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TMI Blog2025 (4) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of Money-Laundering Act, 2002 (hereinafter referred to as "PMLA") has arrested him at 8:21 p.m. at New Delhi and supplied him the grounds of arrest by recording "reasons to believe", which was duly served upon him and informed to one Mr. Sanjay Sharma. 2. The consequential order dated 19.11.2024 (Annexure P-38) was passed by the Learned Special Judge, Enforcement Directorate/(Corruption Prevention), CBI Court No. 2, Ghaziabad, whereby the remand application was allowed for 03 days to the Enforcement Directorate (hereinafter to be referred as "ED") from 19.11.2024 to 22.11.2024, while also dealing with the application for bail, which was impliedly rejected. 3. Similarly, challenge is also raised to the order dated 22.11.2024 (Annexure P-41), passed by the Special Judge, wherein the petitioner was sent to judicial custody, while rejecting the argument as such, that the jurisdiction of this Court had been encroached upon. 4. As per the prayers made, the reading down and the harmonious interpretation of the provisions of the PMLA were sought to be invoked on the ground that the principal schedule/predicate offence(s) had been committed in the jurisdiction of this Court and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial Leave to Appeal (crl.) No(s). 2606 of 2025, wherein the apex Court had observed that the order was interim in nature and would not have any bearing on the main Writ petition, which was yet to be disposed of. The said order reads as under: "The impugned order, being interim in nature, will not have any bearing on the Writ Petition which is yet to be disposed of, being Crl. W.P. No. 2/2025 pending before the High Court of Himachal Pradesh at Shimla. With the aforesaid clarification, the Special Leave Petition stands disposed of. Pending application(s), if any, shall also stand disposed of." 8. It is also pertinent to mention that during the course of arguments on 25.02.2025, it transpired that a complaint dated 10.01.2025 (Annexure P-62) has also been filed under Section 44 read with Section 45 of PMLA against the petitioner and six other individuals alongwith two partnership firms by the name of Star Mines and Garhwal Stone Crusher. The Special Court at Ghaziabad on 17.01.2025 (Annexure P-63) had taken cognizance of the offences under Section 3 read with Section 70 of PMLA and Section 4 of the PMLA and summoned other accused for trial. 9. The necessary documents were b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ora vs. Directorate of Enforcement (2023 SCC OnLine SC 1682), that it is prospective in nature. 14. While referring to Prabir Purkayastha vs. State (NCT of Delhi) [(2024) 8 Supreme Court Cases 254], it was contended that the person arrested has a fundamental and a statutory right to be informed about the grounds of arrest and the purpose of informing to the arrested person the grounds of arrest is salutary and sacrosanct and any other interpretation would tantamount to diluting the sanctity of the fundamental right guaranteed under Article 22(1) of the Constitution of India. 15. While referring to the judgment passed in Arvind Kejriwal vs. Directorate of Enforcement (2024 SCC OnLine SC 1703), it was sought to be highlighted that power of judicial review remains both before and after the filing of criminal proceedings/prosecution complaint and the argument raised that the judicial scrutiny was not permissible, as it will interfere with the investigation, had been rejected by the apex Court and the validity of arrest could always be examined. 16. While referring to the judgment in Radhika Agarwalvs. Union of India and others (2025 SCC OnLine SC 449), it is contended that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into by any Court competent to try; and when there was several local areas where the offence was committed; and when it is committed partly in one local area and partly in another, it may be inquired into or tried by any Court having jurisdiction of such local areas. The consequential effect would be that when an act is an offence by reason of anything, which has been done, would be inquired into or tried by the Court within whose local jurisdiction such thing has been done or such consequence has ensued. 20. It was accordingly contended that in the case of illegal mining by the petitioner, who is proprietor of M/s Jai Maa Jawala Stone crusher situated in Kangra District (H.P.); and partner in other mining crushers; and accused of generating proceeds of crime from the illegal sand and mineral mining in this State and Uttar Pradesh (village Bartha, PS Behat, District Saharanpur, where Garhwal Stone Crusher was acquired and being run by the petitioner and others) ; and the proceeds of crime have been laundered through investments in properties and businesses including purchase of Garhwal Stone Crusher, Saharanpur, Uttar Pradesh, the amount of proceeds of crime was 4.70 crores and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery in the form of Gold and Silver was recovered, apart from cash in Indian currency, various documents numbering 98 were also taken into possession. 