THE HON'BLE Dr. JUSTICE SHAMEEM AKTHER
CRIMINAL PETITION Nos.1073, 1074, 1076, 1077, 1079, 1080 and
3119 of 2021 and CRIMINAL REVISION CASE No.83 of 2021
COMMON ORDER:
Since the facts of the case and the points that arise for
determination in all these cases are similar, all these cases are taken
up together and are being disposed of by this common order.
2. Criminal Petition Nos.1073, 1074, 1076 of 2021 are filed under
Section 482 of Cr.P.C., seeking to quash the order of even date dated
11.01.2021, passed in S.C.Nos.1 of 2016, 2 of 2017, 2 of 2018
respectively by the Principal Special Judge for CBI Cases, Hyderabad.
Criminal Petition Nos.1077, 1079, 1080 and 3119 of 2021 are filed
under Section 482 of Cr.P.C., seeking to quash the order of even date
dated, 11.01.2021, passed in Crl.M.P.No.1411 of 2020 in S.C.No.1 of
2016, Crl.M.P.No.1414 of 2020 in S.C.No.2 of 2016, Crl.M.P.No.1412
of 2020 in S.C.No.1 of 2016, Crl.M.P.No.1421 of 2020 in S.C.No.2 of
2018 respectively, by the Principal Special Judge for CBI Cases,
Hyderabad. Criminal Revision Case No.83 of 2021 is filed under
Sections 397 & 401 of Cr.P.C., challenging the order, dated
11.01.2021 passed in Crl.M.P.No.1416 of 2020 in S.C.No.2 of 2017
by the Principal Special Judge for CBI Cases, Hyderabad.
3. Heard the submissions of Sri S.Niranjan Reddy, learned senior
counsel representing Sri N.Naveen Kumar, learned counsel for the
petitioners in Crl.P.Nos.1073, 1074, 1076, 1077, 1079, 1080 and
3119 of 2021; Sri Gyanendra Kumar, learned counsel, appearing for
Ms. K.Rachana Reddy, learned counsel for the petitioner in
Crl.R.C.No.83 of 2021; Sri T.Surya Karan Reddy, learned Assistant
2 Dr.SA, J
Crl.P.No.1073/2021 & batch
Solicitor General of India and Sri B.Narasimha Sarma, learned
Standing Counsel for Enforcement Directorate, for respondents in
Criminal Petition Nos.1073, 1074, 1076, 1077, 1079, 1080 and 3119 of 2021 and respondent No.1 in Criminal Revision Case No.83 of 2021 respectively and perused the record.
4. The petitioner in Criminal Petition Nos.1073 and 1074 of 2021 is M/s.Jagati Publications Limited. It is challenging the order of even date, dated 11.01.2021, passed in S.C.Nos.1 of 2016 and 2 of 2017 passed by the Court below, whereby, the Court below held that offence under The Prevention of Money-Laundering Act, 2002 (for short, 'PML Act') is a stand-alone offence and shall precede the trial of predicate/scheduled offence. The petitioner in Criminal Petition No.1076 of 2021 is Sri V.Vijay Sai Reddy. He is challenging the order, dated 11.01.2021, passed in S.C.No.2 of 2018, by the Court below, whereby, the Court below held that the offence under PML Act is a stand-alone offence and shall precede the trial of predicate/scheduled offence. The petitioner in Criminal Petition No.1077 of 2021 is M/s.Jagati Publications Limited. It is challenging the order, dated 11.01.2021, passed in Crl.M.P.No.1411 of 2020 in S.C.No.1 of 2016 by the Court below, whereby, the petition filed by the petitioner under Section 362 Cr.P.C. requesting the Court below to take up the hearing on charges in scheduled offence, i.e., C.C.No.9/2012 before S.C.No.1/2016, was dismissed. The petitioner in Criminal Petition No.1079 of 2021 is Sri V.Vijay Sai Reddy. He is challenging the order, dated 11.01.2021, passed in Crl.M.P.No.1414 of 2020 in S.C.No.2 of 2016 by the Court below, whereby, the petition filed by the petitioner under Section 362 Cr.P.C. requesting 3 Dr.SA, J Crl.P.No.1073/2021 & batch the Court below to take up the hearing on charges in scheduled offence, i.e., C.C.No.10/2012 before S.C.No.2/2016, was dismissed. The petitioner in Criminal Petition No.1080 of 2021 is Sri V.Vijay Sai Reddy. He is challenging the order, dated 11.01.2021, passed in Crl.M.P.No.1412 of 2020 in S.C.No.1 of 2016 by the Court below, whereby, the petition filed by the petitioner under Section 362 Cr.P.C. requesting the Court below to take up the hearing on charges in scheduled offence, i.e., C.C.No.9/2012 before S.C.No.1/2016, was dismissed. The petitioner in Criminal Petition No.3119 of 2021 is M/s.Caramel Asia Holdings Pvt Ltd. It is challenging the order, dated 11.01.2021, passed in Crl.M.P.No.1421 of 2020 in S.C.No.2 of 2018 by the Court below, whereby, the petition filed by the petitioner under Section 362 Cr.P.C. requesting the Court below to take up the hearing on charges in scheduled offence, i.e., C.C.No.27/2013 before S.C.No.2/2018, was dismissed. The petitioner in Crl.R.C.No.83 of 2021 is M/s.Bharathi Cement Corporation Private Limited. The prayer in the said Criminal Revision Case is to call for the records pertaining to Crl.M.P.No.1416 of 2020 in S.C.No.2 of 2017, on the file of the Court below and set aside the common order, dated 11.01.2021, passed by the Court below and direct the Court below to hold simultaneous trial of scheduled offences and offences under PML Act or in the alternative, in immediate succession with the trial of scheduled offences preceding the trial of offences under PML Act in terms of Section 44(1) of PML Act.
