Bangalore District Court
Deputy Director Dirctorate Of ... vs Ms Salve Regina Charitable Trust on 6 May, 2025
1 Spl.C.No.127/2014
KABC010078142014
IN THE COURT OF XLVII ADDITIONAL CITY CIVIL &
SESSIONS JUDGE AND SPECIAL JUDGE FOR CBI
CASES, BENGALURU (CCH-48)
DATED THIS THE 6th DAY OF MAY 2025
PRESENT
Sri Satish J.Bali, B.Com., LL.M.,
XLVII Addl. City Civil and Sessions Judge and Spl. Judge
for CBI Cases, Bengaluru (CCH-48)
SPL.CC.NO.127/2014
COMPLAINANT: Deputy Director,
Directorate of Enforcement,
Government of India,
3rd Floor, B Block,
Shantinagar -TTMC,
KH Road, Shantinagar,
Bangalore -560 027.
(By Sri Sudeep Bangera, Spl. Public
Prosecutor)
Vs.
ACCUSED: 1. M/s Salve Regina Charitable Trust,
Represented by Smt. Regina
Seelan, President -Trustee,
Divya Shakthi Oldage Home,
No.9, Hanumanth Nagar,
Bileshivale, Doddagubbi Post,
Bangalore-560 077.
2 Spl.C.No.127/2014
2. Smt. Regina Seelan,
President -Trustee,
Female aged 55 years,
W/o Joseph Jayaseelan,
M/s Salve Regina Charitable
Trust, Divya Shakthi Oldage
Home, No.9, Hanumanth
Nagar, Bileshivale,
Doddagubbi Post,
Bangalore -560 077.
3. Shri Gopalakrishna, Male,
Aged 44 years,
S/o Late Hanumappa,
No. 131, Bileshivale Village,
Doddagubbi Post,
Bangalore -560 077.
4. Shri Ramaiah, Male,
Aged 50 years,
S/o Ramanappa,
Bileshivale village,
Doddagubi Post,
Bangalore-560 077.
5. Shri B.M. Ramanjinappa,
Male, Aged 40 years,
S/o Muniyappa,
Bileshivale,
Bidarahalli Hobli,
Bangalore East Taluk,
Bangalore.
6. Mrs. K.R.Arunakumari,
Female, Aged 38 years,
W/o B.R.Narayanaswamy,
No. 306, Byrathy Main Road,
Byrathy, Kothanur Post,
Bangalore - 560 077.
3 Spl.C.No.127/2014
7. M. Ganesh, Male,
Aged 44 years,
S/o Krishnappa,
Gundur village,
Bidarhalli Hobli,
Bangalore.
8. Shri Ramachandra,
Male, Aged 40 years,
S/o Munishivappa,
155, Byrathi village,
Kothanur Post,
Bangalore.
1.Date of Commission of Offence : During the
period from
1.07.2010 to
13.08.2010
2. Date of Report of Offence : 09/09/2010
3. Arrest of Accused : Accused are on bail
4. Name of the complainant : Deputy Director,
Enforcement
Directorate
5. Date of recording of Evidence : 9/12/2021
6. Date of closing Evidence : 2/12/2023
7. Offences complained of : Sec. 45(1) of the PMLA
Act, 2002 for offences
u/s 3 punishable u/s
4 of the Act.
8. Opinion of the Judge : As per the final order
(Satish J. Bali)
XLVII Addl. City Civil and Sessions
Judge and Judge for CBI Cases,
Bengaluru (CCH-48)
4 Spl.C.No.127/2014
JUDGMENT
This is a complaint filed by the Deputy Director of Enforcement as against the accused under Section 45(1) of Prevention of Money Laundering Act, 2002 (in short PML Act) seeking to punish them for the offence punishable under section 4 of the Act.
2. The Accused no.1 is a trust represented by Accused no.2 who is the President/chief founder and trustee of the Accused no.1 - trust. Accused No.3 to 8 have entered into an agreements of sale / lease deed with the Accused no.1 under various Agreements of sale and Lease deed agreeing to sell / Lease their respective properties in favour of the Accused no.1 - trust represented by Accused no2.
3. The complainant's case as could be seen from the complaint is that, the accused no.2 is a President and Chief Functionary of accused no.1 - trust which was registered on 30/5/2005 along with other trustees. The said trust is running "Divya 5 Spl.C.No.127/2014 Shakthi Oldage Home" in a rented premises at No. 9, Hanumanth Nagar, Bileshivale, Doddagubbi Post, Bangalore. The accused no.2 has opened a website www.scr.trust.org in the month of March 2009 and so also a payment gateway through ICICI Merchant Services Pvt. Ltd.,so as to receive donations. It is specifically stated that the accused no.1 trust along with accused no.2 and other trustees indulged in 995 fraudulent transactions using compromised credit card data with the help of other unknown fraudsters and received an amount of Rs.15,68,53,627 during 1/7/2010 to 13/8/2010 through the above said gateway provided to them by their above said official website of the trust. On the basis of the complaint lodged by one Smt. Maria Reuben, the authorized signatory of ICICI Merchant Services Pvt. Ltd., Bangalore, a case came to be registered by the Cyber Crime Police Station Ltd., Bangalore in their Crime No. 28/2010 dated 9/9/2010 as against the accused no.1 and 2. It is 6 Spl.C.No.127/2014 alleged that, they have committed the offences punishable under Section 420 of IPC which is a scheduled offence under Prevention of Money Laundering Act and also the offences punishable under Section 66(c) and 66(d) of Information Technology Act, 2000.
On the basis of a letter dated 13/10/2010 of Deputy Superintendent of Police, Cyber Crime Police Station, Bangalore, complainant received a complaint lodged by the above said official of ICICI Merchant Services Pvt. Ltd., Bangalore and on satisfaction of prima faice case, a case came to be lodged by the complainant as against the accused no.1 to 8 in their ECIR No. 85/BZ/2010-2011 dated 29/10/2010 for the offences committed under Section 3 which is punishable under Section 4 of Prevention of Money Laundering Act, 2002.
The complaint further reveals that the accused no.1 - trust opened bank account bearing No. 0169010118521 with the ICICI Bank and also 7 Spl.C.No.127/2014 another bank account bearing No. 2310100031310 with Axis Bank, Bangalore. It is specifically alleged that out of the above said sum of Rs.15,68,53,627/- by way of fraudulent transactions, the accused no.1 trust had made following payments to the accused no.3 to 8 while entering into Agreements of sale and Lease deed.
i) The Accused no.3 agreed to sell his property bearing Sy.no. 4/8 in total 38 Guntas for valuable consideration of Rs.3,00,00,000/-, out of which he had received a sum of Rs.2,50,00,000/- in cash and balance by way of cheques bearing No. 455968, 455975 and 468705 for Rs.6,00,000/-, Rs.20,00,000/-, and Rs.5,00,000/- respectively held at ICICI Bank, Indira Nagar, and by way of another cheque bearing No.282455 of Axis Bank, Cox Town Branch, for Rs.19,00,000/-.
Out of the above said cheques, the accused no.3 had encashed first three cheques through his SB Account with Vijaya Bank, Kothanur and a sum 8 Spl.C.No.127/2014 of Rs.31,00,000/- was deposited in the above said account. The said agreement of sale was entered on on 23/7/2010.
ii) The Accused no.4 vide Agreement of Sale dated 18/7/2010 agreed to sell his property in sy.no. 9/P, 15 guntas situated at Bileshivale, Village, Bangalore East in favour of accused no.1 - trust for total consideration of Rs.1,15,00,000/- and out of the said amount on 18/7/2010, he had received Rs.1,00,00,000/- by way of cash and balance of Rs.15,00,000/- by way of two cheques bearing No. 282459, 282460 of Rs.7,50,000/- each. As per the request of the accused no.2, he has not presented the above said cheques for encashment.
iii) Accused No.5 vide agreement of sale dated 30/7/2010 agreed to sell 1 acre 20 Guntas in Sy.no.118 at Bileshivale village for total consideration of Rs.2,85,00,000/- and on 30/7/2010 he had received Rs.2,35,00,000/- by way of cash and the balance amount by way of two cheques bearing No. 9 Spl.C.No.127/2014 282457, 282458 respectively of Axis Bank, Bangalore for Rs.25,00,000/-. Again, as per the request of the accused no.2, above said cheques were not presented for payment.
iv) The Accused no.6 who is the owner of 6 shops situated in sy.no.121/2, Bileshivale village entered into Lease agreement with accused no.1- trust on 2/8/2010 for the purpose of running "Wisdom Computer Center" for a period of 10 years and received a sum of Rs.10,00,000/- by way of cheques of Axis Bank and Rs.20,00,000/- by way of cash.
v) The Accused no.7 entered into an Agreement of sale with the Accused no.1 - trust on 29/7/2010 agreeing to sell 2 acres of land at sy.no.61/P11 and 61/P13, new no. 81 and 82 of Gundur village, Bidarhalli Hobli, Bangalore for a total consideration of Rs.3,50,00,000/-, out of which he had received Rs.2,67,50,000/- as an advance, but a memorandum of understanding dated 20/7/2010 10 Spl.C.No.127/2014 was entered into between him and Accused no.1 - trust wherein it was agreed to show the actual cost of the above said land as Rs.1,35,00,000/-, and out of which a sum of Rs.15,00,000/- was paid in cash and balance was paid through four cheques bearing No. 267809, 2676110, 267611 and 267612 of Axis Bank for Rs.20,00,000/-, Rs.10,00,000/-, Rs.10,00,000/- and Rs.12,50,000/-. Out of the above said cheques, first two cheques were encashed by the Accused no.7 and as per the request of the Accused no.2, the other two cheques were not presented for payment.
vi) The Accused no.8 by way of Agreement of Sale dated 16/7/2010 agreed to sell 3 plots situated at sy.no.16/1 of Byrathi village for total consideration of Rs.43,20,000/-, out of which he had received Rs.33,00,000/- by way of cheque, and remaining amount by way of 3 cheques bearing No. 4000463, 455951 and 455959 of Vijaya Bank, Kothanur Branch, Bangalore for Rs.5,00,000/-, Rs.8,00,000/- and Rs.5,00,000/- respectively. 11 Spl.C.No.127/2014
It is also alleged that the Accused no.1 - trust out of the above said proceeds of crime has purchased Innova car bearing registration No.KA- 53-P-3129 for Rs.12,27,052/- from Motor World Ltd., and Ford Figo car bearing registration No. KA-53-P- 3360 for valuable consideration of Rs.6,40,687/-.
