Madras High Court
Shri Ajay Kumar Gupta vs Adjudicating Authority (Pmla)
Author: N.Sathish Kumar
Bench: N.Sathish Kumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 13-06-2017
Delivered on : 13-07-2017
CORAM:
THE HON`BLE MR.JUSTICE N.SATHISH KUMAR
Crl.O.P.Nos.10497 and 10500 of 2017
1.Shri Ajay Kumar Gupta
2.Smt.Veenita Gupta
3.Ms.Vishakha Gupta
4.Ms.Saloni Gupta ...Petitioners/Defendants
Vs
1. Adjudicating Authority (PMLA)
4th Floor, Court Room-3
Room No.17, Jeevan Deep Building,
Parliament Street,
New Delhi 110001 ...1st Respondent/1st Respondent
2. Deputy Director,
Directorate of Enforcement,
2nd and 3rd Floor,
Murugesa Naicker Complex,
84, Greams Road,
Thousand Lights,
Chennai 600006. ...2nd Respondent/complainant
3. Deputy Superintendent of Plice
Central Bureau of Investigation,
Anti Corruption Branch,
Shastri Bhavan, 3rd Floor,
Haddows Road,
Chennai 600034. ...3rd Respondent/3rd Respondent
Prayer in Crl.O.P.No.10497 of 2017
Criminal Original Petition filed under Section 482 of Cr.P.C to call for the records in Provisional Attachment Order No.09/2017 dated 07.04.2017 in ECIR/CEZO/08/2015 Chennai Zone passed by the Second Respondent and quash the same
Prayer in Crl.O.P.No.10500 of 2017
Criminal Original Petition filed under Section 482 of Cr.P.C to call for the records in Original Complaint in O.C.No.855 of 2017 filed by the Second Respondent before the Hon'ble Chair person Adjudicating Authority, the first respondent under the Prevention of Money Laundering Act, 2002 and quash the same.
For Petitioners : Mr.V.S. Venkatesh
[in both Crl.O.Ps.]
For Respondents : Mr.M. Dhandapani
1 and 2 Special Public Prosecutor for
[in both Crl.O.Ps.] Enforcement Directorate
For Respondent 3 : Mr.K. Srinivasan
[in both Crl.O.Ps.] Special Public Prosecutor for
CBI Cases
C O M M O N O R D E R
Crl.O.P.No.10497 of 2017 is filed to quash the Provisional Attachment Order No.09/2017 dated 07.04.2017 in ECIR/CEZO/08/ 2015 Chennai Zone passed by the second respondent, whereas Crl.O.P.No.10500 of 2017 is filed to quash the Original Complaint in O.C.No.855 of 2017 filed by the second respondent under the Prevention of Money Laundering Act, 2002.
2. The brief facts leading to file these petitions are as follows:
2.(a) The first petitioner was working as an Assistant Commissioner of Customs and Central Excise, Customs House, Chennai and he resigned from the services with effect from 14.4.2011. While he was working as an Appraiser in the Customs House, Chennai, the 3rd respondent, Deputy Superintendent of Police, CBI had filed an FIR No.RCMA1/2005A/0031 on 29.06.2005 for alleged possession of assets and pecuniary resources in the name of First Petitioner and in the name of his family members for alleged commission of offences under Section 13(2) r/w 13(1)(e) of the Prevention of Corruption Act 1988. A final report under Section 173(2) of Cr.P.C.was also filed on 13.01.2009 by 3rd respondent before the Principal Special Judge for CBI Cases, Chennai, in C.C.No.18 of 2009 for the offences punishable under Section 13(2) r/w 13(1)(e) of the Prevention of Corruption Act, 1988 against 1st petitioner and Section 109 of I.P.C. r/w 13(2) r/w 13(1)(e) of Prevention of Corruption Act, 1988 against 2nd petitioner. Check period was shown as 01.05.1997 to 30.06.2005. 3rd and 4th petitioners were not arrayed as accused in the above C.C.No.18 of 2009.
