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TMI Blog2023 (11) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... . W.P.(C) 16957/2022 preferred by the petitioner in some other case for seeking permission to travel abroad, both of which have been placed on record by the petitioner, throws light on the position of the petitioner in the alleged Railway Job for Land Scam - the investigation in the present ECIR is still continuing and the petitioner has merely been summoned to appear and submit certain documents. Even as per the own case of petitioner, he has joined investigation in the present ECIR upon being summoned by the Directorate of Enforcement on six occasions in past, between March till August 2023. Thus, no tenable grounds have been shown now as to why the impugned summons deserve to be quashed. Even otherwise, as held in several judicial precedents, this Court cannot throttle the investigative process at the stage of issuance of summons to the petitioner. This Court notes that the petitioner herein in the past has been summoned by the Directorate of Enforcement on about six occasions, as per the own case of petitioner, and has not been arrested till date. It is also not in dispute that the petitioner has also not been arrested by the CBI in the RC pertaining to predicate offence. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kground facts, as disclosed in the petition, are that the family of petitioner owns Krrish group of companies and has been in business of Breweries and Distilleries since the year 1983, and in the real estate business also since 2008. It is stated that the company namely M/s Iceberg Industries Ltd. (previously known as Iceberg Consultants Limited) was incorporated in the year 1994 and the petitioner had become its whole-time director from the date of its incorporation. The said company, for the purpose of setting up a Distillery and Brewery plant had purchased a land of approximately 12 acres in Bihta, Bihar and the petitioner had then set up a plant for Distillery in Bihar under the company M/s Iceberg Industries Ltd. It is stated that since the petitioner s distillery was operating in Bihar, the petitioner had started purchasing small chunks of lands/plots in Bihar for the purpose of expansion or storage, in the name of several companies such as M/s In-Shape Health Resorts Pvt. Ltd., M/s Iceberg Hotel Resorts Ltd., and M/s AK Infosystem Pvt. Ltd. during the years 2006-2011. It is stated that one of the properties ad-measuring 9527 sq. ft. purchased by M/s AK Infosystem Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquired by the family members of Sh. Lalu Prasad Yadav from different persons through five sale deeds and two gift deeds. It is further stated that Directorate of Enforcement had registered an ECIR bearing No. 31/DLZO/2022 on 16.08.2022 on the basis of predicate offences in the RC registered by CBI and had taken up investigation under the provisions of Prevention of Money Laundering Act, 2002 ( PMLA ). 5. It is the case of petitioner that during this period, he was summoned by the CBI on several occasions and he had appeared before the agency on every occasion and duly co-operated in the investigation. It is stated that the investigation in the CBI case had culminated into a chargesheet filed by EO-II, CBI, New Delhi before the Special CBI Court, Rouse Avenue, New Delhi, wherein the petitioner has been made a prosecution witness, after conducting detailed investigation with respect to the petitioner. Thus, it is stated that the petitioner was absolved from commission of any scheduled offence in the predicate offence case and was rather named as a witness. 6. It is stated that after registration of the ECIR, the petitioner had been summoned by the Directorate of Enforcement s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the RC registered by the CBI and thus, the proceedings under PMLA are not maintainable in terms of the law laid down in case of Vijay Madanlal Choudhary v. Union of India 2022 SCC OnLine SC 929. In this regard, it is submitted that the petitioner is not even an accused in the predicate offence and since there is no predicate offence against the petitioner, the question of the ECIR being sustained against the petitioner in isolation does not arise, as also held by this Court in the case of Harish Fabiani v. Enforcement Directorate 2022 SCC OnLine Del 3121. It is further submitted that in the scheduled offence wherein the CBI has registered an RC, the statement of the petitioner had been recorded under Section 161 and 164 of Cr.P.C. and the petitioner has been cited as a witness in the chargesheet filed by the CBI, and thus, the proceedings under PMLA cannot be initiated against the petitioner. 10. It is also argued that as per Section 44 of the PMLA, the prosecution by CBI and by the Directorate of Enforcement is to be tried together by the same judge, and therefore, it would give rise to a situation where the petitioner is a witness in the case registered by the CBI a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner stands settled in case of Vijay Madanlal Choudhary (supra) that the offence of money laundering is an independent offence and one need not be named as an accused in the predicate offence. 14. As regards the contention qua Section 44 of PMLA raised by the learned Senior Counsel for the petitioner and the argument that petitioner is a witness in the predicate offence, it is submitted by the learned Special Counsel for respondent that a similar argument was earlier rejected by a Co-ordinate Bench of this Court in case of Benoy Babu v. Directorate of Enforcement 2023 SCC OnLine Del 3771. 