27. It appears before the petitioner was arrested by the ED on 18.11.2024 (Annexure P-32), an F.I.R No. 360/2024 dated 7.11.2024 (Annexure P-61) was registered at the instance of Mining Inspector, Saharanpur (UP), against the petitioner, including Garhwal Stone Crusher and others including Sanjay Kumar, Partner of Garhwal Stone crusher and Mr .Deepak Chaudhary, partner of M/s Star Mines. Perusal of the same would go on to show that the investigation had been carried out by the ED that proceeds of crime amounting to Rs. 1.80 crores in cash generated from the illegal mining carried out by M/s Jai Maa Jawala Stone Crusher, had been used to acquire the Gharwal Stone Crusher at Village Bartha, Saharanpur, Uttar Pradesh. In the said stone crusher, the petitioner is stated to be having partnership of 75%, whereas other accused as such had a nominal share ranging between 9 to 8%. Details of seizure of the raw material having value of Rs.62.14 lacs is also mentioned, which had been done by GST Department on 20.06.2024and when the requisite pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her is involved mining of minerals illegally by using the prohibited machines. d. Gian Chand through Jai Maa Jawala Stone Crusher is involved in mining of minerals illegally during prohibited time (08:00 PM to 05:00 AM) e. Gian Chand through Jai Maa Jawala Stone Crusher is involved in the illegal mining of minerals beyond the area specified by Government of Himachal Pradesh in his mining lease. f. Gian Chand through Jai Maa Jawala Stone Crusher is knowingly a party and directly involved in sale of the said illegally mined minerals without using any permit/X form. and thus generating and acquiring the Proceeds of Crime from the criminal activity relatable to schedule offence. g. Gian Chand through Jai Maa Jawala Stone Crusher has directly generated and acquired proceeds of crime by selling the said illegally mined minerals for an amount of Rs. 5 Cr approx.. annually, totalling to Rs. 12.5 Cr. However, he did not reveal the present status of the PoC and thus making it unavailable for proceedings under PMLA, 2002. His such act amounts to concealment of PoC generated from the sale of illegally mined minerals. h. Gian Chand is knowingly involved in the acquisition, possession, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein the value of Garhwal Stone Crusher of Rs. 4.70 Cr has been under valued at Rs. 2.90 Cr (Approx.) in order to conceal the PoC of Rs. 1.60 Cr generated and acquired from the criminal activity relatable to scheduled offence. After such concealment, the Garhwal Stone Crusher is projected and claimed as untainted and integrated into the mainstream economy. p. In view of the above, Gian Chand has committed the offence of money laundering as defined under section 3 of PMLA, punishable under section 4 of PMLA read with section 70 of PMLA." 30. It is thus apparent that prior to the arrest on 18.11.2024 (Annexure P-32), the predicate offence had already been committed in Saharanpur (UP), leading to lodging of F.I.R No. 360/2024 on 7.11.2024 and part of cause of action has arisen in the State of UP. Merely because the petitioners went to the Apex Court and withdrew the Writ Petition (Cr) bearing No. 5154 of 2024 on 13.12.2024 on his own volition, by making a statement that they would be given liberty to approach this Court, (Himachal Pradesh High Court) would not grant this Court jurisdiction in the absence of the fact that arrest as such was never made within the jurisdiction of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew, the High Court should not have entertained the challenge. If the act of directing remand is fundamentally a judicial function, correctness or validity of such orders could, if at all, be tested in properly instituted proceedings before the appellate or revisional forum. In the circumstances, even if the arrests were effected within the jurisdiction of the High Court, since the accused were produced before a competent court in pursuance of Sections 435, 436 of the 2013 Act, the High Court ought not to have entertained the writ petition. However, since the High Court considered the matter from the standpoint whether the initial order of arrest itself was valid or not and then found that such illegality could not be sanctified by subsequent order of remand, we may deal with that question now." 32. We are of the considered opinion that the judgment is applicable on all fours to the issue in question. 