5. Sri S.Niranjan Reddy, learned senior counsel appearing for the petitioners in all the Criminal Petitions would contend that the impugned orders are contrary to law and settled legal position. The 4 Dr.SA, J Crl.P.No.1073/2021 & batch Court below erred in holding that the offence under PML Act is a stand-alone offence, which is not inextricably linked to predicate/scheduled offences. Proceeding with the trial of offences under PML Act without proving the guilt of the accused under the predicate/scheduled offence at the first instance is impermissible, since it amounts to presumption that the accused are guilty of predicate/scheduled offences, which is gross violation of cardinal principle of criminal law that 'an accused is deemed to be innocent unless guilt is proved'. Drawing attention of this Court to Sections 3 and 4 of PML Act, the learned senior counsel submitted that whosoever directly or indirectly indulged themselves in any process or activity connected with the 'proceeds of crime' and projecting it as untainted property can be held to be guilty for an offence under Section 3, which is punishable under Section 4 of PML Act. 'Proceeds of crime', as per definition given in Section 2(1)(u) of PML Act, means any property derived or obtained directly or indirectly, by a person as a result of criminal activity relating to a scheduled offence. Thus, the offence under Section 3 of PML Act is dependent upon the offences under the scheduled offences in Indian Penal code. In other words, if the offences under the Indian Penal Code which have been declared as scheduled offences are not established, one cannot determine the proceeds of crime and therefore, unless proceeds of crime is established by putting the accused on trial, any prosecution of the person under PML Act would be premature and would be futile exercise. Though the PML Act is silent as to whether trial of predicate/scheduled offences must precede the trial of offence under PML Act, or vice-versa, or both the offences are to be tried simultaneously, but the procedure which appears to be absurd is to 5 Dr.SA, J Crl.P.No.1073/2021 & batch be discarded and the procedure which would fulfill the aim and object of the PML Act, which is a special legislation, is to be adopted. The Court below completely missed the distinction between the concept of stand-alone offence and the sequence of trying different stand-alone offences. Merely because the offences under PML Act are held to be stand-alone offences, it cannot be held that those offences can be tried regardless of the consequences of scheduled offences. In comparable legislations and offences, Courts have consistently held that the consequential offences must await or must be tried along with the predicate/scheduled offences. A person who is not at all arrayed as an accused in a scheduled offence or even if he is acquitted of the scheduled offences, he can still be prosecuted under PML Act. In the scheduled offences, if all the accused are acquitted, it is deemed that no crime is committed by them and hence, none of them can be convicted under PML Act. Unless and until a predicate/scheduled offence exists, there is no money laundering offence. Predicate/scheduled offence is foundation and offence under PML Act is the structure/framework thereon. If foundation is removed, then the structure/framework standing thereon would fall. Money laundering offence starts at the end of predicate offence. Money laundering offence necessarily depends upon the predicate/scheduled offence. The ideal way is that the predicate/scheduled offence has to be tried at the first instance, or there can be simultaneous trial of predicate/scheduled offences and offences under PML Act. If it is accepted that the offence under PML Act is a stand-alone offence, the very scope of Section 44(1)(a) & (c) of PML Act, which prescribes jurisdiction and committal of cases relating to scheduled offences, gets defeated. Further, Under Section 6 Dr.SA, J Crl.P.No.1073/2021 & batch 44(1)(d) of PML Act, a Special Court, while trying the scheduled offence or the offences under PML Act, shall hold trial in accordance with the provisions of Code of Criminal Procedure, as it is applied to a trial before a Court of Session. The Explanation to the said section contemplates that the Special Court, during investigation, enquiry or trial under the PML Act, shall not be dependent upon any orders passed in respect of the scheduled offences. It contemplates orders already passed in respect of the scheduled offence, but not orders to be passed in future. Trial of predicate/scheduled offences and offences under PML Act shall not be construed as a joint trial, but they can be taken up simultaneously. The orders under challenge are legally unsustainable and are liable to be set aside and ultimately prayed to allow all the Criminal Petitions as prayed for. In support of his contentions, the learned Senior Counsel had relied on the following decisions.
