Jharkhand High Court
Anosh Ekka vs Enforcement Directorate Throug on 19 February, 2013
Author: R.R.Prasad
Bench: R.R.Prasad
In the High Court of Jharkhand at Ranchi
W.P.(Cr.) No.257 of 2012
With
Cr.Rev.No.920 of 2012
with
Cr.Rev.No. 699 of 2011
Binod Kumar Sinha @ Binod Kumar...Petitioner[W.P(Cr.) No.257 of 2012]
Kamlesh Kumar Singh @ Kamlesh Singh..Petitioner[Cr.Rev.920 of 2012]
Anosh Ekka.................................. Petitioner [Cr.Rev.No.699 of 2011]
VERSUS
State of Jharkhand through Directorate of Enforcement... Opposite Party
CORAM: HON'BLE MR. JUSTICE R.R.PRASAD
For the Petitioner: M/sShekhar Naphade, Sr.Advocate,Anshuman Sinha,
Vinay Prakash and Awanish Shankar, Advocates
For the E. D : Mr. A.K.Das, Advocate
Reserved on 7.2.13. Pronounced on 19 .2.13.
9/ 19 .2.13. All the three applications were heard together and are being
disposed of by this common order as the issue involved in all these
cases is the same.
Before coming to the point of issue, the facts of the case need to
be taken notice of.
A complaint case was lodged in the court of Special Judge
(Vigilance) -cum- Additional Judicial Commissioner, Ranchi by the
complainant Rajiv Sharma alleging therein that the then Chief Minister
Shri Madhu Koda, while holding the office of the Chief Minister and
before that office of Minister, Mines and Co-operative amassed huge
properties moveable as well as immovable by indulging in corrupt
practices and thereby embezzled public money in collusion with Vinod
Sinha [petitioner in W.P (Cr.) No.257 of 2012] and Sanjay Kumar
Choudhary. Having acquired ill-gotten money in crores in connivance
with aforesaid two persons they purchased/invested money in number of
Companies not only in India but also at abroad including Dubai where
crores of rupees were transferred through Hawala. That apart, money
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was also invested in crores in purchasing land and also in purchasing
Mines in a foreign country, namely, Liberia.
The said complaint was forwarded to the Officer-in-Charge,
Vigilance Police Station, Ranchi under section 156(3) of the Code of
Criminal Procedure for its institution and investigation. Accordingly, it
was registered as Vigilance P.S. case no. 9 of 2009 under Sections 420,
423, 424,465 read with Section 120B of the Indian Penal Code and also
under Sections 7, 10,11 and 13 of the Prevention of Corruption Act,
1988. Later on, the investigation was taken over by the C.B.I. While the
C.B.I was proceeding with the investigation, the Enforcement Directorate
on the basis of allegation made in the vigilance case lodged
Enforcement Case Information Report ( ECIR) against the persons who
had been made accused in the vigilance case.
So far as petitioner Binod Kumar Sinha is concerned, the
Enforcement Directorate lodged a case which was registered as
Enforcement Case Information Report No.ECIR/02/PAT/09/AD which
was taken for enquiry and during enquiry it was revealed that the money
acquired through corrupt and illegal means was transferred to a number
of closed associates and companies in India and also in foreign
countries by illegal means and thereby whatever properties were
acquired moveable or immoveable, those were acquired through the
proceeds of crime. In the said case when complaint was filed under
Section 45 of the PMLA Act, cognizance of the offence was taken.
Thereupon an application was filed for staying the further proceeding
until and unless it is established by the prosecution that the petitioner
having committed scheduled offences has acquired properties through
proceeds of the said crime but the prayer was rejected, vide order dated
11.6.2012which is under challenge.
Similarly, in the said Enforcement Case Information Report No.ECIR/02/PAT/09/AD when complaint was filed under Section 45 of the PMLA Act against Kamlesh Kumar Singh, petitioner in 3 Cr.Rev.No.920 of 2012 cognizance of the offence was taken. Subsequently, an application for discharge was filed taking a plea that unless the petitioner is found to have committed scheduled offence, he cannot be prosecuted for an offence under Section 3 of the Act and that it has still not been established by the prosecution that the petitioner by committing scheduled offence has acquired properties by corrupt or illegal means and has invested it in purchasing moveable and immovable properties. That application was rejected vide order dated 25.9.2012 which is under challenge.
