Mili Ghosh vs The Union Of India & Anr
2023 Latest Caselaw 4380 Cal

                     IN THE HIGH COURT AT CALCUTTA
                     CRIMINAL REVISIONAL JURISDICTION
                              Appellate Side




Present:

The Hon'ble Justice Jay Sengupta



                           CRR 40 of 2019
              CRAN 1 of 2019 (Old No: CRAN 2479 of 2019)
                                 With
                           CRR 41 of 2019
              CRAN 1 of 2019 (Old No: CRAN 2481 of 2019)

                                Mili Ghosh
                                  Versus
                         The Union of India & anr.



For the petitioner             : Mr. Sandip Kumar Bhattacharyya
                                Mr. Apalak Basu
                                Mr. Dipta Banerjee
                                                 ..... Advocates
For the ED                     : Mr. Vipul Kundalia
                                Mr. Anurag Roy
                                Ms. Uneaza Ali
                                                 .....Advocates
Heard lastly on                : 15.03.2023

Judgment on                    : 20.07.2023
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Jay Sengupta, J.:

1.    These are applications under Sections 397/401 read with Section 482

of the Code of Criminal Procedure, inter alia, praying for setting aside the

impugned order dated 19.09.2018 passed by the learned Judge, Special

(CBI) Court No. 1, Bichar Bhawan Calcutta in M.L. Case No. 02 of 2007

under Section 45 read with Section 3 and Section 4 of the Prevention of

Money Laundering Act, 2002 (State versus Gopinath Das and Ors.) and the

impugned order dated 19.09.2018 passed by the said Court in ML Case No.

1 of 2007 under similar provisions, respectively, wherein the petitioner's

applications for discharge from the said cases were rejected. As common

facts and questions of law were involved, the two revisions were taken up for

hearing together.

2.    Mr. A. Bhattacharyya, learned counsel for the petitioner, submitted as

follows. The genesis of the present case were the two letters of complaint

lodged with the CBI, by the officials of the State Bank of India and the

Oriental Bank of Commerce dated 23.05.2006 and 09.06.2006, respectively.

It was alleged in the said letters of complaint that one Mr. Gopinath Das, the

proprietor of M/s Hindustan International had allegedly entered into a

criminal conspiracy with some persons and in furtherance to the said

conspiracy had prepared forged and fabricated documents were then

submitted to the banks as a result of which a sum of Rs. 12,28,22,463/-

was allegedly misappropriated from the State Bank of India and a sum of

Rs. 6.76 crore was allegedly misappropriated from the Oriental Bank of

Commerce. Subsequently, on the basis of the letters of complaint as above
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referred, a case was registered by the CBI, an investigation was carried out

and ultimately a charge-sheet was filed before the learned Judge, 3rd Special

(CBI) Court, Calcutta against certain persons named therein. It would be

pertinent to note that the present petitioner was not named in the letter of

complaint, the formal FIR, nor in the charge-sheet. The Enforcement

Directorate subsequently carried out a preliminary inquiry into the business

affairs of the said M/s Hindustan International. It transpired that there was

an agreement dated 17.03.2006 between the said Mr. Gopinath Das and the

husband of the petitioner, Mr. Subrata Ghosh, by virtue of which the shares

of a company known as the Dheklapara Tea Co. Ltd., were sold to the said

Gopinath Das. The net sum of money was transferred to the Current

Account of the husband of the petitioner, Mr. Subrata Ghosh. The said

current account was in the name of Mr. Subrata Ghosh only and the

petitioner had no connection with the same. It was not the case of the

prosecution that the present petitioner received even a single penny in her

account. It was not the case of the prosecution that the applicant knew the

principal offender, Mr. Gopinath Das, who according to the case of the

prosecution, had siphoned off the funds. Accordingly, the first part of

Section 3 of the PMLA was clearly not applicable against her. The second

part of the provisions of Section 3 spoke about the knowledge of committing

the crime of money laundering of an accused person. Admittedly it was not

the case of the prosecution that the applicant herein had any kind of

knowledge regarding the alleged commission of the offence. It was the case

of the prosecution that Mr. Gopinath Das has transferred a sum of Rs. 2.14
                                       4



crore to the bank account of one Mr. Subrata Ghosh. Any further

transaction from the said account by Mr. Subrata Ghosh, who was the

solitary account holder of the current account would loose its character as a

tainted money unless and until the knowledge of the beneficiary about the

money being tainted was brought on record. It is the case of the prosecution

that out of the money that was allegedly given by Mr. Gopinath Das to Mr.

