Jharkhand High Court
Narendra Mohan Singh And Anr vs Directorate Of Enforcement And Anr on 22 March, 2014
Equivalent citations: 2014 (2) AJR 670
Author: R.R.Prasad
Bench: R.R.Prasad
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr. M.P. No. 2686 of 2013
1. Narendra Mohan Singh
2. Ankita Singh........................ Petitioners
Versus
Directorate of Enforcement,Ranchi & Anr....... Opp. Parties
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Coram: The Hon'ble Mr. Justice R.R.Prasad
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For the petitioners : Mrs. Harin P. Raval, Sr. Advocate
: M/s Anil Kumar, Sameer Saurabh
Anando Mukherjee, Advocates
For the E.D. : Mr. A.K.Das, Advocate
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ORDER
C.A.V. On 06/03/2014 Delivered on 22/03/2014
15/22.03.2014A Complaint was lodged on 01/07/2009, against Madhu Koda and others which was registered as Case No. 1 of 2009, wherein on amongst the other it had been alleged that Kamlesh Kumar Singh , while had held the office of the Minister, Departments of Water Resource, Excise, Civil and Food Supplies, Government of Jharkhand, Ranchi, amassed wealth disproportionate to his know sources of income by corrupt or illegal means. That complaint was sent before the Vigilance Bureau, Ranchi for its institution and investigation. The Vigilance instituted the case as Vigilance P.S. Case No. 9 of 2009 and after investigating the case, filed charge sheet on 28/01/2010, against the accused persons including Kamlesh Kr. Singh on the charge that Kamlesh Kr. Singh has acquired properties movable as well as immovable worth Rs. 1,75,15,918/-, which was disproportionate to his known sources of income and, thereby, it was alleged that he committed offence punishable under Sections 409, 420, 423, 424, 465 and 120B of the Indian Penal Code and also under Sections 7, 10. 11 and 13(2) read with Section 13(e) of the Prevention of Corruption Act.
2. Subsequently, this Court passed an order on 04/08/2011 in WP (PIL) No. 4700 of 2008, directing the CBI to take up the Vigilance Case No. 9 of 2009 for its further investigation. In compliance of the order passed by this Court, the CBI re-registered the case as RC Case No. 5(A)/2010/AHD/ Ranchi. On completion of investigation, charge sheet was submitted on 26/03/2012, against the accused persons including Kamlesh Kr. Singh on the charge that he has acquired assets during the period from March, 2005 to July, 2009 to the tune of Rs. 5,46,07,597/- which is disproportionate to his known sources of income. Before the charge sheet was submitted, the Enforcement Directorate had lodged an ECIR case against the accused persons. After investigation of the case, a complaint was filed against Kamlesh Kr. Singh under Section 45 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as PML Act) on 14/02/2011. After the charge sheet was submitted by the CBI, when further facts came to light in the investigation of the CBI, the Enforcement Directorate took up the matter for further investigation in the said ECIR case, whereby culpability of these petitioners and other accused persons was found and, hence, a supplementary complaint was filed before the Special court under Section 45 of the PML Act, on 12/08/2013, on the allegation that during investigation made by the Enforcement Directorate when it was found that Surya Sonal Singh, son of Kamlesh Kr. Singh, had claimed that he had acquired certain properties out of the amount of one crore after getting loan from Ankita Singh (petitioner no. 2), wife of Narendra Mohan Singh (petitioner no. 1), a summon was issued to him under Section 50 of PML Act. He responded to that summon and made statements that he had taken loan of Rs. 1 Crore from his sister Ankita Singh, which was utilized for acquisition of the properties at Vipul Trade Centre, Gurgaon. Thereupon, Smt. Ankita Singh was also noticed, who confirmed that she had given loan of Rs. 1 crore vide two cheques to his brother Surya Sonal Singh in two equal installments of Rs. 50 lakhs each on 22/07/2008 and 28/08/2008 respectively, after taking loan from her husband Narendra Mohan Singh (petitioner no. 1). Narendra Mohan Singh having been noticed, also responded and disclosed that he had given laon of Rs. 1 crore to his wife Ankita Singh (petitioner no. 2). But, the income tax returns (ITRs) filed by them never reflected that Narendra Mohan Singh had given loan to his wife, who in turn, had given it to his brother Surya Sonal Singh as loan. It has been further alleged that Narendra Mohan Singh though had claimed before the authority of the Enforcement Directorate that he had taken loan/advance from many parties, but he never disclosed the name of the parties before the Enforcement Directorate. Thus, it was submitted that all the aforesaid three persons have taken false plea that the properties at Gurgaon was acquired by Surya Sonal Singh by the amount taken on loan, rather the properties had been acquired through the proceeds of crime generated by his father Kamlesh Kr. Singh by committing scheduled offence.
