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TMI Blog2024 (10) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... re was information available with the ED which had compulsorily to be disclosed to the relevant authority for taking necessary action. In the instant case, if the FIR is perused, then it becomes clear that the Directorate of Enforcement while investigating in a money laundering case under the provisions of PML Act, 2002 had discovered that a company known by the name of M/s. Prizm Holography and Security Films Pvt. Ltd. which was based in Noida was illegally granted a tender to supply holograms to the Excise Department of Chhattisgarh. FIR therefore was registered under sections 420, 468, 471 473, 484 and 120-B IPC. The accused government officials and the owner of the firm M/s. Prizm Holography and Security Films Pvt. Ltd. along with Anwar Dhebar were prima facie involved in the case in question. A bare perusal of the FIR does not evidently disclose the complicity in the case of Anwar Dhebar with the crime in question but the counter affidavits of the State definitely reveal such incriminating evidence which confirms the involvement of Anwar Dhebar. The whatsapp chat between Anwar Dhebar and company officials of the firm definitely go to indicate that there were dubious activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or their illegal acts had charged commission. It will be very unsafe to accept the arguments of the learned counsel for the petitioners that for all initiation of criminal cases, statements made before the authorities under Section 50 of the PML Act, 2002 could never be used. Such statements which are in the knowledge of an investigating agency can always be used for initiating or for furthering of any pending investigation. It of course need not be used for the purposes of a trial and definitely they could not be categorized as confessions or admissions - Also when the ED had by its communication dated 28.07.2023 informed the State of Uttar Pradesh and which information had resulted in the F.I.R. dated 30.07.2023 then that information was an information under Section 66(2) of the PML Act, 2002 and that information could be always used by the State of Uttar Pradesh. Still further even if the crimes had allegedly been discovered in the State of Chhatisgarh, when it was discovered by ED that duplicate holograms were being made in NOIDA a district of the State of Uttar Pradesh then it was in the fitness of things that the State of Uttar Pradesh was informed about the wrongs which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No.3 and all actions/ investigations and proceedings emanating therefrom; III. Issue appropriate writ, order or direction to quash the Impugned Letter dated 28.07.2023 along with all consequential actions/proceedings/investigations emanating therefrom as being illegal and in violation of the Orders of the Hon'ble Supreme Court. 3. Similarly, Criminal Misc. Writ Petition No.6195 of 2024 (Arun Pati Tripathi vs. State of U.P. Ors.) has been filed with the following prayers : I. Issue appropriate writ, order or direction to quash the FIR dated 30.7.2023 bearing FIR No.196/2023 dated 30.7.2023 u/s 420, 468, 471, 473, 484, 120-B IPC PS Kasna, District Greater Noida, Uttar Pradesh ( Impugned FIR ) registered by the Respondent No.3 and all consequential actions/proceedings/ investigations emanating therefrom; II. Issue appropriate writ, order or direction to stay the operation and effect of the FIR dated 30.7.2023 bearing FIR No.196/2023 dated 30.7.2023 u/s 420, 468, 471, 473, 484, 120-B IPC PS Kasna, District Greater Noida, Uttar Pradesh ( Impugned FIR ) registered by the Respondent No.3 and all actions/ investigations and proceedings emanating therefrom; III. Issue appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections 276(C), 277, 278, 278E of the Income Tax Act read with sections 120-B, 191, 199, 200 and 204 of Indian Penal Code for the Assessment Year 2020-21. Based on this Income Tax Complaint, the Enforcement Directorate (henceforth called the ED ) which finds its existence because of a notification issued under section 49(3) of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the PML Act, 2002 ) registered an Enforcement Case Information Report (henceforth called the ECIR ) on 18.11.2022 alleging that a liquor scam in the State of Chhatisgarh had come to light. This was numbered as ECIR/RPZO/11/2022 (hereinafter referred to as ECIR-11 ). In the meantime, on 6.4.2023, the Additional Chief Metropolitan Magistrate returned the income tax complaint for the lack of territorial jurisdiction. This was done by the order dated 6.4.2023 and this was also appealed against by the Income Tax Department. There was since now an ECIR-11 registered against Anil Tuteja, Yash Tuteja, Smt. Saumya Chaurasia, Anwar Dhebar, Nitesh Purohit, Vikas Aggarwal alias Sabu, Vikas Aggarwal, CA, Mandeep