Properties can be attached under PMLA if linked to criminal activity, and companies can be prosecuted under the Act, irrespective of individual liability.

COMMON ORDER

(S.M.Subramaniam J.)

The Criminal Original Petitions have been instituted under Section 482 of Cr.P.C. to quash the complaint in Spl.CC.No.02 of 2021 on the file of the Learned IX Additional Special Judge for CBI Cases, City Civil Court, at Chennai, dated 10.01.2021. The petitioners in the Criminal Original Petition Nos.6925, 6926 & 6927 of 2022 are the Accused Nos. 25, 21 & 22 respectively.

FACTS OF THE CASE :

2. The IDBI Bank, DIFC Branch, Dubai, sanctioned first loan of 52 Million Euros (INR equivalent to 322.40 crores) to Accused-8, i.e., M/s.Win Wind Oy, Finland (hereinafter referred as WWOy). Accused-8 company is wholly subsidiary of Accused-7 i.e., M/s.Siva Industries & Holding Ltd. Accused-16 is Ms.S.Jayalakshmi, who owns 86% of the shareholding of Accused-7. Further Accused-16, Ms.S.Jailakshmi, owns 90.09% of the petitioner in Crl.O.P.No.6925/2022 /Accused-25 company, i.e., M/s.Sterling Futures & Holidays Ltd. Balance 9.91% of Petitioner in Crl.O.P.No.6925/2022/Accused-25 Company i.e., M/s.Sterling Futures & Holidays Ltd. is owned by Accused-1's father, Shri R.Chinnakannan (alias Vellal RCK). Accused-16 i.e., Ms.S.Jayalakshmi is the former wife of Accused-1, Mr.C.Sivasankaran.

3. The second loan of 67 Million US Dollars was sanctioned by IDBI to Accused-2 i.e., M/s. Axcel Sunshine Ltd's (British Virgin Islands) in Dubai Bank Account. The second loan of 67 Million US Dollars was placed, layered and integrated by a series of transactions through companies based in British Virgin Island, Mauritius, and Singapore before finally being credited to the Bank Account of Accused-7 i.e., Siva Industries & Holdings Ltd. and Accused-7 used it to repay the first loan availed by its wholly owned subsidiary company i.e., WWOy (Accused-8). Pertinently comfort letter provided by Accused-7 i.e., Siva Industries & Holdings Ltd. to IDBI for the second loan sanctioned by IDBI to Accused-2 i.e., Axcel Sunshine Ltd's (British Virgin Islands).

4. Central Bureau of Investigation registers FIR No.9/2018, on

13.04.2018, under Sections 120B, 420 IPC & Section 13 of Prevention of Corruption Act, 2013, which is the scheduled offence under Prevention of Money Laundering Act, 2002 (hereinafter referred as PMLA). Since the scheduled offence is present in the FIR registered by CBI in FIR No.9 of 2018, the Enforcement Directorate recorded ECIR under PMLA on 01.05.2018. Consequently, the Provisional Attachment Order in PAO No.1/2019 was issued on 31.01.2019. The Provisional Attachment Order was confirmed by the adjudicating authority on 13.01.2020. The respondent filed a complaint on 10.01.2021 under PMLA. The said complaint, dated 10.01.2021, is sought to be assailed in the present Criminal Original Petitions.

ARGUMENTS ON BEHALF OF THE PETITIONERS:

5. The learned counsel for the petitioners, Mr.Nithyash Natarajan , would submit that the petitioners are the companies registered and therefore, vicarious liability cannot be fastened on the companies. A company, as an entity, cannot be held liable for the alleged offence, if any committed presumably, by some individuals, shareholders or others. Secondly, Mr.Nithyash would contend that the properties attached under PMLA had been purchased long before the alleged commission of the scheduled offence, between the years 2010 and 2017. The attached properties were purchased in the year 1975 and other properties were also purchased prior to the year 2010. Some properties were purchased in the year 2005 also. Therefore, the properties were not purchased from and out of the alleged proceeds of crime under PMLA. Thus, the Provisional Attachment Order itself is not in accordance with the provisions of PMLA. In this context, it is contended that Section 70 of PMLA cannot operate against the company with reference to the alleged offence, if any committed by shareholders or other persons under PMLA.

6. Mr.Nithyash Natarajan would draw the attention of this Court with reference to the definition of “Proceeds of Crime”