Bangalore District Court
The Directorate Of Enforcement vs Sri. Ravi @ Cycle Ravi on 2 November, 2022
KABC010374512019
IN THE COURT OF XLVII ADDL. CITY CIVIL &
SESSIONS JUDGE AND SPECIAL JUDGE FOR CBI
CASES, BENGALURU, (CCH48)
Dated this the 2nd day of November, 2022
PRESENT
Smt. E. CHANDRAKALA., B.Sc, LL.M.,
XLVII Addl. City Civil & Sessions Judge
and Special Judge for CBI cases,
Bengaluru
SPL.CC.NO.1346/2019
COMPLAINANT: The Directorate of Enforcement
Government of India,
Represented by its
Assistant Director,
Bengaluru Zonal Office,
3rd Floor,'B' Block,BMTC,
TTMC K.H.Road, Shanthi Nagar,
Bengaluru, Karnataka560 027.
(By Sri.Rajesh Rai.K, the Special
Public Prosecutor)
/Vs/
ACCUSED : Sri. Ravi @ Cycle Ravi
S/o Late Sri. Muniyappa
2 Spl.CC.No.1346/2019
D.O.B. 25.10.1977
R/o No.11B, Prakurti Apartment,
Srinivaspura Main Road,
Rajarajeshwari,
Bengaluru560 060.
(By Sri.K.S. Javali,
Advocate for Accused)
*****
1.Date of Commission of Offence July, 2018
2. Date of Report of Offence : 11072018
3. Appearance of Accused : 24022020
4. Name of the complainant : Assistant Director,
Directorate of Enforcement
5. Date of recording of Evidence : 02032022
6. Date of closing Evidence : 17082022
7. Offences complained of : Under Secs.3, 4 & Sec.8(5)
of the Prevention of
MoneyLaundering Act,2002
8. Opinion of the Judge : Accused is not found guilty
(E.CHANDRAKALA)
XLVII Addl. City Civil & Sessions Judge
and Special Judge for CBI cases,
Bengaluru.
3 Spl.CC.No.1346/2019
JUDGMENT
The Assistant Director of the Directorate of Enforcement, Bengaluru has filed this complaint under Secs.44 & 45 r/w Secs.3 & 4 & Sec. 8(5) of the Prevention of Money Laundering Act,2002 (for brevity the PMLA) against the accused to take cognizance and punish for the offence under Sec.3 punishable under Sec.4 PMLA and for confiscation of the properties involved in money laundering.
2. The Complainant has been authorized to file this complaint under Secs.44 and 45(1) of PMLA as per the Notification issued by the Government of India, Ministry of Finance, Department of Revenue, New Delhi in F.No.6/14/2008ES dated 11/11/2014.
3. The brief facts set out in the complaint is that, the accused was involved in many criminal 4 Spl.CC.No.1346/2019 cases such as Murder, Kidnap, Conspiracy, Dacoity, and Extorted the money from innocent people and purchased the properties in the name of his family members out of the proceeds acquired from the criminal activities related to the schedule offence registered in Cr.No.239/2018 dated 27/06/2018 under Secs.307, 332, 353 of IPC and Secs.3,25 and 27 of the Arms Act, 1959 by Kengeri Police Station, Bengaluru. The complainant authority has recorded ECIR in No.BGZO/04/2018 dated 30/08/2018 on the basis of case registered by Kengeri Police Station, Bengaluru in Cr.No.239/2018. During the investigation, the complainant authority found that accused is known notorious rowdy and there were several cases registered against him in various police stations all over Karnataka. The accused extorted money from innocent people and acquired the properties in the name of his family members and projected as untainted property. The accused has 5 Spl.CC.No.1346/2019 directly involved in criminal activities and generated proceeds of crime and committed the offence of moneylaundering under Sec.3 punishable under Sec.4 of PMLA.
4. After receipt of the complaint, PCR No.67/2009 was registered and sworn statement of the complainant was dispensed in view of Sec.200(a) of the Cr.P.C., as the complainant is a Government servant. The cognizance was taken for the offence under Secs.3 & 4 of PMLA against the accused.
5. After registration of the case, in pursuance to summons, the accused has appeared before the Court and enlarged on bail. The copies of complaint and its enclosures furnished in compliance of the provision of Sec.207 of Cr.P.C. After hearing before framing charge, the discharge application was 6 Spl.CC.No.1346/2019 dismissed and the charge was framed, wherein the accused pleaded not guilty and claim to be tried.
6. The Complainant in order to bring the guilt of the accused, has examined 5 witnesses as PW1 to PW5 and got marked documents Ex.P.1 to Ex.P.49. The accused was examined under Sec.313 of Cr.P.C., wherein, has denied the incriminating material appearing against him. He did not choose to lead evidence. He has filed written statement alongwith copies of judgments. Ex.D.1 was marked during cross examination.
7. Heard the arguments of Sri.Rajesh Rai.K, the Ld. Special Public Prosecutor for complainant and Sri.K.S. Javali, the Ld. Senior Advocate appearing for accused. The Ld.Spl. P.P filed written argument with following citations :
1. 1991(2) SCC 141 (Gokak Patel V/s Dundayya Gurusiddappa Hiramata) 7 Spl.CC.No.1346/2019
2. W.P.No.26889/2018 (M/s.Advanatage Strategic Consulting Pvt. Ltd., V/s The Assistant Director, Directorate of Enforcement)
3. Crl.P.No.5698/2019 (Sri.Katta Subramaniam Naidu V/s Deputy Director, Directorate of Enforcement)
4. (2015) 3 S.C.C (Cri.) 881 (Mohan Lal v/s State of Rajasthan)
5. (2016) S.C.C Online Kar.282 (Smt.K.Sowbaghya V/s Union of India)
8. The Ld. Counsel appearing for accused has furnished the following citations:
1. 2022 SCC Online SC 929 (Vijay Madanlal Choudhary and others V/s Union of India and others)
2. Crl.P.No.9490/2021 C/W Crl.P.No.9740/2021 (C.Madesh @ Avva Madesh and another V/s Directorate of Enforcement)
3. 2022 Live Law SC 688 (Parvathi Kollur and another V/s State by Directorate of Enforcement)
4. Crl.P.No.1072/2021 (M/s.Jagathi Publication Ltd., V/s Directorate of Enforcement) 8 Spl.CC.No.1346/2019
5. W.P.No.288/2022 (Decan Mining Syndicate Pvt. Ltd., and another V/s Directorate of Enforcement)
6. 2022 S.C.C Online SC 561 (J.Shekar @ Shekar Reddy V/s Directorate of Enforcement)
9. Perused, the Complaint, Charge, evidence and documents placed on record.
10. In the light of above material on record, the points that arise for consideration of the court are under:
1) Whether the complainant/ prosecution proves beyond reasonable doubt that the accused knowingly indulged in criminal activities, acquired the proceeds of crime and purchased the properties in the name of his wife and mother and projected it as untainted and thereby committed the offence of moneylaundering within the meaning of Sec.3 and punishable under Section 4 of the Prevention of Money Laundering Act, 2002?
