Bangalore District Court
Assistant Director vs John Micheal on 8 April, 2024
1 Spl.C.No.132/2015
KABC010070872015
IN THE COURT OF XLVII ADDL. CITY CIVIL &
SESSIONS JUDGE AND SPECIAL JUDGE FOR CBI
CASES, BENGALURU (CCH-48)
DATED THIS THE 6th DAY OF APRIL, 2024
PRESENT
Sri Santhosh Gajanan Bhat, B.A.L., LL.B. ,
LXXXI Addl. City Civil & Sessions Judge, Bengaluru
City (CCH-82)
(Special Court exclusively to deal with criminal cases
related to elected, former and sitting MPs/ MLAs
in the State of Karnataka)
C/c of XLVII Addl. City Civil and Sessions Judge and
Judge for CBI Cases, Bengaluru (CCH-48)
SPL.CC.NO.132/2015
COMPLAINANT: Assistant Director,
Directorate of Enforcement
Bengaluru.
(By Sri I S Pramod Chandra,
Learned Spl. Public Prosecutor)
Vs.
ACCUSED : 1. Sri. John Michael
S/o. Yesudas
Aged 46 years,
R/at. No.3, 3rd Cross,
Jinkethimmana Halli,
Near Om Shree Kateramma Layout,
T.C.Palya P.O.,
2 Spl.C.No.132/2015
Bengaluru-560 075.
2. Smt. Manjula Michael,
Aged about 33 years, (Split-up)
(By Sri.Santhosh S Nagarale, Advocate)
***
1.Date of Commission of Offence : 22.01.2005-
10.11.2008
2. Date of Report of Offence : 11.09.2010
3. Arrest of Accused : Accused No.1 is on
bail
4. Name of the complainant : Sri. Sreedharan S/o.
Narasimha Iyengar
5. Date of recording of Evidence : 26.04.2022
6. Date of closing Evidence : 26.05.2023
7. Offences complained of : 200 of Cr.P.C., R/w.
Sec.45(1) of
Prevention of
Corruption Act and
under Section 3 and 4
of Money Laundering
Act, 2002.
8. Opinion of the Judge : As per the final order
(Santhosh Gajanan Bhat)
LXXXI Addl. City Civil & Sessions Judge,
Bengaluru City (CCH-82)
C/c of XLVII Addl. City Civil and Sessions
Judge and Judge for CBI Cases,
Bengaluru (CCH-48)
3 Spl.C.No.132/2015
JUDGMENT
The Assistant Director, Directorate of Enforcement, Bengaluru, had filed a complaint under Section 200 of Cr.P.C., R/w. Sec.45 (1) of Prevention of Money Laundering Act, 2002 (hereinafter referred as PMLA), for the offence punishable under Section 3 and 4 of the aforesaid Act,cc against the accused No.1 through John Michael and accused No.2 Manjula Michael (against whom the case is ordered to be split-up).
2. The complainant herein, being the Assistant Director, Directorate of Enforcement is the competent authority to file the complaint by virtue of the powers conferred under the notification No.6/14/2008 dated 11.11.2014 and it is been narrated in the complaint with the genesis of the case was registration of FIR in Crime No.239/2010 dated 11.09.2010 and Cr.No.61/2011 dated 03.03.2011 wherein charge-sheet was filed against the accused No.1 before the I ACMM Court at Bengaluru. Further it has been narrated in detail in the complaint 4 Spl.C.No.132/2015 that in the predicate offence, it was alleged that one N.Sreedharan and Sri. Tapan Bhandari who were residing at Riyadh, Kingdom of Saudi Arabia were induced by accused No.1 John Michael under the pretext of providing allotment of BDA sites under the Chief Minister's discretionary quota and also it has been narrated that he had got himself introduced as the Special Secretary of the then Chief Minister Dharam Singh and had induced the aforesaid persons to part with huge sum of amount and after collecting the same he had got executed several forged and fabricated sale deeds purporting it to be issued by BDA and thereby he was said to have committed the offences punishable under Section 419, 420, 468, 471 of IPC. It has also been narrated that due to contravention of Section 420 and 471 of IPC, it is termed as scheduled offences coming within the meaning of Section 2(1)(y) of PMLA, complainant authorities had registered the case against the aforesaid accused persons in ECIR/10/BZ/2011 to investigate the commission of 5 Spl.C.No.132/2015 offences punishable under Section 3 of PMLA in terms of Section 48 and 49 of the Act. The complaint also indicates of narration, date of incident wherein it has been stated that the witnesses were summoned in pursuance of the case registered by the ED authorities and on 6.12.2013 a notice was issued for securing N.Sreedharan, who had appeared before the authorities and had got statement recorded. Likewise, the complaint also discloses of recording the statement of Sri.Tapan Bhandari, Sri. Ivan Raj Samuel, Sri. Pradeep Kuruvilla, Smt. Hima Bindu, Smt. Tanuj Kapileshwari and Ram Kumar, who had stated of paying huge amount to accused No.1 John Michael. It is also been narrated that John Michael had received totally a sum of Rs.28.00 lakhs during the period July 2007-2008 and also he had received a sum of Rs.26,07,000/- during the period October 2007 and July 2008. The complaint also indicates of Tapan Bhandari tendering his statement on 09.01.2012 under Section 50 of the Act stating that he 6 Spl.C.No.132/2015 was cheated and defrauded by accused No.1 John Michael and also he had narrated in detail about the amounts given by him through cheque and also through cash. In order to support his contention, he had also produced the statement of accounts for the verification by the complainant-authorities. The complainant further reveals that the investigating agency had summoned accused No.1 John Michael under Section 50 of PMLA and his statement came to be recorded on 30.01.2012 wherein he had admitted the receipt of payment of Rs.6,80,940/- by HSBC cheque dated 05.07.2008 through Sri. Tapan Bhandari, Sri.N.Sreedharan for the purpose of allotment of BDA sites at Bengaluru and had stated to have deposited the said amount at HDFC Bank, which was utilized on 09.07.2008. It is his contention that the aforesaid account bearing No.02861000024779 was closed on 09.04.2011 and he had utilized Rs.2.30 lakhs for purchasing a house site in the name of his wife Smt. Manjula Michael who had been arraigned as 7 Spl.C.No.132/2015 accused No.2 at site No.4, Khata No.28, Varanasi @ Jinkethimmanahalli, Bidarahalli Hobli, Bengaluru East Taluk, Bengaluru on 13.10.2008. Further, it has been submitted that he had admitted of receiving amount of Rs.11,13,004/- from Sreedharan on three occasions and also the statement discloses that he had owned the property in his name at House No.3, Khata No.28/45/1, 3rd Cross, Varanasi Road, Jinkethimmanahalli, T.C.Palya Post, Bengaluru and he had purchased in the year 2005 and the house was built consisting of ground floor and first floor in the year 2005-06 through the savings and loan availed by him. The complaint also reveals of his statement that he had stated on 03.12.2013 that he had purchased a Car bearing registration No.KA-03/MK-998 in the name of his wife Smt. Manjula Michael for a sum of Rs.4.00 lakhs which he had paid through cash. The complaint also reveals of recording the statement under Section 50 pertaining to accused No.2 Smt. Manjula Michael, who had stated in her statement on 15.02.2012 8 Spl.C.No.132/2015 that she does not have any individual and independent source of income as she was only a homemaker. Further, the complaint reveals of collecting of the details of the properties that were standing in the name of accused No.1 and 2 with respect to site No.4, Khata No.28, situated at Varanasi Road @ Jinkethimmanahalli, T.C.Palya Post, Bengaluru, in the name of accused No.2 and also the motor car bearing registration number KA-03/MK-998 registered on 31.07.2008 in the name of accused No.2. Based on the collection of the materials, the investigating authorities had found that the aforesaid properties were purchased out of the proceeds of crime which was committed by accused No.1 as per the predicate offence in which the final report was filed by the investigating authorities. As such, the complaint came to be registered.
3. On presentation of the complaint before the then Principal City Civil and Sessions Judge, Bengaluru, the Court had found necessary materials and accordingly 9 Spl.C.No.132/2015 had ordered for dispensation of examining the complainant under Section 200 of Cr.P.C., and also had directed to register the case by taking cognizance of the offences under Section 3 and 4 of PMLA. On the registration of the case, necessary summons came to be issued against accused No.1 and 2 who had appeared before the Court and were admitted to bail initially. During the pendency of the case, accused No.2 had not appeared before the Court and necessary NBW came to be issued. Subsequently, on 10.11.2021, the case against accused No.2 was ordered to be split-up as she was not traced out. It is noticed from records that my Predecessor in office, by looking into the materials placed before the Court had proceeded to frame necessary charges against accused No.1 herein. The charges came to be framed against accused No.1 on 28.12.2021 wherein he had pleaded not guilty and claimed to be tried. As such, the trial was fixed. The prosecution, in order to prove their case had examined totally 9 witnesses as PW.1 to 9 and 10 Spl.C.No.132/2015 Ex.P.1 to P.55 was marked. On completion of the prosecution witnesses, the statement of accused came to be recorded as contemplated under Section 313 of Cr.P.C. wherein, he had denied all the incriminating materials available against him. He had pleaded that there is no defence evidence and the case was posted for arguments.
