Madras High Court
Saravanan vs The Assistant Director on 29 September, 2023
Author: M.Sundar
Bench: M.Sundar
Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 29.09.2023
CORAM
THE HONOURABLE MR.JUSTICE M.SUNDAR
and
THE HONOURABLE MR.JUSTICE R.SAKTHIVEL
Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023
and
Crl.M.P.Nos.7975, 9244, 9229, 9231, 9256, 9282 & 9283 of 2023
Saravanan
S/o.Palaniappan ... Petitioner in Crl.O.P.No.13132 of 2023
Preetha
W/o.Vijayananth ... Petitioner in Crl.O.P.No.14795 of 2023
Dwarkanathan Vijayakumar
S/o.Dwarkananthan ... Petitioner in Crl.O.P.No.14804 of 2023
Lakshmi Muthuraman
W/o.P.Saravanan ... Petitioner in Crl.O.P.No.14860 of 2023
Vijay Ananth
S/o.Vinayagamurthy ... Petitioner in Crl.O.P.No.14899 of 2023
Aravinth Raj
S/o.Muthukrishnan ... Petitioner in Crl.O.P.No.14901 of 2023
Vs.
The Assistant Director
Directorate of Enforcement
Government of India, Department of Revenue
Page Nos.1/58
https://www.mhc.tn.gov.in/judis
Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023
2nd and 3rd Floors, Murugesa Naicker Complex
No.84, Greams Road, Thousand Lights,
Chennai-600 006. ..Respondent in Crl.O.P.No.13132 of 2023
The Assistant Director
Office of the Joint Director
Directorate of Enforcement,
Chennai Zonal Office-I,
Government of India, 5th and 6th Floor
BSNL Administrative Building
Kushkumar Road, Nungambakkam
Chennai-600 034. ..Respondent in Crl.O.P.Nos.14795, 14804,
14860, 14899 & 14901 of 2023
Criminal Original Petition No.13132 of 2023 filed under Section 482
of Cr.PC praying to call for the records in summons issued by the respondent
police vide Summons No.PMLA/SUMMON/CEZO/2023/1152 in
ECIR/CEZO-I/63/2022 pending on the file of the respondent and quash the
same.
Criminal Original Petition No.14795 of 2023 filed under Section 482
of Cr.PC praying to call for the records in summons issued by the respondent
police vide Summons No.PMLA/SUMMON/CEZO/2023/1181 in
ECIR/CEZO-I/63/2022 pending on the file of the respondent and quash the
same.
Criminal Original Petition No.14804 of 2023 filed under Section 482
of Cr.PC praying to call for the records in summons issued by the respondent
police vide Summons No.PMLA/SUMMON/CEZO/2023/1180 in
ECIR/CEZO-I/63/2022 pending on the file of the respondent and quash the
same.
Page Nos.2/58
https://www.mhc.tn.gov.in/judis
Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023
Criminal Original Petition No.14860 of 2023 filed under Section 482
of Cr.PC praying to call for the records in summons issued by the respondent
police vide Summons No.PMLA/SUMMON/CEZO/2023/1184 in
ECIR/CEZO-I/63/2022 pending on the file of the respondent and quash the
same.
Criminal Original Petition No.14899 of 2023 filed under Section 482
of Cr.PC praying to call for the records in summons issued by the respondent
police vide Summons No.PMLA/SUMMON/CEZO/2023/1182 in
ECIR/CEZO-I/63/2022 pending on the file of the respondent and quash the
same.
Criminal Original Petition No.14901 of 2023 filed under Section 482
of Cr.PC praying to call for the records in summons issued by the respondent
police vide Summons No.PMLA/SUMMON/CEZO/2023/1183 in
ECIR/CEZO-I/63/2022 pending on the file of the respondent and quash the
same.
For Petitioner
in Crl.O.P.No.13132 of 2023 : Mr.N.R.Elango
Senior counsel
assisted by Mr.E.V.Chandru @
E.Chandrasekaran and
instructed by
Mr.R.Vivekananthan
Mr.S.Senthil Murugan
Ms.M.Kruthika
Mr.J.Mahesh
in Crl.O.P.Nos.14795, 14804
14860, 14899 & 14901 of 2023: Mr.N.R.Elango
Senior counsel
assisted by Mr.E.V.Chandru @
E.Chandrasekaran and
Page Nos.3/58
https://www.mhc.tn.gov.in/judis
Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023
instructed by
Mr.M.Nagoor Moideen
Mr.R.Krishna Kumar
Mr.C.Loganathan
Mr.S.Ganesh, Mr.K.Saravanan
For petitioner
in Crl.MP.No.9244 of 2023 :Mr.P.Vijendran
assisted by Ms.K.Mani Kuyil
For Respondent in all Crl.OPs
and
For Respondent No.1
in Crl.MP.9244 of 2023 : Mr.P.Sidharthan
Special Public Prosecutor (ED Cases)
along with
Mr.Cibi Vishnu
Special Public Prosecutor (ED Cases)
For Respondent No.2
in Crl.MP.9244 of 2023 :Mr.N.R.Elango
Senior counsel
assisted by Mr.E.V.Chandru @
E.Chandrasekaran and
instructed by
Mr.R.Vivekananthan
Mr.S.Senthil Murugan
Ms.M.Kruthika
Mr.J.Mahesh
COMMON ORDER
[Order of the Court was made by M.SUNDAR, J.,] This common order will now dispose of captioned 6 'main criminal original petitions' ('Crl.OPs' in plural and 'Crl.OP' in singular for the sake of Page Nos.4/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 brevity) and captioned 7 'criminal miscellaneous petitions' ('Crl.MPs' in plural and 'Crl.MP' in singular for the sake of brevity).
2. This common final order has to be read in conjunction with and in continuation of earlier proceedings made in earlier listings in captioned Crl.OPs and captioned Crl.MPs. We deem it appropriate to set out the proceedings / orders made in first of the captioned main Crl.OP, i.e., Crl.O.P.No.13132 of 2023 and Crl.MP thereat being proceedings / orders made in the listings on 12.06.2023 and 03.07.2023 {to be noted, there are two proceedings / orders dated 03.07.2023, (one in implead Crl.MP and another in main Crl.OP) and both have been extracted from the case file and reproduced infra} and common proceedings / orders made in captioned 6 Crl.OPs and 7 Crl.MPs in the previous listing on 27.09.2023 which read as follows:
Proceedings dated 12.06.2023:'Crl.O.P.No.13132 of 2023
and Crl.M.P.No.7975 of 2023 in Crl.O.P.No.13132 of 2023 M.SUNDAR, J., and Page Nos.5/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 K.GOVINDARAJAN THILAKAVADI, J., [Order of the Court was made by M.SUNDAR. J] Captioned 'Criminal Original Petition' [hereinafter 'Crl. OP' for the sake of convenience, clarity and brevity] has been filed with a prayer to quash summons issued by lone respondent being summons No.PMLA/SUMMON/CEZO/2023/1152 in ECIR/CEZO-1/63/2022 dated 29.05.2023.
2.Mr.N.R.Elango, learned Senior counsel appearing on behalf of counsel on record for petitioner submits, on instructions that summons directs appearance of petitioner on 01.06.2023 but the same has been rescheduled to 13.06.2023.
