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TMI Blog2024 (7) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... vidences on record, who confirmed the monetary transactions received by him. The same were also found in tandem with the contents of BBM messages retrieved by forensics lab, CERT-In. These amounts were found to be sent for Hawala Transactions through Delhi based Hawala Operators which reflected in the BBM messages of Aditya Sharma and Ex. CBI Director AP Singh. Satish Babu Sana and Pradeep Koneru have, thus, prima facie committed offence of money laundering as defined in Section 3 of the PMLA, 2002 by directly or indirectly indulging in, knowingly assisting, knowingly a party and actually involved in all or any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property. The petitioners have challenged the constitutionality of Section 50 of PMLA, which has already been put to rest by the Hon ble Supreme Court in its Three Judge Bench decision in Vijay Madanlal Choudhary Vs. UOI [ 2022 (7) TMI 1316 - SUPREME COURT] wherein it is held that ' We fail to understand as to how article 20 (3) would come into play in respect of process of recording statement pursuant to such summo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shaurya Singh, Mr. Saikh Bakhtiyar, Ms. Rudrali Patil Mr. Akshat Gupta, Advocates, Mr. Mukul Rohtagi, Senior Advocate, Mr. Jayant Bhushan, Senior Advocate with Ms. Devanshi Singh, Mr. Anirudha Deshmukh, Mr. Mahesh Agarwal, Mr. Rishi Agrawala, Mr. Ankit Banati, Mr. Abhay Agnihotri and Ms. Tarini Khurana, Advocates For the Respondents Through: Mr. Zoheb Hossain, Special Counsel for ED with Mr. Vivek Gurnani, Mr. Kartik Sabharwal, Mr. Baibhav Ms. Manisha Dubey, Advocates. Mr. Chetan Sharma, Additional Solicitor General with Mr. Ripu Daman Bhardwaj, CGSC, Mr. Amit Gupta and Mr. Vikramaditya, Advocates for CBI Mr. Parvinder Singh, SP, CBI, AC-III and Insp. S. Kumar in person Mr. Zoheb Hussain, Special Counsel with Mr. Vivek Gugnani, Mr. Baibhav, Mr. Kartik Sabharwal and Mr. Kanishk Maurya, Advocates for ED. JUDGMENT SURESH KUMAR KAIT, J 1. An investigation was carried out by the Directorate of Enforcement ( DoE ) under the provisions of Foreign Exchange Management Act, 1999 ( FEMA ) against accused Moin Akhtar Qureshi on the allegation that he through his company, namely, India Premier Services Pvt. Ltd. (IPSPL) applied for obtaining Concession Agreement from M/s DIAL (Delhi Internation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Crl) 2903/2019 under Article 226 of the Constitution of India read with Section 482 Cr.P.C. seeking to declare provisions of Section 50 (2) of Prevention of Money Laundering Act, 2002 ( PMLA ) as unconstitutional being ultra vires and violative of Articles 14, 20 and 21 of Constitution of India and Section 132 of Indian Evidence Act, 1872 ( IEA ). 5. During the course of investigation by the Department of Enforcement, searches were conducted at various places of Moin Akhtar Qureshi and his companies, which resulted into extraction of BBM messages for the period 2011 to 2014 and other incriminating documents authenticated by service provider Blackberry, Canada, which revealed he had taken huge amount of money from different public persons using corrupt practices, through illegal means. The data so procured, revealed name of Satish Sana. 6. On 12.05.2017, petitioner-Satish Babu Sana received summons under Section 50 of PMLA from respondent No. 1-DoE with direction to appear on 12.05.2017. The petitioner claims to have appeared before the competent authority and his statement under Section 50 of PMLA was recorded on the said date. Petitioner again received summons for appearance on 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as listed for 17.08.2019. 13. On 19.08.2019, the learned PMLA Court allowed petitioner s bail application and he was granted bail. 14. The petitioner has approached this Court seeking a declaration that Section 50 (2) of the PMLA is constitutionally invalid/ unconstitutional, and ultra virus of Section 132 of the Indian Evidence Act and Articles 14, 20 (3) and 21 of the Constitution of India, in case of a witness to a case. A declaration is sought that provisions of Section 50 (2) of PMLA shall not apply to any person who has been arrayed and shown as a witness in a complaint. Hence, a writ of certiorari is sought to be issued to quash the summons dated 19.7.2019 and 25.7.2019. 