The facts which has given rise to Cr.Rev.No.699 of 2011 are that a complaint was filed by one Kumar Vinod, upon which Vigilance lodged a case under Sections 406 409, 420, 423, 424, 465 and 120B of the Indian Penal Code and also under Section 11/13 of the Prevention of Corruption Act against the petitioner, who at the relevant point of time was Rural Development Minister, Government of Jharkhand and also against others alleging therein that the petitioner having amassed properties by corrupt means invested it in purchasing different lands worth Rs.54.44 crores. Subsequently, the said case was taken over by the C.B.I and the C.B.I having investigated the case submitted charge sheet , upon which cognizance of the offence punishable under Section 109 of the Indian Penal Code and also under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act was taken against this petitioner.
Meanwhile, the Enforcement Directorate also filed a case against the petitioner and one other person, namely, Hari Naraian Rai which was registered as ECIR case no. ECIR/01/PAT/09/AD on 4.9.2009 on the allegation that the petitioner while was holding the office of Minister, Rural Development Department, Government of Jharkhand, having amassed properties by corrupt means invested it in purchasing land worth Rs.54.44 crores.
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Subsequently, upon allegation being found prima facie true, a complaint was lodged on 11.12.2009 for commission of offence under Section 3 of the PMLA Act punishable under Section 4 of the Act, upon which cognizance was taken under Section 3/ 4 of the PMLA Act. Thereafter an application was filed for discharging the petitioner from accusation which was rejected, vide order dated 5.8.2011 which is under challenge.
The question which has come up for consideration is as to whether the prosecution for scheduled offences as defined under the provision of Money Laundering Act, 2002 is necessarily to be preceded the trial for the offence under Section 3/ 4 of the Prevention of Money Laundering Act, 2002 ?
Mr.Shekhar Naphade, learned Sr. counsel appearing for the petitioner by drawing attention to the provision as contained in Section 3 as well as Section 4 of the Prevention of Money Laundering Act, submitted that whosoever directly or indirectly indulged themselves in any process or activity connected with the proceeds of crime and projecting it as untainted property can be held to be guilty for an offence under Section 3 and thereby it is punishable under Section 4 of the Act. 'Proceeds of crime' as per definition given in sub-section (u) of Section 2 means any property derived or obtained directly or indirectly, by a person as a result of criminal activity relating to a scheduled offence, whereas scheduled offences in terms of sub-section (x) of Section 2 are the offences specified either under Part (A), Part (B) or Part (C) of the schedule of the Act.
Thus, it was submitted that offence under Section 3 of the Money Laundering Act is dependent upon the offences under the Indian Penal code or the Prevention of Corruption Act. In other words, if the offences either under the Prevention of Corruption Act or under the Indian Penal Code which have been declared as scheduled offences are not established, one cannot determine the proceeds of crime and therefore, 5 unless proceeds of crime is established by putting the accused on trial, any prosecution of the person under the Money Laundering Act would be pre-matured and would be an exercise in futility as one cannot be convicted for the offence under the Money Laundering Act without there being any conviction of the person for the scheduled offences.
Learned counsel by referring to the provision of the Money Laundering Act submitted that under the scheme of the Act procedure seems to be there with respect to adjudication proceeding as well as trial under the Prevention of Money Laundering Act but the Act is absolutely silent as to whether trial under the scheduled offences must precede the trial of offence under the Prevention of Money Laundering Act or both the offences being tried simultaneously or trial of the offence under the Prevention of Money Laundering Act should precede the trial of the offence under the Prevention of Corruption Act. The answer to this can be found by applying well known mathematical tools of 'Reductio absurdum' method meaning thereby that whichever procedure under the scheme of the Act would appear as absurd that is to be discarded and only that procedure which would fulfill the aim and object of the Act is to be adopted.