3. The central theme of captioned Crl.OP is that there can be no ECIR (Enforcement Case Information Report) under 'the Prevention of Money-Laundering Act, 2002' [hereinafter 'PMLA' for the sake of convenience and clarity] against an individual or entity when closure has been given to predicate offence; that in the case on hand, predicate offence is vide Crime No.187 of 2022 on the file of Chennai-CCB PS CCB-1 for alleged offences under Sections 406, 420, 465, 468, 471 and 120B of 'Indian Penal Code, 1860 (Act 45 of 1860)' ['IPC' for brevity]; that predicate offence was on the file of Metropolitan Magistrate for Exclusive Trial of CCB Cases [relating to cheating cases in Chennai] and CBCID Metro Cases, Chennai, wherein a closure was given vide an order dated 05.06.2023 pursuant to closure report dated 02.06.2023; that the closure report is based on de facto complainant and petitioner resorting to arbitration proceedings before Singapore International Arbitration Centre [SIAC] vide SIAC ARB No.113/22 BRP consolidated with Arb No.114/22 BRP; that proceedings before SIAC is underway; that when predicate offence has been given closure, there cannot be ECIR under PMLA as standalone proceedings and therefore, summons deserves to be interfered with is learned Senior counsel's say.
4. This Court having set out the crux and gravamen qua captioned Crl.OP, perused records and noticed that the aforementioned closure report dated 02.06.2023 captures arbitration proceedings before SIAC in paragraph No.7 and the same reads as follows:
'7) It is submitted that it is ascertained that the complainant's company initiated Arbitration Proceeding before the Singapore International Arbitration Centre (SIAC) vide SIAC ARB No.113/22 Page Nos.6/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 BRP consolidated with ARB No.114/22 BRP and the same is still pending before the Singapore International Arbitration Centre.'
5. It also comes to light that summons was originally issued before closure order but it is being proceeded with and pursued by respondent notwithstanding closure of predicate offence.
6. Learned Senior counsel, in support of the proposition that in the light of Section 3 of PMLA, there cannot be standalone ECIR proceedings when closure has been given to predicate offence (to be noted, this proposition is the sheet anchor submission of learned Senior counsel) relied on oft-quoted Vijay Madanlal Choudhary case [Vijay Madanlal Choudhary and Others Vs. Union of India and Others reported in 2022 SCC OnLine SC 929] rendered by Hon'ble Supreme Court and Harish Fabiani case [Harish Fabiani and Others Vs. Enforcement Directorate and Others reported in 2022 SCC OnLine Del 3121] rendered by a Hon'ble Division Bench of Delhi High Court. In Vijay Madanlal Choudhary case, conclusion is crystallized in paragraph No.467 and relevant portion is paragraph
(d) of sub-paragraph (v) of main paragraph No.467 which reads as follows:
'467. In light of the above analysis, we now proceed to summarise our conclusion on seminal points in issue in the following terms:—
(i) .....................
(ii) ....................
(iii) ...................
(iv) ...................
(v)(a) ..................
(b) .......................
(c) ......................
(d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-
laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and / or pending enquiry / trial including by way of criminal complaint before the competent forum. If the person is finally discharged / acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, Page Nos.7/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 there can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him.'
7. As regards Harish Fabiani case, a Hon'ble Division Bench of Delhi High Court in a case of similar factual matrix i.e., while dealing with a case of continuation of proceedings vide ECIR, despite predicate offence having been quashed by judgment of High Court of Bombay, quashed the ECIR proceedings inter alia by placing reliance on aforementioned Vijay Madanlal Choudhary principle.
8. To be noted, another Hon'ble Division Bench of this Court also vide order dated 01.11.2022 in W.P.No.10854 of 2020 and W.M.P.No.13179 of 2020 has taken a similar view.
9. In the light of the narrative thus far, prima facie case made out.
10. Issue notice.
11. Mr.S.Sasikumar, learned Special Public Prosecutor for Enforcement Directorate accepts notice for respondent and seeks three weeks time for filing objections.
12. As prima facie case has been made out and as it is clear that there is possibility of an irreversible situation if ECIR proceedings continue pending main Crl. OP, the balance of convenience is in favour of grant of interim order that has been sought for. Therefore, there shall be an interim order as prayed for in the captioned criminal miscellaneous petition [Crl.M.P.No.7975 of 2023 in Crl.O.P.No.13132 of 2023] insofar as the petitioner is concerned till next listing.
13. Request for three weeks time made by learned Prosecutor is acceded to.
14. List on 03.07.2023.' Proceedings dated 03.07.2023 made in Crl.M.P.No.9244 of 2023:
'Crl.M.P.No.9244 of 2023
in Crl.O.P.No.13132 of 2022 M.SUNDAR, J., and Page Nos.8/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 R.SAKTHIVEL, J., [Order of the Court was made by M.SUNDAR. J.,] Captioned 'Criminal Miscellaneous Petition' [hereinafter 'Crl.MP' for the sake of convenience and clarity] has been taken out by an individual, who has averred that he is a Journalist.
2. Captioned Crl.MP has been taken out with a prayer to implead the petitioner as respondent No.2 in the captioned main Crl.OP and Crl.MP.No.7975 of 2023 for interim stay thereat.
3. Mr.P.Vijendran, learned counsel on record for petitioner in captioned Crl.MP submits that the petitioner is a Journalist and he wants to implead himself and the aforementioned implead prayer is predicated on this plea.
4. Mr.P.Sidharthan, learned Special Public Prosecutor, who is before us accepts notice for first respondent and requests for time to get instructions and revert to this Court with objections, if any. As regards second respondent, learned counsel on record for petitioner in Crl.OP has already been served.
5. Mr.N.R.Elango, learned Senior counsel appearing on behalf of counsel on record for second respondent submits that the counsel on record who has been served with advance copy needs time to file a detailed counter affidavit opposing the implead prayer.
6. List the captioned implead petition after three weeks. List on 28.07.2023.' Proceedings dated 03.07.2023 made in Crl.O.P.No.13132 of 2023:'Crl.O.P.No.13132 of 2022
and Crl.M.P.No.7975 of 2023 in Crl.O.P.No.13132 of 2023 M.SUNDAR, J., and R.SAKTHIVEL, J., [Order of the Court was made by M.SUNDAR. J.,] Page Nos.9/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 Read this in conjunction with and in continuation of earlier proceedings made in the previous listing on 12.06.2023 which reads as follows:
'Captioned 'Criminal Original Petition' [hereinafter 'Crl. OP' for the sake of convenience, clarity and brevity] has been filed with a prayer to quash summons issued by lone respondent being summons No.PMLA/SUMMON/CEZO/2023/1152 in ECIR/CEZO-1/63/2022 dated 29.05.2023.
2.Mr.N.R.Elango, learned Senior counsel appearing on behalf of counsel on record for petitioner submits, on instructions that summons directs appearance of petitioner on 01.06.2023 but the same has been rescheduled to 13.06.2023.
3. The central theme of captioned Crl.OP is that there can be no ECIR (Enforcement Case Information Report) under 'the Prevention of Money-Laundering Act, 2002' [hereinafter 'PMLA' for the sake of convenience and clarity] against an individual or entity when closure has been given to predicate offence; that in the case on hand, predicate offence is vide Crime No.187 of 2022 on the file of Chennai-CCB PS CCB-1 for alleged offences under Sections 406, 420, 465, 468, 471 and 120B of 'Indian Penal Code, 1860 (Act 45 of 1860)' ['IPC' for brevity]; that predicate offence was on the file of Metropolitan Magistrate for Exclusive Trial of CCB Cases [relating to cheating cases in Chennai] and CBCID Metro Cases, Chennai, wherein a closure was given vide an order dated 05.06.2023 pursuant to closure report dated 02.06.2023; that the closure report is based on de facto complainant and petitioner resorting to arbitration proceedings before Singapore International Arbitration Centre [SIAC] vide SIAC ARB No.113/22 BRP consolidated with Arb No.114/22 BRP; that proceedings before SIAC is underway; that when predicate offence has been given closure, there cannot be ECIR under PMLA as standalone proceedings and therefore, summons deserves to be interfered with is learned Senior counsel's say.