15. During pendency of the present petition, this Court vide order dated 14.10.2019 had stayed operation of summoning order dated 30.09.2019 passed by the learned Trial Court whereby petitioner-Satish Babu Sana was directed to tender his further statement under Section 50 (2) of the Act, 2002. W.P.(Crl) 384/2019 16. Similarly, during search conducted at various places of Moin Akhtar Qureshi and his companies by the Department of Enforcement and extraction of BBM messages for the period 2011 to 2014 and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a witness to the accused. The petitioner is, thus, also seeking quashing of R.C. No. 224/2017. A. 0001 dated 16.02.2017, registered by the respondent No. 1-CBI. W.P.(Crl) 2353/2019 23. Petitioner-Pradeep Koneru has also preferred W.P.(Crl) 2353/2019 under Article 226 of the Constitution of India read with Section 482 Cr.P.C. seeking to declare Section 50 (2) of PMLA as constitutionally invalid/unconstitutional and ultra vires of Section 132 of Indian Evidence Act and Articles 14, 20 (3) and 21 of the Constitution of India. 24. Petitioner has further sought a declaration that Section 50 (2) of PMLA is not applicable to a person who has been arrayed as a witness in the complaint. In addition, petitioner has also prayed for quashing of summons dated 19.07.2019 and 25.07.2019 as void, ab initio and quash the proceedings arising out of the ECIR No. 2/2017 being violative of Section 132 of IEA and Articles 14, 20 and 21 of the Constitution of India. 25. Petitioner-Pradeep Koneru has averred that the Directorate of Enforcement, Department of Revenue, while investigating certain violations of the FEMA came to the conclusion that one Moin Akhtar Qureshi was guilty of in connivance with se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminal cases) and also the persons who wanted to seek undue favors from other investigating agencies of Govt. It is also reflected that he was able to procure undue relief for such accused persons by getting them off the hook from investigating agencies. In this way, he also obtained huge amount of money for providing his services towards using his influence. The money was obtained by Moin Qureshi in the name of Govt. servants/ political persons holding public office and the said public servants illegally into either obtained the money for themselves or through their kin. In support of this, two public persons/ witnesses Satish Sana and Pradeep Koneru came forward and recorded their statements under Section 50 PMLA to the effect that they had paid crores of rupees to Moin Qureshi to help them in getting relief from investigating agency, CBI. The persons apart from Satish Sana and Pradeep Keneru who had paid money to Moin Qureshi, are under investigation. XXXX 7. During the course of ED investigations Sh. Satish Sabna and Sh. Pradeep Kneru in their statement under 50 PMLA have confirmed that they delivered crores of rupees to Moin Akhtar Qureshi through his employee Sh. Aditya Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, he had appeared before the CBI on 12.10.2017 and he was again and again called by Devender Kumar, DSP CBI three-four times. Thereafter, he had left for Dubai, where he met Somesh Prasad and Manoj Prasad, who convinced him that they had good connections in CBI and after talking to some CBI officials, assured him that on payment of Rs. Five Crores, they will get him favourable order in his case. Both these persons showed him profile photo of CBI Director Rakesh Asthana with whom they had spoken in his presence, which photo he tallied from Google search also. 34. In the said complaint, petitioner-Satish Babu Sana complained that he paid amount of Rs. One Crore to Manoj Prasad in his office in Dubai and thereafter, on the asking of Somesh Prasad, gave Rs. 1.95 crores to Sunil Mittal on 13.12.2017 in New Delhi. The petitioner also alleged that he was informed that the said amount was given to Rakesh Asthana, in lieu of taking care of case against him. However, petitioner was short of money and Manoj Prasad asked him to pay balance of Rs. Two Crores. Again, he was summoned by the CBI on 19.02.2018 and on 21.02.2018 for questioning and interrogation. Thereafter, he flew to Dubai to me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid down u/s 439 Cr.P.C. In the instant matter the applicant had been assisting the investigating agency ever since 2017 till the time of his arrest. He has roots in society and there is nothing on record to suggest that there is any likelihood of his absconding in case he is granted bail. In so far as submission of Mr. Singh regarding the