BRIEF FACTS
The division bench of the Delhi High Court relied upon, the judgement by Hon’ble Supreme Court of India in Vijay Madanlal Choudhary & Ors Vs. Union of India & Ors., 2022 while deciding on the issue of constitutionality and vires of various provisions of the Prevention of Money Laundering Act, 2002 (“PMLA”) inter alia Section 2(1)(u), Section 50 and Explanation to Section 44.
The petitioners in the present Writ petition pray for issue of a writ of certiorari setting aside summons issued by the ED to various petitioners in respect of the said ECIR, the Look Out Circular (“LOC”) and any other consequential proceedings emanating out of the said ECIR, and quash the same in view of the predicate offence having been quashed by judgment dated 4th May, 2022 passed by the High Court of Bombay in relation to the said FIR. The thrust of the petitioners‟ contention is based upon the conclusion of the Hon‟ble Supreme Court in Vijay Madanlal Choudhary
COURT’S OBSERVATION
The Delhi High Court observed that the authorities under the PMLA cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed.
Further, the scheduled offence must be registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum and, in the event there is already a registered scheduled offence but the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or quashing of the criminal case of the scheduled offence, there can be no action for money laundering against not only such a person but also any person claiming through him in relation to the property linked to the stated scheduled offence
The Court concluded-
a) The relief sought regarding constitutionality or vires of various provisions of the Prevention of Money Laundering Act, 2002 is infructuous having been decided by the Hon‟ble Supreme Court in Vijay Madanlal Choudhary & Ors. Vs. Union of India & Ors
b) All proceedings are set aside and there would be no further coercive action or search and seizure or summons arising from the said ECIR.
CASE: HARISH FABIANI & ORS. vs ENFORCEMENT DIRECTORATE & ORS
CITATION: W.P.(CRL) 408/2022
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