4. This Court having set out the crux and gravamen qua captioned Crl.OP, perused records and noticed that the aforementioned closure report dated 02.06.2023 captures arbitration proceedings before SIAC in paragraph No.7 and the same reads as follows:
'7) It is submitted that it is ascertained that the complainant's company initiated Arbitration Proceeding before the Singapore International Arbitration Centre (SIAC) vide SIAC ARB No.113/22 Page Nos.10/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 BRP consolidated with ARB No.114/22 BRP and the same is still pending before the Singapore International Arbitration Centre.'
5. It also comes to light that summons was originally issued before closure order but it is being proceeded with and pursued by respondent notwithstanding closure of predicate offence.
6. Learned Senior counsel, in support of the proposition that in the light of Section 3 of PMLA, there cannot be standalone ECIR proceedings when closure has been given to predicate offence (to be noted, this proposition is the sheet anchor submission of learned Senior counsel) relied on oft-quoted Vijay Madanlal Choudhary case [Vijay Madanlal Choudhary and Others Vs. Union of India and Others reported in 2022 SCC OnLine SC 929] rendered by Hon'ble Supreme Court and Harish Fabiani case [Harish Fabiani and Others Vs. Enforcement Directorate and Others reported in 2022 SCC OnLine Del 3121] rendered by a Hon'ble Division Bench of Delhi High Court. In Vijay Madanlal Choudhary case, conclusion is crystallized in paragraph No.467 and relevant portion is paragraph
(d) of sub-paragraph (v) of main paragraph No.467 which reads as follows:
'467. In light of the above analysis, we now proceed to summarise our conclusion on seminal points in issue in the following terms:—
(i) .....................
(ii) ....................
(iii) ...................
(iv) ...................
(v)(a) ..................
(b) .......................
(c) ......................
(d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-
laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and / or pending enquiry / trial including by way of criminal complaint before the competent forum. If the person is finally discharged / acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, Page Nos.11/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 there can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him.'
7. As regards Harish Fabiani case, a Hon'ble Division Bench of Delhi High Court in a case of similar factual matrix i.e., while dealing with a case of continuation of proceedings vide ECIR, despite predicate offence having been quashed by judgment of High Court of Bombay, quashed the ECIR proceedings inter alia by placing reliance on aforementioned Vijay Madanlal Choudhary principle.
8. To be noted, another Hon'ble Division Bench of this Court also vide order dated 01.11.2022 in W.P.No.10854 of 2020 and W.M.P.No.13179 of 2020 has taken a similar view.
9. In the light of the narrative thus far, prima facie case made out.
10. Issue notice.
11. Mr.S.Sasikumar, learned Special Public Prosecutor for Enforcement Directorate accepts notice for respondent and seeks three weeks time for filing objections.
12. As prima facie case has been made out and as it is clear that there is possibility of an irreversible situation if ECIR proceedings continue pending main Crl. OP, the balance of convenience is in favour of grant of interim order that has been sought for. Therefore, there shall be an interim order as prayed for in the captioned criminal miscellaneous petition [Crl.M.P.No.7975 of 2023 in Crl.O.P.No.13132 of 2023] insofar as the petitioner is concerned till next listing.
13. Request for three weeks time made by learned Prosecutor is acceded to.
14. List on 03.07.2023.'
2. Today. Crl.MP.No.9244 of 2023 in Crl.O.P.No.13132 of 2023 with implead prayer has been taken out by an individual on the basis that he is a Journalist.
3. Mr.P.Sidharthan, learned Prosecutor requested for three weeks time to get instructions as regards implead prayer.
4. In the light of the narrative thus far, list captioned matters on 28.07.2023. Interim order already granted on 12.06.2023 more particularly as set out in paragraph No.12 of 12.06.2023 proceedings / orders to continue until next listing.
List on 28.07.2023.' Page Nos.12/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 Proceedings dated 27.09.2023 :
'Crl.O.P.Nos.13132, 14795, 14804, 14860, 14901 & 14899 of 2023 and Crl.M.P.Nos.7975, 9244, 9229, 9231, 9256, 9282 & 9283 of 2023 M.SUNDAR, J.
and R.SAKTHIVEL, J.
[Order of the Court was made by M.SUNDAR, J.] As regards the captioned matters, there are six main 'Criminal Original Petitions' ['Crl.OPs' in plural and 'Crl.OP' in singular for the sake of convenience and clarity]. In each main Crl.OP, there is a ‘Criminal Miscellaneous Petition’ ['Crl.MP' for the sake of brevity] for interim stay and interim orders already granted and extended are operating. One of captioned Crl.MPs viz., Crl.M.P.No.9244 of 2023 in main Crl.O.P.No.13132 of 2023 has been taken out by a third party with a prayer to implead the petitioner thereat as second respondent in that main Crl.OP. This Crl.MP i.e., 'Crl.M.P.No.9244 of 2023' shall be referred to as 'implead Crl.MP' for the sake of convenience and clarity.
2. Mr.N.R.Elango, learned Senior Advocate assisted by Mr.E.V.Chandru @ Chandrasekar, learned counsel, instructed by Mr.R.Vivekananthan, Ms.M.Kruthika, Mr.M.Nagoor Moideen and Mr.R.Krishna Kumar, learned counsel on record for the petitioners in all six captioned Crl.OPs adverted to earlier proceedings made in the previous listings and made further submissions which shall be captured elsewhere infra in this order.
3. To be noted, this proceedings shall be read in conjunction with and in continuation of earlier proceedings made in the previous listings. In other words, proceedings made in the previous listings shall be read as an integral part and parcel of this proceedings.
4. Learned Senior Counsel for petitioners adverting to the earlier proceedings made the following further submissions:
(i) In a case with similar factual matrix, another Hon’ble Co-
ordinate Division Bench of this Court made a similar interim order dated 13.04.2023 in a W.M.P. in W.P.No.10901 of 2023. This Page Nos.13/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 13.04.2023 interim order was assailed in Hon’ble Supreme Court by the 'Enforcement Directorate' [‘ED’ for the sake of brevity] vide Special Leave Petition in S.L.P.(Criminal) Diary No.28128 of 2023 and Hon’ble Supreme Court in and by order dated 18.09.2023 noticed that F.I.R. qua predicate offence had been quashed on 10.05.2023 after the 13.04.2023 interim order. The SLP was dismissed as withdrawn having become infructuous saying that ED will be entitled to take such steps as may be permissible in law, if the quash order is overturned and the proceedings are revived. Therefore the principle laid down by Hon'ble Supreme Court is, when predicate offence perish ECIR vide PMLA proceedings also will go as the two are coterminous is his further say;
(ii) Learned Senior Counsel submitted that prior to 18.09.2023 order of Hon’ble Supreme Court, on 14.09.2023, this Bench in Anil Jain’s case in a similar factual matrix acceded to a prayer for closing/dropping all proceedings against the petitioner, i.e., ECIR proceedings. It was submitted that in Anil Jain’s case also this Bench has put in a similar caveat. To be noted, such similar caveat was put in by this Bench by respectfully following orders of Hon’ble Supreme Court in Emta Coal;
(iii) As regards implead Crl.MP, learned Senior Counsel submitted that a perusal of the affidavit of the implead petitioner would show that (a) even according to the implead petitioner, the de- facto complainant has entered into a settlement and had given a withdrawal letter dated 26.05.2023 itself; (b) the burden of the song in the support affidavit qua implead prayer is one assailing/complaining about closure of predicate offence and it really does not pertain to PMLA proceedings/ECIR;
(iv) There are two criminal cases against the implead petitioner, namely, F.I.R.No.763 of 2023 dated 18.08.2023 and F.I.R.No.303 of 2023 dated 20.08.2023 both on the file of Pallikaranai Police Station and the implead petitioner has been remanded in these cases.