33. In Kaushik Chatterjee vs. State of Haryana and others, (2020) 10 SCC 92, the prayer was to seek transfer of three criminal cases pending on the files of Court of Additional Judicial Magistrate, Gurugram to a competent Court at New Delhi. The plea as such was raised that no part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has taken cognizance of the offence of Money-Laundering. In other words, the trial of the scheduled offence, insofar as the question of territorial jurisdiction is concerned, should follow the trial of the offence of money-laundering and not vice versa." 35. It was further held that under PMLA, the involvement of a person in any one or more of certain processes or activities connected with the proceeds of crime, constitutes the offence of money laundering and these processes include concealment, possession, acquisition and use, apart from projecting as untainted property or claiming as untainted property. Thus, it was held that in the places, where the possession is located; or the place in which it was concealed or located; or the place in which it is used and located, will be the area, where the offence had been committed and therefore it would amount to "deriving or obtaining a property" as a result of criminal activity relating to a scheduled offence. Relevant paragraphs read as under: 38. As we have pointed out earlier, the involvement of a person in any one or more of certain processes or activities connected with the proceeds of crime, constitutes the offence of money la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agarik Suraksha Sanhita). The same reads as under:- Sections 177 to 180 of erstwhile Cr.P.C. Sections 197 to 200 of BNSS "177. Ordinary place of inquiry and trial.-Every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed. 178. Place of inquiry or trial.- (a) When it is uncertain in which of several local areas an offence was committed, or (b) where an offence is committed partly in one local area and partly in another, or (c) where an offence is a continuing one, and continues to be committed in more local areas than one, or (d) where it consists of several acts done in different local areas, it may be inquired into or tried by a Court having jurisdiction over any of such local areas. 179. Offence triable where act is done or consequence ensues.- When an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be inquired into or tried by a Court within whose local jurisdiction such thing has been done or such consequence has ensued. 180. Place of trial where act is an offence by reason of relation to other offence.-When an act is an offence by reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nforcement, (2024) 9 SCC 22, the Apex Court had repelled the challenge made qua the jurisdiction as such regarding the summoning, which had been done by the Delhi Office of the Enforcement Directorate and also the quashing of the complaint which had been filed under Section 174 of Indian Penal Code and the order passed by the Chief Metropolitan Magistrate taking cognizance of the complaint. The issue was pertaining to an FIR which had been registered by CBI at Kolkata under the provisions of IPC and the Prevention of Corruption Act, 1988, in respect of alleged illegal excavation and theft of coal in the leasehold areas of Eastern Coalfields limited. On account of summons having been served, the petitioner and his wife had contested the same in the said case that cause of action had arisen in West Bengal and therefore the examination should be done at Kolkata and resultantly the complaint had been filed that there was non-compliance of summons. The said challenge as such was repelled on the ground that part of the offence had been committed by the accused persons as per the complaint as the amounts have been transferred through vouchers to Delhi and overseas and the ECIR had been re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undering and confiscating the proceeds of crime, thereby ensuring that such illicit funds do not undermine the financial system. Money laundering has far-reaching consequences, not only in terms of individual acts of corruption but also in causing significant loss to the public exchequer. The laundering of proceeds of crime results in a significant loss to the economy, disrupts lawful financial transactions, and erodes public trust in the system. The alleged offences in the present case have a direct bearing on the economy, as illicit financial transactions deprive the state of legitimate revenue, distort market integrity, and contribute to economic instability. Such acts, when committed by persons in positions of power, erode public confidence in governance and lead to systemic vulnerabilities within financial institutions. 32. The PMLA was enacted to combat the menace of money laundering and to curb the use of proceeds of crime in the formal economy. Given the evolving complexity of financial crimes, courts must adopt a strict approach in matters concerning economic offences to ensure that perpetrators do not exploit procedural loopholes to evade justice. 33. The present case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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