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HIGH COURT OF MADRAS
S.M. SUBRAMANIAM, J
S.JAYALAKSHMI – Appellant
Versus
DIRECTORATE OF ENFORCEMENT – Respondent
Discharge - Money Laundering - PMLA Sections [3, 5(1), 24, 70] - The court upheld the trial court's dismissal of discharge under PMLA, emphasizing that a shareholder can be implicated in money laundering if evidence of indirect involvement is present, and clarified the burden of proof in such cases.
Fact of the Case:
The petitioner, a shareholder of a company involved in loans from IDBI Bank for refinancing purposes, was charged under the PMLA. She claimed no involvement in the loans and sought discharge, but the trial court denied this, leading to the current appeal.
Finding of the Court:
The court noted that the petitioner, despite not being formally accused in the predicate offences or proceedings, held significant shares and was involved in operations that facilitated money laundering, allowing proceedings to continue.
Issues: Whether the petitioner could be discharged from PMLA charges despite being a major shareholder and lacking direct involvement in the predicate offence.
Ratio Decidendi: A shareholder may be prosecuted under PMLA if evidence indicates indirect involvement in money laundering activities, with emphasis on the presumption of innocence shifting to the accused once material evidence is established.
Final Decision: The Criminal Revision Case is dismissed with no costs.
O R D E R
(S.M.Subramaniam J.)
Under assail is the judgement dated 13th October, 2023 in Crl.M.P.No.6422 of 2022 in Spl.C.C.No.2 of 2021.
2. The petitioner is Accused No.16 and she filed a petition under Section 227 of Criminal Procedure Code for discharge. Since the petition has been dismissed, the present Criminal Revision Case came to be instituted.
3. The petitioner is the then wife of Mr.C.Sivasankaran. The facts of the case are that the company, by name M/s Win Wind Oy, Finland (WWO) was sanctioned loan by M/s IDBI Bank, DIFC Branch, Dubai, for financial assistance of EURO 52 Million - (INR equivalent to 322.40 crores) towards Working Capital Facility, Capital Expenditure (CAPEX) and Loan Equivalent Ratio (LER). Due to lack of business, the company could not carry on the business and eventually ended up only accumulating losses. Later, WWO applied for Voluntary Bankruptcy and approached the Court of Finland who appointed Bankruptcy Estate Administrator (BEA) on 03.10.2013 for liquidation of assets.
4. After that, senior officials of IDBI Bank suggested to grant loan to M/s Axcel Sunshine Limited (M/s.ASL) based in the British Virgin Islands, for non-productive purpose to a tune of 83 Million USD to use the same for repaying the loan of M/s WWO and other associate companies of Siva Groups. Accordingly, the IDBI, DIFC Branch, Dubai disbursed a loan to the tune of 67 Million USD to M/s Axcel Sunshine Limited on 05.03.2014. The loans disbursed had not been utilised for the purpose for which it was availed from the IDBI Bank. Thus, the petitioners have involved in the process and activity of placement layering an integration of the proceeds of crime.
5. The petitioner sates that she was no way connected with the first loan disbursed to WWO Finland or the second loan disbursed to M/s.ASL, BV Island by IDBI Bank. As a shareholder of SIHL, the petitioner has neither given any consent, nor signed any resolution passed by SIHL to borrow money from IDBI Bank or to offer collateral security for loan.
6. In the meantime, CBI, BS & FC registered FIR No.09 dated 13.04.2018 under Section 120 B r/w Sections 409, 420 of IPC, r/w Section 13(2) r/w Section 13(1)(d) of Prevention of Corruption Act, 1988. Since the case registered by the CBI disclosed an offence under Section 120B r/w 420 of IPC, r/w Section 13(2) r/w Section 13(1)(d) of Prevention of Corruption Act, 1988, which is a schedule offence under Section 2(1)(y) of Prevention of Money Laundering Act, 2002 (herein after referred as PMLA), the respondent had registered a case in ECIDR/CEZO/1/10/2018 on 01.05.2018 for further investigation. The petitioner was not arraigned as an accused, either in the FIR or in the ECIR. Further she was not arraigned as accused in the final report filed by the CBI for the offence's under Sections 120(B) and 420 of IPC before the Additional Chief Metropolitan Magistrate, Egmore, Chennai, on 24.12.2022 in C.C.No.554 of 2023.
7. On completion of investigation, the respondent issued the Provisional Attachment Order (PAO) No. 01/2019 dated 31.01.2009 and attached the immovable properties of the companies in terms of Section 5(1) of PMLA. The petitioner states that no movable or immovable properties of the petitioner were attached. The respondent preferred a prosecution complaint in Special C.C.No.02 of 2021 dated 10.01.2021 under PMLA before the Trial Court, in which the petitioner has been arrayed as Accused No.16. The petitioner was arraigned as accused in representative capacity in respect of A7, A22, A23, A24 and A25. The petitioner filed a Crl.M.P.No.5543 of 2021 before the Trial Court to delete her name in terms of Section 305 Cr.P.C. which was allowed vide order dated 18.07.2022. Thereafter, the petitioner filed a petition under Section 227 Cr.P.C. for discharge from PMLA prosecution proceedings. The said petition has been dismissed vide order dated 13.10.2023 which resulted in filing of the present Criminal Revision Case.
8. The learned counsel for the petit
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