Madras High Court
T.D.Sonia vs The Deputy Director on 14 October, 2022
W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 14.10.2022
CORAM
THE HONOURABLE Mr. JUSTICE P.N.PRAKASH
AND
THE HONOURABLE Mr. JUSTICE RMT.TEEKAA RAMAN
W.P.No.22975 of 2022and W.M.P.No.21979 of 2022,
Crl.R.C.No.608 of 2022 and C.M.P.Nos.6401 & 6402 of 2022
AND
Crl.R.C.No.609 of 2022 and C.M.P.Nos.6398 & 6399 of 2022
W.P.No.22975 of 2022 :
T.D.Sonia .. Petitioner/A-4
Vs.
The Deputy Director
Directorate of Enforcement
Government of India
Ministry of Finance
Department of Revenue, 2nd and 3rd Floor
Murugesa Naicker Complex
No.84, Greams Road
Thousand Lights, Chennai 600 006 .. Respondent
Writ Petition filed under Article 226 of the Constitution of India
praying to issue a writ of certiorari, to call for the records pertains to the case
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
in Spl.C.C.No.1 of 2020 pending on the file of the learned XIV Additional
Sessions Judge for CBI Cases at Chennai (Special Court constituted u/s
43(1) of the Prevention of Money-Laundering Act, 2002 and quash the
same.
For Petitioner : Mr.ARL.Sundaresan
Senior Counsel
for Mr.A.Saravanan
For Respondent : Mr.P.Sidharthan
Special Public Prosecutor
(Enforcement Directorate)
Crl.R.C.No.608 of 2022 :
T.D.Sonia .. Petitioner/A-4
Vs.
The Deputy Director
Directorate of Enforcement
Government of India
Ministry of Finance
Department of Revenue, 2nd and 3rd Floor
Murugesa Naicker Complex
No.84, Greams Road
Thousand Lights, Chennai 600 006 .. Respondent
Criminal Revision preferred under Section 397 read with 401 Cr.P.C.
praying to set aside the order passed by the learned XIV Additional Sessions
Judge for CBI Cases at Chennai (Special Court constituted u/s 43(1) of the
Prevention of Money-Laundering Act, 2002) in Crl.M.P.No.8009 of 2021
dated 02.05.2022 and consequently allow the discharge petition filed by the
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
petitioner in Crl.M.P.No.8009 of 2021 in Spl.C.C.No.1 of 2020 on the file of
the learned XIV Additional Sessions Judge for CBI Cases at Chennai
(Special Court constituted u/s 43(1) of the Prevention of Money-Laundering
Act, 2002).
For Petitioner : Mr.ARL.Sundaresan
Senior Counsel
for Mr.A.Saravanan
For Respondent : Mr.P.Sidharthan
Special Public Prosecutor
(Enforcement Directorate)
Crl.R.C.No.609 of 2022 :
T.D.Tataji .. Petitioner/A-3
Vs.
The Deputy Director
Directorate of Enforcement
Government of India
Ministry of Finance
Department of Revenue, 2nd and 3rd Floor
Murugesa Naicker Complex
No.84, Greams Road
Thousand Lights, Chennai 600 006 .. Respondent
Criminal Revision preferred under Section 397 read with 401 Cr.P.C.
praying to set aside the order passed by the learned XIV Additional Sessions
Judge for CBI Cases at Chennai (Special Court constituted u/s 43(1) of the
Prevention of Money-Laundering Act, 2002) in Crl.M.P.No.11655 of 2019
dated 29.10.2021 and consequently allow the discharge petition filed by the
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
petitioner in Crl.M.P.No.11655 of 2019 in Spl.C.C.No.1 of 2020 on the file
of the learned XIV Additional Sessions Judge for CBI Cases at Chennai
(Special Court constituted u/s 43(1) of the Prevention of Money-Laundering
Act, 2002).
For Petitioner : Mr.ARL.Sundaresan
Senior Counsel
for Mr.A.Saravanan
For Respondent : Mr.P.Sidharthan
Special Public Prosecutor
(Enforcement Directorate)
COMMON ORDER
[Made by P.N.PRAKASH, J.]
In view of commonality of issue involved, these writ petition and
criminal revisions are considered and decided by this common order.
2. For the sake of convenience, the parties will be referred to by their
respective names.