4. Heard the Ld. Spl. Public Prosecutor Sri. I.S. Pramod Chandra on behalf of the ED authorities. In the first instance, he has taken this court with respect to the allegations which was leveled against John Michael in commission of predicate offence under Section 420, 465, 468, 471 of IPC. It is vehemently submitted by the Ld. Spl. Public Prosecutor that the offences mentioned under Section 420 and 471 of IPC constitute schedule offences within the meaning of Section 2(1)(y) of PMLA and as such, the registration of the ECIR was apt and correct. That apart, the Ld. Special Public Prosecutor has taken this court to the judgment rendered by this Court in Spl.C.No.94/2021, which was arising out of the FIR in 11 Spl.C.No.132/2015 Cr.No.61/2011 of Ramamurthy Nagar Police Station, Bengaluru. It is his submission that another case was registered against Sri. John Michael in Cr.No.239/2010. The proceeds of crime is proved in the predicate offence, wherein it indicates that accused No.1 John Michael had utilized the amount which he had obtained by committing the predicate offences. In order to substantiate his contention, the Ld. Special Public Prosecutor has taken this court through the statement which was recorded by the Enforcement Directorate under Section 50 of PMLA of witnesses Tapan Bhandari, N.Sreedharan and also that of accused No.1 John Michael and his wife accused No.2 Smt. Manjula Michael. The Ld. Special Public Prosecutor has argued that the statement under Section 50 of the PMLA rests on higher footing and it cannot be considered as a mere extra judicial confession. Lastly, he has vehemently argued that the presumption which is available under Section 24 of the PMLA casts a reversal burden on the accused to explain about his innocence. 12 Spl.C.No.132/2015 The Ld. Special Public Prosecutor has taken this court through the entire evidence which was recorded before this court and has also pointed out that the investigating authority has collected the certified copies of the registered sale deeds which was purchased in the name of accused No.2 Manjula Michael through the proceeds of crime and also the Car which was purchased out of the proceeds of crime. It is his contention that the provisional attachment order passed by the adjudicating authority was confirmed subsequently as per the confirmation order which was produced at Ex.P.54 and P.55. further it has been submitted that the allegation against the accused in the predicate offence is proved and has been consequently convicted for the said offences. That apart when the the commission of predicate offence by accused No.1 John Michael when compared with the statement recorded under Section 50 of the PMLA would fully corroborate that the said properties were purchased only out of the proceeds of crime. By pointing out the same, it 13 Spl.C.No.132/2015 is his contention that the complainant authorities have proved their case beyond reasonable doubt. In order to buttress his contention, he has produced the certified copy of the orders passed by this Court in the predicate offences in Spl.C.No.94/2021 dated 14.03.2024 wherein, accused John Michael was convicted for the offences punishable under Section 420, 419, 468, 471 and 201 of IPC.
5. The Learned Counsel Sri. Santhosh S Nagarale, on behalf of accused No.1 John Michael has vehemently argued that the prosecution has utterly failed to prove the case beyond reasonable doubt. The Learned Counsel for the accused has firstly taken this court through the entire deposition pertaining to PW.1, PW.2 and PW.5 Tapan Bhandari. It is his submission that, no were in the evidence of PW.5, it has been pointed out that a definite sum of amount was credited into the account of accused John Michael nor the document which has been produced at Ex.P.12 was nothing but a computerized 14 Spl.C.No.132/2015 statement prepared by the witness himself was indicating the name of accused of receiving the aforesaid amount. He has also taken this court through the registered Sale Deed which was produced at Ex.P.5 and has also argued at length that the said property was purchased in the year 2005 and whereas, the allegations is made of committing the scheduled offence in the year 2007. It is his submission that the property was purchased prior to the alleged commission of predicate offence and under the circumstances invoking the provisions of PMLA would not be proper. That apart, it is his contention that Ex.P.7 confirmation order is also not clearly indicating that when the amount was transferred and the account extract at Ex.P.35(A) dated 09.07.2008 did not clearly reflect the transfers of proceeds of crime. It is his submission that unless and until the prosecution links that the amount was utilized from the proceeds of crimes, PMLA cannot be invoked. In order to substantiate his contention, the Learned Counsel has relied upon the judgment of the 15 Spl.C.No.132/2015 Hon'ble Apex Court reported in (2015) 4 SCC 435 (Tajuddin Vs. Union of India) wherein, it has been held that the ED authorities have to clearly establish that the proceeds of crime was utilized for purchasing of the schedule properties. By pointing out the said infirmities in the case of the prosecution, he has sought for acquitting the accused.
6. The Ld. Special Public Prosecutor has also filed written submissions and likewise, the Learned Counsel for the accused has submitted written synopsis in this regard.
7. Heard and perused the materials. The points that would arise for my consideration are :
1. Whether the prosecution proves beyond reasonable doubt that accused No.1 John Michael had committed an offence punishable under Section 4 of Prevention of Money Laundering Act ?
2. Whether the prosecution proves beyond reasonable doubt that, accused had purchased properties situated at site No.3, katha No.28/45/1 and site No. 4, katha No.28 both situated at 3 rd cross, of 16 Spl.C.No.132/2015 Varanasi/Jinkethimanahalli village, Bidarahalli hobli, Bangalore taluq and the car bearing registration No.KA 03 MK 998 requires to be ordered to be confiscated ?
3. What order ?
8. My answer to the above points are as follows:-
Point No.1: In the Affirmative Point No.2: In the Affirmative Point No.3: As per final order for the following:-
REASONS
9. Point Nos.1 and 2: These two points are taken up together since they are inter-connected with each other. In the instant case, the prosecution has contended that accused No.1 had received the proceeds of bribe which have emanated from Cr.No.239/2010 and Cr.No.61/2011 and further FIR registered in Cr.No.61/2011 was registered as Spl.C. No.94/2021 which had culminated in the conviction of the accused person. Under the said premises, it has been submitted by the ED authorities being represented 17 Spl.C.No.132/2015 by the Ld. Special Public Prosecutor that the offence alleged against accused No.1 in predicate offence was under Sections 420 and 465 of IPC which is to be construed as a schedule offence under Part A of the PMLA. By pointing out the same and also relying upon the conviction judgment passed in Spl.C.No.94/2021, the Ld. Special Public Prosecutor has submitted that the provision of Section 4 of PMLA would be applicable and also as the predicate offence is held to be proved and on the basis of the materials collected by the investigating officer in the instant case, the records clearly establishes the fact that the accused had purchased the house property and also a Car through the proceeds of bribe and the same was further fortified by the orders passed by the Adjudicating Authority which was confirmed as per the Ex.P.54 and 55.
10. Before adumbrating to the said aspects, it would be appropriate to recapitulate the entire evidence which has been led by the prosecution in this regard. 18 Spl.C.No.132/2015 The prosecution in order to establish his contention has examined totally 9 witnesses as PW.1 to 9.
11. PW.1 J. Subramaniyam was the then Deputy Director who had taken up the case for further investigation in the year 2013. He has deposed that on 25.11.2013, Mr. Sreedharan, who was the complainant in predicate offence, was summoned and accordingly he had tendered his statement under Section 50(3) of the Act, wherein he had explained the manner in which he was cheated by accused No.1. He has also deposed that accused No.1 John Michael had appeared before him and had given statement on 03.12.2013 and he was explained with the cases registered against him. At the time of recording the statement, he had admitted of receiving amounts from CW.6 and 7 Tapan Bhandari and Sreedharan for the purpose of allotting BDA site under the Chief Minister's quota from the Government of Karnataka and he had utilized the amounts for his own use and had purchased property bearing No.3 Khata 19 Spl.C.No.132/2015 No.28/45/1 situated at Varanasi Road, Jinkethimmanahalli, Bengaluru wherein, he had constructed a house and also purchased a Car bearing registration No.KA-03/MK-998 in the name of his wife who has been arraigned as accused No.2. He has also deposed of recording the statement of accused No.2 Smt.Manjula Michael on 04.08.2014 and had deposed of collecting bank documents from accused No.1 from HDFC Bank, which indicated of accused withdrawing huge amount of cash and he had also collected the copy of the registered Sale Deed and the RC Book from RTO authorities. It is his evidence before the Court that the Deputy Director had passed two provisional attachment orders under Section 5 of PMLA which was confirmed by Adjudicating Authorities at New Delhi. He had identified the FIR and other documents and the same were marked as Ex.P.1 to P.11. Subsequently, the witness was recalled and again he has identified the documents at Ex.P.12 to 23 which were the statements of witnesses in 20 Spl.C.No.132/2015 the predicate offence, bank extracts of the witnesses, accused persons etc. During the course of cross- examination, he has specifically deposed that they have not sent the documents to BDA or FSL for the purpose of examination of the Sale Deed and also he has admitted that the witness N. Sreedharan had only produced photostat copies. Further, he has admitted that the Sale Deeds did not disclose the signature of the accused John Michael nor he had independently verified the same. It is his specific evidence that though Ex.P.13 statement of account does not indicate the name of accused, it was pertaining to the transaction that are taken place and the said statement was prepared by witnesses i.e., N. Sreedharan. He has also admitted of not verifying the statement given by the accused nor he had verified whether the accused was working in the office of the Hon'ble Chief Minister or not. He has also admitted that the name of accused was not forthcoming in the documents at Ex.P.12 and 14.
21 Spl.C.No.132/2015
12. PW.2 F. Khader Mydeen has deposed of recording the statement of Sreedharan, Tapan Bhandari, John Michael and Manjula Michael in detail. He has also deposed that accused No.1 in his statement dated 30.01.2012 had admitted payment of Rs.6,80,940/- from Tapan Bhandari through Sreedharan and he had utilized Rs.2.30 lakhs for the purchase of house site in the name of his wife i.e., Smt. Manjula Michael. He had also deposed of recording the statement of accused No.2 Manjula Michael, who had stated that she did not had any independent or individual income and her husband had purchased the site and Car in her name. During the course of cross-examination, he has admitted of conducting part investigation of the case on the basis of the FIR registered by the Ramamurthynagar Police Station. It is his submission that, after recording the ECIR he had summoned Sri. N. Sreedharan and Sri Tapan Bhandari and had recorded their statement and has admitted that he had not seized any Sale Deeds from 22 Spl.C.No.132/2015 accused by any Investigating Officer in the above case. He has also admitted that apart from oral statement of Sri N. Sreedharan, there were no documents regarding payment of Rs.41,79,580/-. Further, he has admitted of not verifying the source of income of Sri N Sreedharan and Sri Tapan Bhandari. It was suggested to him that Sri Sreedharan and Sri Tapan Bhandari, had themselves cheated the accused and other persons and had filed a false complaint which was promptly denied by the witness. Further, he has also admitted that the consideration amount in the sale deed was mentioned as Rs.1,09,000/- and he did not ascertained whether accused Nos.1 and 2 had purchased any other property except the property mentioned in Ex.P.36. Apart from that, nothing much was elucidated.
13. PW.3 Chandramouli R has deposed that he had worked as Deputy Director of Enforcement Directorate and he had received the case papers from the Investigating Officer and on perusing the materials, he 23 Spl.C.No.132/2015 had passed the provisional attachment order in 9/2014 dated 6.8.2014 as per Ex.P.46. During the course of cross-examination, he has deposed of verifying about many transactions made between the complainant and accused which was not mentioned in his order. He has admitted that Sale Deed was executed on 27.04.2005. Further, he has admitted that there were many transactions between the complainant and the accused prior to that date. Lastly, it was suggested that the property was purchased by accused No.1 out of his own hard earned money which was denied by the witness.
