Madras High Court
Shri Anuraag Jain vs Directorate Of Enforcement on 19 September, 2022
Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 19.09.2022
Coram
THE HONOURABLE MR. JUSTICE P.N.PRAKASH
and
THE HONOURABLE MR. JUSTICE RMT. TEEKAA RAMAN
Crl.O.P.No.15357 of 2022
and
Crl.M.P.Nos.8626 & 8628 of 2022
1.Shri Anuraag Jain
S/o.Mathanlal Jain
2.Smt.K.Manjula
W/o.K.Kamalchand Jain ... Petitioners
Vs.
Directorate of Enforcement,
The Assistant Director,
Chennai Zonal Office-II,
II and III Floor,
Murugesa Naicker Complex,
84, Greams Road,
Chennai – 600 006. ... Respondent
1/10
https://www.mhc.tn.gov.in/judis
Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
Criminal Original Petition filed u/s.482 of the Code of Criminal
Procedure praying to call for the records in C.C.No.14 of 2018 on the file of
Principal Sessions Court [Special Judge for PMLA cases], Chennai and
quash the same.
For Petitioners : Mr.S.D.Venkateswaran, Senior Counsel
for Mr.P.Sathyanathan
For Respondent : Mr.P.Sidharthan
Special Public Prosecutor [ED]
*****
ORDER
[Made by P.N.PRAKASH, J.]
Seeking to quash the proceedings in C.C.No.14 of 2018 on the file of
the Special Court constituted u/s.43(1) of the Prevention of Money
Laundering Act, 2002 [Principal Sessions Judge], Chennai, the present
petition has been filed.
2. The minimum facts that are required for deciding this quash
petition are as under:
2.1. On a complaint given by the Deputy Manager, Union Bank of
India, Nodal Regional Office, No.139, Broadway, Chennai, the Central
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Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
Bureau of Investigation [CBI] registered a case in RC No.8/E/2008-
CBI/BS&FC dated 25.09.2008 for the offences u/s.120-B r/w 420, 467, 468
and 471 IPC and Section 13(2) r/w 13(1)(d) of the Prevention of Corruption
Act, 1988, against one R.Kannan, the then Chief Manager of Union Bank of
India, Mount Road, Branch, Chennai and others including Anuraag Jain and
Manjula.
2.2. The sum and substance of the allegation in the FIR is that,
R.Kannan, the then Chief Manager of Union Bank of India, Mount Road,
Branch, Chennai, has granted huge loans to M/s.National Medicines Private
Limited [hereinafter referred to as "NMPL"], a company run by the family
of Anuraag Jain, which later became an NPA.
2.3. On enquiry, it was found that NMPL had submitted documents of
properties with existing encumbrance as collateral security for the loan
amounting to Rs.4.25 crores. It may be pertinent to state here that at the time
when the case was registered i.e. on 25.09.2008, Section 420 IPC was not a
scheduled offence in the Prevention of Money Laundering Act, 2002
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Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
[hereinafter referred to as the ‘PMLA’] and it was included only with effect
from 01.06.2009. After its inclusion, the Enforcement Directorate registered
a case in ECIR/61/CEZO/Z-II/2010 (VSK) on 23.11.2010 and took up
investigation under the PMLA.
2.4. The Central Bureau of Investigation completed their
investigation and filed a final report on 09.12.2009 in C.C.No.45 of 2009 in
the Special Court for CBI cases, Chennai, against Kannan and five others
including Anuraag Jain and Manjula. The Enforcement Directorate
completed their investigation and filed a complaint in C.C.No.14 of 2018 in
the Principal Sessions Court, Chennai (Special Court for PMLA cases)
against five accused including Anuraag Jain [A2] and Manjula [A4] for
quashing which, this petition has been filed.
3. Learned counsel on either side admitted that charges have been
framed by the trial Court and the case is now ripe for trial.