The complaint further reveals that the above said accused no.3 to 8 have received the above said advanceconsideration amount / refundable deposit for lease of shops out of the proceeds of crime generated by the Accused no.1 - trust in connection with crime punishable under Section 420 of Indian Penal Code, and the said amount was retained in collusion of accused no.3 to 8 even after they came to know of the FIR registered against the said trust. It is alleged that, Accused no.1 to 8 involved / indulged in the process and activity connected with the "proceeds of crime" including its "concealment", "possession", "acquisition" or "use" and projecting or claiming it as a "untainted property", as such they have committed 12 Spl.C.No.127/2014 the offence under Section 3 which is punishable under Section 4 of Prevention of Money Laundering Act, 2002 and thereby prayed to punish the accused for the above said offences.
4. After receipt of the complaint, as there were prima facie materials to proceed against the accused, the cognizance was taken against the accused for the offence under Sections 3 which is punishable under section 4 of Prevention of Money Laundering Act.
5. After registration of the case, in pursuance of the summons, all the accused appeared before the court and are enlarged on bail. The copies of complaint and its enclosures have been furnished to all the accused in compliance of Section 207 of Cr.P.C.,
6. After hearing both the sides, my predecessor in office has framed the charges against the accused for the aforesaid offences and they have not pleaded guilty and claimed to be tried. 13 Spl.C.No.127/2014
7. In order to bring home the guilt of the accused, the complainant examined as many as 12 witnesses as PW's.1 to 12 and got marked documents at Ex.P1 to Ex.P61 and closed its side.
8. The incriminating circumstances appearing in the evidence of the prosecution case were read over to the accused in compliance of Section 313 of Cr.P.C., wherein they have denied the incriminating materials appearing against them and not chosen to lead evidence. The accused no. 7 and 8 have filed their statement when they were examined under Section 313 of Cr.P.C. The answers given by the accused no.1 to 8 in response to question posed to them under Section 313 of Cr.P.C., recorded by the court and accused have not chosen to lead Defence Evidence. During the course of cross- examination of PW.1, Ex.D1 and Ex.D2 got marked on behalf of the accused.
9. Heard the arguments of Learned Special Public Prosecutor for complainant and also Learned 14 Spl.C.No.127/2014 counsels for all the Accused. The learned counsel for Accused no4 has filed written Arguments which is perused by this court.
10. The learned counsel for the accused no.1 by furnishing the copy of Judgment passed in C.C.18147/2012 on the file of I Additional Chief Metropolitan Magistrate, Bengalur has submitted that in the predicate offence, the accused no.1 and 2 and other accused were acquitted after full-pledged trial and in view of the Judgment of Hon'ble Apex Court in Vijay Madanlal Choudhary's case, once the accused are acquitted in predicate offence, which is the basis for the complainant to file the complaint under the provisions of PML Act, the present complaint has no legs to stand, and thereby prayed to acquit all the accused. The learned counsel has placed reliance upon the Judgment of our Hon'ble High Court of Karnataka, Dharwad Bench in the matter between Dr. Natesh D.B Vs. Directorate of Enforcement and also in the matter between Smt. 15 Spl.C.No.127/2014 Parvathi W/o Siddaramaiah Vs. Directorate of Enforcement and B.S.Suresha Vs. Directorate of Enforcement which are referred at sl. No. 9 and 10 supra.
11. Per contra, the Learned Special Public Prosecutor by taking this court to the Judgment passed in predicate offence i.e., C.C.18147/2012 submitted that before the said court, the complainant did not appeared to depose on behalf of the prosecution, and considering the said fact, the accused were acquitted in the said case, and even if the accused are acquitted in predicate offence, there is no hurdle for this court to convict them in view of the Judgment of Hon'ble High Court of Madras passed in W.P.No. 14782, 14786, 14787 of 2024 c/w W.M.P. No. 16016 to 16024 of 2024 dated 28/8/2024 in the matter between Vijayraj Surana Vs. Assistant Director, ED. Further, the Learned Special Public Prosecutor submitted that even though the accused were acquitted in predicate offence, 16 Spl.C.No.127/2014 same will not bind this court and in the said Judgment, the Hon'ble High Court of Madras referred Judgment of Hon'ble Apex Court in the matter between Vijay Madanlal Choudary's case, and submitted that there is no impediment for this court to convict the accused no.1 and 2 as they have misappropriated more than Rs.15 Crores by way of gateway payments. It is also submitted that accused no. 3 to 8 having knowledge that the proceeds of crime involved in the case received the ill-gotten money as earnest money, the accused no.2 entered into agreement of sale / lease agreement and thereby they are also liable to be convicted for the alleged offences.
12. The Learned counsel for the accused in support of their arguments, have pressed into service the following decisions:
1) J. Sekar Vs. Enforcement Directorate, (2022) 7 SCC 370 at page 383;17 Spl.C.No.127/2014
2) Vijay Madanlal Choudhary Vs. Union of India (2022 SCC Online SC 929 and order dated 6/2/2023 made in Criminal Revision Petition No. 700/2021 by the Hon'ble High Court of Karnataka.
3) Writ Petition (Criminal) No. 153/2023 between Yash Tuteja and another Vs. Union of India and others.
4) 2024 (1) KCCR 322 in the case of C.Devaraju Vs. Directorate of Enforcement, Shanthinagar, Bangalore.
5) MANU/SC/0924/2022: VIJAY MADANLAL CHOUDHARY VS. UNION OF INDIA AND OTHERS Special Leave Petition (Criminal) No. 4634 of 2024, Page 533.
6) AIR 2024 SC 117 PAVANA DIBBUR VS.
THE DIRECTORATE OF ENFORCEMENT - Para 26. 7) MANU/SC/0306/2024 EQUIVALENT
/NEUTRAL CITATION: 2024 IN SC 301 YASH TUTEJA AND ANOTHER VS. UNION OF INDIA AND OTHERS - Para 7.
8) Writ Petition (Criminal) No. 153/2O23, 208/2023, 216/2023, 217/ 2013 dated 8/4/2024 between YASH TUTEJA AND 18 Spl.C.No.127/2014 ANOTHER VS. UNION OF INDIA AND OTHERS (SUPREME COURT).
9) Writ Petition No. 32956/2024 (GM-RES) dated 27/1/2025 between Dr.NATESH D.B. VS.
DIRECTORATE OF ENFORCEMENT (Hon'ble High Court of Karnataka).
10) Criminal Petition No.1132/2025 and 1129/2025 dated 7/3/2025 (Hon'ble High Court of Karnataka, Bengaluru) between Smt.PARVATHI W/O SIDDARAMAIAH VS.
DIRECTORATE OF ENFORCEMENT, SRI
B.S.SURESHA VS. DIRECTORATE OF
ENFORCEMENT.
11) C.C.18147/2012 dated 5/4/2025
(Judgment of Predicate Offence).
13. On the other hand, learned Special Public Prosecutor has pressed into service the following citations:
1. 2012(6) SCC 107 Sandeep Vs. State of U.P.
2. 2010 SCC Online 2661, Nawal Prasad alias Nawal Kumar Vs. State of Bihar.
3. Writ Petition No.14782, 14786 and 14787 of 2024 and W.M.P. Nos. 16016 to 16024 of 19 Spl.C.No.127/2014 2024 dated 28/8/2024 between Vijayaraj Surana Vs. Assistant Director, ED (Hon'ble High Court of Madras).
14. Perused the materials and evidence on record.
15. In view of the above said facts, the following points arises for consideration of the Court:
1. Whether the prosecution proves beyond reasonable doubt that Accused no1and 2 knowingly indulged in fraudulent transactions using compromised credit card data and received an amount of 15,68,53,627 during the period 1.07.2010 to 13.08.2010 through e-commerce gateway and acquired proceeds of crime and projected it as untainted by entering into Agreement of sale and Agreement of Lease with Accused no.3 to 8 and involved in the commission of offence of money laundering within the meaning of Sec 3 and punishable under section 4 R/W sec 70 of the Prevention of Money Laundering Act,2002?