14. PW.4 K.O. Paul is also the Investigating Officer, who has deposed of recording the statement of accused No.1 and 2. Apart from denial, nothing was suggested to him.
15. PW.5 Tapan Bhandari has deposed about the fact of knowing the accused John Michael through Sri N. Sreedharan and also the representations made by him to get a BDA site allotted in his name as he was 24 Spl.C.No.132/2015 working as Personal Assistant to the then Chief Minister and in furtherance of the same, he had paid Rs.25,30,000/- to the accused out of which, Rs.5.00 lakhs was paid through cheque and remaining amount in cash. He has also deposed that the documents which were supplied to him by accused John Michael were of forged one and later on he came to know about the same while he was residing in Saudi Arabia and lodged complaint through e-mail. During the course of cross- examination, he has feigned his ignorance with respect to the certificate issued under Section 65(B) of Indian Evidence Act to be accompanied to the documents. He has also admitted that initially, Sreedharan was in contact with accused and he had met him about 2-3 times. He has also admitted that Sri Sreedharan had stated to get a Sale Deed executed and had handed over the Sale Deeds to him. However, he has denied the suggestion of not paying any amount to the accused person.
25 Spl.C.No.132/2015
16. PW.6 Lakshmi Mantri was the officer-in- charge of HDFC Bank, who had furnished the account extracts of accused persons.
17. PW.7 Shivakumar D was the Senior Sub- Registrar, who had furnished the Sale Deed at Ex.P.5 and Encumbrance Certificate at Ex.P.52.
18. PW.8 Renukaradhya H.S. has deposed of receiving the case files from Ramamurthynagar Police Station, for the purpose of further investigation and had recorded the statement of witnesses and collected necessary documents and also FSL Report and filed charge-sheet against accused for the offence under Section 468, 471 and 420 of IPC. Apart from denial, nothing was suggested to him.
19. PW.9 Subhash Agarwal was the Joint Director of Enforcement of Directorate and has deposed that certain properties pertaining to accused was acquired out of the proceeds of crime and therefore, he had issued Provisional Attachment Order on 28.02.2012 26 Spl.C.No.132/2015 with respect to site No.4, Khata No.28, Varanasi@ Jinkethimmanahalli, Bengaluru, standing in the name of accused No.2 as per Ex.P.53 and P.54. Apart from denial, nothing was elucidated from him during the course of cross-examination.
20. When the entire evidence led by both the parties is carefully appreciated, the first and foremost aspect which is required to be considered at this juncture is whether the provisions of PMLA are applicable to the case on hand.
21. The provision of Section 3 of the PMLA clearly defines the circumstance under which the Act can be made applicable. For the sake of convenience and brevity, the provision of Section 3 is herewith extracted which reads as follows;
"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 including its concealment, possession, 27 Spl.C.No.132/2015 acquisition or use and projecting or claiming] [Substituted for the words "proceeds of crime and projecting" by Act No. 2 OF 2013] it as untainted property shall be guilty of offence of money- laundering.
The provision of Section 3 had underwent a drastic change and it has to be construed from the looking into the amendment made to the act and has to be compared with the provisions which has stood earlier to amendment and also subsequently the changes which were inserted in the amending Act. Initially, the explanation to the provision was not available and subsequently by the amending Act No.2 of 2019, w.e.f.
1.8.2019, the explanation was introduced which would clearly define that a person shall be held guilty of an offence of money laundering if he is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly as a party or is actually involved in one or more of the knowing processes. The underlining word in all the aforesaid 28 Spl.C.No.132/2015 explanation is the knowledge which is entertained by the person who has alleged to have committed an offence. At this juncture, what amounts to economic offence is also required to be appreciated. In this regard, the reliance is placed on the judgment of the Hon'ble Apex Court reported in (2018) 11 SCC 46 (Rohith Tandon Vs. Directorate of ED), wherein it has held as:
21.The consistent view taken by this Court is that economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Further, when attempt is made to project the proceeds of crime as untainted money and also that the allegations may not ultimately be established, but having been made, the burden of proof that the monies were not the proceeds of crime and were not, therefore, tainted shifts on the accused 29 Spl.C.No.132/2015 persons under Section 24 of the 2002 Act."
(emphasis supplied)
22. The ramification and effect of economic offence is also explained by the Hon'ble Apex court in another judgment rendered in (1987) 2 SCC 364 ( State of Gujarath V Mohanlal Jitamalji Porwal ) wherein it is held as:
"5.....The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye 30 Spl.C.No.132/2015 unmindful of the damage done to the National Economy and National Interest. ......"
23. When the said judgment which is explanatory to the provision of law is conjointly appreciated, it indicates that the courts have to view the economic offences differently and it cannot be brushed aside lightly by looking into the sentence being imposed. Directly or indirectly, the economic offences bleed the economy of the nation and hence said offences are considered as white collar offences. The provision of PMLA act clearly indicates that the person who is alleged to have committed the offence is required to have definite knowledge of committing the offence of money laundering. Once again, the provision of Section 2(u) is required to be appreciated. In order to ascertain what would amount to proceeds of crime. The said provision clearly explains that any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to schedule offence, or the value 31 Spl.C.No.132/2015 of any such property, then, the same can be termed as 'proceeds of crime'. At this juncture, it would be appropriate to read conjointly the Section 2(u) and also Section 3 Explanation portion (I) has been rendered. When both the provisions are conjointly read, the assiduous factor is the knowledge of the person who attempts to commit or attempted to commit an act of money laundering or also any property which is derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence. At this juncture, the allegation which has been leveled against the accused John Michael in the predicate offence is required to be looked into. It is an admitted fact that the two FIR's came to be registered against accused John Michael in 61/2011 and also in 239/2010. In the first instance, the case which was registered by the Ramamurthynagar Police in Crime No.239/2010 was subsequently transferred to CID Authorities for the purpose of investigation who, on 32 Spl.C.No.132/2015 completion of investigation had filed the final report as contemplated under Section 173 of Cr.P.C., for the offence punishable under Section 419, 420, 468, 471 and 201 of IPC. It is relevant to note at this juncture at the cost of repetition that, said case was initially placed before the Learned ACMM Court at Bengaluru and subsequently, due to pendency of the Money Laundering case, pending before the Special Court, the same came to be transferred to this Court and it was renumbered as Spl.C.No.94/2021. It is also relevant to note that, the Court, at the time of evidence has framed necessary charges for the offence committed by the accused under Section 419, 420 and 201 of IPC. Subsequently, the trial was conducted and after contest by both the parties, the Court had held the accused guilty of committing the offences punishable under Section 419, 420, 468, 471 and 201 of IPC and suitable punishment and sentence was ordered against him. At this juncture, the offence for which the conviction has been awarded is required to 33 Spl.C.No.132/2015 be looked into with the schedule which has been mentioned along with the PMLA. As per the schedule Part (A) paragraph 1, the offence of Section 419, 420, 471 finds place and it can be termed as schedule offences.
24. With this clarification, the second aspect which is required to be appreciated is whether the accused was having knowledge of committing the offence which would involve one or more of the following processes or activities connected with proceeds of crime i.e., concealment, possession or acquisition or use of projecting as untainted property or claiming as untainted property. In the instant case, at the cost of repetition, the predicate offence was filed by contending that the accused No.1 John Michael had got himself represented to be the Personal Secretary of the then Chief Minister Sri. N. Dharam Singh and had induced several persons viz., CW.6 N.Sreedharan who was reported to be dead during the course of proceedings, 34 Spl.C.No.132/2015 however his statement was recorded as contemplated under Section 50(3) of PMLA and also PW.5 Tapan Bhandari. It is the definite case of the prosecution that the accused John Michael had got befriended Sri. N. Sreedharan, who was working at HDFC Bank and also through N. Sreedharan PW.5 Tapan Bhandari was introduced. It has been contended by the prosecution that the accused by inducing them to get allotment of BDA site has obtained huge sum of money and in particularly a sum of Rs.11,13,004/- on three occasions from Sri. N.Sreedharan and he had also obtained a sum of Rs.30,82,032/- from Sri. Tapan Bhandari towards getting BDA site allotted. In this regard, the evidence of PW.5 Tapan Bhandari which was led in the predicate offence as well as in the above case is required to be appreciated. Though this case is independently being looked into to ascertain whether the proceeds of crime was utilized by accused person, the evidence which was led in the earlier case would also throw light in the 35 Spl.C.No.132/2015 instant case. PW.5 in the instant case has specifically deposed that, he was introduced to accused through N. Sreedharan who had represented himself to be the Personal Assistant to the then Chief Minister and he has paid Rs.25,30,000/- to the accused out of which a sum of Rs.5.00 lakhs was paid through cheque and remaining amount by cash. Subsequently, the witness has identified the accounts statement at Ex.P.35(A) which is belonging to accused John Michael which he had maintained at HDFC Bank. The entries which were made on 08.07.2008 which is termed as high value cheques for clearing indicates that a sum of Rs.6,80,940/- was transferred from the account of Tapan Bhandari to the account of accused John Michael and also the subsequent entries clearly indicate that Accused John Micheal had withdrawn the same, indicated of utilizing the amount which was transferred by the Sri Tapan Bhandari. At the cost of repetition, in the predicate offence, the court has already accepted the contention of 36 Spl.C.No.132/2015 the prosecution of transfer of amount by Sri Tapan Bhandari to Accused. Under the circumstances, it is crystal clear that a definite amount came to be transferred from the account of the witnesses i.e., PW.5 Tapan Bhandari to that of the accused John Micheal. It is also relevant to note at this juncture that this court in the predicate offence has in detail explained the manner and mode of transfer of amount which was made by the witnesses to the account of accused John Michael. At this juncture, it is made clear that this Court is depending upon the outcome of the case in the predicate offence for the simple reason that it is well settled principles of law that the case under PMLA can only be preceded if predicate offence against him is proved. It is also been specified in the judgment of the Hon'ble Apex Court in the case of Vijay Madanlal Choudhury and others Vs. Union of India and others, reported in 2022 SCC Online SC 929 that in the event of acquittal, discharge or quashment of the proceedings against the 37 Spl.C.No.132/2015 accused in the predicate offence, the proceedings under PMLA cannot be maintained. In order to better appreciate the said principle which has been laid down by the Hon'ble Apex Court in the aforesaid case is extracted as follows;
253. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression "derived or obtained"
is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent 38 Spl.C.No.132/2015 jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2(1)(u) read with Section 3. Taking any other view would be rewriting of these provisions and disregarding the express language of definition clause "proceeds of crime", as it obtains as of now.
