Andhra Pradesh High Court - Amravati
Union Of India vs Dr Appa Rao Mukkamala on 5 January, 2024
Author: R Raghunandan Rao
Bench: R Raghunandan Rao
IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI
HON‟BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE
&
HON‟BLE MR. JUSTICE R. RAGHUNANDAN RAO
WRIT APPEAL Nos.967, 641, 1010 and 1011 of 2023
WRIT APPEAL No.967 of 2023
Union of India,
Rep. by it‟s Secretary,
Ministry of Finance,
New Delhi and three others.
... Appellants
Versus
M/s. Lexus Technologies Private Limited,
Rep. by its Director Sanamsetty Subba Rao,
Having its Regd. Office at Flat No.A405,
Sri Balaji Fortune Towers, Op. Auto Nagar,
Mangalagiri, Guntur District,
Andhra Pradesh - 522 503 and another.
...Respondents
Mr. A. R. L. Sundaresan, Additional Solicitor General of India, representing Mr. J. U. M. V. Prasad, Counsel for the appellants. Mr. Ravi Chandavarapu, Counsel for respondent No.1. Ms. V. Dyumani, Counsel for respondent No.2. WRIT APPEAL No.641 of 2023 Directorate of Enforcement, Rep. by it‟s Director, Department of Revenue, HCJ & RRR, J 2 W.A.Nos.967 of 2023 and batch Pravartan Bhawan, APJ Abdul Kalam Road, New Delhi - 110 011 and two others.
... Appellants Versus Uppalapau Srinivasa Rao, S/o. Venkateswara Rao, Aged 50 years, R/o.D.No.54-46-17A, Layola College Road, Central Excise Colony, Vijayawada, Krishna District, Andhra Pradesh and another.
...Respondents Mr. A. R. L. Sundaresan, Additional Solicitor General of India, representing Mr. J. U. M. V. Prasad, Counsel for the appellants. Mr. B. Adinarayana Rao, Senior Counsel representing Mr. Javvaji Sarath Chandra, Counsel for respondent No.1. Deputy Solicitor General of India, Counsel for respondent Nos.2 and
3. WRIT APPEAL No.1010 of 2023 Union of India, Rep. by it‟s Secretary, Ministry of Finance, New Delhi and three others.
... Appellants Versus Dr. Mani Akkineni, W/o. Late Sudarshan Rao, Aged 65 years, R/o. Flat No.105, Trendset Harmony Apartment, Gayatri Nagar, Vijayawada, Andhra Pradesh and another.
HCJ & RRR, J 3 W.A.Nos.967 of 2023 and batch ...Respondents Mr. A. R. L. Sundaresan, Additional Solicitor General of India, representing Mr. J. U. M. V. Prasad, Counsel for the appellants. Mr. B. Adinarayana Rao, Senior Counsel representing Mr. Javvaji Sarath Chandra, Counsel for respondent Nos.1 and 2. WRIT APPEAL No.1011 of 2023 Union of India, Rep. by it‟s Secretary, Ministry of Finance, New Delhi and three others.
... Appellants Versus Dr. Appa Rao Mukkamala, S/o. Late Bhaskara Rao, Aged 75 years, R/o. 4545, Warwick Circle, Grand Blanc, Michigan 48439, USA, Presently Residing at River House, Krishna Karakatta Road, Undavalli, Guntur District and another.
...Respondents Mr. A. R. L. Sundaresan, Additional Solicitor General of India, representing Mr. J. U. M. V. Prasad, Counsel for the appellants. Mr. Ravi Chandavarapu, Counsel for respondent Nos.1 and 2.
HCJ & RRR, J 4 W.A.Nos.967 of 2023 and batch DATE : 05.01.2024 PER DHIRAJ SINGH THAKUR, CJ:
1. In all the four aforementioned writ appeals, since common questions of law and fact arise, we propose to deal with them by way of a common order.
For purposes of convenience, reference shall be made to facts contained in W.A.No.967 of 2023.
2. The present Writ Appeal No.967 of 2023 has been filed in terms of Clause 15 of the Letters Patent against the judgment and order dated 09.08.2023 passed in W.P.No.18057 of 2023, whereby the writ Court while exercising powers under Article 226 of the Constitution of India, has quashed the impugned ECIR dated 31.05.2022, the Provisional Attachment Order No.1/2023, dated 10.05.2023 and the Original Complaint No.1996/2023, dated 08.06.2023, in terms of the provisions of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as "PMLA, 2002") and has further directed release of all the seized property, material and documents.