2. What Order ?
16. My answer to the above points are as under:
Point No.1: In the Negative;
20 Spl.C.No.127/2014
Point No.2: As per final order; for the
following:
REASONS
17. POINT NO.1 : Perused, the charge sheets, charge, evidence and documents placed on record.
18. The learned Special Public Prosecutor in his arguments submitted that Accused no.1 is a trust of which Accused no.2 is Director and Accused no.3 to 8 are proposed vendors /lessees who entered into an agreement of sale and lease agreement with the Accused no.1 - trust and Accused no.2 being the Director of Accused no.1 - trust has opened an account with ICICI Bank bearing No. 0169010118521 through e-commerce gateway provided to the official website of the Accused no.1 - trust www.src.org and using compromised credit card data with the help of other unknown fraudsters indulged in 995 fraudulent transactions and thereby received a sum of Rs.14,68,53,627/- during the 21 Spl.C.No.127/2014 period 1/7/2010 to 13/8/2010 and Accused no.2 being custodian of the above said fraudulent money in order to claim the same as untainted property entered into Agreement of sale and lease Agreements with accused no. 3 to 8 and has paid the earnest amount/ lease amount to them out of the above said proceeds of crime and thereby committed the offence punishable under Section 4 of PML Act. It is submitted that the Accused no.1 with the help of Accused no.2 intended to purchase 8 immovable properties out of the above said fraudulent amount and in this connection the official of the ICICI Bank lodged a complaint before the Cyber Crime Police Station, CID, Bengaluru which registered the case against the Accused no.1 and 2 and other trustees in their crime no. 28/2010 dated 9/9/2010 and subsequently a charge-sheet came to be filed in C.C.No.18147/2012. It is also submitted that, on the basis of the said charge-sheet, the complainant authorities have recorded a case in ECIR 22 Spl.C.No.127/2014 No.84/BZ/2010-2011 dated 29/10/2010 under relevant provisions of PML Act as there were sufficient materials to proceed against the accused. The learned Special Public Prosecutor also submitted that there is no bar to proceed with the present case on hand, even if the predicate offence is pending before the jurisdictional court as the offence under the PML Act is a stand alone offence. It is submitted that, the accused have indulged themselves with proceeds of crime and Accused no.1 and 2 have made an attempt to launder the proceeds of crime by entering into agreement of sale / lease agreement with accused no.3 to 8 and as per their statements, found in possession of proceeds of crime and even after they came to know about the criminal case registered against the accused no.1 and 2, have not made attempts to return the earnest /lease amount to the accused no.1 - trust, as such the accused no 3 to 8 are liable to be punished for the offence punishable under Section 4 of PML Act. 23 Spl.C.No.127/2014
19. The Learned Spl.P.P with the help of depositions of PW.1 to 12, submitted that the Accused no.2 being the Director of Accused no.1 - trust has opened an account as could be seen from Ex.D1 and Ex.D2 in order to receive donations but by misusing of credit cards, received a sum of Rs.15,68,53,627/- through fraudulent transactions. The learned Special Public Prosecutor submitted that the complainant has examined the investigating officer, complainant and other material witnesses and has got marked Ex.P1 to Ex.P62, as such discharged the initial burden casted upon the complainant and the burden shifts upon the accused to prove that they are not involved in the alleged offence. It is also submitted that, the accused no.3 to 8 have knowingly dealt with proceeds of crime and thereby they are also liable to be punished. It is also submitted that the Ex.P24 the statements of account reveals that from 1/7/2010 to 26/8/2010, large sum of money was credited to the account of the 24 Spl.C.No.127/2014 accused no.1 and out of the said amount, the accused no.2 has issued cheques in respect of payment of earnest amount/ lease amount to the accused no.3 to 8, as such they have dealt with proceeds of crime and claimed the same as untainted property. Further, it is submitted that the accused have not led any contra evidence even though this court has given an opportunity to them, as such they have not discharged their burden to prove that they are innocent. With reference to the evidence of PWs.8 and 9, it is submitted that no suggestions were put to these witnesses denying opening of account with ICICI Bank by the accused no.2 on behalf of accused no.1 - trust, as such any evidence which is not tested in the cross- examination is deemed to be admitted. It is submitted that the statements recorded by the complainant - authority has got presumptive value under Section 50 of the PML Act, as such prayed to punish the accused for the offence committed under 25 Spl.C.No.127/2014 Section 3 which is punishable under Section 4 of PML Act.
20. Per contra, the Learned counsels for the accused no.3 to 8 have submitted that, the accused no.3 to 8 are not cited as accused in a predicate offence, on the other hand, they were cited as an witness as could be seen from the charge-sheet filed in the predicate offence. It is submitted that, accused no.7 is a bonafide vendor and not aware of filing case against accused no.1 and 2 and he has no knowledge about the source of income of the trust and bonafidely entered into agreement of sale with the accused no.1 - trust in order to sell his property and after coming to know of filing the case against accused no.1 and 2, accused no.7 did not presented the cheques which were issued for payment of earnest amount. It is submitted that, accused no.3 to 8 have been cited as witness in the predicate offence.
26 Spl.C.No.127/2014
21. The Learned counsel for the accused no.1 to 4 has submitted that, though it is alleged that by way of fraudulent transactions, a huge sum of money has been credited to the account of the accused no.1 - trust, but no complaint by the credit card holders for misusing their credit cards has been filed. It is submitted that accused no.1 - trust had authorization to receive the donations not only within the country but also from foreign countries as it has been registered under the FCRA Act. It is submitted that the accused no.1 and 2 had no knowledge as to fraudulent transactions and illegal fund. The knowledge and use of fraudulent money has not been proved by the prosecution. Further, it is submitted that, the accused no. 3 to 8 without having knowledge of fraudulent amount have entered into transactions with accused no.1 and 2 and they are innocent.
22. The learned counsel for the accused no.6 with reference to cross-examination of PW.12, PW.7 27 Spl.C.No.127/2014 has submitted that the said accused has not been cited as an accused in the predicate offence and accused no.6 entered into lease agreement with refundable deposit, and after coming to know of filing of the case, accused no.1 and 2 have vacated the leased premises and accused no.6 has no knowledge of the "proceeds of crime" and accused no.6 is not involved in the crime, as such prayed to acquit the accused.
23. The learned counsel for the accused no.5 with reference to the cross-examination of PW.3, PW.9, PW.12 and with reference to Ex.P9 submitted that the investigating officer has not collected the statement of account of accused no.5 and the said account has not been verified by the Investigating Officer, the panchanama has not been produced and record of rights also not been furnished. It is also submitted that Investigating Officer has recorded the statement of accused no.5 who does not know the English but it has been stated that the statement 28 Spl.C.No.127/2014 has been recorded in the presence of staff who knows Kannada but his signature on the statement has not been obtained. Further, it is stated that accused no.5 has no knowledge that amount received by him is out of "proceeds of crime" and as per Section 3 of PML Act, in order to punish the accused under PML Act, it is mandatory that there must be a "knowledge" of proceeds of crime, and thereby prayed to acquit the accused.
24. In reply, the Learned Special Public Prosecutor by referring to the written arguments filed by the accused no.4 submitted that the individual card holders have lodged the complaint before their respective banks for mis-utilisation of their credit cards by referring to Ex.P40 and submitted that, on the basis of the complaint lodged by the official of ICICI Merchant Services Pvt. Ltd., a case came to be registered by the Cyber Crime Police and as there were prima-facie case against the accused in respect of the offences committed under Section 3 which is 29 Spl.C.No.127/2014 punishable under Section 4 of PML Act, for which the complainant has filed the complaint under Section 45 of the Act. Further, the learned Special Public Prosecutor with reference to the decisions cited above has argued that even when accused were questioned by posing incriminating circumstances appearing in the evidence against them, they kept mom and they have not led any evidence. It is also submitted that, the statements of accounts and the agreement of sale / lease agreements executed by the accused no.1 - trust in favour of accused no.3 to 8 makes it very clear that accused no.1 and 2 by entering into the said agreements tried to claim the proceeds of crime as untainted property and thereby they have committed the offence punishable under Section 4 of the Act. It is also submitted that it is not necessary that all the accused of PMLA case have to be arrayed as accused in predicate offence and the very framing of charge under Section 420 of IPC is not challenged by any of the accused and same has 30 Spl.C.No.127/2014 attained finality. It is submitted that, the burden is on the accused no.1 to 4 to prove that funds deposited into the account of accused no.1 - trust are verified and vetted by the service provider but no such evidence has been led, hence an adverse inference has to be drawn against the accused. It is submitted that, the PML Act is a special Act and special procedure is prescribed for investigation under the Act and when there is no special provision under the PML Act, the provisions of Cr.P.C., will apply, as such it is not fatal to the case of the prosecution for not producing and proving mahazar. It is also submitted that the complainant in all the cases need not be examined and the official of ICICI Merchant Services Pvt. Ltd., by filing the complaint has set the law into motion and evidence on record reveals that accused have committed the offence under the Act. It is submitted that, the prosecution has made all efforts to secure CW.9 but went in vain, on the other hand, the statements of CW.9 is 31 Spl.C.No.127/2014 marked through the person who has identified his signature, as such the prosecution has proved its case beyond all reasonable doubt. It is submitted that, PW.11 was examined instead of CW.9, and statement of CW.9 i.e., Rajeevkumar at Ex.P39 is got marked through PW.11 who has identified his signature appearing on it. It is submitted that Ex.P40 contains complaint lodged by the individual credit card holders as to the mis-use of their cards. It is also submitted that PW.11 was not cross- examined by the counsels for accused no.1 to 4. Hence, his evidence is unimpeaced and deemed to be admitted. The accused no.1 and 2 when examined under Section 313 of Cr.P.C., while answering to Question No.46 admitted withdrawal of fraudulent money which is sufficient to convict the accused. It is submitted that, accused no. 3 to 8 did not returned the earnest amount/ lease amount even after they came to know of lodging of complaint against the accused no.1 and 2. If really they are 32 Spl.C.No.127/2014 bona-fide vendors, they could have returned the earnest amount as soon as they came to know about the lodging of the case against accused no.1 and 2. Therefore, accused no.3 to 8 having knowledge of proceeds of crime, as such they are also liable to be punished under Section 4 of the PML Act and thereby prayed to convict the accused for the alleged offence.
25. In order to appreciate the above said arguments canvassed by both learned counsels, it is necessary to know certain provisions of Prevention of Money Laundering Act, 2002 which came into force on 1/7/2005.
26. Section 43 of Prevention of Money Laundering Act, 2002 which deals with constitution of Special Courts reads as under:
"43. Special Courts, - (1) The Central Government, in consultation with Chief Justice of the High Court, shall, for trial of offence punishable under section 4, by notification, designate one or more Courts of Session as 33 Spl.C.No.127/2014 Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.
Explanation. - In this sub-section, "High Court" means the High Court of the State in which a Sessions Court designated as Special Court was functioning immediately before such designation.
(2) While trying an offence under this Act, a Special Court shall also try an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial."
27. As per the above said section, this Court is constituted as Special Court to try the offences punishable under Section 4 of the Act. Further, as per Section 44 of the Act, a Special Court based upon the complaint filed by the authorised authority can take cognizance of the offence and such offences are triable by the Special Court. The said section reads as under:
34 Spl.C.No.127/2014
"44. Offences triable by Special Courts. -
(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), -
[(a) an offence punishable under section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed:
Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall continue to try such scheduled offence; or]
(b) A Special Court may, [***] upon a complaint made by an authority authorised in this behalf under this Act take [cognizance of offence under section 3, without the accused being committed to it for trial].