The Court having found prima-facie case being made out, took cognizance of the offences vide order dated 12/08/2013, passed in ECIR/02/Pat/2009/AD(B) against these two petitioners, i.e. Narendra Mohan Singh and his wife Ankita Singh. That order is under challenge.
3. Mr. Raval, learned senior counsel appearing for the petitioners submits that to establish an offence of money laundering, it is essential that the persons, charged, should have directly or indirectly attempted to indulge or knowingly assisted or knowingly been a party or actually involved in any process or activity connected with proceeds of crime. Whereas, in terms of Section 2(u) of PML Act, proceeds of crime means property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence and the scheduled offence in terms of definition given under Section 2(1)(y) of the PML Act, happens to be the offence under Part A, Part B and Part C of the schedule, but allegation against the petitioners of projecting a sum of Rs. 1 crore as untainted money, is never the subject matter of the charge sheet submitted by the CBI and, therefore, any prosecution under Section 3 of the PML Act against the petitioners would not be maintainable as for prosecuting a person under PML Act, precondition is that one should involved himself in the process or activities connected with the proceeds of crime and the proceeds of crime be derived or obtained as a result of criminal activity relating to scheduled offence. But, here in the case as has been stated above, the charge upon which cognizance has been taken under the PML Act, that never form part of the charges upon which CBI has submitted charge sheet.
In this regard, further submission is that two transactions, which are said to be the proceeds of crime committed by Kamlesh Kr. Singh under Section 13, of Rs. 50/-lakhs each, took place on 22/07/2008 and 28/08/2008, on which dates Rs. 50 lakhs and further Rs. 50 lakhs on being taken loan by Ankita Singh from her husband Narendra Mohan Singh, gave it to her brother Surya Sonal Singh as loan but Section 13 of the Prevention of Corruption Act, has been added as scheduled offence by virtue of the amendment made in the year 2009, w.e.f. 01/06/2009 and, thereby, it is evident that those two transactions were made before Section 13 of the Prevention of Corruption Act, was added as scheduled offence and, thereby, those transactions even if, are taken to be proceeds of crime, cannot be said to have been generated from the scheduled offence and, hence, on this ground alone, prosecution cannot be maintained under the PML Act and, thereby, the order taking cognizance is fit to be quashed.
In this regard, it was further submitted that the amended Act, whereby Section 13 was incorporated, cannot have retrospective effect as the statute, which affects substantive rights is always presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment. In this regard, learned senior counsel has referred to the decisions rendered in the cases of "State of Andhra Pradesh and Others- versus- Ch. Gandhi [(2013) 5 SCC 111] and "Ritesh Agarwal and Another-versus- Securities and Exchange Board of India and Others, [(2008) 8 SCC 205]".
Second limb of the argument is that the Directorate of Enforcement in relation to the transactions of Rs. 1 crore given by way of loan by petitioner no. 2 to her brother Surya Sonal Singh, had passed an order on 24/07/2013 for provisional attachment. For confirmation of the same a complaint was filed before the Adjudicating Authority under the Provisions of Money Laundering Act, 2002. The learned Adjudication Authority after thorough consideration of the matter did record that the amount of Rs. 1 crore is a legitimate money and is not connected with the proceeds of crime and, thereby, the entire case of the Enforcement Directorate that the petitioners have indulged themselves in a process connected with the proceeds of the crime by projecting it as untainted money generated by Kamlesh Kr. Singh by committing scheduled offence falls flat on the ground and, thereby, it is liable to be quashed in view of the decision rendered in a case of "Radheshyam Kejriwal-versus-State of West Bengal and Another, [(2011) 3 SCC 581", wherein it has been held that the charges against Sri Radheshyam Kejriwal for contravening the provisions of Section 9(1)(f)(i) and Section 8(2) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973, cannot be sustained. In the face of the finding given by the Enforcement Directorate in adjudication proceeding that there is no contravention of any of the provisions of the Act. Thus, it was held that it would be unjust and an abuse of the process of the Court to permit the enforcement Directorate to continue with the criminal prosecution.
