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TMI Blog2022 (2) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... money laundering. In the present matter, at the initial stage of proceedings, the Respondents were charged for offences under Section 21/25/29 of the NDPS Act and 420/468/471/120B of the IPC, however, the learned Additional Sessions Judge, Amritsar, observed that material produced before the Court as well as the allegations made against the Respondents were largely made upon suspicion. Though certain material, properties and cash, were recovered and attached/seized but the fact that such properties were obtained through proceeds of crime of drug trafficking could not be established. In view of the observation that the no scheduled offence was made out against the Respondents, this Court finds that an investigation and proceedings into the PMLA could not have been established against them at the first instance. A bare reading of the provision of the Cr.P.C. suggests that the Court shall limit itself to the findings, sentence or order passed by the subordinate Court, against which the Revisionist is seeking relief before the Courts concerned, and shall not go beyond the analysis and observations made by the subordinate court. By extension, a limitation and bar is, hence, set out on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Judge, New Delhi District, Patiala House Courts, in CC No. 158/2014 titled as "Enforcement Directorate vs Gagandeep Singh & Ors", whereby all the accused persons were discharged on the ground that no prima facie case was made out against them. FACTUAL MATRIX 2. It is the background of the case that criminal proceedings under PMLA were initiated against Respondents by the Petitioner on the basis of independent intelligence gathered by them regarding money laundering activities. An FIR bearing No. 29/2011 under Section 21/25/29/61 of the Narcotic Drugs and Psychotropic Substance Act, 1985, (hereinafter "NDPS Act") and 420/468/471/120B of the Indian Penal Code, 1860 (hereinafter "IPC") was registered by the State Special Operation Cell, Amritsar against the Respondents alongwith other accused, and a Mutual Assistance Request (MAR) Note Verbale No. 458/2014 dated 27th August, 2014 (Letter of Request), was also issued by the Australian Competent Authority regarding the involvement of the Respondents in criminal activities that constitute offences under Part A and Part C of the schedule to PMLA, based on which, on 24th September, 2014, the Directorate of Enforcement (hereinafter " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PMLA, on the basis of investigation carried out for the alleged money laundering activities of the Respondents. Investigation conducted by the ED supported with the documents received and collected clearly establishes the involvement of Respondents in commission of offence of money laundering under Sections 3 and 4 of the PMLA. Letters of request were also sent to Australia, Hong Kong, USA and Canada under Section 57 of the PMLA requesting for the details of the accounts and transactions done by and on behalf of the Respondents. 6. Vide Order dated 3rd August, 2015, the Respondents were acquitted of charges framed against them by the learned Additional Sessions Judge/Exclusive Court at Amritsar in FIR No. 29/2011 holding that the prosecution failed to lead any cogent or trustworthy evidence to prove that the accused, Respondents herein, entered into a criminal conspiracy and observed as under: - "46. I have given my thoughtful consideration to the arguments advanced on behalf of accused Paramdeep Singh and Gagandeep Singh. As far as accused Paramdeep Singh and Gagandeep Singh are concerned, the first head of charge framed against them is under section 25 of NDPS Act for having u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used as genuine. In this regard, crossexamination of Investigating Officer is very much relevant wherein he admitted that no forged document was recovered from the possession of accused, meaning thereby that as far as charge under section 420/468/471 IPC is concerned, the same are also not proved on file. 49. These two accused namely Paramdeep Singh and Gagandeep Singh are also served with charge-sheet under section 29 of NDPS Act. However prosecution in the present case has failed to lead any cogent or trustworthy evidence to prove on file that these accused had entered into a criminal conspiracy with all other accused to send the drug money to Pakistan. Hence, as there is nothing on file on the basis of which it can be held that these two accused namely Paramdeep Singh and Gagandeep Singh had in any manner indulged in any act falling under NDPS Act, they stand acquitted of the charge under section 29 of NDPS Act also. 50. In view of above detailed discussion, this court is of the considered view that prosecution in the present case, has miserably failed to bring home the guilt against accused Mukhtiar Singh, Swaran Sing, Paramdeep Singh and Gagandeep Singh beyond any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concluding that prima facie case was not made out against the Respondents and as such the Order dated 15th May, 2017, is illegal and deserves to be set aside. 11. It is submitted that the learned Additional Sessions Judge, while passing the impugned Order has not appreciated that the documents relied upon, and the supplementary complaints filed corroborated that the accused persons/ Respondents No. 1 to 3 have committed the offence of money laundering under Section 3 of PMLA by laundering the ill-gotten funds, dealing with proceeds of crime generated through drugs and acquiring and concealing untainted property. It is further submitted that the Respondent No. 4 Company, operated by the Respondents No. 1 and 2, is registered as a money changer, whereas, investigation has revealed that the company has been used for laundering proceeds of crime made punishable by the PMLA. 12. Learned counsel for the Petitioner submitted that during investigation and searches carried out by the Petitioner, incriminating material including documents in the form of hard copies, electronic devices, Indian currency worth Rs. 77 lakhs and foreign currency worth Rs. 3 lakhs were recovered and seized from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that he was dealing in sale and purchase of foreign exchange and also involved in money transfer from India to other countries illegally and that he was aware about the source of money that were being transferred between him and his counterparts abroad. Respondent No. 1 further stated that 30 per cent of the amount being transferred to him were relating to proceeds from drawn from illegal activities being carried out in other countries. Further, Respondent No. 2, in his statement further disclosed the information regarding his companies and the status of cases pending against him. Respondent No. 2 stated that he directed one Mr. Sanjeev Saini to deposit Australian money in his company's account, that is, SK Trading