1. Binod Kumar Sinha @ Binod Kumar Vs. State of Jharkhand1
2. Arun Kumar Mishra Vs. Directorate of Enforcement2
3. Rajiv Chanana Vs. Dy. Director, Directorate of Enforcement3
4. Inspector of Police Vs. Assistant Director, Directorate of Enforcement and another4
5. Sushil Kumar Katiyar Vs. Union of India and others5
6. P.Chidambaram Vs. Directorate of Enforcement6
7. Ram Raj Chaodhury Vs. Emperor7
8. Kuriakose Chacko Vs. State8
9. Aleem Vs. State of A.P.9
10. Harjinder Singh Vs. State of Punjab & others10
11. B.V.R.Satyanarayana Vs. The State11
6. Sri Gyanendra Kumar, learned counsel appearing for the petitioner in Criminal Revision Case No.83 of 2021 also raised similar contentions before this Court. He further submitted that the burden 1 2013 SCC Online Jhar 373 2 2015 SCC Online Del 8658 3 Decided by order, dated 19.09.2014, passed in W.P.(C) No.6293/2014 by the High Court of Delhi 4 2019 SCC Online Ker 4546 5 Manu/UP/0777/2016 6 (2019) 9 SCC 24 7 AIR 1946 Pat 74 8 1950 SCC Online Ker 7 9 1994 (2) A.P.L.J. 451 (HC) 10 (1985) 1 SCC 422 11 1976 SCC Online AP 111 7 Dr.SA, J Crl.P.No.1073/2021 & batch of proof in Scheduled offences and the offences under PML Act is different.
7. Per contra, Sri T.Surya Karan Reddy, learned Assistant Solicitor General of India representing the respondents in Criminal Petitions and Sri B.Narasimha Sarma, learned Standing Counsel for Enforcement Directorate appearing for the respondent in Criminal Revision Case would contend that by virtue of amendment to Section 44 in PML Act in the year 2013, the scheduled offences and money laundering offences are to be tried by the same Court. Trial of offences of money laundering and trial of scheduled offence are not joint trial, the fate of the former does not depend on the latter. The offence of money laundering is a stand-alone offence. A person who has not committed a scheduled offence, can well be prosecuted for an offence of money laundering. In such a situation, the prosecution need not wait for the scheduled offence to be established. The offence of money laundering under Section 3 of PML Act is an independent offence and the said view is fortified by a catena of judgments. Further, the trial of offences under PML Act is completely different from the trial of scheduled offences. The subject Sessions Cases and miscellaneous petitions are filed with a malice intention, to procrastinate the pending proceedings by adopting dilatory tactics. PML Act is a special legislation incorporating a complete code, and the cases being investigated under PML Act shall be proceeded further in accordance with the statutory scheme of the Act. Further, Section 44(1)(c) of PML Act provides for transfer of a case for scheduled offence to the Court where the proceedings for money laundering is tried. This provision entirely takes away the submission of the 8 Dr.SA, J Crl.P.No.1073/2021 & batch petitioners that money laundering offence necessarily depends upon the predicate/scheduled offence. If the said submission of the petitioners is accepted, the provisions enshrined in Section 44(1)(a) of PML Act would stand defeated. Section 44 of PML Act, provides for both the offences of money laundering and scheduled offence to be tried by the Special Court, if the same is connected to Sections 3 & 4 of PML Act. Through the Finance (No.2) Act, 2019, Section 44 of PML Act has been amended by inserting an explanation to clause (d) of sub-section (1) of Section 44 of the Act, which is as under :
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 in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial.
As per the above provision, it clearly sets out that the trial for the offence of money laundering is independent trial and it is governed by its own provisions and it need not get interfered by the trial of scheduled offence. Money laundering is a stand-alone offence, since a person who has not committed a scheduled offence could be prosecuted for an offence of money laundering, in such a situation, the prosecution need not wait for the scheduled offence to be established and it can independently prosecute and produce material to show that he had knowingly assisted or was responsible for laundering of the illicit wealth and in such a situation, the property would then stand attached and the person who has been prosecuted for money laundering has to prove that he is not guilty of money laundering. Further, in the instant cases, the burden of proving the proceeds of crime and untainted property is on the accused, which burden has not been discharged by the petitioners. Hearing on charges must be taken up without any delay. Stalling of hearing on 9 Dr.SA, J Crl.P.No.1073/2021 & batch charges at this stage would not be legally appropriate and it would be against the spirit and object of the provisions of Section 44 of PML Act and the same would cause great hardship to the respondent/complainant and ultimately prayed to dismiss the Criminal Petitions and the Criminal Revision Case. In support of their submissions, the learned Assistant Solicitor General of India and the learned Standing Counsel for Enforcement Directorate relied on the following decisions.
