Telangana High Court

T. Hanumantha Rao, vs The Asst. Director Pmla, on 28 March, 2023

Bench: K.Surender

         THE HONOURABLE SRI JUSTICE K.SURENDER

                CRIMINAL PETITION No.712 OF 2023

ORDER:

1. Petitioner is questioning the continuance of the proceedings

vide ECIR/HYZO/34/2021, Directorate of Enforcement, Hyderabad

Zonal Office.

2. This Court in Criminal Petition Nos.439 and 545 of 2023 has

quashed the proceedings against the accused in CC No.6229 of

2022 on the file of XVII Additional Chief Metropolitan Magistrate,

Hyderabad. The CC was the outcome of cognizance taken by the

learned Magistrate on the basis of protest petition. The said protest

petition was filed since the police having investigated the case after

receiving complaint and filed final report stating that the case was

civil in nature. The ED started investigation by proceeding vide

ECIR/HYZO/34/2021 on the basis of crime registered by Jubilee

Hills police which was concluded by the police as civil in nature.

3. Briefly, the facts of the case are that the Jubilee Hills Welfare

Society Limited represented by its Secretary B.Ravinderanath filed

complaint on 25.02.2021 addressed to the Station House Officer,

Jubilee Hills Police Station. It was stated in the complaint that the

members of the Jubilee Hills Cooperative House Building Society

Limited intend to bring to the notice of the police regarding

unlawful actions of the committee members and Jubilee Hills

Cooperative House Building Society in respect of sale deed No.2675

of 2020 and Gift deed No.2688 of 2020.

4. It is alleged in the complaint that on 25.03.1988, Plot No.853-

F was allotted to Ms.Ch.Sirisha and the plot was lying vacant since

then. If the plot is not registered within three years of allotment, as

per the bye-laws of the Society, the allotment would lapse

automatically. The said Ch.Sirisha migrated to USA and the plot

cannot be registered in her name. The Society with the assistance

of A1 to A6 entered into the property in the year 2017 and started

construction activity and also causing nuisance to the neighbor in

plot No.853-C. During the Covid pandemic period in 2019, A1 to A6

with the support of A9-Sub-Registrar registered the plot vide

document No.2675 of 2020 in the name of Ch.Sirisha @ Rs.126/-

per sq.yard for a total consideration of Rs.1,91,000/- even though

the market value is around Rs.45.00 Crores. In the process, the

Registration Department has been cheated. In the event of the

property being sold in the open market, it would have garnered

money in the form of taxes to the State Government. However, the

accused had transferred the property in the name of A7, thereby

committed offences of cheating, breach of trust, impersonation and

also evading income tax.

5. The said transaction is benami transaction and it was found

that A7 namely Ch.Sirisha was not the Sirisha in whose name the

plot was allotted. The said complaint was signed on behalf of

Jubilee Hills Society and signed by B.Ravindranath, Secretary and

registered on 24.04.2021 and after investigation, the Police filed

Final Report under Section 173 of Cr.P.C stating that the

dispute/transaction is civil in nature.

6. Aggrieved by the police investigation referring the case as civil

in nature, protest petition was filed before the XVII Additional Chief

Metropolitan Magistrate vide Crl.M.P.No.553 of 2021. The learned

Magistrate examined two witnesses namely B.Ravindranath (S.W.1,

Secretary of Jubilee Hills Welfare Society) and K.Nagendra Prasad

(S.W.2, who is member in Jubilee Hills Cooperative House Building

Society). Briefly, both the witnesses stated that the accused in

collusion, registered the plot in the name of A7 Ch.Sirisha, who

was not the Sirisha, in whose name the plot was earlier allotted.

Learned Magistrate having recorded the statements of the two

witnesses ordered as follows:

"Dated: 05.08.2022

Complainant is absent. Heard and perused the entire record including Sworn Statements of witnesses. Prima facie accusation is well found against A1 to A9 for the offences under Sections 120-B, 406, 408, 409, 419, 420, 467, 468, 471, 477A IPC. Hence this court has taken cognizance of the offence punishable under sections 120- B, 406, 408, 409, 419, 420, 467, 468, 471, 477A IPC against A1 to A9. Register as C.C.No.6229/2022. Issue summons to A1 to A9 through court and R.P on payment of process. Call on 17.10.2022."

7. This Court in the Common Order dated 28.02.2023 in

Criminal Petition Nos.439 and 545 of 2023, quashed the

proceedings on 28.02.2023 finding that taking cognizance against

the accused was not in accordance with the law laid down by the

Hon'ble Supreme Court in the cases of; i) Sunil Bharti Mittal v.

Central Bureau of Investigation1; ii) Fakhruddin Ahmad v. State

of Uttaranchal and another2; iii) Deepak Gaba and others v.

State of Uttar Pradesh3.

8. Learned counsel appearing for the petitioner would submit

that since the proceedings are already quashed, the question of

continuing investigation by the Enforcement Directorate does not

arise in view of the judgment of Hon'ble Supreme Court in the case

(2015) 4 Supreme Court Cases 609)

(2008) 17 Supreme Court Cases 157

(2023 LiveLaw(SC) 3

of Vijay Madanlal Choudhary v. Union of India4, and followed

subsequently in the case of Parvathi Kollur v. State by Directorate

of Enforcement in Criminal Appeal No.1254 of 2022 arising out of

SLP (Crl.)4258 of 2021, dated 16.08.2022.

The three Judge Bench of Hon'ble Supreme Court in Vijay

Madanlal's case held as follows:

"467.Conclusion:

(i)..(ii)..(iii)..(iv)...(v)(a)..(b)..(c)..

(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."

9. On the other hand, Sri A.R.L.Sundaresan, learned Additional

Solicitor General of India appearing for learned Deputy Solicitor

General of India for the respondent-Enforcement directorate, would

submit that the operative portion of this Court's order indicates

that the proceedings against A1 to A3 and A9 have only been

quashed and that in the said circumstances, when the proceedings

2022 SCC OnLine SC 929

are pending against the other accused for the predicate offence, the

proceedings against this petitioner cannot be quashed.

10. This Court in Criminal Petition Nos.439 and 545 of 2023,

held at para 16 as follows:

"16. The Hon'ble Supreme Court further held that mere assertion "that having perused the record and statements of witnesses prima facie accusation is well founded" as recorded by the learned Magistrate will not meet the requirements of summoning the accused by application of judicious mind.

Time and again, this Court and the Hon'ble Supreme Court has found that summoning a person as accused to face criminal trial is a serious step taken by the criminal Court and such summoning can only be done when the Magistrate finds on the basis of facts that the ingredients of the offence alleged are prima facie made out. For the said reason, cognizance order bereft of proper reasoning is liable to be set aside and accordingly set aside."

9. The order taking cognizance by the Magistrate was set aside

and it cannot be said that proceedings are pending against other

accused. However since the petitions were preferred by accused 1

to 3 and 9, the concluding portion was accordingly spelt out.

10. In view of the quashing of proceedings against accused in the

predicate offence, following the judgment of Hon'ble Supreme Court

in Vijay Madanlal Choudhary's case (supra), the proceedings in

ECIR/HYZO/34/2021, Directorate of Enforcement, Hyderabad

Zonal Office are hereby quashed.

11. Accordingly, the Criminal Petition is allowed. Consequently,

miscellaneous applications, if any, shall stand closed.

12. Sri T.Prayumnakumar Reddy, learned Senior Counsel informs