Orissa High Court
Smt. Janata Jha And Another vs Assistant Director on 16 December, 2013
Author: M.M. Das
Bench: M.M. Das
ORISSA HIGH COURT: CUTTACK.
CRLMC No. 114 OF 2011
In the matter of an application under section 482 of the Code of
Criminal Procedure.
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Smt. Janata Jha and another ...... Petitioners
-Versus-
Assistant Director,
Directorate of Enforcement,
Government of India and another. ...... Opp. Parties
For Petitioners : M/s. Milan Kanungo,
S.Das, S.K.Mishra,
A.N. Das & Y.S.P. Babu.
For opp. parties : Mr. S.D. Das,
Asst. Solicitor General.
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Decided on 16.12.2013
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PRESENT :
THE HONOURABLE SHRI JUSTICE M.M. DAS
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M. M. DAS, J.This Criminal Misc. Case has been filed under section 482 of the Code of Criminal Procedure seeking quashing of the proceeding under section 3 of the Prevention of Money Laundering Act, 2002 (for short, 'the PMLA') initiated against the petitioners by the opp. party no. 1 vide Enforcement Case Information Report (ECIR) No. 14 of 2010 on the ground that the said proceeding is not only illegal and arbitrary, but also without jurisdiction in view of section 5(1) proviso (i) of the PMLA as well as for quashing of all consequential proceedings.
22 On the basis of letter No. 503/SR dated 9.4.2010 of the Superintendent of Police, Keonjhar forwarding a copy of an FIR filed under sections 307/357/387 IPC read with sections 25 and 27 of the Arms Act, 1959 along with the copies of the seizure reports and statements of prosecution witnesses recorded under section 161 Cr.P.C. relating to the petitioners, addressed to the Assistant Director, Directorate of Enforcement, Bhubaneswar, it being found that the petitioner no. 2 was involved in large scale smuggling of iron ores and acquired huge properties through illegal means and also through extortion by the concerned Investigating Officer, the petitioner no. 2 was arrested by the Barbil police and was detained under N.S.A. being lodged in Keonjhar Jail. Pursuant to an order passed by this Court, the opp. party no. 1 interrogated the accused - petitioner no. 2 in jail custody of 22.5.2010 in presence of the Superintendent of Keonjhar District Jail. Finding that the offences under sections 307/387 IPC as well as under sections 25 and 27 of the Arms Act 1959 are scheduled offences under the PMLA (as amended), the Directorate of Enforcement, Bhubaneswar registered the ECIR bearing No. 14/BBSR/ 2010 dated 8.5.2010 against the petitioner no.2 for initiating action under PMLA. Investigation was taken up under the said Act and it was found out during the investigation that the accused petitioner no. 2 had accounts in various Banks at Barbil, where huge amounts have been deposited. Account was also opened in the name of the petitioner no. 1. Details of the bank accounts were collected from 3 the respective banks which reflected the multiple entries showing huge transaction of money in the name of the petitioners. According to the Investigating Agency, none of the petitioners apparently had any legal source of income. The Banks were requested by the Assistant Director not to allow any debit from those accounts for smooth conduct of the investigation under the PMLA. Summons in terms of section 50 of the PMLA were issued pursuant to which witnesses were examined regarding criminal activities of the petitioner no.2.
3. The retention of the said amount in different bank accounts of the petitioners has been confirmed by the adjudicating authority under the PMLA, New Delhi on 23.9.2010 in O.C. No. 54 of 2010 after hearing both the parties. The Income Tax authorities have also seized the amount lying in the accounts of petitioner no.2 on 4.6.2010 for initiation of proceedings under the provisions of the Income Tax Act for which the amounts could not be seized under the PMLA at that point of time. Huge amounts have been deposited also in the name of the sons of the petitioners which have been found out during investigation and have been confirmed by the adjudicating authority under the Act in O.C. No. 96 of 2011 after hearing both the parties.
4. The present application, as stated earlier, has been filed to quash ECIR No. 14 of 2010.
In Misc. Case No. 84 of 2011 by order dated 9.2.2011, this Court, as an interim measure, directed that the investigation in ECIR No. 14 of 2010 pending before the Assistant Director of Enforcement, Government of India, Bhubaneswar may 4 continue, but the same shall not be concluded without leave of this Court.