3. The facts leading to the filing of the instant petitions are as under :
3.1. One T.D.Naidu, father of Tataji and Sonia obtained huge loans
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
from Andhra Bank and Union Bank of India for starting a medical college in
the name of D.D.Medical College in Tiruvallur and also took amounts to an
extent of Rs.16.65 crores from students, for giving admission without even
getting the necessary permission from the Medical Council of India. In
connection with this, several FIRs were filed by the Inspector of Police,
Kanakamma Chatram Police Station, Tiruvallur.
3.2. Since the FIR registered disclosed the commission of offences
punishable under Sections 406, 420, 468, 471 and 506 IPC, the
Enforcement Directorate registered a case in ECIR No.13/2013 on
15.11.2013 and after completing the investigation, the Enforcement
Directorate has filed a complaint in Spl.C.C.No.1 of 2020 in the XIV
Additional Sessions Court (Special Court for PMLA Cases), Chennai against
(i) T.D.Naidu/A-1, (ii) T.D.Prabhavathy/A-2, (iii) T.D.Tataji/A-3,
(iv) T.D.Sonia/A-4, (v) R.Varadarajan/A-5 and (vi)
N.Raveendranadha Reddy/A-6.
3.3. After completing investigation, the Enforcement Directorate has
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
filed a supplementary complaint also against the aforesaid persons on
13.08.2018 with additional allegations.
3.4. The allegations found in the complaint against Tataji/A-3 read as
under :
“10.3. Shri T.D.Tataji (A3 herein) had knowingly assisted Shri
T.D.Naidu (A1 herein), who has defrauded several persons including
several innocent students, Andhra Bank, Union Bank of India, which are
Public Financial Institutions/Nationalised Banks etc., to several crores of
rupees, who is not having any legitimate source of income proportionate to
the assets he owns in his name or in the name of the Trusts, which he was
managing. Shri T.D.Tataji does not have any independent source of
substantial income. Shri T.D.Tataji has knowingly assisted Shri T.D.Naidu
in acquiring the aforesaid properties out of the proceeds of the crimes
involved in various aforementioned offences and has been enjoying the
income derived from the said properties and claiming the same as untainted
properties. Thus, it is very well confirmed that Shri T.D.Tataji (A3 herein)
has indirectly involved in the offence of money laundering and knowingly is
a party in possession, acquisition and use of the proceeds of crime and
projecting the same as untainted property. Therefore, Shri T.D.Tataji (A3
herein) has been guilty of offence of money laundering under section
2(1)(p) r/w Section 3 of the PMLA, 2002.”
3.5. Similarly, the allegations against Sonia/A-4 in the complaint read
as under :
“10.4. Ms.T.D.Sonia (A4 herein), had knowingly assisted Shri
T.D.Naidu (A1 herein), who has defrauded several persons including
several innocent students, Andhra Bank, Union Bank of India, which are
Public Financial Institutions/Nationalised Banks, etc., to several crores of
rupees, who is not having any legitimate source of income proportionate to
the assets he owns in his name or in the name of the Trusts, which he was
managing. Ms.T.D.Sonia (A4 herein) does not have any independent
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
source of substantial income. Ms.T.D.Sonia (A4 herein) has knowingly
assisted Shri T.D.Naidu in acquiring the aforesaid properties out of the
proceeds of the crimes involved in various aforementioned offences and has
been enjoying the income derived from the said properties and claiming the
same as untainted properties. Thus, it is very well confirmed that
Ms.T.D.Sonia (A4 herein) has indirectly involved in the offence of money
laundering and knowingly is a party in possession, acquisition and use of the
proceeds of crime and projecting the same as untainted property. Therefore
Ms.T.D.Sonia (A4 herein) has been guilty of offence of money laundering
under section 2(1)(p) r/w section 3 of the PMLA, 2002.”
3.6. In the supplementary complaint, the details of the properties
standing in the name of Tataji and Sonia have been set out and they include
not only immovable properties, but also high-end vehicles, including a
Mercedes Benz.
