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TMI Blog2025 (1) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... nistration of justice on the principle that when the law gives a person anything, it gives him that without which it cannot exist and that the inherent power is exercised ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist and that the authority of court exists for advancement of justice and if any attempt is made to abuse the authority so as to produce injustice, the court has power to prevent abuse and that it would be an abuse of process of court to allow any action which would result in injustice and prevent promotion of justice and that in exercise of powers, the court would be justified to quash any proceeding if it finds that the initiation/continuance of it amounts to abuse of process of court or quashing of these proceedings would otherwise serve the ends of justice. Perusal of the record tends to show that initially the investigation in the matter was initiated by the ACB upon registration of FIR 4/2020 under the J K Prevention of Corruption Act, wherein crux of the composite allegations against the petitioners in both the petitions was that the Society was falsely created which succeeded in obtaining the loan from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case for forgery or Bank fraud. Petition allowed. - HON BLE MR. JUSTICE JAVED IQBAL WANI, JUDGE For the Petitioner(s) Through: Mr. Tasaduq H. Khawaja, Advocate with Mr. Ab. Muizz, Advocate, Mr. M. Y. Bhat, Sr. Advocate with Mr. Sajid Ahmad Bhat, Advocate. For the Respondent(s) Through: Mr. Zuhaib Hussain, Advocate (Virtual Mode) with Mr. Faizan Ah. Ganie, Advocate. JUDGMENT 1. The issues involved in the instant petitions are akin and analogous to each other and are taken up hereunder for final disposal at this stage with the consent of learned counsel for the parties. 2. Before proceeding to advert to the issues involved in the petition, the brief facts in context of issues involved are briefly detailed hereunder: A. CRM(M) No. 484/2024. (i) The petitioners herein are stated to have been working as Chairman and Secretary of a registered Co-operative Society, namely, River Jehlum Co-operative House Building Society (for short the Society ), which Society had proposed to develop a satellite township at Shivpora, Srinagar on a big plot of land that was identified by the Society for the said purpose and the said land was proposed to be purchased by the Society from its land owners f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while alleging further that the loan had been sanctioned by the Bank illegally and fraudulently without following the Standard Operating Procedure, proper documentation, KYC norms and also without obtaining tangible security with further allegation that the whole exercise had been undertaken by the petitioners herein at the behest and instance of the then Chairman of the Bank, namely, Mohammad Shafi Dar (petitioner in connected CRM(M) No. 418/2024), who came to be the alleged kingpin in the whole affair, having compromised the interest of the Bank while sanctioning loan in favour of the Society. (iv) The petitioners herein along with other accused persons therein the FIR (Supra) are stated to have been arrested in connection with the investigation therein the said FIR, however, subsequently released on bail by the orders of the competent court of law and during the course of said investigation, the land in question is stated to have been attached and the bank accounts of 18 land owners frozen, so as to stop them from withdrawing the amount credited into their accounts against the land in question. (v) After completion of the investigation in the FIR supra, charge-sheet is stated to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring aspect of the case, although there had been no element or feature of money-laundering, as sale consideration of the land in question had been credited in the accounts of the land owners by the Bank out of the sanctioned amount of loan directly and the petitioners have had never been in possession of the money in question that is alleged to have been laundered, as sine qua non for the offence of money-laundering that one should be in possession of proceeds of crime and engaged in an activity to project it as an untainted property. (ix) It is further stated that the respondent-Directorate after remaining dormant for about three years reactivated itself most probably at the instance of the then Govt. of J K for the aforesaid reasons of litigation instituted by the above named Mohammad Shafi Dar and in furtherance of the said ECIR registered in 2021 started further proceedings in the month of November 2023 and in the course of said proceedings, on 14.12.2023, attached the land in question being 257 Kanal and 18 Marlas having been acquired in the name of the Society in lieu of the sanctioned amount of loan and subsequent thereto, the petitioners herein as also the above named Moham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the account of landowners for the purposes of making out case of money-laundering against the petitioners under such circumstances is not only abuse of process of law but amounts to overreaching orders of Hon'ble Supreme Court. e) Because the transaction between landowners and Society have been treated as genuine by the Hon'ble Supreme Court and allegation of the Society being non-existent has not been approved by the Hon'ble Supreme Court so much so calling landowners has been termed as harassment. No case can be thus made against petitioners. f) Because the existence of proceeds of crime and its possession by a person is quintessential ingredient of offence of money-laundering and a person can be accused of offence of money-laundering only if he projects or uses such property by projecting it as untainted property. None of the conditions exist in the present case. The complaint is, thus, liable to be quashed. g) That the Hon'ble High Court has already taken cognizance of the matter and stayed the proceedings in the complaint at the behest of so-called main accused, Mr. Mohammed Shafi Dar. Under the circumstances, proceedings cannot be continued against petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIR dated 31.03.2021 and consequently upon undertaking investigation thereof and concluding the same, prosecution/complaint against six accused persons/entities including the petitioners herein came to be instituted on 29.01.2024 for offence of money-laundering under Section 3 punishable under Section 4 of the PMLA. It is being lastly stated in the reply, before referring to the various judgments delivered by the Apex Court qua the ambit and scope of exercise of inherent power of this Court saved under Section 482 Cr. P.C., that the petitioners have committed the offence of money-laundering rendering them liable for prosecution under PMLA and that, as such, interference by this Court in the instant petition at this Stage will amount to abuse of process of law and will prove to be detrimental to the interest of the Bank and defeat the purpose of PMLA. B. CRM(M) No. 418/2024 (i) In the instant petition, the petitioner herein claims to have been elected as Chairman of the Bank in the month of December 2018 for a period of three years to expire in December 2021, however, alleges to have been dislodged on 15.05.2020 at the instance of a powerful team of bureaucrats working in the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertinent to mention here that the petitioner herein is the alleged main accused implicated in the complaint having arisen out of the ECIR (Supra) and in the complaint is alleged to have committed the offences as are alleged committed by the petitioners of CRM(M) No. 484/2024 supra. 