2) What order ?
9 Spl.CC.No.1346/2019
11. My findings on the above points are as hereunder:
Point No.1 : In the Negative
Point No.2 : As per final order for the
following:
REASONS
12. POINT NO.1 : The first and foremost point raised by the Ld. Senior Counsel regrading applicability of the Act, on the ground that the offense under Section 307 IPC and Sec. 25 and 27 of The Arms Act, 1959, was included in the Schedule of PMLA only in the year 2013 after acquisition attached properties. Further, the Explanation to Sec.3 was inserted only in the year 2019. Hence, the complaint is not maintainable.
13. On the other hand, the Ld.Spl.P.P. replied that though the PART A was included in the Schedule in the year 2013, the act committed by the 10 Spl.CC.No.1346/2019 accused is a continuing one as he is enjoying the proceeds of crime along with his family members, hence, the PMLA is aptly applicable to the present case on hand and relied upon the following decisions:
1. Crl.P.No.5698/2019 passed by Hon'ble High Court of Karnataka dtd., 14/12/2020.s
2. W.P.No.14649/2014 (GMRES) passed by the Hon'ble High Court of Karnataka reported in 2016 S.C.C Online Kar.282 (Smt.K.Soubaghya V/s Union of India and others).
14. On careful reading of the aforesaid decisions, the Hon'ble High Court has observed that the schedule to the PMLA was amended by Act (2) of 13 and various offences specified therein came to be included with effect from 15022013. Sections 3 and 5 of PMLA were very much there in the statute book and prosecution under Sec.3 of PMLA initiated against the accused subsequent to 15022013 is 11 Spl.CC.No.1346/2019 not violative of Art.20(3) of the Constitution of India. The Hon'ble Apex Court in Vijay Madanlal Choudary's case reported in 2022 ONLINE SC page 929 has held that the amendment vide Finance (No.2) Act, 2019, Explanation has been added which is obviously a classificatory amendment.
15. This complaint is filed on 27112019. The Kengeri Police registered FIR against the accused on 27/06/2018. By that time, the predicate offense under Section 307 IPC and Sec.25 and 27 of The Arms Act was set out in the Schedule to PMLA. The Explanation to Sec.3 was inserted by the Finance (No.2) Act, 2019 with effect from 01082019. On careful reading of the Sec.3 of PMLA, it is clear that process or activity connected with the proceeds of crime is a continuing activity and it continues till such time a person is directly and indirectly enjoying the proceeds of crime. Therefore, even though 12 Spl.CC.No.1346/2019 schedule offence case registered against the accused and the properties acquired is earlier to 01082019, the complaint is maintainable as it is undisputed fact that the accused family members have been enjoying the properties acquired through proceeds of the alleged crime and the offence under Sec.3 of PMLA is a continuing activity. Therefore, there is no force in the arguments of the Ld. Senior Counsel in this regard.
16. The complainant in order to bring home the guilt of the accused has examined the 5 witnesses as PWs1 to 5 and got marked documents Exs.P.1 to
49. PW1 is the Rtd. Dy.SP, he has filed charge sheet in predicate offence case. PW2 is the Police Inspector, he has filed complaint in predicate offence. PW3 is Sepoy of ED. He identified the properties provisionally attached by the authority. 13 Spl.CC.No.1346/2019 PWs4 and 5 are the Investigating Officers of this case.
17. PW5, the then Assistant Director of Directorate of Enforcement (for short 'ED') has deposed before the Court that after receipt of information from the Commissioner of Bengaluru City, having registered several cases against the accused, has recorded the ECIR No.4/2018 on 30/08/2018 as per Ex.P.9. He has summoned the accused, his wife, mother and recorded their statements under Sec.50(3) of PMLA. He further deposed that he received the certified copies of the sale deeds, Encumbrance Certificates held in the names of Ramya and Lakshmamma, the wife and mother of accused from the SubRegistrar, J.P.Nagar and Nagarbhavi as per Exs.P.20 to 24, 27 to 35, 37 to 39. He has recorded the statement of accused in the presence of jail authorities on 14 Spl.CC.No.1346/2019 04/12/2018 as accused was in judicial custody. He placed the papers before the Deputy Director for issuance of the provisional attachment order and the Deputy Director has passed provisional attachment order on 29/03/2019 as per Ex.P.6. He has collected the statement of accounts held in the name of accused and his family members. As per the statements of accused, his wife, mother and the documents obtained from the SubRegistrar office and from the charge sheet submitted in the predicate offence case, P.W.5 found that accused was involved in criminal activities like extortion, cheating, attempt to murder and the offense under the Arms Act and generated the proceeds from crime and purchased the properties in the name of his wife and mother and projected the properties as untainted. P.W.5 further deposed that there were 23 cases registered against the accused in various police stations. The statements of accused and his 15 Spl.CC.No.1346/2019 family members and the documents submitted by them did not substantiate that properties were purchased from legal source of income.
18. On perusal of ECIREx.P.9, it reveal that on 30/08/2018, the ED recorded ECIR against the accused on the basis of FIR No.239/2018 registered on 27/06/2018 for the offences under Secs.120(B), 307, 332, 353 of IPC and Secs.3,25 and 27 of Arms Act,1959 by the Kengeri Police Station, Bengaluru City. It further disclose that other 28 cases registered against the accused. The ECIR was recorded on the suspicion that he holds various accounts to launder the proceeds of crime derived by him.
19. Now, it is relevant to know what constitutes offense under Sec.3 of PMLA. The amended Sec.3 reads thus:
3. Offence of moneylaundering: Whosoever directly or indirectly attempts to indulge or 16 Spl.CC.No.1346/2019 knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of moneylaundering.
The explanation to Sec.3 of PMLA is added as per the Finance (No.2) Act, 2019 (23 of 2019), dated 01.08.2010, with effect from 01.08.2019 and the said explanation reads thus:
[Explanation. 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;
(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.17 Spl.CC.No.1346/2019
20. In view of Explanation (ii) of Sec.3 of PMLA, the process or activity connected with proceeds of crime is 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. Therefore, when any person is sought to be prosecuted under Section 3, the following prerequisites are required to be satisfied :
(a) whether he was directly concerned or indirectly concerned with the attempt to indulge in an act;
(b) whether a person has knowingly assisted;
(c) whether a person has been knowingly a party;
(d) whether a person was actually involved.
All the above acts must be related to any process or activity connected with the proceeds of crime and 18 Spl.CC.No.1346/2019 projecting it as untainted property. There should only be a nexus between the criminal activity relating the scheduled offence and the proceeds thereof in order to bring the person to book. The term "as result of criminal activity" is very important. In other words, a clear nexus must be shown to exist 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 offence and not to the general offense.