3.7. Tataji filed a petition in Crl.O.P.No.2763 of 2017 to quash the
prosecution against him in Special C.C.1 of 2020 before the XIV Additional
Special Court for PMLA Cases, the earlier avatar of which is C.C.No.31 of
2015 on the file of the Principal Sessions Court (Special Court for PMLA
Cases), which was dismissed by this Court on 02.03.2021 with the
following observations :
“6.In the opinion of this Court, the date of birth given by the
petitioner is a question of fact, which cannot be decided in a petition under
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
Section 482 Cr.P.C. and the same has to be decided only by the trial Court
during trial. If it is found that with the proceeds of crime, the properties
were purchased in the name of the petitioner whilst he was a minor, then it
would be a good case for the petitioner before the trial Court.”
3.8. Thereafter, Tataji filed a petition in Crl.M.P.No.11655 of 2019 in
Spl.C.C.No.1 of 2020 under Section 239 Cr.P.C. seeking discharge, which
has been dismissed by the trial Court on 29.10.2021, aggrieved by which,
Tataji has preferred Crl.R.C.No.609 of 2022.
3.9. The discharge petition filed by Sonia before the trial Court in
Crl.M.P.No.8009 of 2021 in Spl.C.C.No.1 of 2020 under Section
227 Cr.P.C., also came to be dismissed on 02.05.2022, challenging which,
she has preferred Crl.R.C.No.608 of 2022.
3.10. Coming to W.P.No.22975 of 2022, it has been filed by Sonia for
quashing the prosecution in Spl.C.C.No.1 of 2020.
4. Heard Mr.ARL.Sundaresan, learned Senior Counsel representing
Mr.A.Saravanan, learned counsel on record for Tataji and Sonia and
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
Mr.P.Sidharthan, learned Special Public Prosecutor for the Enforcement
Directorate.
5. Mr.ARL.Sundaresan contended that Tataji and Sonia have not
been shown as accused in the predicate offence and therefore, their
prosecution under the PML Act, cannot be sustained. In support of this
contention, he placed strong reliance on the judgment of the Supreme Court
in Vijay Madanlal Choudhary and Others Vs. Union of India and Others
(2022 SCC OnLine SC 929), wherein, it is held as follows :
“467. In light of the above analysis, we now proceed to
summarise our conclusion on seminal points in issue in the following
terms:
(i) ... ...
(v) ... ...
(d) The offence under Section 3 of the 2002 Act is dependent on
illegal gain of property as a result of criminal activity relating to a
scheduled offence. It is concerning the process or activity connected with
such property, which constitutes the offence of money-laundering. The
Authorities under the 2002 Act cannot prosecute any person on notional
basis or on the assumption that a scheduled offence has been
committed, unless it is so registered with the jurisdictional police and/or
pending enquiry/trial including by way of criminal complaint before the
competent forum. If the person is finally discharged/acquitted of the
scheduled offence or the criminal case against him is quashed by the
Court of competent jurisdiction, there can be no offence of money-
laundering against him or any one claiming such property being the
property linked to stated scheduled offence through him.”
Based on the above, he contended that Tataji and Sonia are on a better
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
footing, in that, they have not been arrayed as accused in the predicate
offence itself and hence, their prosecution under the PML Act cannot be
sustained.
6. We carefully considered the aforesaid submissions of the learned
Senior Counsel and we are unable to countenance the same. This issue was
considered by this very Bench answering against the accused in
Crl.O.P.No.19880 of 2022 decided on 14.09.2022.
7. Mr.ARL.Sundaresan's further contention is that the immovable
properties were purchased much before the loans that were allegedly
obtained from the banks by T.D.Naidu and those properties were only
settled on Tataji and Sonia and hence, their prosecution for the alleged
possession of the alleged proceeds of crime, cannot be sustained.
8. This, in our view, is a disputed question of fact which could be
decided only during trial and not in revision proceedings or in a petition
under Article 226 of the Constitution of India. That apart, a reading of the
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
supplementary complaint shows that high-end cars were purchased in the
name of Tataji and Sonia and they were using them. To answer this point,
we may profitably allude to the statement of law in paragraph 295 of Vijay
Madanlal Choudhary (stated supra), which reads as under :
“295. As aforesaid, in this backdrop the amendment Act 2 of
2013 came into being. Considering the purport of the amended
provisions and the experience of implementing/enforcement agencies,
further changes became necessary to strengthen the mechanism
regarding prevention of money-laundering. It is not right in assuming
that the attachment of property (provisional) under the second proviso,
as amended, has no link with the scheduled offence. Inasmuch as
Section 5(1) envisages that such an action can be initiated only on the
basis of material in possession of the authorised officer indicative of any
person being in possession of proceeds of crime. The precondition for
being proceeds of crime is that the property has been derived or
obtained, directly or indirectly, by any person as a result of criminal
activity relating to a scheduled offence. The sweep of Section 5(1) is not
limited to the accused named in the criminal activity relating to a
scheduled offence. It would apply to any person (not necessarily being
accused in the scheduled offence), if he is involved in any process or
activity connected with the proceeds of crime. Such a person besides
facing the consequence of provisional attachment order, may end up in
being named as accused in the complaint to be filed by the authorised
officer concerning offence under Section 3 of the 2002 Act.”