Chawla, Siddharth Singhania and M/s. Lingraj Suppliers Pvt. Ltd., certain accused persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ED purportedly under section 66(2) of the PML Act, 2002 wrote to the Additional Director General of Police, Special Task Force, UP Police, Lucknow, Uttar Pradesh and shared certain information in respect of a company called M/s. Prizm Holography Security Films Pvt. Ltd., Noida. This communication purportedly sent under section 66(2) of the PML Act, 2002 was taken cognizance of by the Police and an FIR was lodged by the U.P. Police on 30.7.2023 which gave rise to Case Crime No.196/2023. The FIR was specifically lodged against Arunpati Tripathi, ITS, Special Secretary, Excise; Niranjan Das, IAS, Excise Commissioner; Anil Tuteja, IAS, Vidhu Gupta and Anwar Dhebar. While the FIR was pending on 7.8.2023 the Supreme Court, upon being informed that with regard to the issuing of duplicate holograms an FIR had been lodged which had given rise to Case Crime No.196/2023, had directed the U.P. Police not to take any coercive steps till the next date of listing of the writ petitions. The Supreme Court had, however, not interfered with the investigation. The order dated 7.8.2023 passed by the Supreme Court is being reproduced here as under :- Learned senior counsel for the petitioner contends th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as the second petitioner (Anwar Dhebar) in Writ Petition (Crl.) No.208/2023 is concerned, is hereby quashed. The writ petition is, accordingly, partly allowed; (iii) The complaint based on ECIR/RPZO/11/2022, as far as the petitioner (Arun Pati Tripathi) in Writ Petition (Crl.) No.216/2023 is concerned, is hereby quashed. The writ petition is, accordingly, allowed. (iv) There will be no order as to costs; and (v) Pending applications, including those seeking impleadment, are disposed of accordingly. 10. We may note that the petitioners in Writ Petition (Crl.) No.153/2023 and the petitioner in Writ Petition (Crl.) No.217/2023 have not been shown as accused in the complaint. Only the second petition in Writ Petition (Crl.) No.208/2023 and the petitioner in Writ Petition No.216/2023 have been shown as accused in the complaint. In the case of those petitioners who are not shown as accused in the complaint, it is unnecessary to entertain the Writ Petitions since the complaint itself is being quashed. 11. The paragraph 12 of the aforesaid judgment dated 8.4.2024 had, however, left it open to the petitioners therein to challenge the FIR dated 30.7.2023 lodged by the State of Uttar Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self and that they could not have been used for the purposes of initiating criminal proceedings afresh by the State of Uttar Pradesh. Relying upon a judgment of the Supreme Court in Prem Prakash vs. Union of India through the Directorate of Enforcement reported in 2024 SCC OnLine 2270, learned counsel has submitted that not only the statements recorded under Section 50 of the PML Act, 2002 could not be used for the purposes of the lodging of a separate FIR under the IPC it also could not be used for the purposes of initiating a subsequent ECIR by the ED itself. In this regard, learned counsel for the petitioner relied upon paragraphs 24, 25, 26 and 32 of that judgement. The paragraphs mentioned above are being reproduced here as under :- 24. Vijay Madanlal Choudhary (supra) though held that the authorities under the PMLA are not police officers, did anticipate a scenario where in a given case, the protection of Section 25 of the Evidence Act may have to be made available to the accused. The Court observed that such situations will have to be examined on a case-to-case basis. We deem it appropriate to extract Para 172 of Vijay Madanlal Choudhary (supra). 172. In other words, there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the statute confers upon him are analogous to or even identical with those of a police officer would not make him a police officer and, therefore, if such an officer records a confession it would not be hit by S. 25 of the Evidence Act. In our judgment what is pertinent to bear in mind for the purpose of determining as to who can be regarded a police officer for the purpose of this provision is not the totality of the powers which an officer enjoys but the kind of powers which the law enables him to exercise. The test for determining whether such a person is a police officer for the purpose of S. 25 of the Evidence Act would, in our judgment, be whether the powers of a police officer which are conferred on him or which are exercisable by him because he is deemed to be an officer in charge of police station establish a direct or substantial relationship with the prohibition enacted by S. 25, that is, the recording of a confession. In other words, the test would be whether the powers are such as would tend to facilitate the obtaining by him of a confession from a