5. Mr.P.Vijendran, learned counsel for implead petitioner made the following submissions:
(i) There is no dispute about the factum of two criminal cases and remand of implead petitioner but according to learned counsel, they are trumped up foisted cases;
(ii) On the basis of Section 301 clause (2) of ‘Code of Criminal Procedure’ [‘Cr.P.C.’ for the sake of brevity] the petitioner Page Nos.14/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 has got locus to seek impleadment.
6. As regards learned Special Public Prosecutor, Mr.P.Sidharthan made the following submissions:
(i) Reliance was placed on paragraph 269 of Vijay Madanlal’s case [to be noted, para 269 as in SCC OnLine report i.e., 2022 SCC OnLine SC 929] to say that even a bare reading of language of Section 3 of the ‘Prevention of Money Laundering Act, 2002’ [hereinafter ‘PMLA Act’ for the sake of convenience and clarity], money laundering is an independent offence;
(ii) Even according to the settlement agreement made in ‘SIAC’ [Singapore International Arbitration Centre], the settlement amount has actually not changed hands and according to learned Special Public Prosecutor this is proceeds of the crime. This according to learned Special Public Prosecutor is the distinguising feature qua Anil Jain’s case;
(iii) The argument that the closure was on 05.06.2023 close on the heels of summons to the petitioner was made but this was put to rest as it was pointed out that the settlement arrived at i.e., Memorandum of Understanding (MOU) even as seized by ED is dated 18.01.2023.
7. Mr.R.Vivekananthan, learned counsel for petitioner in Crl.OP (Crl.O.P.No.13132 of 2023) submitted that he will file the details of two criminal cases qua implead petitioner in the Registry and bring it on board. To be noted, Mr.P.Vijendran, learned counsel for implead petitioner has been favoured with a copy of the same. Let it be brought on board.
8. List day after tomorrow. List on 29.09.2023.'
3. Aforementioned proceedings capture short facts and bring out the trajectory the captioned matter has taken thus far which serve as essentials for appreciating this final order and therefore, we are not setting out the same again in this final order. Suffice to say that all proceedings / orders made in the previous listings of the captioned matters (including proceedings / orders Page Nos.15/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 made in lead case i.e., Crl.O.P.No.13132 of 2023 and Crl.MP thereat which has also been extracted and reproduced supra) shall be read as an integral part and parcel of this final order. This also means that short forms, short references and abbreviations used in the previous proceedings / orders shall be used in the instant final order also for the sake of convenience and clarity.
4. As would be evident from earlier proceedings, we have to deal with Crl.M.P.No.9244 of 2023 in Crl.O.P.No.13132 of 2023 first as that will decide the question of whether the petitioner therein has to be impleaded and / or heard or not. Before we commence this legal drill, we deem it appropriate to record that pursuant to the proceedings made in the previous listing on 27.09.2023, today petitioner has brought on record a typed set which consists of two FIRs namely, FIR No.763 of 2023 dated 18.08.2023 on the file of Pallikaranai Police Station and FIR No.303 of 2023 dated 20.08.2023 on the file of Chitlapakkam Police Station. Mr.N.R.Elango, learned Senior counsel for petitioner, on instructions, submitted that he is not pressing this point and giving up this point in his opposition to the implead prayer in Crl.M.P.No.9244 of 2023. Learned counsel on record has made an endorsement in the typed set and a scanned reproduction of the endorsement Page Nos.16/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 made by counsel on record for second respondent in Crl.M.P.No.9244 of 2023 is as follows:
This leaves us the argument qua implead prayer in Crl.M.P.No.9244 of 2023 sans the two FIRs and criminal complaints against the implead petitioner.
5. Mr.P.Vijendran, learned counsel for implead petitioner relied heavily on clause (2) of Section 301 of Cr.P.C which reads as follows:
'301. Appearance by Public Prosecutors -
(1) ...........................
(2) If in any such case any private person instructs a pleader to prosecute any person in any Court, the Public Prosecutor or Assistant Public Prosecutor in charge of the case shall conduct the prosecution, and the pleader so instructed shall act therein under the directions of the Public Prosecutor or Assistant Public Prosecutor, and may, with the permission of the Court, submit written arguments after the evidence is closed in the case.'
6. Adverting to clause (2) of Section 301 of Cr.PC, learned counsel for Page Nos.17/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 implead petitioner submitted that when any private person instructs a Pleader to prosecute any person in a Court, learned Public Prosecutor or Assistant Public Prosecutor as the case may, shall conduct the prosecution and Pleader shall be instructed i.e., instructed by a private person may with permission of the Court file written arguments after evidence is closed in the case. Learned counsel submitted that the implead petitioner is a journalist by avocation, he is a public-spirited person, he has espoused public causes and in this backdrop he has instructed a Pleader to prosecute. In support of his argument, learned counsel pressed into service Soshit Karamchari case [Akhil Bharatiya Soshit Karamchari Sangh (Railway), represented by its Assistant General Secretary Vs. Union of India and others reported in (1981) 1 SCC 246] and Fertilizer Corporation case [Fertilizer Corporation Kamgar Union (Regd.) Sindri and others Vs. Union of India and others reported in (1981) 1 SCC 568]. Learned counsel Mr.P.Vijendran drew the attention of this Court to paragraph No.62 of Soshit Karamchari case and paragraph No.23 of Fertilizer Corporation case which read as follows:
Paragraph No.62 of Soshit Karamchari case :
'62. A technical point is taken in the counter-affidavit that petitioner 1 is an unrecognised association and that, therefore, the petitioner to that extent, is not sustainable. It has to be overruled.Page Nos.18/58
https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 Whether the petitioners belong to a recognised union or not, the fact remains that a large body of persons with a common grievance exists and they have approached this Court under Article 32. Our current processual jurisprudence is not of individualistic Anglo- Indian mould. It is broad-based and people-oriented, and envisions access to justice through "class actions", "public interest litigation" and "representative proceedings". Indeed, little Indians in large numbers seeking remedies in Courts through collective proceedings, instead of being driven to an expensive plurality of litigations, is an affirmation of participative justice in our democracy. We have no hesitation in holding that the narrow concept of "cause of action" and "person aggrieved" and individual litigation is becoming obsolescent in some jurisdictions. It must fairly be stated that the learned Attorney-General has taken no objection to a non-recognised association maintaining the writ petitions.' Paragraph No.23 of Fertilizer Corporation case:
'23. That disposes of the question as regards the maintainability of the writ petition. But, we feel concerned to point out that the maintainability of a writ petition which is correlated to the existence and violation of a fundamental right is not always to be confused with the locus to bring a proceeding under Article 32. These two matters often mingle and coalesce with the result that it becomes difficult to consider them in watertight compartments. The question whether a person has the locus to file a proceeding depends mostly and often on whether he possesses a legal right and Page Nos.19/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 that right is violated. But, in an appropriate case, it may become necessary in the changing awareness of legal rights and social obligations to take a broader view of the question of locus, to initiate a proceeding, be it under Article 226 or under Article 32 of the Constitution. If public property is dissipated, it would require a strong argument to convince the Court that representative segments of the public or at least a section of the public which is directly interested and affected would have no right to complain of the infraction of public duties and obligations. Public enterprises are owned by the people and those who run them are accountable to the people. The accountability of the public sector to Parliament is ineffective because the parliamentary control of public enterprises is "diffuse and haphazard". We are not too sure if we would have refused relief to the workers if we had found that the sale was unjust, unfair or mala fide.'