Private Limited, in Australia, and AVS Trading Limited in Hong Kong, in such a way that the legal authorities do not notice such deposits. Respondent No. 3, in his statement under Section 50 of the PMLA, stated that he was doing illegal business of sending foreign currency abroad and that he was receiving payments regarding these foreign payments from foreign countries, including Australia, New Zealand, Canada, China, Hong Kong and USA. Relying on the statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the commission of a scheduled offence from which the proceeds of crime are culminating. It is submitted that there is an umbilical cord connection between the scheduled offence and the offence of money laundering. Learned senior counsel for the Respondents relied upon Nikesh Tarachand Shah vs. Union of India, (2018) 11 SCC 1, wherein the Hon'ble Supreme Court observed as under: - "11. Having heard the learned counsel for both sides, it is important to first understand what constitutes the offence of money laundering. Under Section 3 of the Act, the kind of persons responsible for money laundering is extremely wide. Words such as "whosoever", "directly or indirectly" and "attempts to indulge" would show that all persons who are even remotely involved in this offence are sought to be roped in. An important ingredient of the offence is that these persons must be knowingly or actually involved in any process or activity connected with proceeds of crime and "proceeds of crime" is defined under the Act, by Section 2(1)(u) thereof, to mean any property derived or obtained directly or indirectly, by any person as a result of criminal activity relating to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, it is submitted by the learned senior counsel for the Respondents that there are two contingencies that need to be considered while establishing an offence under Part C, first, that the offence is committed outside India the proceeds of the crime are transferred into India or, second, that the offence is committed in India and the proceeds of crime are transferred outside India. It is submitted that in absence of either of the two, mere investigation or trial of any scheduled or predicate offence in India cannot ipso facto result in invocation of the provisions under PMLA. 25. It is submitted by learned senior counsel that the learned Special Judge has rightly discharged the Respondents in view of the fact that the only scheduled offence which was alleged against the Respondents was under NDPS Act, and even with respect to the alleged schedule offences, the Special Court (NDPS), Amritsar, held that there was no involvement of the Respondents in the same and no proceeds of crime were generated. Hence, no prosecution can continue under the PMLA as initiated by the Petitioner/ ED, and as such, the petition is liable to be dismissed as the same is devoid of any merit. FINDINGS AN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. Explanation. --For the removal of doubts, it is hereby clarified that, -- (i) a person shall be guilty of offence of moneylaundering 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. 4. Punishment for money-laundering. --Whoever commits the offence of money-laundering shall be pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money laundering. In the present matter, at the initial stage of proceedings, the Respondents were charged for offences under Section 21/25/29 of the NDPS Act and 420/468/471/120B of the IPC, however, the learned Additional Sessions Judge, Amritsar, observed that material produced before the Court as well as the allegations made against the Respondents were largely made upon suspicion. Though certain material, properties and cash, were recovered and attached/seized but the fact that such properties were obtained through proceeds of crime of drug trafficking could not be established. 31. In view of the observation that the no scheduled offence was made out against the Respondents, this Court finds that an investigation and proceedings into the PMLA could not have been established against them at the first instance. 32. Further, the essential consideration is the extent of powers that may be exercised by this Court in the revisional jurisdiction. The Cr.P.C. makes provision for the High Court to exercise its revisional jurisdiction in furtherance of any proceeding before any subordinate Criminal Court. The provision under Section 397 of the Cr.P.C. unequivocally states that the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, it may examine whether the Order impugned before it suffers from procedural illegality or irregularity." 34. This Court, in view of the aforesaid findings and the law laid down by the Hon'ble Supreme Court, in its revisional jurisdiction will not proceed into the enquiry of the records, documents and other evidence in consideration before the learned Trial Court, but shall constrain itself to the findings of the learned Court below in the impugned order and to the question whether there is any patent illegality, error apparent on record or incorrectness. 35. At this stage in revisional jurisdiction, the question to be assessed is whether in the observations made by the learned Additional Sessions Judge there was gross illegality, incorrectness or apparent impropriety while discharging the Respondents. It is deemed necessary to establish the degree of consideration to be given to the material on record as well as the facts before the Court, at the stage of framing of charges. 36. In State of Maharashtra & Ors. vs. Som Nath Thapa and Ors., (1996) 4 SCC 659, Hon'ble Supreme Court was of the opinion as laid down as under: - "31. … if on the basis of materials on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Court is limited to the prima facie satisfaction of the Court and if the Court does not find reasonable grounds of suspicion against the Accused, it may discharge him of the offences alleged against him. 40. In the present matter, the Petitioner had filed a Supplementary Complaint based on certain additional documents received by it against the Respondents, including, the Prosecution Report of Commonwealth Director of the Public Prosecution by the Australian Federal Police. The Petitioner based its findings against the Respondents on the said documents and alleged certain facts based on the apprehension that the amount being transferred from the business accounts of the Respondents were proceeds of drug trafficking and hence, was laundered money. Keeping in view all the material, including the abovementioned document, the Additional Sessions Judge was not satisfied that the apprehension and suspicion of the Petitioner was well founded and even for the offences under the NDPS, no recovery was brought on record. It was observed that the additional evidence did not disclose prima facie any material to infer that the accused persons, Respondents herein, were involved in the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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