suspect or delinquent. If they do, then it is unnecessary to consider the dominant purpose for which he is appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght, but then, a stance of silence is running a calculated risk. On the other hand, if there is any mode of pressure, subtle or crude, mental or physical, direct or indirect, but sufficiently substantial, applied by the policeman for obtaining information from an accused strongly suggestive of guilt, it becomes compelled testimony , violative of Article 20(3). (Emphasis supplied) 32. We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker . The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind. It will be extremely unsafe to render such statements admissible against the maker , as such a course of action would be contrary to all canons of fair play and justice. (iii) Learned counsel for the petitioner stated that the statements recorded under Section 50 of the PML Act, 2002 were akin to the admissions made before the Police and, therefore, as per Section 25 of the Eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State of U.P. In this regard, learned Senior Counsel relied upon paragraph nos.107, 111 and 116 of the jugment of the Supreme Court in State of Punjab vs. Davinder Pal Singh Bhullar reported in (2011) 14 SCC 770 which are being reproduced here as under :- 107. It is a settled legal proposition that if initial action is not in consonance with law, all subsequent and consequential proceedings would fall through for the reason that illegality strikes at the root of the order. In such a fact situation, the legal maxim sublato fundamento cadit opusmeaning thereby that foundation being removed, structure/work falls, comes into play and applies on all scores in the present case. ....................... 111. Thus, in view of the above, we are of the considered opinion that the orders impugned being a nullity, cannot be sustained. As a consequence, subsequent proceedings/orders/FIR/investigation stand automatically vitiated and are liable to be declared non est. ................ 116. In view of the above, the appeals succeed and are accordingly allowed. The impugned orders challenged herein are declared to be a nullity and as a consequence, the FIR registered by CBI is also quashed. (v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , AIR 2021 SC 1918; State of Telangana Vs. Habib Abdullah Jellani, (2017) 2 SCC 779 and Lalita Kumar vs. State of U.P., (2014) 2 SCC 1, he has submitted that this Court may not interfere with the FIR as definitely a perusal of the FIR showed that a cognizable offence was made out and it was a subject of investigation as to whether the accused persons were to be charge-sheeted or whether no criminal proceedings were to be undergone against them. He submits that the investigation was going on and everything would be subject to it. Learned Additional Advocate General has further relied upon the judgment of Supreme Court in Vijay Madanlal Choudhary Ors. vs. Union of India Ors. reported in 2022 SCC OnLine 929 [AIR 2022 SL (Supp) 1283] and has submitted that definitely under Section 66(2) of the PML Act, 2002 as and when a cognizable offence was noticed by the ED, it could have always referred the matter to the State of Uttar Pradesh for taking cognizance of it and for the lodging of the FIR under Section 154 of Cr.P.C. Learned Additional Advocate General in fact states that if the State of Uttar Pradesh did not lodge the FIR then it would be failing in its duty as a State. Learned Addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal case in connection with scheduled offence. This is because the machinery provisions cannot be construed in a manner which would eventually frustrate the proceedings under the 2002 Act. Such dispensation alone can secure the proceeds of crime including prevent and regulate the commission of offence of money-laundering. The authorised officer would, thus, be expected to and, also in a given case, justified in acting with utmost speed to ensure that the proceeds of crime/property is available for being proceeded with appropriately under the 2002 Act so as not to frustrate any proceedings envisaged by the 2002 Act. In case the scheduled offence is not already registered by the jurisdictional police or complaint filed before the Magistrate, it is open to the authorised officer to still proceed under Section 5 of the 2002 Act whilst contemporaneously sending information to the jurisdictional police under Section 66(2) of the 2002 Act for registering FIR in respect of cognizable offence or report regarding non-cognizable offence and if the jurisdictional police fails to respond appropriately to such information, the authorised officer under the 2002 Act can take recourse to appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther submits that even otherwise if there was an information and the ED felt that it was to be shared with