Subrata Ghosh, an amount of more than Rs. 2 lakhs, was given to the

Union Bank of India, to foreclose the house building loan, which Mr.

Subrata Ghosh availed for the purpose of purchasing a flat at Tollygunge.

Admittedly the loan account was in the joint name of Mr. Subrata Ghosh

and his wife, Mrs. Mili Ghosh, being the applicant herein. The applicant was

the second account holder in the house building loan. In these peculiar

circumstances of the case, the bank became the primary beneficiary as it

had received its money back. The said company, being the Dheklapara Tea

Company     Ltd.,   was   public   limited   company    and    the   present

applicant/petitioner was a mere share-holder in it. She was not a director of

the company. The opposite parties during the course of their arguments

before this Hon'ble Court also produced a document being an alleged money

receipt which was issued in favour of the petitioner by her husband Mr.

Subrata Ghosh. The said receipt indicated that the husband of the

petitioner Mr. Subrata Ghosh had received a sum of Rs. 6,51,000/- in cash,

from the petitioner. It was contended by the prosecution that such receipt

would indicate that the petitioner was somehow connected with any tainted

money. This was for the purpose of causing prejudice to the applicant and
                                       5



nothing else. The petitioner had been arraigned as an accused in this case

on the basis of presumption only, which had no place in the eye of law.

Three judgments were relied on by the prosecution. In the case of P.

Chidambaram versus Directorate of Enforcement, 2019 (9) SCC 24, Section

26 of the Indian Penal Code was dealt with in absence of a specific definition

of "reason to believe" in the PML Act. This judgment supported the case of

the defence and not the case of the prosecution. This case was related to a

bail application and is not applicable in connection with this case. So far as

the other two decisions were concerned, i.e., The Deputy Director,

Directorate of Enforcement and Ors. versus Axis Bank and Ors., 2019 (2)

Crimes 181(Del) and J. Sekar vs. Union of India (2018) 246 DLT 610, both

the cases were relating to confiscation or attachment of property.

Confiscation of a property and a criminal trial against a person are two

different aspects having two different kinds of requirements and as such,

these two judgments were not applicable. The consequences of the failure of

prosecution for the scheduled offence upon the offence of Money Laundering

was no longer res integra, as had been held by the Hon'ble Supreme Court

of India in the case of Vijay Madanlal Choudhary & ors. versus Union of

India & Ors., decided on 27.07.2022. Such view was also re-iterated by the

Hon'ble Supreme Court in the case of Parvathi Kollur & Anr. Versus State by

Directorate of Enforcement, as decided on 16.08.2022. Although the

prosecution had harped on Section 24 of the Act, they had remained

strangely silent about the knowledge, which was one of the essential

elements for constituting an offence of Money Laundering under Section 3 of
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the PML Act. The entire prosecution case did not reveal any element of

knowledge which could be attributed to the present petitioner and as such,

the question of her prosecution for the offence of Money Laundering as

defined in Section 3 of the Act, did not and could not arise.

3.    Mr.    Kundalia,   learned     counsel   representing   the    respondents,

submitted as follows. One Gopinath Das, after discounting bills of lading,

purchased the Dheklapara Tea Estate from the said Subrata Ghosh and

transferred a sum of Rs. 2,14,00,000/- into his account. The said sum was

transferred into the account of Subrata Ghosh through various transactions

for a period from January 4, 2005 to January 30, 2006. Out of the said sum

of Rs. 2,14,00,000/-, a flat in the joint name of Subrata Ghosh and Mili

Ghosh was purchased in Kolkata for a total consideration value of Rs.