2.(b) Trial is under progress in the Court of XIV Additional Special Judge for CBI Cases. Presently the Investigating Officer, P.W.74 of the case is being cross-examined by the defence side. In the meanwhile, after six years of the aforesaid alleged offence u/s 13(2) r/w Sec.13(1)(e) of the Prevention of Corruption Act, 1988, which is a Scheduled Offence under Prevention of Money Laundering Act, 2nd respondent registered an Enforcement Case Information Report and also sent summons to the petitioners 1 & 2.
2.(c) It is the contention of the petitioners that the alleged offences as per the charge Sheet have allegedly committed between 1.5.1997 to 30.06.2005 and during this period Prevention of Money Laundering Act, 2002 was not even in force. The Act came into force on 01.07.2005 through the notification published in the Gazette of India dated 1.4.2005. The petitioners also gave a reply to the effect that as on 1.7.2005 Section 13 of the Prevention of Corruption Act do not find place in the scheduled offences list under Prevention of Money Laundering Act. It was also pointed out to the office of the 3rd respondent by the petitioners' reply that Section 13 of the Prevention of Corruption Act 1998 was added in the list of scheduled offences only on 1.6.2009. The first petitioner appeared before the Assistant Director on 20.06.2016 and his statement was recorded and the 2nd petitioner appeared on 21.6.2016 and her statement was also recorded. She has stated that all the original documents of properties were seized by the CBI, ACB, Chennai and the same are in the custody of the 14th Additional Special Judge for CBI Cases. However, 1st and 2nd respondents did not consider any of the submissions made by the petitioners and the above impugned Provisional attachment order has been passed. 3rd and 4th petitioners were minors, born on 14.08.1993 and 5.4.1996 respectively.
2.(d) The second respondent provisionally attached movable properties in the name of 3rd and 4th petitioners. 3rd and 4th petitioners were minor at the time of the alleged offence. The list of properties provisionally attached in the name of 3rd petitioner is as follows:
Sl.No Referred in CBI Charge Sheet in CC 18/2009 Description Held in Name/Names Amount 1 85 STDR No.356494 Dated 26.12.2003 maturing on 26.12.2006 at SBI, Kodambakkam Branch Shri Ajay Kumar Gupta, Smt. Veenita Gupta & Miss Vishakha Gupta 33,000.00 2 86 STDR No.356485 Dated 26.12.2003 maturing on 26.12.2006 at SBI, Kodambakkam Branch Shri Ajay Kumar Gupta, Smt. Veenita Gupta & Miss Vishakha Gupta 33,000.00 3 87 STDR No.356493 Dated 26.12.2003 maturing on 26.12.2006 at SBI, Kodambakkam Branch Smt. Veenita Gupta & Miss Vishakha Gupta 33,000.00 4 89 STDR No.3564835 Dated 26.12.2003 maturing on 26.12.2006 at SBI, Kodambakkam Branch Shri Ajay Kumar Gupta, Smt. Veenita Gupta & Miss Vishakha Gupta 33,000.00 5 97 8 Years 7 Months Kisan Vikas Patra N.51 CD 924858 dated 01.02.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Vishakha Gupta 10,000.00 6 101 8 Years 7 Months Kisan Vikas Patra N.51 CD 924842 dated 25.01.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Vishakha Gupta 10,000.00 7 105 8 Years 7 Months Kisan Vikas Patra N.51 CD 925215 dated 08.02.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Vishakha Gupta 10,000.00 8 108 8 Years 7 Months Kisan Vikas Patra N.51 CD 929096 dated 12.04.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Vishakha Gupta 10,000.00 9 109 8 Years 7 Months Kisan Vikas Patra No.90 BB 770972 dated 18.04.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Vishakha Gupta 5,000.00 10 110 8 Years 7 Months Kisan Vikas Patra No.90 BB 770973 dated 18.04.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Vishakha Gupta 5,000.00 11 119 Balance in SB Account No.4754 in A/c of Central Bank of India, Anna Nagar Branch as on 30.06.2005 Shri Ajay Kumar Gupt & Miss Vishakha Gupta 37,039.56 12 131 Amount in PPF A/c.No.01P00900383 at SBI, Anna Nagar West Branch as on 30.06.2005 Miss Vishakha Gupta 80,000.00 Total 2,99,039.56