In this regard, it was further submitted that the trial of the offence under the Prevention of Money Laundering Act can never precede the trial of the schedule offences as the prosecution needs to establish that one is having committed scheduled offences has acquired the property through proceeds of crime and unless that is established, any trial which proceeds under the Prevention of Money Laundering Act would be pre- matured and that if it proceeds then the court will have to assume that the accused is guilty for the scheduled offences which would be against the spirit of the Act and therefore, that option never lies with the court. So far as the other option left with the court for proceeding with the trial under the scheduled offences as well as under the Prevention of Money 6 Laundering Act simultaneously, there would be procedural difficulty on the part of the court to proceed with both the trials simultaneously.
In this regard it was highlighted that the provision of the Prevention of Money Laundering Act contains a totally different procedure for investigation. The investigation is never to be done by the police, rather by the officer of the Directorate of Enforcement or any other officer specially authorized by the Act and the Act prohibits a police officer from taking investigation of the case under the Prevention of Money Laundering Act whereas for the scheduled offences it is for the police to take up the investigation. Only on completion of investigation, report is submitted either under Section 169 or under Section 173 of the Code of Criminal Procedure, upon which cognizance of the offence is taken. But in a case of Prevention of Money Laundering Act, the prosecution needs to file a complaint under Section 44 read with Section 45 of the Act and it is only the special court which is constituted by the Government can take cognizance of the offence under the Prevention of Money Laundering Act. That too when Director of Enforcement or any other officer specially empowered by the Government accord sanction for prosecution whereas trial of the offence under the Prevention of Corruption Act can only be taken by the special judge appointed under Section 3 of the Prevention of Corruption Act and in the event, when sanction is accorded under Section 19 of the Act which means that the sanctioning authority for according sanction for prosecution under the Prevention of Corruption Act is different than the authority who accords sanction for prosecution under the Prevention of Money Laundering Act and that the special court for prosecuting a person under the Prevention of Corruption Act holds a trial in accordance with the procedure of the trial of a warrant case by the Magistrate whereas under Section 43 read with Section 46 of the Prevention of Money Laundering Act, special court is deemed to be a court of sessions under the provision of Prevention of 7 Money Laundering Act and as such, he has to follow the procedure as applicable to the trial before the sessions court.
In this situation, trial of offence under the Prevention of Corruption Act and the trial of offence under the Prevention of Money Laundering Act cannot be consolidated and combined as one trial. The aforesaid proposition gets strengthen from the fact that offences under the Unlawful Activities (Prevention) Act have been incorporated as scheduled offence in the Prevention of Money Laundering Act but under the provision of the Unlawful Activities (Prevention) Act, it is to be tried by the court constituted under the Code of Criminal Procedure whereas the offence under the Prevention of Money Laundering Act is to be tried in the special court constituted under Section 43 read with Section 44 of the Prevention of Money Laundering Act.
It was pointed out that Section 44 of the PMLA Act is a non obstante clause but it never refers to the provision of Unlawful Activities (Prevention) Act and therefore, in view of Section 48 of the Unlawful Activities (Prevention) Act, the provision under the Unlawful Activities (Prevention) Act will override the provision as contained in Section 44 of the Prevention of Money Laundering Act and that it would be significant to note that under the Unlawful Activities (Prevention) Act, forfeiture can take place even if a person concerned is convicted or not for any offence under the said Act whereas the provision as contained in Section 8(5) of the Prevention of Money Laundering Act is somewhat different which speaks that whenever one is acquitted for any scheduled offence, the attachment of the property will cease to have effect.
Under the circumstances, one can come to the conclusion logically that prosecution for the scheduled offences is necessarily to be preceded the trial under the Prevention of Money Laundering Act which appears to be in consonance with the spirit of the Act. If the intention of the Parliament would have been there for trials of both the offences to proceed simultaneously, such intention must have been there but since it 8 is not there under the statute, one for the reason stated above, can come to the conclusion that trial of the scheduled offences is to be gone into first. The aforesaid arguments advanced on behalf of the petitioner Binod Kumar Sinha have been adopted in its entirity by the counsel appearing for the petitioner of the criminal revisions applications.