7. Mr.P.Sidharthan, learned Special Public Prosecutor for the Enforcement Directorate (ED) has filed a terse counter and we deem it appropriate to extract and reproduce the same :
'COUNTER AFFIDAVIT FILED BY THE ABOVE-
NAMED RESPONDENT I, Deepak Rajput, S/o Shri Vijay Kumar Thakur, aged about 35 years, employed as Assistant Director, Chennai Zonal Office, Directorate of Enforcement, Ministry of Finance, Department of Revenue, having office at No.2, 5th Page Nos.20/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 and 6th Floor, BSNL Administrative Building, Kushkumar Road, Nungambakkam, Chennai 600034, do hereby solemnly affirms and sincerely state as follows:
RESPECTFULLY SHOWETH:-
1. I humbly submit that I am the Respondent in the instant Criminal Miscellaneous Petition and as well as the investigation officer of the case; I have read the affidavit filed in this petition filed by the Petitioner/Accused herein. I am well conversant with the facts of the case and I have been authorised to file this counter affidavit on behalf of the Directorate of Enforcement against the present petition before this Hon'ble Court.
2. I submit that the Directorate of Enforcement, Govt. of India, is a specialized investigating agency and is entrusted with the investigation in respect of the offence of money laundering as defined under Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA) which is punishable under Section 4 of the PMLA. I submit that I am presently the investigation officer in the crime recorded by the Directorate of Enforcement under PMLA in ECIR/CEZO-1/63/2022.
3. In the present implead prayer which been taken out by petitioner on the basis that he is journalist, it is submitted that that this Directorate has no objections, if, this Hon'ble Court wants to hear the submissions of the said Petitioner.' Page Nos.21/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023
8. Adverting to aforementioned counter affidavit and more particularly, paragraph No.3 thereat, learned Special Public Prosecutor submitted that ED has no objection, if this Hon'ble Court wants to hear the submissions of implead petitioner. Learned Special Public Prosecutor brought to our notice a judgement rendered by a Hon'ble single Judge of this Court on 06.04.2004 in Srinath Prasad case [Srinath Prasad Vs. State reported in 2004 SCC OnLine Mad 930 : 2004 Cri LJ 3635] and supported the contention of implead petitioner that he (implead petitioner) is entitled to join the fray in the light of clause (2) of Section 301 of Cr.P.C.
9. Mr.N.R.Elango, learned Senior counsel instructed by counsel on record for petitioner in main Crl.OP (second respondent in the implead petition, i.e., Crl.M.P.No.9244 of 2023) submitted that clause (2) of Section 301 of Cr.P.C. operates in the arena of victimology which is part of evolved form of criminal jurisprudence (a recent phenomenon) but victimology has no application qua implead petitioner and therefore, this facet of criminal jurisprudence does not come to implead petitioner's aid is his further say. In support of his contention, learned Senior counsel drew our attention to proviso to Section 372, Section 2(wa) and proviso to Section 24(8) of Cr.PC.Page Nos.22/58
https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 Learned Senior counsel submitted that all these provisions have been brought into Cr.PC by way of an amendment and the same kicked in on 31.12.2009 and argued that it is clear that a person who wants to come on board qua criminal proceedings vide clause (2) of Section 301 of Cr.PC should be in the realm of a victim and in the case on hand, the implead petitioner (as already alluded to and as already delineated) does not fall in this umbra nay not even penumbra as his case is, he is a journalist espousing public cause. Be that as it may, a perusal of implead petition support affidavit brings to light that implead petitioner's case is, he claims to be aggrieved by the closure of predicate offence. It is always open to implead petitioner to work out his remedies, if any, if available in law but that will not bolster the petitioner's argument to implead himself in the case on hand is learned Senior counsel's say. Learned Senior counsel, in this regard, submitted that the burden of the song in implead affidavit is qua closure of predicate offence and not PMLA proceedings and this seen in the light of the aforementioned three provisions which were brought into Cr.PC on and from 31.12.2009 nullifies the implead prayer. In this regard, a judgement of Hon'ble Supreme Court in Rekha Murarka case [Rekha Murarka Vs. State of West Bengal and another reported in (2020) 2 SCC 474] rendered on Page Nos.23/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 20.11.2019 was pressed into service to say that a person has to be a victim to get the benefit of clause (2) of Section 301 of Cr.PC and in any event even that benefit is only in the course of trial.
10. We now commence the discussion and dispositive reasoning part of legal drill as regards implead prayer. As regards Soshit Karamchari case, on facts that was a matter pertaining to promotion in Railway Administration qua disadvantaged section of the Society and in this fact setting eloquent articulation of Hon'ble Mr.Justice V.R.Krishna Iyer was made vide paragraph No.62 to which our attention is drawn (extracted and reproduced supra). Likewise, Fertilizer Corporation (to be noted, paragraph No.23 which was pressed into service has already been extracted and reproduced supra) pertains to retrenchment and termination of service due to abolition of posts. Petitioner challenged legality of the sale of certain plant and equipment of the Sindri Fertilizer Factory and in the backdrop of this factual matrix, 'person aggrieved' was viewed in a expansive perspective. In this regard, we respectfully remind ourselves of declaration of law by Hon'ble Supreme Court in the celebrated Padma Sundara Rao case [Padma Sundara Rao Vs. State of Tamil Nadu reported in (2002) 3 SCC 533]. Relevant paragraph in Page Nos.24/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 Padma Sundara Rao case is Paragraph No.9 which reads as follows:
'9. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington v. British Railways Board [(1972) 2 WLR 537 :
1972 AC 877 (HL) [Sub nom British Railways Board v. Herrington, (1972) 1 All ER 749 (HL)]] . Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases.'