2.(e) Similarly the list of properties provisionally attached in the name of 4th petitioner is as follows:
Sl.No Referred in CBI Charge Sheet in CC 18/2009 Description Held in Name/Names Amount 1 81 STDR No.356496 Dated 26.12.2003 maturing on 26.12.2006 at SBI, Kodambakkam Branch Smt. Veenita Gupta & Miss Saloni Gupta 33,000.00 2 83 STDR No.356495 Dated 26.12.2003 maturing on 26.12.2006 at SBI, Kodambakkam Branch Shri Ajay Kumar Gupta, Smt. Veenita Gupta & Miss Saloni Gupta 33,000.00 3 88 STDR No.356492 Dated 26.12.2003 maturing on 26.12.2006 at SBI, Kodambakkam Branch Smt. Veenita Gupta & Miss Saloni Gupta 33,000.00 4 90 STDR No.356483 Dated 26.12.2003 maturing on 26.12.2006 at SBI, Kodambakkam Branch Shri Ajay Kumar Gupta, Smt. Veenita Gupta & Miss Saloni Gupta 33,000.00 5 98 8 Years 7 Months Kisan Vikas Patra N.51 CD 924859 dated 01.02.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Saloni Gupta 10,000.00 6 102 8 Years 7 Months Kisan Vikas Patra N.51 CD 924843 dated 01.02.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Saloni Gupta 10,000.00 7 104 8 Years 7 Months Kisan Vikas Patra N.51 CD 924908 dated 08.02.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Saloni Gupta 10,000.00 8 107 8 Years 7 Months Kisan Vikas Patra N.51 CD 929095 dated 12.04.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai Miss Saloni Gupta 10,000.00 9 111 8 Years 7 Months Kisan Vikas Patra No.90 BB 770974 dated 18.04.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Saloni Gupta 5,000.00 10 112 8 Years 7 Months Kisan Vikas Patra No.90 BB 770975 dated 18.04.2005 issued by Sub-Post Master, Sowcarpet NDSO, Chennai - 79 Miss Saloni Gupta 5,000.00 11 130 Amount in PPF A/c.No.01P00900382 at SBI, Anna Nagar West Branch as on 30.06.2005 Miss Saloni Gupta 80,000.00 Total 2,62,000.00
2.(f) The Provisional Attachment Order suffers from serious infirmity. The 3rd and 4th petitioners were never arrayed as accused in any case and they were school going children and now they are studying in college and without considering the same, they have now been summoned to appear before the 1st respondent. The Provisional Attachment Order No.9/2017 relates to the properties possessed or acquired by the petitioners 1 and 2 during the period 1.5.1997 to 30.06.2005 and during such material period the Prevention of Money Laundering Act was not in force. The Prevention of Money Laundering Act, 2002 was came into force only on 1.7.2005. Whereas final report was submitted by CBI on 13.01.2009. Similarly, Prevention of Corruption Act was included in the Scheduled List of Offences only with effect from 01.06.2009 and it can have no retrospective or retroactive operation and any penal action for alleged offences committed prior to the enactment and operation of law is violative of the Article 20 (1) of the Constitution of India.
2.(g) Hence, Challenging the Provisional Attachment Order passed by the 2nd respondent dated 7.4.2017 Criminal Original Petition No.10497 of 2017 has been filed. The petitioners also filed Criminal Original Petition No.10500 of 2017 to quash the Original Complaint in O.C.No.855 of 2017 filed by 2nd respondent before the 1st respondent.