4. Incidentally, it was also submitted that the provisions as contained in Section 44 (1)(b) of the PML Act, 2002 does empower a Special Court to take cognizance of the offence under Section 3 upon a complaint made by the authority authorized in this behalf and at the same time proviso to Section 45 of the PML Act, 2002 does provide that the Special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by the authority prescribed therein and, thereby, when both the provisions do stipulate that the cognizance can be taken only upon 'a complaint', contemplation never seems to be there to have more than one complaint and, thereby, there does not appear to be any scope for launching prosecution by way of a supplementary complaint. Since, the cognizance of the offence has been taken upon a supplementary complaint, the said order cannot be held to be sustainable in the eye of law.
5. As against this, Mr. Das, learned counsel appearing for the Enforcement Directorate submits that initially a complaint was lodged under Section 45 PML Act, against Kamlesh Kumar Singh when he was found to have been projecting the proceeds of crime as untainted properties but after submissions of the charge sheet by the CBI, certain new facts came to light that Surya Sonal Singh, son of Kamlesh Kumar Singh had claimed to have acquired a property from the legitimate sources by way of advances etc., he was noticed under Section 50 of the PML Act, to which he responded wherein he claimed to have raised the money by taking loan of Rs. 1 crore from his sister Ankita Singh for acquiring properties at Vipul Trade Centre, Gurgaon. When Ankita Singh was noticed, she disclosed that the money, which had been given to her brother, had been taken from her husband Narendra Mohan Singh (petitioner no. 1). When Narendra Mohan Singh quizzed on this point, he admitted that he had given the money to his wife after taking loan from some persons, but at that point of time he never disclosed the name of the persons from whom he had taken loan. That apart, the income tax returns, filed by all the three persons never reflected those transaction and, thereby, their pleas were not accepted to be true.
In this regard, it was further submitted that now the petitioners, on the basis of certain documents such as balance sheet, have been taking plea that those documents reflect the said fact, which has been taken on behalf of those persons, but those documents can be said to be the products of an afterthought as the ITRs submitted by them, which had been obtained by the authority of the Enforcement Directorate from Income Tax authority, had never reflected about those transactions and that a new plea has been taken on behalf of the petitioners, which though had never been taken at the time of giving statements that he had taken loan from Bhawesh Metal Private Limited and M/s Dynamix Reality, but on verification, the claim made by petitioner no. 1, has been found to be false. Under the circumstances, a supplementary complaint has been filed and filing of which has never been prohibited under the PML Act nor under the Code of Criminal Procedure.
6. Further, it was submitted that the provision as contained in section 3 of the Prevention of Money Laundering Act, never does stipulate that only when one commits scheduled offence particularly offence under Section 13 of the Prevention of Corruption Act, when it was incorporated in the statute by way of amendment, projection of the proceeds of the crime by the person would be liable to be prosecuted, rather the offence of money laundering is committed on the date when the proceeds of crime is being projected as untainted property, which proposition has been laid down by this Court in a case of "Hari Narayan Rai- versus- Union of India & Other [ W.P.(Cr.) No. 325 of 2010]". Learned counsel, in order to buttress his stand, has also referred to a decision rendered in a case of "Sajjan Singh-versus- State of Punjab [AIR 1964 (SC) 464]" and also in a case of "Union of India- versus- Hassan Ali Khan and another [(2011) 10 SCC 235]".
Thus, it was submitted that this application is devoid of any merit and, hence, it is fit to be dismissed.
7. Since, as per the case of the prosecution, the transaction of Rs. 1 crore took place on 22/07/2008 and 28/08/2008, when petitioner no. 2, after taking loan of the said amount from her husband- petitioner no.1, advanced it as loan to her brother Surya Sonal Singh, the son of Kamlesh Kumar Singh, one of the accused in a case registered under Section 13(1)(e) of the Prevention of Corruption Act, submission is being advanced on behalf of the petitioners that the said transaction cannot be taken to be projection of proceeds of crime as the offence under Section 13 of the Prevention of Corruption Act, was added as scheduled offence w.e.f. 01/06/2009, when the Amendment Act came into force.
On the other hand, the stand, which has been taken on behalf of the Enforcement Directorate is that for the purpose of prosecuting a person under Section 3 of the P.M.L. Act, the date of laundering would be relevant and not the date when the scheduled offence is committed.
8. In order to appreciate the submissionis, one needs to take notice of the provision as contained in Sections 3, 2(u) and 2(v) of the PML Act, which deals with the offence of money laundering and define proceeds of crime and the 'properties' respectively, which are as follows:-
"3. Offence of money-laundering- Whoever 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.