HCJ & RRR, J 5 W.A.Nos.967 of 2023 and batch
3. Investigation under PMLA, 2002 came to be initiated vide ECIR/VKSZO/027/2022, dated 31.05.2022, against the respondents herein and officials of M/s. NRI Academy of Sciences which is a Society registered under the Andhra Pradesh Societies Registration Act, 2001 (hereinafter referred to as "the Act, 2001"), on the basis of two FIRs bearing Crime No.85 of 2021, dated 03.03.2021 for offences punishable under Sections 420, 406, 120B r/w Section 34 of IPC and Crime No.346 of 2021 dated 19.06.2021 for offences punishable under Sections 120B, 409, 471, 420 and 506 of IPC registered at Mangalagiri police station.
4. Since the dispute primarily involved the control over the management of the NRI Academy of Sciences which was running a one thousand bedded hospital including medical colleges and nursing homes, a Division Bench of this Court vide judgment and order dated 22.02.2022 passed in W.A.Nos.234 of 2022 and batch, held that the Society was registered under the provisions of the Act, 2001, Section 23 whereof dealt with the dispute regarding management arising among the committee or the members of the Society in respect of the matters relating to the affairs of the Society etc., the same could not be gone into in writ proceedings and therefore, referred the same for adjudication, with the consent of HCJ & RRR, J 6 W.A.Nos.967 of 2023 and batch the parties to a sole Arbitrator in terms of the said Section 23 of the Act, 2001. The order dated 22.02.2022, passed by the Division Bench also recorded the agreement of the counsel for the parties that all pending litigations in relation to the subject dispute before any legal fora/Courts would be withdrawn by the respective parties.
5. In the backdrop of the aforementioned developments, petitions under Section 482 Cr.P.C. bearing Crl.P.No.2341 of 2023 and Crl.P.No.1398 of 2023, came to be filed for quashing the proceedings in Crime No.85 of 2021 for offences under Sections 420, 406, 120B r/w Section 34 IPC and in Crime No.346 of 2021 for offences under Sections 120B, 409, 471, 420, 506 IPC both the FIRs registered with Mangalagiri Rural Police Station, respectively. In these petitions, it was urged that the complainant in Crime Nos.85/2021 and 346/2021 was a member of the NRI Academy of Sciences and that the said FIRs had been registered on account of the disputes between the rival groups for control over the management of the Society. Reference was made to the judgment and order dated 22.02.2022, passed in W.A.Nos.234 of 2022 and batch and therefore, made a prayer that the FIRs in question be quashed. An affidavit also appears to have been filed by the complainant in the aforementioned proceedings before the learned HCJ & RRR, J 7 W.A.Nos.967 of 2023 and batch single Judge tendering his unconditional consent for quashing of the FIRs. Based upon the aforementioned facts which were placed before the learned single Judge, the proceedings in regard to Crime No.85/2021 and 346/2021 were quashed without going into the merits of the cases.
6. The W.P.No.18057 of 2023, came to be filed by respondent No.1 herein challenging the proceedings initiated by the appellants herein under the provisions of the PMLA, 2002 on the ground that the proceedings were without any authority or adjudication in view of the fact that the FIRs in question had been quashed by this Court in CRLP.No.2341/2023 and CRLP.No.1398/2023.
Following the ratio of the judgment passed by Apex Court in Vijay Madanlal Choudhary and Others vs. Union of India 1, the writ Court allowed the writ petition and quashed the impugned ECIR dated 31.05.2022, along with the Original Complaint and the Provisional Attachment Order which was impugned therein. Hence, the present writ appeal.
1 2022 SCC OnLine 929 HCJ & RRR, J 8 W.A.Nos.967 of 2023 and batch
7. The main ground urged in the present writ appeals is focused on the issue that the economic offences cannot be quashed at the investigation stage on the ground that the matter had been settled between the parties as they were public wrongs committed against the society. It was urged that the FIRs bearing Crime No.85/2021 Crime No.346/2021 ought not to have been quashed based upon an agreement between the parties inter se.
8. Counsel for respondent No.1, on the other hand, reiterated the position of the law as was crystallised by the Apex Court in Vijay Madanlal Choudhary and Others vs. Union of India (supra), wherein it was held:
"467. ... (d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money- laundering against him or any one claiming such property being the property linked to stated scheduled offence through him."