[Provided that after conclusion of investigation, if no offence of money-laundering is made out requir4ing filing of such complaint, the said authority shall submit a closure report before the Special Court; or]
(c) if the court which has taken cognizance of the scheduled offence is other than, the Special Court which has taken cognizance of the complaint of the offence of money-laundering 35 Spl.C.No.127/2014 under sub-clause (b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed.] [(d) a Special Court while trying the scheduled offence or the offence of money- laundering shall hold trial in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), as it applies to a trial before a Court of Session.] [Explanation. - For the removal of doubts, it is clarified that, -
(i) the jurisdiction of the Special Court while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial;
(ii) the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, 36 Spl.C.No.127/2014 against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not.] (2) Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause (b) of sub- section (1) of that section as if the reference to "Magistrate" in that section includes also a reference to a "Special Court" designated under section 43."
28. The present complaint is filed by the Deputy Director of Directorate of Enforcement. He along with the complaint has furnished notification of Government of India, Ministry of Finance, Department of Revenue dated 1/7/2005 to show that the Director of Enforcement shall be the Director to exercise the powers conferred under the Act. Further, as per Gazette Notification of Ministry 37 Spl.C.No.127/2014 of Finance, Department of Revenue dated 21/4/2010, the Central Government nominated the "Director of Enforcement" as a "Assistant Director"
for the purpose of the Act. Further, as per order of the Government of India, Ministry of Finance, Department of Revenue dated 1/10/2008, the Deputy Directors of Director of Enforcement were authorized to lodge the complaint under Section 45 of the Act before the Special Court. The said Section reads as under:
"45. Offences to be cognizable and non- bailable.- (1) [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless-]
(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and
(ii) ...........................
Provided further that the Special Court shall not take cognizance of any offence 38 Spl.C.No.127/2014 punishable under section 4 except upon a complaint in writing made by -
(i) the Director; or
(ii) any offence of the Central Government or State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government.
29. In view of Section 45 and the above said Gazette notification of the Central Government, the "Deputy Director" is authorized to file the complaint under Section 45 of the Act. In this case, the capacity of the complainant to file the present complaint as per Ex.P38 has not been disputed by any of the accused. In view of the above said provisions of law and notifications, the Deputy Director, Director of Enforcement, Government of India is very well authorized to file the complaint as he is the "Appointed Authority" under the Act.
30. The Learned counsels for the accused have vehemently argued that the accused no.3 to 8 39 Spl.C.No.127/2014 have not been arrayed as accused in schedule offence rather as a witnesses, as such the present complaint is not maintainable against them. Since the learned counsels for the accused have argued the said point, it is necessary to know the meaning of "scheduled offence" which is defined by Section 2(y) as under:
"(y) "scheduled offence" means -
(i) the offences specified under Part A of the Schedule; or"
(ii) the offences specified under Part B of the Schedule if the total value involved in such offences is 'one crore rupees] or more; or]
(iii) the offences specified under Part C of the Schedule;]"
31. As per the above said definition, the scheduled offence are specified in Part-A, B of the schedule attached to the Act of 2002.
32. In order to appreciate the rival contentions of both the counsels, it is also necessary to know the 40 Spl.C.No.127/2014 meaning of 'proceeds of crime' which is defined by Section 2(u) of the Act as under:
"(u) "proceeds of crime" means any
property derived or obtained, directly or
indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad];
[Explanation. - For the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;]"
33. From plain reading of Section 3 r/w Section 2 (i) (u) of Prevention of Money Laundering Act, it is clear that what is made punishable under Section 3 is the activity connected with the proceeds of crime either by getting oneself involved in the 41 Spl.C.No.127/2014 process or activity connected thereto or directly or indirectly attempting to indulge or knowingly assist or knowingly be a party to the alleged activities and projecting it as untainted property.
34. The reference to "scheduled offence" under Section 2(i) (y) of PML Act is only an indicator or pointer that the properties laundered by the offenders on their origin or source in any of the offence or crime specified in the scheduled offence and therefore the offenders are liable to answer the charge under Section 3 punishable under Section 4 of PML Act.
35. The proceeds of crime must be projected as untainted property. The use of word 'and' between the words 'proceeds of crime and projecting it as untainted' needs to be read in a conjunctive sense. Thus, the attempt or assists or knowledge which the section 3 speaks of must relate to any process or activity connected with the proceeds of crime and projecting it as untainted property. Where proceeds 42 Spl.C.No.127/2014 of crime sought to be projected as untainted property, the offence under Section 3 would be completed. Therefore, when any person is sought to be proceed with under Section 3, the following pre- requisites are required to be satisfied.
a) Whether he was directly concerned or indirectly concerned with the attempt to indulge in an act;
b) Whether person has knowingly
assisted;
c) Whether a person has been
knowingly be a party;
d) Whether a person was actually
involved.
36. All the above acts must be related to any process or activity connected with the proceeds of crime and projecting it as untainted property. There should be nexus between criminal activity relating to scheduled offence and proceeds thereof in order to bring the person under the provisions of PML Act. The term 'as a result of criminal activity' is very 43 Spl.C.No.127/2014 important. In other words, a clear nexus must been shown to exists between the criminal activity and the property which has been derived or obtained by any person. The criminal activity must be related only to the scheduled offences and not to others.
37. As discussed supra, before drawing the presumption under Section 24 of the Act, it is for the complainant to prove the nexus between the criminal activity by the accused relating to the scheduled offence and proceeds thereof.
38. PW.1 who is the Investigating Officer in a scheduled offence has deposed as to lodging of FIR, filing of charge-sheet and additional charge-sheet, and also securing of agreement of sale, lease deeds of accused no. 3 to 8 and also he has got marked the statement of account of accused no.1 - trust with Axis Bank and ICICI Bank. He also got marked the copy of trust deed as per Ex.P22.
39. PW.1 has also got marked the declaration submitted by the accused no.1 - trust as Ex.P23, 44 Spl.C.No.127/2014 statement of account of accused no.1 - trust with ICICI Bank, Indiranagar Branch as Ex.P24, statement of account of accused no.1 - trust with Axis Bank, Hanumanthanagar Branch as Ex.P25, copy of statement of account of accused no.1 - trust from 1/1/2010 to 31/12/2010 as Ex.P26 and also the copies of statement of account of accused no.1 - trust for a period from 1/1/2012 to 31/12/2012 as Ex.P27.
40. The prosecution has also got examined PW.2 the Special Director, Enforcement of Directorate, Kolkatta who has passed provisional attachment order as per Ex.P29. He has deposed that their office on 9/9/2010 has received a copy of FIR, compliant and other documents pertaining to the case and after receipt of the said documents, conducted the investigation and collected the documents and also recorded statement of the accused and other witnesses under Section 50 of Prevention of Money Laundering Act. After going 45 Spl.C.No.127/2014 through the said documents, he has come to conclusion that the accused persons have committed the offence under Section 420 of IPC which is a scheduled offence under Prevention of Money Laundering Act. He deposed that accused persons have also acquired proceeds of crime from the said criminal activity, therefore he has passed provisional attachment order under Section 5 of Prevention of Money Laundering Act on 15/6/2012 as per Ex.P28 and identified his signature appearing on the same as Ex.P28(a). He further deposed that he filed complaint before the Adjudicating Authority seeking for confirmation of the provisional attachment order Ex.P28 which by order dated 5/11/2012 has confirmed the said order and the same has been identified and marked as Ex.P29. He deposed that by that time the Joint Director was empowered to pass provisional attachment order under Section 5 of the Limitation Act.
46 Spl.C.No.127/2014
41. The prosecution has also got examined the witnesses to the agreement of sale of accused no.4 and 5 as PW.3 and PW.4. PW.3 identified his signature appearing on the said agreement of sale which are marked as Ex.P9 and Ex.P10. He turned hostile and the Learned Special Public Prosecutor was given an opportunity to cross-examine him. PW.4 who is also another witness to the agreement of sale of accused no.3 and one J. Raghu identified his signature appearing on the agreement of sale Ex.P8 and Ex.P14. He also turned hostile to the case of the prosecution and an opportunity was given to the learned Special Public Prosecutor to cross-examine this witness.
42. The prosecution has also got examined Sr. Sub Registrar, K.R. Puram, Bengaluru and another Sr. Sub Registrar, Bidarahalli, Shivajinagar, Bengaluru as PW.5 and PW.6 through whom the certified copy of the trust deed got marked as per Ex.P22 (a) and its amended copy dated 29/11/2005 47 Spl.C.No.127/2014 as per Ex.P22(b). Through PW.5, the Encumbrance Certificate in respect of sy.no. 50/8B which is a part and parcel of sy.no.50/2 are marked as Ex.P30 and Ex.P31.
43. The prosecution has also got marked Encumbrance Certificate through PW.6 in respect of sy.no. 121 and sy.no. 61-P-13 of Gundur village as Ex.P32 and Ex.P33. This witness has not been cross-examined by any of the accused.
44. The prosecution has also got examined one Narasimhamurthy s/o Krishnappa who was doing computer servicing at Bileshivale village. He deposed that once he went to the computer center run by accused no.2 in order to repair the same, and he identified accused no.2 and accused no.7. He stated that accused no.7 expressed his intention to sell 1 acre of land and same was communicated to accused no.2 who has expressed her intention to purchase the said property. This witness is a attesting witness to the agreement of sale of accused 48 Spl.C.No.127/2014 no.7 dated 29/7/2010 which is marked as Ex.P34. This witness also turned hostile to the case of the prosecution and Learned Special Public Prosecutor and Learned counsels for the accused were provided an opportunity to cross-examine this witness.