1. Smt.Soodamani Dorai Vs. Joint Directorate of Enforcement12
2. Babulal Verma and another Vs. Enforcement Directorate and another13
3. J.Sekar @ Sekar Reddy Vs. Directorate of Enforcement14
8. In view of the above rival contentions, the points that arises for determination in these Criminal Petitions and the Criminal Revision Case is as follows:
1. Whether hearing on charges and trial proceedings can go on in subject Sessions Cases registered for the offences under PML Act before commencement of hearing on charges and trial proceedings in the subject Calendar Cases registered for the predicate/scheduled offences?
2. Whether trial proceedings of predicate/scheduled offences and offences under PML Act be conducted simultaneously?
3. Whether the impugned orders of even date dated 11.01.2021, passed in S.C.Nos.1 of 2016, 2 of 2017, 2 of 2018, Crl.M.P.Nos.1411 of 2020 in S.C.No.1 of 2016, 1414 of 2020 in S.C.No.2 of 2016, 1412 of 2020 in S.C.No.1 of 2016, 1421 of 2020 in S.C.No.2 of 2018 and 1416 of 2020 in S.C.No.2 of 2017, by the Principal Special Judge for CBI Cases, Hyderabad, are legally sustainable?
POINTS:-
12
2018 SCC Online Mad 3138 13 2021 SCC Online Bom 392 14 Decided on 04.02.2021 in Crl.O.P.Nos.24200 & 24202 of 2017 by the High Court of Madras 10 Dr.SA, J Crl.P.No.1073/2021 & batch
9. The background facts of the case, in brief, are that pursuant to the common order, dated 10.08.2011, passed by the erstwhile High Court of Andhra Pradesh in W.P.No.794 of 2011 filed by Mr.P.Shankar Rao, the then MLA, Secunderabad Cantonment, and W.P.No.6604 of 2011 filed by Mr.K.Yerrannaidu and two others, the Central Bureau of Investigation (CBI) registered a Crime in RC 19(A)/2011-CBI-HYD on 17.08.2011 against Sri Y.S.Jagan Mohan Reddy, the then Member of Parliament, Kadapa, and 73 others, for the offences punishable under Sections 120B, 420, 409 & 477A of IPC and Section 13(2) r/w 13(1)(c)&(d) of Prevention of Corruption Act, 1988 (for short, 'PC Act'). On the basis of information collected by CBI during the course of investigation, supported by the documents recovered from the alleged accused persons, the Enforcement Directorate, having found that a prima facie case is made out against the alleged accused persons for proceeding under the provisions of PML Act, since the offences under Section 120B r/w 420 of IPC and Section 13 of Prevention of Corruption Act are scheduled offences under PML Act, registered an Enforcement Case Information Report (ECIR) in ECIR/09/HZO/2011 on 30.08.2011.
10. It is also pertinent to state that the CBI, Hyderabad, has filed charge sheet in R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1, Sri V.Vijay Sai Reddy/A-2 and M/s. Jagati Publications Ltd./A-3 and the same is numbered as C.C.No.9/2012 before the Court below. The Enforcement Directorate, basing on the scheduled offences, filed a private complaint against A-1 to A-3 under Section 200 Cr.P.C r/w Sections 45, 3, 4, 8(5) of PML Act before the learned Metropolitan Sessions Judge, Hyderabad, and it was 11 Dr.SA, J Crl.P.No.1073/2021 & batch numbered as S.C.No.106/2015. Subsequently, the said S.C. is transferred to the Court below and re-numbered as S.C.No.1/2016. A-1 to A-3 have filed three separate applications under Section 309 of Cr.P.C before the Court below requesting to defer all further proceedings in the above said S.C., till the conclusion of the adjudication of the scheduled offence (C.C.No.9/2012), vide Crl.M.P.No.1891/2017 (filed by A-3), Crl.M.P.No.1892/2017 (filed by A-2) and Crl.M.P.No.1893/2017 (filed by A-1) and the above said applications were dismissed by the Court below, vide common order dated 17.01.2020.
