took note of Vijay Madanlal Choudhary with particular referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings. Therefore, on this sole ground, the High Court concluded in paragraph 22 of the impugned order that the ED has to await the outcome of the proceedings for quashing the criminal complaints, in which a stay order was in force. But the High Court made it clear that it was not entering upon the merits and demerits of the proceedings initiated by the ED and the High Court left all the questions to be dealt with in appropriate proceedings. 63. Eventually, the High Court concluded in paragraph 23 of the impugned order as follows: "23. … Therefore, as we have concluded that in view of the quashing of the proceedings in C.C.No.25 of 2021 and staying of the proceedings in C.C.No.19 of 2020 & C.C.No.24 of 2021 as highlighted above, the scheduled offence for the present is eclipsed, suspended or stop operating during the period of stay, the respondent Department has to await the finality of the said proceedings. Needless to mention, if the proceedings in C.C.No.l9 of 2020 and C.C.No.24 of 2021 are quashed pursuant to the orders in the applications filed by the respective persons to quash the proceedings, in which event, the respondent cannot step in or initiate any proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has attained finality with the dismissal of Criminal Revision Case No.224 of 2021; (ii) once the order for de novo investigation in Criminal O.P. No.15122 of 2021 is set aside; (iii) once the order of the High Court dated 30.03.2022 relating to right of the ED to secure the copies of documents is dealt with; (iv) once the order of the High Court dated 30.07.2021 quashing one of the criminal cases is set aside; and (v) once the stay operating in two of the criminal cases for predicate offences is vacated, then the temporary reprieve that has been granted by the High Court to the accused in the impugned order would automatically go. Realising this difficulty in law, the accused changed the theme of the song completely before us, despite the fact that they were ordained as respondents in the appeals only to support the impugned order of the High Court. 70. In fact, all the learned senior counsel appearing for all the accused in the PMLA case, advanced arguments for the grant of larger reliefs than what they got under the impugned order, without even filing any appeal against the same. It is possible in law for a successful party (though in civil proceedings) to support the decree w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 50(2) of PMLA is akin to the power of the Police Officer under Section 160 of the Code; (ix) that with the amendment of PMLA by Finance (No.2) Act, 2019 w.e.f. 01.08.2019, the requirement of mens rea was done away with and the Explanation inserted by the amendment made all processes or activities such as concealment, possession, acquisition, use, projecting as untainted property and claiming as untainted property, available in the alternative. In other words, while the main part of Section 3 uses the conjunction "and", the Explanation under Section uses the expression disjunction "or"; (x) that the amendment of Section 3 goes completely contrary to the law laid down in Bihta Co-operative Development and Cane Marketing Union Ltd. vs. Bank of Bihar AIR 1967 SC 389, to the effect that an Explanation cannot widen the scope of the main Section; (xi) that it is only where proceeds of crime are laundered that the PMLA comes into play, though the existence of proceeds of crime is a sine qua non for the commission of an offence under PMLA; (xii) that if the ED were to have jurisdiction to investigate solely on the basis of information that a predicate offence has been comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the PMLA. In this connection, he drew our attention to paragraph 113 of the decision of another Three Member Bench in Union of India vs. Ganpati Dealcom Private Limited (2023) 3 SCC 315, wherein this Court expressed an opinion that the ratio laid down in Vijay Madanlal Choudhary with respect to confiscation proceedings under Section 8 of the PMLA, required further exposition in an appropriate case and that without such exposition, much scope is left for arbitrary application. Learned senior counsel also drew our attention to an order passed by another Two Member Bench of this Court in a writ petition being Writ Petition (Crl.) No.65 of 2023, challenging some of the provisions of the PMLA. By an order dated 03.03.2023, a Two Member Bench of this Court directed the said writ petition to be placed when the Bench would be sitting in a combination of three Judges. After it was so placed before a Three Member Bench, notice was ordered in the writ petition. Therefore, he contended that the present appeals arising out the proceedings initiated by ED may be placed before a larger Bench. 75. In sum and substance, all the above arguments of Shri Kapil Sibal, learned senior counsel are aimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings of this Court dated 25.08.2022 in Review Petition (Crl.) No.219 of 2022 in Karti P. Chidambaram vs. The Directorate of Enforcement. 81. Lastly, it is contended that when certain questions of law are referred to a larger Bench, all subsequent matters should be tagged or deferred. In support of this contention, the learned senior counsel relies upon the orders passed by this Court in Jairam Ramesh vs. Union of India SLP (C) No.13103 of 2019, Thomas Franco Rajendra Dev WP (C) No.366/2022 dated 12.05.2022 vs. Union of India, Kantaru Rajeevaru (Right to Religion, In re-9 J.) vs. Indian Young Lawyers Association (2020) 9 SCC 121, Asgar Ali vs. State of Jammu and Kashmir 2022 SCC Online SC 3095 and Central Board of Dawoodi Bohra Community vs. State of Maharashtra 2023 SCC Online SC 129. 82. Contending that when the very initiation of proceedings by the ED was without the existence of jurisdictional facts, all subsequent actions, like a pack of cards should fall, the learned senior counsel relies upon the latin maxim sublato fundamento cadit opus meaning that "if initial action is not in consonance with law, all subsequent and consequential proceedings fall through". In suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Northern Railway Co-operative Credit Society Ltd., Jodhpur vs. Industrial Tribunal, Rajasthan, Jaipur (1967) 2 SCR 476. 