Andhra Pradesh High Court - Amravati
Directorate Of Enforcement vs Uppalapu Srinivasa Rao on 5 January, 2024
Author: R Raghunandan Rao
Bench: R Raghunandan Rao
IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI
HON‟BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE
&
HON‟BLE MR. JUSTICE R. RAGHUNANDAN RAO
WRIT APPEAL Nos.967, 641, 1010 and 1011 of 2023
WRIT APPEAL No.967 of 2023
Union of India,
Rep. by it‟s Secretary,
Ministry of Finance,
New Delhi and three others.
... Appellants
Versus
M/s. Lexus Technologies Private Limited,
Rep. by its Director Sanamsetty Subba Rao,
Having its Regd. Office at Flat No.A405,
Sri Balaji Fortune Towers, Op. Auto Nagar,
Mangalagiri, Guntur District,
Andhra Pradesh - 522 503 and another.
...Respondents
Mr. A. R. L. Sundaresan, Additional Solicitor General of India,
representing Mr. J. U. M. V. Prasad, Counsel for the appellants.
Mr. Ravi Chandavarapu, Counsel for respondent No.1.
Ms. V. Dyumani, Counsel for respondent No.2.
Directorate of Enforcement,
Rep. by it‟s Director,
Department of Revenue,
HCJ & RRR, J
and batch
Pravartan Bhawan,
APJ Abdul Kalam Road,
New Delhi - 110 011 and two others.
... Appellants
Versus
Uppalapau Srinivasa Rao,
S/o. Venkateswara Rao,
Aged 50 years, R/o.D.No.54-46-17A,
Layola College Road, Central Excise Colony,
Vijayawada, Krishna District,
Andhra Pradesh and another.
...Respondents
Mr. A. R. L. Sundaresan, Additional Solicitor General of India,
representing Mr. J. U. M. V. Prasad, Counsel for the appellants.
Mr. B. Adinarayana Rao, Senior Counsel representing Mr. Javvaji
Sarath Chandra, Counsel for respondent No.1.
Deputy Solicitor General of India, Counsel for respondent Nos.2 and
3.
Union of India,
Rep. by it‟s Secretary,
Ministry of Finance,
New Delhi and three others.
... Appellants
Versus
Dr. Mani Akkineni, W/o. Late Sudarshan Rao,
Aged 65 years, R/o. Flat No.105,
Trendset Harmony Apartment,
Gayatri Nagar, Vijayawada,
Andhra Pradesh and another.
HCJ & RRR, J
and batch
...Respondents
Mr. A. R. L. Sundaresan, Additional Solicitor General of India,
representing Mr. J. U. M. V. Prasad, Counsel for the appellants.
Mr. B. Adinarayana Rao, Senior Counsel representing Mr. Javvaji
Sarath Chandra, Counsel for respondent Nos.1 and 2.
Union of India,
Rep. by it‟s Secretary,
Ministry of Finance,
New Delhi and three others.
... Appellants
Versus
Dr. Appa Rao Mukkamala,
S/o. Late Bhaskara Rao,
Aged 75 years, R/o. 4545, Warwick Circle,
Grand Blanc, Michigan 48439, USA,
Presently Residing at River House,
Krishna Karakatta Road, Undavalli,
Guntur District and another.
...Respondents
Mr. A. R. L. Sundaresan, Additional Solicitor General of India,
representing Mr. J. U. M. V. Prasad, Counsel for the appellants.
Mr. Ravi Chandavarapu, Counsel for respondent Nos.1 and 2.
HCJ & RRR, J
and batch
DATE : 05.01.2024
PER DHIRAJ SINGH THAKUR, CJ:
1. In all the four aforementioned writ appeals, since common
questions of law and fact arise, we propose to deal with them by way
of a common order.
For purposes of convenience, reference shall be made to facts
contained in W.A.No.967 of 2023.
2. The present Writ Appeal No.967 of 2023 has been filed in
terms of Clause 15 of the Letters Patent against the judgment and
order dated 09.08.2023 passed in W.P.No.18057 of 2023, whereby
the writ Court while exercising powers under Article 226 of the
Constitution of India, has quashed the impugned ECIR dated
31.05.2022, the Provisional Attachment Order No.1/2023, dated
10.05.2023 and the Original Complaint No.1996/2023, dated
08.06.2023, in terms of the provisions of the Prevention of Money
Laundering Act, 2002 (hereinafter referred to as "PMLA, 2002")
and has further directed release of all the seized property, material
and documents.
