Madras High Court
D.Rajasekar vs Directorate Of Enforcement on 14 August, 2024
Author: S.M.Subramaniam
Bench: S.M.Subramaniam, V.Sivagnanam
Crl.Rc.No.1482 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 14.08.2024
CORAM :
THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM
AND
THE HONOURABLE MR. JUSTICE V.SIVAGNANAM
Crl.Rc.No.1482 of 2022
against
Crl.M.P.No.4022 of 2021
in
C.C.No.58 of 2018
1. D.Rajasekar ... Petitioners/Accused
2. J.Yogalakshmi
Vs.
Directorate of Enforcement,
Represented by its Assistant Director,
Directorate of Enforcement,
Chennai Zone - II,
Ministry of Finance, Department of Revenue,
3rd Floor, C Block, Murugesa Naicker Office Complex,
84, Greams Road, Thousand Lights,
Chennai - 6. ... Respondent/Complainant
PRAYER: Criminal Revision Petition filed under Section 397 r/w 401 of
Code of Criminal Procedure, to call for the records of order in
Crl.MP.No.4022/2021 in C.C.No.58/2018, dated 10.06.2022 on the file
of the learned Principal Sessions Judge at Chennai, set-aside the same as
illegal, incompetent and without jurisdiction.
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Page 1 of 11
Crl.Rc.No.1482 of 2022
For Petitioners : M/s.M.Muruganantham
For Respondent : Mr.Rajnish Pathiyil
Special Public Prosecutor (ED)
JUDGMENT
(Order of the Court was made by S.M.SUBRAMANIAM, J.)
Under assail is the Order dated 10.06.2022 in
Crl.MP.No.4022/2021 in C.C.No.58/2018.
2. Petition under Section 227 of Cr.P.C., has been instituted
before the Sessions Court at Chennai in C.C.No.58/2018 seeking relief to
discharge the petitioners/Accused from the offence of Money Laundering
as defined under Section 3 and punishable under Section 4 of Prevention
of Money Laundering Act (hereinafter referred to as 'PMLA').
3. The Sessions Court rejected the petition, which resulted in
institution of the present criminal revision petition.
4. Mr.M.Muruganantham, the learned Counsel appearing on
behalf of the petitioners would submit that the predicate offence
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allegedly committed by the petitioners was under Section 13 (2) r/w 13
(1) (e) of the Prevention of Corruption Act, 1988. They were prosecuted
for the offence for possessing disproportionate wealth. The
disproportionate wealth in the predicate offence was acquired between
the period from 22.10.2007 and 17.06.2010. Admittedly, the petitioners
were convicted in the criminal case on 30.06.2016 in C.C.No.22 of 2012
under the Prevention of Corruption Act. The suspension of sentence has
been granted.
5. When the facts stand as it is, the respondent herein initiated
action under PMLA through ECIR No.18/2016 dated 05.12.2018.
6. The learned Counsel for the petitioners would urge that the
disproportionate wealth accumulated as per the predicate offence was
Rs.8,70,429/- as per the trial Court and Rs.7,00,429/- as per this Court
and during the relevant point of time, the ceiling of Rs.30,00,000/- was
contemplated for invoking PMLA. Since the amount of disproportionate
wealth possessed by the petitioners is lesser than that of the ceiling fixed
under the Act, the very initiation is per se is invalid. Secondly, it is
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contended that the amendment and insertion of Act 2 of 2013 with effect
from 15.02.2013 cannot have retrospective effect, so as to include the
disproportionate assets accumulated in between the years 2007 and 2010.
On that score also the initiation of action under PMLA becomes invalid.
Thirdly, it is contended that the petitioners were convicted under
Prevention of Corruption Act for possessing disproportionate wealth and
for the same offence, the PMLA has been invoked. Therefore, it is hit by
the principles of double jeopardy and thus unconstitutional.
7. The learned Counsel for the petitioners relied on para.270 of
Vijay Madanlal case reported in 2022 SCC Online SC 929. The three
Judges bench of the Apex Court in unequivocal terms reiterated that such
actions in the absence of establishing proceeds of crime are untenable.
Therefore, the Trial Court has not considered these aspects while dealing
with the discharge petition. Thus, the revision petition is to be allowed.
8. Mr.P.Rajnish Pathiyil, the learned Special Public Prosecutor
would strenuously oppose by stating that the trial court has elaborately
considered all these grounds. Prevention of Corruption Act and
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invocation of PMLA by the respondent cannot be compared with. The
predicate offences though under the Prevention of Corruption Act and
the petitioners were convicted, the petitioners continued to possess the
proceeds of crime, which resulted in initiation of action under PMLA. So
long as a person possess the proceeds of crime and PMLA being a
Central Act, there is no impediment for the Enforcement Directorate to
register case and prosecute the persons, who continued to possess the
proceeds of crime as defined under Section 2 (1) (u) of PMLA.
