ORDER :

P.N. Prakash, J.

1. For the sake of convenience, the parties will be referred to by their names.

2. On a complaint lodged by the General Manager, State Bank of India (SBI), Chennai, the CBI registered an FIR in Crime No. RC.05/E/2018/CBI/BS&FC/BLR on 21.03.2018 for the offences under Sections 120-B, 420, 467, 468 and 471 IPC read with Sections 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988, against M/s. Kanishk Gold Pvt. Ltd. (in short "KGPL"), Chennai and five named accused. The sum and substance of the allegations in the FIR is that, during 2011, a consortium of 14 banks with SBI as the lead bank, had sanctioned working capital credit facilities which KGPL (A1) had allegedly diverted, resulting in loss to the banks to the tune of Rs. 824.15crores as on 31.12.2017. Since the FIR disclosed the commission of a 'schedule offence' under the Prevention of Money Laundering Act, 2002 (in short "the PML Act"), the Enforcement Directorate registered a case in ECIR No. CEZO-I/07/2018 on 22.03.2018, conducted investigation under the PML Act, collected materials and filed a complaint in C.C. No. 13 of 2018 in the Court of the Principal Sessions Judge (Special Court), Chennai, against KGPL (A1), Bhoopesh Kumar Jain (A2), Mohanlal Jewellers Pvt. Ltd. (in short "MJPL") (A3), Suresh Khatri (A4) and T.K.S. Pugazhendi (A5) for the offence under Section 3 read with 4 of the PML Act, for quashing which, MJPL (A3) has filed Crl.O.P. No. 25688 of 2018 and Suresh Khatri (A4) has filed Crl.O.P. No. 20127 of 2018 under Section 482 Cr.P.C.

3. Heard Mr. A. Ramesh, learned Senior Counsel representing Mr. Jayesh B. Dolia, learned counsel on record for MJPL (A3) and Suresh Khatri (A4) and Mr. R. Sankaranarayanan, learned Additional Solicitor General assisted by Mr. N. Ramesh, learned Special Public Prosecutor appearing for the Enforcement Directorate.

4. Before adverting to the submissions raised at the Bar, it is necessary to set out the allegations against the accused. The fact that the CBI registered a case which disclosed a 'schedule offence' under the PML Act is not in dispute. MJPL (A3) and Suresh Khatri (A4) have not been shown as accused in the FIR that has been registered by the CBI. The allegations against KGPL (A1) and the other accused in the present case are that, KGPL (A1) had obtained huge loans from the consortium of banks for their business purpose, which they diverted into the account of MJPL (A3) and that the amounts so diverted, being proceeds of crime, was projected as untainted money.

5. In the complaint in C.C. No. 13 of 2018, the Enforcement Directorate has given the following flowcharts:

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6. In paragraph 14.4 of the complaint, it is more clearly stated as under:

"14.4. On the basis of the Transaction Testing conducted by the Forensic Audit Team on the sample purchase transactions made by KGPL, the Forensic Audit made the following observation:

"Mohanlal Jewellers Pvt. Ltd.: We received 3 purchase invoices of the party (Mohanlal Jewellers) amounting to a total of Rs. 52.98 Crores. However, the borrower (KGPL) has not provided the purchase order, document evidencing receipt of goods and gold purity certificate, if any"

The Forensic Audit has further reported that on examination of the Purchase Register, it was noticed that the total purchases made by KGPL for the review period from April 01, 2009 to June 30, 2017, amounted to Rs. 10,134 Crores. Further, on analysing the yearly purchase it was observed that Rs. 6,984 Crores, i.e., about 69% of the total purchases were made in the period FY 2013-14 to FY 2017-18 (uptill 18th May 2017) revealed that purchases of top ten parties constitute about 65.71% of the total purchases in that period, and M/s. Mohanlal Jewellers Pvt. Ltd., are one among them, who had sold 1089105.37 gms of Gold Bullions valued at Rs. 318.75 Crores to KGPL. KGPL had made the payments from their various bank accounts held inside the consortium, out of working capital borrowings, for the purchase of t