HCJ & RRR, J 9 W.A.Nos.967 of 2023 and batch The judgment in Vijay Madanlal Choudhary case (supra) was followed subsequently by the Apex Court in Assistant Director Enforcement Directorate vs. M/s. Nik Nish Retail Limited and others2 decided on 14.07.2023, wherein it was held:
"In paragraph 187 (v) (d) of the decision in the case of Vijay Madanlal Chowdhury & Ors. V. Union of India & Ors. (2022) SCC OnLine SC 929, it is held that even if predicate offence is quashed by the Court of competent jurisdiction, there can be no offence of money laundering against the accused.
Appropriate proceedings can be always filed by the concerned parties for challenging the order by which predicate offence was quashed. If the said order is set aside and the case is revived, it will be always open for the petitioner to revive the proceedings under the Prevention of Money Laundering Act, 2002.
The Special Leave Petition is accordingly disposed of."
9. Even when the position of law on this subject appears to have been settled, yet we refrain from expressing any opinion on the issue, on the ground that the present appeal itself is not maintainable, in view of the judgment of the Apex Court rendered in Ram Kishan Fauji vs. State of Haryana and others3. 2 SLP (Criminal) Diary No(s).24321/2023 3 (2017) 5 SCC 533 HCJ & RRR, J 10 W.A.Nos.967 of 2023 and batch
10. In the case of Ram Kishan Fauji (supra), the Apex Court had not accepted the view expressed by a full Bench of the Andhra Pradesh High Court, wherein it held that, when the power was exercised under Article 226 of the Constitution for quashing of a criminal proceeding, there was no exercise of criminal jurisdiction. A distinction was sought to be made between proceedings for quashing of the FIR under Section 482 of the Criminal Procedure Code and the powers exercisable by the High Court under Article 226 of the Constitution for quashing of criminal proceedings. The Apex Court, however, held the view so expressed by the full Bench of the composite High Court of Andhra Pradesh as incorrect. It was held:
"56. As we find from the decisions of the aforesaid three High Courts, it is evident that there is no disagreement or conflict on the principle that if an appeal is barred under Clause 10 or Clause 15 of the Letters Patent, as the case may be, no appeal will lie. The High Court of Andhra Pradesh, however, has held that when the power is exercised under Article 226 of the Constitution for quashing of a criminal proceeding, there is no exercise of criminal jurisdiction. It has distinguished the proceeding for quashing of FIR under Section 482 Cr.P.C and, in that context, has opined that from such an order, no appeal would lie.On the contrary, the High Courts of Gujarat and Delhi, on the basis of the law laid down by this Court in Ishwarlal Bhagwandas, have laid emphasis on the seed of initiation of criminal proceeding, the consequence of a criminal proceeding and also the nature of relief sought before the Single Judge under Article 226 of the Constitution. The conception of „criminal jurisdiction‟ as used in Clause 10 of the Letters Patent is not to be construed in the narrow sense. It encompasses in its gamut the inception and the consequence. It is the field in respect of which the jurisdiction is exercised, is relevant. The contention that solely because a writ petition is filed to quash an investigation, HCJ & RRR, J 11 W.A.Nos.967 of 2023 and batch it would have room for intra-court appeal and if a petition is filed under inherent jurisdiction under Section 482 Cr.P.C., there would be no space for an intra-court appeal, would create an anomalous, unacceptable and inconceivable situation. The provision contained in the Letters Patent does not allow or permit such an interpretation. When we are required to consider a bar or non-permissibility, we have to appreciate the same in true letter and spirit. It confers jurisdiction as regards the subject of controversy or nature of proceeding and that subject is exercise of jurisdiction in criminal matters. It has nothing to do whether the order has been passed in exercise of extraordinary jurisdiction under Article 226 of the Constitution or inherent jurisdiction under Section 482 Cr.P.C.
58. In view of the aforesaid premised reasons, we hold that the High Courts of Gujarat and Delhi have correctly laid down the law and the view expressed by the Full Bench of the High Court of Andhra Pradesh is incorrect."
11. Be that as it may, following the ratio of the judgment in Ram Kishan Fauji (supra), we hold that the present writ appeals are not maintainable and are accordingly dismissed. No costs.
Pending miscellaneous applications, if any, shall stand closed. DHIRAJ SINGH THAKUR, CJ R. RAGHUNANDAN RAO, J SSN HCJ & RRR, J 12 W.A.Nos.967 of 2023 and batch HON‟BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE & HON‟BLE MR. JUSTICE R. RAGHUNANDAN RAO WRIT APPEAL Nos.967, 641, 1010 and 1011 of 2023 (Per Dhiraj Singh Thakur, CJ) DATE : 05.01.2024 SSN