Jharkhand High Court
Prem Prakash vs Union Of India Through The Directorate ... on 10 September, 2025
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
2025:JHHC:27891
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr. RevisionNo.1226 of 2024
With
Cr. Revision No. 333 of 2025
-----
Prem Prakash, aged about 48 years, son of Pramod Kumar Sinha,
resident of Flat No. 3K/7, Harmu Housing Colony, PO Harmu, PS
Argora, District Ranchi. ... ... Petitioner
[In both cases]
Versus
Union of India through the Directorate of Enforcement ... Respondent
[In both cases]
------
CORAM:HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
-------
For the Petitioner(s) :Mr.Indrajit Sinha, Advocate
Mrs. Sneh Singh, Advocate
Mr. Rishav Kumar, Advocate
For the Respondent(s) :Mr. Amit Kumar Das, Advocate;
Mr. Saurav Kumar, Advocate;
Mr. Varun Girdhar, Advocate
------
th
C.A.V. on 27 August, 2025 Pronounced on 10/09/2025
1. Since these matters are interlinked and, as such, both are heard
together and being disposed of by a common order.
2. Both of these Criminal Revision petitions have been filed under
sections 438 & 442 of Bhartiya Nagarik Suraksha Sanhita, 2023.
3. Criminal Revision No.1226 of 2024 is directed against the
order dated 08.8.2024 passed by the learned Additional Judicial
Commissioner-1 -cum- Special Judge, PML Act, Ranchi in connection
with ECIR Case No. 05 of 2023 in ECIR/RNZO/10/2023 registered for
the offence under sections 3 and 4 of the Prevention of Money
Laundering Act, 2002 (in short PMLA,2002) whereby and whereunder,
the Criminal Miscellaneous Application No. 2205 of 2024 filed by the
petitioner seeking discharge has been rejected.
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4. Criminal Revision No. 333 of 2025 is directed against the order
dated 04.2.2025 passed by the learned Additional Judicial
Commissioner-1 -cum- Special Judge, PML Act, Ranchi in connection
with ECIR Case No. 05 of 2023 in ECIR/RNZO/10/2023 registered for
the offence under sections 3 and 4 of the Prevention of Money
Laundering Act, 2002, whereby and whereunder, the charge has been
framed against the petitioner.
Factual Matrix:
5. The brief facts of the case as per the pleadings made in the
instant petitions which requires to be enumerated herein, read as under:
(i) An ECIR bearing No. RNZO/10/2023 was
recorded on 07.03.2023 and investigation under the
provisions of prevention of Money Laundering Act (PMLA)
was initiated on the basis of FIR being Sadar PS Case No.
399 of 2022 dated 08.09.2022 registered for the offences
under sections 406,420,467,468, 447, 504,506, 341, 323 and
34 of the Indian Penal Code since offences under sections
420 and 467 of IPC are Scheduled Offences under Part A of
the Schedule of PMLA, 2002. On 1.9.2023, after
completion of investigation in connection with
aforementioned ECIR, the Directorate of Enforcement filed
the Prosecution Complaint arraigning the petitioner as
Accused No.8.
(ii) The Prosecution Complaint contained reference to the
First Information Report being Sadar PS Case No. 399 of
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2022 which was registered on the directions of the learned
court of Chief Judicial Magistrate, Ranchi in connection
with Complaint Case No. 3111 of 2021 passed by order
dated 28.6.2022. The said complaint case was filed by
Umesh Kumar Gope against Rajesh Rai, Imtiaz Ahmad,
Bharat Prasad, Lakhan Singh, Punit Bhargava and Bishnu
Kumar Agarwal for fraudulently acquiring one acre of land
situated at Cheshire Home Road, Plot No. 28, Khata No. 37,
Mouza Gari, Ranchi, Jharkhand.
(iii) The allegations in the First Information Report being
Sadar PS Case No. 399 of 2022 are briefly as follows:
(a) The FIR alleged that Rajesh Rai illegally
and fraudulently made a power of attorney in the
name of Imtiaz Ahmad and Bharat Prasad. On the
strength of the said Power of Attorney they prepared
a forged sale deed and sold the above-mentioned
parcel of land admeasuring 1 acre to Punit Bhargava
for an amount of Rs. 1,78,55,800/-.
(b) Puneet Bhargava further sold the said land to
Bishnu Kumar Agarwal through two Sale Deeds for
a total amount of Rs. 1,80, 00,000/- (Two Sale
Deeds dated 01.04.2021 for an amount of Rs. 1,
02,60,000/- and Rs. 77, 40, 000/-).
(iv) Investigation further revealed that through the
consideration amount in the deed between Imtiaz Ahmed,
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Bharat Prasad and Puneet Bhargav is shown as Rs.
1,78,55,800/- only an amount of Rs. 25,00,000/- was paid
from the account of Shiva Fabcons- one proprietorship firm
of Punit Bhargava into the account of Rajesh Rai on
12.02.2021. Investigation further reveals that out of the said
Rs. 25 lakh an amount of Rs. 18,00,000/- was immediately
transferred to the Bank account of Green Traders, a
partnership firm under the control of Md. Saddam Hussain.
(v) Further during the investigation, Surveys were
conducted on 09.02.2023 and 15.02.2023 at the circle office
Bargai Ranchi and office of Registrar of assurances Kolkata
respectively and original register II/volumes containing the
above entry were inspected, falsification of the original
records were identified and the custody of original registers
were taken. After obtaining permission the original registers
were sent for examination by an expert to Directorate of
Forensic Science, Handwriting and Forensic Bureau,
Gandhinagar which confirmed the forgery and tampering in
the above stated registers. Another FIR bearing number 137
of 2023 dated 10.05.2023 was registered under Sections
120B, 465, 467, 468 & 471 of the Indian Penal Code at
Hare Street PS, Kolkata on the basis of the report of the
fact-finding committee of the Registrar of Assurances,
Kolkata which was also made a part of the investigation.
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(vi) Investigation thus revealed that the accused persons
namely Afsar Ali, Md Saddam Hussain, Imtiaz Ahmed,
Bishnu Kumar Agarwal, Chhavi Ranjan, Prem Prakash,
Punit Bhargava, Rajesh Rai, Lakhan Singh and Bharat
Prasad are habitual offenders and they are involved in mass
forgery. Further, during course of investigation three
immovable properties were provisionally attached vide
order dated 31.08.2023.
(vii) Based on the above, the Directorate of
Enforcement registered ECIR Case No. 05 of 2023 in ECIR
/ RNZO/10/2023 dated 07.03.2023 in connection with
which the Prosecution Complaint dated 01.09.2023 was
filed.
(viii)The petitioner was earlier arrested on 25.08.2022 in
connection with another ECIR being ECIR No. 04 of 2022
registered for offences of Money Laundering arising out of
allegations related to illegal mining activities. The petitioner
was thus in Judicial Custody since 25.08.2022.The
investigating agency in connection with the instant matters
filed an application under section 267 of the Code of
Criminal Procedure, 1973, pursuant to which the petitioner
was produced before the learned Court of the Special Judge
under PMLA at Ranchi on 11.08.2023.
On 11.08.2023, an application for custody of the
petitioner/accused under Section 167 of the Code of
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Criminal Procedure, 1973 read with Section 65 and 19(3) of
the Prevention of Money Laundering Act, 2002 was filed by
the Directorate of Enforcement praying for 5 days custody
of the petitioner. The Investigating Agency explained the
grounds of arrest to the petitioner, however no copy of the
grounds of arrest was furnished to the petitioner. The
petitioner was arrested on 11.08.2023 at 12:15 hours and an
Arrest Memo was served upon him in the Court of the
Special Judge under PMLA at Ranchi.
(ix) The petitioner was taken into custody in connection
with ECIR 05 of 2023 arising out of ECIR/RNZO/10/2023
and sent to police remand for a period of five days and the
petitioner's statements under Section 50 of the Prevention of
Money Laundering Act, 2002 was recorded in which he
denied all the allegations and clearly stated that he had no
connection with the alleged illegal activity(s) or with the
other accused persons.On 01.09.2023, the Directorate of
Enforcement filed the Prosecution Complaint before the
learned Court in which the petitioner was arrayed as accused
no. 8 and thereafter the learned Trial Court vide order dated
04.09.2023 took cognizance of the offence under section 3
punishable under section 4 of the PML Act, 2002 against
the petitioner and other accused persons.
(x) On 20.07.2024, the petitioner filed a discharge
application under section 227 of the Code of Criminal
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Procedure, 1973, praying for discharge as there was no
sufficient ground for proceeding against the petitioner under
offences of Section 3 of the Prevention of Money
Laundering Act, 2002 punishable under Section 4 of the Act
of 2002.
(xi) The prosecution did not point out a single material
which would prima facie establish the involvement of the
petitioner in the alleged crime.
(xii) The Learned Special Court vide order dated 08.08.2024
without applying its judicial mind and without considering
the submissions made by the petitioner, has rejected the
application for discharge filed by the petitioner.
(xiii) Consequent to dismissal of the said application of
discharge, the charges under Sections 3 and 4 of the
Prevention of Money Laundering Act, 2002, has been
framed against the petitioner on 04.02.2025.
(xiv) The order dated 08.08.2024 (in Cr. Revision 1226 of
2024) by which discharge application has been dismissed
and order dated 04.02.2025 (in Cr. Revision 333 of 2025)
by which charge under Sections 3 and 4 of the Prevention of
Money Laundering Act, 2002, was framed against the
petitioner has been assailed herein.
Arguments advanced on behalf of the petitioner:
6. The learned counsel appearing on behalf of the petitioner(s) has
submitted that the learned Special Judge, PML Act, Ranchi has failed to
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appreciate that the prosecution has not produced material which would
show that the petitioner has in any manner dealt with "proceeds of
crime".
7. The learned Special Judge has also failed to appreciate that the
petitioner cannot be said to even remotely be associated with the
scheduled offence as mentioned in the ECIR as he is neither involved in
any form of forgery or even has knowledge of the documents that were
allegedly forged or manipulated.
8. The petitioner has been prosecuted on the basis of assumptions and
surmises, and the officials of the Investigating Agency has totally
overlooked the principle that there must 'reason to believe' rather than
mere assumptions that the offences alleged against the petitioner have
actually been committed by him.
9. The learned counsel has further submitted that a perusal of the entire
prosecution complaint and the statements of witnesses and accused
persons makes it clear that the master mind behind the forgery
committed is Afshar Ali and his accomplices and not the accused
persons who have simply purchased the land and certainly not the
present petitioner who has neither purchased the land nor has any nexus
with any land purchase transaction.
10. It has further been submitted that from the records it is evident
that there is no cogent material to show the petitioner's involvement in
forgery or manipulation of records and the case of the prosecution is also
not supported with any material to show that the petitioner was aware
that the deed of 1948 was forged.
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11. The Learned Special Judge has failed to appreciate that the
petitioner had no involvement in forgery or manipulation of land records.
Further, it has been well recorded that the complainant of the Complaint
case no. 3111 of 2021 was frivolously exerting claim on the subject land
thus nothing survived in relation to the predicate offence on the basis of
which the ECIR was recorded.
12. The learned Special Judge, PMLA cases at Ranchi has erred in
not considering that a civil suit with respect to the title of the subject
land is pending before Civil Court, Ranchi during pendency of which
provisions under PMLA do not authorize the investigating officer to
conclude, decide and hold the true owner of the property or even further
presumption of the same being 'proceeds of crime'.
13. The petitioner was not in any way involved in purchase of land
by co-accused Mr. Punit Bhargava. The prosecution's assumption that
the petitioner was an accomplice to the accused, Bishnu Kumar Agarwal
is unfounded.
