Calcutta High Court (Appellete Side)
Ramesh Chandra Singh vs Assistant Director on 3 October, 2024
Author: Jay Sengupta
Bench: Jay Sengupta
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Appellate Side
Present:
The Hon'ble Justice Jay Sengupta
C.R.R. 3468 of 2018
CRAN 5 of 2019
(Old No. CRAN 4042 of 2019)
Ramesh Chandra Singh
Vs
Assistant Director, Enforcement Directorate,
Government of India & Ors.
For the petitioner : Mr. Debasish Roy
Mr. Satadru Lahiri
Mr. Safdar Azam
Ms. Sreemayi Roy
.....Advocates
For the Enforcement Directorate : Mr. Lokenath Chatterjee
Mr. Subhajit Das
.....Advocates
Heard lastly on : 18.07.2024
Judgment on : 03.10.2024
Jay Sengupta, J:
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1. This is an application for quashing of proceeding in respect of ECIR No.
KLZ/16/2017 dated 17.10.2017 so far as the present petitioner is
concerned.
2. Learned senior counsel representing the petitioner submitted as
follows. From the stand taken by the Enforcement Directorate, it appeared
that ECIR: KLZO/16/2017 was registered on 17.10.2017 on the basis of CBI
FIR No. RC0102017A0021 dated 11.09.2017. In the CBI case, charge sheet
had been filed. It was the contention of the Enforcement Directorate that
during the course of the enquiry in the ECIR case registered by them. It was
allegedly found that the petitioner had amassed huge amount of wealth,
which could not have been from his known source of income. In the CBI case
after completion of investigation charge sheet was filed against one Samiran
Kumar Mondal. On the prayer of the Enforcement Directorate initially a
provisional order of attachment was passed by the adjudicating authority on
01.10.2019. It subsequently came to be confirmed on 19.03.2020. After
completion of their enquiry the Enforcement Directorate lodged a complaint
against the petitioner and his relatives before the learned Special Court
under the Prevention of Money Laundering Act on 25.08.2020 which was
registered as ML Case No. 10 of 2020. Although the Inspectors and/or the
officials of the Provident Fund authorities were supposed to hold inspection
at the business establishment as planned and guided by the
recommendation made by Shram Suvidha Portal, the petitioner and his
subordinates allegedly held inspection at random in various establishments
without the recommendation of the said Portal. With regard to the
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disproportionate assets amassed by the petitioner and his relatives, the CBI
also registered a case being RC012018A0012 dated 19.11.2018 for having
assets to the tune of Rs.56,47,789/-, disproportionate to their known source
of income. It was the contention of the Enforcement Directorate that
quashing of the proceedings of Case No. ECIR: KLZO/16/2017 dated
17.10.2017 was not permissible in view of the judgement delivered by the
Hon'ble Supreme Court in the case of Vijay Madan Lal Choudhary & Ors. vs
UOI & Ors., (2022) SCC Online Sc 929 as in the case of CBI
RC0102017A0021 dated 11.09.2017 charge sheet had been filed and the
proceedings were pending before the appropriate Court. The contentions the
Enforcement Directorate were the product of jugglery of facts without
addressing the actual state of affairs which had been brought into the
records of this revisional application before this Hon'ble Court by way of
filing supplementary affidavit on behalf of the petitioner. The Enforcement
Directorate deliberately chose not to address the main issue raised by the
petitioner in his favour for quashing of the proceedings of Case No. ECIR:
KLZO/16/2017 and also the proceedings of Case No. ML 10 of 2020 now
pending before the Learned Judge, Special Court, PMLA, Kolkata. With
regard to the purported misdeeds of Samiran Kumar Mondal the CBI
initiated Case No. RC0102017A0021 dated 11.09.2017, a charge sheet was
filed in the said case against Samiran Kumar Mondal. But, the petitioner was
only a witness in the said charge sheet. It was nobody's case that the
proceeds of the crime of the CBI Case which were amassed by Samiran
Kumar Mondal went to the coffers of the petitioner and/or his family