3. Heard the learned counsel for the petitioners, learned Special Public Prosecutor for Enforcement Directorate appearing for R1 and R2 and also the learned counsel appearing for the 3rd respondent, who is a formal party in these cases.
4. The main contention of the of the petitioner is that when the alleged offence itself was prior to 01.07.2005, when the Prevention of Money Laundering Act was not in force, attaching the properties under the amended Act is not valid in law. Prevention of Money Laundering Act is penal stature, therefore, can have no retrospective or retroactive operation and any penal action for alleged offences committed prior to the enactment and operation of law is violate of the Article 20(1) of the Constitution of India. The second respondent has not considered this aspect and simply passed the order attaching the properties including the minors i.e., 3rd and 4th petitioners, who have no way connected with the alleged offences. It is the further contention of the learned counsel for the petitioners that while all the properties in Provisional Attachment Order were seized by CBI, ACB, Chennai and the same are in the custody of 14th Additional Special Judge Court for CBI cases, the question of summoning or transferring the properties does not arise at all. He further submitted that the 2nd respondent has not properly exercised his power to pass the attachment order.
5. The learned Special Public Prosecutor for Enforcement Directorate appearing for Respondents 1 and 2 would submit that the Money Laundering offence is continuing offence. Once Provisional Attachment is passed, the petitioner has to appear before the Adjudicating Authority and not before this Court for quashing the entire proceedings and though in the Schedule of offences the Prevention of Corruption Act was included later, Money Laundering offence is continuous one and retrospective effect can be given to the Act. Hence, the learned Special Public Prosecutor submitted that the petitions for quashing Original Complaint and also for quashing the Provisional Attachment Order of the second respondent are not maintainable and both the petitions are liable to be dismissed. The Learned Special Public Prosecutor for Enforcement Directorate also relied upon the Judgments reported in
1.Solidaire India Ltd., Vs. Fair Growth [AIR 2001 FC 958 : JT 2001(2) SC 642; MANU/ST/0009/2001],
2.Bank of India vs. Ketan Parekh [2008 (8) SCC 148 : AIR 2008 SC 2361; MANU/SC/2700/2008],
3.Union of India Vs. Hassan Ali Khan and another [C.A.No.1883 of 2011 of Honourable Supreme Court ] and
4.Gokak Patel Volkart Ltd., Vs. Dundayya Gurushiddaiah Hiremath [1991 SCR (1) 396, 1991 SCC (2) 141].
6. In the light of the above submissions, now the point that arise for consideration in these Criminal Original Petitions is:
whether the order of Provisional Attachment made and the Original Complaint filed before the Adjudicating Authority, under the Prevention of Money Laundering Act, 2002, by the second respondent are in accordance with law or liable to be quashed?
7. It is not disputed that the 1st petitioner was charge sheeted by the CBI, Anti Corruption Branch for the alleged possession of assets and pecuniary resources and the 2nd petitioner was prosecuted for abetment in the above offence. It is also not in dispute that the alleged offences against the petitioners 1 and 2, related to the period from 01.05.1997 to 30.06.2005 and 3rd and 4th petitioners have not been made as accused in the charge sheet filed by the 3rd respondent before the XIV Additional Special Judge for CBI Cases. Further, it is also not in dispute that in C.C.No.18 of 2009 trial also commenced and 74 witnesses were examined. The provisional Attachment Order was passed by the 2nd Respondent on 07.04.2017 to attach the properties of the petitioners including 3rd and 4th petitioners, in whose name the properties were shown to the value of Rs.5,61,039.36 in the form of some Fixed Deposits, Kisan Vikas Patras, Savings Bank Account and PPF, etc., It is also not in dispute that based on the charge sheet filed by the CBI Anti Corruption Branch, an Enforcement Case Information Report No.CZO/08/2015 dated 20.02.2015 was registered by the Directorate of Enforcement, Chennai and filed before Adjudicating Authority under the Prevention of Money Laundering Act, 2002. Accordingly Provisional Attachment Order passed under the Prevention of money Laundering Act attaching all properties of the petitioners, in fact, which also subject matter of CBI Case. It is relevant to mention Section 5 of the Prevention of Money Laundering Act, 2002:
5. Attachment of property involved in money-laundering.-
(1) Where the Director, or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that-
(a) any person is in possession of any proceeds of crime; and
(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed:
Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be or a similar report or complaint has been made or filed under the corresponding law of any other country:
Provided further that, notwithstanding anything contained in [first proviso], any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.] (2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.
