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TMI Blog2024 (11) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... sary directions for discharge of the accused no. 3 in cc no. 01/15 dated 15.12.2015 title Assistant Director, Enforcement Directorate vs. Kamal Kalra and Ors. for the offences under section 3& 4 of PMLA and section 71 of the act ibid." 2. The brief facts that led to the filing of the instant petition are that on the basis of a complaint received from DGM, Bank of Baroda dated 24th September, 2015, Central Bureau of Investigation (hereinafter "CBI") registered an FIR bearing No. RC.BD1/2015/E/0009 dated 9th October, 2015 against 59 current account holders (proprietor/director/partner of the 59 firms/companies) and other unknown bank officials/private persons for commission of the offences under Sections 420/120B of the Indian Penal Code, 1860 (hereinafter "IPC") read with Sections 13 (2) and 13 (1) (d) of the Prevention of Corruption Act, 1988 (hereinafter "PC Act"). 3. It is stated in the above-mentioned complaint that during the internal audit carried out by Zonal Internal Audit Division (ZIAD) of Bank of Baroda, New Delhi at their Ashok Vihar Branch, certain serious irregularities were observed/reported pertaining to foreign exchange transactions in current accounts of various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner filed an application seeking dropping of the proceedings against him pending before the learned Special Judge as no cognizance has been taken by the Court concerned. Vide order dated 7th April, 2022, the said application was dismissed by the learned Special Judge stating to the effect that the petitioner's contention has no merit and the matter was listed for arguments on charge for 21st May, 2022. 10. Hence, the present petition has been filed on behalf of the petitioner seeking setting aside of the order dated 7th April, 2022 passed by the learned Trial Court as well as his discharge. 11. Learned counsel appearing on behalf of the petitioner submitted that the impugned order dated 7th April, 2018 has been passed without taking into consideration the entirety of the matter and thus, the same is liable to be set aside as it is wholly erroneous and the learned Trial Court has taken an unreasonable view while considering the statutory provisions regarding taking cognizance of the alleged offence under the PMLA. 12. Learned counsel relies on the description of 'taking cognizance of an offence' as observed by the Hon'ble Supreme Court in the matter of R.R. Chari v. State of U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f investigation. The Explanation - II of Section 44 (1) (b) of the PMLA was inserted by an amendment in the year 2019 which allows for filing of supplementary complaints and it does not have any retrospective effect, therefore, the same cannot be applied to the complaint in question. 19. It is further submitted that even if the Explanation-II of Section 44 (1) (b) of the PMLA were to have retrospective effect, the provisions enshrined therein cannot be interpreted in a manner to assume that the initial complaint can be filed without completing the investigation. 20. It is submitted that in P.M.C. Mercantile Private Ltd. v. State, 2014 SCC OnLine Mad 10242, the Madras High Court observed that under Section 173 (2) of the CrPC, a final report should only be submitted when the police have completed the investigation and if any report is filed before investigation is complete, it is considered as "incomplete report" and consequently, the incomplete report doesn't meet requirement in terms of Section 173 (2) of the CrPC, based on which no cognizance of the offence can be taken by the Court concerned. 21. It is submitted that in contemplation of Section 173 of the CrPC and Section 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that in accordance with the established legal precedents in State of Maharashtra v. Sharadchandra Vinayak Dongre, (1995) 1 SCC 42, Narendra Kumar Amin v. CBI, (2015) 3 SCC 417 and Vinay Choudhary v. State, 1989 SCC OnLine Del 87, a police report under Section 173 (2) of the CrPC is filed to facilitate the Magistrate to determine whether there's ample evidence to take cognizance of the offence alleged regardless of how the police has labeled the report. 29. It is submitted that under Section 44 (1) (b) of the PMLA, once the investigation is complete, the prosecution must submit a complaint to the Court as was done in the instant case and the said complaint should include the names of the parties, details of the information, a list of witnesses, and relevant documents. It is further submitted that the present complaint meets all these requirements for the Court concerned to take cognizance, and the case has now proceeded to the next stage wherein the matter was listed for arguments on charge on 21st May, 2022. 