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members. In the complaint which was filed by the Enforcement Directorate
against the petitioner and his family members being Case No. ML 10 of 2020
it was nowhere suggested that the Enforcement Directorate found any money
trail from the proceeds of the crime of the CBI case. ML Case No. 10 of 2020
copy of which was also placed on record stood on its own about the assets
amassed by the petitioner and his relatives which were disproportionate to
their known source of income. Now, with regard to the disproportionate
assets as submitted by the Enforcement Directorate, the CBI had also
registered a case being Case No. RC012018A0012 dated 19.11.2018. In this
case Closure Report was filed on behalf of the CBI and which was accepted
by the Court of competent jurisdiction. The Enforcement Directorate claimed
the petitioner's disproportionate assets to be around Rs. 2,89,50,536/-
whereas at the time of registration of the First Information Report, the CBI
brought it down to Rs. 56,47,789/- and at the time of filing of the Closure
Report, it came down to Rs. 9,88,978/- which as per the CBI was 8.25% of
the income of the petitioner and his family members from all known sources
of income. Reliance was placed on the judgement reported in Krishnanand
Agnihotri Vs. The State of Madhya Pradesh, (1977) 1 SCC 816. The
petitioner's argument was based on the judgement of the Hon'ble Apex Court
in the case of Vijay Madan Lal Choudhary and Ors. Vs UOI and Ors., (2022)
SCC Online SC 929 wherein it was held that if the allegations of the
scheduled offences were obliterated in the eye of law being in the form of
acquittal, quashment, then the proceedings initiated under the Prevention of
Money Laundering Act on the basis of such scheduled offences would also
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come to its legal death. In absence of accusation of any scheduled offences,
there could not be any existence of a proceeding under the Prevention of
Money Laundering Act. In the instant case the CBI had initiated a proceeding
under the Prevention of Corruption Act against Samiran Kumar Mondal in
which charge sheet was filed and the petitioner was a witness in the said
charge sheet. The proceedings which had been initiated by the Enforcement
Directorate were on the basis of such proceedings launched by the CBI.
Admittedly, the petitioner being a witness in the said case, could not be said
to have committed any contravention of the Prevention of Money Laundering
Act with regard to the accusation made in the CBI case. A second case was
initiated by the Enforcement Directorate, which was not in any way
connected with the CBI case i.e., the petitioner and his family members on
their own had amassed wealth disproportionate to their known source of
income. On this issue an investigation was launched by the CBI for certain
scheduled offences, which was also terminated by a Court. The petitioner at
no point of time submitted that the present ECIR: KLZO/16/2017, or for that
matter, the complaint filed by the Enforcement Directorate being Case No.
ML 10 of 2020 would be effaced, but what the petitioner was submitting was
that in view of non existence of any scheduled offences against the petitioner,
the proceedings of Case No. ML 10 of 2020 should be quashed so far as the
petitioner and his family members were concerned. Reliance were placed on
judgements/orders of the Hon'ble Apex Court in i) Vijay Madan Lal
Choudhary and Ors. vs UOI and Ors. (2022) SCC Online SC 929, ii) J. Sekar
@ Sekar Reddy Vs. Directorate of Enforcement (2022) 7 SCC 370, iii) Parvathi
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Kollur and Anr. Vs. State by Directorate of Enforcement, (2022) Livelaw (SC)
688., iv) Adjudicating Authority (PMLA) and Ors. Vs. Shri Ajay Kumar Gupta
and Ors. (Criminal Appeal Nos. 391-392/2018), v) M/s. Nik Nish Retali Ltd.
and Anr. Vs. Assistant Director, Enforcement Directorate, Government of
India and Ors. (CRR No. 2752 of 2018), (2022) SCC Online (Cal) 4044, vi)
Krishnanand Agnihotri Vs. The State of Madhya Pradesh, (1977) 1 SCC 816.