(3) very order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier.
(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment.
Explanation. For the purposes of this sub-section person interested, in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.
(5) he Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority.
8. These provisions of Section 5 remained in force till 30.05.2009 as Prevention of Money Laundering (Amendment) Act, 2009, No.21 of 2009 came into force on 01.06.2009. The charge sheet was filed by the CBI before the said Court on 13.01.2009. At the relevant time, Section 13 of the Prevention of Corruption Act was not in the list of schedule under the Prevention of Money Laundering Act. Section 5 of the Prevention of Money Laundering Act was further amended by the Act 2 of 2013. The amended Section 5 of the Prevention of Money Laundering (Amendment) Act, 2012 reads as follows:
5. Amendment of Section 5. - In Section 5 of the principal Act, for sub-section (1), the following sub-section shall be substituted, namely:-
(1) Where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purpose of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that-
(a) any person is in possession of any proceeds of crime, and
(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed.
Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be or a similar report or complaint has been made or filed under the corresponding law of any other country:
Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act.
9. On a careful perusal of the above section after amendment, makes it clear that even any person having convicted for an offence and any person is in possession of any proceeds of crime, the Director or any other officer not below the rank of Deputy Director authorised by him has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money laundering is not attached immediately, the non attachment of the property is likely to frustrate any proceedings under the said Act. Though there are two provisions subsequently amended, what is required is that, the attaching officer has reason to believe the reasons and such belief to be recorded in writing and the other condition is charged offence must be a scheduled offence. Similarly Section 8 also amended under the Amended Act of 2009. As per the amendment, even if the case instituted in respect of scheduled offence results in acquittal of the accused, a person could still be prosecuted under Section 3 and 4 of the Prevention of Money Laundering Act. In nut shell, this amendment has made the Prevention of Money Laundering Act an independent Act. Section 5 clearly stipulated that there is a requirement of law that before any attachment, reasons in writing to be recorded by the officer concerned. It is to be noted that in this case, admittedly the offence is related to the check period from 01.05.1997 to 30.06.2005 and even at that time, the Prevention of Money Laundering Act was not in force and came into force only on 1.7.2005 and the Section13 of the Prevention of Corruption Act was included in the schedule, in the year 2009.
10. In this regard it is useful to refer the judgment of the Division Bench of Karnataka High Court in the case of M/s Obulapuram Mining Company Pvt. Ltd., vs. Directorate of Enforcement in W.P.Nos.5962 of 2016, 11442 of 2016 and 11440-11441 of 2016 the Division Bench held as follows:
10. It can be seen from the records that all the offences allegedly committed by the writ petitioner were earlier to the insertion of the provision in the schedule of the Prevention of Money Laundering (Amendment) Act, 2009 and as such, they have no application.
11. Therefore, the Enforcement Case Information Report and the order of attachment are without jurisdiction and are liable to be quashed. As we have, already, held that the writ petitioner cannot be prosecuted for the offences alleged, as they are not the scheduled offences under the PML Act. Those offences under the Mines and Geology (Development and Regulation) Act, 1957, the Forest (Conservation) Act, 1980, the Indian Penal Code and the Prevention of Corruption Act, 1988, were included in the PML Act declaring them as scheduled offences only with effect from June 1, 2009. Hence, the Enforcement Directorate Could not have invoked the provisions of the PML Act with retrospective effect.