21. From plain reading of section 3, 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 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. Further, in order to attract the 19 Spl.CC.No.1346/2019 offence under Sec.3, it must be established that accused involved in the process of moneylaundering in regard to placement and integration. The reference to "scheduled offence" under section 2(1)(y) of the PMLA is only an indicator or a pointer that the properties laundered by the offenders had their origin or source in any of the offence or crime specified in the schedule and therefore the offenders are liable to answer the charge under section 3 punishable under section 4 of PMLA.
22. According to the complaint, and evidence of P.W.5, the proceeds of crime was derived from Cr.No.239/2018 and other criminal cases. The offence under Sec.307 of IPC and Sec. 25, & 27 of The Arms Act are being schedule offences under PMLA, ECIR was recorded against the accused and filed complaint. The complaint Ex.P.2, would show that accused has also involved in Cr.No.399/2016 20 Spl.CC.No.1346/2019 of Thalaghattapura Police registered for the offence under Secs.143, 144, 147, 323, 504, 506, 307 R/w Sec.149 of IPC.
23. It is important to note that the recitals of the complaint Ex.P.2 would reveal that the police formed a team to apprehend the accused as he was indulged in many of criminal cases and was declared as notorious rowdy. When the police made an attempt to apprehend the accused, they have been stabbed and assaulted by the accused and thereby Cr.No.239/2018 was registered against the accused by the Police Inspector, OCW, CCB, Bengaluru. On the basis of the complaint, the CCB, Bengaluru laid charge sheet against the accused and another for the aforesaid offences.
24. The Ld.Spl.P.P argued that as per Ex.P.4, the Assistant Commissioner of Police informed the ED authority that the accused is a notorious 21 Spl.CC.No.1346/2019 rowdy and he was involved in more than 30 cases, such as kidnap, murder, robbery, extortion and accused and his associates habitually collects hafta and money from innocent people. On the basis of the information, the ED has recorded ECIR as per Ex.P.9 on 30/08/2018 for the offences under Sec.3 punishable under Sec.4 of PMLA.
25. On the other hand, the Ld. Senior Advocate appearing for accused has repelled that Ex.P.2 was registered only to curb the alleged criminal activities of accused and mere registration of case is not sufficient to come to the conclusion that the accused has involved in criminal activities.
26. The ECIR Ex.P.9 the column (2) would depicts about the nature of schedule offence as follows :
2. Nature of Scheduled Offence :
(I) Scheduled (ii) Section of the (iii)Agency 22 Spl.CC.No.1346/2019 Acts(s) Act(s) investigating scheduled offence
(a) Arms Act 1959 U/s.3, 25, & 27 Kengeri Police
(b) Indian Penal Arms Act, Station, Bangalore Code U/s.120-B, 302, City.
307, 332, 353 IPC Further, the column No.9 reveal that there were 8 murder, kidnap and other cases registered against the accused and he was suspected that he had various accounts to laundering the proceeds of crime derived by him. Annexure1 of ECIR disclose the list of cases registered against the accused. The accused in his statement recorded under Sec.50(3) of PMLA has narrated about the cases registered against him.
27. The prosecution to prove that the accused was involved in criminal activities, has examined the witnesses PWs1 and 2. PW2 is the complainant in Cr.No.239/2018. He is the Police Inspector. He deposed before the Court that he was deputed to watch the criminals who were involved in organized 23 Spl.CC.No.1346/2019 crimes. On 24/06/2018 as per the directions of the Joint Police Commissioner, a wing was formed to trace the accused in this case. The team consisted of P.W.2, Police Inspector and staff. P.W.2 has further deposed that on 27/06/2018, they received the credible information about the accused and immediately they went near 80 ft road, Thalghattapura, to apprehend the accused and they found the accused was proceeding in a Fortuner car bearing No.KA04MK7111. When they asked to stop the vehicle, the accused did not stop and thereby they chased and finally intercepted near Shaneshwara temple. The accused fired against the police and stabbed the staff Satish with dragger and caused injuries. Therefore, P.W.2 fired against the accused. P.W2 has stated that accused is a known notorious rowdy and involved in criminal cases all over the Karnataka relating to Murder, Kidnap, Dacoity and Extortion. He identified the FIR and 24 Spl.CC.No.1346/2019 complaint as per Exs.P.1 and 2. Ex.P.1 is the copy of the FIR in Cr.No.239/2018. Ex.P.2 is the complaint made by PW2, Ex.P.3 is the copy of charge sheet. These documents would goes to show that PW2 has lodged the complaint against accused on 27/06/2018 and a case was registered and after investigation, the ACP, CCB, SIT submitted the charge sheet against the present accused and another for the offences under Secs.307, 332, 353 of IPC and Secs.3, 25, 27 of Arms Act. The charge sheet filed against the accused in the said case is in regard to assault made by the accused against the public servants and obstruction caused while discharging their duties and also made attempt to commit murder by holding deadly weapons without licence. Except Exs.P.1 to 3, the complainant has not placed any other documents before the Court to show that accused was involved in other 23 criminal cases. However, the accused in his examination 25 Spl.CC.No.1346/2019 under Sec.313(1)(b) of Cr.P.C., has stated that PW2 and his staff apprehended him on 27/06/2018 when he came from the house. He further stated that a false case has been filed against him. As could be seen from the contents of the complaint, it has alleged that accused has involved in 23 criminal cases morefully stated in para 2 of the complaint. The details of the cases are as follows:
1.Banashankari Police Station Cr.No.428/2001 u/S.364, 364A, 365 R/w Sec.34 of IPC.
2. C.K.Achucattu Police Station Cr.No.76/2010 u/S.229A of IPC.
3.C.K.Achucattu Police Station Cr.No.181/2010 u/S.302 of IPC.
4. Girinagar Police Station Cr.No.324/2009 u/S.307, 364A, 384 of IPC.
5. Girinagar Police Station Cr.No.150/2007 u/S.143, 144, 147, 148, 120B, 302 of IPC.
6. Hanumanthanagar Police Station Cr.No.249/2005 u/S.364A, 365, 387 of IPC.
7. Girinagar Police Station Cr.No.346/2003 u/S.302 of IPC.26 Spl.CC.No.1346/2019
8. K.G.Nagar Police Station Cr.No.151/1997 u/S.302 of IPC.
9. Siddapura Police Station Cr.No.111/2009 u/S.302 of IPC.
10. Subramanyapura Police Station Cr.No.259/2005 u/S.307 of IPC.
11. Thyagarajanagar Police Station Cr.No.177/2009 u/S.143, 147, 148, 307 R/w Sec.149 of IPC.
12. Ramamurthynagar Police Station Cr.No.336/2006 u/S.399, 402 of IPC
13. Mico Layout Police Station Cr.No.614/2000 u/S.143, 147, 302, 324 R/w Sec.149 of IPC.
14. City Market Police Station Cr.No.144/2007 u/S.399, 402 of IPC.
15. Jnanabharthi Police Station Cr.No.233/2005 u/S.399, 402 of IPC.
16. Kamakshipalya Police Station Cr.No.646/2010 u/S.399, 402 of IPC.
17. Kengeri Police Station Cr.No.257/2009 u/S.302(202) of IPC.
18. Banashankari Police Station Cr.No.348/2016 u/S.302 of IPC.
19. J.P.Ngar Police Station Cr.No.45/2018 u/S.302 of IPC.27 Spl.CC.No.1346/2019
20. Thalaghattapura Police Station Cr.No.399/2016 u/S.307 of IPC.
21. Thalaghattapura Police Station Cr.No.401/2016 u/S.307 of IPC.
22. Madivala Police Station Cr.No.403/2017 u/S.302, 120B, 402, 147 R/w Sec.149 of IPC.
23. Magadi Police Station Cr.No.248/2015 u/S.302, 201 of IPC.
28. The Sec.25 and 27 of Arms Act and Sec.307 of IPC are being the schedule offences under PartA of schedule of PMLA, the ED authority proceeded to investigate the matter in the case. The oral evidence and documents placed by the complainant clearly goes to show that the accused has involved in criminal activities as referred above.