11. Therefore, we are of the considered view that aforementioned two case laws, i.e., Soshit Karamchari and Fertilizer Corporation are clearly completely different as regards factual matrix operating in different realm do not come to the aid of the implead petitioner in the case on hand. Be that as it may, Mr.P.Vijendran, learned counsel for implead petitioner in his effort and endeavour to persuade us to accede to implead prayer placed before us two more case laws, i.e., judgments of Hon'ble Supreme Court. One is Jagjeet Singh case [Jagjeet Singh and Others Vs. Ashish Mishra @ Monu and another reported in (2022) 9 SCC 321] and another is R.Rathinam case Page Nos.25/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 [R.Rathinam Vs. State and another reported in (2000) 2 SCC 391]. R.Rathinam was a case in which factual matrix has been described by Hon'ble Supreme Court as a 'carnage' in a District in Tamil Nadu and which has also been described as a 'gory episode' where 6 persons belonging to a particular community were done to death. In such a social cause scenario, 75 public-spirited advocates of this Court presented two petitions before the then Hon'ble Chief Justice for cancellation of bail granted to the persons concerned. Therefore, R.Rathinam case is entirely in a different context and scenario, i.e., fact setting which does not come to the aid of the petitioner and likewise Jagjeet Singh case pertains to a case where farmers returning home after protest was epicentre of the matter, several farmers had gathered to celebrate the birth anniversary of Sardar Bhagat Singh and to protest against the Agricultural Acts of 2020. Be that as it may, we notice that Soshit Karamchari case, Fertilizer Corporation case as well as R.Rathinam case were rendered prior to 31.12.2009 before the aforementioned amendments kicked in qua Cr.PC. In this view of the matter also, they do not come to the aid of the petitioner. However, as regards Jagjeet Singh case, it is post amendment i.e., rendered in 2022 and what Jagjeet Singh case deals with is, right of a victim. This has been elucidatively articulated by Hon'ble Supreme Page Nos.26/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 Court in paragraph Nos.14 and 15 of Jagjeet Singh case which read as follows:
'ANALYSIS
14. Having heard learned Senior Counsels for the parties at considerable length, we find that the following questions fall for our consideration:
14.1. (A) Whether a 'victim' as defined under Section 2(wa) of the Code of Criminal Procedure, 1973 (hereinafter 'Cr.P.C.") is entitled to be heard at the stage of adjudication of bail application of an accused?
14.2. (B) Whether the High Court overlooked the relevant considerations while passing the impugned order granting bail to the Respondent-Accused?;
14.3. (C) If so, whether the High Court's order dated 10.02.2022 is palpably illegal and warrants interference by this Court?
A. Victim's right to be heard:
15. Until recently, criminal law had been viewed on a dimensional plane wherein the Courts were required to adjudicate between the accused and the State. The 'victim' - the de facto sufferer of a crime had no participation in the adjudicatory process and was made to sit outside the Court as a mute spectator.
However, with the recognition that the ethos of criminal justice dispensation to prevent and punish 'crime' had surreptitiously turned its back on the 'victim', the jurisprudence with respect to the Page Nos.27/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 rights of victims to be heard and to participate in criminal proceedings began to positively evolve.' This Court has no hesitation in saying that victimology has no application to implead petitioner.
12. In Srinath Prasad case, pressed into service by learned Prosecutor (alluded to supra) a petition was filed for suspension of sentence pending appeal, an earlier petition filed by the petitioner for a similar relief was dismissed. In the earlier round, P.W.1 (father-in-law of the petitioner) filed an intervening petition and an order was passed after hearing both petitioner and intervenor. In the second petition, it was contended by petitioner that intervenor has no right to intervene and it is a matter between the court and the petitioner and if at all, only the prosecution can object and not P.W.1. Learned counsel for intervenor submitted that grievance of the individual cannot be overlooked and he has right to intervene at the stage of suspension of sentence. This Court held that a private person has no right of audience except to assist the prosecution and to file a written argument during trial. Therefore, at the stage of suspension of execution of sentence, the private party has no right of audience and at the highest, he can assist the Page Nos.28/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 prosecution and submit written arguments at the stage of final hearing of the appeal. In any event, Srinath Prasad is completely distinguishable on facts as it was intervenor petition by a father-in-law in sections 498-A and 308 IPC case {Husband or relative of husband of a woman subjecting her to cruelty and Attempt to commit culpable homicide}.
13. As regards the facts in Rekha Murarka case, the appellant is the widow of one Gyan Prakash Murarka (the deceased) who is alleged to have been stabbed and murdered by second respondent and appellant was also injured while trying to save her husband. While the evidence was being recorded, the appellant sought an expeditious trial of the case, which was allowed and subsequently, she filed another application under Section 301 read with the proviso to Section 24(8) of the Cr.PC inter-alia seeking to advance oral argument in support of question of law and fact only after the learned Public Prosecutor, if so required and to raise objection in case any irrelevant question is put to any prosecution witness, if so required. Hon'ble Supreme Court held that if the victim's counsel feels that a certain aspect has gone unaddressed in the examination of the witnesses or the arguments advanced by the Public Prosecutor, he may route any questions or points Page Nos.29/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 through the Public Prosecutor himself. This would not only preserve the paramount position of the Public Prosecutor under the scheme of CrPC, but also ensure that there is no inconsistency between the case advanced by the Public Prosecutor and the victim's counsel. In this case law cited by learned senior counsel also fact setting is different. Be that as it may, general principle is paramount position of Public Prosecutor vide Cr.PC scheme should be preserved.
14. We now turn to the second limb of argument of second respondent (petitioner in main Crl.OP). A careful perusal of support affidavit qua implead petition makes it clear that burden of the song qua implead petitioner is grievance about the closure of complaint qua predicate offence. Therefore, we are of the view that implead prayer does not appeal to us owing to facts and circumstances of the case. We have already noticed, scanned and reproduced the counter affidavit filed by ED. ED does not oppose implead prayer. This means that the implead petition namely, Crl.M.P.No.9244 of 2023 is dismissed.
15. We now move on to the main matters. This court notices from the Page Nos.30/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 submissions that the argument of ED in the case on hand is distinguishable qua Anil Jain case primarily on the ground that the settlement money has not changed hands. As regards settlement money, it hardly matters, as closure of predicate offence is qua a settlement in what is purely a private transaction between private persons / entities where no public money is involved. To be noted, closure happened on 05.06.2023. On the facts of the case, we find that it is a transaction between two private entities on one side and private individual on the other. Therefore, it is a matter where we are unable to convince ourselves regarding proceeds of crime theory as it is nobody's case that public money is involved. In this private transaction, the matter ran into rough weather and the parties chose to go for 'ADR' ['Alternate Dispute Resolution'] mechanism by way of Arbitration before 'Singapore International Arbitration Centre' ['SIAC'] as already alluded to supra.
16. To put it differently, we find that this is a case where there is nothing to demonstrate that there is 'proceeds of crime'. This is a private transaction between private individuals / entities and the two individuals /entities have chosen to resort to ADR [Alternative Disputes Resolution] i.e., arbitration by SIAC [Singapore International Arbitration Centre]. In the Page Nos.31/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 course of arbitration by SIAC, the private entities / individuals have chosen to give a closure to the dispute by entering into a Memorandum of Understanding / Settlement. This Court is also acutely conscious of the position that an Arbitration Tribunal (SIAC) is a Private Tribunal and as far as this Court is concerned, the paramount consideration is, this is not a matter where it is anybody's case, much less the case of prosecution that public money is involved. In SIAC, in the course of arbitration proceedings, a memorandum of understanding was entered into on 18.01.2023 as between the adversaries and this memorandum of understanding where the parties settled the issue amongst themselves was the basis of a letter from defacto complainant which lead to closure report which was accepted by the Court hearing the predicate offence case. In this view of the matter, the argument of learned Prosecutor that proceeds of crime have not changed hands becomes a non starter.
17. Learned Prosecutor submitted that the closure is post summons to the petitioner. Learned Prosecutor drew our attention to summons dated 29.05.2023 calling upon the petitioner to appear on 01.06.2023 qua Crl.O.P.No.13132 of 2023 and earlier summons dated 30.04.2023. This Page Nos.32/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 really does not carry the matter any further for the learned Prosecutor as the settlement has been arrived at on 18.01.2023 itself even according to the document seized by ED as rightly pointed out by learned Senior counsel.