14. It has further been contended that it has been wrongly alleged
that the petitioner was connected to and has connived with some public
servant/ government official to bring about illegal gain to any of the
purported beneficiaries. The land in question was never transferred in the
name of the petitioner nor the petitioner had received any amount from
anyone whatsoever for dealing with the said land and the petitioner has
no nexus with the transfer of a sum of Rs. 1,01,57,400/- to the account
of M/s Jamini Enterprises, a firm of which the petitioner is not even a
partner. It is evident from the reading of the prosecution complaint as
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well as from the materials collected in course of investigation, that the
petitioner cannot be said to be aware that the sale proceeds generated
from the sale of land by Punit Bhargava was in any way relatable to an
offence committed at a prior point of time when the purchaser namely
Bishnu Agarwal as also Punit Bhargava before purchasing the property
in question had made a due diligence in search of the title relating to said
land and had been made to believe that the title of the vendor of Punit
Bhargava, namely Rajesh Rai had a perfect right, title, interest over the
property in question.
15. It has further been contended that the prosecution has failed to
collect any material which would show that the petitioner possessed the
requisite mens rea to commit an offence punishable under section 4 of
the PMLA. It is fairly well settled that mens rea, unless expressly
excluded will have to be read into a penal statute. It has also been
contended that the case of the prosecution rests upon the statements of
the witnesses and accused persons which has been made under section
50 of the PMLA without any independent corroboration of the said
statements through independent sources.
16. It has been contended that the statements recorded while in
custody (although in connection with ECIR No.4/2022) will not be
admissible and is hit by Section 25 of the Evidence Act since the same
were given whilst in Judicial custody, pursuant to another proceeding
instituted by the same Investigating Agency.The statements given by the
co-accused even if there is anything incriminating will not have the
character of substantive evidence and as such no prosecution could be
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initiated against the petitioner on the basis of such statements as the
same will be hit by Section 30 of the Evidence Act.
17. It has further been submitted by the learned counsel for the
petitioner that the Hon'ble Apex Court while enlarging the petitioner on
bail in SLP (Crl.) No. 5416 of 2024 has categorically observed in
paragraph 43 that moreover, there is no material placed on record to
show as to on what basis it is claimed that the beneficial interest in M/s
Jamini Enterprises lies with the appellant. Hence, the statements relied
upon do not prima facie make out a case of money laundering against the
appellant.
18. Therefore, submission has been made that since the Hon'ble
Apex Court has already observed that no prima facie case of money
laundering against the appellant is made out as such the prayer for
discharge of the petitioner is fit to be allowed.
19. It has been submitted that in order to make out an offence under
the provisions of the PML Act, 2002, it is obligatory upon the
prosecution to produce material which should show that an accused has
in any manner dealt with 'proceeds of crime' generated from the
commission of the scheduled offence and in absence of any material
showing that the petitioner had illegally gained property as a result of
any criminal activity relating to a scheduled offence the petitioner is
liable to be discharged.
20. It has been contended that the learned Court below has failed to
consider the broad probabilities, total effect of evidence and documents
produced and the basic infirmities appearing in the case at the time of
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considering the discharge application and there is no cogent far less any
legally admissible evidence against the petitioner and even if the entire
evidence is taken on its face value the same does not give rise to even
suspicion far less grave suspicion to proceed against the petitioner.
21. Learned counsel for the petitioner, on the aforesaid grounds,
has submitted that it is, therefore, a fit case where the impugned orders
need to be interfered with.
Arguments advanced on behalf of the Respondent:
22. It is submitted that the instant prosecution complaint dated
01.09.2023 filed against the Petitioner as well as nine other co-accused
persons is backed by cogent evidence gathered during the course of
investigation and not solely based on statements of the Petitioner as well
as his accomplices. Further, there are ample pieces of evidence that
prove that the Petitioner is involved in the offence of money laundering,
which are further corroborated by the statements of witnesses and
accused persons of the instant case. Hence, the averments that the
Petitioner has no connection with illegal activities of the instant case are
unfounded and liable to be dismissed.
23. It is further submitted that the learned Special Court, PMLA,
Ranchi after considering the active role of the petitioner in knowingly
assisting his co-accused persons namely Bishnu Agarwal, Afshar Ali and
others in illegally acquiring landed property admeasuring 1 acre situated
at Cheshire Home Road, Ranchi, rejected the discharge application of the
petitioner vide order dated 08.08.2024, which is just and proper. Hence,
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the averments of the petitioner are baseless and liable to be rejected.
Further, charges have already been framed against the Petitioner on
04.02.2025.
24. The petitioner is knowingly a party with the co-accused persons
namely Afshar Ali Afsu Khan, Rajesh Rai, Lakhan Singh, Imtiaz
Ahmed, Bharat Prasad, Punit Bhargava, Chhavi Ranjan and Bishnu
Kumar Agarwal in acquisition of proceeds of crime in form of landed
property admeasuring 1 acre situated at Plot no. 28, Khata no. 37,
Village Gari, Cheshire Home Road, Ranchi initially in the name of his
accomplice Punit Bhargava and later assisting the accused person Bishnu
Kumar Agarwal in its ultimate acquisition by fraudulent means. The
petitioner, being an accomplice of Bishnu Kumar Agarwal, assisted him
in acquiring the said one-acre property by hatching a conspiracy and
initially making Punit Bhargava the owner of the said land. Later, this
land was acquired by Bishnu Kumar Agarwal, who is the ultimate
beneficiary of the said land. Hence, the petitioner Prem Prakash is
involved in the activities connected with the acquisition, possession, and
concealment of the proceeds of crime and claiming and projecting the
proceeds of crime as untainted property. Thus, the petitioner cannot be
absolved from the offence of money laundering as defined under section
3 of PMLA, 2002 therefore, the averments of the petitioner are wrong
and liable to be set aside.
25. It has been submitted that Bishnu Kumar Agarwal paid Rs.
1,78,20,000/-to the accused Punit Bhargava in favour of his firm Shiva
Fabcons in account No. 52580200000085 of Bank of Baroda, out
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of which an amount of Rs.1,01,57,400/- was transferred to the bank
account of Jamini Enterprises, a firm whose beneficial owner is the
petitioner Prem Prakash.
26. Further, the petitioner, being an accomplice of Bishnu Kumar
Agarwal, assisted him in acquiring the said one-acre property by
hatching a conspiracy and initially making Punit Bhargava the owner of
the land admeasuring 1 acre at Cheshire Home Road, Ranchi, which is a
government land. Later, this land was acquired by Bishnu Kumar
Agarwal who is the ultimate beneficiary of the said land. Hence, the
averments of the petitioner that he is not related to any property directly
or indirectly are wrong and denied.
27. So far as the averments of the petitioner of not being named in
any of the scheduled offence is concerned, it is stated that in Pavana
Dibbur vs. Directorate of Enforcement Criminal Appeal No.
2779/20223, it is held that it is not necessary that the accused for the
offence of money laundering to be made accused of schedule offences
and it is also pertinent to mention that the offence of money laundering is
an independent offence. Hence, the averments of the petitioner are
baseless.
28. It is humbly submitted that the offence of money laundering is a
separate and independent offence as held by the Hon'ble Supreme Court
in Vijay Madanlal Choudhary v.UOI, 2022 SCC Online 729. Hence, it
is not necessary that the accused of a predicate offence can only commit
offence of money laundering, the set of accused in offence under PMLA
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could be different and which depends on activity or process such person
is involved in pertaining to proceeds of crime.
29. It is reiterated that the petitioner is knowingly a party with the
co-accused persons namely Afshar Ali @ Afsu Khan, Rajesh Rai,
Lakhan Singh, Imtiaz Ahmed, Bharat Prasad, Punit Bhargava, Chhavi
Ranjan and Bishnu Kumar Agarwal in acquisition of proceeds of crime
in form of government property admeasuring 1 acre situated at Plot no.
28, Khata no. 37, Village Gari, Cheshire Home Road, Ranchi initially in
the name of his accomplice Punit Bhargava and later assisting the
accused person Bishnu Kumar Agarwal in its ultimate acquisition by
fraudulent means. The petitioner being an accomplice of Bishnu Kumar
Agarwal assisted him in acquiring the said one acre property by hatching
a conspiracy and initially making Punit Bhargava as the owner of the
said land. Later, this land was acquired by Bishnu Kumar Agarwal who
is the ultimate beneficiary of the said land. Hence, Petitioner is involved
in the activities connected with the acquisition, possession, and
concealment of the proceeds of crime and claiming and projecting the
proceeds of crime as untainted property, and the petitioner Prem Prakash
is guilty of the offence of money laundering as defined under section 3
of PMLA, 2002. Thus, the petitioner is liable to be punished under
section 4 of PMLA, 2002.
30. It is further submitted that Section 3 of the PMLA, clearly
states that 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
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concealment, possession, acquisition or use and projecting or claiming it
as untainted property shall be guilty of offence of money-laundering.
Hence, in light of the above, the case of the Petitioner is based upon
cogent evidence to show his involvement, and then during the stage of
framing of charges, only a prima facie case is considered.
31. The learned Special Court, PMLA, Ranchi after considering the
active role of the petitioner in knowingly assisting his co-accused
persons namely Bishnu Agarwal, Afshar Ali and others in illegally
acquiring landed property admeasuring 1 acre situated at Cheshire Home
Road, Ranchi, which is backed by cogent evidences relied upon in the
prosecution Complaint dated 01.09.2023, rejected the discharge
application of the petitioner vide order dated 08.08.2024 and charges are
framed on 04.02.2025, which is just and proper. Hence, the averments of
the petitioner are baseless and liable to be rejected.
32. It is stated that in Pavana Dibbur vs. Directorate of
Enforcement, Criminal Appeal No. 2779/20223, the Hon'ble Supreme
Court has held that it is not necessary that the accused for the offence of
money laundering to be made accused of schedule offences and it is also
pertinent to mention that the offence of money laundering is an
independent offence. It is not necessary that the offender of money
laundering necessarily need to be made accused or charge-sheeted in
predicate offence. The offence of money laundering is a separate and
independent offence. Hence, the averments of the petitioner are baseless.
33. Further, it is submitted that the Petitioner is a beneficiary of the
proceeds of crime, and the Petitioner was aware of the forgery and even
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intentionally purchased the property through Puneet Bharghav and sold
in a short span of time.The role of the petitioner cropped up and on
having reasons to believe that he is guilty of the offence of money
laundering, he was arrested on 11.08.2023.
34. Further, the ECIR is a preliminary document, recorded on
initiation of investigation and not on completion of investigation under
PMLA. Hence, as the active role of the petitioner cropped up in the
instant case, he was arrested under section 19 of PMLA, 2002 for further
investigation under PMLA. Further, the petitioner was arrested before
the judgment of the Hon'ble Supreme Court in Arvind Kejriwal vs
Directorate of Enforcement dated 12.07.2024, before which the reasons
to believe recorded for arresting the accused was sent to the Ld.
Adjudicating Authority in a sealed envelope. Hence, the averments of
the petitioner are wrong and liable to be set aside.
35. It has been contended that the observation so made by the
Supreme Court at the time of consideration of bail of the present
appellant is not applicable in the facts and circumstances of the issue
reason being that the Supreme Court itself has clarified that whatever
observation has been made, that is for the purpose of consideration of the
bail within the parameter of Section 45 of the Act, 2002 and the same
shall not influence the trial, as such, submission has been made that the
observation so made by the Supreme Court at the time of consideration
of the issue of regular bail will not be applicable herein.
36. It is submitted that the question of whether the accused being
guilty or non-guilty is a matter of trial, and the same is to be seen
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through the evidence produced on record before the Special Court
PMLA. While arresting an accused, the primary assumption that is to be
made is whether there are sufficient reasons to believe that the person is
guilty of the offence under section 3 punishable under Section 4 of
PMLA 2002. Therefore, in the light of facts and circumstances of the
present case, there were cogent reasons to believe that the Petitioner is
guilty of offence under Section 3 punishable under Section 4 of PMLA.