45. The prosecution has also got examined one of the trustee of accused no.1 - trust as PW.8 who has deposed that he became acquainted with PW.2 through his wife who was working in a Marketing Company during 2010. He stated that during the year 2005-06, the accused no.2 started the accused no.1 - trust and she used to call the meeting. He has deposed as to who are all the trustees of the accused no.1 - trust and has identified trust deed as per Ex.P22, and has deposed that accused no.2 and Mr.Victor D' Souza used to raise funds for the trust activities of the trust from known people and also from foreign countries. He has deposed that in the year 2010, he was arrested by the Cyber Crime Police regarding funding of the 49 Spl.C.No.127/2014 trust and allegations of money laundering were made against him. He stated that accused no.2 and one Mr.Victor D' Souza were looking after the bank transactions of the trust. As this witness has failed to state how the funds to the accused no.1 - trust from the abroad were credited, he was treated partly hostile. He identified his statement recorded by the complainant authorities as per Ex.P35 and his signature as Ex.P35(a)
46. The prosecution has also got examined one Mr.Thomas P.Joseph as PW.9 who was Secretary of the accused no.1 - trust. He identified the trust deed as per Ex.P22 and also his signature appearing on the same. He deposed that the accused no.2 raised the funds from friends circle and accused no.2 along with one Mr.Victor D' Souza were operating the trust account with ICICI Bank and funds were utilized for social activities. He deposed that accused no.2 has told him that she was intending to purchase properties from the funds of 50 Spl.C.No.127/2014 the trust. He deposed that he resigned to the Secretaryship and made as trustee of the accused no.1 - trust. He deposed that in the year 2010, the police have booked a case against the trust regarding withdrawal of cash of the trust and investing in the properties. He specifically deposed that accused no.2 and above said Mr.Victor D' Souza were doing the land transactions, and he stated that during the year 2013, complainant authority have recorded his statement as per Ex.P36 and identified his signature appearing on the same as per Ex.P36(a).
47. The prosecution has also got examined the complainant - H.P.Sudham Das as PW.10. He has deposed that from 16/1/2013 to 25/1/2017, he was working as a Deputy Director of Directorate of Enforcement, Bengaluru who is competent to file complaint before the Special Court under PML Act. He has deposed that on 29/10/2010, the then Assistant Director of Enforcement recorded ECIR in No.85/BZ/2010-11 against accused no.1 and others 51 Spl.C.No.127/2014 for the offence under Section 3 which is punishable under Section 4 of the PML Act, and identified the ECIR as Ex.P37. He further deposed that CW.3 has conducted the investigation from whom he has received the case papers and CW.4 has passed provisional attachment order as per Ex.P28. PW.10 further deposed that from the materials investigated by the IO, he found that accused no.1 - trust opened an account at ICICI Bank and got payments through Gateway from abroad to the extent of Rs.13,91,00,293/- and out of it, utilized sum of Rs.11,54,89,251/- towards purchase of movable and immovable properties. He deposed that the advance payments for purchase of the above said properties were made through cash and also in cheques out of the proceeds of crime and same were projected as untainted. He further deposed that he got prepared the complaint as per Ex.P38 and identified his signature appearing on the same as Ex.P38(a). He stated that accused no.2 is the President of accused 52 Spl.C.No.127/2014 no.1 - trust and other accused no.3 to 8 are landlords who have entered into an agreement of sale and lease agreement with accused no.1 - trust and after entering into the said agreements, they came to know that police are investigating the matter and inspite of it, accused no.3 to 8 have retained the advance amount and utilized the same for their personal use. He deposed that registration of sale deed are not completed in view of pending investigation.
48. The prosecution has also got examined one Hariprasad Babu as PW.11, Business Manager of ICICI Merchant Services. He deposed that since from past two years, he was working in the above said capacity and CW.9 - Rajeev Kumar was their Ex-employee who left the services and joined another company at Singapore. He deposed that said Rajeev Kumar had conducted the investigation regarding the payments through their payment Gateway in the year 2010 of accused no.1 - trust and he identified 53 Spl.C.No.127/2014 the signature of Mr. Rajeev Kumar as he was conversant with the files which were handled by him. He stated that Mr. Rajeev Kumar was working as a Risk Manager at the time of leaving their company. He identified the statement made by Mr. Rajeev Kumar recorded under Section 50(2) of PML Act as per Ex.P39 and also his signature appearing on the same as Ex.P39(a). He has got marked the transactions pertaining to the accused no.1 contained in the statement running from page no. 151 to 197 as per Ex.P40 and also identified the signature of his colleague Mr.Rajeev Kumar appearing on the same as Ex.P40(a). He further deposed that as per Ex.P41 the accused no.2 has given a document to his colleague Mr. Rajeev Kumar and has identified his signature as Ex.P41(a). He further got marked the statement of properties purchased by accused no.1 - trust by utilizing the payments made through their payment Gateway as 54 Spl.C.No.127/2014 per Ex.P42 and also signature appearing on the same of Mr.Rajeev Kumar as Ex.P42(a).
49. The prosecution has also examined the Retired Deputy Director, Enforcement Directorate, who has conducted further investigation of the case as PW.12. In his examination in chief, he has deposed that based upon the FIR registered by the Cyber Crime Police Station for the offence under Section 420 of IPC, the matter was referred by the Dy.S.P., Cyber Crime to the Enforcement Directorate on 13/10/2010 and based on the above said FIR, ECIR 85/BZ/2010-11 dated 29/10/2010 came to be recorded and the then Assistant Director investigated with the banks and also summoned some of the trustees of accused no.1 - trust as well as CW.9. He has stated that he recorded the statements of accused no.2 on 15/3/2011 and 17/2.2011 under Section 50 of PML Act as per Ex.P60 and Ex.P61 by issuing summons to her. He further deposed that he got examined the sale 55 Spl.C.No.127/2014 agreements entered into by the accused no.1 - trust with accused no.3 to 8 and recorded their statements by issuing summons to them. He further deposed that the accused no.3 to 8 have entered into agreement of sale and lease agreement with accused no.1 - trust and under the said agreements, the proceeds of crime was paid to accused no.3 to 8 and who inspite of having knowledge of the proceeds of crime have retained the said amount and thereby committed the offence punishable under Section 4 of PML Act. He further deposed that he has recorded the statement of Victor D' Souza on 2/9/2013. Further he also deposed that he has also recorded the statements of other trustees by name Sri Thomas P. Joseph, Sri Marian Emanuel Vinod so as to examine their role in functioning of the accused no.1 - trust. He further deposed that provisional attachment order dated 11/12/2013 came to be passed, same was got confirmed by the appellate authority. In para 17 and 18 of his examination in 56 Spl.C.No.127/2014 chief, PW.12 has specifically stated that the accused no.2 being the President and Chief Founder of accused no.1 - trust received an amount of Rs.13,91,00,293/- during period from 1/7/2010 to 13/8/2010 into the account of accused no.1 - trust maintained with ICICI Bank. He further deposed that out of the said amount, accused no.2 has deployed the sum of Rs. 7,42,67,759/- towards purchase and lease of immovable and movable properties which were attached by the provisional attachment order. He stated that they have also spent balance amount for various miscellaneous expenses connected with the accused no.1 - trust. PW.12 further deposed that during the investigation, he found that accused no.3 to 8 were in possession of the proceeds of crime which were received as an advance towards either sale of land or lease of property, hence they have committed the offence under Section 3 of Prevention of Money Laundering Act. He identified accused 2 to 57 Spl.C.No.127/2014 8 before the court and also statements recorded by accused no.2 to 8 as per Ex.P43 to Ex.P161.
50. During the course of cross-examination of PW.1, the counsel for accused no.1 and 2 has got confronted the photostat copy of merchant processing application submitted to the ICICI Bank, and also merchant processing agreement as per Ex.D1 and Ex.D2.
51. From the perusal of the above said oral as well as documentary evidence on record, what is not disputed by the accused no.2 is that the accused no.1 - trust was formed by the accused no.2 as a President and Chief founder of the same. Further, the agreement of sale, lease agreements entered into with accused no.3 to 8 reveals that accused no.1 - trust represented by accused no.2 entered into said agreements for purchase and lease of properties mentioned therein. It is also not in dispute that under the said agreements, the earnest amount mentioned therein has been paid to the accused no.3 58 Spl.C.No.127/2014 to 8. It is also not indisute that Accused no2 as a chief founder of Accused no 1 trust opened the payment Gateway with ICICI BANK in order to receive donations for the trust.
52. At this juncture, it is relevant to discuss certain provisions of Prevention of Money Laundering Act, 2002, more particularly the definition of the terms such as "money-laundering", as defined under Section 2(1) (p) and the term "proceeds of crime" as defined under Section 2(1) (u) of the Act. Further, it is also relevant to bear in mind the definition of "Scheduled offence" as defined under Section 2(1) (y) and also Section 3 of the Act, which deals with the offence of money-laundering.
53. Section 3 which deals with offence of money-laundering reads as under:
"3. Offence of money-laundering., - Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime 59 Spl.C.No.127/2014 includes which concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering."
The explanation added to the said section by the Finance (No.2) Act, 2019 with effect from 1/8/2019 reads as under:
"For the removal of doubts, it is hereby clarified that -
(i) a person shall be guilty of offence of money-
laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely :-
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property, in any manner whatsoever;60 Spl.C.No.127/2014
(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever."
Section 2(1) (u) of the Act defines the "proceeds of crime" as under: -
"Proceeds of Crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or whether such property is taken or held outside the country, then the property equivalent in value held within the country or abroad.
With effect from 1/8/2019, an Explanation was attached to the said definition to the effect that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained 61 Spl.C.No.127/2014 as a result of any criminal activity relatable to the scheduled offence."
54. The term "money-laundering" has meaning as described under Section 3 of the Act.
55. Section 2(1) (y) defines "scheduled offence"
as under:
"scheduled offence" means -
(i) the offences specified under Part A of the schedule; or
(ii) the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or
(iii) the offences specified under Part C of the Schedule.
56. Section 4 of the Act deals with Punishment of money-laundering and prescribes a punishment with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and also shall be liable to fine.