5. In the prosecution report vides Annexure-1 in column (2) and column (7), it has been mentioned as follows:-
"2.Nature of Scheduled Offence - Attempt to murder, putting person in fear of injury in order to commit extortion-charged under sections 307 & 387 of IPC, read with Sections 25 & 27 of Arms Act falling under the list of Scheduled offences of the Prevention of Money Laundering Act, 2002 as amended.
Scheduled Act Sections of the Act Agency Investigating Scheduled Offences Indian Penal Code/ Arms Sections 307/353/387 read Superintendent of Act. with section 25 & 27 Arms Act Police, Keonjhar District , Orissa.
7. Material relating to commission of offence and reason to believe that an offence of money laundering has been committed and assessment thereof.
On 05.03.2010 Shri Krishna Chandra Parida son of late Natabar Parida Inspector in-charge of Barbil Police Station, District - Keonjhar lodged an FIR that he received an information on 06.03.2010 at 4 A.M. from his source to the effect that on 05.03.2010 at about 10 P.M. one Jiten @ Jitendra Jha of Station Road, P.S. - Barbil was terrorizing the business men at Barbil by a revolver on demand of Dada Buti. None of the locality dared to lodge any complain against the said Jiten @ Jitendra Jha. However, Sri Krisna Chandra Parida, Inspector in-charge of Barbil Police Station himself entered the above mentioned fact in Barbil police station diary on 6.3.2010 and left for the spot, i.e., house of Jiten @ Jitendra Jha of Barbil with S/Sri A.P. Kar, Sub-Inspector, B.Gidhi and S. Purohit, A.S.Is, Ram Chandra Patra, N.Mohanta, Habildars and other staff and conducted search in the house premises of said Jiten @ Jitendra Jha. During the course of search Jiten @ Jitendra Jha suddenly brought out a revolver kept under the pillow on his bed and fired aiming at police with a view to kill the police personnel but fortunately it missed hitting the police personnel conducting search there."
6. Mr. Kanungo, learned counsel for the petitioners submitted that the petitioners have explained in the petition as to how 5 they have acquired the amounts in the bank accounts. In view of such assertions, he submitted that it could not be said that the properties recovered from the house of the petitioners are proceeds of crime which have been projected as untainted within the meaning of section 3 of the PMLA and hence, the proceeding is illegal and arbitrary being contrary to law. He further submitted that both the petitioners have filed their Income tax returns disclosing the sources of income and profits for which tax has been paid.
7. Section 3 of the PMLA defines the offence of money laundering, which reads thus:
"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".
Section 5 of the PMLA provides attachment of property involved in money-laundering, which reads thus:
"5. Attachment of property involved in money- laundering- (1) When the Director or any other officer not below the rank of Deputy Director authorized by the Director for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that -
(a) any person is in possession of any proceeds of crime; and
(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed:6
Provided that no such order or attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person authorized to investigate the offence mentioned in that Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or a similar report or complaint has been made or filed under the corresponding law of any other country:
Provided further that, notwithstanding anything contained in clause
(b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorized by him for the purpose of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money laundering is not attached immediately under this Chapter, the non-attachment of the property is likely to frustrate any proceeding under this Act"
(2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.
(3) Every order of attachment made under sub-
section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier.
(4) Nothing in this section shall prevent the person interested in the enjoyment of the
immovable property attached under sub-section (1) from such enjoyment.
Explanation - For the purpose of this sub-
section, "person interested", in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.
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5. The Director or any other officer who provisionally attaches any property under sub- section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the "Adjudicating Authority". Section 17 (3) of the PMLA provides as follows:-
"17. Search and Seizure:- (1) and (2) xx xx (3) Where an authority, upon information obtained during survey under section 16, is satisfied that any evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing enter and search the building or place where such evidence is located and seize that evidence.
Provided that no authorization referred to in sub-section (1) shall be required for search under this sub-section".