85. In response to the above submissions, it was argued by Shri Tushar Mehta, learned Solicitor General: (i) that the offence of money-laundering is treated by the global community as an offence of international implication, affecting the economies of Nations; (ii) that the law could be traced to Palermo and Vienna Conventions; (iii) that the Conventions led to the establishment of Financial Action Task Force For short, "FATF"; (iv) that for a long time after the above Conventions and the formation of FATF, India was found to be lacking in curbing money-laundering and hence certain recommendations were made for the Mutual Evaluation of Anti-Money Laundering and Combating the Financing of Terrorism; (v) that the recommendations made by them were carried into effect by making suitable amendments to the Act; (vi) that the historical perspective of the Act and the amendments thereto are discussed in detail in Vijay Madanlal Choudhary; (vii) that almost all provisions of the PMLA were challenged in Vijay Madanlal Choudhary and every ground of attack to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madanlal Choudhary as correct and trying to demonstrate how the initiation of proceedings in the present case falls foul of the ratio in Vijay Madanlal Choudhary (by Shri C.A. Sundaram); and (iii) relying upon some portions, but attacking some other portions of Vijay Madanlal Choudhary so that any one of these provide an escape route (by Shri Luthra). 87. In terms of issues, the arguments advanced by all the three learned senior counsel can be crystallized and formulated into two fundamental questions that may have to be addressed by us. These questions are:- (i) Whether without identifying the proceeds of crime or a property representing the proceeds of crime and without identifying any process or activity connected to proceeds of crime as required by Section 3, which constitute the foundational/ jurisdictional fact, ED can initiate an investigation and issue summons? (ii) Whether in the light of the fact that notice has been ordered in the review petition and a few interim orders have been passed in some proceedings, it is necessary for this Court to tag these appeals along with a review petition or defer the hearing of these matters until a decision is rendered in the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issued a general statement of ethical principles which encourages banks' management to put in place effective procedures to ensure that all persons conducting business with their institutions are properly identified, that transactions that do not appear legitimate are to be discouraged and that cooperation with law enforcement agencies is achieved. (v) In 1989, the FATF was established at the G-7 summit held at Paris, as an inter-governmental body by the member countries namely Canada, France, Germany, Italy, Japan, UK and USA. Now FATF consists of 39 members including India and over 200 jurisdictions around the world have committed to the FATF recommendations. (vi) In 1990, the Member States of the Council of Europe signed and ratified a Convention known as The Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, also known as the Strasbourg Convention or CETS 141. Interestingly, Australia though not a Member of the Council of Europe, also signed and ratified this Convention. The Convention sought to facilitate international co-operation and mutual assistance in investigating crime and tracking down, seizing and confiscating the proceeds the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so as to be an accused in the offence of money-laundering. It reads as follows: "Self-laundering: "As the section refers to "any person," this includes both the person who committed the predicate offence and third party launderers. Although generally not an issue in States in the common law tradition, there can be a question whether the offence should be extended to the person who also committed the predicate offence. The Vienna and Palermo Conventions provide an exception to the general principle that both the predicate offender and third parties should be liable for money laundering where fundamental principles of domestic law require that it not apply to the person who committed the predicate offence. In some countries, constitutional principles prohibit prosecuting a person both for money laundering and a predicate offence. In the case of most common law countries, there do not appear to be fundamental principles that prohibit the application of the money laundering offence to self-launderers. However, if an exception is necessary, an additional provision, as "[t]he offence of money laundering shall not apply to persons who have committed the predicate offence" should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminal activity. Origin may be the physical origin, or its origin in criminality. For this second offence, there should not be a requirement of proof that the purpose of the concealment or disguise is to frustrate the tracing of the asset or to conceal its true origin. Although as a general matter this will be the purpose of the concealing or disguising, the applicable UN Conventions require that there be criminalization that is not dependent upon a showing of such purpose. 3. Acquisition, possession or use of proceeds. This section imposes liability on recipients who acquire, possess or use property, and contrasts with the two provisions above that deal with liability for those who provide illicit proceeds. There must be intent to acquire, possess or use, and the accused must have knowledge at the time of acquisition or receipt that the property was proceeds. 