The averments of the petitioner appear to be an attempt to portray
himself as innocent and dissociate himself from his co-accused in order
to aloof himself from the illegal activities for facilitating the illegal
acquisition of government land. Thus, the averments of the petitioner are
unfounded and liable to be dismissed. Reliance is placed upon decision
of Hon'ble Supreme Court in Balbir Singh v. State of Punjab AIR 1957
SC 216 held that Confessional statements can be considered if they
implicate the maker substantially in the same extent as the other accused
against whom it is sought to be taken into consideration. Thus, the
learned Special Court, PMLA, Ranchi has rightfully rejected the
petitioner's discharge application vide order dated 08.08.2024 and
consequently the charges under relevant Section have been framed
against the petitioner.
37. Learned counsel for the Opposite Party-ED, on the aforesaid
grounds, has submitted that it is, therefore, not a fit case where the
impugned orders to be interfered with.
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Analysis:
38. We have heard the learned counsel for the parties at length and
has also gone through the finding recorded by the learned trial Court in
the impugned order as also the case diary.
39. It is evident from record that an ECIR bearing no. RNZO / 10 /
2023 was recorded on 07.03.2023 and investigation under the provisions
of Prevention of Money Laundering Act (PMLA) was initiated on the
basis of FIR being Sadar P.S. Case no. 399 of 2022 registered for
offences under Sections 406, 420, 467, 468, 447, 504, 506, 341, 323 &
34 of the Indian Penal Code.The said FIR being Sadar P.S. Case No. 399
of 2022 was registered on the directions of the Ld. Court of Chief
Judicial Magistrate, Ranchi in Complaint Case No. 3111 of 2021 passed
vide order dated 28.06.2022. A complaint case was filed by Umesh
Kumar Gope against Rajesh Rai, Imtiaz Ahmad, Bharat Prasad, Lakhan
Singh, Punit Bhargav and Bishnu Kumar Agarwal for fraudulently
acquiring one acre of land situated at Cheshire Home Road, Plot No 28,
Khata No. 37, Mouza Gari, Ranchi, Jharkhand.
40. As per the said FIR it has been alleged that Rajesh Rai illegally
and fraudulently made a Power of Attorney in the name of Imtiaz
Ahmad and Bharat Prasad on the strength of the said Power of Attorney
they prepared a forged sale deed and sold the above-mentioned parcel of
land admeasuring 1 acre to Punit Bhargav for an amount of
Rs.1,78,55,800/- and Puneet Bhargav further sold the said land to
Bishnu Kumar Agarwal through two Sale Deeds for a total amount of
Rs.1,80,00,000/- (Two Sale deeds dated 01.04.2021 for an amount
Rs.1,02,60,000/- and Rs.77,40,000/-).
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41. Further during the investigation, Surveys were conducted on
09.02.2023 and 15.02.2023 at the Circle Office, Bargain, Ranchi, and
office of Registrar of assurances Kolkata respectively and original
register II/volumes containing the above entry were inspected
falsification of the original records were identified and the custody of
original registers were taken. After obtaining new permission the
original registers were sent for examination by an expert to Directorate
of Forensic Science, Handwriting and Forensic Bureau, Gandhinagar
which confirmed the forgery and tampering in the above stated registers.
42. Based on the above, the Directorate of Enforcement registered
ECIR Case No. 05 of 2023 in ECIR / RNZO / 10 / 2023 dated
07.03.2023 and the Prosecution Complaint was filed on 01.09.2023, by
the Directorate of Enforcement in which the petitioner was arrayed as
accused no. 8 and thereafter the learned court vide order dated
04.09.2023 took cognizance of offence under Section 3 punishable under
Section 4 of the PML Act, 2002 against the petitioner and other accused
persons.
43. In the said prosecution complaint, the role of petitioner has
been mentioned, for ready reference the relevant paragraph of the
aforesaid prosecution complaint is being quoted as under:
Brief summary of result of investigation under PMLA
9.1 The investigations under the provisions of PMLA, 2002 in FIR no.
399/2022 dated 08.09.2022 revealed that there is organized group of
persons who are habitually involved in making fake deeds and
falsifying original land records at Circle Offices and Registrar of
Assurances, Kolkata and with the help of said fake deeds, acquire and
dispose properties in fraudulent manner.
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9.2 Investigation reveals that such forgery is widespread and certain
government officials are part of the said conspiracy. Various
influential persons like Bishnu Kumar Agarwal, Prem Prakash and
others in connivance with senior government officials like Chhavi
Ranjan are involved in acquisition of landed properties in Ranchi.
9.3 Investigation has revealed that Bishnu Kumar Agarwal has been
assisted by Prem Prakash, Chhavi Ranjan and others in acquiring
proceeds ofcrime in the form of landed properties the details of which
are given below-
9.4 The FIR alleged that Rajesh Rai, S/o Jagdish Rai, illegally and
fraudulently made a power of attorney in the name of Imtiyaz Ahmed
and Bharat Prasad. On the strength of the said power of attorney, they
prepared a forged sale deed and sold the above-mentioned parcel of
land measuring 1 acres to Punit Bhargav for an amount of Rs.
1,78,55,800/-. Punit Bhargava further sold the said land to Bishnu
Kumar Agarwal, vide two sale deeds for the total amount of Rs.
1,80,00,000/-. (Vide two sale deeds, both dated 01.04.2021, for an
amount of Rs. 1,02,60,000/- and Rs. 77,40,000/-).
9.5 Thus, the FIR stated that the land admeasuring 1 acres, situated at
Gari, Cheshire Home Road, PS Sadar, Ranchi was acquired in a
fraudulent manner by the above persons who indulged in fabricating
documents and forging records, on the basis of which a power of
attorney was fraudulently executed and subsequently the land was
transferred to Punit Bhargava, who Immediately sold this land to
Bishnu Agarwal, a businessman having interests in several avenues
including real estate business.
9.6 Investigation reveals that Rajesh Rai in connivance with Bharat
Prasad, Md. Saddam Hussain,Afshar Ali, Imtiaz Ahmed and others
prepared one forged deed of 1948 was prepared by the accused
persons and on the basis of that a power of attorney was given in
favour of Imtiaz Ahmed and Bharat Prasad. The other accomplice
namely Lakhan Singh became the confirming party in the deed and
they executed sale deed dated 06.02.2021 in favour of Punit Bhargava
for an amount of Rs. 1,78,55,800/- which was registered as document
no. 2021/RAN/1016/BK1/906 in book no. BK1, Vol. no. 112 from page
no. 369 to 506 at the office of SRO, Ranchi.
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9.7 Punit Bhargava further sold the said land to Bishnu Kumar
Agarwal vide two sale deeds, both dated 01.04.2021, registered as
document no. 2021/RAN/2784/BK1/2483 in book no. BK1, Vol. no.
316 from page no. 405 to 532 at the office of SRO, Ranchi (for an
amount of Rs. 1,02,60,000/-) and document no.
2021/RAN/2783/BK1/2482 in book no. BK1, Vol. no. 316 from page
no. 261 to 404 at the office of SRO, Ranchi (for an amount of Rs.
77,40,000).
9.8 Investigation further reveals that though the consideration
amount in the deed between Imtiaz Ahmed and Bharat Prasad and
Punit Bhargava is shown as Rs. 1,78,55,800/-, but only an amount of
Rs. 25 lacs have been paid from the Bank of Baroda account of Shiva
Fabcons, (account no.52580200000085) one of theproprietorship
firms of Punit Bhargava into the SBI Account no. 31180122501 of
Rajesh Rai on 12.02.2021. Further Investigation reveals that out of
the said amount of Rs. 25 lacs, an amount of Rs. 18 lacs were
immediately transferred to the bank account of Green Traders, a
partnership firm under the control of Md. Saddam Hussain (one of the
accused arrested by this office on 14.04.2023 and presently
languishing in Judicial Custody).
9.9 During investigation, surveys were conducted on 09.02.2023
(RUD No. 06) at the Circle office, Bargai, Ranchi and on 15.02.2023
(RUD No. 07) at the office of Registrar of Assurances (Records),
Kolkata under section 16 of PMLA, 2002 and the original register
II/volumes, containing the above entry were inspected and
falsification of the original records were identified in the above
documents. The custody of the original registers was taken from the
Circle Office as well as from the Registrar of Assurances, Kolkata
after the permission of Hon'ble PMIA Court Ranchi under section 91
of Cr.PC. After obtaining due permission, the said original register
was sent for by an expert to Directorate of Forensic Science,
Handwriting and Forensic Bureau, Gandhinagar. The Directorate of
Forensic Science has confirmed the forgery and tempering in the
above stated registers.
9.10 During further investigation, it revealed that the accused persons
namely Afshar All, Md. Saddam Hussain, Imtiaz Ahmed, Bishnu
Kumar Agarwal, Chhavi Ranjan, Prem Prakash, Rajesh Rai, Lakhan
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Singh and Bharat Prasad are habitual offenders and they are involved
in mass forgery. It is also established that Bishnu Kumar Agarwal has
acquired other lands in frivolous manner with the help of government
officials. 9.11 As stated above, investigation has established that the
property situated at Khata no. 93, Plot no. 543, 544, 546 and 547,
total area 9.30 acres acquired by Bishnu Kumar Agarwal was a
government property (Khasmahal Land). And the said property has
been acquired by the accused Bishnu Kumar Agarwal by influencing
the government officials including the Ex-DC Chhavi Ranjan who
helped him by suppressing and shelving all the official records and
documents which established that the above property acquired by
Bishnu Kumar Agarwal was a government property (Khasmahal
Land). Further, this property has been in possession of Nazarat
Hussain & his families without any grounds and has been in their
occupation. Later, this land was taken onlease by Ramchandra
Mukherjee effective from the year 1985 and expired in the year 2014
after which, the lease of the above-stated was not renewed in name of
any person. However, Bishnu Kumar Agarwal by concealing and
suppressing the facts and by assistance of the accused Chhavi Ranjan
and others purchased this Khasmahal land in illegal manner.
14 Specific Roles of the Accused persons in commission of offence
of Money laundering
14.8 Prem Prakash, S/o Pramod Kumar Sinha (Accused no. 8) - The
accused person was a party with the accused persons namely Afshar
Ali @ Afsu Khan, Rajesh Rai, Lakhan Singh, Imtiaz Ahmed, Bharat
Prasad, Punit Bhargava, Chhavi Ranjan and Bishnu Kumar Agarwal
in acquisition of proceeds of crime in form of landed property
admeasuring 1 acre situated at Plot no. 28, Khata no. 37, Village
Gari, Cheshire Home Road, Ranchi initially in the name of Punit
Bhargava and later assisting the accused person Bishnu Kumar
Agarwal in its ultimate acquisition by fraudulent means. The accused
being an accomplice of Bishnu Kumar Agarwal assisted him in
acquiring the said one acre property by hatching a conspiracy and
initially making Punit Bhargava as the owner of the said land. Later,
this land was acquired by Bishnu Kumar Agarwal who is the ultimate
beneficiary of the said land. Investigation reveals that Bishnu Kumar
Agarwal paid Rs. 1,78,20,000/- to the accused Punit Bhargava in his
firm Shiva Fabcons. The amount was paid into Bank of Baroda
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account 52580200000085 out of which, an amount of Rs.