3. Learned counsel appearing on behalf of the Enforcement Directorate
submitted as follows. FIR No. RC 0102017A0021 dated 11.09.2017, under
Section 7 of the Prevention of Corruption Act, 1988, was registered by the
Central Bureau of Investigation (hereinafter also referred to as "CBI"), Anti-
Corruption Branch (hereinafter also referred to as "ACB"), Kolkata, on the
basis of a complaint from one Avinandan Ghosh, who was engaged in his
family business being run in the name and style of M/s Ghosh Engineering
Co., a proprietorship firm. The said complaint was made against Samiran
Kumar Mondal, Enforcement Officer, SRO, Ministry of Labour &
Employment, Employees Provident Fund Organisation (hereinafter also
referred to as "EPFO"), Park Street, Kolkata, for demanding bribe. A trap was
laid by the CBI and the suspected officer Samiran Kumar Mondal was
arrested red-handed while taking bribe (FIR No. RC0102017A0021 dated
11/09/2017). A Charge Sheet in the FIR No. RC 0102017A0021 dated
11.09.2017 was filed by CBI, ACB, Kolkata vide No. 35/2017 dated
27.12.2017 under Sections 7, 13(2) r/w 13(1)(d) of the Prevention of
Corruption Act, 1988, against Samiran Kumar Mondal, the then
Enforcement Officer, Employee's Provident Fund Organisation, Sub Regional
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Office, Park Street, Kolkata, for demanding illegal gratification of Rs.
30,000/- from one Ashok Ghosh, proprietor of M/s Ghosh Engineering Co.
and father of Avinandan Ghosh and subsequently, accepting amount of
Rs.20,000/- as the demanded bribe amount. On the basis of CBI FIR No. RC
0102017A0021 dated 11.09.2017, investigation under the provisions of the
Prevention of Money Laundering Act, 2002 (hereinafter referred to as "PMLA")
was initiated by recording an Enforcement Case Information Report (ECIR)
bearing number KLZO/16/2017 on 17.10.2017 against Samiran Kumar
Mondal and others. Since, the offences punishable under Section 7 of the
Prevention of Corruption Act, 1988, were Scheduled Offences under PMLA,
further information was gathered, which revealed that Samiran Kumar
Mondal and other associated officers, namely (1) Ramesh Chandra Singh,
Assistant Provident Fund Commissioner, (2) Dipak Bhattacharya,
Enforcement Officer and (3) Sukumar Shaw, Enforcement Officer, were also
involved in illegal activities dealing with provident fund matters. Ramesh
Chandra Singh, the petitioner herein, was the immediate superior officer of
Samiran Kumar Mondal, E.O., Dipak Bhattacharya, E.O., Sukumar Shaw,
E.O., and they carried out inspections as per the instructions of the
petitioner (ECIR bearing number KLZO/16/2017 dated 17.10.2017. The
Enforcement Directorate conducted searches on various premises Samiran
Kumar Mondal and Ramesh Chandra Singh and seized documents related to
movable and immovable properties and cash of Rs. 10.6 lakhs and jewellery
and subsequently, Enforcement Directorate had filed an application under
Section 17(4) of the PMLA for retention of seized properties and documents,
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before the Adjudicating Authority, New Delhi, under PMLA, being O.A. No.
245 of 2018. The said Original Application contained panchanamas and
necessary particulars and documents. The Adjudicating Authority allowed
retention of seized documents and properties vide its order dated 19.12.2018
in O.A. No. 245 of 2018. On the basis of investigation under the PMLA, 2002,
the immovable and movable properties collectively valued at Rs.
2,89,50,536/-, along with accrued interest and benefits thereon, were
provisionally attached under Section 5(1) of PMLA, 2002, vide Order No. 13
of 2019 dated 01.10.2019 dated 01.10.2019, on reasons to believe that the
said properties were involved in money laundering and were proceeds of
crime under PMLA, 2002, which was confirmed by the learned Adjudicating
Authority, PMLA, 2002, New Delhi, vide Order dated 19.03.2020 in O.C.