4. Participation in, association with or conspiracy to commit, attempts to commit and aiding, abetting, facilitating and counselling. There are varying degrees of complicity or participation other than physical commission of the offence: assistance (aiding and abetting, facilitating) and encouragement (counselling). In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:-- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever." 96. If the main part of Section 3 is dissected with forensic precision, it will be clear that Section 3 addresses itself to three things (we may call them 3 'P's) namely, (i) person; (ii) process or activity; and (iii) product. Insofar as persons covered by Section 3 are concerned, they are, (i) those who directly or indirectly attempt to indulge; or (ii) thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney that constitutes the 'proceeds of crime' within the meaning of Section 2(1)(u). It is no rocket science to know that a public servant receiving illegal gratification is in possession of proceeds of crime. The argument that the mere generation of proceeds of crime is not sufficient to constitute the offence of money-laundering, is actually preposterous. As we could see from Section 3, there are six processes or activities identified therein. They are, (i) concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting as untainted property; and (vi) claiming as untainted property. If a person takes a bribe, he acquires proceeds of crime. So, the activity of "acquisition" takes place. Even if he does not retain it but "uses" it, he will be guilty of the offence of money-laundering, since "use" is one of the six activities mentioned in Section 3. 100. The FIRs for the predicate offences identify all the three components of Section 3, namely, (i) persons; (ii) process; and (iii) product. Persons accused in the FIRs are those who have indulged in the process or activity. The illegal gratification that they have taken, represents the proceeds of crime. The (i) acquisition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich itself tantamount to money-laundering. 105. A lot of heat and dust was generated about the ED registering an Information Report on 29.07.2021 without any material whatsoever and thereafter indulging in a fishing expedition both by summoning the respondents and by seeking copies of various documents from the Special Court before which the complaints relating to the predicate offences are pending. But we do not see any substance in these arguments. The reason why we say so will be understood if we rewind and go back to a few facts. 106. On 29.10.2015, Devasagayam made a complaint. It was against ten different persons, but not against the Minister, his brother and his Secretary. But on 07/08.03.2016, one Gopi made a complaint naming the brother of the Minister and claimed that a total amount of more than Rs.2 crores was paid. Gopi then filed Criminal O.P. No.7503 of 2016 on the file of the High Court in which the High Court passed an order on 20.06.2016, to expand the investigation and go against the real culprits. But a Final Report under Section 173(2) of the Code was filed on 13.06.2017. This was followed by another complaint filed by V. Ganesh Kumar on 09.09.2017 in FIR No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity in respect of a scheduled offence. Therefore, it does not require any expedition, much less a fishing expedition for someone to say that the receipt of bribe money is an act of money-laundering. 113. The contention of Shri Sidharth Luthra that there was no explanation for the delay on the part of the ED in registering the Information Report, is a self-serving argument. If the ED registers an Information Report immediately upon the registration of a FIR for a predicate offence, ED will be accused of acting in haste. If they wait until the drama unfolds up to a particular stage, ED will be attacked as guilty of delay. The accused should be thankful to ED for giving a long rope from 2016 till 2021. 114. Therefore, all the arguments on facts and all the legal contentions emanating from some portions of the judgment in Vijay Madanlal Choudhary, to challenge the validity of the proceedings initiated by ED are completely unsustainable. Question No. 2: Whether in the light of the fact that notice has been ordered in the review petition and a few interim orders have been passed in some proceedings, it is necessary for this Court to tag these appeals along with a review petition or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. PART-III (Permission to ED to inspect the records of the Special Court trying the predicate offences) 120. To recapitulate, ED registered an Information Report on 29.07.2021. Thereafter, ED filed applications before the Special Court seeking certified copies of the FIR, statements of witnesses, etc. By an order dated 09.11.2021, the Special Court allowed the application partly and directed the issue of certified copies of FIR, complaint, statements, etc., but refused to provide certified copies of unmarked documents. 121. As against the said order, ED moved the High Court under Section 482 of the Code. These petitions were partly allowed by the High Court by an order dated 30.03.2022, permitting ED to have inspection of the documents under Rule 237 of the Rules, 2019 and thereafter, to file a fresh third party copy application. It is against this order that one of the accused by name M. Karthikeyan (Accused No.3) in the Final Report filed under Section 173(8) of the Code in CC No.24 of 2021 has come up with an appeal. 122. The grievance of the appellant in this appeal is that the High Court has overlooked the provisions of Rule 231(3) of the Rules, 2019 and also Section 65B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Officials who are in-charge of the investigation, on the ground (i) that the offences under the PC Act have not been included in CC No.25 of 2021; (ii) that steps were not taken to have the interim stay vacated in two criminal cases; and (iii) that a misleading picture was projected before the High Court as though the investigation was incomplete. 128. Shri Ranjit Kumar, learned senior counsel appearing for the State and Shri Tiwari, learned AAG for the State submitted that there was no willful disobedience of the orders passed by this Court and that the State actually took steps to vacate the stay. According to the learned senior counsel, the hands of the investigating agency were tied due to the stay order and that once the appeals arising out of the two substantial orders of the High Court dated 01.09.2022 and 31.10.2022 are disposed of, the State will take expeditious steps. 129. For the present, we would accept the explanation offered by the alleged contemnors. This is for the reason that the alleged contemnors alone are not to be blamed for where we are. The entire case turned out to be a match where it became impossible to identify who was playing for which team. Despit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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