18. As regards an interim order made by another Hon'ble coordinate Division Bench which was carried to Hon'ble Supreme Court and order made by Hon'ble Supreme Court as there was closure in the interregnum, the same has been captured in the previous proceedings which has been set out supra which is now being read as an integral part and parcel of this final order. In addition to this, it was also pointed out that Hon'ble Bombay High Court in Akbar Travels case [Directorate of Enforcement Vs. State of Maharashtra and others in Crl.WP(ST) No.3122 of 2020] in and by order dated 21.12.2020 addressed itself to the question as to the locus of ED qua a closure report filed by State i.e., State of Maharashtra in Akbar Travels case and concluded that ED is an independent investigating agency empowered to investigate offences under PMLA and cannot be termed as victim aggrieved / injured or interested person having regard to judicial pronouncements. This order of Bombay High Court was carried to Hon'ble Supreme Court by ED vide SLP (Crl.) No.5524 of 2021 and Hon'ble Supreme Court in and by order Page Nos.33/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 dated 26.09.2022 refused to interfere with the order of Bombay High Court and dismissed the SLP making a clear observation that rights and remedies can be availed in accordance with law. We also respectfully notice that the question of law if any has been kept open. Therefore, it may not be necessary to delve much into those aspects of the matter and it would suffice if we deal with Anil Jain case. Anil Jain case made by this Court in W.P.No.3167 of 2023 has been reported in 2023 : MHC : 4314 (Neutral Citation of Madras High Court) and a scanned reproduction of the same is as follows:
Page Nos.34/58
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19. A careful perusal of Anil Jain case will make it clear that Vijay Madanlal principle [Vijay Madanlal Choudhary and others vs. Union of India and others reported in 2022 SCC OnLine SC 929], Parvathi Kollur case [Parvathi Kollur and another vs. State of Directorate of Enforcement reported in 2022 SCC OnLine SC 1975] and more particularly Emta coal case [Emta Coal Limited and others vs. The Deputy Director, Directorate of Enforcement] reported in 2023/DHC/000277 {Neutral Citation of Delhi High Court} rendered by Hon'ble Delhi High Court have all been adverted to. Paragraph No.15 of our Anil Jain case is of significance. To be noted, in paragraph No.15, we had recorded that the Court made a research and found Page Nos.48/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 that Emta Coal case has been carried to Hon'ble Supreme Court vide a special leave petition (details given therein) and Hon'ble Supreme Court had put in a caveat that in the event of any further action being taken in respect of predicate offence then liberty is preserved for resorting / taking further steps under PMLA. In Anil Jain case, we had to necessarily mention in paragraph 15 thereat that this Court made a research and fretted out the obtaining position that Emta Coal had been carried to Hon'ble Supreme Court as neither the petitioner therein nor the prosecution brought to notice of this Court that Emta Coal case rendered by Hon'ble Delhi High Court was carried to Hon'ble Supreme Court. Be that as it may, we had respectfully put in a similar caveat in Anil Jain case. We deem it appropriate to respectfully adopt the approach of Hon'ble Supreme Court and put in a similar caveat in the case on hand also. Before we write the operative portion, it may be necessary to deal with the argument of learned Prosecutor who drew our attention to paragraph No.269 of Vijay Madanlal case which reads as follows:
'269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal Page Nos.49/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 activity relating to or in relation to a scheduled offence. The process or activity can be in any form — be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence — except the proceeds of crime derived or obtained as a result of that crime.'
20. Vijay Madanlal case is a cluster of matters where Hon'ble Supreme Court addressed itself to multiple questions made by multiple parties and crystallized the conclusions under the caption 'CONCLUSION' in paragraph No.467 which reads as follows:
'CONCLUSION
467. In light of the above analysis, we now proceed to summarise our conclusion on seminal points in issue in the following terms:—
(i) The question as to whether some of the amendments to the Prevention of Money-laundering Act, 2002 could not have been enacted by the Parliament by way of a Finance Act has not been examined in this judgment. The same is left open for being examined along with or after the decision of the Larger Bench (seven Judges) of this Court in the case of Rojer Mathew.
(ii) The expression “proceedings” occurring in Clause (na) of Section 2(1) of the 2002 Act is contextual and is required to be given expansive meaning to include inquiry procedure followed by the Authorities of ED, the Adjudicating Authority, and the Special Court.
(iii) The expression “investigation” in Clause (na) of Section 2(1) of the 2002 Act does not limit itself to the matter of investigation Page Nos.50/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 concerning the offence under the Act and is interchangeable with the function of “inquiry” to be undertaken by the Authorities under the Act.
(iv) The Explanation inserted to Clause (u) of Section 2(1) of the 2002 Act does not travel beyond the main provision predicating tracking and reaching upto the property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence.
(v)(a) Section 3 of the 2002 Act has a wider reach and captures every process and activity, direct or indirect, in dealing with the proceeds of crime and is not limited to the happening of the final act of integration of tainted property in the formal economy. The Explanation inserted to Section 3 by way of amendment of 2019 does not expand the purport of Section 3 but is only clarificatory in nature. It clarifies the word “and” preceding the expression projecting or claiming as “or”; and being a clarificatory amendment, it would make no difference even if it is introduced by way of Finance Act or otherwise.
(b) Independent of the above, we are clearly of the view that the expression “and” occurring in Section 3 has to be construed as “or”, to give full play to the said provision so as to include “every” process or activity indulged into by anyone. Projecting or claiming the property as untainted property would constitute an offence of money -laundering on its own, being an independent process or activity.
(c) The interpretation suggested by the petitioners, that only upon projecting or claiming the property in question as untainted property that the offence of Section 3 would be complete, stands rejected.
(d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of moneylaundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there Page Nos.51/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 can be no offence of money-laundering against him or any one claiming such property being the property linked to stated scheduled offence through him.
(vi) Section 5 of the 2002 Act is constitutionally valid. It provides for a balancing arrangement to secure the interests of the person as also ensures that the proceeds of crime remain available to be dealt with in the manner provided by the 2002 Act. The procedural safeguards as delineated by us hereinabove are effective measures to protect the interests of person concerned.
(vii) The challenge to the validity of sub-section (4) of Section 8 of the 2002 Act is also rejected subject to Section 8 being invoked and operated in accordance with the meaning assigned to it hereinabove.
(viii) The challenge to deletion of proviso to sub-section (1) of Section 17 of the 2002 Act stands rejected. There are stringent safeguards provided in Section 17 and Rules framed thereunder. Moreover, the pre-condition in the proviso to Rule 3(2) of the 2005 Rules cannot be read into Section 17 after its amendment. The Central Government may take necessary corrective steps to obviate confusion caused in that regard.
(ix) The challenge to deletion of proviso to sub-section (1) of Section 18 of the 2002 Act also stands rejected. There are similar safeguards provided in Section 18. We hold that the amended provision does not suffer from the vice of arbitrariness.
(x) The challenge to the constitutional validity of Section 19 of the 2002 Act is also rejected. There are stringent safeguards provided in Section 19. The provision does not suffer from the vice of arbitrariness.
(xi) Section 24 of the 2002 Act has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act and cannot be regarded as manifestly arbitrary or unconstitutional.