10(a). The CBI, Hyderabad, has filed charge sheet in R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1 and five others and the same is numbered as C.C.No.10/2012. Sri V.Vijay Sai Reddy is shown as A-2 and M/s. Jagati Publications Ltd. is shown as A-3 in the above said CC. The Enforcement Directorate, basing on the scheduled offences, filed a private complaint against A- 1 to A-6 under Section 200 Cr.P.C r/w Sections 45, 3, 4, 8(5) of PML Act before the Court below and the same is numbered as S.C.No.2/2016. A-1 to A-3 in the said S.C.No.2/2016 have filed three separate applications under Section 309 of Cr.P.C requesting to defer all further proceedings in the above said SC till the conclusion of the adjudication of the scheduled offence (C.C.No.10/2012) vide Crl.M.P.No.1958/2017, Crl.M.P.No.1959/2017 and Crl.M.P.No.1960/2017, and the said applications were dismissed by the Court below, vide common order, dated 17.01.2020. 10(b). The CBI, Hyderabad, has filed charge sheet in R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1 and eight others and the same is numbered as C.C.No.24/2013. Sri 12 Dr.SA, J Crl.P.No.1073/2021 & batch V.Vijay Sai Reddy is shown as A-2 and M/s. Jagati Publications Ltd. is shown as A-8 in the above said C.C. The Enforcement Directorate, basing on the scheduled offences, filed a private complaint against A- 1 to A-9 under Section 200 Cr.P.C r/w Sections 45, 3, 4, 8(5) of PML Act before the Court below and the same is numbered as S.C.No.2/2017. A-1, A-2 and A-5 in the above said S.C.No.2/2017 have filed three separate applications under Section 309 of Cr.P.C requesting to defer all further proceedings in the above said S.C. till the conclusion of the adjudication of the scheduled offence (C.C.No.24/2013) vide Crl.M.P.No.2104/2017, Crl.M.P.No.2105/2017 and Crl.M.P.No.2106/2017 and the said applications were dismissed by the Court below, vide common order dt.17.01.2020. 10(c). The CBI, Hyderabad, has filed charge sheet in R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1 and eight others and the same is numbered as C.C.No.26/2013. Sri V.Vijay Sai Reddy is shown as A-2 and M/s. Jagati Publications Ltd. is shown as A-5 in the above said C.C. The Enforcement Directorate, basing on the scheduled offence, filed a private complaint against A-1 to A-11 under Section 200 Cr.P.C r/w Section 45, 3, 4, 8(5) of PMLA, 2002 before the Court below and the same is numbered as S.C.No.1/2018. A-1 to A-5 in the said S.C.No.1/2018 have filed three separate applications under Section 309 of Cr.P.C requesting to defer all further proceedings in the above said SC till the conclusion of the adjudication of the scheduled offence (C.C.No.26/2013) vide Crl.M.P.No.3851/2019 Crl.M.P.No.3852/2019 and Crl.M.P.No.3853/2019, and the said applications were dismissed by the Court below vide common order dt.17.01.2020.
13 Dr.SA, J
Crl.P.No.1073/2021 & batch
10(d). The CBI, Hyderabad, has filed charge sheet in
R.C.19(A)/2011-CBI/HYD against Sri Y.S.Jagan Mohan Reddy/A-1 and 14 others and the same is numbered as C.C.No.27/2013. Sri V.Vijay Sai Reddy is shown as A-2 and M/s. Caramel Asia Holdings Pvt. Ltd. is shown as A-14 in the above said C.C. The Enforcement Directorate, basing on the scheduled offence, filed a private complaint against A-1 to A-17 under Section 200 Cr.P.C r/w Section 45, 3, 4, 8(5) of PMLA, 2002 before the Court below and the same is numbered as S.C.No.2/2018.
11. The core contentions of the learned senior counsel appearing for the petitioners is that the offences under PML Act are not stand- alone offences and that they are inextricably linked to the predicate/scheduled offences; if the offences under the Indian Penal Code are not established, 'proceeds of crime' cannot be determined and unless 'proceeds of crime' is not established, any prosecution of the person under PML Act would be premature and would be futile exercise; Unless and until a predicate/scheduled offence exists, there is no money laundering offence; Predicate/scheduled offence is foundation and offence under PML Act is the structure/framework thereon and if foundation is removed, then the structure/framework standing thereon would fall; Money laundering offence starts at the end of predicate offence; Money laundering offence necessarily depends upon the predicate/scheduled offence; If it is accepted that the offence under PML Act are stand-alone offences, the very scope of Section 44(1)(a) & (c) of PML Act, which prescribes jurisdiction and committal of cases relating to scheduled offences, gets defeated.
14 Dr.SA, J
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12. By way of amendment to Section 44 of PML Act in the year 2013, it has been explicitly brought out that the proceedings in both the offences, i.e., scheduled offence and money laundering offence are to be tried by the Special Court constituted under PML Act, if the same is connected to Sections 3 & 4 of PML Act. Further, by way of Finance (No.2) Act, 2019 (23 of 2019), dated 01.08.2019, Section 44 of PML Act has been amended by inserting an explanation to clause
(d) of sub-section (1), which reads as follows:-
"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 in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial."
