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CALCUTTA HIGH COURT
Suvra Ghosh, J.
Louis Dreyfus Company
India Private Limited – Petitioner
versus
Enforcement Directorate, Government of India – Enforcement Directorate
CRR 1145 of 2024
Decided on 22.5.2026
For the Petitioner: Mr. Sandipan Ganguly, Sr., Mr. Pavan Narang, Mr. Anirban Tarafder, Adv.
Mr. Rishad Medora, Advocates.
For the Enforcement Directorate:Mr. Arijit Chakraborty, Mr. Deepak Sharma, Ms. Swati Kumari Singh, Advocates.
IMPORTANT POINTS
(1) Offence of money laundering is an independent offence.
(2) ECIR – Prevention of Money Laundering Act, 2002 steps in only if there exists proceeds of crime within meaning of Section 2(1)(u) of Act and it is involved in any process or activity.
Headnote:
Prevention of Money Laundering Act, 2002 – Sections 45 and 50 – Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 528 – ECIR – It is not necessary that a person against whom an offence under Section 3 of PMLA is alleged has to be shown as accused in scheduled offence – Offence of money laundering is an independent offence and though accused may not have been named in scheduled offence, his involvement in concealment, possession, acquisition or use of proceeds of crime as much as projecting it as untainted property would constitute offence of money laundering – Such accused may come into picture after scheduled offence is committed and need not be an accused in scheduled offence – Though petitioner has been termed as a beneficiary by E.D., no prima facie independent material is found in support thereof – If the person is finally discharged/acquitted of scheduled offence or criminal case against him is quashed, there can be no offence of money laundering against him or any one claiming such property being the property linked to scheduled offence through him – Material available does not make out a case for petitioner to stand trial – Criminal quashed insofar as petitioner is concerned – However, proceedings shall continue against other accused persons. (Paras 14, 15, 17, 21 and 23)
Result: Criminal Revision Application allowed.
JUDGMENT
Suvra Ghosh, J.—In the present application, the petitioner seeks quashing of M.L. Case no. 7 of 2018 under Section 45 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the PMLA). The genesis of the case is the FIR registered by the Central Bureau of Investigation (for short the CBI) on 31st March, 2014 against one Manoj Kumar Jain, Director of M/s of Prakash Vanijya Private Limited (PVPL) and others on the basis of a complaint received from the Central Bank of India, Corporate Finance Branch, Kolkata alleging loss of Rs.234.57 crores. CBI filed charge sheet and supplementary charge sheet under Sections 420/467/468/471/120B of the Indian Penal Code and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act which includes scheduled offences under the PMLA. In view thereof, the Enforcement Directorate (hereinafter referred to as the E.D.) registered ECIR no. KLZO/9/2016 dated 5th September, 2016 which culminated in filing of a prosecution complaint against the petitioner and others.
2. Seeking quashing of the said complaint, learned counsel for the petitioner has submitted as hereunder:-
The allegation against the petitioner is that the petitioner company resorted to circular trading in connivance and conspiracy with the other accused persons and the three LCs opened in favour of the company amounting to Rs.25 crores were routed back after discounting to M/s. PVPL and its sister concerns through the purported debtor company of PVPL, namely M/s. Quality Vintrade Private Limited (QVPL). The petitioner sold commodities to PVPL by way of sale contracts after purchasing the same from QVPL through warehouse trust receipt which is conclusive proof of sale of goods lying in a warehouse under the Sale of Goods Act. There is no requirement of physical movement of the goods for completion of the transaction which is done through warehouse receipt. The petitioner company stored the goods purchased from QVPL in the warehouses and sold them as part of normal trade transaction to PVPL and others.
3. The petitioner has not been arraigned as an accused in the predicate offence wherein charge sheet and supplementary charge sheet have been filed. The three LCs in question were investigated by the CBI which revealed the criminality of Manoj Kumar Jain and other accused persons. However, the petitioner was not implicated. Further, one of the authorized representatives of the petitioner company Mr. Narendra Malik has been cited as a prosecution witness in the charge sheet of the predicate offence. The E.D. has transgressed into the arena of the predicate offence in holding investigation with regard to the predicate offence even after the petitioner was exonerated therefrom by the CBI. Investigation of the predicate offence is solely within the domain of the CBI and the E.D. had no authority to investigate the same. The CBI has in fact held that investigation could not establish any diversion of fund in respect of the petitioner company.
4. It is a fact that a person may be implicated in money laundering even if he is not arraigned as an accused in the predicate offence if he is involved in the subsequent generation of proceeds of crime and directly or indirectly deals with the same. In the present case, the CBI has looked into the criminality, if any, attached to the three transactions among the petitioner, PVPL and QVPL pertaining to the three LCs in question and has not attributed any criminality to the petitioner. QVPL has not been made an accused. Therefore purchase of goods by the petitioner from QVPL is not tainted and the chain of alleged circular trading breaks. Also, the LC has a credit period of 150 days which has not been considered by the E.D. PVPL has honoured 12 out of 15 LCS and the petitioner has no responsibility with regard to failure of PVPL to honour the remaining three LCS, moreso, since the petitioner had no knowledge that the PVPL would not honour the LCs in future. The amo
