IN THE HIGH COURT OF JUDICATURE AT MADRAS

RESERVED ON : 08.02.2021

PRONOUNCED ON : 23.02.2021

CORAM

THE HONOURABLE Mr.JUSTICE P.N.PRAKASH

AND

THE HONOURABLE Mr.JUSTICE V.SIVAGNANAM

CRL.O.P.Nos.20127 & 25688 of 2018

AND

CRL.M.P. Nos.10736 & 14642 of 2018

M.Suresh Khatri

..Petitioner

in Crl.O.P.No.20127 of 2018

M/s.Mohanlal Jewellers Pvt. Ltd.

Rep by its managing director,

shri M.Suresh khatri, Old No.12/1,

NSC Bose Road, Soucarpet,Chennai 1

..Petitioner

in Crl.O.P.No.25688 of 2018

Vs.

Directorate of Enforcement

Rep. by the Deputy Director

Government of India

Ministry of Finance

Department of Revenue

2^nd & 3^rd Floor, C Block

Murugesa Naicker Complex

84, Greams Road, Thousand Lights

Chennai 6

..Respondent in both Crl.O.Ps

Criminal Original Petitions filed under Section 482 Cr.P.C.

to quash the proceedings in C.C.No.13 of 2018 pending on the

file of the Principal Sessions Judge, Chennai as against the

petitioners

For Petitioners : Mr.A.Ramesh

Senior Counsel for

Mr.Jayesh B. Dolia

for M/s.Aiyar & Dolia

For Respondent : Mr.R.Sankaranarayanan

Additional Solicitor General

assisted by Mr.N.Ramesh

https://hcservices.ecourts.gov.in/hcservices/

Special Public Prosecutor for ED

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

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proceeds of crime, was projected as untainted money