269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form -- be it one of concealment, possession, acquisition, use 39 Spl.C.No.132/2015 of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money- laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence -- except the proceeds of crime derived or obtained as a result of that crime.
270. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money-laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person 40 Spl.C.No.132/2015 has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money-laundering under the 2002 Act
-- for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of Clause (ii) in Explanation inserted in 2019 is of no consequence as it does not 41 Spl.C.No.132/2015 alter or enlarge the scope of Section 3 at all.
271. As mentioned earlier, the rudimentary understanding of 'money-
laundering' is that there are three generally accepted stages to money- laundering, they are:
(a) Placement : which is to move the funds from direct association of the crime.
(b) Layering : which is disguising the trail to foil pursuit.
(c) Integration : which is making the money available to the criminal from what seem to be legitimate sources.
272. It is common experience world over that money-laundering can be a threat to the good functioning of a financial system. However, it is also the most suitable mode for the criminals deal in such money. It is the means of livelihood of drug dealers, terrorist, white collar criminals and so on. Tainted money breeds discontent in any society and in turn leads to more crime and civil unrest.
Thus, the onus on the Government and the people to identify and seize such money is heavy. If there are any proactive steps 42 Spl.C.No.132/2015 towards such a cause, we cannot but facilitate the good steps. However, passions aside we must first balance the law to be able to save the basic tenets of the fundamental rights and laws of this country. After all, condemning an innocent man is a bigger misfortune than letting a criminal go.
25. When the aforesaid postulates are appreciated with the facts of the case, it is clear that the Court, at the time of considering the accusation against accused under the PMLA is to rely upon the predicate offence and its outcome. In the instant case, though two separate FIR were lodged against accused John Michael, i.e., in Crime No.61/2011 and Cr.No.239/2010 the case registered in Crime No.239/2010 was subsequently converted under the Spl.C.No.94/2021 which had culminated in conviction of accused for the aforesaid offences which can be termed as scheduled offence. In that predicate offence, the Court had specifically held that the accused had received huge sum of money from 43 Spl.C.No.132/2015 the witnesses i.e., N. Sreedharan, Tapan Bhandari and others by committing the crime which was punishable under Section 419, 420, 468, 471 and 201 of IPC which can be termed as proceeds of crime and by utilizing the same, he had purchased the property. In order to substantiate the aforesaid aspect, the ED authorities have produced the documents i.e., the registered Sale Deed at Ex.P.5. At the first instance, it is pertinent to note that the learned Counsel for the accused has vehemently argued that the absolute sale deed which was registered in the year 2005 and got marked as Ex.P.5 was executed on 27.04.2005 and whereas, the allegations of commission of offence was made in the year 2009 which is very much subsequent and hence, it cannot be termed as the property which was purchased out of the proceeds of crime. No doubt, the said submission seems to be fashionable and correct at the first instance, however, when the records and documents which have been collected by the ED authorities are 44 Spl.C.No.132/2015 appreciated in detail, it would indicate that the alleged transaction by accused John Michael with Sri. N.Sreedharan and Sri. Tapan Bhandari had commenced in the year 2005 itself. At this juncture, the statement of CW.6 N.Sreedharan which was recorded by the ED authorities under Section 50(3) of the Act is required to be appreciated. The said statement has already been marked as Ex.P.12 before this Court and in his statement he has narrated in detail about the manner in which he had made the payment. In the first portion of his statement, he has specifically stated of handing over Rs.33,39.012/- to accused John Michael and also in order to substantiate his contention, he has produced the Bank Account extract. It is pertinent to note that CW.6 N.Sreedharan had specifically stated of handing over money by way of cash. However, the said aspect has been seriously disputed by the learned Counsel for the accused. In order to look into the same, the account extracts of N.Sreedharan maintained at HSBC Bank is 45 Spl.C.No.132/2015 required to be looked into which is marked as Ex.P.15. The account extracts starts from 14.01.2005 and there are transactions indicating of withdrawal of huge amount during the period January 2005 to April 2005. The Court has specifically taken up the exercise of looking into the account extract of N. Sreedharan for the simple reason that the Sale Deed was executed as per Ex.P.5 on 27.04.2005 by John Michael. With these basic materials, I have relied upon the statement of accused under Section 50(3) of PMLA as per Ex.P.23. In his statement, he has specifically deposed of getting the Sale Deed executed and it is his contention that he has constructed a house over the said property and even he had let out one floor for rent. At this juncture, what is required to be appreciated is whether the statement which is recorded under Section 50(3) of PMLA can be relied upon. No doubt, the statement which is recorded is akin to the extra judicial confession as contemplated under Section 27 of the Indian Evidence Act. The special 46 Spl.C.No.132/2015 enactment attaches a significant meaning to the statement recorded under Section 50(3) of the Act. For the sake of convenience, the said provision is extracted, which reads as follows;
"All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required."
26. As per the provision of Sec. 50(4) of the Act, the proceedings before the Director, Additional Director, Joint Director, Deputy Director or Assistant Director, conducted shall be deemed to be a judicial proceeding within the meaning of Section 193 and Section 228 of IPC. In other words, the statement which has been recorded would have a cascading effect on the outcome of the case since the said portion of the statement can be relied upon. At the same time, the other facet of law 47 Spl.C.No.132/2015 which is required to be looked into is, whether the statement was recorded prior to registration of the ECIR or at the time of conducting the preliminary enquiry. In this regard, it is relevant to note that the FIR came to be registered by the Ramamurthynagar Police Station in Cr.No.239/2010 and 61/2011 in the year 2009 and 2010. However, subsequently, ECIR case was registered in the year 2013 and subsequently, the case was filed in the year 2015. At the time of filing of complaint in the year 2015, the statement of accused John Michael was already recorded. Particularly, the statement as per Ex.P.23 was recorded on 03.12.2013. In this regard, the Court has relied upon the judgment of the Hon'ble High Court of Delhi reported in 2023 SCC Online Del 3769 (Vijay Nair V Directorate of Enforcement) wherein it is held as:
51. This court is fully conscious of the fact that personal liberty is a sacrosanct right and pre-trial detention cannot be taken as a punitive measure. However, the court 48 Spl.C.No.132/2015 has to strike a balance between the interest of an individual and the interest of the society at large. This court is also conscious of the fact that though the statements recorded under Section 50 PMLA are admissible in evidence but their evidentiary value has to be weighed at the time of trial.
It is pertinent to mention here that learned senior counsels has argued that the ED is only basing its case only on the statements of the witnesses recorded under Section 50 of PMLA.
53. The option before this court is either to go into the meticulous examinations of the witnesses as being argued by the learned defence counsels or to take into account the statements recorded under Section 50 of PMLA by the ED. It is correct that the case of ED is based on the statements under Section 50 PMLA cannot be taken as gospel truth but at the same, the court has to take into account the probabilities and the legislative intent behind enacting Section 50 PMLA. The bare perusal of Section 50 makes it clear that these are deemed to be 49 Spl.C.No.132/2015 judicial proceedings. There are consequences for making a false statement or not complying to the summons under Section 50 of PMLA as provided under Section 63 of the PMLA. There statements under Section 50 PMLA cannot be brushed aside.
27. As per the dictum of the Hon'ble High Court, when the statement is recorded prior to lodging of the complaint, the same can be appreciated and it does not debar the prosecution from relying upon the said statement. However the sole caveat which has been imposed is that its veracity is required to be considered at the time of trial. Further the provisions itself would clearly indicate that the proceedings has to be construed as judicial proceeding as contemplated under section 193 and Section 228 of IPC. In other words the statement stands on higher pedestal than that of ordinary statement recorded under section 161 of Cr.P.C. In order to better appreciate the same, I have bestowed my anxious reading to the evidence of the 50 Spl.C.No.132/2015 investigating officer who had recorded the statement of Sri N Sreedharan i.e. PW-2 F Khader Maydeen as per EX P 25. In his chief examination he has explained in detail the manner of recording the statement under section 50 of the PMLA Act. In order to impeach its credibility nothing much was elucidated during the course of cross examination. It is rather astonishing to note that no were in the cross examination the recording of statement of Sri N Sreedharan is denied and all that it is suggested to the investigating officer that apart from recording the statement he has not conducted any material investigation. In other words, it is candidly admitted that the statement was recorded by the investigating officer. I have also bestowed my anxious reading to the submissions made by the learned Counsel for accused with respect to the statement of N.Sreedharan. It is pertinent to note that N. Sreedharan was reported to be dead during the course of proceedings and his statement was recorded on 6.12.2013. As such, the Court was not 51 Spl.C.No.132/2015 having the benefit of thoroughly looking into the statement of N. Sreedharan. However, the said statement was placed before this Court and was marked as Ex.P
25. The question which requires to be appreciated at this juncture is, credibility and relevancy of the said statement of N. Sreedharan who was not subjected to cross-examination. In this regard, the provision of section 33 of the Indian Evidence Act is required to be looked into. For the purpose of convenience, the provision U/Sec.33 is culled out, which reads as follows;
Sec.33 : Evidence given by a witness in a judicial proceeding, or before any person authorized by law to take it, is relevant for the purpose of proving, in a subsequent judicial proceeding, or in a later stage of the same judicial proceeding, the truth of the facts which it states, when the witness is dead, or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or if his presence cannot be obtained without an amount of delay or expense 52 Spl.C.No.132/2015 which under the circumstances of the case, the Court considers unreasonable:
Provided, that the proceeding was between the same parties or their representatives in interest; that the adverse party in the first proceeding had the right and opportunity to cross- examine; that the questions in issue were substantially the same in the first as in the second proceeding.