accuse having not cooperated in investigation is concerned, Ld. Counsel for the accused has relied upon the judgment in (2017) 9 SCC 714 titled as Santosh Vs. State of Maharashtra, wherein Hon ble Supreme Court held that not confessing cannot be considered same as not co-operating. Mr. Singh also expressed his apprehension regarding possibility of accused interfering with the investigation/ tampering with the evidence. There is nothing on record to show that accused did interfere with the investigation all this time in any manner except for the allegation that he did not co-operate in the investigation. In view of the facts as they are since accused Moiin Akhtar Qureshi has already been granted bail and the role of applicant is no graver than his role in the case, the application of accused Satish Babu Sana seeking grant of bail is allowed. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed benefit, which is termed as proceeds of crime . On the basis of the investigation, complaint under Section 45(1) of PMLA was filed against Moin Akhtar Qureshi and statement of petitioner under Section 50 PMLA was recorded on 01.05.2017. After investigating, the petitioner was cited as witness at Serial No. 26 in the complaint. 45. However, thereafter, petitioner was summoned on 23.07.2019 and 19.08.2019 under Section 50 of PMLA, arrayed as an accused. 46. Learned senior counsel appearing on behalf of petitioner-Pradeep Koneru submitted that prior to filing of the complaint, petitioner attended the Bureau as many as seven times as and when telephonically called and summoned by the Investigation Officer; he had given similar version in all his statements recorded under Section 50 of the Act and respondent has not been able to show any new fact or allegation to summon him in the garb of investigation. Learned senior counsel further submitted that statement recorded under Section 50 PMLA is equivalent to statements recorded under Sections 193 and 228 of the IPC in judicial proceedings and so, his status acquired after recording of statement under Section 50 PMLA cannot be changed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt either under Section 193 or Section 319 of the Penal Code. 51. Learned senior counsel empathically submitted on behalf of petitioner-Pradeep Koneru that if the impugned summoning of petitioner is allowed to be sustained, then the entire rigour of Section 50 (2) should be declared to be unconstitutional. In the alternative, it is prayed that Section 50 (2) should be constitutionally saved by holding that no supplementary statement, on the same facts which have been recorded in the earlier Section 50 (2) Statements, be allowed to be taken once a person acquainted with the facts of a case has been accorded a status of a witness. 52. Learned senior counsel for petitioner vehemently submitted that O.M. No. 25016/31/2010-IMM dated 27.10.2010 issuing the guidelines for issuance of Look Out Circular Notices cannot be said to be procedure established by Law and ought to be struck down as unconstitutional being violative of Article 21 of the Constitution. Also submitted that to challenge the 2010 Notification under which an LoC is issued, is different from challenging the issuance of LoC itself in a particular fact scenario. It is averred on behalf of the petitioner-Pradeep Koneru that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rway. 56. Learned ASG appearing on behalf of respondents submitted that the statements tendered under Section 50 of PMLA have no relation with the change of status from a witness to accused . Section 50 ibid merely acts an aid to investigation granting power to specified authorities to gather evidence by way of statements and/or production of records, which results into filing of complaint before the competent court. The power to arrest an accused, in terms of Section 19 ibid, has been granted to arrest an accused after forming reasons to believe that the said persons has committed an offence punishable under the Act and till the conclusion of investigation, role and status of the persons involved may modify on the basis of facts being unravelled in the subsequent investigation. 