17,25,000/-. A payment of Rs. 1,50,000/- was made as per receipt dated

March 29, 2006. A further amount of Rs. 6,51,610/- was paid by Mili Ghosh

to Subrata Ghosh evidenced in money receipt. The accused petitioner had

shown in her balance sheet on 31.03.2006 that the value of the shares held

by her in the Dheklapara Tea Company was valued at an amount of Rs.

2,20,000/- and held cash in hand for an amount of Rs. 6,25,685.53/-. In

addition to the above, reliance was placed upon the statement of the current

account held by Subrata Ghosh which had various transaction and which in

the absence of appropriate narration could not be collated and was treated

as coming squarely within the purview of Section 3. The provisional

attachment confirmation order dated 23rd September, 2009, clearly

mentioned that with regard to the property in question, no evidence was

produced by the petitioner herein to show that the source of the money used

to buy the property was anything other than laundered money originating

from Gopi Nath Das that flowed into the account of Subrata Ghosh, who

was the husband of the petitioner. Also there was a finding in the aforesaid

provisional attachment confirmation order that even though the petitioner

had taken a loan purportedly to finance the flat in question, there was no

evidence that the petitioner actually paid that amount to the seller or to her

husband Subrata Ghosh for payment to the seller. It was an admitted fact

on behalf of Subrata Ghosh vide the statement in page 283 of the RUD that

he transferred shares in Dheklapara Tea Estate held by him and his family

members to Gopi Nath Das for Rs. 2.25 crore. This showed that the family

members including the petitioner had the requisite knowledge and intention

to obtain money from Gopi Nath Das, which brought them under the ambit

of money laundering. Further, Subrata Ghosh admitted that the proceeds of

crime received from Gopi Nath Das were used to purchase properties

including the flat in question, as per page 300 and 301 of the RUD. In Vijay

Madanlal Choudhary versus Union of India (2022 SCC Online SC 929), it

was held that possession of proceeds of crime constituted offence of money

laundering. The provisions of PMLA were attracted when proceeds of crime

were involved in any process or activity including mere possession of such

proceeds of crime. Section 24 of PMLA applied to both proceedings before

the Adjudicating Authority and the Special Court. If the involvement of a

person in any process or activity connected to proceeds of crime was

established, then the onus shifted on that person to rebut the legal

presumption that the proceeds of crime were not involved in money

laundering. Thus, when there was a clear finding by the Adjudicating

Authority that the petitioner had not been able to show that the source of

the funds used to buy the property in question as distinct from the proceeds

of crime originating from Gopi Nath Das, then the onus to rebut the

presumption that the petitioner had not contravened Section 3 of the PMLA

shifted on to the petitioner herself. Thus, prima facie satisfaction for the

Court existed to presume that such proceeds of crime were involved in

money laundering as under Section 24(b). Consequently, the petitioner had

to rebut such presumption in the course of trial, and could not bypass such

procedure under law by way of a discharge application.

4. I heard the learned counsels for the parties, perused the application,

affidavits, the records of the case and the written notes of submissions.

5. For a proper adjudication of the lis, it would be necessary to quote the

following provisions of the Prevention of Money Laundering Act, 2002 -

Section 2. sub-section (u) "proceeds of crime" means any property derived

or obtained, directly or indirectly, by any person as a result of criminal

activity relating to a scheduled offence or the value of any such property [or

where such property is taken or held outside the country, then the property

equivalent in value held within the country] [or abroad]; [Explanation. - For

the removal of doubts, it is hereby clarified that "proceeds of crime" include

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 any criminal activity relatable to the scheduled offence;]

Section 3. Offence of money-laundering. - Whosoever directly or

indirectly attempts to indulge or knowingly assists or knowingly is a party or

is actually involved in any process or activity connected with the [proceeds

of crime including its concealment, possession, acquisition or use and

projecting or claiming] it as untainted property shall be guilty of offence of

money-laundering.