12. The petitioner cannot be tried and punished for the offences under the PML Act when the offences were not inserted in the schedule of offences under the PML Act. This would deny the writ petitioner the protection provided under Clause (1) of Article 20 of the Constitution of India. Article 20(1) of the Constitution of India prohibits the conviction of a person or his being subjected to penalty for ex-post facto laws. Consequently, the order of attachement is, also, liable to be set aside.
11. In the case of Mahanivesh Oils & Foods Pvt. Ltd., V. Directorate of Enforcement in W.P.(C)1925/ 2014 and C.M.No.4017/2014 the Delhi High Court has held thus:
19. Section 2(u) of the Act defines proceeds of crime and reads as under:-
"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;"
20. Thus, a conjoint reading of 5(1) read with Section 2(u)of the Act clearly indicates that the power to attach is only with respect to the 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 such property.
21. Thus, plainly, the occurrence of a scheduled offence is the substratal condition for giving rise to any proceeds of crime and consequently, the application Section 5(a) of the Act. A commission of a scheduled offence is the fundamental pre-condition for any proceeding under the Act as without a scheduled offence being committed, the question of proceeds of crime coming into existence does not arise.
22. In view of the above, the contention that the Act is completely independent of the principal crime (scheduled offence) giving rise to proceeds of crime is unmerited. It is necessary to bear in mind that the substratal subject of the Act is to prevent money-laundering and confiscate the proceeds of crime. In that perspective, there is an inextricable link between the Act and the occurrence of a crime. It cannot be disputed that the offence of money-laundering is a separate offence unde Section 3 of the Act, which is punishable under Section 4 of the Act. However as stated earlier, the offence of money-laundering relates to the proceeds of crime, the genesis of which is a scheduled offence. In the aforesaid circumstances, before initiation of any proceeding under Section 5 of the Act, it would be necessary for the concerned authorities to identify the scheduled crime. The First Proviso to Section 5 also indicates that no order of attachment shall be made unless in relation to a schedule offence a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 or a complaint has been filed by a person authorised to investigate the scheduled offence before a Magistrate or Court for taking cognizance of the scheduled offence. Thus, in cases where the scheduled offence is itself negated, the fundamental premise of continuing any proceedings under the Act also vanishes. Such cases where it is conclusively held that a commission of a scheduled offence is not established and such decision has attained finality pose no difficulty; in such cases, the proceedings under the Act would fail.
29. The Act is a penal statute and, therefore, can have no retrospective or retroactive operation. Article 20(1) of the Constitution of India expressly forbids that no person can be convicted of any offence except for the violation of a law in force at the time of the commission of the act charged as an offence. Further, no person can be inflicted a penalty greater than what could have been inflicted under the law at the time when the offence was committed. Clearly, no proceedings under the Act can be initiated or sustained in respect of an offence, which has been committed prior to the Act coming into force. However, the subject matter of the Act is not a scheduled offence but the offence of money-laundering. Strictly speaking, it cannot be contended that the Act has a retrospective operation because it now enacts that laundering of proceeds of crime committed earlier as an offence. In The Queen v. The Inhabitants of St. Mary, Whitechapel (1848) 12 QB 120, the Court pointed out that "The Statute which in its direct operation of prospective cannot be properly be called a retrospective statute because a part of the requisites for that action is drawn from the time antecedent to its passing". Thus, with effect from 1st June, 2009 laundering proceeds of crime under Section 420 of the IPC is enacted as an offence of money-laundering punishable under Section 4 of the Act. It is important to note that the punishment under Section 4 of the Act is not for commission of a scheduled offence but for laundering proceeds of a scheduled crime. The fact that the scheduled crime may have been committed prior to the Act coming into force would not render the Act a retrospective statute as only the offence of money-laundering committed after the enforcement of the Act can be proceeded against under the Act.