the concerned agency for necessary action then it was essential that the information ought to be shared and that the concerned agency had to take action. Learned counsel for the ED relied upon paragraph nos.282 and 290 of the judgment of the Supreme Court in Vijay Madanlal Choudhary (supra) which are being reproduced here as under :- 282. Be it noted that the authority of the Authorised Officer under the 2002 Act to prosecute any person for offence of money- laundering gets triggered only if there exists proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act and further it is involved in any process or activity. Not even in a case of existence of undisclosed income and irrespective of its volume, the definition of proceeds of crime under Section 2(1)(u) will get attracted, unless the property has been derived or obtained as a result of criminal activity relating to a scheduled offence. It is possible that in a given case after the discovery of huge volume of undisclosed property, the authorised officer may be advised to send information to the jurisdictional p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the culprits do not go unpunished and the proceeds of crime are secured and dealt with as per the dispensation provided for in the 2002 Act . Suffice it to observe that the amendment effected in 2015 in the second proviso has reasonable nexus with the object sought to be achieved by the 2002 Act. 17. Learned counsel for the ED, therefore, states that for the ED to disclose the information which it had in its possession was the proper thing to do. To share the information was not just a power that the ED possessed but it was also its duty to do so. 18. Sri Zoheb Hossain, learned counsel for the ED further submitted that the ECIR-11 was never quashed. The Supreme Court by its order dated 8.4.2024 had only quashed the prosecution complaint which was filed by the ED pursuant to the ECIR-11. Learned counsel for the ED relying upon the judgment dated 20.8.2024 passed by the Chhattisgarh High Court submitted that even the counsel for the petitioners at Chhattisgarh had conceded to this fact that the Supreme Court had only quashed the prosecution complaint. Learned counsel for the ED further submitted that the statements recorded under section 50 of the PML Act, 2002 would always co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure P16) is beyond the ED's jurisdiction, as it is not violative of law and the Investigating Agency has acted within the precincts of law, ensuring that all procedures and actions taken during the course of investigation adhered to law. 21. Learned counsel for the E.D. for the similar proposition of law has also relied upon a judgment dated 01.02.2024 passed by the High Court of Punjab and Haryana at Chandigarh in Angad Singh Makkar vs. Union of India and Ors. reported in CRMM- 5228-2024. The High Court had observed that the E.D. was free to communicate to the Police any information which it had in it s possession. The paragraph 23 of that judgment is being reproduced here as under :- 23. Based on the crimes mentioned in para No. 3 (supra), the Enforcement Directorate was also prosecuting him for proceeds of crime. During such enquiry, the Joint Director of Enforcement Directorate, got to know about commission of other offences and thus he rightly exercised his statutory obligations in accordance with Section 66(2) of PMLA and informed the concerned Superintendent of Police, Gobindpur, Yamuna Nagar at Jagadhri. Neither, such communication sent by the Joint Director of Enf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused person, if it is an admission, is admissible in evidence under Section 21 of the Evidence Act, unless the statement amounts to a confession and was made to a person in authority in consequence of some improper inducement, threat or promise, or was made to a Police Officer, or was made at a time when the accused was in custody of a Police Officer. If a statement was made by the accused in the circumstances just mentioned its admissibility will depend upon the determination of the question whether it does not amount to a a confession. If it amounts to a confession, it will be inadmissible, but if it does not amount to a confession, it will be admissible under Section 21 of the Act as an admission, provided that it suggests an inference as to a fact which is in issue in, or relevant to, the case and was not made to a Police Officer in the course of an investigation under Chapter XIV of the Code of Criminal Procedure. Secondly, a statement made by an accused b person is admissible against others who are being jointly tried with him only if the statement amounts to a confession. Where the statement falls short of a confession, it is admissible only against its maker as an admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chawat, J., after referring to Lord Atkin's observations in Pakala Narayana Swami's