The independence of proceedings under PMLA from those of the scheduled offense and the overriding effect of the stringent conditions for release under Section 45 of PMLA over the general provisions of Cr.P.C.

S.P.GARG, J.

1. The petitioner seeks regular bail under Section 439 Cr.P.C. in case ECIR/18/DZ-II/2016/AD (RV) registered under Sections 3 & 4 of Prevention of Money Laundering Act, 2002 (hereinafter referred as ‘PMLA’). Status report is on record.

2. I have heard learned Senior Counsel for the petitioner and learned Addl. Solicitor General and have examined the file.

3. Learned Senior Counsel for the petitioner urged that the petitioner is in custody since 28.12.2016. He has joined the investigation on various dates. The petitioner a practicing lawyer for nearly 35 years belongs to a respectable family. It is urged that petitioner’s arrest is premature as the offences under Sections 420/406/409/467/468/471/188/120-B IPC alleged in FIR No.205/2016 PS Crime Branch have not been prima facie established; no charge-sheet till date has been filed and the investigation is still at preliminary stage. The petitioner was not named therein; he was never asked to join the investigation in the said proceedings. Enforcement Directorate (hereinafter referred as ‘ED’) can’t conduct investigation before the Crime Branch concludes its investigation in the FIR No.205/2016 as the ‘scheduled offence’ requires to be proved before attracting provisions of PMLA. Learned Senior Counsel further submitted that Sections 3 & 4 of PMLA are not attracted and an individual can be arraigned as an accused under PMLA only if ‘scheduled offence’ as defined in the PMLA is committed and the proceeds obtained from the criminal activity relating to such ‘scheduled offence’ is being laundered to make it legal or to take the benefit of the same. It is imperative for the investigating agency to ascertain that first the ‘scheduled offences’ are prima facie, proven or accepted to have been committed without any reasonable apprehension of doubt.

4. Learned Senior Counsel would urge that the petitioner’s arrest is wholly unjustified and unwarranted being violative of Article 21 of the Constitution of India. No trial under Sections 3 & 4 of PMLA can proceed without a charge-sheet being filed in the case emanating from FIR No.205/2016 PS Crime Branch. Section 44 of the Act as amended in 2013 contemplates ‘joint trial’ by a Special Court in case of ‘scheduled offence’ and offence under PMLA, to avoid conflicting and multiple opinions of courts. In the instant case, when the charge-sheet in the ‘scheduled offence’ is yet to be filed, trial against the petitioner under PMLA cannot commence or continue.

5. Relying upon ‘Gurcharan Singh vs. Union of India’, 2016 SCC OnLine Delhi 2493, Senior Counsel urged that, prima facie, offences under PMLA are non-cognizable in terms of the amendment carried out in the year 2005. It is further argued that allegations contained in FIR No.205/2016 and the ECIR/18 do not constitute violation of the Demonetization Policy of the Government of India and acts of deposit of cash of Rs. 38.53 crores and preparation of Demand Drafts, which were never encashed, are permissible under Section, 2(iii) and 2(vii) of Demonetization Policy. The said Notification does not attract any criminal charges for holding old notes in huge denominations. These sections permit unlimited deposit of old currency in the bank account and there are no restrictions in the use of banking transactions. It was further urged that the ED has no jurisdiction to investigate the instant case; only Delhi Police is competent to do so. Role of ED as an investigating agency comes into play only when a ‘scheduled offence’ is prima facie made out and ‘proceeds of crime’ as defined under Section 2(u) of PMLA have been identified and have been used to launder money. Most of the actions mentioned in the FIR attract tax implications and the appropriate authority to investigate the matter is Income Tax Department and not ED.

6. Reliance has been placed on ‘Sushil Kumar Katiyar vs. Union of India & Ors.’, MANU/UP/0777/2016; ‘Gurucharan Singh vs. Union of India’, SLP (Crl.) No.19020-19022/201