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IN THE HIGH COURT OF BOMBAY
M.S. Sonak, Valmiki Sa Menezes, JJ.
Ankur - Appellant
Versus
Hardeep Singh - Respondent
Criminal Writ Petition No. 46 of 2023
Decided On : 24-04-2023
MONEY LAUNDERING - PREVENTION OF MONEY LAUNDERING ACT, 2002 - Sections 3, 4, 45 of PMLA; Sections 420, 409, 120-B of IPC; Sections 3, 4 of Goa Public Gambling Act, 1976; Section 66-D of Information Technology Act, 2000 - The court discussed the necessity of a scheduled offence for prosecution under the PMLA, emphasizing that without a registered scheduled offence, no prosecution for money laundering can be initiated. The court interpreted the provisions of the PMLA, particularly Section 3, as dependent on the existence of a scheduled offence, and referenced the Supreme Court's ruling in Vijay Madanlal Choudhary, which established that prosecution under the PMLA cannot proceed on mere assumptions. The court concluded that since the Petitioners were not charged with any scheduled offences, the ECIR and related proceedings were quashed.
Fact of the Case:
The Petitioners sought to quash ECIR No. ECIR/PJZO/03/2022 registered under the PMLA and related proceedings, arguing that they were not named in the FIR and that the scheduled offences had been dropped in the charge sheet filed by the Crime Branch. The Petitioners contended that without a scheduled offence, no prosecution under the PMLA could be sustained.
Finding of the Court:
The court found that the Petitioners were not named in the FIR and that the scheduled offences under the IPC had been dropped. It held that there was no basis for the ECIR or the prosecution under the PMLA, as the necessary scheduled offences were absent. The court referenced previous rulings to support its conclusion that prosecution under the PMLA requires an underlying scheduled offence.
Issues: Whether the absence of scheduled offences against the Petitioners precludes prosecution under the PMLA and whether the ECIR and related proceedings can be quashed.
Ratio Decidendi: The court established that prosecution under the PMLA is contingent upon the existence of a scheduled offence. In the absence of such an offence, as evidenced by the dropped charges in the charge sheet, the ECIR and related proceedings cannot stand.
Final Decision: The court quashed the ECIR No. ECIR/PJZO/03/2022 and all related proceedings, granting liberty to the Enforcement Directorate to revive the proceedings if new material implicating the Petitioners in scheduled offences arises.
JUDGMENT/ORDER
M.S.SONAK, J. - Heard Mr Dattaprasad Lawande with Mr Ashish Kuncoliencar for the Petitioners and Mr Karpe for the Respondent.
2. As substantially common questions of law and fact arise in both these Petitions, the learned Counsel for the parties agree that a common judgment and order can dispose of both these Petitions.
3. Accordingly, Rule in both these Petitions. The Rule is made returnable immediately at the request of and with the consent of the learned Counsel for the parties.
4. In both these Petitions, the Petitioners seek quashing of ECIR No. ECIR/PJZO/03/2022 dtd. 28/1/2022 registered under the Prevention of Money Laundering Act, 2002 (PMLA) and the proceedings in PMLA No.01/2022 pending on the file of Additional Sessions Judge and Special Court under PMLA 2000, at Mapusa, Goa. The Petitioners also seek quashing of the entire proceedings, including attachment proceedings initiated under ECIR No. ECIR/PJZO/03/2022 dtd. 28/1/2022.
5. On 22/1/2022, an FIR No. 10/2022 was registered by Porvorim Police Station, Goa, under Ss. 420, 409, 120-B read with Sec. 34 of the Indian Penal Code (IPC) and Ss. 3 and 4 of the Goa Public Gambling Act, 1976 along with Sec. 66-D of the Information Technology Act, 2000, against Rajnish Kumar, Shashank Siddharth and Anup Palod. These three persons were arrested, and investigations were handed over to the Crime Branch at Ribandar. It is pertinent to note that the Petitioners were not named in FIR No.10/2022.
6. Based upon FIR No.10/22, the Directorate of Enforcement, Panaji Zonal Office registered Enforcement Case Information Report (ECIR) bearing No. ECIR/PJZO/03/2022 against the three persons in FIR No.10/2022. Out of the offences alleged against the three accused persons in FIR No.10/2022 and the impugned ECIR, only Ss. 420 and 120-B of IPC are scheduled offences under the PMLA.
7. However, on 6/4/2022, the Petitioners' premises were raided, and the Petitioners were placed under arrest on 7/4/2022. Bail applications filed by both the Petitioners were rejected by the PMLA Court on 25/4/2022. On 6/5/2022, the Petitioners took out proceedings before this Court for bail. However, on 3/6/2022, a prosecution complaint under Sec. 45 of the PMLA was filed against the Petitioners for the commission of money laundering as defined under Sec. 3 and punishable under Sec. 4 of the PMLA. On 17/6/2022, the PMLA Court took cognizance of the offence under Sec. 3, read with Sec. 4 of the PMLA against the Petitioners. On 22/6/2022, this Court rejected the Petitioners' bail application by observing that the investigations were still in progress.
8. However, on 23/12/2022, the Investigating Officer, Crime Branch, Ribandar filed a Charge-sheet No. 104/2022 invoking only Ss. 3 and 4 of the Goa Public Gambling Act, 1976 against the three accused persons named in FIR No.10/2022. Significantly, upon investigations, the I.O. dropped the charges of scheduled offenses under Sec. 420 and 120-B of the IPC against the three accused persons. Even, the other offenses under Ss. 408 of the IPC and Sec. 66-D of the Information Technology Act, 2000, were deleted.
9. Therefore, the Petitioners now contend that there was no scheduled offence against them under the PMLA, nor were they shown as accused persons in the FIR No.10/22. This position is clear from the charge sheet filed by the Crime Branch, Goa Police under FIR No.10/2022 (Annexure "E" at pages 179-241 of the Paper Book).
10. Accordingly, the Petitioners again applied for and were released on bail by this Court vide order dtd. 9/1/2023. This Court took cognizance that no charge sheet was filed on the scheduled offences under the PMLA after concluding the investigations in FIR No.10/2022.
11. On 15/3/2023, the Enforcement Directorate summoned the Petitioners to appear in their Office on 17/3/2023. The Petitioners contend that since no scheduled offences were alleged against them and even though more than a year had elapsed after filing the prosecution complaint agains
Prosecution under the Prevention of Money Laundering Act, 2002 is not sustainable without a registered scheduled offence, as established by the Supreme Court in Vijay Madanlal Choudhary.
Without a predicate offense, proceedings under the Prevention of Money Laundering Act cannot be sustained, as established by the Supreme Court.
The court affirmed that actions taken under the Prevention of Money Laundering Act are invalid without a subsisting predicate offense, establishing that quashing of an FIR necessitates the quashing o....
The court established that the offense of money laundering under PMLA cannot exist independently of a scheduled offense.
FIR and ECIR become two different documents and both tend to take shape on its own, independent of each other.
The presence of a scheduled offence legitimizes the existence of an ECIR and allows the department to continue the investigation. However, the settlement or quashing of scheduled offences in FIRs pro....
The Prevention of Money Laundering Act proceedings cannot survive if the predicate offences linked to them are closed by the court, indicating the non-existence of 'proceeds of crime'.
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