[Explanation. - For the removal of doubts, it is hereby clarified that, -

(i) 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

assisted or knowingly is a party or is actually involved in one or more of the

following processes or activities connected with proceeds of crime, namely: -

(a) concealment; or

(b) possession; or

(c) acquisition; or

(d) use; or

(e) projecting as untainted property; or

(f) claiming as untainted property, in any manner whatsoever;

(ii) the process or activity connected with proceeds of crime is a

continuing activity and continues till such time a person is directly or

indirectly enjoying the proceeds of crime by its concealment or possession or

acquisition or use or projecting it as untainted property or claiming it as

untainted property in any manner whatsoever.

6. Therefore, proceeds of crime means not only a property derived or

obtained directly, but also indirectly as a result of criminal activity relating

to a scheduled offence. The explanation to the provision would make it

further clear that the proceeds of crime would also include property derived

or obtained as a result of criminal activity relatable to a scheduled offence.

7. In the present case, it is alleged that a part of the laundered money

was parked with the husband of the petitioner in his account. This was, in

turn, used by the petitioner and her said husband for purchasing a

property. Therefore, the monetary trail would make it abundantly clear that

the altered form of such tainted money can fairly be termed as proceeds of

crime.

8. Section 3 of the PMLA Act, 2002 practically brings within the ambit of

money laundering any activity or process connected to an act of money

laundering. A person can be hauled up for money laundering if he either

directly or indirectly attempts to indulge in or knowingly assists or

knowingly is a party or is actually involved in any process or activity

connected with the proceeds of crime. So far as the present petitioner is

concerned, she could come within its swipe, if not for directly or indirectly

attempting to indulge, at least for knowingly assisting or knowingly being a

party or for actually getting involved in a process or activity connected to the

proceeds of crime.

9. The explanation to Section 3 of the said Act sets out the process or

activities connected with the proceeds of crime that could attract the offence

of money laundering, their concealment or possession or acquisition or use

or projecting as untainted property or claiming as untainted property. In the

present context, the petitioner could be held responsible for any of the above

referred processes or activities.

10. For better clarity, the bare facts prima facie constituting an offence

may have to be culled out from the entire factual matrix. First, the present

petitioner although claiming to be a home maker and an unsuspecting wife

of the accused who had allegedly received the tainted money from the prime

offender in the scheduled offence, was nevertheless a prime shareholder in

the sham company along with her husband and other relatives. It was the

fraudulent transfer of shares in this company that started the process by

which money was illegally laundered. Thereafter, the present petitioner was

absent from the picture for the immediately succeeding sequence of events.

She comes in again when a part of the tainted money parked in her

husband's account was used as consideration for purchasing a property in

their joint names.

11. In view of the above facts, it cannot be said that no prima facie case is

made out against the petitioner, more particularly in the peculiar

circumstance that not only was the tainted money used for purchasing a

property in the joint names of the petitioner and the husband, but the

petitioner had also been a shareholder in the company the transfer of whose

shares was itself a subject matter of the case of money laundering.

12. Even if the petitioner wants to deny any knowledge of the money used

being obtained by fraudulent means, she has to do the same if and once a

trial commences. Before that, on the present facts it may have to be

presumed, in terms of Section 24 of the PML Act, that such proceeds of

crime were involved in money laundering.

13. The decision of the Hon'ble Apex Court in Vijay Madanlal Choudhary

(supra) only further strengthens the case against the petitioner. There,

Section 24 of the PML Act was held to be constitutionally valid.

14. As prima facie case is made out against the present petitioner in the

facts and circumstances of the present case, she cannot be exonerated from

the charges at this stage and before a full-fledged trial commences.

15. In view of the above discussions, the revisional applications are

dismissed. The connected applications are, accordingly, disposed of.

16. However, there shall be no order as to costs.

17. The learned Trial Court shall however not be swayed by any

observation made by this Court in this revision as the same were made at

this stage only for deciding the revisional application.

18. Urgent photostat certified copies of this judgment may be delivered to

the learned Advocates for the parties, if applied for, upon compliance of all

formalities.

(Jay Sengupta, J.)

S.M