Explanation. - A criminal trial or
inquiry shall be deemed to be a
proceeding between the prosecutor and the accused within the meaning of this section. Statements Made Under Special Circumstances
28. The provision of Sec.33 of the Indian Evidence Act, states that if a witness is dead, or cannot be found or is incapable of giving evidence or is kept out of the way by the adverse party, only then the evidence which is recorded could be considered as non-existing in the eyes of law. Apart from that, it is to be stated that such kind of evidence is only relevant to the purpose of 53 Spl.C.No.132/2015 corroboration to the incident. In this regard, the reliance is placed on the judgment of the Hon'ble High Court of Karnataka, reported in Crl.A.No.97/2017 between (State of Karnataka Vs. Nagendra Reddy) dated 29.01.2024. In the said authoritative judgment, it is succinctly explained how the provision is required to be appreciated. It is held as:
24. Now if we assess the entire evidence, though we find that PW1 has given a narration of the incident of putting threat to him by accused Nos.1 and 2 for the purpose of obtaining sale deed, his evidence cannot be accepted by applying Section 33 of the Indian Evidence Act. Section 33 reads as below:
33. Relevancy of certain evidence for proving, in subsequent proceeding, the truth of facts therein stated.-Evidence given by a witness in a judicial proceeding, or before any person authorized by law to take it, is relevant for the purpose of proving, in a subsequent judicial proceeding, or in a later stage of the same judicial 54 Spl.C.No.132/2015 proceeding, the truth of the facts which it states, when the witness is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or if his presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable:
Provided - "that the proceeding was between the same parties or their representatives in interest;" that the adverse party in the first proceeding had the right and opportunity to cross- examine; "that the questions in issue were substantially the same in the first as in the second proceeding."
Explanation. - A criminal trial or inquiry shall be deemed to be a proceeding between the
prosecutor and the accused within the meaning of this section.
25. In the case of MULKH RAJ SIKKA VS. DELHI ADMINISTRATION supra, the Hon'ble Supreme Court has held in paragraph No.20 as below:55 Spl.C.No.132/2015
"20. Section 33 of the Evidence Act provides to the extent material that evidence given by a witness in a judicial proceeding is relevant for the purpose of proving in a later stage of the same judicial proceeding the truth of the facts which it states when the witness cannot be found, provided that the adverse party in the first proceeding had the right and opportunity to cross-examine."
26. No doubt Section 33 of the Evidence Act states that if a witness is dead or cannot be found or is incapable of giving evidence or is kept out of the way by adverse party or his presence cannot be obtained without an amount of delay or expense, his evidence in a judicial proceeding or before any person authorized by law to take it, can be considered relevant in a subsequent judicial proceeding or at a later stage of the same judicial proceeding to prove the truth of the facts. But it is to be stated that such kind of evidence is only relevant, not that it can be relied upon without looking for corroboration. According 56 Spl.C.No.132/2015 to Section 158 of the Indian Evidence Act, all matters either to contradict or corroborate the statements under Section 32 or 33 may be proved in order to impeach or confirm the credit of the person who made such statement. The expression, "for the purpose of proving the facts which it states" in Section 33 does not imply a meaning that absolute reliance can be placed on the previous evidence given by a witness whose presence cannot be secured at a later stage of the proceedings.
29. In the aforesaid judgment the Hon'ble High court has clearly held that in the event of non- appearance of the witness the statement tendered by him cannot be considered as conclusive one but the same will be considered as relevant based on the other materials available. In the instant case, the statement recorded under section 50 of PMLA is to be construed as judicial proceeding and even during the course of cross examination; the recording of the same is candidly 57 Spl.C.No.132/2015 admitted. That apart, it is relevant to note that Accused No.1 Jhon Micheal and his wife Accused No.2 Manjula Micheal had tendered their statement under section 50 of the PMLA act and it was recorded by PW2 F Khader Maydeen as per Ex P 30 and EX P 31 and even during the course of recording of statement under section 313 of Cr.P.C of Accused NO.1 he has admitted of tendering his statement. Hence, the statement recorded under section 50 of PMLA will be having higher evidentiary value in the absence of any contradicting materials being produced or materials to impeach the process of recording of the statement during trial. When the said postulate is carefully appreciated, it would clearly indicate that the Court can rely upon the statement of person who is found to be dead or is not being capable of summoning before the Court for the purpose of recording his evidence. As such, the relevancy and presumption attached to the statement stands fortified. 58 Spl.C.No.132/2015
30. That apart, the Court has also looked into the aspect that, whether the provisional attachment order passed by the Adjudicating authority, wherein the property standing in the name of Smt. Manjula Michael who had been arraigned as accused No.2 in the above case and subsequently a split-up case was registered against her can be termed as the one which was purchased out of the proceeds of crime. Time and again, it has been made clear by the Hon'ble Apex Court that, in order to attract the rigors of Section 3 and 4 of PMLA, firstly, it requires to be established that a predicate offence which can be termed as scheduled offence is in existence and it has ended in conviction. The second aspect which is required to be proved by the prosecution is that, the property was purchased out of the proceeds of crime. Only on establishing the aforesaid aspects, the prosecution can seek for confiscation of the property obtained from the proceeds of crime. In the instant case, I have already in detail discussed about the existence of 59 Spl.C.No.132/2015 predicate offence and also the culmination of the same in conviction of the ac John Michael. It is relevant to note at this juncture that the prosecution has contended that the site No.3 situated in Khata No.28/45/1 Varanasi @ Jinkethimmanahalli, Bidaralli Hobki, Bengaluru East Taluk standing in the name of John Michael, which is produced at Ex.P.5 and the site property which is standing in the name of Smt. Manjula Michael at Ex.P.36 pertaining to site No.4, Khata No.28, situated at Varanasi @ Jinkethimmanahalli, Bidarahalli Hobli, Bengaluru East Taluk and also the Car of which, the B Extract has been produced before the Court as per Ex P.9 are said to have been purchased out of the proceeds of crime. It is relevant to note at this juncture that, as per the statement of PW.5 Tapan Bhandari, he had paid a sum of Rs.30,82,032/- to accused John Michael towards allotment of a site and also his wife Smt. Chanda Bhandari had paid certain amount. In order to substantiate their contention, Mr. Tapan 60 Spl.C.No.132/2015 Bhandari had appeared before the ED authorities and had given a detailed statement. The said statement has been produced before the Court and marked as Ex.P.26. In his statement he has in detail explained that he had paid a sum of Rs.18,42,840/- by cash during the period January 2006 and 2007 and Rs.6,80,940/- by way of cheque drawn on HSBC Bank on 5.7.2008 and infact, his wife Chanda Bhandari has paid a sum of Rs.5,58,252/- through cash. The said aspect is to be appreciated with the account extract which has been furnished by the ED authorities. The account extract which is collected and marked as Ex.P.35 belonging to Mr. John Michael on 5.7.2008 finds a place in his account statement and also the document which is more fully marked as Ex.P.35(A) indicates about transactions that had taken place and in fact, the aforesaid amount has been reflected in the account of John Michael. This leads to draw a presumption that he had purchased the property and also had made developments over the site 61 Spl.C.No.132/2015 property which was standing in his name out of the proceeds of crime.
31. At this juncture, the provision of Section 24 of PMLA is required to be looked into. For the sake of convenience, the provision is extracted, which reads as follows;
The Court explained that while Section 24 of PMLA relates to 'burden of proof' and directs that the court shall presume that the proceeds of crime are involved in money laundering, it does not however, create a presumption of guilt of the predicate offences on the accused.
As per the said provision, the burden of proof will be upon the person who is charged with the offence of money laundering under Section 3 and the Court shall unless the contrary is proved, presumes that such proceeds of crime are involved in money laundering. The aforesaid presumption is required to be looked into historical perspective, wherein the 62 Spl.C.No.132/2015 celebrated case reported in (1935) 1 AC 462 (Wolmington Vs. DPP) is required to be looked into, which reads as follows;
"Bearing these considerations in mind, I now turn to some of the cases cited to us. I doubt whether in any of the early ones the question of the burden of proof was considered. Rather they were concerned with the ingredients of the crime of murder. One of the first difficulties was to settle the meaning of express and implied malice. It was not till 1825 that Bayley J, in Bromage v. Prosser (1825) 4 B & C 247 , gave his famous definition of malice as meaning a wrongful act, done intentionally without just cause or excuse. The older cases were rather concerned to give examples of what might be malice. This was so in Mackalley's case. 9 Co Rep 65 b the prisoner was there accused of murdering a serjeant of London. The Courts were already considering cases of express or implied malice, and the passage in Coke appears simply to 63 Spl.C.No.132/2015 mean that if a man does acts calculated to kill, and actually does kill, that is evidence of malice or intent; in other words, evidence of one of the ingredients of murder, but it does not seem to be at all concerned with onus of proof or to support the statement of Sir Michael Foster on that point.
One of the most famous of the earlier treatises on criminal law was the History of the Pleas of the Crown by Sir Matthew Hale. That celebrated judge died on Christmas Day, 1675. It was known that he had left a treatise on the subject, and upon November 29, 1680, it was ordered by the House of Commons that the executors of Sir Matthew Hale be desired to print the manuscript relating to Crown Law and a Committee be appointed to take care of the printing thereof. It is not said that anything appears in Hale suggesting that the burden of proving his innocence lay on the prisoner. Looking at the edition of 1800 Chapter 37, Vol 1, p 454 we find him again concerned with what malice is. It is 64 Spl.C.No.132/2015 headed "Concerning murder by malice implied presumptive, or malice in law,"
and Mackalley's case 9 Co Rep 65 b is duly cited.
As appears from Foster's Pleas of the Crown, Sir Michael Foster was familiar with Hale's treatise (see his preface), and although in the course of his book he makes reference to Hale, he gives no authority for the proposition which is under discussion. It cannot be doubted that at that time in English Courts of justice the law of evidence was in a very fluid condition. Indeed in some civil cases it differed on different circuits. See Weeks v.
Sparke (1813) 1 M & S 679, 687, 688 and also the note xx. in Stephen's Digest of the Law of Evidence. 11th Ed (1930), p 182 It was only later that the Courts began to discuss such things as presumption and onus. In Wigmore on Evidence Vol 4, section 2513, note on page 3562 , a reference is made to the judgment of Weaver J. in the case of The State v. Brady. (1902) Ia 91 NW 801 This was cited in the case of Rex v.