29. The next core point for consideration is whether the accused acquired proceeds of crime from criminal activities relating to schedule offense. Before discussing on this point, it is relevant to know what is meant by proceeds of crime and 28 Spl.CC.No.1346/2019 property as defined under PMLA. Section 2(1)(u) of PMLA defines proceeds of crime which reads thus :
Sec.2(1)(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.
The Hon'ble Supreme Court in Vijay Madanlal Choudary's case has observed that any property derived or obtained directly or indirectly, as a result of criminal activity concerning the schedule offence, the same can be regarded as proceeds of crime.
30. By keeping the above principle of law in mind, the court incline to peruse the evidence placed by the complainant/prosecution in regard to acquisition of the properties by the accused either from out of crime proceeds or through legal means. 29 Spl.CC.No.1346/2019 The initial burden lies on the prosecution to prove that accused involved in criminal activities and he acquired the crime proceeds, used and claimed as untainted.
31. It is to be noted that when the complainant has deposed that accused involved in many criminal activities including Cr.No.239/2018 and generated the proceeds of crime from above criminal activities, the initial burden casts on the complainant to place material before the Court.
32. According to complaint and evidence of PWs4 and 5, the attached properties Nos.1 to 4 were acquired by accused in the name of his wife Ramya and mother Lakshmamma from the proceeds of crime. PW3 has confirmed the provisional attachment order in respect of properties morefully mentioned at para No.5 of the complaint. PW3 has deposed that there is material to confirm the 30 Spl.CC.No.1346/2019 provisional attachment order as the accused has directly involved in commission of money laundering.
33. The complainant has also produced certified copies of the sale deeds and Encumbrance Certificates in respect of attached properties. The wife of accused by name Ramya has purchased the properties bearing site No.18 for Rs.4,80,000/ on 26/06/2013 as per Ex.P.24, Site No.828A and 828B for Rs.6,00,000/ on 19/01/2012 as per Ex.P.30, site Nos.912 and 913 for Rs.6,00,000/ under registered sale deed dated 14/09/2011 as per Ex.P.28. The mother of accused by name Lakshmamma has purchased site No.641 for Rs.8.80.000/ under registered sale deed dated 02/12/2012 as per Ex.P.31.
34. As per the contention of prosecution, the total amount of consideration was Rs.25,60,000/ 31 Spl.CC.No.1346/2019 was generated by accused from the schedule offense in Cr.No.239/2018. PW4 in his crossexamination has admitted the above properties were purchased during the year 201113. The predicate offence Cr.No.239/2018 was registered on 27/06/2018. So, it has argued that prior to registration of the predicate offence case, all the properties were acquired by wife and mother of accused. Hence, at no stretch of imagination can be said that the properties acquired from proceeds of crime.
35. The Ld.S.P.P would submit that accused has stated before the Investigating Officer regarding acquisition of the properties in the names of his wife and mother and the statements of the accused, his wife and mother given before IO has evidentiary value in the eye of law. Hence, the same can be considered So, it is for the accused to explain the 32 Spl.CC.No.1346/2019 source for acquisition of the properties as the burden lies on him as per Sec.24 of PMLA.
36. Percontra, the Ld. Senior Advocate appearing for accused has replied that ED authority has not examined the wife and mother of accused before the Court nor they arraigned as accused in the case. Hence, the statement recorded by the Investigating Officer under Sec.50(3) of PMLA is untenable in law.
37. The accused, his wife and mother gave statements before the IO under Sec.50(2) and (3) of PMLA. It is relevant to know what is the effect of statements given before the IO under the Section 50(3) of PMLA. Which reads thus:.
Section 50. Powers of authorities regarding summons, production of documents and to give evidence, etc.
1.xxxxxxx
2. xxxxxxx (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 33 Spl.CC.No.1346/2019 make statements, and produce such documents as may be required.
As per Sub Section 4 of Sec 50 of the Act, every proceeding under subsections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and Section 228 of IPC. The Section 193 says whoever intentionally gives or fabricate false evidence in any other case, shall liable for punishment. Sec.228 provides for punishment to the persons who intentionally insult to any public servant sitting in any judicial proceeding. The Sec. 50 of PMLA, confers the powers on the Director, ED to summon and record the statement of witnesses and accused persons. Here in the case, the accused has not denied the statements given before the IO. Therefore, there is no impediment to consider the statements as per EX.P.13 to 15 as the same have evidentiary value in the eye of law. The point is whether the statements 34 Spl.CC.No.1346/2019 would reveal the incriminating material against the accused or not.
38. According to PWs4 the Deputy Director and 5 the IO, wife and mother of the accused have not satisfactorily explained the income or source to acquire the above properties in their names. The complainant has produced statement of accused, his wife and mother marked as per Exs.P.13, 14 and 15. PW5 has deposed that he has issued summons to the accused, his wife and mother and in response to summons, they appeared and recorded statement under Sec.50(3) of PMLA. As stated supra, there is no incriminating material against the accused in the statements except accepting the acquisition of properties by his wife and mother. Even the statements of Ramya and Lakshmamma does not depicts that the accused funded to purchase the properties. Moreover, they have stated the source of 35 Spl.CC.No.1346/2019 acquisition. Thus, statements Ex.P.13 to 15 not helpful to the prosecution, because it does not disclose the incriminating material about crime proceeds.
39. Nextly, the Ld. Spl.P.P would submit that there is presumption under Sec.24 of the PMLA and the burden lies on the accused to rebut the presumption that he is not involved in money laundering. Before drawing such presumption, it is relevant to know the provision of law and what it says. The Section 24 of PMLA states thus:
Section 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 moneylaundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in moneylaundering 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.36 Spl.CC.No.1346/2019
On careful reading of the provision, it would be clear that the burden of proving that the proceeds of the crime are untainted is on the accused. So, the burden lies on the accused to establish that there is no nexus with the proceeds of crime and properties attached by the ED. Before drawing the presumption under Sec.24 of the Act, it is for the complaint to prove the nexus between the criminal activity and the proceeds thereof.
