Smt Nandipi Vijalakshmi vs Deputy Director
2023 Latest Caselaw 1934 Kant

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      IN THE HIGH COURT OF KARNATAKA AT BENGALURU

          DATED THIS THE 20TH DAY OF MARCH 2023
                          BEFORE
           THE HON'BLE MR. JUSTICE K.NATARAJAN

            CRIMINAL PETITION NO. 4641 OF 2022
BETWEEN

SMT NANDIPI VIJALAKSHMI
W/O LATE NANDIPI SHRIHARI
AGED 49 YEARS
R/AT FLAT NO.403,
KAKATIYA RESIDENCY
KAPPAGAL ROAD,
GANDHINAGAR
BELLARY - 583 103                          ... PETITIONER

(BY SRI SANDESH J. CHOUTA, SENIOR ADVOCATE
FOR SRI. SHIVAJI H. MANE, ADVOCATE)

AND

DEPUTY DIRECTOR
DIRECTORATE OF ENFORCEMENT
GOVERNMENT OF INDIA
3RD FLOOR, B BLOCK,
BMTC BUILDING
K H ROAD, SHANTHINAGAR
BENGALURU - 560 027                       ... RESPONDENT

(BY SRI UNNIKRISHNANAN M., SPECIAL COUNSEL FOR ED)

      THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
CR.P.C PRAYING TO QUASH THE IMPUGNED ORDER DATED
20.11.2020 PASSED BY THE HONOURABLE III ADDITIONAL
DISTRICT AND SESSIONS JUDGE, D.K., MANGALURU IN
SPL.C.C.NO.118/2016 HAVING FRAMED CHARGE AS AGAINST
THE    PETITIONER/ACCUSED   NO.3    FOR   THE  OFFENCE
PUNISHABLE UNDER SECTIONS 3 AND 4 OF PREVENTION OF
MONEY LAUNDERING ACT AND CONSEQUENTLY QUASH THE
ENTIRE PROCEEDINGS.
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     THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 9.3.2023, THIS DAY, THE COURT
MADE THE FOLLOWING:

                              ORDER

This criminal petition is filed by the petitioner-

accused No.3 under Section 482 of Cr.P.C. for quashing

the order dated 20.11.2020 passed by the III Additional

District and Sessions Judge, D.K., Mangaluru, in Spl.C.C.

No.118/2016, whereby the trial Court has framed charge

against the petitioner accused No.3 for the offences

punishable under Sections 3 and 4 of Prevention of Money

Laundering Act (hereinafter referred to as 'PML Act').

2. Heard the arguments of learned counsel for the

petitioner and learned Special Counsel for the respondent.

3. The case of the petitioner is that she is the

wife of late Nandipi Srihari, who was the Managing Director

of M/s. Rytu Depot Cold Storage Private Limited.

Central Bureau of Investigation (CBI) has filed charge

sheet against accused No.1-company, accused No.2-

Nandipi Srihari i.e. the husband the petitioner herein, and

four others for the offences punishable under Sections

420, 467, 468, 471 120B of IPC read with Sections

13(1)(d) and 13(2) of the Prevention of Corruption Act.

Based upon the case registered by the CBI, the Directorate

of Enforcement (ED) registered a case in ECIR 98/BZ/2010

under sections 3 and 4 of PML Act. After investigation,

final report has been filed. Now, the trial Court took

cognizance of the offence and issued summons to the

witnesses, which is under challenge.

4. The learned counsel for the petitioner has

strenuously argued on the point that the petitioner was

not arraigned as accused either in FIR or in the charge

sheet filed by the CBI. The petitioner is the wife of

accused No.2, who died on 24.04.2013. The petitioner has

been arraigned as an accused on the case registered by

the ED. Union Bank of India has entered into a one time

settlement in the NPA Account of accused No.1 and in

pursuance of the said settlement, the Union Bank of India

has also executed cancellation deed of deposit of title

deeds on 27.03.2018 in favour of the petitioner. The loan

has been cleared by the petitioner by paying

Rs.35,70,000/- and the lien over the property has been

cancelled.