Stoddart 2 Cr App R 217, 233 :--
65 Spl.C.No.132/2015
"The use of the terms 'presumption of guilt' and 'prima facie evidence of guilt' with reference to the possession of stolen goods has perhaps been too long indulged in by Courts and text-
writers to be condemned; but we cannot resist the conclusion that,
when so employed, these expressions are unfortunate, and often misleading. .... 'Presumptions' of guilt and 'prima facie' cases of guilt in the trial of a party charged with crime mean no more than that from the proof of certain facts the jury will be warranted in convicting the accused of the offence with which he is charged."
We were referred to the case of Rex v. Legg Kelyng, 27 , where it is said that at the Newgate Session in 1674 "one John Legg, being indicted for the murder of Mr. Robert Wise, it was upon the evidence agreed that if one man kill another, and no sudden quarrel appeareth, this is murder." Mackalley's case 9 Co Rep 65 b is quoted as an authority and the report goes on: "and it lieth upon the party indicted to prove the sudden quarrel." With regard 66 Spl.C.No.132/2015 to Kelyng's Reports, the critics have greatly differed. Sir John Kelyng was Chief Justice of the King's Bench. He died in 1671 and whatever opinion may be held about him as a judge, upon which see Foss's Biographical Dictionary of The Judges of England (1870), p 381 , the critics have differed greatly upon the value of his Reports. Lord Campbell in his Life of Kelynge, Lives of the Chief Justices (1849) Vol 1, p 511 , says "He compiled a folio volume of decisions in criminal cases, which are of no value whatever." But, on the other hand, there are others who regard the book as of high authority: see Wallace on The Reporters London (1882), p 327 [FF Heard, the editor of this reprint, made additions and alterations in Wallace's text without notice to the reader Wallace himself (3rd ed Philadelphia 1855, p 209) dismissed Kelyng with a very short paragraph ... FP] .
The report of Legg's case Kelyng, 27 is meagre and unsatisfactory and cannot, I think, be held to mean that unless the prisoner prove the sudden 67 Spl.C.No.132/2015 quarrel, he must be convicted of murder. The word "onus" is used indifferently throughout the books, sometimes meaning the next move or next step in the process of proving or sometimes the conclusion of the whole matter.
32. Based on the same, the provisions of section 24 of the PMLA is required to be appreciated. Initially it was held that the burden of proof of fact will be on the prosecution and only the onus of proving the same will be oscillating. However, the PMLA is a code by itself and the provisions would clearly give presumptive value to the said aspect. the weightage attached to the presumption under PMLA is also required to be looked into. In the judgment rendered by the Hon'ble Apex Court, reported in 2022 SCC Online SC929 ( Vijay Madanlal Choudhary V Union of India) it has been held as under:
72. As for Section 24 and the burden of proof which is reversed within this Act, it is stated that Section 24(a) applies 68 Spl.C.No.132/2015 only after charges have been framed by the Special Court. Section 24(b) refers to persons not charged with the offence of money-laundering under Section 3 and it is further contended that Section 24(a) and (b) have no application to proceedings for bail.
Furthermore, it is stated that presumption of innocence is a golden thread running through all criminal proceedings. This can apply only in cases of extremely serious offences on the ground of compelling State interest. It is submitted that in such a case where the maximum sentence is of seven years, such a provision is ultra vires Article 21 of the Constitution. It is argued that in special statutes like UAPA, MCOCA and the PC Act, the reverse burden of proof has only been upheld due to the compelling State interest, such as security and public order. Thus, it is agreed that in cases of narco terrorism, underworld, gangs the undoubted evils may prosper;
hence, Section 24(a) can accordingly be read down so as to apply to cases of 69 Spl.C.No.132/2015 laundering where the predicate offence seeks to punish nefarious activities.
33. By looking into the said aspect, it is to be appreciated that as per section 24(a) of the Act, the presumption will be available in favour of the Authority and whereas, at the time of trial, the presumption which will be available will be under section 24(b) of the Act, which would indicate that the onus will shift upon the person to rebut the said presumption. In the instant case, it is noticed that the accused has utterly failed to rebut the same nor any suggestion were made during the course of cross examination. It is relevant to note that a suggestion was made to the investigating officer that the properties which were purchased were out of the hard earned income of the accused. However, in the absence of any materials, it would not be appropriate to hold that the presumption has been successfully rebutted. The Court is of the opinion that, the accused has utterly failed to prove his discharge of burden. In the entire 70 Spl.C.No.132/2015 case, it is noticed that apart from denial, no constructive materials have been produced by the accused to discharge the burden. Admittedly, when the case is registered under the scheduled offences, which is termed as predicate offence against the accused person and when the same ends in conviction of the accused and further, if it is proved that any property either movable and immovable or any materials are procured invoking of obtaining the benefit from the proceeds of crime would lead to draw a presumption in favour of the prosecution, unless it is rebutted by them. In the case on hand, apart from denial, no such material has been produced. If for the sake of arguments, the predicate offence stands established, the provision of Section 3 of PMLA would be attracted. In other words, as per the celebrated judgment rendered by the Hon'ble Apex Court in Vijay Madanlal Choudhary case, only on discharge, acquittal or quashment of the predicate offence the invocation of PMLA would become redundant. By looking into the 71 Spl.C.No.132/2015 facts and circumstances of the case and also totality of the case, the material produced would clearly indicate that the properties were purchased out of the proceeds of crime. I have also bestowed my anxious reading to the fact that accused No.2 Smt. Manjula Michael is declared to be an absconding accused and a split-up case has been registered against her. Admittedly, the properties which were provisionally attached and confirmed by the Adjudicating Authority stands in her name. However, it is noticed that two separate proceedings were initiated before the Adjudicating Authority and as per Ex.P.7 Provisional Attachment order came to be passed with respect to property situated in site No.3, Katha No.28/45/1, situated at Varanasi/Jinkethimmanahalli, Bangalore and Ex.P.8 is the Provisional Attachment Order passed with respect to site property in site No.4, Katha No.28, situated at Varanasi@Jinkethimanahalli, Bangalore with respect to the site standing in the name of his wife Smt. Manjula Micheal. It is relevant to note 72 Spl.C.No.132/2015 that as per the statement of Sri. N. Sreedharan and also other beneficiaries in predicate offence, it indicates that the accused had commenced his illegal activities from the year 2005 itself and subsequently a complaint was lodged in the year 2009 and further the statement recorded under section 50 of PMLA clearly indicates that the amount was transferred to accused John Micheal in the year 2005 itself and the same stands vindicated by the account extracts which are being produced before the court and marked during the course of evidence. I have also appreciated the complaint which has been filed by the ED authorities. Even in the complaint an allegation has been made of accused No.1 owning property and also some properties being purchased in the name of accused No.2. At this juncture, the statement of Smt. Manjula Michael which is recorded under Section 50(3) of the PMLA, which are marked as Ex.P.24 is to be appreciated. In the said statement she has specifically stated that she was not having any 73 Spl.C.No.132/2015 independent source of income and the house property was purchased through the funds handed over to her by accused No.1 John Michael and also the Car was purchased from the funds handed over to her by accused No.1. It is relevant to note at this juncture that, the statement of accused No.1 John Michael also indicates of purchasing the house property in the name of his wife Smt. Manjula Michael. I have also looked into the statement recorded under Section 313 of Cr.P.C., In the said statement, the accused No.1 John Michael had specifically admitted of giving statement on 03.12.2013 before the ED authorities and he has also admitted that Mr. Tapan Bhandari has lodged a case. More particularly question No.7 clearly indicates that it was specifically narrated to accused that he has narrated that on 01.08.2014 he and his wife had appeared and even she has stated that she was not having any independent source of income to purchase Car and she was totally depending on his income which has been specifically 74 Spl.C.No.132/2015 admitted by accused No.1. No doubt, the admissions given by accused in his 313 Statement cannot be sole basis of conviction. However, at the same time, the same recording of statement cannot be considered as bald formality and it is a stage wherein an opportunity is provided to the accused to offer an explanation to the incriminating materials available against him. As such, it would indicate that the prosecution has proved beyond reasonable doubt with respect to commission of offence by accused John Michael. When the entire case of the prosecution is appreciated coupled with the documentary and ocular evidence led before the Court, it would clearly indicate that the prosecution has established their case beyond reasonable doubt.
SUMMATION:
34. To sum up, the ED authorities have initially registered a complaint under Section 200 of Cr.P.C., stating that the accused Nos.1 and 2 had committed the offence under Sections 3 and 4 of PMLA, wherein, 75 Spl.C.No.132/2015 accused No.1 John Michael had received the proceeds of crime from one Sri. N.Sreedharan, Sri.Tapan Bhandari and others, and he in turn had induced them to part with money under the pretext of obtaining allotment of BDA site as he had stated to be the Personal Secretary of the then Chief Minister Sri. N.Dharam Singh. It is further contended that a predicate offence under Section 419, 420, 468, 471 and 201 came to be filed by Ramamurthy Nagar Police Station in crime No.61/2011 and Cr.No.239/2010 which has been culminated in Spl.C.No.94/2021 and ended in conviction of accused No.1. The ED authorities had produced the registered Sale Deed which indicates of the property standing in the name of John Michael and his wife as per Ex.P.5 and EX P.22 and also the account extract would indicate of the receiving huge amount from PW.5 Tapan Bhandari and CW.6 N.Sreedharan. Since the presumption available under Section 24 is not rebutted and also the statement under Section 50(3) of PMLA is having a specific 76 Spl.C.No.132/2015 evidentiary value, the same is successfully established by the prosecution that the properties i.e., House Property in site No.3, Khata No.28/45/1 Varanasi @ Jinkethimmanahalli, Bidaralli Hobli, Bengaluru East Taluk standing in the name of John Michael, and the site property which is standing in the name of Smt. Manjula Michael pertaining to site No.4, Khata No.28, situated at Varanasi @ Jinkethimmanahalli, Bidarahalli Hobli, Bengaluru East Taluk and also the Car bearing Registration No.KA-03/MK-998 purchased out of the proceeds of crime and hence, accused No.1 John Michael is guilty of committing the offence as contemplated under Section 3 and 4 of PMLA. Accordingly, the point Nos.1 and 2 are answered in the Affirmative.
35. Point No.3: In the result, I proceed to pass the following;
ORDER The Complaint filed under Sec.45(1) of Prevention of Money Laundering Act, is hereby allowed.