57. Learned ASG pointed out that upon scrutiny of the BBM messages it has transpired that Moin Akhtar Qureshi had taken huge amount of money from different public persons for obtaining undue favours from public servants at the extant time after exercising his personal influence over them using corrupt practices, through illegal means, thereby influencing them. It is submitted that in the present case, Proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Madhu Koneru and he had sent huge amount of money to him. 62. Learned Special Public Prosecutor submitted that the facts and circumstances of cases of ED and CBI are different and the investigation conducted by ED, in no way shall prejudice the rights of the petitioners in proceedings initiated by the CBI so, it would not be appropriate to quash the FIR. Moreover, no complaint was ever made by petitioner-Pradeep Koneru in respect of extortion of money. 63. To draw attention of this Court to the provisions of Section 8 of PC Act, reliance was placed upon decisions of Hon ble Supreme Court in Upendra Rai Vs. Central Bureau of Investigation 2018 SCC OnLine Del 12856; decision dated 05.02.2014 in Central Bureau of Investigation Vs. Jitender Kumar Singh (Crl. Appeal No. 943 of 2008 with Criminal Appeal No. 161 of 2011) and Babji Vs. State of Andhra Pradesh (2018) 17 SCC 732. Reliance was also placed upon decision dated 19.12.2019 of High Court of Chattisgarh at Bilaspur in B.L. Aggarwal Vs. Central Bureau of Investigation and Ors. 64. With regard to applicability of provisions of Section 120B IPC, reliance was also placed upon decisions in Yogesh alias Sachin Jagdish Joshi Vs. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder 08/2017 in respect of proceeds of crime, prosecution Complaint was filed on 23.10.2017 and thereafter, supplementary complaint dated 17.07.2018 was filed. It was submitted that Section 50 (2) PMLA empowers the Director or Additional Director, Joint Director, Deputy Director or Assistant Director to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding and under Section 50 PMLA, the summoned person is required to give truthful statement and is not absolved from speaking truth on the ground that such statement is admissible in evidence and could be used against him. Next submitted that a statement recorded pursuant to Section 50 (3) and Section 50 (4) of the PMLA is at a stage of investigation to determine the facts in a particular case and summoning as per Section 50 of the Act, is not an act of prosecution. 69. It was submitted that investigation in this case was initiated under PMLA, 2002 subsequent to registration of FIR u/s 120 (B) IPG PC Act, 1988-Section 8, 9, 12 13 (2) r/w 13(1) (d) by CBI. 70. Lastly, it was submitted that in view of the nature and complexity of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding sensitive position. 75. During further investigation and scrutiny of BBM it revealed that father of the petitioner, Rajendra Prasad Koneru and his brother-Madhu Kenuru, were arrested by CBI on 03.11.2011 for the offences punishable u/s 120-B, 409, 420, 109, 477 of IPC and u/s 13 (2) r/w Sec. 13 (1(c) (d) and Sec. 15 of PC Act, 1988 and Pradeep Koneru had paid Rs. 5.75 Crore to Moin Akhtar Qureshi and sent several e-mails with regard to the said CBI case. 76. Also it was revealed that Satish Babu Sana had paid amount of Rs. 5,00,000 to Moin Akhtar Qureshi by way of claimed investment in M/S Great Heights Infratch Private Limited and as per Forensic Extraction Report in respect of hard disk of mobile numbers 9810035614 and 9711305614 of Moin Akhtar Qureshi, BBM messages retracted, amount of Rs. 12,69,00,000/- was paid by Satish Babu Sana to Moin Akhtar Qureshi . 77. The provisions of Section 3 of PMLA provide as under:- Whosoever directly or indirectly attempts to indulge or knowingly assist or knowingly is a party or is actually involve in any process of activity connected (Proceeds of Crime including concealment, possession, acquisition, or use or projecting or claiming) untai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or obtained as a result of that crime. 80. In the present case, during the course of investigation by ED, Satish Babu Sana and Pradeep Koneru in their respective statements recorded under Section 50 of PMLA, admitted having paid crores of rupees to Moin Akhtar Qureshi through his employee Sh. Aditya Sharma for obtaining illegal favor from govt. servant(s) after using his influence. Aditya Sharma was also confronted with the facts and evidences on record, who confirmed the monetary transactions received by him. The same were also found in tandem with the contents of BBM messages retrieved by forensics lab, CERT-In. These amounts were found to be sent for Hawala Transactions through Delhi based Hawala Operators which reflected in the BBM messages of Aditya Sharma and Ex. CBI Director AP Singh. 