6. The petitioner herein, as well, has maintained the instant petition fundamentally on the premise on which the petitioners of CRM(M) No. 484/2024 supra have maintained the said petition, as such, for the sake of brevity, the same is not reiterated hereunder. 7. Objections to the petition have been filed by the respondent-Directorate, wherein the petition is being opposed on almost same and similar premise and grounds on which the petition bearing CRM(M) No. 484/2024 supra has been opposed, as such, the same as well is not being reiterated for the sake of brevity. Heard learned counsel for the parties and perused the record. 8. Before proceeding further in the matter, it would be advantageous and appropriate to refer to the ambit and scope of inherent power vested in this Court saved under Section 482 Cr.P.C, qua the quashing of a complaint/FIR. A reference in this regard to the judgment of Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. 7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. The Apex Court further in this regard has also in case titled as State of Karnataka vs. M. Devenderappa and another reported in 2002 (3) SCC 89 , at para 6 held as under: 6....All courts, whether civil or criminal possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of justice on the principle quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae esse non potest (when the law gives a person anything it gives him that without which it cannot exist). While exercising powers under the section, the court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaining whether the necessary ingredients to constitute the alleged offence are disclosed or not. In frivolous or vexatious proceedings, the Court owes a duty to look into many other attending circumstances emerging from the record of the case over and above the averments and, if need be, with due care and circumspection try to read in between the lines. The Court while exercising its jurisdiction under Section 482 of the Cr.P.C. or Article 226 of the Constitution need not restrict itself only to the stage of a case but is empowered to take into account the overall circumstances leading to the initiation/registration of the case as well as the materials collected in the course of investigation. Thus, what emanates from the above principles of law is that the inherent power of this court saved under Section 482 Cr. P.C. does not confer any new power on the High Court, in that, it only saves the inherent power of this Court, which the court possessed before enactment of the Code of Criminal Procedure and it envisages three circumstances under which the inherent jurisdiction may be exercised, namely- a) To give effect to an order under the Code, b) To prevent abuse of process of cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;] Section 3. Offence of money-laundering. Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in 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 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 money-laundering 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 (a) 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint are true. 12. As is noticed in the preceding para, the case set up by the respondent-Directorate against the petitioners herein in the complaints put briefly is that petitioners in CRM(M) No. 484/2024, claiming to be the Chairman and Secretary of the Society had approached the Bank headed by the petitioner in CRM(M) No. 418/2024 for grant of a loan to enable the Society to develop a satellite township on an identified piece of land situated at Shivpora, Srinagar, in order to enable the Society to purchase land from the land owners, in response whereof, the Bank though its Chairman agreed and provided loan to the Society to the tune of Rs. 250 crores and the land owners in furtherance thereof executed an irrevocable power of attorney in favour of the Chairman of the Society i.e. petitioner 1 in CRM(M) No. 484/2024 to facilitate the transfer of land in favour of the Society, who in turn executed a perpetual lease in favour of the Society represented by the petitioner 2 in CRM(M) No. 484/2024, whereafter, the said lease hold rights had been mortgage by the Society with the Bank in lieu of the loan of Rs. 223 crores sanctioned by the Bank through its Chairman being petitioner in C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court passed orders to facilitate the land owners the withdrawal of the said money, having been deposited/credited in their accounts in lieu of the land having been perpetually leased out in favour of the Society. Having regard to the aforesaid position obtaining in the matter, inasmuch as the admitted facts noticed in the preceding paras, the alleged offence manifestly has not resulted in any proceed of crime in favour of the petitioners herein. A-fortiori, it cannot be said that the petitioners have indulged in any activity connected with the proceeds of crime for unless there are proceeds of crime , there cannot be any activity about the proceeds of crime , in that, existence of proceeds of crime pursuant to the predicate offence is sine qua non for commission of offence of money-laundering, to be precise that if there is no money or property, a question of money-laundering would not arise. A reference in this regard to the judgment of the Apex Court passed in case titled as Vijay Mananlal Choudhary and others vs. Union of India and others reported in 2022 SCC Online SC 929 would be relevant, wherein at para 283 and 284 following has been held:- 283. Even though, the 2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such profits may have resulted in money-laundering, which stage in the instant case has not reached. The fact that the money that was transferred in the accounts of the land owners which had been attached on the premise that the same is proceeds of crime and was released in favour of the said land owners by the orders of the Apex Court cannot be overlooked, in that, if the said money in the accounts of the land owners was proceeds of crime , the same would not have been ordered to be released in favour of the land owners and treating the said money in the accounts of the land owners for the purpose of making out a case of money-laundering against the petitioners herein under said circumstances cannot but said to be not only abuse of process of law, but as well an attempt to overreach the orders of the Apex Court, in that, the transaction between the land owners and the Society essentially has been treated as a genuine transaction by the Apex Court while ordering release of money in question in favour of the land owners. 17. Thus, what emanates from the above is that none of the ingredients of the offence of money-laundering against the petitioners herein is found to be existing i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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