40. First, that the criminal activity relating to a scheduled offence has been committed. Second, that the property in question has been derived or obtained, directly or indirectly,by any person as a result of that criminal activity. Third, the person concerned is, directly or indirectly, involved in any process or activity connected with the said property being proceeds of crime. On establishing the fact that there existed proceeds of crime and the person 37 Spl.CC.No.1346/2019 concerned was involved in any process or activity connected therewith, itself, constitutes offence of moneylaundering.
41. The nature of process or activity has now been elaborated in the form of Explanation inserted vide Finance (No.2) Act, 2019. On establishing these foundational facts in terms of Section 24 of the 2002 Act,a legal presumption would arise that such proceeds of crime are involved in moneylaundering. The fact that the person concerned had no causal connection with such proceeds of crime and he is able to disprove the fact about his involvement in any processor activity connected therewith, by producing evidence in that regard, the legal presumption would stand rebutted. The existence of proceeds of crime is, therefore, a foundational fact, to be established by the prosecution, including the involvement of the person in any process or 38 Spl.CC.No.1346/2019 activity connected therewith. Once these foundational facts are established by the prosecution, the onus must then shift on the person facing charge of offence of moneylaundering to rebut the legal presumption that the proceeds of crime are not involved in moneylaundering, by producing evidence which is within his personal knowledge.
42. The Hon'ble Apex Court in Vijay Choudary Madanlal case has observed that the expression "presume" is not conclusive. It also does not follow that the legal presumption that the proceeds of crime are involved in moneylaundering is to be invoked by the Authority or the Court, without providing an opportunity to the person to rebut the same by leading evidence within his personal knowledge. In any case, as the burden on the accused would be only an evidentiary burden, it can 39 Spl.CC.No.1346/2019 be discharged by the accused by producing evidence regarding the facts within his personal knowledge.
43. P.W.5 the IO has specifically admitted in the cross examination that no amount or property was seized in Cr.No.239/2018 and the said case was not registered for the offence of robbery, dacoity and extortion. This witness has deposed that he has investigated in regard to proceeds of crime. But has not placed any materail before the court. Further, he has admitted that attached properties were purchased prior to registration of the Cr.No.239/2018 dated 27/06/2018. He pleaded ignorance with regard to result of 17 criminal cases registered against the accused.
44. It is suffice to say that though the complaint Ex.P.2 and ECIR Ex.P.9 reveal about registration of 23 cases against the accused, PW5 the IO has not produced any other document in 40 Spl.CC.No.1346/2019 respect of 23 cases, except Cr.No.239/2018 registered by Kengeri Police. Furthermore, the evidence of PW5 substantiates that ECIR was recorded by the authority only on the basis of Cr.No.239/2018. As discussed above, PW5 in his crossexamination has deposed that "On the basis of Cr.No.239/2018 and other crime cases, we have recorded the ECIR." From this, it is crystal clear that this complaint has been filed only on the basis of predicate offence registered in Cr.No.239/2018. Admittedly, the said case is not for the offence of robbery, dacoity and extortion. No amount or property were seized in the said case. The I.O PW5 has not investigated the proceeds of alleged crime. The evidence of PWs1 and 2 disclose only with regard to the offence under Secs.323, 353, 307 of IPC and Secs.3, 25, 27 of Arms Act, 1959. 41 Spl.CC.No.1346/2019
45. The offenses under Sec.307 and Secs. 25 and 27 of Arms Act are being schedule offence under PMLA, hence it is for the complainant to establish that accused has generated the proceeds of crime from the schedule offense in Cr.No.239/2018. Even for arguments sake, it is considered that there were several cases registered against the accused for the offences of murder, attempt to commit murder, extortion, kidnap, the same would not substantiate that the contention of prosecution with regard to crime proceeds.
46. The accused has produced 16 judgments passed in several crime numbers, which are as follows:
1. Cr.No.181/2010 (SC.No.1153/2010)
2. Cr.No.324/2009 (SC.No.1343/2010)
3. Cr.No.150/2007 (SC.No.181/2010),
4. Cr.No.249/2005, (SC.No.1169/2011),
5. Cr.No.346/2003 (SC.No.477/2004)
6. Cr.No.151/1997 (SC.No.603/201), 42 Spl.CC.No.1346/2019
7. Cr.No.111/2009 (SC.No.1008/2010),
8. Cr.No.177/2009 (SC.No.1092/2010)
9. Cr.No.336/2006 (SC.No.1075/2009)
10. Cr.No.614/2000 (SC.No.110/2001),
11. Cr.No.144/2007 (SC.No.700/2008),
12. Cr.No.233/2005 (SC.No.211/2006),
13. Cr.No.646/2010 ( SC.No.830/2011),
14. Cr.No.257/2009 (SC.No.1297/2010),
15. Cr.No.399/2016 ( SC.No.197/2010),
16. Cr.No.401/2016 (SC.No.198/2019).
On reading of the above judgments it is clear that, the concerned Courts have acquitted the accused in Cr.No.324/2009 (SC.No.1343/2010) registered by Girinagar Police Station for the offences under Secs.397, 364A, 384 of IPC, Cr.No.150/2007 (SC.No.181/2010) registered by Girinagar Police Station for the offence under Secs.143, 144, 147, 148, 120B, 302 of IPC, Cr.No.249/2005, (SC.No.1169/2011) registered by Hanumanthanagar Police Station for the offences under Secs.364A, 365, 43 Spl.CC.No.1346/2019 387 of IPC, Cr.No.346/2003 (SC.No.477/2004) registered by Girinagara Police Station for the offences under Sec.302 of IPC, Cr.No.144/2007 (SC.No.700/2008) registered by City Market Police Station for the offence under Secs.399, 402 of IPC, Cr.No.233/2005 (SC.No.211/2006) registered by Jnanabharti Police Station for the offence under Secs.399, 402 of IPC, Cr.No.646/2010 (SC.No.830/2011) registered by Kamakshipalya Police Station for the offences under Secs.399, 402 of IPC, Cr.No.151/1997 (SC.No.603/201) registered by K.G.Nagar Police Station for the offence under Sec. 302 of IPC, Cr.No.111/2009 (SC.No.1008/2010) registered by Siddapura Police Station for the offence under Sec.302 of IPC, Cr.No.177/2009 (SC.No.1092/2010) registered by Thyagarajanagar Police station for the offence under Secs.143,147, 148, 307 R/w Sec.149 of IPC, Cr.No.336/2006 (SC.No.1075/2009) registered by Rammurthynagar 44 Spl.CC.No.1346/2019 Police Station for the offence under Secs.399, 402 of IPC, Cr.No.614/2000 (SC.No.110/2001) registered by MicoLayout Police Station for the offences under Secs.143, 147, 302, 324 R/w Sec.324 of IPC, Cr.No.257/2009 (SC.No.1297/2010) registered by Kengeri Police Station for the offences under Secs.364, 302 and 201 of IPC, Cr.No.399/2016 (SC.No.197/2010) registered by Thalaghattapura Police Station for the offences under Secs. 143, 147, 148, 341, 323, 307, 363 R/w Sec.149 of IPC. These criminal cases mentioned as Sl.Nos.4 to 9, 11 to 16, 17, 20 and 21 in Para No.2 of the complaint.
