C O M M O N O R D E R

P.N.PRAKASH, J.

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 :

“CHART ON ILLUSTRATION OF FLOW OF FUND GENERATED OUT OF PROCEEDS OF CRIME Consortium of Banks Credit Cash Limits extended favouring M/s.Kanishk Gold P. Ltd. into their various accounts held with the consortium of banks Amount transferred in the name of purchase of Gold in spite of no Physical Transport of Consignment (PLACEMENT OF PROCEEDS OF CRIME)

Cash Credit Limit A/c.No.00040460000335 of M/s.Mohanlal Jewellers P. Ltd. held with M/s.HDFC Bank @ R.K.Salai, Chennai The Generated Proceeds of Crime is transformed into (LAYERING THE PROCEEDS OF CRIME)

Various Fixed Deposits drawn at different dates between February 2018 and March 2018 aggregating to Rs.143,58,41,369.90 and marked as lien to Gold Loan and lying with Bank @ R.K.Sali, Chennai and Diverting funds into the bank account of individuals INSTANCES OF INTER-CONNECTED TRANSACTIONS PROVING LAUNDERING OF PROCEEDS OF CRIME Account of Kanishk Gold P. Ltd. in Tamil Nadu Rs.40 Lakhs Mercantile Bank A/c.No.00040460000335 of M/s.Mohanlal Jewellers P. Ltd. held with M/s.HDFC Bank, Chennai Account of Kanishk Gold Rs.40 Lakhs P. Ltd. in ICICI Bank Ltd.

Rs.11,98,00,000/- on 6.9.2016 from Kanishk Account A/c.No.00040460000335 of Fixed Deposit of Rs.6,48,27,225/- on 7.9.2016 M/s.Mohanlal Jewellers P. Ltd. Rs.7 crore drawn on held with HDFC Bank,Chennai from Kanishk Account 7.9.2016 in HDFC Bank Rs.5,39,