The above explanation sets out in clear terms that trial of money laundering offence is independent trial and it is governed by its own provisions and it need not get interfered with the trial of scheduled offence. The PML Act, being a special enactment, contemplates a distinct procedure at the initial stage and thereafter provides for initiation of prosecution, in order to achieve the special purpose envisaged under the Act and as such, it cannot be construed that proceedings under the PML Act are to be equated with prosecution initiated under the criminal proceedings for predicate/scheduled offences. Thus, initiation of action under the PML Act cannot have any implication or impact in respect of registration of other cases, either under the Indian Penal Code or any other penal laws. The offence of money laundering contemplated under Section 3 of the PML Act is an independent offence. A reference to criminal activity relating to offence under PML Act has a wider connotation, and it may extend to a person, who is connected with criminal activity relating to 15 Dr.SA, J Crl.P.No.1073/2021 & batch scheduled offence, but may not be the offender of scheduled offence. It is in this background that it has to be necessarily held that offence under PML Act is a stand-alone offence. Keeping in view the same, if we look at sub-section (b) of Section 44 of the PML Act, it would clearly indicate that the Special Court may take cognizance of the offence upon a complaint by authorized signatory, which means that cognizance would be taken of an offence, which is separate and independent. Even in case of a person who is initially not booked for a scheduled offence but booked later, and subsequently acquitted of the said scheduled offence, still such person can be proceeded under PML Act. It is not necessary that a person has to be prosecuted under the PML Act, only in the event of such person having committed scheduled offence. Prosecution can be independently initiated under PML Act only for the offence of money laundering.
13. Further, the word "Explanation to a statutory provision" came up for consideration before a Full Bench of the Hon'ble Supreme Court in S.Sundaram Pillai vs. V.R.Pattabiraman (F.B.)15. The Hon'ble Supreme Court, in para Nos.45 and 52 of the said decision, held as under:-
Para 45. It is now well settled that an Explanation added to a statutory provision is not a substantive provision in any sense of the term but as the plain meaning of the word itself shows it is merely meant to explain or clarify certain ambiguities which may have crept in the statutory provision.
Para 52. Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is -
a) to explain the meaning and intendment of the Act itself.
b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve.
c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful.
d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order 15 AIR 1985 (SC) 582 16 Dr.SA, J Crl.P.No.1073/2021 & batch to suppress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment; and
e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same.
The opening words used in the Explanation to Sections 2(1)(u), 3 and 44(1)(d) of PML Act are "for the removal of doubt, it is clarified that". In Lok Sabha debate, it is debated that "six are only explanations to the existing clause. The clause itself is not being changed. We are only coming with explanations. Therefore, the amendment is not amendment of the clause itself. It is more explaining the clause".
14. The Explanations added to Sections 2(1)(u), 3 and 44(1)(d) of PML Act by way of Amendment under Finance (No.2) Act, 2019 are with effect from 01.08.2019 and are retrospective amendments, which is fortified by the Lok Sabha debate and the decision of the Hon'ble Supreme Court stated supra. The amendment carried out to the above sections is not a substantive amendment. The object of PML Act is only to ascertain the 'proceeds of crime' involved in money laundering.
15. A careful perusal of Section 2(1)(u) of PML Act and the explanation thereof makes it clear that a wider definition is given to 'proceeds of crime' including property not only derived or obtained from the scheduled offence, but also any property which may directly or indirectly be derived or obtained as a result of criminal activity relatable to a scheduled offence. Section 3 of PML Act further clarifies that 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 assists or knowingly is a party or is actually 17 Dr.SA, J Crl.P.No.1073/2021 & batch involved in concealment, possession, acquisition, use, projecting as untainted property, claiming as untainted property and the process or activity connected with the proceeds of crime is a continuing activity, which itself shows the offence of money laundering is a continuing offence. Thus, a bare reading of Sections 2(1)(u), 3 and 44(1)(d) of PML Act along with explanations thereof makes it clear that the offence of money laundering is a stand-alone offence and the trial proceedings are completely different to that of the scheduled offence. Trial of money laundering offence is independent trial and it is governed by its own provisions, it will not meddle with the trial of scheduled offence.
16. Similar question came up for consideration before the Hon'ble High Court of Madras in Smt.Soodamani Dorai Vs. Joint Directorate of Enforcement's case (12 supra) relied by the respondents, wherein, it was held that adjudication, prosecution and trial under PML Act is independent of scheduled offence. It was held as follows:
"In respect of the question whether criminal proceedings initiated by the police is a bar for proceedings under the Prevention of Money Laundering Act, the provisions of PMLA, 2002 are independent and having self-contained code. Before Amendment Act, 2012, the proceedings of PMLA, 2002 were fully depending upon the scheduled offence. However, after Amendment Act, 2012, with effect from 15.2.2013, the amendments were made in Sections 5(1), 8(3), 8(5), 8(6), 8(7) and 8(8) of the Act, which are very well evident that the proceedings are independent from scheduled offence proceedings. It would not be out of place to humbly submit herein that the provision of Section 5(1)(b) that "such person has been charged of having committed a scheduled offence and" was deleted by the Amendemnt Act, 2012, with effect from 15.2.2013. In the case of Samsuddin v. Union of India, it has been held that the offence of money laundering is independent of scheduled offences and it has been further held that the time of commission of the scheduled offence is not relevant to the context of the prosecution under the Act.