81. Petitioner-Satish Babu Sana in his statement under Section 50 of PMLA admitted having invested Rs. 50 Lacs in farmland business in the company M/s. Great Heights Infratech Pvt. Ltd. of Sh. Moin Akhtar Qureshi and also that he had given cash of Rs. 1.5 crores to him. The investigation thus revealed involvement of Satish Babu Sana in acquisition of proceeds of crime by Moin Akhtar Qureshi a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any person, including any officer of a *reporting entity, and examining him on oath ; (c) compelling the production of records ; (d) receiving evidence on affidavits ; (e) issuing commissions for examination of witnesses and documents ; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). (5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation were issued by the Magistrate being violative of article 20 (3) of the Constitution. This court opined that the guarantee in article 20 (3) is against testimonial compulsion and is not limited to oral evidence. Not only that, it gets triggered if the person is compelled to be a witness against himself, which may not happen merely because of issuance of summons for giving oral evidence or producing documents. Further, to be a witness is nothing more than to furnish evidence and such evidence can be furnished by different modes. The court went on to observe as follows : Broadly stated the guarantee in article 20 (3) is against 'testimonial compulsion'. It is suggested that this is confined to the oral evidence of a person standing his trial for an offence when called to the witness-stand. We can see no reason to confine the content of the constitutional guarantee to this barely literal import. So to limit it would be to rob the guarantee of its substantial purpose and to miss the substance for the sound as stated in certain American decisions. The phrase used in article 20 (3) is 'to be a witness'. A person can 'be a witness' not merely by giving oral ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who is witness in offences related to scheduled offences, during his interrogation, may put-forth some material which would indicate his involvement in the commission of offence under PMLA. This Court in a catena of decisions has already held that proceedings under the scheduled offences and PMLA are separate and distinct and have no binding upon each other. 86. The Hon ble Supreme Court in Vijay Madanlal (Supra) further held as under:- 112. Reverting to clause (d) of sub-section (1) of section 44, it postulates that a Special Court while trying the scheduled offence or offence of money-laundering shall hold trial in accordance with the provisions of the 1973 Code as it applies to a trial before a court of sessions. Going by the plain language of this provision, no fault can be found for conducting trial in the respective cases in the same manner as provided in the 1973 Code. However, the grievance is about the insertion of Explanation vide Finance (No. 2) Act, 2019. As a matter of fact, this insertion is only a clarificatory provision, as is evident from the opening statement of the provision which says that for the removal of doubts, it is clarified that . None of the clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a recorded under PMLA on various dates were analyzed and it was seen that he had been shifting his stand in his various statements. In his statement dated 19.05.2017, on being asked to explain the communication dated 08.11.2012 which reads as recd 85 rest 15 tomorrow morning, satish says not possible today or tomorrow, can I pay 50 to ram bhai he stated that This conversation as per my knowledge is not related to me . In the same statement on being asked to explain the message dated 22.11.2012 which reads as Recd 50 L frm Satish he stated that I have invested this amount 50 Lakhs in his real estate company M/s. Great Heights Infra Pvt. Ltd. I have paid this amount through cheque I have declared this amount with Income Tax 2012-13. I have purchased 50,00,000 shares for Rs. 1 each. Further in his statement dated 14.07.2017, to the Ques.(27):- Of How much total money was paid to Mr. Moin Akhtar Qureshi, He replied that, he has paid Rs. 50 Lacs through RTGS to his company account and Rs. 25 Lacs in instalment. For Rs. 50 Lacs paid he gave me a Share Certificate of his Company M/s Great Height Infratech Pvt. Ltd, C-134, Ground Floor, Defence Colony, New Delhi. And Rs. 25 Lacs which was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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