1,01,57,400/- was transferred to the bank account of Jamini
Enterprises, a firm whose beneficial owner is Prem Prakash. Hence,
the accused person Prem Prakash is involved in the activities
connected with the acquisition, possession, concealment, of the
proceeds of crime and claiming and projecting the proceeds of crime
as untainted property. Thus, the accused person Prem Prakash has
committed the offence of money laundering as defined under section 3
of PMLA, 2002 and is accordingly liable to punished under section 4
of MLA, 2002,."
44. It is evident from the prosecution complaint that the petitioner
Prem Prakash exerted his influence in order to assist his accomplice
Bishnu Kumar Agarwal in acquisition of the land situated at Cheshire
Home Road measuring one acre.Record transpires that the accused
petitioner was a party with the other co-accused persons namely Afsar
Ali @ Afsu Khan and others in acquisition of proceeds of crime in form
of landed property admeasuring 1 acre situated at Plot no. 28. Khata no.
37, village Gari Chesire Home Road, Ranchi in the name of Punit
Bhargav and Investigation reveals that Bishnu Kumar Agrawal has paid
Rs. 1,78,20,000/- to the accused Punit Bhargav in his firm Shiva
Fabcons. The amount was paid into the Bank of Baroda account no.
52580200000085 out of which as amount of Rs. 1,01,57,400/- was
transferred to the Bank account of Jamini Enterprises, whose beneficial
owner is petitioner Prem Prakash.
45. It has come in the complaint that present petitioner Prem
Prakash and Punit Bhargav knowingly acquired the proceeds of crime
and their knowledge about the forgery committed with respect to
acquiring the above said property is evident from the fact that they
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acquired the property at a throw away price and that too without paying
the consideration amount which was mentioned in the deed.
46. It is further evident from record that petitioner had preferred an
application for discharge on 20.07.2024in connection with said ECIR
Case No. 05 of 2023 in ECIR/RNZO/10/2023 registered for commission
offence u/s 3 of the Prevention of Money Laundering Act, 2002 to
discharge him from this case on the ground that the material brought on
record by the prosecution against this applicant even if taken in their
entirety, do not fulfill the necessary ingredients of the offences as alleged
by the prosecution and in such view of the matter, there is not a single
ground to proceed and frame charges against the applicant.
47. Per Contra thelearned State counsel vehemently opposed the
prayer of the petitioner on the ground that, at the stage of framing charge
only prima-facie material has to be ascertained and there are sufficient
prima-facie clinching material was available on the record,as such charge
has been framed against the petitioner.
48. The Spl. Judge PML Act while appreciating the rival contention
has rejected the aforesaid discharge application of petitioner vide order
dated 08.08.2024 on the ground that after going through these materials
it transpires that accused/petitioner was a party with other accused
persons in acquiring properties in fraudulent manner and selling those
properties illegally to acquire proceeds of crime.
49. The aforesaid order dated 08.08.2024 has been assailed before
this Court by way of filing the petition being Cr. Revision 1226 of 2024.
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50. During pendency of the said Criminal Revision, the charges
have been framed against the petitioner vide order dated 04.02.2025
passed by the Spl. Judge PML Act. The said order dated 04.02.2025 has
also been challenged herein by filing the petition being Cr. Revision 333
of 2025.
51. In the background of the factual aspect stated hereinabove, the
issues which require consideration are--
(i) Whether the orders dated 08.08.2024 and 04.02.2025 by which
the application for discharge filed by the petitioner has been
dismissed and charges have been framed respectively, can be said
to suffer from an error?
(ii) Whether on the basis of the evidence which has been collected
in course of investigation, prima facie case against the petitioner is
made out or not?
52. Since both the issues are interlinked as such, they are taken up
together.
53. This Court, before appreciating the argument advanced on
behalf of the parties deems it fit and proper to discuss herein some of the
provisions of law as contained under the Act, 2002 with its object and
intent.
54. The Act 2002 was enacted to address the urgent need to have a
comprehensive legislation inter alia for preventing money-laundering,
attachment of proceeds of crime, adjudication and confiscation thereof
including vesting of it in the Central Government, setting up of agencies
and mechanisms for coordinating measures for combating money-
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laundering and also to prosecute the persons indulging in the process or
activity connected with the proceeds of crime.
55. It is, thus, evident that Act 2002 was enacted in order to answer
the urgent requirement to have a comprehensive legislation inter alia for
preventing money-laundering, attachment of proceeds of crime,
adjudication and confiscation thereof for combating money-laundering
and also to prosecute the persons indulging in the process or activity
connected with the proceeds of crime.
56. It needs to refer herein the definition of "proceeds of crime" as
provided under Section 2(1)(u) of the Act, 2002 which reads as under:
"2 (1) (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 3[or where such property is taken or held outside the
country, then the property equivalent in value held within the country]
4[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;]"
57. It is evident from the aforesaid provision that "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.
58. In the explanation it has been referred that for removal of
doubts, it is hereby clarified that "proceeds of crime" include property
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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. The
aforesaid explanation has been inserted in the statute book by way of Act
23 of 2019.
59. It is, thus, evident that the reason for giving explanation under
Section 2(1)(u) is by way of clarification to the effect that whether as per
the substantive provision of Section 2(1)(u), the 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 but by way of
explanation the proceeds of crime has been given broader implication by
including 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.
60. The "property" has been defined under Section 2(1)(v) which
means any property or assets of every description, whether corporeal or
incorporeal, movable or immovable, tangible or intangible and includes
deeds and instruments evidencing title to, or interest in, such property or
assets, wherever located.
61. The schedule has been defined under Section 2(1)(x) which
means schedule to the Prevention of Money Laundering Act, 2002. The
"scheduled offence" has been defined under Section 2(1)(y) which reads
as under:
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"2(y) "scheduled offence" means-- (i) the offences specified under
Part A of the Schedule; or (ii) the offences specified under Part B of
the Schedule if the total value involved in such offences is [one crore
rupees] or more; or (iii) the offences specified under Part C of the
Schedule."
62. It is evident that the "scheduled offence" means the offences
specified under Part A of the Schedule; or the offences specified under
Part B of the Schedule if the total value involved in such offences is [one
crore rupees] or more; or the offences specified under Part C of the
Schedule.
63. The offence of money laundering has been defined under
Section 3 of the Act, 2002 which reads as under:
"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.]"
64. It is evident from the aforesaid provision that "offence of
money-laundering" means whosoever directly or indirectly attempts to
indulge or knowingly assists or knowingly is a party or is actually
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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.
65. It is further evident that 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.
66. The punishment for money laundering has been provided under
Section 4 of the Act, 2002.
67. The various provisions of the Act, 2002 alongwith
interpretation of the definition of "proceeds of crime" has been dealt
with by the Hon'ble Apex Court in the case of Vijay Madanlal
Choudhary and Ors. Vs. Union of India and Ors., (2022) SCC OnLine
SC 929 wherein the Bench comprising of three Hon'ble Judges of the
Hon'ble Supreme Court has decided the issue by taking into
consideration the object and intent of the Act, 2002.
68. It is evident that the purposes and objects of the 2002 Act for
which it has been enacted, is not limited to punishment for offence of
money-laundering, but also to provide measures for prevention of
money-laundering. It is also to provide for attachment of proceeds of
crime, which are likely to be concealed, transferred or dealt with in any
manner which may result in frustrating any proceeding relating to
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confiscation of such proceeds under the 2002 Act. This Act is also to
compel the banking companies, financial institutions and intermediaries
to maintain records of the transactions, to furnish information of such
transactions within the prescribed time in terms of Chapter IV of the
2002 Act.
69. The predicate offence has been considered in the aforesaid
judgment wherein by taking into consideration the explanation as
inserted by way of Act 23 of 2019 under the definition of the "proceeds
of crime" as contained under Section 2(1)(u), whereby and whereunder,
it has been clarified for the purpose of removal of doubts that, the
"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, meaning thereby, the words "any
property which may directly or indirectly be derived or obtained as a
result of any criminal activity relatable to the scheduled offence" will
come under the fold of the proceeds of crime.
70. In the judgment rendered by the Hon'ble Apex Court in Vijay
Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) as
under paragraph 284, it has been held that the Authority under the 2002
Act, is to prosecute a person for offence of money-laundering only if it
has reason to believe, which is required to be recorded in writing that the
person is in possession of "proceeds of crime". Only if that belief is
further supported by tangible and credible evidence indicative of
involvement of the person concerned in any process or activity
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connected with the proceeds of crime, action under the Act can be taken
forward for attachment and confiscation of proceeds of crime and until
vesting thereof in the Central Government, such process initiated would
be a standalone process.
71. Now, after having discussed the judgments passed by the
Hon'ble Apex Court on the issue of various provisions of the Act, 2002,
this Court, is proceeding to discuss the principle of discharge and
framing of charge.
72. Now, after having discussed the judgments passed by the
Hon'ble Apex Court on the issue of various provisions of the Act, 2002,
this Court, is proceeding to discuss the principle of discharge.
73. It is well settled that at the time of framing of charge
meticulous examination of evidence is not required, however the
evidence can be sifted or weighed at least for the purpose of recording a
satisfaction that a prima facie case is made out for framing charge to
proceed in the case. Further the trial Court is not required to discuss the
evidence for the purpose of conducting a trial but the discussion of the
materials on record is required to reflect the application of judicial mind
for finding that a prima-facie case is made out against the petitioner.
74. It is settled connotation of law that at the stage of framing of
charge, the probable defence of the accused is not to be considered and
the materials, which are relevant for consideration, are the allegations
made in the First Information Report/complaint, the statement of the
witnesses recorded in course of investigation, the documents on which
the prosecution relies and the report of investigation submitted by the
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prosecuting agency. The probative value of the defence is to be tested at
the stage of trial and not at the stage of framing of charge and at the stage
of framing of charge minute scrutiny of the evidence is not to be made
and even on a very strong suspicion charges can be framed.
75. Further it is settled position of law that at the stage of framing
the charge, the trial Court is not required to meticulously examine and
marshal the material available on record as to whether there is sufficient
material against the accused which would ultimately result in conviction.
The Court is prima facie required to consider whether there is sufficient
material against the accused to presume the commission of the offence.
Even strong suspicion about commission of offence is sufficient for
framing the charge, the guilt or innocence of the accused has to be
determined at the time of conclusion of the trial after evidence is
adduced and not at the stage of framing the charge and, therefore, at the
stage of framing the charge, the Court is not required to undertake an
elaborate inquiry for the purpose of sifting and weighing the material.
76. The issue of discharge was the subject matter before the
Hon'ble Supreme Court in the case of State of Tamilnadu, by Inspector
of Police in Vigilance and Anti-Corruption v. N. Suresh Rajan, (2014)
11 SCC 709, wherein at paragraphs no. 29, 32.4, 33 and 34 the Hon'ble
Apex Court has been observed as under:--
"29. We have bestowed our consideration to the rival submissions and
the submissions made by Mr. Ranjit Kumar commend us. True it is
that at the time of consideration of the applications for discharge, the
court cannot act as a mouthpiece of the prosecution or act as a post
office and may sift evidence in order to find out whether or not the
allegations made are groundless so as to pass an order of discharge.
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It is trite that at the stage of consideration of an application
for discharge, the court has to proceed with an assumption that the
materials brought on record by the prosecution are true and evaluate
the said materials and documents with a view to find out whether the
facts emerging therefrom taken at their face value disclose the
existence of all the ingredients constituting the alleged offence. At this
stage, probative value of the materials has to be gone into and the
court is not expected to go deep into the matter and hold that the
materials would not warrant a conviction. In our opinion, what needs
to be considered is whether there is a ground for presuming that the
offence has been committed and not whether a ground for convicting
the accused has been made out. To put it differently, if the court thinks
that the accused might have committed the offence on the basis of the
materials on record on its probative value, it can frame the charge;
though for conviction, the court has to come to the conclusion that the
accused has committed the offence. The law does not permit a mini
trial at this stage.