As against this, Mr.A.K.Das, learned counsel appearing for the Enforcement Directorate submitted that Prevention of Money Laundering Act was enacted to discharge the international obligation for preventing Money Laundering, setting of agencies and mechanism for coordinating measures for combating money laundering and thereby the provisions have been laid down to deal with attachment, adjudication and confiscation as well as to deal with the offences of money laundering by the court to be appointed as special court for holding trials of the offences under Section 3 of the Prevention of Money Laundering Act as well as the trial under the scheduled offences as stipulated under Section 44(1)(a) of the Act and that in view of he provision as contained in Section 71 of the Act, provision of the Prevention of Money Laundering Act will have over riding effect over any other law even if it is inconsistent to the provision of Prevention of Money Laundering Act.
It was further submitted that there has been absolutely no provision under the Act for the court to proceed with the trial of the scheduled offence first and as such, the trial court has rightly rejected the prayer made by one of the petitioners not to proceed with the case unless the petitioner is found guilty for the scheduled offences.
The Act known as Prevention of Money Laundering Act, 2002 seems to have been legislated to subserve a twin purpose to prevent money laundering and to provide for confiscation of property derived from, or involved in money laundering, and to ensure curbing of the tendency of committing scheduled offences.
Keeping in view the said object and reason for which said Act was legislated, it is to be considered as to whether object of the Act gets 9 frustrated if the court proceeds with the trial of the offences under the Prevention of Money Laundering Act as well as with the trial of the scheduled offences. Simultaneously or that the trial of the scheduled offence is necessarily to precede the trial under PMLA Act.
It be recalled that offence of money laundering has been defined in Section 3 of the Act which reads as follows:
" Office of money-laundering - Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering.
Section 4 of the Act which prescribes the punishment of money laundering reads as under:
"Punishment for money-laundering- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees:
Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as it for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted."
Further I do find that the proceeds of crime has been defined in sub-section (u) of Section 2 which reads as follows:
(u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property.
If all these provisions are read together one would come to conclusion that if any person gets involved in any manner connected with the proceeds of crime obtained by committing scheduled offence he is liable to be punished under Section 4 of the Act.
Chapter III pertains to attachment, adjudication and confiscation. Section 5 of the Act does stipulates that Director, or any other officer mentioned therein has reason to believe that any person charged or having committed schedule offence is in possession of any proceeds of 1 crime which is likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation, he may attach such property provisionally.
Thereafter Section 8 deals with the matter relating to adjudication whereby adjudicating authority after giving due opportunity to concerned person comes to conclusion that any person has committed an offence under the Act or is in possession of proceeds of crime, he shall by an order in writing confirm the attachment of the property and that becomes final after the guilt of a person is proved in the trial court.
However, under sub-section (5) of Section 8 if a person accused of scheduled offence is acquitted, the attachment of the property, ceased to have effect.
Chapter V deals with the procedure relating to summons, search and seizure whereas Chapter VI deals with the matter relating to establishment of appellate tribunal, appeals to the appellate tribunal and powers of the appellate tribunal. Then comes Chapter VII which deals with special courts. The provisions of Sections 43 and 44 read as follows:
43. Special Courts. (1) The Central Government, in consultation with the Chief Justice of the High Court, shall, for trial of offence punishable under section 4 by notification designate one or more Courts of Sessions as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.
(2) While trying an offence under this Act, a Special Court shall also try an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial.
44. "Offices triable by Special Courts - (1) Notwithstanding anything contained in the Code of Criminal procedure, 1973 (2 of 1974),-
(a) the scheduled offence and offence punishable under Section 4 shall be triable only by the Special Court constituted for the area in which the offence has been committed;
(b) a Special Court may, upon a complaint made by an authority authorized in this behalf under this Act take cognizance of the offence for which the accused is committed to it for trial.
(2) Nothing contained in this section shall be deemed to affect the special powers of the High Court 1 regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause (b) of sub-section (1) of that section a if the reference to "Magistrate" in that section includes also a reference to a "Special Court" designated under section 43."
The provision of Section 43 does prescribes that only the Court of Session designated as Special Court is to try offence punishable under section 4 of the Prevention of Money Laundering Act. At the same time, Section 44 does prescribe that scheduled offence and the offence punishable under Section 4 of the Act shall be triable only by the Special Courts. The provision therein shall have overriding effect on the provision of the Code of Criminal Procedure.
