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'.

JUDGMENT :

AJOY KUMAR MUKHERJEE, J.

Brief background

1. The instant two proceedings have been preferred by the petitioner herein seeking quashment of the proceeding being in ML Case No. 15 of 2013 pending before learned Special CBI Court 1 under section 3 read with section 70 of the Prevention of Money Laundering Act, 2002 (herein after called as PMLA) in CRR 4586 of 2023 along with Enforcement Case Information Report (in short ECIR) bearing no. KLZO I/22/2021 dated 28.05.2021 which were initiated by the Enforcement Directorate (in short ED). The said ECIR was registered by the ED pursuant to the FIR bearing no. 246/2019 dated 01.08.2019 at Bhawanipure PS Kolkata and FIR bearing no. 260 of 2019 dated 12.11.2019 registered at PS Beleghata (in short would be referred as Kolkata FIRs).

2. The petitioner at first challenged the continuation of the aforesaid ECIR before this court in CRR 708 of 2023 interalia on the grounds of the same being non-est without jurisdiction since the ECIR was based on the aforesaid two Kolkata FIRs, wherein police had submitted final report on the ground of mistake of facts and such closure report/final report had also been accepted by the concerned Magistrate.

3. During pendency of the aforesaid application being CRR 708 of 2023 before this Court, the ED filed a complaint in terms of section 45(1) (second proviso) of the PMLA before the learned Special Judge, CBI-1 Kolkata resulting in aforesaid ML Case no. 15 of 2023 and vide order dated 21.09.2023, the learned judge was pleased to take cognizance on the said complaint. The petitioner therefore in aforesaid two Applications filed before this Court had challenged the impugned proceeding in ML Case no. 15 of 2023 as well as the ECIR bearing no. KLZO I/22/2021 and all orders passed therein including the order dated 21.09.2023

Chronology of events in short

4. Being aggrieved by the aforesaid proceedings Ms. Arora, learned counsel for the petitioner argued that on 21.01.2022 in pursuance of freezing order dated 23.12.2021, the ED authorities, Kolkata filed OA no. 623 of 2022. Even in the said OA case the ED disclosed that the aforesaid two Kolkata FIRs registered at Beliaghata and Bhawanipur PS as the scheduled offence and there was no mention about the CBI charge sheet at Kochi. Thereafter on 25.03.2022, ED authorities filed their rejoinder in OA no. 623 of 2022, wherein their stand was that the aforesaid Kolkata FIRs were the only predicate case/scheduled offence for the Kolkata ECIR and there was no mention of the CBI charge sheet of Kochi, Kerala.

5. On 31.03.2022 a provisional attachment order dated 31.03.2022 was passed by the ED, Kolkata in connection with the ECIR at Kolkata against the petitioner and other 11 entities whereby the total assets to the extent of Rs.409,92,14,598/- of the petitioner and others where attached. In pursuance of the provisional personal attachment order, Kolkata ED had filed original complaint under section 5(5) of the PMLA being OC No. 1721 of 2022 and learned adjudicating authority had confirmed such provisional attachment order as above, against which petitioners and others preferred an appeal before the Appellate Tribunal. It is only on 29.04.2022, ED for the first time disclosed about the CBI Case at Kochi which is already subject matter of another PMLA proceeding at Kochi. Therefore, said CBI charge-sheet, Kochi cannot be the subject matter of the PMLA case, Kolkata.

6. Ms. Arora further argued that on 03.06.2022, ED authorities at Kochi in the PMLA criminal complaint i.e. SC no. 533 of 2018 filed supplementary complaint before learned Special Court and as per supplementary PMLA complaint filed by the ED authorities, no proceeds are alleged to have been generated from the petitioner. Therefore, according to petitioner, it is admitted positon that Kolkata ECIR was only based on the aforesaid two Kolkata FIRs registered in Bhawanipur and Beliaghata, which culminated into a closure report stating mistake of facts and said clos