8. Mr. Kanungo further submitted that it would be clear from the prosecution report that the opp. party no. 1 has conducted search and seizure on the basis of FIR lodged under section 154 Cr.P.C. by the police vide Annexure-2 even though the report under section 173 Cr.P.C. was not forwarded to the Magistrate and, therefore, the entire prosecution report including the search and seizure and attachment to the properties are illegal, being contrary to law. The evidences of the witnesses recorded by the opp. party no.1 are, therefore, also without authorization of law being contrary to the proviso to section 17 (3) of the PMLA. He also submitted that a parallel proceeding under section 131 of the Income Tax Act and Wealth Tax Act is pending for disposal in respect of the self-same property. Therefore, the present proceeding should be stayed till final disposal of the proceeding under the Income Tax Act.
9. It appears from the record that in the case initiated by the police which was ultimately tried by the learned Assistant 8 Sessions Judge, Keonjhar in S.T. Case No. 23/70 of 2011 and the learned Assistant Sessions Judge by his judgment dated 7.11.2011 has acquitted the petitioner no.2 (sole accused) from the offences for which he was charged and with regard to the property seized, returned a finding that the seized fire arm shall be submitted to the State armoury for its disposal and the seized cash, gold ornaments and foreign currency shall be at the disposal of the State Government and the claim of the accused for its return is to be decided by the Income Tax Department. The order of disposal of the seized revolver shall take effect after four months from expiry of the appeal period and shall be subject to the order in appeal, if any.
10. On the basis of such order of acquittal, Mr. Kanungo submitted that if the proceeding under the PMLA is allowed to proceed, it would amount to double jeopardy in respect of the petitioner no.2.
11. Mr. S.D. Das, learned Assistant Solicitor General appearing for the opp. parties 1 and 2, on the contrary, submitted that the ambit and scope of trial under the PMLA is totally different from that of the Indian Penal Code. In a case for offences under the Indian Penal Code under the criminal jurisprudence, it is for the prosecution to prove the guilt of the accused beyond reasonable doubt. But in a proceeding under the PMLA, the onus is on the accused to prove that the properties seized are untainted and not the proceedings of any crime. The offences, for which the petitioner no. 2 was tried, come under the schedule of the Act.
12. Considering the facts of the present case and the provisions of the PMLA (as amended), this Court is of the view that the 9 PMLA, being a Special Statute, it has overriding effect on the Income Tax Act and further considering the huge amounts of money, which are lying in the bank in the accounts of the petitioners as well as the nature of proceeding under the PMLA, more specifically, section 24 thereof, which provides with regard to burden of proof that when a person is accused of having committed offence under section 3, the burden of proving that the proceeds of crime are untainted property shall be on the accused, this Court is of the view that even if the petitioner no. 2 has been acquitted of the charges framed against him in the sessions trial, a proceeding under the PMLA 2002 cannot amount to double jeopardy, where the procedure and nature of proof are totally different from a criminal proceeding under the Indian Penal Code.
13. The Hon'ble Supreme Court in the case of Union of India v. Hassan Ali Khan and another,, while dealing with an order, by which the accused persons were granted bail by the High Court, in Criminal Appeal No. 1883 of 2011 (arising out of SLP (Crl.) No. 6114 of 2011) observed as follows:-
".................There is no denying the fact that allegations have been made that the said monies were the proceeds of crime and by depositing the same in his bank accounts, the respondent no.1 had attempted to project the same as untainted money. The said allegations may not ultimately be established, but having been made, the burden of proof that the said monies were not the proceeds of crime and were not, therefore, tainted shifted to the respondent no.1 under section 24 of the PML Act......."
14. In view of the above, this Court finds no reason to exercise its inherent power under section 482 Cr.P.C. to quash the 10 proceeding initiated under the PMLA against the petitioners. It may be made clear that the question as to whether the inherent power available under section 482 Cr.P.C. can be exercised for quashing a proceeding initiated under the IMLA or not, is left open.
15. In the result, the CRLMC, being devoid of merit, stands dismissed.
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M.M. Das, J.
Orissa High Court, Cuttack.
December 16th , 2013/Biswal.
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