77 Spl.C.No.132/2015
Acting under Section 235(2) of Cr.P.C, the accused No.1 John Michael is convicted for the offences under Sec.3 punishable under Sec.4 of Prevention of Money Laundering Act, 2002.
The bail bond of accused and his surety bond shall stand cancelled.
To hear regarding sentence, call on 08.04.2024.
(Dictated to the Stenographer Grade-I, transcribed by her, revised and corrected by me and then pronounced in the Open Court on this the 6th day of April, 2024).
(Santhosh Gajanan Bhat) LXXXI Addl. City Civil & Sessions Judge, Bengaluru City (CCH-82) C/c of XLVII Addl. City Civil and Sessions Judge and Judge for CBI Cases, Bengaluru (CCH-48) ORDER REGARDING SENTENCE
36. In the instant case, the accused is hereby convicted for the offences of money laundering under section 3 which is punishable under section 4 of the PMLA. 78 Spl.C.No.132/2015
37. The accused is secured under body warrant and he is produced before the court.
38. The Learned Special Public Prosecutor Sri I S Pramod Chandra has vehemently argued that the offences against the accused for the provisions of law have been proved beyond reasonable doubt. It has been submitted that the accused had induced the complainant in the predicate offence Sri. Tapan Bhandari, who had handed over a sum of Rs.25,23,788/- towards allotment and registration of BDA site and whereas, the wife Smt. Chanda Bhandari has handed over a sum of Rs.5.00 lakhs and that apart, Sri. N.Sreedharan has handed over a sum of Rs.11,13,004/ on three occasions. Further it is submitted that from the evidence which is placed before the court it is established that the prosecution has proved that the properties are purchased through the proceeds of crime. Further it is his submission that the conduct of the accused is also required to be considered 79 Spl.C.No.132/2015 since the accused had once again created forged documents and has sold the house property standing in his name in site no.3 of Varanasi@ Jinkethimmanahalli Village, Bengaluru, inspite of the order of attachment passed by the competent authority and separate FIR is registered in Cr.No.113/2022 which is pending for adjudication. Since accused is a habitual offender, no leniency can be shown to him and accordingly, he has sought for imposing maximum punishment and has also argued that as per section 8(7) of the PMLA, the property standing in the name of Smt Manjula Micheal is also required to be confiscated as the property in site No.4, Katha No.28 of Varanasi @ Jinkethimmanahalli, Bengaluru was also purchased of the proceeds of crime. Accordingly, has sought for imposing maximum punishment coupled with confiscation of the property.
39. The Learned Counsel for the accused is present before the Court and has submitted that accused is the sole bread earner in his family and he has 80 Spl.C.No.132/2015 to take care of his aged mother, who is aged about 86 years and he is also suffering from various ailments.
40. The Court has also heard the accused, who has also reiterated the submissions made by his counsel and has requested the court to take a lenient view and has further submitted that his mother is aged about 86 years and has to take care of his son aged about 9 years who is now in the custody of the grand mother and has also submitted of his health condition and also the conviction in predicate offence. Accordingly he has sought for imposing minimum sentence as contemplated under law.
41. Heard the parties and the point that requires to be considered is what would be the appropriate sentence that could be imposed on the accused person.
42. The Hon'ble Apex Court has time and again reiterated that, in matters of awarding sentence, the court should be cautious and has to consider all the relevant factors to arrive at a just conclusion. It is the 81 Spl.C.No.132/2015 cardinal principle of law that the nature and gravity of crime is to be appreciated and not the criminal which are germane for consideration to impose suitable punishment. Further, the Hon'ble Apex Court has directed the trial courts to precisely consider the aggravating and mitigating factors at the time of awarding sentence. If the aggravating and mitigating factors are appreciated, the same can be culled out as follows;
Aggravating Factors:
1. The accused had induced the innocent persons to part with a huge amount under the pretext of providing BDA sites.
2. The accused had impersonated himself to be the Personal Secretary of the then Chief Minister and the same is a serious aspect.
3. The act of the accused was deliberate and intentional one.
4. The accused is a habitual offender, facing several cases.82 Spl.C.No.132/2015
5. The act of the accused in purchasing the properties is established to be from the proceeds of crime which is narrated in the predicate offence.
6. The act committed by the accused is against society at large and will have a deep impact over the society.
7. The offence committed by the accused is white collared offence and will affect socio economic fabric of the country.
8. If any lenient view is to be taken, the act would further erode the faith and may lead to draw an inference that the economic offences would be dealt liberally.
9. The accused inspite of the attachment order passed by the Adjudicating authority has sold the house property in Site No.3, Varanasi@ Jinkethimmanahalli, Bidarahalli Hobli, Bengaluru, by creating forged document for which separate case is registered in Cr113/2022 which is pending for investigation. The said act would establish the fact that the accused doesn't show scant respect to law and also to the orders passed by any authority.83 Spl.C.No.132/2015
Mitigating Factors:
a. The accused does not have any criminal antecedents.
b. The accused has to take care of his aged mother and also he is the sole bread earner of his family and has to take care of his young son of 9 years old.
c. The accused is suffering from various ailments and accused is having deep roots in the society.
43. On considering the aggravating and mitigating factors, it is noticed that the offence which is committed by the accused could be termed as white collared offence, which bleeds the economy of the nation. Further, the maxim "Nullum crimen sine lege" which means, the principle of legality in the rule of construing criminal statute is to be in favour of citizens and also the approach should be towards the social welfare. The important aspect of socio-economic offence is to be considered from the point of view of the harm it has caused to the society at large. Even though the gravity of offence cannot be deciphered easily, the same requires to be considered in a manner which would indicate the 84 Spl.C.No.132/2015 mode in which its execution was carried out by the accused. The Hon'ble Apex Court has also specifically laid down the dictum that the Court has to consider the cry of the victim at the time of imposing punishment. It is also been held that the society at large is the sufferer due to the commission of white collared offence by the accused person. When the aforesaid aspect is applied to the case on hand, it indicates that the accused had induced the witnesses in the above case to part with huge amount of money. It is to be appreciated that the accused had chosen the persons who had got faith and had made them to part with money under the pretext of providing BDA sites. Further it is established during the course of trial that the accused had purchased two sites and a car from the proceeds of crime, which would squarely attract the provisions of PMLA. Further the intention of the legislature to curb economic offence can be construed from various dictums laid down by the Hon'ble Apex court and in particularly in 2022 SCC 85 Spl.C.No.132/2015 Online SC929 ( Vijay Madanlal Choudhary V Union of India) wherein it is held as:
148. Relying on international Conventions, such as Vienna Convention, Palermo Convention and FATF Recommendations, it is urged that the same concern has been expressed by the global community, which is reflected in all the above-
mentioned Conventions. It is further submitted that Section 45 of the PMLA fulfils the mandate of international Conventions as the implementation of the PMLA is monitored internationally and is linked to India's international obligations.
149. It is submitted that in furtherance of the legitimate State interest, departure from ordinary criminal procedure has been made under the PMLA. Reliance has been placed on A.K. Roy v. Union of India252 to urge that that 'the liberty of the individual has to be subordinated, within reasonable bounds, to the good of the people'.
Further, the twin conditions are not 86 Spl.C.No.132/2015 novel or draconian in nature as they are also present in other numerous special enactments for the welfare of the people and they not only provide deterrent effect but also tackle the offence of money-laundering. It is submitted that this Court in Nikesh Tarachand Shah has not reckoned this crucial aspect. It is submitted that the length of punishment is not the only indicator of the gravity of the offence and private parties have wrongly argued that the twin conditions cannot be made applicable in a legislation which carry a punishment of only seven (7) years. Gravity of offence is to be judged on a totality of factors, especially keeping in mind the background in which the offence came to be recognized by the Legislature in the specific international context. To buttress this submission, the learned Solicitor General has relied on State of Gujarat v. Mohanlal Jitamalji Porwal254,Y.S. Jagan Mohan Reddy v.
Central Bureau of Investigation255, Nimmagadda Prasad v. Central Bureau of Investigation 256, Gautam 87 Spl.C.No.132/2015 Kundu257, and State of Bihar v. Amit Kumar alias Bachcha Rai258. Further, reliance has been placed on Mohd.
Hanif Quareshi v. State of Bihar259 to state that the seriousness of an offence and its impact on society is the subject matter of legislative wisdom and Legislature understands and correctly appreciates the needs of its own people.
150. It is submitted that persons involved in the offence of money-
laundering are influential, intelligent and resourceful and the crime is committed with full pre-meditation, which ensures that the offence is not detected and even if it is detected, investigation agency cannot trace the evidence. Further, it is stated that the offence is committed with the help of advanced technology so as to conceal the transaction, which makes the stringent bail conditions justified. Twin conditions of bail under Section 45 protect the interests of the accused as well as that of the prosecution.
Reliance has been placed on Talab Haji 88 Spl.C.No.132/2015 Hussain v. Madhukar Purshottam Mondkar260, to state that the fair trial must not only be fair to the accused but also be fair to the prosecution, so that a person guilty of the offence may not be acquitted.
151. It is submitted that in case of offence of money-laundering, mere routine conditions which ensure presence of the accused during trial or protect the evidence, are not enough because of the trans-border nature of the offence of money-laundering and influence which may be exercised by the accused. An accused can anonymously remove the money trail using the technology, which is available today so as to make the investigation infructuous. Therefore, even deposit of the passport of the accused may not deter the accused from fleeing the course of justice or to eliminate the evidence.
152. It is submitted that economic offences constitute a class apart and need to be visited with different 89 Spl.C.No.132/2015 approach in the matter of bail.
Further, the fact that the economic offences are considered as a different class of offences, recognizes the grave and serious nature of the offence with deep rooted conspiracy, as they involve huge loss of public funds, thus, affecting the economy of the country as a whole. It is submitted that the Court while granting bail must keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused, reasonable apprehension of the witnesses being tampered with and the larger interests of the public/State. It is submitted that granting or refusal to grant bail depends on the nature of offence, needs of investigation, status of the accused and other factors. The Legislature, being aware of the need of the day, is competent to provide a special procedure for grant of bail. It would be 90 Spl.C.No.132/2015 wrong to say that the Court has unfettered discretion in granting or refusal to grant the bail. It is true that the Court exercises discretion while granting or refusing bail, but that exercise of power has to be within the legislative framework. It is stated that the requirement of the Court being satisfied that the "accused is not guilty of an offence" is not a novel legislative device. Section 437 of Cr.P.C. also imposes a similar condition 261. Moreover, the twin conditions have been provided for by the Parliament in numerous other enactments as well. It is submitted that the Parliament is competent to classify offences and offenders in different categories. The Parliament has classified the offence of money-
laundering as a separate class of offence from ordinary criminal laws. The said classification was necessary because the PMLA was framed in a specific international context, providing for separate and special architecture for investigation.