62 Spl.C.No.127/2014
57. Keeping in view the above said definitions and sections of the Act, let me appreciate the evidence on record.
58. When entire evidence on record read along with oral evidence of PWs. 1 to 12 carefully perused, what is not disputed is that accused no.2 as a President and Chief Founder for accused no.1 - trust along with other trustees formed trust as shown in Ex.P22. During the course of cross-examination of PW.1, the merchant processing application form and merchant processing agreement were confronted which are marked as Ex.D1 and Ex.D2 which makes it very clear that accused no.2 opened an account with ICICI Bank in order to receive donations from the donors. It is also suggested to PW.1 that the accused no.1 and 2 opened the internet payment gateway account with ICICI Bank. Therefore, the evidence on record makes it very clear that internet gateway payment account was opened with the ICICI Bank which is a complainant in scheduled offence 63 Spl.C.No.127/2014 in order to receive donations from donors. Though PW.1 in his cross-examination stated that during his investigation, he found all 995 transactions as fake transactions but in Page no.16 of his cross- examination, he admitted that no card holder has lodged the complaint personally before him and he has not recorded the statement of any of the card holders who gave complaint to the Bank. He admitted that copies of the complaints forwarded by the banks which have issued credit cards are not found in the charge-sheet which is marked as Ex.P5. Further, he admitted that during his investigation, he made efforts to record the statement of foreign card holders through Letter rogatory but went in vain. The Learned Special Public Prosecutor by referring to Ex.P40 has argued that the cardholders whose credit card has been misused have lodged the complaint before the banks which have issued the credit cards and as such accused no.1 and 2 have fraudulently misused the credit cards of foreigners 64 Spl.C.No.127/2014 and got amount credited to the account of the trust which subsequently has been used to enter into agreement of sale, lease agreements with accused no.3 to 8. I have carefully perused the account statement which is vital document marked as Ex.P24 maintained with ICICI Bank and also Ex.P25 which is statement of account of accused no.1 - trust maintained with Axis Bank. Though the said documents reveals that huge sum of amount was credited to the account of accused no.1 - trust but when the said entries are compared with transaction details of accused no.1 - trust at Ex.P40 and retrieval request, it is quite clear that the entries found in Ex.P24 are not tallying with the entries found in Ex.P40. Though the Ex.P40 contains the declaration of unauthorised use of credit cards by one SPARKS MADALINE, SCANNEL STEPHEN.C, ELLIOT S OFFENBACH, but the said misuse of credit cards and crediting the said amount is not reflected in Ex.P24 and Ex.P25. It is also pertinent to 65 Spl.C.No.127/2014 note that cardholders whose credit cards alleged to have been misused have not lodged any complaint as no such complaint is forthcoming from the complainant's records. The complaint which is marked as Ex.P4 is lodged by the official of ICICI Merchants Services by name Maria Reuben, but for the reasons best known to the complainant she has not been examined before the court. The charge- sheet and additional charge-sheet filed in predicate offence reveals that the complainant is shown as one of the witness but she has not been examined before this court to prove the allegations made in the complaint. This is one aspect of the matter.
59. Secondly, it is not in dispute that as per the agreement of sale marked at Ex.P8 to Ex.P14 and lease agreement at Ex.P11, the accused no.2 on behalf of accused no.1 - trust entered into these agreements in order to purchase the properties and occupy the house property of accused no.6 as a lessee but it has to be proved that in order to enter 66 Spl.C.No.127/2014 these agreements, the accused no.1 and 2 have utilized the proceeds of crime. Under such circumstances, heavy burden is casted upon the complainant to prove that accused no.1 and 2 used the proceeds of crime so as to enter into agreements of sale / lease agreements with accused no. 3 to 8.
60. The complainant has also examined the Special Director of Enforcement as PW.2 who has passed provisional attachment order attaching the properties of accused no.3 to 8. In the cross- examination, PW.1 and 2 admitted that accused no.3 to 8 are not arrayed as accused in predicate offence. It is not in dispute that the properties of accused no. 3 to 8 have been attached under provisional attachment order as could be seen from Ex.P28 and Ex.P29 and said order has been confirmed. But, the said attachment order is subject to outcome of the the present case as could be seen from Section 8(6) of Prevention of Money Laundering Act, 2002. 67 Spl.C.No.127/2014
61. The complainant has also examined the witnesses to agreement of sale of accused no.4, accused no.5 and accused no.3 and also accused no.7 as PWs.3 to 4 and 7. PW.3 and PW.4 have turned hostile to the case of the prosecution. PW.5 and PW.6 are Sub-Registrars who have identified the trust deed at Ex.P22 and also the encumbrance certificate which is marked at Ex.P32 and Ex.P33. The formation of accused no.1 - trust by the accused no.2 and other trustees as shown in the FIR and charge-sheet is not at all in dispute. PW.7 in his cross-examination stated that as per the request of accused no.2 and 7, he stood as a witness to the agreement of sale of accused no.7 marked at Ex.P34. The complainant has also examined PW.8 who was trustee of accused no.1 - trust. He has deposed that in the year 2005-06, the accused no.2 started accused no.1 - trust and he was one of the trustee. He has also deposed as to the names of other trustees and identified his signature appearing on 68 Spl.C.No.127/2014 Ex.P22 which is a trust deed. He stated that in the year 2010, he was arrested by the Cyber Crime Police in connection with predicate offence and made money laundering allegations against him. He failed to state how the funds from the abroad were credited to the account of the accused no.1 - trust, as such, he was partially treated as hostile and permission was granted to the learned Special Public Prosecutor to cross-examine him. But, in the cross-examination also, nothing worthwhile has been elicited from his mouth as to the manner in which the funds from abroad were credited to the account of the trust. In the cross-examination conducted by the learned counsel for the accused no.1 and 2, PW.8 admitted that accused no.2 and one Mr. Victor D'Souza were looking after the bank transactions of the accused no.1 - trust. The evidence on record especially the charge-sheet and additional charge-sheet reveals that apart from accused no.2, there were other trustees of the accused no.1 - trust, but for the 69 Spl.C.No.127/2014 reasons best known to the complainant, all the trustees of the accused no.1 - trust have not been arrayed as an accused in this case.
62. PW.9 who was Secretary of the accused no.1 - trust has also deposed that accused no.2 and Mr. Victor D' Souza were operating the trust account and in the year 2010, a case has been booked against the trust for withdrawal cash of the trust and investing in the properties. In the cross- examination, PW.9 admitted that he had no personal knowledge about the property transactions of the trust and as per his knowledge, accused no.2 and any of the trustees have no personal interest in the transactions. This evidence of PW.9 makes it very clear that he has no personal knowledge with regard to the property transactions of accused no.1 - trust. The complainant was examined as PW.10 who has deposed as to recording of ECIR against accused no.1 - trust as per Ex.P37, passing of provisional attachment order as per Ex.P28 and confirmation of 70 Spl.C.No.127/2014 the said order as per Ex.P29. Further, he deposed that from his investigation, he found that accused no.1 - trust opened an account with ICICI Bank and got payments through gateway from abroad to the extent of Rs.13,91,00,293/- and out of the said amount, a sum of Rs.11,54,89,251/- was utilized for purchasing of movable and immovable properties. He also deposed that the earnest amount in respect of the above said transactions were made in cash and cheques out of proceeds of crime and projected it as untainted. He deposed as to preparing the complaint as per Ex.P38.
63. In the cross-examination at page no.7, para no.10, PW.10 has admitted that he has no knowledge whether accused no.2 had informed accused no.5 with regard to the proceeds of crime at the time of entering into the agreement. Further, at page no.9, PW.10 admitted that he has not made any efforts to find out who were the false unknown fraudsters as mentioned in the complaint at para 71 Spl.C.No.127/2014 no.3. He also admitted that he has not produced any document to show that who is the owner of website www.src.org. Further, he admitted that he has not produced any documents before the court to show who have lost amount from the alleged acts of the accused mentioned in the complaint. Further, PW.10 at para 14, page no.10 of his cross-examination has also admitted that he has not produced any documents to show the procedure adopted by ICICI Merchants Services Pvt. Ltd., with regard to the transactions of deposits and withdrawals, and except FIR and complaint, there are no other documents to show the fraudulent transaction of Rs.15 Crores.
64. This evidence of PW.10 makes it very clear that the Investigating Officer in predicate offence as well as in present case,have not made any efforts to find out who were the unknown fraudsters mentioned in the complaint. When the averments of the complaint are carefully perused, it is alleged that there were unknown fraudsters who indulged with 72 Spl.C.No.127/2014 accused no.1 and 2 in order to commit fraud of credit cards. But, even at the time of investigation, no such effort was made to find out who were the fraudsters as alleged in the complaint. Moreover, except FIR and complaint, the complainant has not produced any documents to show the fraudulent transactions. The above named card holders whose name is forthcoming along with Ex.P40 have not been examined before the court for the reasons best known to the complainant. It is also pertinent to note that while dealing with the offence punishable under Prevention of Money Laundering Act, the complainant has to prove its case beyond reasonable doubt. In this regard, it is useful to refer a decision of Hon'ble Apex Court reported in AIR ONLINE 2022 SC 609, in the matter between J.Sekar @ Sekarreddy Vs. Directorate of Enforcement, wherein the Hon'ble Apex Court at Para no.18 held as under:
"In our opinion, even in cases of PMLA, the Court cannot proceed on the basis of 73 Spl.C.No.127/2014 preponderance of probabilities. On perusal of the statement of objects and reasons specified in PMLA, it is stringent law brought by Parliament to check money-laundering. Thus, the allegation must be proved beyond reasonable doubt in the court. Even other wise, it is incumbent upon the court to look into the allegation and the material collected in support thereto and to find out whether prima facie offence is made out. Unless the allegations are substantiated by the authorities and proved against a person in the court of law, the person is innocent."
