THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No.712 OF 2023
ORDER:
1. Petitioner is questioning the continuance of the proceedings vide ECIR/HYZO/34/2021, Directorate of Enforcement, Hyderabad Zonal Office.
2. This Court in Criminal Petition Nos.439 and 545 of 2023 has quashed the proceedings against the accused in CC No.6229 of 2022 on the file of XVII Additional Chief Metropolitan Magistrate, Hyderabad. The CC was the outcome of cognizance taken by the learned Magistrate on the basis of protest petition. The said protest petition was filed since the police having investigated the case after receiving complaint and filed final report stating that the case was civil in nature. The ED started investigation by proceeding vide ECIR/HYZO/34/2021 on the basis of crime registered by Jubilee Hills police which was concluded by the police as civil in nature.
3. Briefly, the facts of the case are that the Jubilee Hills Welfare Society Limited represented by its Secretary B.Ravinderanath filed complaint on 25.02.2021 addressed to the Station House Officer, Jubilee Hills Police Station. It was stated in the complaint that the members of the Jubilee Hills Cooperative House Building Society 2 Limited intend to bring to the notice of the police regarding unlawful actions of the committee members and Jubilee Hills Cooperative House Building Society in respect of sale deed No.2675 of 2020 and Gift deed No.2688 of 2020.
4. It is alleged in the complaint that on 25.03.1988, Plot No.853- F was allotted to Ms.Ch.Sirisha and the plot was lying vacant since then. If the plot is not registered within three years of allotment, as per the bye-laws of the Society, the allotment would lapse automatically. The said Ch.Sirisha migrated to USA and the plot cannot be registered in her name. The Society with the assistance of A1 to A6 entered into the property in the year 2017 and started construction activity and also causing nuisance to the neighbor in plot No.853-C. During the Covid pandemic period in 2019, A1 to A6 with the support of A9-Sub-Registrar registered the plot vide document No.2675 of 2020 in the name of Ch.Sirisha @ Rs.126/- per sq.yard for a total consideration of Rs.1,91,000/- even though the market value is around Rs.45.00 Crores. In the process, the Registration Department has been cheated. In the event of the property being sold in the open market, it would have garnered money in the form of taxes to the State Government. However, the accused had transferred the property in the name of A7, thereby 3 committed offences of cheating, breach of trust, impersonation and also evading income tax.
5. The said transaction is benami transaction and it was found that A7 namely Ch.Sirisha was not the Sirisha in whose name the plot was allotted. The said complaint was signed on behalf of Jubilee Hills Society and signed by B.Ravindranath, Secretary and registered on 24.04.2021 and after investigation, the Police filed Final Report under Section 173 of Cr.P.C stating that the dispute/transaction is civil in nature.
6. Aggrieved by the police investigation referring the case as civil in nature, protest petition was filed before the XVII Additional Chief Metropolitan Magistrate vide Crl.M.P.No.553 of 2021. The learned Magistrate examined two witnesses namely B.Ravindranath (S.W.1, Secretary of Jubilee Hills Welfare Society) and K.Nagendra Prasad (S.W.2, who is member in Jubilee Hills Cooperative House Building Society). Briefly, both the witnesses stated that the accused in collusion, registered the plot in the name of A7 Ch.Sirisha, who was not the Sirisha, in whose name the plot was earlier allotted. Learned Magistrate having recorded the statements of the two witnesses ordered as follows:
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"Dated: 05.08.2022 Complainant is absent. Heard and perused the entire record including Sworn Statements of witnesses. Prima facie accusation is well found against A1 to A9 for the offences under Sections 120-B, 406, 408, 409, 419, 420, 467, 468, 471, 477A IPC. Hence this court has taken cognizance of the offence punishable under sections 120- B, 406, 408, 409, 419, 420, 467, 468, 471, 477A IPC against A1 to A9. Register as C.C.No.6229/2022. Issue summons to A1 to A9 through court and R.P on payment of process. Call on 17.10.2022."
7. This Court in the Common Order dated 28.02.2023 in Criminal Petition Nos.439 and 545 of 2023, quashed the proceedings on 28.02.2023 finding that taking cognizance against the accused was not in accordance with the law laid down by the Hon'ble Supreme Court in the cases of; i) Sunil Bharti Mittal v. Central Bureau of Investigation1; ii) Fakhruddin Ahmad v. State of Uttaranchal and another2; iii) Deepak Gaba and others v. State of Uttar Pradesh3.
8. Learned counsel appearing for the petitioner would submit that since the proceedings are already quashed, the question of continuing investigation by the Enforcement Directorate does not arise in view of the judgment of Hon'ble Supreme Court in the case 1 (2015) 4 Supreme Court Cases 609) 2 (2008) 17 Supreme Court Cases 157 3 (2023 LiveLaw(SC) 3 5 of Vijay Madanlal Choudhary v. Union of India4, and followed subsequently in the case of Parvathi Kollur v. State by Directorate of Enforcement in Criminal Appeal No.1254 of 2022 arising out of SLP (Crl.)4258 of 2021, dated 16.08.2022.
The three Judge Bench of Hon'ble Supreme Court in Vijay Madanlal's case held as follows:
"467.Conclusion:
(i)..(ii)..(iii)..(iv)...(v)(a)..(b)..(c)..
(d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money- laundering against him or any one claiming such property being the property linked to stated scheduled offence through him."
9. On the other hand, Sri A.R.L.Sundaresan, learned Additional Solicitor General of India appearing for learned Deputy Solicitor General of India for the respondent-Enforcement directorate, would submit that the operative portion of this Court's order indicates that the proceedings against A1 to A3 and A9 have only been quashed and that in the said circumstances, when the proceedings 4 2022 SCC OnLine SC 929 6 are pending against the other accused for the predicate offence, the proceedings against this petitioner cannot be quashed.
10. This Court in Criminal Petition Nos.439 and 545 of 2023, held at para 16 as follows:
"16. The Hon'ble Supreme Court further held that mere assertion "that having perused the record and statements of witnesses prima facie accusation is well founded" as recorded by the learned Magistrate will not meet the requirements of summoning the accused by application of judicious mind.
Time and again, this Court and the Hon'ble Supreme Court has found that summoning a person as accused to face criminal trial is a serious step taken by the criminal Court and such summoning can only be done when the Magistrate finds on the basis of facts that the ingredients of the offence alleged are prima facie made out. For the said reason, cognizance order bereft of proper reasoning is liable to be set aside and accordingly set aside."
9. The order taking cognizance by the Magistrate was set aside and it cannot be said that proceedings are pending against other accused. However since the petitions were preferred by accused 1 to 3 and 9, the concluding portion was accordingly spelt out.
10. In view of the quashing of proceedings against accused in the predicate offence, following the judgment of Hon'ble Supreme Court in Vijay Madanlal Choudhary's case (supra), the proceedings in ECIR/HYZO/34/2021, Directorate of Enforcement, Hyderabad Zonal Office are hereby quashed.
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11. Accordingly, the Criminal Petition is allowed. Consequently, miscellaneous applications, if any, shall stand closed.
12. Sri T.Prayumnakumar Reddy, learned Senior Counsel informs this Court that the defacto complainant/Ravindranath in the crime and the proposed respondent No.3 in Criminal Petition Nos.439 and 545 of 2023 has preferred the SLP before the Hon'ble Supreme Court and the same was dismissed as withdrawn on 27.03.2023.
_________________ K.SURENDER, J Date: 28.03.2023 kvs 8 THE HON'BLE SRI JUSTICE K.SURENDER CRIMINAL PETITION No.712 OF 2023 Dt.28.03.2023 kvs