Andhra Pradesh High Court - Amravati
Vallurupalli Nalini Mohan vs Union Of India, on 1 May, 2024
Author: B Krishna Mohan
Bench: B Krishna Mohan
APHC010492992023
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3233]
(Special Original Jurisdiction)
WEDNESDAY ,THE FIRST DAY OF MAY
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE B KRISHNA MOHAN
WRIT PETITION NOs: 25491/2023 and 27760/2023
WRIT PETITION NO: 25491/2023:-
Between:
Vallurupalli Nalini Mohan ...PETITIONER
AND
Union Of India and Others ...RESPONDENT(S)
Counsel for the Petitioner:
1. JAVVAJI SARATH CHANDRA
Counsel for the Respondent(S):
1. JOSYULA BHASKARA RAO ( SC FOR E D )
2. JOSYULA BHASKARA RAO ( SC FOR E D )
3. JOSYULA BHASKARA RAO ( SC FOR E D )
4. JOSYULA BHASKARA RAO ( SC FOR E D )
WRIT PETITION NO: 27760/2023:-
Between:
Dr Raghava Rao Polavarapu and Others ...PETITIONER(S)
AND
Union Of India and Others ...RESPONDENT(S)
Counsel for the Petitioner(S):
1. JAVVAJI SARATH CHANDRA
Counsel for the Respondent(S):
1.
2. JOSYULA BHASKARA RAO ( SC FOR E D )
The Court made the following Common Order:
Heard the learned counsel for the petitioner and the learned Central
Government Counsel for the respondent Nos.1 to 4.
2. The W.P.No.25491 of 2023 is filed questioning the action of the
respondents in continuing the ECIR/VKSZO/27/2022 dated 31.05.2022
(impugned ECIR) and attachment vide Provisional Attachment Order
No.01/2023 dated 10.05.2023 by the respondent Nos.3 and 4, even after
quashing of the Cr.No.85 of 2021 dated 03.03.2021, Mangalagiri Police
Station under Sections 420, 406, 120B r/w 34 of IPC and Cr.No.346 of 2021
dated 19.06.2021, Mangalagiri Police Station under Sections 120B, 409, 471,
420 & 506 of IPC (Predicate Offences) vide Crlp.No.2627 of 2021 dated
23.03.2023 and Crlp.No.1396 of 2023 dated 22.02.2023 respectively by this
Court.
3. The W.P.No.27760 of 2023 is filed questioning the action of the
respondent Nos.1 to 4 in continuing the ECIR/VKSZO/27/2022 dated
31.05.2022 (impugned ECIR) and attachment vide Provisional Attachment
Order No.01/2023 dated 10.05.2023 and Original Complaint No.1996 of 2023,
dated 08.06.2023 by the respondent Nos.4 and 3 respectively, even after
quashing of the Cr.No.346 of 2021 dated 19.06.2021, Mangalagiri Police
Station under Sections 120B, 409, 471, 420 & 506 of IPC (Predicate
Offences) vide order in W.P.No.12137 of 2021 dated 12.05.2023 by this
Court.
4. In these two matters the learned counsel for the petitioner submits that
the Predicate Offences were already quashed and as such the impugned
Provisional Attachment Orders of the respondents shall be quashed in view of
the two judgments of the Hon'ble Supreme Court of India reported in the case
of Vijaya Madanlal Choudhary Vs. Union of India1 and the judgment of the
Hon'ble Supreme Court in the case of Assistant Director Enforcement
Directorate Vs. M/s. Nik Nish Retail Limited and Others2. Following the two
said judgments of the Hon'ble Supreme Court of India the similar writ petition
with the same set of facts was allowed thereby setting aside the Provisional
Attachment Orders passed therein by further directing the respondents therein
to release the attachment and defreeze the petitioner's accounts therein vide
orders passed by this Court in W.P.No.17029 of 2023 dated 09.08.2023.
Against which, the respondents therein preferred W.A.Nos.967, 641, 1010 and
1011 of 2023 before the Division Bench of this Court and the same were
dismissed vide common order dated 05.01.2024 observing that the Writ
Appeals are not maintainable as they arise out of the quashment of criminal
(2022) SCC Online SC 929
SLP (Criminal) Diary No(s).24321/2023
proceedings. Hence, the respondents filed the SLP in Criminal Diary
No.11371/2024 against the order passed by the High Court in W.P.No.21996
of 2023 dated 25.09.2023, wherein notice was ordered by the Hon'ble
Supreme Court dated 08.04.2024.
5. Similarly, there are 8 SLPs pending with the diary Nos.11371, 11940,
12805, 13006, 15584, 15956, 15958 and 16365 of 2024 before the Hon'ble
Supreme Court of India arising out of the similar orders in similar writ petitions.