HCJ & RRR, J
and batch
3. Investigation under PMLA, 2002 came to be initiated vide
ECIR/VKSZO/027/2022, dated 31.05.2022, against the
respondents herein and officials of M/s. NRI Academy of Sciences
which is a Society registered under the Andhra Pradesh Societies
Registration Act, 2001 (hereinafter referred to as "the Act, 2001"),
on the basis of two FIRs bearing Crime No.85 of 2021, dated
03.03.2021 for offences punishable under Sections 420, 406, 120B
r/w Section 34 of IPC and Crime No.346 of 2021 dated 19.06.2021
for offences punishable under Sections 120B, 409, 471, 420 and
506 of IPC registered at Mangalagiri police station.
4. Since the dispute primarily involved the control over the
management of the NRI Academy of Sciences which was running a
one thousand bedded hospital including medical colleges and
nursing homes, a Division Bench of this Court vide judgment and
order dated 22.02.2022 passed in W.A.Nos.234 of 2022 and batch,
held that the Society was registered under the provisions of the Act,
2001, Section 23 whereof dealt with the dispute regarding
management arising among the committee or the members of the
Society in respect of the matters relating to the affairs of the
Society etc., the same could not be gone into in writ proceedings and
therefore, referred the same for adjudication, with the consent of
HCJ & RRR, J
and batch
the parties to a sole Arbitrator in terms of the said Section 23 of the
Act, 2001. The order dated 22.02.2022, passed by the Division
Bench also recorded the agreement of the counsel for the parties
that all pending litigations in relation to the subject dispute before
any legal fora/Courts would be withdrawn by the respective parties.
5. In the backdrop of the aforementioned developments,
petitions under Section 482 Cr.P.C. bearing Crl.P.No.2341 of 2023
and Crl.P.No.1398 of 2023, came to be filed for quashing the
proceedings in Crime No.85 of 2021 for offences under Sections
420, 406, 120B r/w Section 34 IPC and in Crime No.346 of 2021 for
offences under Sections 120B, 409, 471, 420, 506 IPC both the FIRs
registered with Mangalagiri Rural Police Station, respectively. In
these petitions, it was urged that the complainant in Crime
Nos.85/2021 and 346/2021 was a member of the NRI Academy of
Sciences and that the said FIRs had been registered on account of
the disputes between the rival groups for control over the
management of the Society. Reference was made to the judgment
and order dated 22.02.2022, passed in W.A.Nos.234 of 2022 and
batch and therefore, made a prayer that the FIRs in question be
quashed. An affidavit also appears to have been filed by the
complainant in the aforementioned proceedings before the learned
HCJ & RRR, J
and batch
single Judge tendering his unconditional consent for quashing of
the FIRs. Based upon the aforementioned facts which were placed
before the learned single Judge, the proceedings in regard to Crime
No.85/2021 and 346/2021 were quashed without going into the
merits of the cases.
6. The W.P.No.18057 of 2023, came to be filed by respondent
No.1 herein challenging the proceedings initiated by the appellants
herein under the provisions of the PMLA, 2002 on the ground that
the proceedings were without any authority or adjudication in view
of the fact that the FIRs in question had been quashed by this Court
in CRLP.No.2341/2023 and CRLP.No.1398/2023.
Following the ratio of the judgment passed by Apex Court in
Vijay Madanlal Choudhary and Others vs. Union of India 1, the writ
Court allowed the writ petition and quashed the impugned ECIR
dated 31.05.2022, along with the Original Complaint and the
Provisional Attachment Order which was impugned therein. Hence,
the present writ appeal.
2022 SCC OnLine 929
HCJ & RRR, J
and batch
7. The main ground urged in the present writ appeals is focused
on the issue that the economic offences cannot be quashed at the
investigation stage on the ground that the matter had been settled
between the parties as they were public wrongs committed against
the society. It was urged that the FIRs bearing Crime No.85/2021
Crime No.346/2021 ought not to have been quashed based upon an
agreement between the parties inter se.
8. Counsel for respondent No.1, on the other hand, reiterated
the position of the law as was crystallised by the Apex Court in
Vijay Madanlal Choudhary and Others vs. Union of India (supra),
wherein it was held:
"467. ... (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."
