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IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW
Subhash Vidyarthi, J.
Mohan Lal Rathi – Applicant
Versus
Union Of India Thru. Directorate Of Enforcement Zonal Office Lko. And Another – Opposite Parties
Application U/S 482 No. - 1663 of 2023
Decided On : 19-09-2023
Section 482 Cr.P.C. - Validity of Cognizance/Summoning Order - Prevention of Money Laundering Act, 2002 - Sections 3/4 - Summary of Acts and Sections: The court discussed the legal provisions of Section 3 of the Prevention of Money Laundering Act, 2002, emphasizing that the offence of money-laundering is independent and connected with the proceeds of crime derived from criminal activity relating to a scheduled offence. The court also highlighted the conditions for granting pardon under Section 306 Cr.P.C. and its implications on the proceedings under PMLA.
Fact of the Case:
The applicant sought to quash the cognizance/summoning order and proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) after being made an approver and granted pardon in a scheduled offence. The Enforcement Directorate filed a counter affidavit stating that the offence under PMLA is stand-alone and not covered by the pardon granted in the scheduled offence.
Finding of the Court:
The court found that the grant of pardon in the scheduled offence does not automatically absolve the accused from facing trial under PMLA unless the accused seeks pardon in the PMLA case by making a full and true disclosure of the circumstances within his knowledge. The court dismissed the application under Section 482 Cr.P.C. as lacking merit.
Issues: The main issue was the effect of grant of pardon in the scheduled offence on the proceedings under PMLA and the validity of the cognizance/summoning order under PMLA.
Ratio Decidendi: The court held that the grant of pardon in the scheduled offence does not automatically absolve the accused from facing trial under PMLA unless the accused seeks pardon in the PMLA case by making a full and true disclosure of the circumstances within his knowledge.
Final Decision: The court dismissed the application under Section 482 Cr.P.C. as lacking merit, upholding the validity of the cognizance/summoning order and the proceedings under PMLA.
JUDGMENT :
1. Heard Sri Dhruv Gupta, the learned counsel for the applicant, Sri Kuldeep Srivastava, the learned counsel for the Enforcement Directorate and Sri Dharmendra Pratap Singh, holding brief of Sri Anurag Kumar Singh, the learned counsel for the respondent-C.B.I..
2. By means of this application filed under Section 482 Cr.P.C., the applicant has sought to assail the validity of the cognizance/ summoning order dated 08.08.2019 passed in Complaint Case No.121/2019 titled “Directorate of Enforcement Vs. Yadav Singh & Others” in the Court of Session Judge / Special Judge PMLA, Lucknow, summoning the applicant for trial of offences under Sections 3/4 of Prevention of Money Laundering Act, 2002, and all proceedings of the aforesaid complaint case, including the order dated 04.02.2023, whereby a non-bailable warrant has been issued against the applicant.
3. In furtherance of the order dated 16.07.2015, passed by a Division Bench of this Court in Writ Petition No. 12396 (M/B) of 2014, the C.B.I. had registered an FIR bearing RC No. DST/2015/A/0003/CBI/ STF/DLI against five persons - (1) Yadav Singh, the then Chief Engineer Noida, (2) Smt. Kusumlata, wife of Yadav Singh, (3) Ms. Garima Bhushan, daughter of Yadav Singh, (4) Sunny Yadav, son of Yadav Singh and (5) Rajinder Manocha, as associate of Yadav Singh, for commission of offences under Section 109 read with 120- B IPC, read with Section 13(2), read with Section 13(1)(e) of Prevention of Corruption Act, 1988 on 30.07.2015.
4. The C.B.I., after investigation, submitted a charge-sheet dated 26.09.2017 against 11 persons, including the applicant. It is stated in the charge-sheet that Yadav Singh was found in possession of disproportionate assets worth 231,541,514 - 512.66% to his known Rs. 231,541,514 - 512.66% to his known sources of income, either in his own name or in the name of his family members. The applicant was the Chartered Accountant of Yadav Singh.
5. The family members of Yadav Singh had incorporated numerous companies and firms and most of the business transactions found in those entities were fake and were used to convert the ill-gotten money of Yadav Singh into white money with the help of a battery of Chartered Accountants. The Chartered Accountants helped in layering the ill-gotten money by putting the same in various other companies and by making accommodation entries in accounts.
6. On an application filed by the applicant, the Special Judge, Prevention of Corruption Act, C.B.I., Ghaziabad has passed an order in Special Case No. 08/2017 whereby the applicant has been made an approver and he has been granted pardon in the aforesaid case arising out of RC No. DST/2015/A/0003/CBI/STF/DLI regarding offences under Sections 109 read with 120- B IPC, read with Section 13(2), read with Section 13(1)(e) of Prevention of Corruption Act, 1988.
7. The order dated 25.06.2017 granting pardon to the applicant was challenged by the co-accused Yadav Singh by filing an Application under Section 482 No. 31498 of 2018, which was dismissed by a Division Bench of this Court by means of an order dated 11.09.2018. S.L.P. (Crl.) No. 9692 of 2018 filed by Yadav Singh against the aforesaid order was dismissed by the Hon’ble Supreme Court by means of an order dated 07.12.2018.
8. The recording of examination-in-chief of the applicant in C.B.I. case commenced on 18.09.2018 and it concluded on 30.10.2018 and thereafter his cross-examination was started. However, his cross- examination could not be completed because proceedings of the C.B.I. trial have been stayed by means of an order dated 07.12.2018, passed by the Hon’ble Supreme Court in Writ Petition (Criminal) No. 322 of 2018, filed by Smt. Kusumlata and another.
9. The Enforcement Directorate registered ECIR/05/PMLA/LKZO/2015 on 23.10.2015 and it filed a complaint against Yadav Singh, his wife Kusumlata and M/s PGP charitable trust on 23.12.2017.
10. On 28.12.2018 the E.D. filed a supplementary complaint against five persons, including the a
Grant of pardon in a scheduled offence does not automatically absolve the accused from facing trial under PMLA unless the accused seeks pardon in the PMLA case by making a full and true disclosure of....
The grant of pardon is within the exclusive domain of the Court and is subject to the condition that the proposed approver makes a full and true disclosure of the circumstances within their knowledge....
Section 306 of Cr.P.C. dealing with tendering of pardon, pardon is a permissible exercise of power by concerned Court and if full disclosure of fact are coming about in terms of said pardon, such par....
The provisions of Section 306(4)(a) of the Cr.P.C. are not attracted if an accused is tendered pardon after the commitment by the Court to which the proceeding is committed in exercise of powers unde....
The Prevention of Money Laundering Act proceedings are independent of the predicate offence and must proceed without delay, reflecting the urgency in addressing economic crimes.
The trial court can revoke an approver's pardon if there is evidence of misrepresentation in the proceedings, even without a Public Prosecutor's certification, as established under the relevant provi....
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