32.4. While passing the impugned orders [N. Suresh
Rajan v. Inspector of Police, Criminal Revision Case (MD) No. 528
22 of 2009, order dated 10-12-2010 (Mad)], [State v. K.
Ponmudi, (2007) 1 Mad LJ (Cri) 100], the court has not sifted the
materials for the purpose of finding out whether or not there is
sufficient ground for proceeding against the accused but whether that
would warrant a conviction. We are of the opinion that this was not
the stage where the court should have appraised the evidence and
discharged the accused as if it was passing an order of acquittal.
Further, defect in investigation itself cannot be a ground
for discharge. In our opinion, the order impugned [N. Suresh
Rajan v. Inspector of Police, Criminal Revision Case (MD) No. 528 of
2009, order dated 10-12-2010 (Mad)] suffers from grave error and
calls for rectification.
33. Any observation made by us in this judgment is for the purpose of
disposal of these appeals and shall have no bearing on the trial. The
surviving respondents are directed to appear before the respective
courts on 3-2-2014. The Court shall proceed with the trial from the
stage of charge in accordance with law and make endeavour to
dispose of the same expeditiously.
34. In the result, we allow these appeals and set aside the order
of discharge with the aforesaid observations.
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77. It has been further held in the case of Asim Shariff v. National
Investigation Agency, (2019) 7 SCC 148, that mini trial is not expected
by the trial court for the purpose of marshalling the evidence on record at
the time of framing of charge. It has been held at paragraph no. 18 of the
said judgment as under:--
"18. Taking note of the exposition of law on the subject laid down by this
Court, it is settled that the Judge while considering the question of framing
charge under Section 227 CrPC in sessions cases (which is akin to
Section 239 CrPC pertaining to warrant cases) has the undoubted power to
sift and weigh the evidence for the limited purpose of finding out whether or
not a prima facie case against the accused has been made out; where the
material placed before the court discloses grave suspicion against the
accused which has not been properly explained, the court will be fully
justified in framing the charge; by and large if two views are possible and
one of them giving rise to suspicion only, as distinguished from grave
suspicion against the accused, the trial Judge will be justified in discharging
him. It is thus clear that while examining the discharge application filed
under Section 227 CrPC, it is expected from the trial Judge to exercise its
judicial mind to determine as to whether a case for trial has been made out
or not. It is true that in such proceedings, the court is not supposed to hold a
mini trial by marshalling the evidence on record."
78. It is further settled position of law that defence on merit is not
to be considered at the time of stage of framing of charge and that cannot
be a ground of discharge. A reference may be made to the judgment as
rendered by the Hon'ble Apex Court in State of Rajasthan v. Ashok
Kumar Kashyap, (2021) 11 SCC 191. For ready reference Paragraph no.
11 of the said judgment are quoted below:--
"11. While considering the legality of the impugned judgment [Ashok
Kumar Kashyap v. State of Rajasthan, 2018 SCC OnLine Raj 3468]
and order passed by the High Court, the law on the subject and few
decisions of this Court are required to be referred to.
11.1. In P. Vijayan [P. Vijayan v. State of Kerala, (2010) 2 SCC
398 : (2010) 1 SCC (Cri) 1488], this Court had an occasion to
consider Section 227 CrPC What is required to be considered at the
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time of framing of the charge and/or considering
the discharge application has been considered elaborately in the said
decision. It is observed and held that at the stage of Section 227, the
Judge has merely to sift the evidence in order to find out whether or
not there is sufficient ground for proceeding against the accused. It is
observed that in other words, the sufficiency of grounds would take
within its fold the nature of the evidence recorded by the police or the
documents produced before the court which ex facie disclose that
there are suspicious circumstances against the accused so as to frame
a charge against him. It is further observed that if the Judge comes to
a conclusion that there is sufficient ground to proceed, he will frame a
charge under Section 228 CrPC, if not, he will discharge the accused.
It is further observed that while exercising its judicial mind to the
facts of the case in order to determine whether a case for trial has
been made out by the prosecution, it is not necessary for the court to
enter into the pros and cons of the matter or into a weighing and
balancing of evidence and probabilities which is really the function of
the court, after the trial starts.
11.2. In the recent decision of this Court in M.R. Hiremath [State of
Karnataka v. M.R. Hiremath, (2019) 7 SCC 515 : (2019) 3 SCC (Cri)
109 : (2019) 2 SCC (L&S) 380], one of us (D.Y. Chandrachud, J.)
speaking for the Bench has observed and held in para 25 as under :
(SCC p. 526)
"25. The High Court [M.R. Hiremath v. State, 2017 SCC OnLine Kar
4970] ought to have been cognizant of the fact that the trial court was
dealing with an application for discharge under the provisions of
Section 239 CrPC. The parameters which govern the exercise of this
jurisdiction have found expression in several decisions of this Court.
It is a settled principle of law that at the stage of considering an
application for discharge the court must proceed on the assumption
that the material which has been brought on the record by the
prosecution is true and evaluate the material in order to determine
whether the facts emerging from the material, taken on its face value,
disclose the existence of the ingredients necessary to constitute the
offence. In State of T.N. v. N. Suresh Rajan [State of T.N. v. N. Suresh
Rajan, (2014) 11 SCC 709 : (2014) 3 SCC (Cri) 529 : (2014) 2 SCC
(L&S) 721], adverting to the earlier decisions on the subject, this
Court held : (SCC pp. 721-22, para 29)
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'29. ... At this stage, probative value of the materials has to be gone
into and the court is not expected to go deep into the matter and hold
that the materials would not warrant a conviction. In our opinion,
what needs to be considered is whether there is a ground for
presuming that the offence has been committed and not whether a
ground for convicting the accused has been made out. To put it
differently, if the court thinks that the accused might have committed
the offence on the basis of the materials on record on its probative
value, it can frame the charge; though for conviction, the court has to
come to the conclusion that the accused has committed the offence.
The law does not permit a mini trial at this stage.'"
79. The Hon'ble Apex Court has further dealt with the proper basis
for framing of charge in the case of Onkar Nath Mishra v. State (NCT
of Delhi) wherein at paragraphs 11, 12 and 14 it has been held as
under:--
"11. It is trite that at the stage of framing of charge the court is
required to evaluate the material and documents on record with a
view to finding out if the facts emerging therefrom, taken at their face
value, disclosed the existence of all the ingredients constituting the
alleged offence. At that stage, the court is not expected to go deep into
the probative value of the material on record. What needs to be
considered is whether there is a ground for presuming that the offence
has been committed and not a ground for convicting the accused has
been made out. At that stage, even strong suspicion founded on
material which leads the court to form a presumptive opinion as to the
existence of the factual ingredients constituting the offence alleged
would justify the framing of charge against the accused in respect of
the commission of that offence.
12. In State of Karnataka v. L. Muniswamy [(1977) 2 SCC 699 : 1977
SCC (Cri) 404], a three-Judge Bench of this Court had observed that
at the stage of framing the charge, the Court has to apply its mind to
the question whether or not there is any ground for presuming the
commission of the offence by the accused. As framing of charge affects
a person's liberty substantially, need for proper consideration of
material warranting such order was emphasised.
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14. In a later decision in State of M.P. v. Mohanlal Soni [(2000) 6
SCC 338 : 2000 SCC (Cri) 1110] this Court, referring to several
previous decisions held that : (SCC p. 342, para 7)
"7. The crystallised judicial view is that at the stage of framing
charge, the court has to prima facie consider whether there is
sufficient ground for proceeding against the accused. The court is not
required to appreciate evidence to conclude whether the materials
produced are sufficient or not for convicting the accused."
80. The Hon'ble Apex Court in the case of Palwinder
Singh v. Balvinder Singh, (2009) 2 SCC (Cri) 850 has been pleased to
hold that charges can also be framed on the basis of strong suspicion.
Marshaling and appreciation of the evidence is not in the domain of the
court at that point of time.
81. Further it is pertinent to mention here that power
to discharge an accused was designed to prevent harassment to an
innocent person by the arduous trial or the ordeal of prosecution. How
that intention is to be achieved is reasonably clear in the section itself.
The power has been entrusted to the Sessions Judge who brings to bear
his knowledge and experience in criminal trials. Besides, he has the
assistance of counsel for the accused and Public Prosecutor. He is
required to hear both sides before framing any charge against the
accused or for discharging him. If the Sessions Judge after hearing the
parties frames a charge and also makes an order in support thereof, the
law must be allowed to take its own course.Self-restraint on the part of
the High Court should be the rule unless there is a glaring injustice
which stares the court in the face. The opinion on any matter may differ
depending upon the person who views it.There may be as many opinions
on a particular matter as there are courts but it is no ground for the High
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Court to interdict the trial. It would be better for the High Court to allow
the trial to proceed. Reference in this regard may be taken from the
judgment as rendered by the Hon'ble Apex Court in Stree Atyachar
Virodhi Parishad v. Dilip Nathumal Chordia, (1989) 1 SCC 715.
82. Further, the difference between the approach with which the
Court should examine the matter in the discharge has been explained by
the Hon'ble Supreme Court in Amit Kapoor v. Ramesh Chander, (2012)
9 SCC 460, in the following words:--
"17. Framing of a charge is an exercise of jurisdiction by the trial
court in terms of Section 228 of the Code, unless the accused is
discharged under Section 227 of the Code. Under both these
provisions, the court is required to consider the "record of the case"
and documents submitted therewith and, after hearing the parties,
may either discharge the accused or where it appears to the court and
in its opinion there is ground for presuming that the accused has
committed an offence, it shall frame the charge. Once the facts and
ingredients of the Section exists, then the court would be right in
presuming that there is ground to proceed against the accused and
frame the charge accordingly. This presumption is not a presumption
of law as such. The satisfaction of the court in relation to the existence
of constituents of an offence and the facts leading to that offence is a
sine qua non for exercise of such jurisdiction. It may even be weaker
than a prima facie case. There is a fine distinction between the
language of Sections 227 and 228 of the Code. Section 227 is the
expression of a definite opinion and judgment of the Court while
Section 228 is tentative. Thus, to say that at the stage of framing of
charge, the Court should form an opinion that the accused is certainly
guilty of committing an offence, is an approach which is
impermissible in terms of Section 228 of the Code.
30. We have already noticed that the legislature in its wisdom has
used the expression "there is ground for presuming that the accused
has committed an offence". This has an inbuilt element of
presumption once the ingredients of an offence with reference to the
allegations made are satisfied, the Court would not doubt the case of
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the prosecution unduly and extend its jurisdiction to quash the charge
in haste. A Bench of this Court in State of Maharashtra v. Som Nath
Thapa (1996) 4 SCC 659 referred to the meaning of the word
"presume" while relying upon Black's Law Dictionary. It was defined
to mean "to believe or accept upon probable evidence"; "to take as
proved until evidence to the contrary is forthcoming". In other words,
the truth of the matter has to come out when the prosecution evidence
is led, the witnesses are cross-examined by the defence, the
incriminating material and evidence is put to the accused in terms of
Section 313 of the Code and then the accused is provided an
opportunity to lead defence, if any. It is only upon completion of such
steps that the trial concludes with the court forming its final opinion
and delivering its judgment. Merely because there was a civil
transaction between the parties would not by itself alter the status of
the allegations constituting the criminal offence.
83. Thus, it is evident that the law regarding the approach to be
adopted by the Court while considering an application for discharge of
the accused personthe Court has to form a definite opinion, upon
consideration of the record of the case and the documents submitted
therewith, that there is not sufficient ground for proceeding against the
accused. However, while framing charges, the Court is not required to
form a definite opinion that the accused is guilty of committing an
offence. The truth of the matter will come out when evidence is led
during the trial. Once the facts and ingredients of the Section exist, the
court would presume that there is ground to proceed against the accused
and frame the charge accordingly and the Court would not doubt the case
of the prosecution.