The offence of money laundering is not covered under any other provisions of law. Section 3 enacted by 2002 Act is a new offence and stands by itself. Section 44(1)(c) of the Prevention of Money Laundering Act, 2002, it is provided that if the Court which takes cognizance of the scheduled offences is other than the Special Court under the PMLA, the Authority should move an application for 18 Dr.SA, J Crl.P.No.1073/2021 & batch tr4ansfer of the scheduled offence to the Special Court and the Special Court, on receipt of such case, proceed to deal with it from the stage at which it is committed. Therefore, it is clear from the provisions of the Act that the offence of money laundering stands by itself. As evident from Section 8(6) of the Act, the Court will release the property only if it is found on the conclusion of trial under PMLA that the offence of money laundering has not taken place or if the property is not involved in money laundering. Therefore, adjudication, prosecution, trial under PMLA is independent of scheduled offence. This is also clear in view of Section 24 of the PMLA, 2002, which deals with burden of proof as it clearly stated that the burden of proof relating to proceeds of crime involved in money laundering is on the accused whereas the burden of proof in the scheduled offences is on the prosecution. Therefore, though the ECIR may have been registered following a scheduled offence, the property in possession of the person, against whom allegations are made, is found to be involved in money laundering, then he can be punished independently of the scheduled offence. Therefore, mere stay of the predicate offence is not a ground for preventing the Directorate of Enforcement from proceeding under the PMLA, 2002.
17. Further, a reading of the provisions of PML Act makes it clear that though the commission of scheduled offence is a fundamental pre-requisite for initiating proceedings under the PML Act, the offence of money laundering is independent of the scheduled offences. The scheme of the PML Act indicates that it deals only with laundering of money acquired by committing the scheduled offence. In other words, the PML Act deals only with the process or activity of proceeds of crime, including its concealment, possession, acquisition or use and it has nothing to do with the launch of prosecution for scheduled offence and continuation thereof. As stated above, the explanation to Section 44 of PML Act clearly indicates that the Special Court, while dealing with the offence under the PML Act, shall not be dependent upon any orders passed, in respect of the scheduled offence. It is apt to observe that money laundering, being an economic offence, poses a serious threat to the national economy and national interest and is committed with cool calculation and deliberate design and with motive of personal gain, regardless of the consequences to the society. Thus, it is absolutely clear that for initiation/registration of a crime under the PML Act, the necessity is registration of a crime for 19 Dr.SA, J Crl.P.No.1073/2021 & batch predicate/scheduled offence and nothing more. To put it differently, for initiating or setting the criminal law in motion under the PML Act, the requirement is prior registration of a crime under predicate/scheduled offence. Once an offence under the PML Act is registered on the basis of a predicate/scheduled offence, then it stands on its own and it does not require support of predicate/scheduled offence. As per the scheme of the PML Act, it does not depend upon the ultimate result of the predicate/scheduled offence. Even if the predicate/scheduled offence is compromised, compounded, quashed or the accused therein is/are acquitted, the investigation under PML Act does not get affected, ceased or wiped out. It may continue till the Enforcement Directorate concludes investigation and either files complaint or closure report before the Special Court. PML Act is a special statute enacted with a specific object to track and investigate cases of money-laundering. Therefore, if the contention of the learned senior counsel for the petitioners that when the foundation (predicate/scheduled offence) is removed, the structure/frame work thereon (offence under PML Act) falls is accepted, it will have frustrating effect on the intention of Legislature in enacting the PML Act, so also on its enforcement.
18. Further, the burden of proof in the predicate/Scheduled offences and the offence under PML Act is different. Section 24 of the PML Act reads as follows:
24. Burden of proof: In any proceeding relating to proceeds of crime under this Act--
a) In the case of a person charged with the offence of money-
laundering under Section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and
b) In the case of any other person the Authority or court, may presume that such proceeds of crime are involved in money- laundering.
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Crl.P.No.1073/2021 & batch
In view of the aforesaid mandate, the requisite burden of proof in both the cases is different. Further, Section 71 of PML Act mandates that the provisions of PML Act have overriding effect on any other law for the time being in force.
19. Further, if an accused in a predicate/scheduled offence is highly influential, either monetarily or by muscle power, and by use of his influence he/she gets the predicate/scheduled offence compromised or compounded to avoid further investigation in the offence under PML Act, it will put to an end to the independent investigation of Enforcement Directorate, which is certainly not the intention of Legislature in enacting the PML Act. Therefore, if the contention of the learned senior counsel for the petitioners that offence under PML Act necessarily depend upon the predicate/scheduled offence and the fate of offence under PML Act depends upon the fate of predicate/scheduled offence is accepted, probably it would be the easiest mode to the accused to put an end to the investigation and trial of offences under PML Act, as the case may be.