30. It is submitted that no objection was ever taken by the petitioner with respect to taking of cognizance. It is further submitted that on 4th May, 2018, the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present matter till date. The expression 'cognizance' has not been defined in the Court. It has no esoteric or mystic significance in criminal law. It merely means ' become aware of ' and when used with reference to a Court or a Judge, it connotes ' to take notice of judicially'. It indicates the point when the Court takes judicial notice of an offence with a view to initiating proceedings in respect of such offence alleged to have been committed by someone. It is no more res-integra that taking cognizance does not involve any formal action or indeed action of any kind but occurs as soon as the Court applies its mind to the suspected commission of an offence. Cognizance therefore, takes place at a point when the Court first takes judicial notice of an offence. The cognizance is taken at the initial stage when the Court peruses the complaint with a view to ascertain whether the commission of any offence is disclosed or not. Once1 the Court on perusal of the complaint is satisfied that the* complaint discloses the commission of an offence and there is no reason to reject the complaint at that stage, and proceeds further in the matter, it is held to have tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aints were filed against accused Mr. Rajiv Wadhwa on 31st March, 2016, and Rakesh Bansal on 17thAugust, 2018, the Court acknowledged that cognizance of the offence had already been taken. Consequently, the Court found no merit in the applicant's contention that cognizance had not been taken and dismissed the application stating that formal orders are not essential to establish the taking of cognizance. 40. In light of the aforesaid submissions and the observations of the learned Trial Court in the impugned order, the issue that comes up for adjudication is 'whether any cognizance was taken by the learned Trial Court and whether the learned Trial Court could have taken cognizance upon the complaint filed by the ED while the investigation is still ongoing? If answer to the same is in affirmative, then whether the Explanation-II of Section 44 (1) (b) of the PMLA introduced by way of amendment applies retrospectively?' 41. Before adverting into the merits of the case, this Court deems it appropriate to reproduce the extracts of Sections 44 of the PMLA. The relevant portion of the same is as under: "Section 44 - Offences triable by Special Courts (1) Notwithstanding anything conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section as if the reference to "Magistrate" in that section includes also a reference to a Special Court designated under section 43..." 42. The issues put forth before this Court lies in the contention of the petitioner that his name is neither mentioned in the FIR, nor in the initial complaint filed by the ED. Furthermore, till date no cognizance of the offence alleged against the petitioner has been taken by the Court concerned as no order to that respect has been passed. It has also been argued that even if cognizance has been taken, the same is illegal and erroneous as the ED filed its complaint without completion of the investigation which is not the mandate of the statutory provisions of the PMLA. Moreover, filing of supplementary complaints, allowed by the insertion of Explanation - II to Section 44 of the PMLA does not apply to the facts of the instant case as the same does not have any retrospective applicability. 43. Therefore, this Court shall first discuss the concept of 'taking cognizance of an offence' which is the subject matter of the dispute in the instant petition. 44. In one of the earliest judgments passed in R.R. Chari v. State of U.P.,1951 SCC 250, the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, the provisions of Sections 200 to 204 of the Cr.PC will apply to the Complaint. There is no provision in the PMLA which overrides the provisions of Sections 200 to Sections 204 of Cr.PC. Hence, the Special Court will have to apply its mind to the question of whether a prima facie case of a commission of an offence under Section 3 of the PMLA is made out in a complaint under Section 44 (1) (b) of the PMLA. If the Special Court is of the view that no prima facie case of an offence under Section 3 of the PMLA is made out, it must exercise the power under Section 203 of the Cr.PC to dismiss the complaint. If a prima facie case is made out, the Special Court can take recourse to Section 204 of the Cr. PC." 48. Perusal of the aforesaid extracts shows that under the PMLA, a Special Court can only take cognizance of an offence under Section 3 of the PMLA, punishable under Section 4 of the PMLA, based on a complaint filed by the ED. It was held that while Section 46 of the PMLA stipulates that the provisions of the CrPC apply to proceedings before the Special Court as well since it functions like a Sessions Court as the phrase "save as otherwise provided in PMLA" allows exceptions. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Karnataka, (2021) 19 SCC 62, wherein, it was held that provisions of CrPC would apply to the procedure undertaken before a Special Court enacted under a special statute unless the said special statute explicitly prohibits the application of provisions of the CrPC. The relevant part of the said judgment reads as under: "58........Moreover, bearing in mind the objective behind prescribing that cognizance has to be taken of the offence and not the offender, a mere change in the form of the cognizance order would not alter the effect of the order for any injustice to be meted out. *** 66. Therefore, on a combined reading of Sections 4 and 5CrPC along with Section 30-C of the MMDR Act, it is apparent that the procedure prescribed under the Code shall be applicable to proceedings before the Special Court unless the MMDR Act provides anything to the contrary. These provisions incorporate the principle of express repeal - i.e. unless any provision of the CrPC is expressly repealed by the provisions of the MMDR Act, the procedure prescribed under the CrPC would apply to the proceedings before the Special Court. Provisions of the PC Act, the Pocso Act and the NIA Act which expressly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the offence had already been taken. In this regard, this Court is inclined to upheld that observations of the learned Court below as the same are in accordance with the law and specifically denotes that cognizance of the offence/complaint has been duly taken. 60. Therefore, as the Court concerned registered the complaint upon prima facie satisfaction that there exist sufficient grounds to proceed under the PMLA, the petitioner's contention thereto does not hold any water and the same are thus rejected. 61. The petitioner has also contended that the learned Judge which passed the order dated 11th December, 2015 was not empowered under the PMLA to pass any order as he was merely a Link Judge. In this regard, the respondent ED has placed reliance on a notification dated 28th June, 2012 (Annexure R1) submitting to the effect that all the Courts of Sessions or ASJ in Delhi are designated as Special Courts for the purposes of Section 43 of the PMLA, and as such, all Courts are duly empowered to try offences under the PMLA. Therefore, this Court does not find any merit in the contention of the petitioner. 62. Now adverting to the next part of the issue raised before this Court t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplaint can certainly be filed by the respondent ED against an accused, who is already facing prosecution for offence under Section 3 of the PMLA before the Special Judge. 69. Based on the above legal analysis, it is evident that when an investigating agency is authorized to conduct the investigation and carries out additional investigation to collect further evidence, the concerned agency has the right to submit a supplementary complaint to present the newly collected material on record. 70. Now adverting to the other part of the instant issue, i.e. the Explanation-II of Section 44 (1) (b) of the PMLA which was added by the Amendment Act of 2019 is not applicable to the facts of the instant case as although the complaint was filed prior to this amendment, nevertheless it cannot have retrospective effect. 71. Explanation-II to Section 44 (1) (b) of PMLA reads as under: "44. Offences triable by Special Courts.- *** *** [Explanation. -For the removal of doubts, it is clarified that,- (i) the jurisdiction of the Special Court while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be dependent upon any orders passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued when the amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law when the Constitution came into force, the amending Act also will be part of the existing law.' (emphasis supplied)" 74. Thus, from the aforesaid judgment it is evident that an explanatory provision, when added in a statute, merely clarifies the meaning of the provisions already enshrined under Act. Therefore, it is a well settled position in law that if a provision is meant to correct, clarify, or declare what the previous law intended, it generally applies retrospectively. In summary, Explanation-II to Section 44 (1) (b) of PMLA has retrospective effect and coherently applies to the instant case. 75. The aforesaid view, particularly with respect to the Explanation - II of Section 44 (1) (b) of the PMLA, was also observed by the Hon'ble Supreme Court in the landmark case of Vijay Madanlal Chaudhary (Supra), wherein, the Hon'ble Court has clarified that the said explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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