65. In view of the above said position of law, heavy burden is casted upon the complainant to prove its case beyond reasonable doubt. Under such circumstances only the presumption as contemplated under Section 24 of the Act is come into play which reads as under:
"24. Burden of Proof. - In any proceeding relating to proceeds of crime under this Act, -
(a) in the case of a person charged with the offence of money-laundering under section 74 Spl.C.No.127/2014 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and
(b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-
laundering."
66. The complainant has also examined the Business Manager of ICICI Merchants Services as PW.11 who was cited as an additional witness. As per the charge-sheet, one Mr. Rajeev Kumar has conducted the investigation regarding payments through the gateway of ICICI in the year 2010. The charge-sheet reveals that he was very much available in predicate offence but he has not been examined in the present case on hand. The evidence of Mr. Rajeev Kumar who has conducted the investigation regarding the payments through their gateway in respect of accused no.1 - trust is very vital as it throws light upon the case of the 75 Spl.C.No.127/2014 Complainant. But, instead of examining him, PW.11 was examined. Though PW.11 has got marked the statement of Mr. Rajeev Kumar recorded under Section 50(2) of PML Act as Ex.P39, transactions pertaining to the accused no.1 as Ex.P40, document which is given by accused no.1 to Mr.Rajeev Kumar as Ex.P41 and the statement of properties purchased by accused no.1 - trust as Ex.P42, but PW.11 is not a person who has conducted the investigation regarding the payments through gateway. Though PW.11 was not cross-examined by accused no.1 to 5, 7 and 8, but it is cardinal principle of law that evidence must be direct. But, in this case, PW.11 is not a proper person to speak regarding the payments through the gateway of accused no.1 - trust. When Mr. RajeevKumar who has conducted the investigation into the payments of accused no.1 - trust through gateway is very much available before the court trying the predicate offence why he was not examined in this case is not made clear by the 76 Spl.C.No.127/2014 complainant. Though PW.11 stated that the said Rajeev Kumar left their company and joined another company in Singapore, but no records are forthcoming before this court. Therefore, whatever evidence which is adduced by the complainant through PW.11 who is neither a person who conducted the investigation into the payment gateway transactions of accused no.1 nor whose statement is recorded under Section 50 of the PML Act, is of little assistance to the case of the complainant.
67. Further, Section 3 of PML Act deals with offence of money-laundering which reads as under:
"3. Offence of money-laundering, - Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the [proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming] it as untainted property shall be guilty of offence of money-laundering."77 Spl.C.No.127/2014
68. The said offence is punishable under Section 4 of the Act. Further, as per Section 24 of the Act, there is a presumption in favour of the prosecution that where a person is charged with the offence of money-laundering under Section 3, it shall be presumed that such proceeds of crime are involved in money-laundering. Further, Section 50 of the Act authorizes - concerned authority with power to summon and record the statement of the concerned person which reads as under:
"50. Powers of authorities regarding summons, production of documents and to give evidence, etc., - (1) The Director shall, for the purposes of section 13, have the same powers as are vested in a civil court under the Code of Civil Procedure 1908 (5 of 1908) while trying a suit in respect of the following matters, namely: -
(a) discovery and inspection;
(b) enforcing the attendance of any person, including any officer of a [reporting entity], and examining him on oath;78 Spl.C.No.127/2014
(c) compelling the production of records;
(d) receiving evidence on affidavits;
(e) issuing commissions for examination
of witnesses and documents; and
(f) any other matter which may be
prescribed.
(2) The Director, Additional Director,
Joint Director, Deputy Director, Assistant
Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act.
(3) 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.
(4) Every proceeding under sub-section (2) (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860).79 Spl.C.No.127/2014
(5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceeding under this Act:
Provided that an Assistant Director or a Deputy Director shall not -
(a) impound any records without recording his reasons for so doing; or
(b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the [Joint Director]."
69. So far as not arraying the accused no. 3 to 8 in a scheduled offence as accused is concerned, it is to be noted that the offence punishable under Section 4 of the PML Act is a stand alone offence. Hence, it is not necessary that the PML provisions can be invoked only against the persons who are arrayed as accused in the scheduled offence. In this regard, the observation of the Hon'ble Apex Court 80 Spl.C.No.127/2014 made in Pavana Dibbur Vs. Director of Enforcement reported in 2023 SCC Online SC 1586 are relevant. In the said decision, at para no.31, while recording conclusion, it is observed as under:
"CONCLUSIONS
31. While we reject the first and second submissions canvassed by the learned senior counsel appearing for the appellant, the third submission must be upheld. Our conclusions are:
a. It is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged, must have been shown as the accused in the scheduled offence;
b. Even if an accused shown in the complaint under the PMLA is not an accused in the scheduled offence, he will benefit from the acquittal of all the accused in the scheduled offence or discharge of all the accused in the scheduled offence. Similarly, he will get the benefit of the order of quashing the proceedings of the scheduled offence;"81 Spl.C.No.127/2014
70. The said position of law is also re-iterated by the Hon'ble Apex Court in one of its unreported Judgment in the matter YASH TUTEJA & ANR VS. UNION OF INDIA & ORS., reported in 2024 SCC ONLINE SC 533 which is relied by the learned counsel for the accused no.5 and 7.
71. In view of the above said position of law, it is not necessary that a person against whom the offence under Section 3 of PML Act is alleged must have been shown as an accused in the scheduled offence. Therefore, with great respect to the arguments canvassed by the learned counsel for the accused, this court is of the opinion even though accused no. 3 to 8 were cited as witnesses in scheduled offence, there is no bar to array them as an accused in the case on hand which is filed under the provisions of Prevention of Money Laundering Act, 2002. What is necessary to constitute the offense of money laundering is the existence of proceeds of crime and the pendency of the predicate 82 Spl.C.No.127/2014 offence. It is only such property which is derived or obtained as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime.
72. The learned counsel for the accused no.7 has furnished Judgment passed in C.C.No. 18147/2012 dated 5/4/2025 which was predicate offence. The perusal of the said Judgment reveals that the accused no.1 and 2 of this case along with other accused were acquitted for the alleged offences punishable under Section 420 r/w Section 34 of IPC and Section 66 (c) (d) of IT Act, and Section 23 and 24 of Foreign Contribution Regulation Act. The offence punishable under Section 420 of IPC is a predicate offence. When the accused in predicate offence are acquitted of alleged offence, the complaint filed under the provisions of Prevention of Money Laundering Act, 2002 will not survive for consideration.
83 Spl.C.No.127/2014
73. This my view is fortified by Judgment of Hon'ble Apex Court in the matter between Vijay Madanlal Choudhary and others Vs. Union of India reported in 2022 SCC Online SC 929 wherein at paragraph no. 253, it was observed as under:
"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 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 84 Spl.C.No.127/2014 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."
74. The Hon'ble Apex Court in another decision reported in 2023 SCC Online 1586 between Pavana Dibbur Vs. Directorate of Enforcement relied upon by the learned counsel for the accused no.2 based upon the above said observations made in Vijay Madanalal's Case at para No. 17 and 18 held as under:
"17. The conditions precedent for attracting the offence under Section 3 of the PMLA are that there must be a scheduled offrence and that there must be proceeds of crime in relation to the scheduled offence as defined in clause (u) of sub section (1) of Section 3 of the PMLA.
18. In a given case, if the prosecution for the scheduled offence ends in acquittal of all the accused or discharge of all the accused or the proceedings of the scheduled offence are quashed 85 Spl.C.No.127/2014 in its entirety, the scheduled offence will not exist, and therefore, no one can be prosecuted for the offence punishable under Section 3 of the PMLA as there will not be any proceeds of crime. Thus, in such a case, the accused against whom the complaint under Section 3 of the PMLA is filed will benefit from the scheduled offence ending by acquittal or discharge of all the accused. Similarly, he will get the benefit of quashing the proceedings of the scheduled offence."
75. Our Hon'ble High Court of Karnataka also in unreported Judgment in Writ Petition No.29490 of 2024 (GM-RES) in the matter between Mr. Narahari.D Vs. Directorate of Enforcement dated 16/12/2024 based upon the observation of the Hon'ble Apex Court in Vijay Madanlal Choudhary's case has come to a conclusion that where the proceedings of scheduled offence are ended in acquittal, discharge or quashed, the proceedings under the PMLA cannot be permitted to be continued.
76. In view of the above said settled position of law, it is quite clear that once the proceedings of scheduled offence are ended in acquittal, discharge or 86 Spl.C.No.127/2014 quashment, the proceedings under the PMLA are not permitted to be continued.
77. The Learned Special Public Prosecutor by citing the decisions of Hon'ble High Court of Madras referred supra, tried to convince this court that even though the predicate offence is ended in acquittal, same will not have bearing effect on the complaint filed under the provisions of Prevention of Money Laundering Act, 2002.
78. I have carefully perused the decision of Hon'ble High Court of Madras referred above, wherein the Hon'ble High Court was dealing with a case of quashing FIR of predicate offence on technical grounds and under such circumstances, the Hon'ble High Court was of the opinion that where FIR of the predicate offence is quashed on technical grounds or on mere procedural irregularities same would not result in quashing of complaint filed under the provisions of Prevention of Money Laundering Act. The Hon'ble High Court was 87 Spl.C.No.127/2014 of the opinion that, if predicate offence was quashed on technical or procedural issues, but not on substantive grounds and there are no findings as to offences of prima facie allegations in the FIR it will not warrant automatic quashing of ECIR. But, when entire case of the facts are carefully perused, it is quite clear that the in predicate offence i.e., C.C.No.18147/2012 the accused therein were not acquitted on mere technical or procedural grounds but the court trying the predicate offence has considered the evidence put forth by the prosecution and has formed an opinion that accused have not committed the alleged offence. Therefore, it can safely be come to the conclusion that on appreciation of evidence on record, all the accused were acquitted in predicate offence. In view of the decision of Hon'ble Apex Court in Vijay Madanlal Choudhary's case, once the accused were acquitted of the predicate offence, the complaint filed under the provisions of Prevention of Money Laundering 88 Spl.C.No.127/2014 Act will not survive for consideration. The said Judgment is binding on all the courts under Article 141 of Constitution. Therefore, with due respect the above said decision of Hon'ble High Court of Madras can be distinguished on the facts and circumstances of the case.