47. Interestingly, PW5 in his cross examination has pleaded ignorance about the result of the above referred cases. Ex.D.1, judgment passed in SC No.341/2005 by the FTCIV, Bengaluru city dated 20/04/2006 reveal that 45 Spl.CC.No.1346/2019 accused was acquitted for the offences under Secs.364A, 365, 384 of IPC, which was registered by Banashankari Police Station for kidnap and ransom. All the above referred judgments would goes to show, that the cases registered against the accused for Murder, attempt to Murder, Kidnap, Etc., were ended in acquittal.
48. P.W.5 the IO has not placed any material before the Court to show the result of the criminal cases mentioned at Sl.Nos.1 to 3, 10, 18, 19, 22, 23 in Para No.2 of the complaint or pending for decision. The Schedule offense Cr.No.239/2018 is pending for decision.
49. According to statement of Ramya, she was doing tailoring work and out of the income, she had purchased the properties. However, she could not produce the statement of accounts regarding source 46 Spl.CC.No.1346/2019 of income. Likewise, Lakshmamma has also stated in her statement that out of her savings and incme from the ancestral property she purchased the properties. Only for the reason that sale consideration was paid in cash, it is difficult to believe the contention of the prosecution that properties were purchased from proceeds of crime. Though statements of accused, his wife and mother as per Exs.P.13 to 15 recorded under Sec.50(3) of PMLA, the same did not prove the incriminating material against the accused in regard to acquisition of crime proceeds from schedule offense.
50. It is necessary to refer Sec.44(1) Explanation I of PMLA, to know whether this case is dependant on the result of schedule offense.
44. Offences triable by Special Courts.-- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),--
(a) xxxxx
(b) xxxxx
(c) xxxx 47 Spl.CC.No.1346/2019
(d) xxxxx Explanation: For 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.
From the above provision of law, it is clear that any enquiry, investigation or trial under this Act, shall not be dependent upon any orders passed in respect of schedule offences.
51. The Ld. Senior Advocate has referred the following decisions in this aspect :
1. 2022 SCC Online SC 929 (Vijay Madanlal Choudhary and others V/s Union of India and others)
2. Crl.P.No.9490/2021 C/W Crl.P.No.9740/2021 (C.Madesh @ Avva Madesh and another V/s Directorate of Enforcement)
3. 2022 Live Law SC 688 (Parvathi Kollur and another V/s State by Directorate of Enforcement)
4. Crl.P.No.1072/2021 (M/s.Jagathi Publication Ltd., V/s Directorate of Enforcement) 48 Spl.CC.No.1346/2019
5. W.P.No.288/2022 (Decan Mining Syndicate Pvt. Ltd., and another V/s Directorate of Enforcement)
6. 2022 S.C.C Online SC 561 (J.Shekar @ Shekar Reddy V/s Directorate of Enforcement)
52. The Hon'ble Apex Court in Vijay Madanlal Choudary's case has observed at para 251 that "The proceeds of crime" being the core of the ingredients constituting the offence of moneylaundering, that expression needs to be construed strictly in that all properties recovered or attached by the Investigating agency in connection with the criminal activities relating to a schedule offence under the general law cannot be regarded as proceeds of crime. The Ld. Spl.P.P has also relied on the same decision in para 30,31, and 32 that the property derived or obtained directly and indirectly as a result of criminal activity relating to a schedule offense. Further, it has submitted that as held in para 42 and 43 of the said decision, criminal activity relating to or in relation to schedule offense as per Sec.3 of PMLA is a continuing one and also relied on Gokak 49 Spl.CC.No.1346/2019 Patel Volkart Ltd., v/s Dundayya Gurusiddaiah Hiremath, reported in 1991(2) SCC 141 and Advantage Strategic Consulting Pvt.Ltd., v/s Assistant Director of ED in W.P.No. 26889/20018.
53. On careful reading of the decisions, the Hon'ble Apex Court has observed in Vijay Madanlal Choudary's case that only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offense can be regarded as proceeds of crime. The authorities under the 2002 Act, cannot resort to action against any person for moneylaundering on an assumption that the property recovered by them must be proceeds of crime and that a schedule offence has been committed, unless the same is registered with the jurisdictional police or pending enquiry by way of complaint before the competent forum.
50 Spl.CC.No.1346/2019
54. The Hon'ble Apex Court in Gokak Patel Volkart Ltd., v/s Dundayya Gurusiddaiah Hiremath, reported in 1991(2) SCC 141 has discussed about continuing offense under Sec.630(1)(b) of the Companies Act that a 'continuing offense' is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It has further held that the expression 'continuing offense' has not been defined in the code. The question whether a particular offense is a continuance offense or not must, therefore, necessarily depend upon the language of the statute which creates that offense, the nature of offense and the purpose intended to be achieved by constituting the particular act as an offense. With due great respect, the said judgment is not applicable to the case on hand for the reason that the same was held and distinguished the 51 Spl.CC.No.1346/2019 'continuing offense' under the statute of Companies Act.
55. In Advantage Strategic Consulting Pvt. Ltd., v/s Assistant Director of ED in W.P.No.26889/20018 case, the Hon'ble High Court of Judicature of Madras has observed in para 17 of the judgment that:
"Though the expression 'continuing offense' is not defined in the PMLA, whether a particular offense is a continuing one or not depends upon the nature of offense and purpose intended to be achieved. The concept of continuing offense is keeping the offense alive day by day without wiping the original guilt. Thus, there is an ingredient of continuance of the offense in continuing offense. Therefore, the contention of petitioner that the second proviso to Sec. 5(1) is only prospective and not retrospective is without substance or force. The second proviso is applicable to property acquired even prior to the coming into force of this provision. Hcence, retrospective penalization is permissible".
In the above referred case, the parties challenged the orders passed by the Adjudicating Authority under the provisions of PMLA. It was the contention of the parties that, the schedule offenses were not included in the schedule to the PMLA when the predicate 52 Spl.CC.No.1346/2019 offense was committed. Therefore, the authority has no power to attach or freeze the account. The Hon'ble High Court has held that the party has to challenge the order of the Adjudicating Authority before the Appellate Tribunal and dismissed the petitions. With due great respect the above decision is not applicable to the case on hand because, proposition of law held in the said decision is in respect of Sec.5(1) of the PMLA. Here in the case, it has contended that the cases registered against the accused is a continuing offense, and he acquired the proceeds of crime. It is imperative on the part of court to state that as per the decision of Vijay Madanlal Choudary's case, in the event the person named in the criminal activity relating to a schedule 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 (schedule offence) against him/her , there can be no 53 Spl.CC.No.1346/2019 action for moneylaundering against such a person or person claiming through him in relation to the property linked to the stated schedule offence. In view of the above finding by the Hon'ble Apex Court, there can be no offense of money laundering against the accused if he finally acquitted/discharged /quashed. It succinctly sum up that offense under Section 3 is dependent on the wrongful gain and illegal gain of property as a result of criminal activity relating to scheduled offense. Therefore, the prosecution cannot claim that the accused generated proceeds of crime from the cases acquitted against him and the criminal acts of the accused are continued and it was "Continuing Offense".
