The main legal point established in the judgment is the wide scope of Section 3 of the Prevention of Money-Laundering Act, 2002 to cover all persons involved in any process or activity connected with the proceeds of crime, as interpreted by the recent decision of the Supreme Court in Directorate of Enforcement vs. Padmanabhan Kishore.

ORDER :

1. This is a petition under Section 482 of the Code of Criminal Procedure (Cr.P.C.) to quash the proceedings as well as the charges framed against the petitioner/A-5 in C.C. No. 14 of 2018, which is pending on the file of the Principal Sessions Judge (Special Court constituted under Section 43(1) of the Prevention of Money-Laundering Act), 2002, Chennai (in short “the Special Court”).

2. The necessary facts which are relevant to deal with this quash petition are as under:

2.1. The company named National Medicines Private Limited was sanctioned with cash credit facility of Rs. 6.25 crores. Out of the sanctioned amount, a pay order was issued for Rs. 4.25 crores to the Standard Chartered Bank, for the taking over of the existing liability of the above said company. The petitioner/A-5 was working as the Chief Manager during the relevant point of time at Union Bank of India and he was part of the team, which sanctioned and released the loan amount.

2.2. A written complaint was given by the Deputy General Manager of Union Bank of India alleging perpetration of criminal activities in the sanction and disbursement of credit facility to the above said company. Based on the same, an FIR came to be registered by the CBI, BS&FC, Bangalore, in R.C. No. 8/E/2008-CBI/BS&FC on 25.09.2008, against the petitioner and others, for various offences under the IPC and under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

2.3. The CBI took up the investigation and on completion of the investigation, a final report was filed under Section 173(2) Cr.P.C. before the XI Additional Special Court for CBI Cases, Chennai and the same was taken on file in C.C. No. 45 of 2009. It was brought to the notice of this Court that the petitioner was convicted and sentenced along with the other accused persons and aggrieved by the same, an appeal was filed by the petitioner/A-5 and the same is pending.

2.4. The respondent filed a complaint under Section 45(1) of the Prevention of Money-Laundering Act, 2002 (hereinafter referred to as “the PML Act”) before the Special Court, as against five accused persons, for the alleged offence under Section 3 of the PML Act, which is punishable under Section 4 of the PML Act and consequently to confiscate the property involved in money-laundering in terms of Sub-Section 5 of Section 8 of the PML Act. The petitioner has been arrayed as A-5 in this complaint.

3. The specific allegations made against the petitioner in the complaint are extracted hereunder, for proper appreciation:

“10.6. Shri R. Kannan, the then Chief Manager of Union Bank of India, Mount Road Branch, Chennai in pursuance of a criminal conspiracy had actually connived with Shri M. Kamalchand Jain and Shri Anuraag Jain in the aforesaid criminal acts and by abetting their motive to fraudulently secure sanction and disbursement of credit facilities from the Union Bank of India, by misrepresentation of lack of perfect title on the subject immovable property with NMPL and by defying the directions of the Hon'ble High Court of Madras to maintain status quo, had actually involved in the process of deriving cash credit facility amounting to Rs. 6.25 crores upon creation of collateral security on the aforesaid immovable property. Thus, the funds so derived and diverted to the accounts of the group entities and loan accounts held with various banks to the extent of Rs. 5.05 crores, including the repayments to the home loan availed for acquiring of the aforesaid immovable property as elucidated above are the “proceeds of crime” as defined under Section 2(1)(u) of PMLA and hence the endeavour of Shri R. Kannan in causing sanction of cash credit facility amounting to Rs. 6.25 crores to NMPL thereby rendering Shri M. Kamalchand Jain and Shri Anuraag Jain to recuperate the said immovable property smeared with the taint of “proceeds of crime” and to arrogate its worth by devious means by projecting the same as validly held by NMPL so as to disguis