An argument has been advanced that the provision of Section 44 may have overriding effect over the provision of the Code of Criminal Procedure but since the provision does not mention about the Prevention of Corruption Act, it will not having any overriding effect of the provision of the Prevention of Corruption Act and thereby the Special Court designated under section 43 will not be competent to try the offences under the Prevention of Corruption Act as the trial of the Prevention of Corruption Act can be conducted only by a Special Judge appointed under Section 3 of the Prevention of Corruption Act.
It is true that Section 44 which is non-obstante clause refers to only Code of Civil Procedure and not the provision of the Prevention of Corruption Act. But sub-section (a) of Section 44 does prescribes that scheduled offences as well as offence punishable under section 4 of the Act is triable by the Special Court and only the court of sessions can be designated as Special Court.
It be recorded that under Section 3 of the Prevention of Corruption Act, the court of session is designated as Special Judge. Therefore, both the offences, that is offences under the Prevention of Corruption Act and also offence punishable under Section 4 of the Prevention of Money Laundering Act are to be tried by court of sessions 1 designated as Special Court. Furthermore when the offence under the Prevention of Corruption Act has been incorporated on the Act as Scheduled offence, there does not appear to be any hindrance on the part of the Special Court to try the offence of the Prevention of Corruption Act as the provision of the Prevention of Money Laundering Act in terms of the provision as contained in Section 71 will have overriding effect even if the provision of the Prevention of Money Laundering Act is inconsistent with any other law. The said provision as contained in Section 71 reads as follows:
"71. Act to have overriding effect - The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force."
Thus, even if Section 44 does not speak about Prevention of Corruption Act, it hardly matters so far it relates to power of the Special Court to try scheduled offences including the offence under the Prevention of Corruption Act and the offence punishable under Section 4 of the Money Laundering Act.
Going further into the matter, it be recorded that the arguments have been advanced on behalf of the petitioner that so far as the procedure relating to investigation, enquiry and trial of the scheduled offences is concerned, it is quite distinct to the procedure relating to investigation/enquiry and trial of the offence punishable under Section 4 of the Prevention of Money Laundering Act and thereby both the charges cannot be clubbed together and thereby Special Court can not proceed with the trial punishable under Section 4 of the Prevention of Money Laundering Act and trial with respect to scheduled offences simultaneously.
No doubt it is true that procedure relating to investigation, enquiry etc. of the scheduled offence is different from the procedure of the investigation of the offence under Section 4 of the Prevention of Money 1 Laundering Act but that difficulty would have arisen when the question would have been there for clubbing of the charges.
Here, the point is never related to clubbing of the charges, rather the point is whether the Special Court can proceed simultaneously with the trial of the scheduled offence as well as trial of the offence punishable under Section 4 of the Prevention of Money Laundering Act. Keeping in view the provision as is enshrined in Section 3 postulating therein that whoever is connected with the proceeds of the crime projecting it as untainted property would be committing offence of Money Laundering Act and further that the proceeds of crime must have been derived or obtained, directly or indirectly by any person as a result of criminal activity relating to scheduled offence in terms of sub-section (u) of Section 2 of the Prevention of Money Laundering Act, there has been no doubt that unless one is held guilty for the scheduled offences, he cannot be held guilty of the offence punishable under Section 4 of the Prevention of Money Laundering Act but hardly there appears to any embargo for the special court to proceed with the trial of the scheduled offences as well as offence under Section 4 of the Prevention of Money Laundering Act simultaneously particularly when there has been nothing in the Act nor intention of the legislator seem to be there of taking of the trial of the offence punishable under Section 4 after one is found guilty for the scheduled offence. Of course, the Special Court trying the offence under the PMLA Act will have to wait for the result of the trial relating to scheduled offence. This recourse not only seems to be the practical solution of the matter but it will also expedite the trial.
Accordingly, I do come to the conclusion unhesitatingly that the Special Court may proceed with the trial for the scheduled offence as well as trial of the offence punishable under the PMLA Act simultaneously. The question posed is answered accordingly.
Thus, I do not find any merit in all the aforesaid three applications. Hence, all the three applications stand dismissed. 1
ND/ ( R. R. Prasad, J.)