79. The learned Special Public Prosecutor has also pressed into service decision of Hon'ble High Court of Patna in the matter between Nawal Prasad @ Nawal Kumar Vs. State of Bihar, where the Hon'ble High Court was dealing with case punishable under Section 302 of Cr.P.C., and held that the burden to prove any particular fact such as alibi is on the person who wishes court to believe in its existence. Further, learned Special Public Prosecutor has also pressed into service decision of Hon'ble Apex Court in the matter between Sandeep Vs. State of UP reported in (2012) 6 SCC 107, where the Hon'ble Apex Court dealt with Section 106 of Evidence Act. On careful perusal of the above said 89 Spl.C.No.127/2014 two decisions, it is quite clear that both the decisions dealt with Section 106 of Evidence Act and with due respect same are distinguishable from the facts of the present case on hand, as such said decisions are not applicable to the case on hand.
80. In order to punish under the provisions of Prevention of Money Laundering Act, the complainant has to prove that that the accused knowingly or with due knowledge have dealt with proceeds of crime as could be seen from Section 3 of the Act. In this context, it needs to be reiterated that, section 3 of the PML Act would come into play only when a person is found indulging, or knowingly assisting or involved in any process or activities connected with the proceeds of crime. Any person who 'Knowingly' assists in any process or activity connected with the proceeds of crime also is within the scope of the section. The term 'Knowingly' means Mens-rea on the part of the person concerned. It is necessary to appreciate that the person concerned 90 Spl.C.No.127/2014 must be aware that his assistance is related to the process or activity connected with the proceeds of crime. When the statements of accused no. 3 to 8 recorded by the authorities under Section 50 of the Act are carefully perused, it is quite clear that they have not admitted as to the knowledge of proceeds of crime. Only after registering FIR, accused no. 3 to 8 came to know that the complaint has been filed under the provisions of Prevention of Money Laundering Act. As stated supra, the knowledge is a must in order to punish a person for dealing with proceeds of crime. The accused with due knowledge of proceeds of crime if he dealt with the same, he is liable to be punished under the provisions of Prevention of Money Laundering Act. But, in this case, the complainant has failed to prove that with due knowledge the accused no.3 to 8 have dealt with alleged proceeds of crime. The cross-examination of PW.12 makes it very clear that accused no.3 to 8 had no knowledge as to the money they have 91 Spl.C.No.127/2014 received under the various agreements of sale and Lease deed was ill-gotten money. Under such circumstances, the accused no.3 to 8 have not committed the alleged offence. Moreover, as rightly canvassed by the learned counsel for the accused no.8, as soon as he came to know about registering FIR, he has got cancelled the agreements entered with the accused no.1 and 2 and returned the earnest amount. The accused no.2 in her statement recorded under Section 50 of Prevention of Money Laundering Act has also stated the said facts. The complainant has failed to bring home the guilt of the accused persons by placing cogent,corroborative evidence that they involved in placing, layering and integrating the monies and committed the offence of money-laundering beyond reasonable doubt. Therefore, viewed from all these angles, it is quite clear that complainant has failed to prove that the Accused have committed the offence punishable 92 Spl.C.No.127/2014 under Section 4 of the Prevention of Money Laundering Act.
81. On coming to properties attached by the ED as per Ex.P28 and Ex.P58, the properties are in possession of ED. In view of findings given to point no.1, the properties attached by the ED is to be released as per Sub Section 6 of Section 8 of PML Act in favour of Accused no.1 to 8. Therefore, Point No.1 is answered in the Negative.
82. POINT NO.2 : In view of the above discussion the accused are not found guilty. Hence, I pass the following :
ORDER The Complaint filed under Sec.45(1) of Prevention of Money Laundering Act,2002 is hereby dismissed.
Acting under Section 235(1) of Cr.P.C, the accused Nos.1 to 8 are acquitted for the offence under Sec.3 punishable under Sec.4 of Prevention of Money-Laundering Act, 2002. Acting under Sec.8(6) of PML Act, the ED authority is directed to release 93 Spl.C.No.127/2014 the attached properties to accused no. 1 to 8.
The bail bond of accused and their surety bond shall stands cancelled.
****** (Dictated to the Judgment Writer, transcribed by her, Script corrected and then pronounced by me in open court this the 6th day of MAY 2025.) SATISH Digitally signed by SATISH BALI BALI Date: 2025.05.06 17:10:29 +0530 (Satish J. Bali) XLVII Addl. City Civil & Sessions Judge and Special Judge for CBI Cases, Bengalulru.
***** ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF PROSECUTION:
PW.1 : T.V. Prabhakara PW.2 : Subhash Agarwal PW.3 : Santosh.G. PW.4 : J.Sridhar PW.5 : Shivakumar.D PW.6 : Girish Chandra PW.7 : Narasimhamurthy PW.8 : Christy Solomon PW.9 : Thomas P. Joseph PW.10 : H.P. Sudham Das PW.11 : Hariprasad Babu PW.12 : Mahesh Chandra Reddy LIST OF DOCUMENTS MARKED THROUGH PROSECUTION: Ex.P1 Letter written to ED authorities Ex.P2 Letter written to ED authorities regarding 94 Spl.C.No.127/2014 providing FIR and other details. Ex.P3 Copy of FIR. Ex.P4 Copy of the complaint Ex.P5 Copy of charge sheet. Ex.P6 Copy of additional charge sheet. Ex.P7 Letter Ex.P8 Sale agreement dated 27/3/2010 Ex.P9 Sale agreement dated 30/7/2010 Ex.P10 Sale agreement Ex.P11 Lease agreement dated 2/8/2010 Ex.P12 Sale agreement dated 10/8/2010 Ex.P13 Sale agreement dated 15/7/2010 Ex.P14 Sale agreement dated 28/7/2010 Ex.P15 ICICI bank letter dated 21/10/2010 Ex.P16 Trust with ICICI Bank Ex.P17 to Copies of IT acknowledgment Ex.P19 Ex.P20 IT returns Ex.P21 PAN Card of A1 Ex.P22 Copy of deed of trustees Ex.P23 Declaration by A1 trust Ex.P24 Trust standing with ICICI Bank Ex.P25 Account statement of A1 trust Ex.P26 Statement of account of A1 trust Ex.P27 Statement of account of A1 trust Ex.P28 PAO Ex.P28(a) Signature Ex.P29 PAO - Adjudicating Authority. Ex.P30 Encumbrance Certificate Ex.P31 Encumbrance Certificate Ex.P32 Encumbrance Certificate Ex.P33 Encumbrance Certificate Ex.P34 Self attested copy of the agreement of sale dated 29/7/2010 95 Spl.C.No.127/2014 Ex.P35 Statement Ex.P35(a) Signature Ex.P36 Statement Ex.P36(a) Signature Ex.P37 ECIR Ex.P38 Complaint Ex.P38(a) Signature Ex.P39 Statement
Ex.P39(a) Signature of Rajeev Kumar Ex.P40 Statement of transaction Ex.P40(a) Signature of Rajeev Kumar Ex.P41 Document given by accused No.2 - Regina Seelan to Mr. Rajeev Kumar Ex.P41(a) Signature of Rajeev Kumar Ex.P42 Statement Ex.P42(a) Signature Ex.P43 Summons issued to Gopala Krishna Ex.P44 Summons issued to B.M.Ramanjinappa Ex.P45 Summons issued to Ramaiah Ex.P46 Summons issued to Santosh Ex.P47 Statement of Aruna Kumari Ex.P48 Summons issued to B.R.Narayanaswamy Ex.P49 Reply dated 26/05/2012 and documents Ex.P50 Summons issued to M.Ganesh Ex.P51 Summons issued to Sri Ramachandra Ex.P52 Summons issued to Z.G.Victor D'Souza Ex.P53 Summons issued to Selva Babu Ex.P54 Summons issued to Thomas P. Joseph Ex.P55 Summons issued to Mariam Emanuel Vinod Ex.P56 Summons issued to Smt. Veena and reply Ex.P57 Confirmation order dated 5/11/2012 in O.C.No. 147/2012 Ex.P58 Provisional Attachment Order No.4/2013 dated 11/12/2013 Ex.P59 Complaint before the Adjudicating Authority 96 Spl.C.No.127/2014 Ex.P60 Summons issued to Smt.Regina Seelan Ex.P61 Summons issued to Smt. Regina Seelan LIST OF WITNESSES EXAMINED ON BEHALF OF DEFENCE:
NIL.
LIST OF DOCUMENTS MARKED THROUGH DEFENCE:
Ex.D1 Photostat copy of Merchant Processing
Application Form
Ex.D2 Photostat copy of Merchant Processing
Application Form
SATISH Digitally signed by
SATISH BALI
BALI Date: 2025.05.06
17:10:41 +0530
(SATISH J. BALI)
XLVII Addl. City Civil & Sessions
Judge and Special Judge for CBI
Cases, Bengalulru.
97 Spl.C.No.127/2014
06/05/2025:
Complainant - ED by
SPP/SBB
A1 - Trust
A1 to A4 - NAM
A5 - BMI
A6- NHP
A7 - HTJ
A8- JP
For Judgment....
..ORDER pronounced in the Open
Court (Vide Separate detailed Judgment..) ORDER The Complaint filed under Sec.45(1) of Prevention of Money Laundering Act,2002 is hereby dismissed.98 Spl.C.No.127/2014
Acting under Section 235(1) of Cr.P.C, the accused Nos.1 to 8 are acquitted for the offence under Sec.3 punishable under Sec.4 of Prevention of Money-Laundering Act, 2002.
Acting under Sec.8(6) of PML Act, the ED authority is directed to release the attached properties to accused no. 1 to 8.
The bail bond of accused and their surety bond shall stands cancelled.
(SATISH J. BALI) XLVII Addl. City Civil & Sessions Judge and Special Judge for CBI Cases, Bengalulru.