34. In the circumstances, it cannot be readily accepted that any offence of money-laundering had been committed after the Act coming into force. This Act cannot be read as to empower the authorities to initiate proceedings in respect of money-laundering offences done prior to 01.07.2005 or prior to the related crime being included as a scheduled offence under the Act.
12. From the above judgments and also the fact that the offences allegedly committed by the first and second petitioners prior to 1.7.2005, the Prevention of Money Laundering Act was not in force. Even after 1.7.2005, the offences were not included in the scheduled offences till 1.6.2009. Since the charge sheet dated 13.1.2009, even on that date, Prevention of Corruption Act has not included in the scheduled list of offences. Therefore, this court is of the view that if retrospective effect is given to any statute of any penal nature, it will be directly in conflict with the fundamental rights of the citizen enshrined in Article 20(1) of the Constitution of India. Admittedly, 2nd respondent filed the case only based on the charge sheet of the CBI, who have not conducted any enquiry on their own. In fact, all the documents are original documents of the alleged proceeds of crime, which are in the custody of the CBI Court. When the entire documents are in the custody of the Court, there cannot be any reason to believe that the properties will be dealt with in any other manner. The impugned order was as if 1st petitioner not able to offer any satisfactory explanation during examination. Therefore, the attachment officer has passed an order without a reason to believe that the proceeds of crime are likely to be transferred or disposal. In the absence of any sufficient reason, arriving to such conclusion by mere reproducing the words reason to believe it cannot be stated that the order has been passed after considering the entire gamut of materials. Admittedly, in this case, entire documents are available and the properties are in the custody of the court. Therefore, the order of attachment is not maintainable.
13. Similarly, the charge sheet was filed on 13.1.2009 under Section 13 of Prevention of Corruption Act, but this section was included in the list of Scheduled Offences under Prevention of Money Laundering Act is only on 1.6.2009. Therefore subsequent amendment cannot be given any retrospective effect. It is also categorically held by the Karnataka High Court in M/s Obulapuram Mining Company Pvt. Ltd.case, referred above. The Delhi High Court in Arunkumar Mishra v. Directorate of Enforcement case in Crl.M.C.No.5508 of 2014 has held as follows:
21. It is settled principle of law that the provisions of law cannot be retrospectively applied, as Article 20(1) of the Constitution bars the ex-post facto penal laws and no person can be prosecuted for an alleged offence which occurred earlier, by applying the provisions of law which have come into force after the alleged offence.
14. Though the learned Special Public Prosecutor for Enforcement Directorate appearing for Respondents 1 and 2 relied upon the citations of the Honourable Supreme Court, on a careful perusal, the judgments are not with regard to the applicability of Scheduled offences of the Money Laundering Act. Therefore, the authorities cited by the learned counsel for respondents is no way helpful to the respondents, to establish their case.
15. In view of the above, the Provisional Attachment Order No.09/2017 dated 7.4.2017 in ECIR/CEZO/08/2015 and the Original Complaint in O.C.No.855 of 2017 are quashed. The point is answered accordingly.
16. In the result, the petitions are ordered as prayed for. Connected M.Ps are closed.
13.07.2017 Index : Yes / No Internet: Yes Speaking order/non-speaking order ggs To
1. Adjudicating Authority (PMLA) 4th Floor, Court Room-3, Room No.17, Jeevan Deep Building, Parliament Street, New Delhi 110001.
2. Deputy Director,Directorate of Enforcement, 2nd and 3rd Floor, Murugesa Naicker Complex, 84, Greams Road, Thousand Lights, Chennai 600006.
3. Deputy Superintendent of Police,Central Bureau of Investigation, Anti Corruption Branch, Shastri Bhavan, 3rd Floor, Haddows Road, Chennai 600034.
N.SATHISH KUMAR, J.
ggs Pre-delivery common order in:
Crl.O.P.Nos.10497& 10500 of 2017 13-07-2017