Assisting in the generation of proceeds of crime does not constitute an offence of money laundering under the Prevention of Money Laundering Act without involvement in subsequent activities related to the proceeds.

JUDGMENT :

(Subhash Vidyarthi, J.)

1. Heard Sri Purnendu Chakravarti, Sri Ritvik Rai and Sri Aviral Raj Singh, the learned counsel for the applicant and Sri Kuldeep Srivastava, the learned counsel for the respondent - Directorate of Enforcement (which will hereinafter be referred to as ‘the E.D.’).

2. By means of the instant application filed under Section 4 82 Cr.P.C., the applicant has prayed for quashing of a complaint dated 16.09.2017 filed by the Directorate of Enforcement against the applicant, the cognizance and summoning order dated 02.04.2018 and the entire proceedings of Sessions Case No. 123 of 2023, under Section 3 & 4 of the Prevention of Money Laundering Act, 2002 in the Court of Special Judge (C.B.I.), Court No. III, Lucknow, qua the applicant.

3. Briefly stated, facts of the case are that initially on 27.12.2008, the Chief Regional Manager, Indian Overseas Bank, Zonal Office, Lucknow sent a complaint to the Superintendent of Police, C.B.I., Bank Securities and Frauds Cell, New Delhi complaining about certain fraudulent transactions and stating that : -

“It would thus be clear from the above that the functioning of the Branch during the tenure of Shri. A.K. Dutta was anything but proper. The investigation report also gives clear indications that Shri. Vijay Kumar Jaiswal was inclined to use all his means, fair and mostly unfair, to have his ways and that Shri. A.K. Dutta was willing to co-operate with him even at the cost of exposing the Bank to huge risks and losses. Some of the contents of the investigation report detailed below point to undesirable and criminal acts on the part of the duo.

- Handing over signed Bankers Cheques to M/s. Shiva Distributors / M/s. Vinayak Distributors without debiting their a/c, or without accounting for the BCs in the books of the Bank.

- Erasure of the counter-signature of Shri. A.K. Dutta on the Bankers Cheque for Rs. 40 lakhs issued favouring ‘Reliance Communications Infrastructure Ltd.’, before presentation of the cheque to the clearing house and returned by the Branch on 05.10.2006.

- Sanction of a CC limit of Rs. 40 lakhs to M/s. Vinayak Distributors after erasing the subjects’ request for limit of Rs. 25 lakhs only.

- The above acts of Shri. Vijay Jaiswal and Shri A.K. Dutta clearly smack of criminality and it is evident that Shri. A. K. Dutta had abused his powers to confer undue pecuniary gains on Shri. Vijay Kumar Jaiswal and other unknown persons. Their activities have not only caused wrongful loss of a mammoth size to our Bank, but also pose direct threats to the lives and limbs of the staff members of the Branch/Bank. The Involvement of some other outsiders also cannot be ruled out. The fraudulent transactions put through by Shri. Dutta has been assessed at Rs. 852.61 lakhs, as per details provided In the Annexure enclosed. This amount does not Include the likely loss of Interest/ commission/exchange incomes to the Bank on a/c. undue excesses/ credits provided in certain a/cs and the excess amount of charges claimed on a/c, of cash remittances, as detailed in the foot note of the Annexure. These accounts have become NPA on 01.04.2008 & suits have been filed in DRT Lucknow on 28.05.2007 except M/s. Kritarth Communications.

We therefore request you to register a regular case against Shri. Vijay Kumar Jaiswal, (Proprietor: M/s. Shiva Distributors), Shri. A.K. Dutta, then Senior Manager, Varanasi Cantonment Branch (presently under suspension) and other unknown, persons who are involved in conspiring