IMPORTANT POINT
Predicate offence – A person not involved in original criminal activity that had resulted in generation of proceeds of crime can be prosecuted under PMLA if he is found to have been involved in concealment, possession, acquisition, user etc. in relation to proceeds of crime.

ORDER

The petitioner is the Bishop and Moderator of the Church of South India (CSI). He is also the Chairman of all educational institutions under the South Kerala Diocese, including the Dr. Somervell Memorial CSI Medical College. In 2019, parents of aspiring medical students filed criminal complaints, alleging that large sums of money was collected from them, by promising admissions to MBBS and PG courses in the Medical College. After collecting the amounts, neither was the promised admissions provided nor the amounts refunded. The Admission Supervisory Committee for Medical Education in Kerala enquired into the allegations and recommended the Government to take appropriate steps to ensure refund of the amounts collected from the complainants. Acting on the recommendation, the Government ordered Crime Branch investigation into the FIRs registered at the Vellarada Police Station based on the complaints submitted by the deceived parents. Thereupon, the Crime Branch registered multiple cases under various penal provisions, including Sections 120-B and 420 of the IPC, against the petitioner and others. While the Crime Branch investigation was in progress, the Enforcement Directorate/1st respondent recorded ECIR/KCZO/11/2020 dated 12.03.2020 and started investigation under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) against the following persons; (i) Dr. Bennet Abraham, Director of Dr. SMCSI Medical College and Hospital (ii) Rev. A. Dharmaraj Rasalam, Chairman of Dr. SMCSI Medical College and Hospital (iii) Sri. P. Thankaraj, Former Comptroller of Dr SMCSI Medical College and Hospital and (iv) Dr. P. Madhusoodanan, Former Principal of Dr SMCSI Medical College and Hospital and other administrative officials.

Thereafter, on 08.05.2024, the 1st respondent filed Annexure A1 Complaint against the petitioner and five others, alleging commission of the offence under Section 3 read with Section 70, punishable under Section 4 of the PMLA. This Crl.M.C. is filed seeking to quash all proceedings against the petitioner in PMLA S.C.No.3 of 2024 pending before the Special Judge (SPE/CBI)-II, Ernakulam.

2. Adv. Shinu J. Pillai, learned Counsel appearing for the petitioner, put forth the following contentions;

Being the Bishop of CSI and de facto Chairman of multiple educational institutions, the petitioner is not directly involved in their day-to-day administration. As far as medical admissions are concerned, the petitioner had only advised the parents, who had approached him to meet the concerned officials. Upon investigation, the Crime Branch was convinced that the petitioner had not deceived the complainants and therefore his name was omitted from the final reports filed before the Magistrate Court. It is stated in the final report that allegations were raised against the petitioner on the belief that naming a person of the petitioner’s stature would expedite the refund process. According to the Counsel, non-inclusion of the petitioner’s name in the final reports is equivalent to his exoneration in the scheduled offence and he cannot therefore be prosecuted for money laundering. Legal support for the argument is sought to be drawn from the decision of the Apex Court in Vijay Madanlal Choudhary and Others v. Union of India and Others, [(2023) 12 SCC 1], with specific emphasis on paragraph 467(d) wherein it is held that, once a person is fully discharged/acquitted of the scheduled offence, or if the criminal case against him is quashed by the competent court, there can be no offence of money laundering against that person. Reliance is also placed on the decisions of the High Court of Telangana in M/s. Smartcoin Financials Pvt. Ltd. v. The Deputy Director and Another, [2024 (3) ALT (Crl) 480] and that of this Court in Vinod Mathew Wilson v. Union of India represented by its Secretary and Others, [2024 SCC OnLine Ker 2348]. It is submitted that in M/s.Smartcoin Financials Pvt. Ltd. (supra), the Telangana High Court had q