15. Therefore, in view of aforesaid submissions, it is prayed that present petition be dismissed. ANALYSIS AND FINDINGS 16. The event that prompts the petitioner to approach this Court is the issuance of summons bearing number PMLA/SUMMON/DLZO/ 2023/1542, dated 06.10.2023, under Section 50(2)(3) of PMLA by the Directorate of Enforcement to the petitioner vide which he has been asked to appear before the investigating officer on 09.10.2023. 17. As per the case set out by the petitioner, he apprehends that in light of the recent conduct of the Directorate of Enforcem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the Joint Director. 19. The Hon ble Apex Court in case of Vijay Madanlal Choudhary (supra) has made the following discussion on the scope of Section 50 and the power to issue summons therein: 425. Indeed, sub-section (2) of Section 50 enables the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to issue summon to any person whose attendance he considers necessary for giving evidence or to produce any records during the course of any investigation or proceeding under this Act. We have already highlighted the width of expression proceeding in the earlier part of this judgment and held that it applies to proceeding before the Adjudicating Authority or the Special Court, as the case may be. Nevertheless, sub-section (2) empowers the authorised officials to issue summon to any person. We fail to understand as to how Article 20(3) would come into play in respect of process of recording statement pursuant to such summon which is only for the purpose of collecting information or evidence in respect of proceeding under this Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection with the property being proceeds of crime is, in that sense, not an investigation for prosecution as such; and in any case, there would be no formal accusation against the noticee. Such summons can be issued even to witnesses in the inquiry so conducted by the authorised officials. However, after further inquiry on the basis of other material and evidence, the involvement of such person (noticee) is revealed, the authorised officials can certainly proceed against him for his acts of commission or omission. In such a situation, at the stage of issue of summons, the person cannot claim protection under Article 20(3) of the Constitution. However, if his/her statement is recorded after a formal arrest by the ED official, the consequences of Article 20(3) or Section 25 of the Evidence Act may come into play to urge that the same being in the nature of confession, shall not be proved against him. Further, it would not preclude the prosecution from proceeding against such a person including for consequences under Section 63 of the 2002 Act on the basis of other tangible material to indicate the falsity of his claim. That would be a matter of rule of evidence. 20. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 108 of Customs Act, had expressed that except in exceptional cases, High Courts should not interfere at the stage of issuance of summons. The relevant observations read as under: 1. By consent the impugned order is set aside. However, we wish to make it clear that as far as possible the High Court should not interfere at the stage when the Department has issued the summons. This is not one of those exceptional cases where the High Court should have interfered at the stage of issuance of the summons... 22. A Co-ordinate Bench of this Court in Virbhadra Singh v. Enforcement Directorate 2017 SCC OnLine Del 8930 , while refusing to quash the summons issued under Section 50 of PMLA, had made the following important observations: 141. The Enforcement officers empowered by PMLA to make investigation into the offences under the said law are not to be equated with police officers. The law confers upon them requisite powers to carry out investigation and collect evidence. The said power includes the power to issue summons to any person whose attendance is considered necessary and compelling his attendance, whether to give evidence or to produce any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Department, as noted earlier, provide a complete answer to the apprehensions that have been expressed. *** 146. There is nothing shown to the court from which it could be inferred that the issuance of summons by the respondents to the petitioners for investigation into the ECIR, in exercise of statutory powers, has caused, or has the effect of causing, any prejudice to any of them... 23. Thus, it is significant to note at this juncture that the power conferred upon the authorities by virtue of Section 50 of PMLA empower them to summon any person whose attendance may be crucial either to give some evidence or to produce any records during the course of investigation or proceedings under PMLA. The petitioner herein has been summoned vide impugned notice dated 06.10.2023 whereby he has been called upon to submit certain documents and records, which are deemed necessary by the Directorate of Enforcement for the purpose of investigation in the Railway Job for Land Scam case, for which the present ECIR has been registered. 