1218 of 2019. A Prosecution Complaint, being ML 10 of 2020, was filed on
25.08.2020 against the petitioner, Sharda Singh, mother of the petitioner,
and Sangita Singh, wife of the petitioner, for their involvement in the offences
of money laundering, and the case was being tried in CBI Court 1, Bankshall
Court, Kolktata. Cognizance of the same was also taken by the learned
Special Court under PMLA, necessary eviction notices under sub-section (4)
of Section 8 of the PMLA dated 25.05.2022 were also issued against the
properties belonging to the family members of the petitioner. Even though
the petitioner was not initially named an accused in CBI FIR No. RC
0102017A0021 dated 11.09.2017, but during the course of investigation
under the Prevention of Money Laundering Act, 2002 (PMLA), it was seen
that EPFO officials were not allowed to undertake inspection at different
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business establishments at random, but inspections were planned and
guided by the recommendations made by the "Shram Subidha" portal. It was
also seen that the petitioner and his team, including Samiran Kumar
Mondal, Enforcement Officer, had made random inspections in different
companies without any recommendation made in the said portal. Ajitesh
Kumar, Regional Provident Fund Commissioner, in his letter dated
06.07.2018 vide No. EPFO/RO/P.St./Adm/AVS/Part/Vol-I/584/898
provided a detailed list of inspections done without recommendation of the
said portal. Further, during the course of investigation conducted under
PMLA, 2002, it was found that during the period of 2011 to 2016, the
petitioner had worked as an Enforcement Office at different Sub-Regional
and Regional offices of EPFO in West Bengal and was subsequently promoted
to the rank of Assistant Provident Fund Commissioner in EPFO. Samiran
Kumar Mondal, Enforcement Officer, Dipak Bhattacharya, Enforcement
Officer, Sukumar Shaw, Enforcement Officer had worked with the petitioner
in different formations of EPFO. The petitioner, upon being promoted to the
rank of Assistant PF Commissioner assumed the position to influence the
business organisation under his jurisdiction, directly and also through the
other officers and had accrued huge amount of wealth, which was not
commensurate with his income. Merely not being named as an accused in
the predicate offence, on the basis of which investigation was commenced by
the Enforcement Directorate, did not absolve the petitioner from being
investigated or treated as an accused in proceedings commenced under the
provisions of the PMLA. In this regard, reliance was placed on the judgement
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of the Hon'ble Supreme Court of India dated February 24, 2023, passed in
The Directorate of Enforcement vs. M. Gopal Reddy (Criminal Appeal No. 534
of 2023 @ SLP (Crl) No. 8260/2021). It was, inter alia, held by the Hon'ble
Supreme Court, "Now so far as the submissions on behalf of respondent no.1
that respondent no.1 was not named in the FIR with respect to the scheduled
offence and that the other accused are discharged/acquitted is concerned,
merely because other accused are acquitted, it cannot be a ground not to
continue the investigation against respondent no.1". Reliance was also
placed on the judgement of the Hon'ble Madras High Court dated September
14, 2022, in P. Rajendran vs. The Assistant Director, Directorate of
Enforcement, Government of India (Criminal Original Petition No. 19880 of
2022 and Crl. M.P. Nos. 13073 and 13076 of 2022. It had been, inter alia,
held, "paragraph nos. 253 and 467 (d) of the judgement of the Supreme
Court in Vijay Madanlal's case (supra) deal with only the cases of persons
named as accused in the predicate offence against whom the prosecution in
the predicate offence is quashed or he is discharged/acquitted. This benefit
cannot be extended to a person, who has not been arrayed as an accused in
the predicate offence because the offence under the PMLA is a standalone
offence and is different and distinct from the predicate offence". Meanwhile,
CBI, ACB, Kolkata, lodged another FIR, vide number RC0102018A0012
dated 19.11.2018 against the petitioner and his wife, Sangita Singh, under
Sections 13(2) and 13(1)(b) of the Prevention of Corruption Act, 1988, and
under Section 109 of the Indian Penal Code, 1860. After preliminary
investigation in the mater, it was learnt that the petitioner had amassed
assets disproportionate to his known sources of income, to the tune of Rs.