84. In the judgment passed by the Hon'ble Supreme court in the
case of Sajjan Kumar v. CBI, reported in (2010) 9 SCC 368, the Hon'ble
Supreme Court has considered the scope of Sections 227 and 228 CrPC.
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The principles which emerged therefrom have been taken note of in para
21 as under:
"21. On consideration of the authorities about the scope of Sections
227 and 228 of the Code, the following principles emerge:
(i) The Judge while considering the question of framing the charges
under Section 227 CrPC has the undoubted power to sift and weigh
the evidence for the limited purpose of finding out whether or not a
prima facie case against the accused has been made out. The test to
determine prima facie case would depend upon the facts of each case.
(ii) Where the materials placed before the court disclose grave
suspicion against the accused which has not been properly explained,
the court will be fully justified in framing a charge and proceeding
with the trial.
(iii) The court cannot act merely as a post office or a mouthpiece of
the prosecution but has to consider the broad probabilities of the case,
the total effect of the evidence and the documents produced before the
court, any basic infirmities, etc. However, at this stage, there cannot
be a roving enquiry into the pros and cons of the matter and weigh the
evidence as if he was conducting a trial.
(iv) If on the basis of the material on record, the court could form an
opinion that the accused might have committed offence, it can frame
the charge, though for conviction the conclusion is required to be
proved beyond reasonable doubt that the accused has committed the
offence.
(v) At the time of framing of the charges, the probative value of the
material on record cannot be gone into but before framing a charge
the court must apply its judicial mind on the material placed on
record and must be satisfied that the commission of offence by the
accused was possible.
(vi) At the stage of Sections 227 and 228, the court is required to
evaluate the material and documents on record with a view to find out
if the facts emerging therefrom taken at their face value disclose the
existence of all the ingredients constituting the alleged offence. For
this limited purpose, sift the evidence as it cannot be expected even at
that initial stage to accept all that the prosecution states as gospel
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truth even if it is opposed to common sense or the broad probabilities
of the case.
(vii) If two views are possible and one of them gives rise to suspicion
only, as distinguished from grave suspicion, the trial Judge will be
empowered to discharge the accused and at this stage, he is not to see
whether the trial will end in conviction or acquittal."
85. In the judgment passed by the Hon'ble Supreme court in the
case of M.E. Shivalingamurthy v. CBI, reported in (2020) 2 SCC 768,
the above principles have been reiterated in para 17, 18, 28 to 31 and the
Hon'ble supreme court has explained as to how the matters of grave
suspicion are to be dealt with. The aforesaid paragraphs are quoted as
under:
"17. This is an area covered by a large body of case law. We refer to
a recent judgment which has referred to the earlier decisions viz. P.
Vijayan v. State of Kerala and discern the following principles:
17.1. If two views are possible and one of them gives rise to suspicion
only as distinguished from grave suspicion, the trial Judge would be
empowered to discharge the accused.
17.2. The trial Judge is not a mere post office to frame the charge at
the instance of the prosecution.
17.3. The Judge has merely to sift the evidence in order to find out
whether or not there is sufficient ground for proceeding. Evidence
would consist of the statements recorded by the police or the
documents produced before the Court.
17.4. If the evidence, which the Prosecutor proposes to adduce to
prove the guilt of the accused, even if fully accepted before it is
challenged in cross-examination or rebutted by the defence evidence,
if any, "cannot show that the accused committed offence, then, there
will be no sufficient ground for proceeding with the trial".
17.5. It is open to the accused to explain away the materials giving
rise to the grave suspicion.
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17.6. The court has to consider the broad probabilities, the total effect
of the evidence and the documents produced before the court, any
basic infirmities appearing in the case and so on. This, however,
would not entitle the court to make a roving inquiry into the pros and
cons.
17.7. At the time of framing of the charges, the probative value of the
material on record cannot be gone into, and the material brought on
record by the prosecution, has to be accepted as true.
17.8. There must exist some materials for entertaining the strong
suspicion which can form the basis for drawing up a charge and
refusing to discharge the accused.
18. The defence of the accused is not to be looked into at the stage
when the accused seeks to be discharged under Section 227 CrPC
(see State of J&K v. Sudershan Chakkar). The expression, "the record
of the case", used in Section 227 CrPC, is to be understood as the
documents and the articles, if any, produced by the prosecution. The
Code does not give any right to the accused to produce any document
at the stage of framing of the charge. At the stage of framing of the
charge, the submission of the accused is to be confined to the material
produced by the police (see State of Orissa v. Debendra Nath Padhi).
28. It is here that again it becomes necessary that we remind
ourselves of the contours of the jurisdiction under Section 227 CrPC.
The principle established is to take the materials produced by the
prosecution, both in the form of oral statements and also documentary
material, and act upon it without it been subjected to questioning
through cross-examination and everything assumed in favour of the
prosecution, if a scenario emerges where no offence, as alleged, is
made out against the accused, it, undoubtedly, would ensure to the
benefit of the accused warranting the trial court to discharge the
accused.
29. It is not open to the accused to rely on the material by way of
defence and persuade the court to discharge him.
30. However, what is the meaning of the expression "materials on the
basis of which grave suspicion is aroused in the mind of the court's",
which is not explained away? Can the accused explain away the
material only with reference to the materials produced by the
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prosecution? Can the accused rely upon material which he chooses to
produce at the stage?
31. In view of the decisions of this Court that the accused can only
rely on the materials which are produced by the prosecution, it must
be understood that the grave suspicion, if it is established on the
materials, should be explained away only in terms of the materials
made available by the prosecution. No doubt, the accused may appeal
to the broad probabilities to the case to persuade the court to
discharge him."
86. In the case of Asim Shariff v. NIA, (supra), it has been held
by the Hon'ble Apex Court that the words 'not sufficient ground for
proceeding against the accused' clearly show that the Judge is not a
mere post office to frame the charge at the behest of the prosecution, but
has to exercise his judicial mind to the facts of the case in order to
determine whether a case for trial has been made out by the prosecution.
In assessing this fact, it is not necessary for the court to enter into the
pros and cons of the matter or into a weighing and balancing of evidence
and probabilities which is really his function after the trial starts. At the
stage of Section 227, the Judge has merely to sift the evidence in order to
find out whether or not there is sufficient ground for proceeding against
the accused. The sufficiency of ground would take within its fold the
nature of the evidence recorded by the police or the documents produced
before the court which ex-facie disclose that there are suspicious
circumstances against the accused so as to frame a charge against him.
87. Recently, the Full Bench of the Hon'ble Apex Court in the case
of Ghulam Hassan Beigh v. Mohd. Maqbool Magrey, (2022) 12 SCC
657 has elaborately discussed the issue of framing of charge and has held
in paragraph 27 which reads as under:
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"27. Thus from the aforesaid, it is evident that the trial court is
enjoined with the duty to apply its mind at the time of framing of
charge 14 and should not act as a mere post office. The endorsement
on the charge-sheet presented by the police as it is without applying
its mind and without recording brief reasons in support of its opinion
is not countenanced by law. However, the material which is required
to be evaluated by the court at the time of framing charge should be
the material which is produced and relied upon by the prosecution.
The sifting of such material is not to be so meticulous as would render
the exercise a mini trial to find out the guilt or otherwise of the
accused. All that is required at this stage is that the court must be
satisfied that the evidence collected by the prosecution is sufficient to
presume that the accused has committed an offence. Even a strong
suspicion would suffice. Undoubtedly, apart from the material that is
placed before the court by the prosecution in the shape of final report
in terms of Section 173 CrPC, the court may also rely upon any other
evidence or material which is of sterling quality and has direct
bearing on the charge laid before it by the prosecution."
88. Thus, from aforesaid legal propositions it can be safely inferred
that if, upon consideration of the record of the case and the documents
submitted therewith, and after hearing the submissions of the accused
and the prosecution in this behalf, the Judge considers that there is no
sufficient ground for proceeding against the accused, he
shall discharge the accused and record his reasons for doing so and if,
after such consideration and hearing as aforesaid, the Judge is of the
opinion that there is ground for presuming that the accused has
committed an offence, the trial Court shall frame the charge.
89. Therefore, the stage of discharge is a stage prior to framing of
the charge and once the Court rejects the discharge application, it would
proceed for framing of charge. At the stage of discharge, the Judge has
merely to sift and weigh the evidence in order to find out whether or not
there is sufficient ground for proceeding against the accused and in other
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words, the sufficiency of grounds would take within its fold the nature of
the evidence recorded by the prosecution or the documents produced
before the court which ex facie disclose that there are suspicious
circumstances against the accused so as to frame the charge against him
and after that if the Judge comes to a conclusion that there is sufficient
ground to proceed, he will frame a charge and, if not, he
will discharge the accused.
90. While exercising its judicial mind to the facts of the case in
order to determine whether a case for trial has been made out by the
prosecution, it is not necessary for the Court to enter into the pros and
cons of the matter or into a weighing and balancing of evidence and
probabilities which is really the function of the court, after the trial starts.
91. It is considered view that at this stage of the instant case, the
Court was only required to consider whether a prima facie case has been
made out or not and whether the accused is required to be further tried or
not because at the stage of framing of the charge and / or considering
the discharge application, the mini trial is not permissible.
92. In the backdrop of aforesaid case laws and judicial deduction,
this Court is now proceeding to examine the fact so as to come to the
conclusion as to whether the evidence which has been collected in course
of investigation and has been brought on record, as would be available in
the impugned order prima facie case against the petitioner is made out or
not?
93. It is evident from the prosecution complaint that the accused
petitioner was a party with the other co-accused persons namely Afsar
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Ali @ Afsu Khan and others in acquisition of proceeds of crime in form
of landed property admeasuring 1 acre situated at Plot no. 28. Khata no.
37, village Gari Chesire Home Road, Ranchi in the name of Punit
Bhargav and Investigation reveals that Bishnu Kumar Agrawal has paid
Rs. 1,78,20,000/- to the accused Punit Bhargav in his firm Shiva
Fabcons. The amount was paid into the Bank of Baroda account no.
52580200000085 out of which as amount of Rs. 1,01,57,400/- was
transferred to the Bank account of Jamini Enterprises, whose beneficial
owner is petitioner Prem Prakash.
94. It has come in the complaint that accused persons Afsar Ali and
Saddam Hussain connived with Prem Prakash for fraudulent
acquisition/registration of this property. Prem Prakash then registered
this property in the name of his very close accomplice and confidant
namely Punit Bhargava, co-accused persons. The sale deed dated
06.02.2021 was executed in favour of Punit Bhargava for an amount of
Rs. 1,78,55,800/- which was registered as document no.
2021/RAN/1016/BK1/906 in book no. BK1, Vol. no. 112 from page no.
369 to 506 the office of SRO, Ranchi.
95. The investigation further reveals that though the consideration
amount in the deed between Imtiyaz Ahmed and Bharat Prasad and Punit
Bhargava was shown as Rs. 1,78,55,800/-, but only an amount of Ra. 25
lacs was paid into the SBI Account no. 31100122501 of the dummy
owner/accused Rajesh Rai on 12.02.2021.
96. It has come in the investigation on the instructions of the
accused petitioner Prem Prakash, his accomplice Punit Bhargava further
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sold the said land to Bishnu Kumar Agarwal vide two sale deeds, both
dated 01.04.2021, registered as document no.
2021/RAN/2784/BK1/2483 in book no. BK1, Vol. no. 316 from page no.
405 to 532 at the office of SRO, Ranchi for an amount of Rs.
1,02,60,000/-) and document no. 2021/RAN/2783/BK1/2482 in book no.