56. It is important to state that though Exs.P.1 to 3, substantiates that accused was indulged in criminal activities, it does not disclose the direct nexus with the schedule offence to acquire 54 Spl.CC.No.1346/2019 proceeds of crime. PWs1, 2, 4 and 5 clearly stated that there were no proceeds of crime from Cr.No.239/2018. At the risk of repetition, it is to be reiterated that the evidence of PW5 itself clearly goes to show that there is no direct nexus with this case and Schedule offence to derive the crime proceeds.
57. At this stage, I would like to refer the decision of Hon'ble Supreme Court rendered in 2016 S.C.C Online Kar 282 (Smt.K.Soubaghya V/s Union of India). The Hon'ble Apex Court has held that initial burden lies on the prosecution to prove the guilt of the accused beyond reasonable doubt. If the prosecution discharge its initial burden, then burden shifts on the accused as per Sec.24 of PMLA.
58. The Ld.Spl.P.P would submit that the definition of Sec.2(1)(v) of PMLA describes what is property and the definition includes movable, 55 Spl.CC.No.1346/2019 immovable, tangible, intangible, corporeal and incorporeal property. Hence, the property held in the names of Ramya and Lakshmamma are proceeds of crime.
59. Per contra, the Ld.Senior Advocate repelled that if the properties held in the names of Ramya and Lakshmamma are proceeds of crime, why they have not arrayed as accused in the case. That itself reveal that the properties were not acquired from proceeds of crime.
60. It is to be noted that the accused has admitted the properties held in the names of his wife and mother. He has further admitted the same in his examination under Sec.313(1)(b) of Cr.P.C. The Sale Deeds, Encumbrance Certificates in respect of attached properties are not disputed by the accused. But, the accused specifically denied that the properties were acquired from proceeds of crime. 56 Spl.CC.No.1346/2019 As discussed above, the complainant except filing FIR, copy of charge sheet has not placed any other material before the Court to show that accused has direct nexus with criminal activities and the proceeds of crime from the schedule offence registered in Cr.No.239/2018. The FIR, charge sheet does not disclose about the acquisition of proceeds of crime from the schedule offence. Most of the cases referred by the prosecution were ended in acquittal. Therefore, there is no hesitation to state that the prosecution has failed to prove the acquisition of proceeds of crime by way of any activity which constitute the offence of money laundering as defined under Sec.3 of the PMLA.
61. Further, the ED authority has not produced entire charge sheet papers of all the criminal cases referred in the complaint to establish that Cr.No.239/2018 is continuing offense of other 57 Spl.CC.No.1346/2019 criminal cases. Further, the ED authority has not examined any of the witnesses who gave complaint against the accused that he extorted the money from illegal activities. In the absence of any material before the Court, it is not probable to accept the contention of the prosecution/complainant that accused acquired the properties in the names of his wife and mother from the source of illegal income.
62. The Ld.S.P.P has also argued that statement of account of the accused, which clearly discloses about the transactions and entire sale consideration was paid through cash. Hence, it can be infer that the sale consideration was paid out of proceeds of crime. On perusal of statement of account as narrated in the statement of Lakshmamma, mother of accused does not disclose the transaction of high value. It is pertinent to note that as discussed supra, the PWs1 and 2 in their 58 Spl.CC.No.1346/2019 crossexamination have categorically stated that accused has not extorted any money from the police personnel in Cr.No.239/2018, which is scheduled offence. PW2 in his crossexamination has specifically stated that there is no proceeds of crime from the schedule offence. PW5, the Investigating Officer has also admitted that no amount or property was seized from Cr.No.239/2018 and in said case there was no offence of robbery, dacoity and extortion. As such, from the above offence it is crystal clear that there is no proceeds of crime from the schedule offence in Cr.No.239/2018.
63. The Ld. Spl.P.P has further argued that in view of the decision of Mohan Lal v/s State of Rajasthan reported in (2015) 3 S.C.C. (Cri) 881, the possession of properties by Ramya and Lakhmamma, is itself sufficient to hold that the properties were acquired from crime proceeds. The decision reads thus:
A. Narcotic Drugs and Psychotropic Substances Act, 1985Ss.13 to 22, 25 and 35 Possession of contraband Contraband hidden away in secret place by accused Absence of physical control over the contraband, but accused exercising requisite control over contraband to give rise to culpable mental state "Possession", held is a flexible concept, and its 59 Spl.CC.No.1346/2019 meaning depends upon the contextual purpose and objective of statute concerned and an appropriate meaning has to be assigned to the word to effectuate the statutory objectOrdinarily elements of possession are physical control and animus to control the thing concerned/contraband However, even in absence of physical control of the contraband, culpable mental state of accused can arise if the accused still has the requisite degree of control over the contraband Accused's conscious possession, in view of his special knowledge of location or site of contraband article, with animus and intention to retain exclusive control or dominion over it, would constitute offence punishable under S.18Fact that accused after stealing opium from Magistrate Court's malkhana concealed it in a secret place and later led police party to discover the same, shows his conscious possession Words and Phrases "Possession", "conscious possession" "Possession" when possible without actual physical control.
On careful reading of the said decision, the Hon'ble Supreme Court has held that "Possession" in the context of any enactment would depend upon the object and purpose of the enactment and an appropriate meaning has to be assigned to the word to effectuate the said object. The judgment rendered in the said case is different from the facts of the present case and both enactments are different.
Therefore, the possession of properties depend upon the object and purpose of the enactments. Hence, it 60 Spl.CC.No.1346/2019 cannot be said that mere having possession of properties cannot be infer that the same were proceeds of crime, unless it is established by the prosecution.
64. The complainant in order to claim the benefit of Sec.24 of PMLA, the important requirements has to be proved that accused acquired proceeds of crime relating or relatable to the schedule offence. At the cost of repetition, it is suffice to state that complainant/prosecution has recorded ECIR only on the basis of Cr.No.239/2018 as schedule offence. So, in view of the decision of Vijay Madanlal Choudary's case, the prosecution has to discharge the initial burden by placing material before the Court that accused generated the proceeds of crime from the scheduled offence. More importantly, the cases referred by the complaint, and so also in the list of Annexure to the 61 Spl.CC.No.1346/2019 ECIR, 17 cases registered for Murder, Attempt to Murder, Kidnap, Ransom were ended in acquittal. Therefore, the contention of complainant is not acceptable one as the prosecution has failed to discharge the initial burden which lies on it. Hence, the question of shifting the burden on accused does not arise at all. If the prosecution discharge its burden by proving that the accused acquired the proceeds of crime form the activity resulting to the scheduled offences, then onus shifts on the accused to disprove the contention of the complainant.