9. Regarding the ceiling of Rs.30,00,000/- , the learned Special
Public Prosecutor would reply by stating that the amendment came into
force with effect from 15.02.2013. The offence has been shifted from
Part-B to Part-A. Once the offences have been brought under Part-A,
then the ceiling is erased. Therefore, the very contention of the
petitioners in this regard is untenable. The offence was transferred from
Part-B to Part-A in the year 2013 and thereafter the petitioners continued
to possess the proceeds of crime and the Enforcement Directorate
initiated action on 05.12.2018 and as on the date of the registration of the
case under PMLA proceeds of crime existed. Thus, there is no infirmity
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and the ground raised in this regard is untenable.
10. Question of double jeorpardy would not arise in this case.
Section 71 of PMLA stipulates that “the provisions of this Act shall have
effect notwithstanding anything inconsistent therewith contained in any
other law for the time being in force.” The Central Act will have
overriding effect and prevail over the State enactments. Though, the
petitioners were convicted under the Prevention of Corruption Act, the
proceeds of crime within the meaning of Section 2(1) (u) continued to be
under the possession of the petitioners as on the date of registration of
ECIR on 05.12.2018. Therefore, on the date of registration of case under
PMLA, the proceeds of crime existed. Thus, there is no violation of the
provisions of PMLA.
11. With reference to the arguments, Section 2(1) (u) defines
“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
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in value held within the country or abroad.” Thus, it is relevant to
consider the scope of Section 3 which provides offence of money
laundering. Section 3 stipulates 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 concealment, possession, acquisition or using and
projecting it as untained property shall be guilty of offence of money
laundering.” Therefore, mere possession of proceeds of crime would be
sufficient to invoke the provisions of PMLA. Using the proceeds of
crime by itself is an offence. Since the scope of Section 3 is wider
enough to cover various circumstances in order to curb the economic
offences, High Court cannot restrict its meaning so as to restrain the
Authorities from invoking the provisions of PMLA.
12. The very statement of objects and reasons for enactment is
that it was realised world over that money laundering possess a serious
threat not only to the financial systems of country but also to their
integrity and sovereignty. Therefore, the scope if narrowed down would
cause prejudice to the interest of nation's wealth. Therefore, Section 3
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cannot be interpreted in a narrow manner, so as to exclude the offence
relating to possession of disproportionate wealth pertaining to the
previous years.
13. In the present case, though the disproportionate assets were
accumulated in between the years 2007 and 2010 and the petitioners
were convicted on 30.06.2016, the disproportionate wealth accumulated
continued to be with the possession of the petitioners and that provided
cause for the Enforcement Directorate to institute action under PMLA.
14. The scope of PMLA is independent and cannot be compared
with the dealing of offences under other enactments including Prevention
of Corruption Act. The very purpose and object of PMLA is to deal with
economic offences. Therefore, the provisions are stand alone and the
Enforcement Directorate is conferred with the powers to prosecute the
persons under Section 3 of the PMLA.
15. In view of the said fact, the principles of double jeopardy
has no application. The other grounds raised by the petitioners are
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connected with the merits of the case. Section 24 of the Act provides
burden of proof and it lies on the affected persons. Therefore, the
petitioners have to establish their innocence during the course of trial
through documents and evidences available on record. Grounds touching
upon the merits cannot be adjudicated in a discharge petition. The
probate value of the evidences cannot be considered while dealing with
the discharge petition by the Courts. Any such adjudication would cause
prejudice to the interest of either of the parties and result in miscarriage
of justice. All such grounds are to be considered during the course of trial
elaborately. Thus, we are not inclined to consider those grounds raised,
which all are connected with the merits of the case.
16. Prima facie, we do not find any reason to interfere with the
order impugned, since the respondent could able to establish that there is
a prima facie case to invoke the provisions of PMLA and rightly they
have done it. It is for the parties to establish their respective case before
the trial court in the manner known to law.
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17. With these observations, the order impugned dated
10.06.2022 in Crl.MP.No.4022/2021 in C.C.No.58/2018 stands
confirmed. Consequently, this Criminal Revision Petition stands
dismissed. It is made clear that the trial court may proceed with the trial
uninfluenced by the observations, if any made relating to the merits of
the case.
[S.M.S., J.] [V.S.G., J.]
14.08.2024
Index : Yes/No
Speaking Order : Yes/No
Neutral Citation : Yes/No
veda
To
The Superintendent of Police,
National Investigation Agency,
No.10, Millers Road, Purasaiwakkam,
Chennai – 600 010.
https://www.mhc.tn.gov.in/judis
S.M.SUBRAMANIAM, J.
AND
V.SIVAGNANAM, J.
veda
14.08.2024
https://www.mhc.tn.gov.in/judis