24. A perusal of the chargesheet filed by the CBI in the predicate offence, and the reply filed by Directorate of Enforcement in another wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of ECIR insofar as it relates to him. Thus, the inherent contradiction lies in the fact that though the petitioner himself does not know whether he is accused or not in the ECIR and states that he apprehends his implication in the case merely because he is being repeatedly summoned, at the same time, he has filed this petition for quashing of ECIR. 29. Secondly, the petitioner has not placed on record the copy of ECIR which is sought to be quashed since he is not in possession of the same. In this regard, it is relevant to note that it is not mandatory for the Directorate of Enforcement to furnish a copy of ECIR to the person who is under investigation, as held by Hon ble Apex Court in Vijay Madanlal Choudhary (supra), and the petitioner herein has only been summoned under Section 50 of PMLA. 30. During the course of arguments, one of the contentions raised by the learned Special Counsel for Directorate of Enforcement was also that a person who is named in the ECIR cannot seek its quashing , and in this regard, the attention of this Court was also drawn by learned Special Counsel to the judgment titled Hukum Chand Garg Ors. v. The State of Uttar Pradesh Ors. SL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the property linked to stated scheduled offence through him. 34. Reliance was also placed upon judgments of Hon ble Apex Court in case of Parvathi Kollur v. State 2022 SCC OnLine SC 1975, Indrani Patnaik v. Enforcement Directorate W.P.(C) No. 368/2021 and of Hon ble Division Bench of this Court in case of Harish Fabiani (supra), in which the aforesaid principle laid down in case of Vijay Madanlal Choudhary (supra) was followed. 35. To rebut these argument, reliance on behalf of respondent/ Directorate of Enforcement was placed on the following observations of Hon ble Apex Court in case of Vijay Madanlal Choudhary (supra) to argue that the offence of money laundering is independent offence and one need not be named as an accused in the predicate offence: 269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form be it one of concealment, possession, acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. Firstly, though the learned Senior Counsel for the petitioner submitted during the course of arguments that the petitioner is a witness in the case registered by the CBI, the learned Special Counsel for the Directorate of Enforcement stated that he was not aware about the same. Further, as disclosed from petition, the petitioner states that he has been made as a witness in the chargesheet as either PW-36 or PW-37 since the names of these witnesses have not been disclosed. In this Court s opinion, when the names of PW-36 and PW-37 have not been disclosed in the chargesheet itself in the interest of pending investigation, this Court cannot come to a conclusion that the petitioner is one these witnesses whose names have not been disclosed. Thus, nothing has been placed before this Court which shows that petitioner herein is a witness in the CBI case. Even otherwise, the investigation in the CBI case is also pending and at this stage, the petitioner cannot be said to have been finally discharged/ acquitted in the scheduled offence . ii. Secondly, a bare reading of the decisions cited on behalf of the petitioner would reflect that the same takes into account a situation where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 226 of Constitution of India or Section 482 of Cr.P.C. since the same essentially reduces such proceedings to the nature of anticipatory bails. The observations of the Hon ble Apex Court in this regard read as under: 67. This Court in the case of Habib Abdullah Jeelani (supra), as such, deprecated such practice/orders passed by the High Courts, directing police not to arrest, even while declining to interfere with the quashing petition in exercise of powers under Section 482 Cr. P.C. In the aforesaid case before this Court, the High Court dismissed the petition filed under Section 482 Cr. P.C. for quashing the FIR. However, while dismissing the quashing petition, the High Court directed the police not to arrest the petitioners during the pendency of the investigation. While setting aside such order, it is observed by this Court that such direction amounts to an order under Section 438 Cr. P.C., albeit without satisfaction of the conditions of the said provision and the same is legally unacceptable. In the aforesaid decision, it is specifically observed and held by this Court that it is absolutely inconceivable and unthinkable to pass an order directing the police not to arres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38 Cr. P.C. does not require a formal accusation and the word may preceding the words be arrested and on accusation signifies that both the arrest and accusation are anticipatory. That is to that, firstly, an application under section 438 can only be filed by a person who is yet to be arrested. Secondly, an application under section 438 can be filed irrespective of whether there is a formal accusation (e.g. FIR), which in a case under the PMLA would mean whether or not there is a prosecution complaint. 47. Though a person can seek protection under Article 20(3) of the Constitution of India only ex-post i.e., only after formally being made an accused, on the other hand a person can seek relief under section 438 Cr. P.C. ex-ante i.e., prior to both arrest and accusation. To interpret the provisions of section 438 differently in the context of PMLA would be contrary to two Constitution Bench decisions of the Supreme Court in Gurbaksh Singh Sibbia (supra) and Sushila Aggarwal (supra), which expressly lay-down that the filing of an FIR, viz. formal accusation, is not a condition precedent for filing an application under section 438 Cr. P.C. 48. For completeness, it may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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