BK1, Vol. no. 316 from page no. 261 to 404 at the office of SRO,
Ranchi (for an amount of Rs. 77,40,000)
97. Thus, prima facie it appears that the present petitioner Prem
Prakash and Punit Bhargav knowingly acquired the proceeds of crime
and their knowledge about the forgery committed with respect to
acquiring the above said property is evident from the fact that they
acquired the property at a throw away price and that too without paying
the consideration amount which was mentioned in the deed.
98. The said Punit Bhargav assisted by Prem Prakash and acquired
the property in his name on instructions of Prem Prakash. The accused
Prem Prakash mediated directly with the accused persons namely Afsar
Ali, Md. Saddam Hussain and others and acquired property in the name
of Punit Bhargav, out of an amount of Rs. 1.78 crores only 25 lacs were
paid.
99. Thus, it would be evident from the material collected that the
Prem Prakash and his associate Punit Bhargav both the persons are party
to the activities connected with the proceeds of crime in formof
immoveable property Cheshire Home Road, Ranchi having deed value
of Rs 1.80 crores including its acquisition, possession, concealment used
and projecting and claiming the proceeds of crime as untainted property.
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100. Thus, from the aforesaid it is evident that prima facie- material
is available against the present petitioners, as such charges have rightly
been framed under the Section 3 of the Act 2002 against the petitioner.
101. The learned counsel for petitioner has contended that petitioner
is nowhere related to the alleged scheduled offence and further the
petitioner has no knowledge of the documents that were allegedly
forged.
102. In the aforesaid context, it needs to refer herein that the Hon'ble
Apex Court in PavnaDibbur v. Directorate of Enforcement (Criminal
Appeal No. 2779/2023) held that the who could commit an offence
under the PMLA maybe not be named in the scheduled offence.
103. Further the offence of money laundering as contemplated in
Section 3 of the PMLA has been elaborately dealt with by the three
Judge Bench in Vijay Madanlal Choudhary (supra), in which it has
been observed that Section 3 has a wider reach. The offence as defined
captures every process and activity in dealing with the proceeds of crime,
directly or indirectly, and is not limited to the happening of the final act
of integration of tainted property in the formal economy to constitute an
act of money laundering. Of course, the authority of the Authorised
Officer under the Act to prosecute any person for the offence of money
laundering gets triggered only if there exist proceeds of crime within the
meaning of Section 2(1)(u) of the Act and further it is involved in any
process or activity. Not even in case of existence of undisclosed income
and irrespective of its volume, the definition of "Proceeds of Crime"
under Section 2(1)(u) will get attracted, unless the property has been
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derived or obtained as a result of criminal activity relating to a scheduled
offence. The property must qualify the definition of "Proceeds of Crime"
under Section 2(1)(u) of the Act. As observed, in all or whole of the
crime property linked to scheduled offence need not be regarded as
proceeds of crime, but all properties qualifying the definition of
"Proceeds of Crime" under Section 2(1)(u) will necessarily be the crime
properties.
104. The Hon'ble Apex Court in the case of Pavana Dibbur vs. The
Directorate of Enforcement (supra) has considered the effect of the
appellant not being shown as an accused in the predicate offence by
taking into consideration Section 3 of the Act, 2002.
105. Based upon the definition Clause (u) of sub-section (1) of
Section 2 of the Act 2002 which defines "proceeds of crime", the
Hon'ble Apex Court has been pleased to observe that clause (v) of sub-
section (1) of Section 2 of PMLA defines "property" to mean any
property or assets of every description, whether corporeal or incorporeal,
movable or immovable, tangible or intangible.
106. To constitute any property as proceeds of crime, it must be
derived or obtained directly or indirectly by any person as a result of
criminal activity relating to a scheduled offence. The explanation
clarifies that the proceeds of crime include property, not only derived or
obtained from 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. Clause (u) also clarifies that
even the value of any such property will also be the proceeds of crime.
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107. It has further been observed by referring the decision rendered
by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs.
Union of India and Ors.(supra) that the condition precedent for the
existence of proceeds of crime is the existence of a scheduled offence. At
paragraph-15 the finding has been given therein that on plain reading of
Section 3 of the Act, 2002, an offence under Section 3 can be committed
after a scheduled offence is committed. By giving an example, it has
been clarified that if a person who is unconnected with the scheduled
offence, knowingly assists the concealment of the proceeds of crime or
knowingly assists the use of proceeds of crime, in that case, he can be
held guilty of committing an offence under Section 3 of the PMLA.
Therefore, 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. For ready reference relevant
paragraphs are being quoted as under:
15. The condition precedent for the existence of proceeds of crime is
the existence of a scheduled offence. On this aspect, it is necessary to
refer to the decision of this Court in Vijay Madanlal Choudhary [Vijay
Madanlal Choudhary v. Union of India, (2023) 12 SCC 1] . In para
109 of the said decision [Vijay Madanlal Choudhary v. Union of
India, (2023) 12 SCC 1] , this Court held thus : (SCC p. 166)
"109. Tersely put, it is only such property which is derived or
obtained, directly or indirectly, as a result of criminal activity relating
to a scheduled offence that can be regarded as proceeds of crime. The
authorities under the 2002 Act 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, unless the same is registered with the
jurisdictional police or pending inquiry by way of complaint before
the competent forum. For, the expression "derived or obtained" is
indicative of criminal activity relating to a scheduled offence already
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accomplished. Similarly, in the event 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
because of quashing of the criminal case (scheduled offence) against
him/her, there can be no action for money laundering against such a
person or person claiming through him in relation to the property
linked to the stated scheduled offence. This interpretation alone can be
countenanced on the basis of the provisions of the 2002 Act, in
particular Section 2(1)(u) read with Section 3. Taking any other view
would be rewriting of these provisions and disregarding the express
language of definition clause "proceeds of crime", as it obtains as of
now." (emphasis in original and supplied)
16. In paras 134 and 135, this Court held thus : (Vijay Madanlal
Choudhary case [Vijay Madanlal Choudhary v. Union of India, (2023)
12 SCC 1] , SCC p. 182)
"134. From the bare language of Section 3 of the 2002 Act, it is amply
clear that the offence of money laundering is an independent offence
regarding the process or activity connected with the proceeds of crime
which had been derived or obtained as a result of criminal activity
relating to or in relation to a scheduled offence. The process or
activity can be in any form -- be it one of concealment, possession,
acquisition, use of proceeds of crime as much as projecting it as
untainted property or claiming it to be so. Thus, involvement in any
one of such process or activity connected with the proceeds of crime
would constitute offence of money laundering. This offence otherwise
has nothing to do with the criminal activity relating to a scheduled
offence -- except the proceeds of crime derived or obtained as a result
of that crime.
135.Needless to mention that such process or activity can be indulged
in only after the property is derived or obtained as a result of criminal
activity (a scheduled offence). It would be an offence of money-
laundering to indulge in or to assist or being party to the process or
activity connected with the proceeds of crime; and such process or
activity in a given fact situation may be a continuing offence,
irrespective of the date and time of commission of the scheduled
offence. In other words, the criminal activity may have been
committed before the same had been notified as scheduled offence for
the purpose of the 2002 Act, but if a person has indulged in or
continues to indulge directly or indirectly in dealing with proceeds of
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crime, derived or obtained from such criminal activity even after it has
been notified as scheduled offence, may be liable to be prosecuted for
offence of money laundering under the 2002 Act -- for continuing to
possess or conceal the proceeds of crime (fully or in part) or retaining
possession thereof or uses it in trenches until fully exhausted. The
offence of money-laundering is not dependent on or linked to the date
on which the scheduled offence, or if we may say so, the predicate
offence has been committed. The relevant date is the date on which
the person indulges in the process or activity connected with such
proceeds of crime. These ingredients are intrinsic in the original
provision (Section 3, as amended until 2013 and were in force till 31-
7-2019); and the same has been merely explained and clarified by way
of Explanation vide Finance (No. 2) Act, 2019. Thus understood,
inclusion of clause (ii) in Explanation inserted in 2019 is of no
consequence as it does not alter or enlarge the scope of Section 3 at
all." (emphasis supplied)
17. Coming back to Section 3 PMLA, on its plain reading, an offence
under Section 3 can be committed after a scheduled offence is
committed. For example, let us take the case of a person who is
unconnected with the scheduled offence, knowingly assists the
concealment of the proceeds of crime or knowingly assists the use of
proceeds of crime. In that case, he can be held guilty of committing an
offence under Section 3 PMLA. To give a concrete example, the
offences under Sections 384 to 389IPC relating to "extortion" are
scheduled offences included in Para 1 of the Schedule to PMLA. An
accused may commit a crime of extortion covered by Sections 384 to
389IPC and extort money. Subsequently, a person unconnected with
the offence of extortion may assist the said accused in the
concealment of the proceeds of extortion. In such a case, the person
who assists the accused in the scheduled offence for concealing the
proceeds of the crime of extortion can be guilty of the offence of
money-laundering. Therefore, it is not necessary that a person against
whom the offence under Section 3 PMLA is alleged must have been
shown as the accused in the scheduled offence. What is held in para
135 of the decision of this Court in Vijay Madanlal Choudhary v.
Union of India, (2023) 12 SCC 1] supports the above conclusion. The
conditions precedent for attracting the offence under Section 3 PMLA
are that there must be a scheduled offence and that there must be
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proceeds of crime in relation to the scheduled offence as defined in
clause (u) of sub-section (1) of Section 3 PMLA..
108. It has further been contended by the learned counsel for the
petitioner that respondent ED has heavily relied upon the statement of
the Co-accused which has been recorded under Section 50 of the Act
2002 but it is the settled position of law which has been settled by the
Hon'ble Apex Court that such type of evidence cannot be the sole basis
in order to fix the culpability of the accused person.
109. It has further been contended that even the said view has been
reiterated by the Hon'ble Apex Court in the SLP Crl. No. 5416 of 2024
which has been preferred by the present petitioner against the order dated
22.03.2024passed by this Court by which the bail petition of the
petitioner has been rejected.
110. In the aforesaid context it needs to refer herein that there is no
dispute regarding the settled proposition of law that the statements
recorded which are merely confessional in nature ought to be ignored
while adjudicating upon a case as confessional statement of co-accused
cannot be treated as substantive evidence and such statements can only
be pressed into service when the Hon'ble Courts are inclined to accept
other evidences. Thus, instead of placing reliance solely upon the
statements of the petitioner and the other co-accused persons recorded
under Section 50 of PMLA, the opposite party ought to have collected
and relied upon other evidence in order to prosecute the petitioner.
111. Further herein it is evident from the prosecution complaint
dated 01.09.2023, filed against the petitioner and other nine co-accused
persons, is supported by substantial evidence gathered during the
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investigation and is not based upon solely on the statements of the
petitioner and his accomplices. Furthermore, primafaciethere is ample
evidence establishing the petitioner's involvement in the offence of
money laundering, which is further corroborated by statements of
witnesses in the instant case. Further, the petitioner's role has already
been discussed herein in detailin the preceding paragraphs, therefore, the
averments of the petitioner are unfounded and liable to be dismissed.
112. The learned Counsel has emphatically contended that the
Hon'ble Apex Court while enlarging the petitioner on bail in SLP (Crl.)
No. 5416 of 2024 has categorically observed in paragraph 43 that there is
no material placed on record to show as to on what basis it is claimed
that the beneficial interest in M/s Jamini Enterprises lies with the
appellant. Hence, the statements relied upon do not prima facie make out
a case of money laundering against the appellant.
113. Therefore, submission has been made that since the Hon'ble
Apex has already observed that no prima facie case of money laundering
against the appellant is made out as such the prayer for discharge of the
petitioner is fit to be allowed.