65. PW4, the then Deputy Director of ED has passed the provisional attachment order in No.5/2019 dated 29/03/2019 as per Ex.P.6 and filed complaint before the Hon'ble Adjudicating Authority, New Delhi in complaint No.1110/2019 as per Ex.P.7. P.W.3, the Sepoy identified the properties and reported to the IO. The ED authority has 62 Spl.CC.No.1346/2019 provisionally attached the properties standing in the names of the Ramya and Lakshmamma, who are wife and mother of the accused. The Hon'ble Adjudicating authority has also confirmed the provisional attachment order. As rightly contended by the Ld. Senior Counsel, the ED authority has not chosen to array the Ramya and Lakshmamma as accused in the case for the reason that they assisted the accused in acquiring the property from illegal source of money. Further, they also have not chosen to made them as witnesses in the case. Further, any criminal activity relating to the schedule offense under general law cannot be regarded as proceeds of crime. In view of the said observation, the requirement is not only does a predicate crime need to be committed, it in turn needs to generate the proceeds of crime. So, there must be direct nexus with the proceeds of crime with criminal activity i.e., schedule offence.
63 Spl.CC.No.1346/2019
66. In view of the above discussion, reasoning, and analysing all the contentions raised by the accused and adverted to the relevant materials, the Court has come to the conclusion that the complainant/prosecution has failed to prove the requirements of the offence of Sec.3 of PMLA against the accused by placing cogent and convincing evidence he involved in placing, layering and integrating the monies and committed the offence of moneylaundering beyond reasonable doubt. Therefore, the presumption under Sec.24 of the Act cannot be drawn in favour of complainant. Thus, the benefit of doubt would goes to accused and thereby the accused is entitled for acquittal.
67. On coming into the properties attached by ED at Ex.P.45 and order passed by the adjudicating authority as per Ex.P.6, the properties are in possession of ED. In view of the finding given to 64 Spl.CC.No.1346/2019 point No.1, the properties attached by the ED is to be released as per SubSection 6 of Section 8 of PMLA. Therefore Point No.1 is answered in the Negative.
68. POINT NO.2 : In view of the above discussion the accused is entitled, to be acquitted of the offence charged against him. Hence, I pass the following ORDER The Complaint filed under Sec.45(1) of PML Act, is hereby dismissed.
Acting under Section 235(1) of Cr.P.C, the accused is acquitted for the offence under Sec.3 punishable under Secs.4 of Prevention of Money Laundering Act,2002.
Acting under Sec.8(6) of PMLA, the ED authority is directed to release the attached properties in the names of Ramya and Lakshmamma.
65 Spl.CC.No.1346/2019
The bail bond of accused and his surety bond stands cancelled.
(Dictated to the Judgment Writer, transcribed by her, corrected and then pronounced by me in open court this the 2nd day of November, 2022.) ( E.CHANDRAKALA ) XLVII Addl. City Civil & Sessions Judge and Special Judge for CBI Cases, Bengaluru.
***** ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF PROSECUTION PW1 P.T.Subramanya PW2 R.Prakash PW3 H.Ramesh PW4 Parashivamurthy M.K PW5 Basavaraj R.Magadum LIST OF WITNESSES EXAMINED ON BEHALF OF DEFENCE :
DW1 LIST OF DOCUMENTS MARKED ON BEHALF OF PROSECUTION :66 Spl.CC.No.1346/2019
Ex.P.1 The copy of FIR in Cr.No.239/2018 Ex.P.2 Complaint dated 27/06/2018 Ex.P.3 Charge sheet Ex.P.4 Letter annexed with two documents. Ex.P.5 Another letter written by the Commissioner of Police Ex.P.6 Provisional Attachment order dt.29/03/2019 Ex.P.6(a) Signature of PW4 in Ex.P.6 Ex.P.7 Complaint No.1110/2019 dt.29.03.2019 Ex.P.7(a) Signature of PW4 Ex.P.8 Complaint filed in Court.
Ex.P.9 ECIR dt.30/08/2018
Ex.P.10 Summons to accused
Ex.P.11 Summons to Ramya W/o accused
Ex.P.12 Summons to Lakshmamma W/o accused
Ex.P.13 Statement of accused
Ex.P.14 Statement of Ramya
Ex.P.15 Statement of Lakshmamma
Ex.P.16 Application to ACMM Court.
Ex.P.17 Intimation issued by I ACMM Court.
Ex.P.18 Letter to SubRegistrar, J.P.Nagar.
Ex.P.19 Letter by SubRegistrar to PW5
Ex.P.20 Encumbrance Certificate pertaining to
Sy.No.44/06.
Ex.P.21 Certified copy of the sale deed
dt.26/09/2008.
Ex.P.22 Certified copy of sale deed dt. 06/08/2015.
Ex.P.23 Encumbrance Certificate of Sy.No.44/06.
Ex.P.24 Certified copy of sale deed dt.26/06/2013.
Ex.P.25 Letter to SubRegistrar, Nagarbhavi
Ex.P.26 Letter from SubRegistrar, Nagarbhavi.
Ex.P.27 Certified copy of sale deed dt.05/10/2009
Ex.P.28 Certified copy of sale deed dt.14/09/2011
Ex.P.29 Certified copy of sale deed dt.18/01/2012
Ex.P.30 Certified copy of sale deed dt.19/01/2012
Ex.P.31 Certified copy of sale deed dt.21/12/2012
67 Spl.CC.No.1346/2019
Ex.P.32 Certified copy of sale deed dt.21/12/2012
Ex.P.33 Encumbrance Certificate pertaining to Site
No.641.
Ex.P.34 Encumbrance Certificate pertaining to Site
Nos.828A and 828B.
Ex.P.35 Encumbrance Certificate pertaining to Site
Nos.912 and 913
Ex.P.36 Letter by SubRegistrar, Nagarbhavi
dt.09/09/2019.
Ex.P.37 Encumbrance Certificate of Site Nos.828A
and 828B.
Ex.P.38 Encumbrance Certificate of Site bearing
No.641
Ex.P.39 Encumbrance Certificate of Site No.912.
Exs.P.40 Letters written by PW5 to SubRegistrar,
and 41 J.P.Nagar and Nagarbhavi
Exs.P.42 Three acknowledgements of Provisional
to 44 Attachment order.
Ex.P.45 Order passed by Adjudicating Authority in
O.C.No.1110/2019.
Ex.P.46 Letter to Jail Superintendent by PW5
Exs.P.47, Three notices issued under Sec.8(4) of 48 & 49 PMLA LIST OF DOCUMENTS MARKED ON BEHALF OF DEFENCE :
Ex.D.1 Certified copy of Judgment in SC No.341/2005 ( E.CHANDRAKALA ) XLVII Addl. City Civil & Sessions Judge and Special Judge for CBI Cases, Bengaluru.
**** 68 Spl.CC.No.1346/2019