(emphasis supplied)
Thus, a reading of the above paragraph shows that even if the accused was
not involved in the criminal activity that generated the proceeds of crime,
but, if he is involved in some way or the other with the proceeds of crime so
generated, he would be liable to be prosecuted under Section 3 read with 4
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
of the PML Act. Whether the cars were purchased from and out of the
proceeds of crime, is also a question of fact which has to be decided only
during trial.
9. In such view of the matter, we do not find any infirmity in the
orders dated 29.10.2021 and 02.05.2022 passed by the trial Court in the
discharge petitions in Cr.M.P.Nos.11655 of 2019 and 8009 of 2021,
respectively, warranting interference by this Court. Similarly, there are
prima facie materials against Sonia and therefore, the prosecution against
her cannot be quashed.
10. In view of the above, the instant petitions viz., W.P.No.22975 of
2022 filed by Sonia seeking quashment of the prosecution in Spl.C.C.No.
1 of 2020 on the file of the Special Court for PMLA Cases, Chennai and
Crl.R.C.Nos.608 and 609 of 2022 preferred by Sonia and Tataji,
respectively, challenging the dismissal orders in their discharge petitions,
stand dismissed. No costs.
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
11. Mr.ARL.Sundaresan submitted that the presence of Tataji and
Sonia before the trial Court may be dispensed with during trial.
12. Accepting the aforesaid submission, the presence of Tataji and
Sonia may be dispensed with on the following conditions :
i. They shall appear before the trial Court on or before
01.12.2022 and execute a bond for Rs.50,000/- each
under Section 88 Cr.P.C. without sureties;
ii. They shall disclose the name of their Advocate, whom
they have engaged in this case and shall also state that
notice to the said Advocate, is tantamount to notice to
them;
iii. They shall be present before the trial Court on the date of
framing of charges;
iv. After framing of charges and questioning, they shall file
individual affidavits stating that the Advocate engaged by
them, will conduct their case in their absence and cross-
examine the witnesses on the day they are examined-in-
chief and will not adopt any dilatory tactics, as held by
the Supreme Court in Vinod Kumar vs. State of Punjab
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
(2015)3 SCC 220;
v. They shall appear before the trial Court for questioning
under Section 313 Cr.P.C. and on the date of judgment;
vi. On such affidavit being filed by them, the trial Court may
consider their applications under Section 317 Cr.P.C.
liberally and dispense with their presence for trial;
vii.If they adopt any dilatory tactics, the trial Court is
empowered to insist upon their presence and even
remand them in judicial custody, as held by the Supreme
Court in State of Uttar Pradesh v. Shambhu Nath Singh
JT 2001(4) SC 319;
viii.If any of them absconds, a fresh FIR can be registered
under Section 229A IPC; and
ix. A copy of the affidavit to be filed by them before the trial
Court, shall be served on the learned Special Public
Prosecutor of the trial Court.
(P.N.P.,J.) (T K R, J.)
14.10.2022
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
gya
To
1.The Deputy Director
O/o.The Joint Director
Directorate of Enforcement
Chennai Zonal Office-I
2nd and 3rd Floor, Murugesa Naicker Complex
No.84, Greams Road, Chennai 600 006
2.The Public Prosecutor
High Court
Madras
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
P.N.PRAKASH, J.
AND
RMT.TEEKAA RAMAN, J.
gya
W.P.No.22975 of 2022
AND
Crl.R.C.Nos.608 & 609 of 2022
14.10.2022
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W.P.No.22975 of 2022 and Crl.R.C.Nos.608 & 609 of 2022
https://www.mhc.tn.gov.in/judis