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Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
4. Learned counsel for the petitioners placed two submissions before
us, viz.,
(i) The Assistant Director is not competent to lay the impugned complaint
as he has not been given special authorisation for the same.
(ii)Section 420 IPC was not a scheduled offence under the PMLA when the
case was registered by the CBI on 25.09.2008.
5. Mr.P.Sidharthan, learned Special Public Prosecutor [ED], refuted
the aforesaid contentions.
6. Coming to the first submission, the answer lies in Sections 48 and
49 of the PMLA r/w Notification vide G.S.R.441(E), dated 01.07.2005 as
amended by G.S.R.579(E), dated 29.08.2013, S.O.1275(E) dated 13th
September 2005, issued by the Central Government and Order in
F.No.6/14/2008-ES dated 11.11.2014 of the Government of India, Ministry
of Finance, Department of Revenue, New Delhi. Section 48 (c) ibid., clearly
classifies the Assistant Director as an "authority for the purposes of this
Act". Thus, when the statute itself classifies the Assistant Director as an
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Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
authority, we are afraid no further authorisation is required for him to file a
complaint for the Special Court to take cognizance of the offence u/s.44(b)
of the PMLA.
7. Insofar as the second submission is concerned, it is true that
Section 420 IPC was not a scheduled offence under the PMLA on
25.09.2008 when the case was registered by the CBI and that it was
included in the statute only with effect from 01.06.2009. In this case, the
Enforcement Directorate has registered the case only after 01.06.2009, viz.,
on 23.11.2010.
8. It may be apposite to extract paragraph No.270 from the judgment
of the Supreme Court in Vijay Madanlal Choudhary and others v. Union
of India and others1.
"270. 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
1 2022 SCC OnLine SC 929
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Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
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 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)
9. A reading of the above clearly shows that irrespective of the fact as
to when the scheduled offence was committed, if the proceeds of crime that
is generated from the commission of a scheduled offence is laundered after
the coming into force of the PMLA, 2002, then one can be prosecuted u/s.3
r/w 4 of the PMLA.
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Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
10. Learned Special Public Prosecutor submitted that the petitioners
have raised other grounds in the quash petition for which, the learned
counsel for the petitioners submitted that he is not pressing them. However,
learned counsel for the petitioners requests this Court to dispense with the
presence of Manjula before the trial Court for all the hearings as she is a
house wife.
11. We are inclined to accept the request of learned counsel for the
petitioners. Manjula shall be present before the trial Court for answering the
charges, for questioning u/s.313 Cr.P.C. and on the date of judgment. If any
identification by a witness is necessary, the Public Prosecutor in the trial
Court shall intimate the same to the trial Court and the trial Court could
insist upon her presence for any particular hearing. For the rest of the
hearing, the trial Court may entertain application u/s.317 Cr.P.C. liberally
and dispense with her presence.
12. Manjula cannot claim prejudice for non-identification by any
witness during trial. If Anuraag Jain and Manjula were not arrested and
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Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
released on bail or if they are not on anticipatory bail, the trial Judge shall
obtain a bond u/s.88 Cr.P.C. for Rs.25,000/- [Rupees twenty five thousand
only] with two sureties each from them, if not already obtained.
In the result, this Criminal Original Petition is dismissed with the
above directions. Consequently, connected miscellaneous petitions are
closed.
[PNP, J.] [TKR, J.]
19.09.2022
Index: Yes/No
gm
To
1.The Principal Sessions Court
[Special Judge for PMLA cases],
Chennai.
2.The Directorate of Enforcement,
The Assistant Director,
Chennai Zonal Office-II,
II and III Floor,
Murugesa Naicker Complex,
84, Greams Road,
Chennai – 600 006.
3.The Public Prosecutor,
High Court, Madras.
https://www.mhc.tn.gov.in/judis
Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
P.N.PRAKASH, J.
and
RMT. TEEKAA RAMAN, J.
gm
Crl.O.P.No.15357 of 2022
19.09.2022
https://www.mhc.tn.gov.in/judis