114. Per contra the learned counsel for ED has submitted thatthe
observation so made by the Supreme Court at the time of consideration
of bail of the present applicant/petitioner is not applicable in the facts
and circumstances of the present issue reason being that the Hon'ble
Supreme Court itself has clarified that whatever observation has been
made, that is for the purpose of consideration of the bail and the same
shall not influence the trial, as such, submission has been made that the
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observation so made by the Supreme Court at the time of consideration
of the issue of regular bail will not be applicable herein.
115. This Court in order to appreciate the rival contention has gone
through the said order dated 28.10.2024 passed in SLP (Crl.) No. 5416
of 2024by the Hon'ble Apex Court. For ready reference the relevant
paragraphs of the said order/judgment upon which reliance has been
placed by the learned counsel for the parties are being quoted as under:
43. Moreover, there is no material placed on record to show as to on
what basis it is claimed that the beneficial interest in M/s Jamini
Enterprises lies with the appellant. Hence, the statements relied upon
do not prima facie make out a case of money laundering against the
appellant.
48. For the reasons stated above, while allowing the appeal, we set
aside the judgment dated 22-3-2024 of the High Court of Jharkhand
at Ranchi in Prem Prakash v. Union of India [Prem Prakash v. Union
of India, 2024 SCC OnLineJhar 745] . We clarify that the
observations made in this judgment are only for the purpose of
disposing of the bail application and they shall not influence the trial
court, which would proceed in accordance with law and on the basis
of the evidence on record.
116. From the perusal of the aforesaid paragraph it is evident that the
Hon'ble Supreme Court has clarified the issue that whatever observation
has been made that is with respect to consideration of the issue of bail
and observation so made will only be applicable for the purpose of
consideration of the issue of regular bail in the touchstone of
Article 21 of the Constitution of India and that is the reason the issue has
been clarified that the same will not affect the trial.
117. Further, it is evident that the observation which has been made
by the Hon'bleSupreme Court since is with respect to consideration of
bail within the parameter of consideration as per the provision of Section
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45 of the Act 2002 which contains the twin conditions for granting of the
bail and has got no nexus with the subject-matter of the discharge. It
needs to refer herein that the issue of dischargeis to be adjudicated with
different yard-stick which has already been discussed by this Court at
length in the preceding paragraphs, as such, the contention of the learned
counsel for the petitioner is not fit to be considered at this stage.
118. So far as the issue of mens rea is concerned which is a state of
mind and under criminal law, mens rea is considered as the guilty
intention and unless it is found that the accused had the guilty intention
to commit the crime, he cannot be held guilty for committing the crime,
but the same cannot be assessed at this stage by this Court because same
can only be adjudicated on appreciation of the facts, evidence and the
documents which can only be appreciated in course of trial when the
evidence will be led in this regard.This Court has found substance in the
argument advanced on behalf of the respondent as the issue of mens rea
can only be assessed by appreciating the evidence either documentary or
oral and therefore, we are of the view that the issue of mens rea, will not
be proper to be looked herein.
119. Be it noted that the legal presumption under Section 24(a) of
the Act 2002, would apply when the person is charged with the offence
of money-laundering and his direct or indirect involvement in any
process or activity connected with the proceeds of crime, is established.
The existence of proceeds of crime is, therefore, a foundational fact, to
be established by the prosecution, including the involvement of the
person in any process or activity connected therewith. Once these
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foundational facts are established by the prosecution, the onus must then
shift on the person facing charge of offence of money- laundering to
rebut the legal presumption that the proceeds of crime are not involved
in money-laundering, by producing evidence which is within his
personal knowledge of the accused.
120. It needs to refer herein that the Hon'ble Apex Court in the case
of Pradeep Nirankarnath Sharma Versus Directorate of Enforcement
and Another 2025 SCC OnLine SC 560 has observed that as established
in multiple judicial pronouncements, cases involving economic offences
necessitate a thorough trial to unearth the complete chain of events,
financial transactions, and culpability of the accused, therefore the
material submitted by the respondent, coupled with the broad legislative
framework of the PMLA, indicates the necessity of allowing the trial to
proceed and not discharging the appellant at the nascent stage of charge
framing and discharging the appellant at this stage would be premature
and contrary to the principles governing the prosecution in money
laundering cases, for ready reference the relevant paragraphs are being
quoted as under:
"30. The PMLA was enacted with the primary objective of preventing
money laundering and confiscating the proceeds of crime, thereby
ensuring that such illicit funds do not undermine the financial system.
Money laundering has far-reaching consequences, not only in terms of
individual acts of corruption but also in causing significant loss to the
public exchequer. The laundering of proceeds of crime results in a
significant loss to the economy, disrupts lawful financial transactions,
and erodes public trust in the system. The alleged offences in the
present case have a direct bearing on the economy, as illicit financial
transactions deprive the state of legitimate revenue, distort market
integrity, and contribute to economic instability. Such acts, when
committed by persons in positions of power, erode public confidence
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in governance and lead to systemic vulnerabilities within financial
institutions.
31. The illegal diversion and layering of funds have a cascading
effect, leading to revenue losses for the state and depriving legitimate
sectors of investment and financial resources. It is settled law that in
cases involving serious economic offences, judicial intervention at a
preliminary stage must be exercised with caution, and proceedings
should not be quashed in the absence of compelling legal grounds.
The respondent has rightly argued that in cases involving allegations
of such magnitude, a trial is imperative to establish the full extent of
wrongdoing and to ensure accountability.
32. The PMLA was enacted to combat the menace of money
laundering and to curb the use of proceeds of crime in the formal
economy. Given the evolving complexity of financial crimes, courts
must adopt a strict approach in matters concerning economic offences
to ensure that perpetrators do not exploit procedural loopholes to
evade justice.
33. The present case involves grave and serious allegations of
financial misconduct, misuse of position, and involvement in
transactions constituting money laundering. The appellant seeks an
end to the proceedings at a preliminary stage, effectively preventing
the full adjudication of facts and evidence before the competent forum.
However, as established in multiple judicial pronouncements, cases
involving economic offences necessitate a thorough trial to unearth
the complete chain of events, financial transactions, and culpability
of the accused.
34. The material submitted by the respondent, coupled with the
broad legislative framework of the PMLA, indicates the necessity of
allowing the trial to proceed and not discharging the appellant at the
nascent stage of charge framing. The argument that the proceedings
are unwarranted is devoid of substance in light of the statutory
objectives, the continuing nature of the offence, and the significant
financial implications arising from the alleged acts. Discharging the
appellant at this stage would be premature and contrary to the
principles governing the prosecution in money laundering cases.
121. From perusal of case record, statements of witnesses, materials
available on record and in view of law laid down by the Hon'ble Apex
Court as referred hereinabove, this Court is of the considered view that
prima-facie sufficient materials are available on the record for framing of
charge against the present petitioner.
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122. It needs to refer herein that the Hon'ble Apex Court in the case
of Munna Devi v. State of Rajasthan, (2001) 9 SCC 631 has observed
that the revisional power under the Code of Criminal Procedure cannot
be exercised in a routine and casual manner. While exercising such
powers the High Court has no authority to appreciate the evidence in the
manner as the trial and the appellate courts are required to do. Revisional
powers could be exercised only when it is shown that there is a legal bar
against the continuance of the criminal proceedings or the framing of
charge or the facts as stated in the first information report even if they
are taken at the face value and accepted in their entirety do not constitute
the offence for which the accused has been charged.
123. Thus, it is evident that the revisional power can only be
exercised to correct patent error of law or procedure which would
occasion unfairness, if it is not corrected. The revisional power cannot be
compared with the appellate power. A Revisional Court cannot
undertake meticulous examination of the material on record as it is
undertaken by the trial court or the appellate court. This power can only
be exercised if there is any legal bar to the continuance of the
proceedings or if the facts as stated in the charge-sheet are taken to be
true on their face value and accepted in their entirety do not constitute
the offence for which the accused has been charged.
124. The Hon'ble Apex Court in the case of Asian Resurfacing of
Road Agency (P) Ltd. v. CBI, (2018) 16 SCC 299 has held that
interference in the order framing charges or refusing to discharge is
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called for in the rarest of rare case only to correct the patent error of
jurisdiction.
125. The Hon'ble Apex Court in the case of State of Tamil
Nadu v. R. Soundirarasu,(supra) has held in paragraph 81 to 83 as
under:
"81. The High Court has acted completely beyond the settled
parameters, as discussed above, which govern the power
to discharge the accused from the prosecution. The High Court could
be said to have donned the role of a chartered accountant. This is
exactly what this Court observed in Thommandru Hannah
Vijayalakshmi [CBI v. Thommandru Hannah Vijayalakshmi, (2021)
18 SCC 135]. The High Court has completely ignored that it was not
at the stage of trial or considering an appeal against a verdict in a
trial. The High Court has enquired into the materials produced by
the accused persons, compared with the information compiled by the
investigating agency and pronounced a verdict saying that the
explanation offered by the accused persons deserves to be accepted
applying the doctrine of preponderance of probability. This entire
exercise has been justified on account of the investigating officer not
taking into consideration the explanation offered by the public servant
and also not taking into consideration the lawful acquired assets of
the wife of the public servant i.e. Respondent 2 herein.
82. By accepting the entire evidence put forward by the accused
persons applying the doctrine of preponderance of probability, the
case put up by the prosecution cannot be termed as "groundless". As
observed by this Court in C.S.D. Swami [C.S.D. Swami v. State, AIR
1960 SC 7] that the accused might have made statements before the
investigating officer as to his alleged sources of income, but the same,
strictly, would not be evidence in the case.
83. Section 13(1)(e) of the 1988 Act makes a departure from the
principle of criminal jurisprudence that the burden will always lie on
the prosecution to prove the ingredients of the offences charged and
never shifts on the accused to disprove the charge framed against him.
The legal effect of Section 13(1)(e) is that it is for the prosecution to
establish that the accused was in possession of properties
disproportionate to his known sources of income but the term "known
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sources of income" would mean the sources known to the prosecution
and not the sources known to the accused and within the knowledge of
the accused. It is for the accused to account satisfactorily for the
money/assets in his hands. The onus in this regard is on the accused to
give satisfactory explanation. The accused cannot make an attempt
to discharge this onus upon him at the stage of Section 239CrPC. At
the stage of Section 239CrPC, the court has to only look into the
prima facie case and decide whether the case put up by the
prosecution is groundless."
126. It requires to refer herein that the ambit and scope of exercise of
power of discharge, are fairly well settled which has been elaborately
discussed in the preceding paragraph and as per settled proposition of
law no comprehensive assessment of the materials or meticulous
consideration of the possible defences need to be undertaken at this stage
nor any exercise of weighing materials in golden scales is to be
undertaken at this stage. The only deliberation at the stage of discharge is
as to whether prima facie case was made out or not and whether the
accused is required to be further tried or not.
127. Further, it is well settled that the revisional power cannot be
parallelled with appellate power. The Revisional Court cannot undertake
meticulous examination of the material on record as is undertaken by the
Trial Court or the Appellate Court.
128. Hence, on the basis of discussion made herein above, this court
is of the considered view that, there is no illegality in the impugned
orders dated 08.08.2024 and 04.02.2025 passed by the learned Special
Judge, PMLA Ranchi in connection with ECIR Case No.05 of 2023 in
ECIR/ RNZO/10/2023.
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129. Accordingly, this Court do not find any justifiable reason to
interfere with the impugned orders dated 08.08.2024 and 04.02.2025,
consequently, these criminal revision petitionsare hereby dismissed.
130. Pending Interlocutory Application(s), if any, also stand
disposed of.
(Sujit Narayan Prasad, J.)
Jharkhand High Court
Dated:_10/09/2025
KNR/AFR
