IMPORTANT POINT
The sufficiency of evidence and compliance with essential elements to constitute an offence under the PMLA Act are crucial in determining the legality of criminal proceedings.

ORDER :

The cognizance taken of the offences punishable under Sections 3, 70 and 4 of Prevention of Money Laundering Act, 2002, and the issuance of summons is impugned in this petition by the petitioner – accused No.7.

2. The summary of the complaint filed by the respondent before the learned Sessions Judge is as follows:

3. The FIRs were registered by the jurisdictional police for the offences punishable under Sections 419, 385, 384, 509, 420 of IPC and Sections 66, 66(c), 66(d) and 67 of the Information Technology Act, stating that, the accused therein were involved in money lending through mobile phone applications on exorbitant rate of interest, and when the borrowers failed to the repay the loan amount in time, and in some cases, even after the repayment of the loan, the accused therein have been harassing the borrowers to extort money from them, and had also stolen the data from the mobile phones of the victims, and misused the same. The accused therein had also created Whatsapp groups to harass the victims, and abused them etc.

4. As the offences under Sections 384, 385, 419, 420 IPC are scheduled offences under the PMLA Act, the case was referred to the respondent herein. The respondent conducted an investigation, and submitted the complaint arraigning the petitioner as accused No.7.

5. In the complaint, it is stated that the accused No.7 is a payment gateway, and they were negligent in allowing the transactions in the name of the accused No.5 without due diligence, and the said allegation is substantiated by the statement of the employee of the accused No.7.

6. The learned Sessions Judge, after perusing the materials on record, took cognizance of the aforesaid offences and issued summons.

7. Sri C.V. Nagesh and Sri Sandesh J Chouta, the learned Senior Counsel representing the petitioner’s counsel, Sri Abhishek Kumar, presented the following arguments :

(a) The allegation against the accused No.7 is that without verification of the credibility of an entity viz., M/s.Jamnadas Morarji Finance Pvt. Ltd., (accused No.5), allowed the transactions in the name of the accused No.5 without due diligence. Therefore, in the absence of any allegation or material that the petitioner was actually involved in the concealment of the proceeds of the crime or knowingly assisted in such concealment of the proceeds of the crime, which must have arisen from the predicate offence, and in the absence of any predicate offence against the petitioner, the cognizance taken of the offences alleged against the petitioner is without any substance.

(b) The onus of proof of innocence gets shifted on the petitioner only in the event of the prosecution discharging its primary burden of establishing that the petitioner has committed an offence under the 2002 Act. The respondent having not established the guilt of the petitioner, the presumption of the guilt of the petitioner cannot be inferred under Sections 22 and 24 of the Act, 2002. In support, reliance is placed on the decision of the Hon’ble Supreme Court in the case of Balvir Singh vs. State of Uttarkhand – 2023 SCC OnLine SC 1261.

(c) The petitioner-accused No.7 is the Company incorporated under the Companies Act, and having its registered office at New Delhi, and not residing within the territorial jurisdiction of the Trial Court. Therefore, the enquiry under Section 202 of Cr.PC is sine qua non for issuance of summons under Section 204 of Cr.PC. The Trial Court without conducting an enquiry has issued summons, and the same stands vitiated for non-compliance of mandatory provision contained in Section 202 of Cr.PC. In support, reliance is placed on the decision of the Hon’ble Surpeme Court in the case of M/s.Cheminova India Pvt. Ltd. And another vs. State of Punjab (Crl.A No.749/2021).

8. Per contra, Sri Aravind Kamath, the learned Additional Solicitor General representing Sri Madhukar Deshpande, learned counsel for the respondent presented the following arguments :

(a) Section 202 of Cr.PC would not stand