7. On the other hand, Sri Jyosula Bhaskar Rao, the learned Central
Government Counsel appearing for the respondents refers to the counter
affidavit of the 3rd respondent at Para Nos.27A, 27B, 27F and 27 G which
reads as under:
"27.A. Further in response to the submissions made in Para 10 to Para
13, it is submitted that PMLA is a special Act consisting of both civil and
criminal proceedings in which seizure and attachments covers under civil
proceedings and the averment of the petitioner that "the continuation of
impugned ECIR and attachment order against the petitioner is perse
illegal and arbitrary as all the predicate offences as defined under
sec.2(y) of the PMLA are quashed against the petitioner herein" is wholly
wrong, illegal and untenable inasmuch as no criminal proceedings were
initiated against the petitioner and summoning under Sec.50, attachment
under Sec.5, search, seizure under Sec.17 are civil proceedings and are part
of investigation. ECIR is only internal document created by the Directorate of
Enforcement department unlike FIR. That the predicate offence is prerequisite
only for registering ECIR but once ECIR is registered PMLA proceedings will
go on its own stand. The Hon'ble apex court recently in Vijay madan lal held
that registration of FIR is not required for investigation for initiating civil
action under PMLA and relevant extract is reproduced below for the kind
reference of this Hon'ble Court.
(xviii) (a) In view of special mechanism envisaged by the
2002 Act, ECIR cannot be equated with an FIR under the 1973 Code.
ECIR is an internal document of the ED and the fact that FIR in
respect of scheduled offence has not been recorded does not
come in the way of the Authorities referred to in Section 48 to
commence inquiry/investigation for initiating "civil action" of
"provisional attachment" of property being proceeds of crime.
27.B. That the petitoners are averring that this case on hand was
squarely covered by the decision of the Hon'ble Apex court in Vijaymadanlal
Choudhary. It is worthwhile to extract the relevant para of the decision that
"187(v)(d) The offence under sec.3....... "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" but the petitioners cannot place reliance on
the lines supra for quashing of ECIR inasmuch the Hon'ble Court placed
emphasis on the word finally discharged/acquitted. The petitioners were
neither acquitted nor discharged finally on merits of the case but on
compromise in the initial stage itself.
27.F. That the PMLA investigation should not be stayed merely because
the predicate offence is quashed on account of compromise. Granting of such
blanket order would not only adversely affect the investigation but would have
far reaching implications for maintaining the Rule of Law. Where the
investigation is stayed for a long time, even if the stay is ultimately vacated,
the subsequent investigation may not be very fruitful for the simple reason that
the evidence may no longer be available. Hence quashing of FIR on
compromise of both parties shall not hamper the investigation by the
respondent.
27.G. Since the Vijay Madan Lal Judgment case doesn't clarify about
the quashing of the scheduled offence proceeding on compromise or on
without prima facie grounds. It should be interpreted in such a way that it shall
serve the purpose and intent of PMLA. Therefore mere quashing of FIRs on
the compromise without going into merits shall not result in closing of PMLA
proceeding. Moreover recently the Hon'ble Supreme Court of India in the case
of Directorate of Enforcement V. Aditya Tripathi, in Criminal Appeal
No.1401 and 1402 of 2023, held that Investigation under the predicate
offences and investigation by the Enforcement Directorate for the Schedule
offences under PMLA Act are different and distinct. The extract of the same is
reproduced below for kind reference of this Hon'ble High Court:
"6.3. From the impugned.... Investigation for the predicated
offences and the investigation by the Enforcement Directorate
for the scheduled offences under the PML Act are different and
distinct. Therefore, the High Court has taken into consideration the
irrelevant consideration. The investigation by the Enforcement
Directorate for the scheduled offences under the PML Act, 2002 is still
going on." - So the Quashing of ECIR in the present case shall be set
aside."
7. Be that as it may, as the similar matters were already disposed of by
this Court and the connected S.L.Ps are pending before the Hon'ble Supreme
Court of India, this Court is not inclined to re-appreciate the very same
contentions of the parties in these matters.
8. Accordingly, these writ petitions are allowed in terms of the order
passed by this Court in W.P.No.17029 of 2023 dated 09.08.2023 by setting
aside the Provisional Attachment Orders issued which are impugned in the
above said writ petitions with a further direction to release the attachment and
defreeze the petitioners' property. There shall be no order as to costs.
As a sequel, Miscellaneous Petitions pending, if any, shall stand closed.
_______________________________
JUSTICE B KRISHNA MOHAN
01.05.2024
PGT