91 Spl.C.No.132/2015
153. The offence of money-laundering is a new offence created by the PMLA, which has a high threshold of arrest as given under Section 19, which itself justifies high threshold for grant of bail. Nature of the offence being peculiar, makes manner of investigation far more difficult than in ordinary penal offences. The PMLA is a complete Code in itself, which creates a separate machinery to tackle the social menace, having adequate safeguards. It is submitted that Legislature has on numerous occasions made departures from the ordinary penal and procedural laws as and when the situation arrived. The classification of the offence on the basis of public policy and underlying purpose of the Act cannot be said to be unreasonable or arbitrary. Therefore, the Parliament is fully competent to deal with special type of cases by providing a distinct and different procedure which in the circumstances, cannot be said to be unreasonable. Therefore, it is submitted that a different standard for bail can be provided in an offence 92 Spl.C.No.132/2015 which serves a special purpose. To buttress these submissions, reliance has been placed on Kathi Raning Rawat v. State of Saurashtra262, Kedar Nath Bajoria v. The State of West Bengal263, Special Reference No. 1 of 1978264 and Kartar Singh 265.
44. The aforesaid judgment clearly throws light on the manner in which the offences committed under Prevention of Money Laundering Act, 2002 is to be dealt by the trial courts. It is the intention of the legislature that the offences are to be viewed seriously and has to be considered as crime against the society at large. The court is not against the criminal but against the criminality in which the act has been committed and the proceeds of crime is being utilized by the accused person. The submission of suffering from ill health and other responsibilities in life which is required to be taken care by the accused as submitted would not be suffice to take a lenient view in the wake of the dictum laid down by the Hon'ble Apex court in the aforesaid case and also 93 Spl.C.No.132/2015 explaining the manner in which the economic offences are to be dealt with. Hence, the immovable properties and the car which were amassed by accused from the proceeds of crime are to be confiscated as contemplated under section 8(5) of the PMLA. Though the case registered in Cr.No.113/2022 is pending for completion of investigation, it is noticed that once again an allegation is leveled against the accused of creating forged and fabricated order indicating of lifting the order of attachment by the competent authority. The registration of FIR itself would indicate that the accused is not a law abiding citizen nor shows any respect to the rudiments of law. The court has also bestowed anxious reading to the fact the one of the site property in site No.4, Katha No.28, situated at Varanasi @ Jinkethimanahalli, Bengaluru and car is standing in the name of his wife Smt. Manjual Micheal who was arraigned as accused No.2 and subsequently she is shown to be an absconding person. However as per the 94 Spl.C.No.132/2015 provisions of section 8(7) of the PMLA, it would clearly indicate that when the proceedings has been initiated against the persons who is declared to be proclaimed offender, the court is empowered to pass appropriate order with respect to confiscation of the property involved in the offence of money laundering after having regard to the material available before the court. Further as per the provisions of section 8(8) of the PMLA it would specify that subsequently, the court is empowered to direct the Central Government in whose favour the property is confiscated to restore the same in the event of showing legitimate interest over the same. In the instant case, the materials which has been furnished clearly establishes that the property in site No.4, katha No.28 situated at Varanasi @ Jinkethimmanahalli was purchased through the registered sale deed dated 13/10/2008 i.e. after the receipt of the proceeds of crime and also the statement of account and bank extracts 95 Spl.C.No.132/2015 establishes the same. Hence, the said property is also liable to be confiscated.
45. Under the circumstances, the court has to consider imposing of maximum punishment as contemplated under Section 4 of the PMLA and also under Sections 8(5) of the PMLA. By considering the said aspects, I proceed to pass the following;
ORDER
The accused John Michael, S/o.
Yesudas, is hereby convicted for the offences of money laundering as defined under Section 3 and punishable under Sections 4 of Prevention of Money Laundering Act, 2002 and he is hereby sentenced to undergo a Rigorous Imprisonment for a period of FIVE years and imposed with a fine of Rs.5.00 lakhs (Rupees Five lakhs only) and in default of payment of fine, he shall undergo a Simple Imprisonment for a period of TWO years.
Further the immovable property consisting of residential site and building 96 Spl.C.No.132/2015 thereon bearing No.3, Katha No. 28/45/1, situated at Varanasi @ Jinkethimmanahalli, Bidarahalli Hobli, Bengaluru East Taluk measuring 1400 sq. feet and another site property of 620 sq.feet in site No.4, Katha No.28, Varanasi @ Jinkethimmanahalli, Bidarahalli Hobli, Bengaluru East Taluk, standing in the name of Manjula Micheal and Car bearing registration No.KA-03 MK- 998 with Chasis No.MA3EED81S 00676526
stands confiscated to the Central Government.
In the event of deposit of fine amount, the same shall be forfeited to the Central Government and since the offence committed is against the society at large, no separate order for compensation is passed under Section 357-A of the Criminal Procedure code. Needless to mention, accused is entitled for set off for the period of detention which he has undergone as under trial prisoner in the above case.
Office is hereby directed to furnish the copy of the Judgment to the accused forthwith.
97 Spl.C.No.132/2015
The bail bond and surety bonds executed by the accused stands cancelled. (Dictated to Stenographer Grade-I, transcribed by her, revised and corrected by me and then pronounced in open court on 8th April, 2024) (Santhosh Gajanan Bhat) LXXXI Addl. City Civil & Sessions Judge, Bengaluru City (CCH-82) C/c of XLVII Addl. City Civil and Sessions Judge and Judge for CBI Cases, Bengaluru (CCH-48) ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF PROSECUTION PW.1 : J. Subramanyiyam PW.2 : F. Khader Mydeen PW.3 : Chandramouli R PW.4 : K.O. Paul PW.5 : Tapan Bhandari PW.6 : Lakshmi Mantri PW.7 : Shivakumar D PW.8 : Renukaradhya H.S. PW.9 : Subhash Agarwal List of Exhibits marked through Prosecution :
Ex.P.1 : True Copy of FIR.
Ex.P.2 : Copy of the entire charge-sheet in
Cr.No.239/2010.
98 Spl.C.No.132/2015
Ex.P.3 : True Copy of FIR in Cr.No.61/2011.
Ex.P.4 : Copy of the charge sheet in Cr.No.61/2011.
Ex.P.5 : C/c. Of the Sale Deed dated 27.04.2005.
Ex.P.8 : The copy of the complaint filed before
Adjudicate Authority.
Ex.P.9 : The true copy of B-register extract of vehicle
bearing No.KA-03/ MK-0998.
Ex.P.10,11 : True copies of the cheque and withdrawal form.
Ex.P.12 : Copy of statement of N.Shridharan.
Ex.P.13 : Copy of Source of Funds.
Ex.P.14 : Copy of Passport.
Ex.P.15 : Statement of account of N.Shridharan.
Ex.P.16 : Copy of closure of PPF Account.
Ex.P.17 : Copy of Loan Certificate.
Ex.P.18 : Copy of source of fund (Lalitha).
Ex.P.19 : Copy of Foreign inward remittance.
Ex.P.20 : Copy of complaint by Tanuj
Ex.P.21 : Copy of statement of payments.
Ex.P.22 : Copy of statements of N.Shridharan.
Ex.P.23 : Copy of statement of accused.
Ex.P.24 : Copy of statement of accused No.2.
Ex.P.25 : True copy of statement of N.Sreedharan
Ex.P.26 : True Copy of statement of Tapan Bhandari.
Ex.P.26(a) : Signature.
Ex.P.27 : True copy of Sale Deed dated 27.03.2007.
Ex.P.28 : True copy of Sale Deed dated 30.11.2007
Ex.P.29 : True copy of Sale Deed dated 07.08.2008.
Ex.P.30 : True copy of statement of accused No.1.
Ex.P.31 : True copy of statement of A.2.
Ex.P.32 : True copy of Letter of A.2.
Ex.P.33 : Statement of A.2.
Ex.P.33(a) : A/c. Of son of A.1.
Ex.P.34 : True copy letter of A.1.
Ex.P.35 : Statement of A.1.
Ex.P.35(a) : True copy.
Ex.P.36 : True copy of Sale Deed
Ex.P.37 : E.C.
99 Spl.C.No.132/2015
Ex.P.38 : True copy of complaint dated 11.09.2010
Ex.P.39 : True copy of Rectification Letter
Ex.P.40 : True copy of Sale deed dated 20.03.2007.
Ex.P.41 : True copy of Sale Deed dated 20.03.2007.
Ex.P.42 : True copy of Sale Deed dated 27.03.2007
Ex.P.43 : True copy of Sale Deed dated 19.11.2007
Ex.P.44 : True copy of Sale Deed dated 20.03.2007
Ex.P.45 : Endorsement dated 7.3.2011.
Ex.P.46 : C/c of Provisional Attachment Order.
Ex.P.46(a) : Signature of witness.
Ex.P.47 : C/c of complaint-Adjudicating Authority.
Ex.P.48 : Statement of A.1.
Ex.P.48(a) : Signature of witness.
Ex.P.48(b) : Signature of A.1.
Ex.P.49 : C/c of E-mail complaint.
Ex.P.50 : C/c of Letter to Asst. Director.
Ex.P.51 : Attested Passport.
Ex.P.52 : E.C.
Ex.P.53 : Provisional Attachment Order
Ex.P.54 : Copy of Corrigendum
Ex.P.55 : Copy of complaint.
List of Material Objects marked through Prosecution:
NIL List of documents marked through Defence Side:
NIL (Santhosh Gajanan Bhat) LXXXI Addl. City Civil & Sessions Judge, Bengaluru City (CCH-82) C/c of XLVII Addl. City Civil and Sessions Judge and Judge for CBI Cases, Bengaluru (CCH-48)