case (supra) and their approval in Palvinder Kaur's case (supra) defined a confession as an admission of the offence by a person charged with the offence . It is thus clear that an admission of a fact, however incriminating, but not by itself establishing the guilt of the maker of such admission, would not amount to confession within the meaning of Sections 24 to 26 of the Evidence Act. 24. Having heard Sri Siddharth Dave, learned Senior Advocate assisted by Sri Saksham Srivastava and Vinayak Mithal, learned counsel appearing in Criminal Misc. Writ Petition No.6236 of 2024; Sri Rajiv Lochan Shukla learned counsel for the petitioner appearing in Criminal Misc. Writ Petition No.6194 of 2024; Sri Imran Ullah, learned counsel appearing for the petitioner in Criminal Misc. Writ Petition No.7389 of 2024 and Sri Shishir Prakash, learned counsel appearing in Criminal Misc. Writ Petition No.6195 of 2024, the Court finds that the question which is required to be answered in the instant case is as to whether when a prosecution complaint filed by the ED, which was already quashed, and was no longer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borated the case of the prosecution. The complaints against illegal allotment of hologram tender to M/s. Prizm Holography and Security Films Pvt. Ltd. had all fallen on deaf ears of the accused persons. We are thus of the view that, therefore, the accused government officials and the owner of the firm M/s. Prizm Holography and Security Films Pvt. Ltd. along with Anwar Dhebar were prima facie involved in the case in question. A bare perusal of the FIR does not evidently disclose the complicity in the case of Anwar Dhebar with the crime in question but the counter affidavits of the State definitely reveal such incriminating evidence which confirms the involvement of Anwar Dhebar. The whatsapp chat between Anwar Dhebar and company officials of the firm definitely go to indicate that there were dubious activities going on in between the accused persons. 25. It is a clear law as has been held by the Supreme Court in Neeharika Infrastructure Pvt. Ltd. vs. State of Maharashtra and Others, AIR 2021 SC 1918; State of Telangana Vs. Habib Abdullah Jellani, (2017) 2 SCC 779 and Lalita Kumar vs. State of U.P., (2014) 2 SCC 1 that if there is a cognizable offence disclosed in the FIR, then no in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the work of manufacturing holograms was given to M/s. Prizm Holography and Security Films Pvt. Ltd. illegally by the accused persons and whether the accused persons for their illegal acts had charged commission. Also, the State of Uttar Pradesh had to see that when duplicate holograms, in connivance of the accused persons were being made and for this purpose the ED had passed on information in its possession to it then it had to further investigate and bring the guilty to book. 28. While holding that the F.I.R. cannot be interfered with in the above mentioned writ petitions, we would also like to meet the arguments made by the learned counsel for the petitioners when he stated that the statements made under Section 50 of the PML Act, 2002 would not enure to the benefits of the prosecution after the prosecution complaint of the ED was set aside by the Supreme Court by its order dated 08.04.2024. Learned counsel for the petitioners had relied upon the judgment of Prem Prakash (Supra) and had submitted that the Supreme Court had held that even though the authorities were not Police under the PML Act, 2002 before whom the witnesses had made their statements, the protection under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the wrongs which were being done on its territory. Also we are of the view that there was nothing malicious in the fact that when the State of Chhatisgarh did not react to the communication dated 11.07.2023, then the ED had written to the State of Uttar Pradesh on 28.07.2023 about the activities which were being done in the State of Uttar Pradesh. The two communications dated 11.07.2023 and 28.07.2023 were sent in quick succession and, therefore, no mala fide could be attached to this act of the ED. If the State of Chhatisgarh did not react to the communication dated 11.07.2023 and the State of Uttar Pradesh reacted to the communication dated 11.07.2023 then it could not be said that, because the State of Chhatisgarh did not react to the communication dated 11.07.2023, the communication dated 28.07.2023 was sent to the State of Uttar Pradesh. Also we refer to the argument of Sri Shishir Prakash who had stated that the allotment of tender to M/s. Prizm Holography and Security Private Limited was challenged before the Chhatisgarh High Court and the Chhatisgarh High Court had found that there was nothing illegal in the grant of tender to the M/s. Prizm Holography and Security Priva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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