5. The learned counsel for the petitioner has further

contended that the Appellate Tribunal, PMLA, New Delhi,

vide its order dated 28.06.2018, while considering an

appeal under Section 46 of the PML Act and the application

seeking confirmation of the provisional attachment order

NO.06/2012, held that the properties are not proceeds of

crime and no proceeds of crime are invovled in the

acquisition of the said properties. The learned counsel

further submitted that CBI, after completion of

investigation, has filed charge sheet against accused No.2

i.e. the husband of petitioner. There is no role played by

the petitioner.

6. The learned counsel for the petitioner has also

contended that the predicate offence registered by the CBI

is now pending in Spl.C.C. No.24/2013 which has been

stayed by the Coordinate Bench of this Court in Criminal

Revision Petition No.100215/2014 and clubbed matters on

13.12.2022 and the case is now reserved for passing the

orders on main petition. Therefore, he has contended

that, until disposal of the predicate offence case, the

proceedings initiated by the E.D. under the PMLA Act is not

sustainable in law. Hence, prayed for allowing the petition.

7. Per contra, learned counsel for respondent-ED

has objected the petition and contended that there is no

acquittal or closing of the predicate offence. Therefore, the

question of staying the further proceedings initiated by the

ED does not arise. Hence, prayed for dismissing the

petition.

8. Having heard the arguments of learned counsel

for the parties, perused the records.

9. Learned counsel for the petitioner has relied upon

the judgment of the Hon'ble Supreme Court and the

judgment of this Court in respect of the Principles laid

down by the Hon'ble Supreme Court that when the

predicate offence is ended in acquittal or discharge, the

proceedings initiated by the ED under the PML Act, is not

sustainable under law. The Hon'ble Supreme Court in the

case of VIJAY MADANLAL CHOUDHARY AND OTHERS

Vs. UNION OF INDIA AND OTHERS reported in 2022

SCC OnLine SC 929, has taken a view that when the

predicate offence is ended in acquittal or discharge, the

proceedings initiated by the ED under the PML Act, is not

sustainable and the same view has been taken by the

Hon'ble Supreme Court in another case in the case of J.

SEKAR ALIAS SEKAR REDDY Vs. DIRECTORATE OF

ENFORCEMENT reported in (2022) 7 SCC 370 and also

the Hon'ble Supreme Court has stayed the proceedings

initiated by the ED in the case of T.D. SONIA Vs. THE

DEPUTY DIRECTORATE OF ENFORCEMENT,

GOVERNMENT OF INDIA, in Special Leave to Appeal

(Criminal) No.10667/2022. Further, this Court in the case

of M/S. DECCAN MINING SYNDICATE PVT. LTD. AND

ANOTHER Vs. ASSISTANT DIRECTOR, DIRECTORATE

OF ENFORCEMENT in Writ Petition No.288/2022 dated

24.04.2022, has quashed the proceedings initiated by the

ED and the same was upheld by the Hon'ble Supreme

Court in Special Leave Petition (Criminal) Diary

No.34057/2022. The Co-ordinate Bench of this Court has

also taken the similar view in the case of MS. C.UMA

REDDY AND OTHERS Vs. DIRECTORATE OF

ENFORCEMENT AND OTHERS in Writ Petition

No.19337/2022 dated 14.12.2022 and stayed the further

proceedings of ED under the PML Act until disposal of the

predicate offence.

10. In view of the principles laid down by the

Hon'ble Supreme Court in the aforesaid cases and relied by

the learned counsel for the petitioner and judgments of

both this Court and the Coordinate Bench when the

predicate offence is stayed, the proceedings of ED based

upon the predicate offence cannot be allowed to proceed

against the accused. Therefore, in my view, until disposal

of the criminal revision petition by the Coordinate Bench in

Criminal.Rev.P.No.100215/2014 and clubbed matters, the

ED cannot be allowed to continue the proceedings in the

present case.

11. Accordingly, the petition is allowed in part. The

proceedings of ED in Spl.C.C. No.118/2016 pending on the

file of III Additional District and Sessions Judge, D.K.,

Mangaluru, is hereby stayed until disposal of the case and

predicate offence, which is challenged in criminal revision

petition in Crl.R.P. No.100215/2014 and other clubbed

matters. In accordance with law.

However, liberty is granted to the ED to proceed in

accordance with law after disposal of the aforesaid criminal

revision petition in respect of predicate offence registered

by the CBI in accordance with law.

Sd/-

JUDGE CS