56,47,789/-, which the petitioner had not been able to account for
satisfactorily. However, the said FIR was closed by the CBI whereupon the
case was also closed by the learned Court. The ratio of the decisions of the
Hon'ble Supreme Court of India in the matter of Vijay Madan Lal Choudhary
and Ors. vs. Union of India and Ors., as reported in 2022 SCC Online Sc 929
and J. Sekar @ Sekar Reddy vs. Directorate of Enforcement as reported in
(2022) 7 SCC 370, to the extent it related to predicate offences i.e., the
accused being discharged/acquitted in scheduled offences leading to a
conclusion that there could not be any offence of money laundering, did not
apply squarely to the facts of the instant case, inasmuch as the prayer in the
application pertained to quashing of ECIR No. KLZO/16/2017 dated
17.10.2017 arising from CBI RC No. RC0102017A0021 dated 11.09.2017,
which had neither been closed by the CBI nor by any learned Court. The
judgements sought to be relied upon by the petitioner were not applicable
and relevant to the facts and circumstances of the case.
4. I heard the submissions of the learned counsel for the parties and
perused the revision petition, the affidavits, investigation papers as produced
on behalf of the Enforcement Directorate and written notes of submissions.
5. In Vijay Madanlal Choudhary (supra), the Hon'ble Supreme Court
upheld the validity of several salient features of the PML Act. Among other
things, it was held there that if a 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.
6. The Hon'ble Apex Court in Pavana Dibbur Vs. Directorate of
Enforcement Directorate, reported at 2023 SCC Online SC 1586, relied on
the ratio laid down in Vijay Madanlal Choudhary (supra) and, inter alia, held
as under:
"..........
a. It is not necessary that a person against whom the offence
under Section 3 of the PMLA is alleged, must have been shown
as the accused in the scheduled offence;
b. Even if an accused shown in the complaint under the PMLA is
not an accused in the scheduled offence, he will benefit from the
acquittal of all the accused in the scheduled offence or discharge
of all the accused in the scheduled offence. Similarly, he will get
benefit of the orders of quashing the proceedings of the
scheduled offence;
............."
7. Therefore, from a careful perusal of the said Act and relevant
decisions, the following propositions, which are relevant to the present lis,
emerge:
(a) In order to be proceeded against under the PML Act, one need
not be an accused in the predicate offence case.
(b) Although the two may cover common facts, the ingredients of the
offences in the predicate offence case and the PML Act case are quite
distinct.
(c) If the predicate offences are quashed or dropped in the parent
case fully or even as against a particular accused, the said accused would get
similar benefit in the case under the PML Act.
8. Admittedly, the present proceeding under the PML Act relates to
predicate offences in a case instituted by the CBI, which has not been
dropped and/or quashed. It is still pending. It is a different thing that in the
said parent case, the petitioner has still been shown as witness. The
proposition of law that an accused in a PML Act case need not be an accused
in the predicate offences case covers this issue.
9. The proceeding that has been dropped is an independent one that was
started against the petitioner on charges, inter alia, of amassing
disproportionate assets. This case too was initiated by the CBI. But, the
instant PMLA proceeding does not owe its origin to the purported predicate
offences contained in such subsequent case started by the CBI. Therefore,
the dropping of such subsequent proceeding would hardly have much
bearing on the PML Act case started in respect of first case concerning
predicate offences.
10. It is also contended by the petitioner that parking of money
fraudulently obtained by the accused in the first predicate offences case has
not been alleged in clear terms in the present PML Act case. However, there
is a clear inkling that the racket was organised by such provident fund
employees as the petitioner. Without being guided by recommendations as
required, illegal inspections were carried out, protection money demanded
and taken. In fact, the prime accused in the first case allegedly acted under
instructions of the petitioner who was a superior officer. The minutest details
about the roles played by each are best left for the trial Court to deliberate
upon.
11. Besides, several materials and evidence have been collected pointing
towards the involvement of the petitioner. Huge amounts of money and
assets have been located and seized, which the petitioner purportedly failed
to account for.
12. The allegations levelled against the petitioner indeed involve disputed
questions of fact that cannot be gone into at this stage.
13. In view of the above discussions, I do not find any merit in the
petitioner's application for quashing of proceeding. Therefore, the same is
dismissed, however without any order as to costs. The connected application
stands disposed of accordingly.
14. However, the petitioner shall be at liberty to agitate all the points taken
up herein before the learned Trial Court at an appropriate stage.
15. Urgent Photostat certified copy of this order, if applied for, be given to
the parties, upon completion of requisite formalities.
(Jay Sengupta, J.)