HCJ & RRR, J
and batch
The judgment in Vijay Madanlal Choudhary case (supra) was
followed subsequently by the Apex Court in Assistant Director
Enforcement Directorate vs. M/s. Nik Nish Retail Limited and
others2 decided on 14.07.2023, wherein it was held:
"In paragraph 187 (v) (d) of the decision in the case of Vijay
Madanlal Chowdhury & Ors. V. Union of India & Ors. (2022) SCC
OnLine SC 929, it is held that even if predicate offence is quashed by
the Court of competent jurisdiction, there can be no offence of
money laundering against the accused.
Appropriate proceedings can be always filed by the
concerned parties for challenging the order by which predicate
offence was quashed. If the said order is set aside and the case is
revived, it will be always open for the petitioner to revive the
proceedings under the Prevention of Money Laundering Act, 2002.
The Special Leave Petition is accordingly disposed of."
9. Even when the position of law on this subject appears to have
been settled, yet we refrain from expressing any opinion on the
issue, on the ground that the present appeal itself is not
maintainable, in view of the judgment of the Apex Court rendered in
Ram Kishan Fauji vs. State of Haryana and others3.
SLP (Criminal) Diary No(s).24321/2023
(2017) 5 SCC 533
HCJ & RRR, J
and batch
10. In the case of Ram Kishan Fauji (supra), the Apex Court had
not accepted the view expressed by a full Bench of the Andhra
Pradesh High Court, wherein it held that, when the power was
exercised under Article 226 of the Constitution for quashing of a
criminal proceeding, there was no exercise of criminal jurisdiction.
A distinction was sought to be made between proceedings for
quashing of the FIR under Section 482 of the Criminal Procedure
Code and the powers exercisable by the High Court under Article
226 of the Constitution for quashing of criminal proceedings. The
Apex Court, however, held the view so expressed by the full Bench
of the composite High Court of Andhra Pradesh as incorrect. It was
held:
"56. As we find from the decisions of the aforesaid three High
Courts, it is evident that there is no disagreement or conflict on
the principle that if an appeal is barred under Clause 10 or
Clause 15 of the Letters Patent, as the case may be, no appeal
will lie. The High Court of Andhra Pradesh, however, has held
that when the power is exercised under Article 226 of the
Constitution for quashing of a criminal proceeding, there is no
exercise of criminal jurisdiction. It has distinguished the
proceeding for quashing of FIR under Section 482 Cr.P.C and,
in that context, has opined that from such an order, no appeal
would lie.On the contrary, the High Courts of Gujarat and
Delhi, on the basis of the law laid down by this Court
in Ishwarlal Bhagwandas, have laid emphasis on the
seed of initiation of criminal proceeding, the consequence of a
criminal proceeding and also the nature of relief sought before
the Single Judge under Article 226 of the Constitution. The
conception of „criminal jurisdiction‟ as used in Clause 10 of the
Letters Patent is not to be construed in the narrow sense. It
encompasses in its gamut the inception and the
consequence. It is the field in respect of which the jurisdiction
is exercised, is relevant. The contention that
solely because a writ petition is filed to quash an investigation,
HCJ & RRR, J
and batch
it would have room for intra-court appeal and if a petition is
filed under inherent jurisdiction under Section 482 Cr.P.C.,
there would be no space for an intra-court appeal, would create
an anomalous, unacceptable and inconceivable situation. The
provision contained in the Letters Patent does not allow or
permit such an interpretation. When we are required to
consider a bar or non-permissibility, we have to appreciate the
same in true letter and spirit. It confers jurisdiction as regards
the subject of controversy or nature of proceeding and that
subject is exercise of jurisdiction in criminal matters. It has
nothing to do whether the order has been passed in exercise of
extraordinary jurisdiction under Article 226 of the
Constitution or inherent jurisdiction under Section 482 Cr.P.C.
58. In view of the aforesaid premised reasons, we hold that
the High Courts of Gujarat and Delhi have correctly laid down
the law and the view expressed by the Full Bench of the High
Court of Andhra Pradesh is incorrect."
11. Be that as it may, following the ratio of the judgment in Ram
Kishan Fauji (supra), we hold that the present writ appeals are not
maintainable and are accordingly dismissed. No costs.
Pending miscellaneous applications, if any, shall stand closed.
DHIRAJ SINGH THAKUR, CJ R. RAGHUNANDAN RAO, J
SSN
HCJ & RRR, J
and batch
HON‟BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE
&
HON‟BLE MR. JUSTICE R. RAGHUNANDAN RAO
WRIT APPEAL Nos.967, 641, 1010 and 1011 of 2023
(Per Dhiraj Singh Thakur, CJ)
DATE : 05.01.2024
SSN