2(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;
2(v) "Property" means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located.
9. Further, it be stated that in part B of the scheduled to the Prevention of Money Laundering Act, 2002, Section 13 of the Prevention of Corruption Act, was incorporated by money laundering Amendment Act, 2009, which came into forece w.e.f. 01/06/2009. From reading of the provision as contained in Sections 3, 2(u) and 2(v), it would appear that any person who involves himself directly or indirectly with any process or activity connected with the proceeds of crime and projects it as untainted money can very well be prosecuted under Section 3. Therefore, it would be that date when one person is found involved in any process or activity connected with the proceeds of crime and projected it as untainted property would be relevant for the purpose of prosecution under Section 3 of the P.M.L. Act and not the date when the scheduled offence was committed. This proposition has been laid down by this Court in a case of "Hari Narayan Rai- versus- Union of India & Other" (supra).
10. Further, in this regard, I may refere to a decision rendered in a case of "Sajjan Singh-versus-State of Punjab" (supra), wherein the appellant was put to trial for the charges under Section 5 of the Prevention of Corruption Act, when the assets acquired by the appellant was found to be disproportionate to his know sources of income, the stand, which had been taken is that the property, which was taken to be disproportionate to his know source of income, had been acquired before Section 5(3) of the Prevention of Corruption Act, was incorporated in Section 5 and, thereby, he is not liable to be prosecuted under Section 5 of the Prevention of Corruption Act. The contention was repelled by Their Lordships for the reason assigned in para-15, which reads as follows:-
"15. It may also be mentioned that if pecuniary resources or property acquired before the date of commencement of the Act were to be left out of account in applying sub-section (3) of S.5 it would be proper and reasonable to limit the receipt of income against which the proportion is to be considered also to the period after the Act. On the face of it this would lead to a curious and anomalous position by no means satisfactory or helpful to the accused himself. For the income received during the years previous to the commencement of the Act may have helped in the acquisition of property after the commencement of the Act. From whatever point we look at the matter it seems to us clear that the pecuniary resources and property in possession of the accused persons or any other person on his behalf have to be taken into consideration for the purpose of sub-sec. (3) of S.5, whether these were acquired before or after the Act came into force."
11. Moreover, the facts of the case also never justifies the submission, which had been advanced on behalf of the petitioners . It be stated that it is a case of the CBI that Kamles Kumar Singh had acquired assets worth Rs. 5,46,07,597/- in between March, 2005 to July, 2009, whereas Section 13, as has been stated above, was incorporated in the scheduled offence w.e.f. 01/06/2009. Therefore, the property derived or obtained as a result of criminal activity relating to scheduled offence can easily be taken to be the proceeds of crime. The petitioners were found to have been involved themselves in that process or activity of the proceeds of crime in the year 2008 when they are said to have advanced the money to Surya Sonal Singh, who has been found to have been involved in the activity connected with the proceeds of crime from the years 2008 to 2012, when he invested the proceeds of crime in the Real Estate at Gurgaon, but all of them have been found projecting it as untainted money much after incorporation of Section 13 as scheduled offence. Moreover, one may find there had been inter connected transaction of the proceeds of crime starting from the year 2008 to 2012. If the prosecution has found Surya Sonal Singh to have involved himself in the activity or process of the proceeds of crime, any transaction entered into in between petitioner nos. 1, 2 and Surya Sonal Singh would be presumed to be interconnected transaction in terms of the provisions as contained in Section 23 of PML Act, which reads as follows:-
"23. Presumption in inter-connected transaction.- Where money-laundering involves two or more inter-connected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under section 8, it shall, unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the remaining transactions form part of such inter-connected transaction."
12. Under the circumstances, the submissions, which had been made on behalf of the petitioners that the transaction entered into by the petitioners in the year 2008, cannot be subject matter of the prosecution under Section 3 of the PML Act, is not worth acceptable.
13. Going further in the matter, it be stated that Adjudicating Authority while adjudicating the matter relating to the attachment of the properties acquired through the said transactions, has been pleased to hold that Rs. 1 crore is legitimate money and is not connected with the proceeds of crime. In such eventuality, learned senior counsel by placing reliance on a decision rendered in a case of "Radheshyam Kejriwal-versus-State of West Bengal and Another" (supra) has sought the prosecution to be quashed.