20. Another question that requires determination in the instant cases is whether the trial of offences under PML Act can go on without commencement of trial of predicate/scheduled offences. Though the learned senior counsel for the petitioners had placed reliance on as many as 11 decisions cited supra, but a perusal of the impugned order reveals that most of said citations were also cited before the Court below and the Court below, having examined the said citations, did not pass any order for conducting simultaneous trial of offence under PML Act and predicate/scheduled offences or stalling the commencement of trial in the offence under PML Act.
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Crl.P.No.1073/2021 & batch
However, a perusal of the said citations makes it clear that those citations do not relate to commencement of trial in these category of cases. They were decided on different points and as such, those citations have no direct bearing over the points that require determination in these cases.
21. Further, it is needless to state that oral and documentary evidence is the backbone to prove the guilt or innocence of the accused in a criminal trial. The trial in all criminal cases including money laundering offences is required to be conducted expeditiously. If the trial is delayed, it would result in impairment of the complainant to prove the case and also impairment of ability of the accused himself to defend his case. The factors like death, disappearance and non-availability of witnesses would also hamper the criminal administration of justice. Therefore, invariably, oral and documentary evidence is required to be placed on record expeditiously, to arrive at a just conclusion. Therefore, it is too early to say that the accused persons are likely to get acquittal in the scheduled offences. There are instances where conviction was recorded by the trial Court and the appellate Court had set aside the said conviction. In the instant case, mere apprehension that the Court below is going to record conviction against the accused persons under PML Act and they are likely to get acquittal in the predicate/scheduled offences would not be a ground to stall the proceedings. In the given facts and circumstances of the case, it is difficult to state the result of the case of predicate/scheduled offence and its bearing over the proceedings or decision rendered in the subject offence under PML Act. Therefore, the contention raised that 22 Dr.SA, J Crl.P.No.1073/2021 & batch without proving the guilt of the accused in predicate/scheduled offences, trial of offences under PML Act cannot be proceeded with, is unsustainable. In view of the above observations, it cannot be held that unless proceeds of crime are established by putting the accused on trial, any prosecution of the person under PML Act would be premature and would be futile exercise. Since the offence under PML Act is a stand-alone offence and not dependent on predicate/scheduled offences, it can be proceeded with independently without awaiting the outcome of result of scheduled offences or commencement of trial in the predicate/scheduled offences. Further, there is no requirement under law to conduct trials of both category of cases simultaneously. Therefore, the contention that Money Laundering offence starts at the end of predicate offence and commencement of trial in offence under PML Act shall not precede trial of predicate/scheduled offence, is unsustainable.
22. It is well established that though the powers of this Court under Section 482 Cr.P.C., are very wide, those powers are required to be exercised sparingly and with abundant caution. The said inherent power can be exercised only when there is abuse of process of Court or to secure ends of justice. The Hon'ble Supreme Court, in catena of decisions, deprecated the practice of staying criminal trials and police investigations, except in exceptional cases. The present cases, in my considered view, does not fall under exceptional cases where the inherent power under Section 482 can be exercised. Further, the object of Revisional Jurisdiction is to set right a patent defect or an error of jurisdiction or law. To invoke the provisions of Section 397 & 401 of Cr.P.C., there has to be a well-founded error. It may not be 23 Dr.SA, J Crl.P.No.1073/2021 & batch appropriate for this Court to scrutinize the orders, which, on the face of them, bear a token of careful consideration and appear to be in accordance with law. Revisional Jurisdiction can be invoked where the decisions under challenge are grossly erroneous, there is no compliance with the provisions of law, findings recorded are based on no evidence, material evidence is ignored or judicial discretion is exercised arbitrarily or perversely. Revisional Court has to confine itself to the legality and propriety of the findings of the subordinate Court and as to whether the subordinate Court acted within its jurisdiction. In the instant Criminal Revision Case, there is nothing to say that the order impugned suffers from illegality or impropriety or the Court below had acted beyond its jurisdiction. Accordingly, point Nos.1 and 2 are decided against the petitioners and point No.3 is answered holding that the orders under challenge in the Criminal Petitions and Criminal Revision Case are legally sustainable.
23. For the foregoing reasons, the contentions raised on behalf of the petitioners in the Criminal Petitions and Criminal Revision Case do not merit consideration. The Criminal Petitions and the Criminal Revision Case are devoid of merit and are liable to be dismissed.
24. In the result, the Criminal Petitions and the Criminal Revision case are dismissed.
Miscellaneous petitions, if any, pending in the Criminal Petitions and Criminal Revision Case, stand closed.
______________________ Dr. SHAMEEM AKTHER, J 10th August, 2021 Bvv