It is true that Their Lordship in a case of "Radheshyam Kejriwal"
has been pleased to hold that if the Adjudicating Authority does find that there is no contravention of any of the provision of the Act, it would be unjust and abuse of the process of Court to permit the Enforcement Directorate to continue with the criminal prosecution. Their Lordships have culled out the proposition in Para-38 sub-clause (vi)-(vii) and 39, which reads as follows:-
"38. The ratio which can be culled out from these decisions can broadly be stated as follows:-
(i)-(v)--------
(vi) The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceeding is on technical ground and not on merit, prosecution may continue; and
(vii) In case of exoneration, however, on merits where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of facts and circumstances can not be allowed to continue underlying principle being the higher standard of proof in criminal cases.
39. In our opinion, therefore, the yardstick would be to judge as to whether allegation in the adjudication proceeding as well as proceeding for prosecution is identical and the exoneration of the persons concerned in the adjudication proceeding is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceedings, the trial of the persons concerned shall be in abuse of the process of court."
14. From perusal of the order passed by the Adjudicating Authority as contained in Annexure-9 to the petitioners' reply to the supplementary counter affidavit, it does appear that Adjudication Authority came to the conclusion for the reason that the CBI having investigated the matter, did not find any illegality or irregularity in the transaction of Rs. 1 crore took place between the petitioner nos. 1, 2 and Surya Sonal Singh and the said transaction get reflected from the I.T. Returns and balance sheet of those persons, but the case of the Enforcement Directorate as has been made out here, is different, wherein the stand of the Enforcement Directorate is that when the Enforcement Directorate, after investigation made by the CBI, did find that there may be involvement of these petitioners and Surya Sonal Singh, issued notice in terms of the provisions as contained in Section 50 of PML Act, in response of which, it has been stated by petitioner no. 2 that she had taken loan from her husband petitioner no. 1 and gave it to her brother as loan. The petitioner no. 2 also admitted that he had transferred the said amount to the account of his wife after taking loan, but at that point of time he never disclosed as to from whom loan had been taken. However, during proceeding of this case, name of the parties has been disclosed from whom the loan had been taken. In order to be satisfied with their claims, when the petitioners and Surya Sonal Singh were asked to produce ITRs, they did produce but in case of none of the petitioners nor Surya Sonal Singh, the factum of aforesaid transactions get reflected from their ITRs. However, subsequently, it is said that the balance sheet was filed wherein said reflection of giving and taking loan has been shown and under the circumstances when initially in ITRs, submitted by them, they had not disclosed about the said transaction, incorporation of said transaction in the ITRs, subsequently submitted, and even the balance sheet as per the case of the Enforcement Directorate, becomes a suspicious documents, on which documents the Adjudicating Authority has placed his reliance.
15. Further case of the Enforcement Directorate seems to be that when the claim was laid by petitioner no. 1 that he had taken loan from M/s Bhawesh Metal and M/s Ketan Metal, the documents submitted by those firms never disclosed any loan being given to petitioner no. 1. However, subsequently, some documents were placed showing advancement of the loan to petitioner no. 1, but those documents in view of the case of the Enforcement Directorate become quite suspicious. In that event, any finding recorded by the Adjudicating Authority would not be binding and, thereby, order passed by the Adjudication Authority, would have no adverse effect upon the case of the Enforcement Directorate whereby the petitioners are being prosecuted for commission of the offence under Section 3 of the PML Act.
16. Going further into the matter, it be stated that the question has been raised over the maintainability of the supplementary complaint on the premise that the provisions as contained in Section 44 (1)(b) and 45 of the PML Act, refers to 'a complaint'. Even if such reference is there of 'a complaint', it never prevents of filing of supplementary complaint as the reference of a complaint has been made in those provisions in the context that whenever a complaint filed by an authority authorized, court may take cognizance over it.
17. We have already noted the circumstances, under which a supplementary complaint has been lodged. In such situation, it can be said that it has been lodged in the same manner in which supplementary charge sheet is submitted in a police case. If such a restricted meaning as has been sought to be advanced then the result would be that even if after filing of a complaint culpability of any other person is found during investigation, he will not be prosecuted. This can never be the intention of the legislature.
18. Thus, having regard to the facts and circumstances, discussed above, I do not find any illegality with the order taking cognizance and, hence, this application stands dismissed.
Before parting with this order, it be stated that any finding recorded for the purpose of disposal of this case, may not be prejudicial to the merit of the case.
(R.R.Prasad, J) Mukund/cp.3