(xii)(a) The proviso in Clause (a) of sub-section (1) of Section 44 of the 2002 Act is to be regarded as directory in nature and this provision is also read down to mean that the Special Court may exercise judicial discretion on case-to-case basis.
(b) We do not find merit in the challenge to Section 44 being arbitrary or unconstitutional. However, the eventualities referred to in this section shall be dealt with by the Court concerned and by the Authority concerned in accordance with the interpretation given in this judgment.
Page Nos.52/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023
(xiii)(a) The reasons which weighed with this Court in Nikesh Tarachand Shah for declaring the twin conditions in Section 45(1) of the 2002 Act, as it stood at the relevant time, as unconstitutional in no way obliterated the provision from the statute book; and it was open to the Parliament to cure the defect noted by this Court so as to revive the same provision in the existing form.
(b) We are unable to agree with the observations in Nikesh Tarachand Shah distinguishing the enunciation of the Constitution Bench decision in Kartar Singh ; and other observations suggestive of doubting the perception of Parliament in regard to the seriousness of the offence of money-laundering, including about it posing serious threat to the sovereignty and integrity of the country.
(c) The provision in the form of Section 45 of the 2002 Act, as applicable post amendment of 2018, is reasonable and has direct nexus with the purposes and objects sought to be achieved by the 2002 Act and does not suffer from the vice of arbitrariness or unreasonableness.
(d) As regards the prayer for grant of bail, irrespective of the nature of proceedings, including those under Section 438 of the 1973 Code or even upon invoking the jurisdiction of Constitutional Courts, the underlying principles and rigours of Section 45 may apply.
(xiv) The beneficial provision of Section 436A of the 1973 Code could be invoked by the accused arrested for offence punishable under the 2002 Act.
(xv)(a) The process envisaged by Section 50 of the 2002 Act is in the nature of an inquiry against the proceeds of crime and is not “investigation” in strict sense of the term for initiating prosecution; and the Authorities under the 2002 Act (referred to in Section 48), are not police officers as such.
(b) The statements recorded by the Authorities under the 2002 Act are not hit by Article 20(3) or Article 21 of the Constitution of India.
(xvi) Section 63 of the 2002 Act providing for punishment regarding false information or failure to give information does not suffer from any vice of arbitrariness.
(xvii) The inclusion or exclusion of any particular offence in the Schedule to the 2002 Act is a matter of legislative policy; and the nature or class of any predicate offence has no bearing on the validity of the Schedule or any prescription thereunder.
(xviii)(a) In view of special mechanism envisaged by the 2002 Page Nos.53/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 Act, ECIR cannot be equated with an FIR under the 1973 Code. ECIR is an internal document of the ED and the fact that FIR in respect of scheduled offence has not been recorded does not come in the way of the Authorities referred to in Section 48 to commence inquiry/investigation for initiating “civil action” of “provisional attachment” of property being proceeds of crime.
(b) Supply of a copy of ECIR in every case to the person concerned is not mandatory, it is enough if ED at the time of arrest, discloses the grounds of such arrest.
(c) However, when the arrested person is produced before the Special Court, it is open to the Special Court to look into the relevant records presented by the authorised representative of ED for answering the issue of need for his/her continued detention in connection with the offence of money-laundering.
(xix) Even when ED manual is not to be published being an internal departmental document issued for the guidance of the Authorities (ED officials), the department ought to explore the desirability of placing information on its website which may broadly outline the scope of the authority of the functionaries under the Act and measures to be adopted by them as also the options/remedies available to the person concerned before the Authority and before the Special Court.
(xx) The petitioners are justified in expressing serious concern bordering on causing injustice owing to the vacancies in the Appellate Tribunal. We deem it necessary to impress upon the executive to take corrective measures in this regard expeditiously.
(xxi) The argument about proportionality of punishment with reference to the nature of scheduled offence is wholly unfounded and stands rejected.'
21. Paragraph No.467 of Vijay Madanlal case is the ratio. It is instructive and we respectfully follow paragraph No.467 of Vijay Madanlal case. In the case on hand, to state with specificity, what is applicable is paragraph No.467(v)(d) of Vijay Madanlal case. This is a case where there is a closure of the predicate offence and therefore, we say that paragraph Page Nos.54/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 No.467(v)(d) of Vijay Madanlal case is applicable in all force to the case on hand. In any event, this paragraph No.467(v)(d) of Vijay Madanlal case is now subject to the caveat in Emta Coal case, i.e., caveat that if predicate offence is resuscitated or opened, the entire matter will get revived. The rights are preserved as done in Emta Coal case by Hon'ble Supreme Court. Therefore, we make it clear that we respectfully follow the ratio in Vijay Madanlal case {paragraph No.467(v)(d)} and Emta coal case {paragraph No.16} which we have followed in Anil Jain case.
22. In Anil Jain case, it was a writ petition where the prayer was to direct ED to close / drop all proceedings but in the case on hand, it is criminal original petitions under Section 482 of Cr.PC seeking quash the summons qua Summons No.PMLA/SUMMON/CEZO/2023/1152 in ECIR/CEZO-I/63/2022, No.PMLA/SUMMON/CEZO/2023/1181 in ECIR/CEZO-I/63/2022, No.PMLA/SUMMON/CEZO/2023/1180 in ECIR/CEZO-I/63/2022, No.PMLA/SUMMON/CEZO/2023/1184 in ECIR/CEZO-I/63/2022, No.PMLA/SUMMON/CEZO/2023/1182 in ECIR/CEZO-I/63/2022 and No.PMLA/SUMMON/CEZO/2023/1183 in ECIR/CEZO-I/63/2022. Law is well settled that in a Section 482 of Cr.PC Page Nos.55/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 quash legal drill, what the Section 482 Court would look into is, uncontraverted averments in the complaint without adding or subtracting to the same. In the case on hand, this legal drill becomes extremely simple as quash prayer turns on the legal point that on closure of predicate offence, ECIR cannot proceed. In this view of the matter, we have no hesitation in saying that we are left with the inevitable conclusion that prayers need to be answered in the affirmative i.e., acceded to.
23. This Court deems it appropriate to add that if SIAC ultimately makes an award, it will be an arbitral award within the meaning of 'Foreign Award' under Section 44 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity] {New York Convention Award} and therefore if the enforcement of the same, if sought in India will be governed by Part II Chapter I of A and C Act but it may not be necessary to go into those aspects of the matter.
24. The result is all 6 Crl.OPs i.e., Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 and 14901 of 2023 are allowed. Summons No.PMLA/SUMMON/CEZO/2023/1152 in ECIR/CEZO-I/63/2022, Page Nos.56/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 No.PMLA/SUMMON/CEZO/2023/1181 in ECIR/CEZO-I/63/2022, No.PMLA/SUMMON/CEZO/2023/1180 in ECIR/CEZO-I/63/2022, No.PMLA/SUMMON/CEZO/2023/1184 in ECIR/CEZO-I/63/2022, No.PMLA/SUMMON/CEZO/2023/1182 in ECIR/CEZO-I/63/2022 and No.PMLA/SUMMON/CEZO/2023/1183 in ECIR/CEZO-I/63/2022 are quashed albeit with a caveat that if predicate offence case is resuscitated or if there is any further action in respect of predicate offence, liberty / rights of all concerned is preserved for restoring / taking further steps under PMLA. Consequently, 6 Crl.MPs (Crl.MP.Nos.7975, 9229, 9231, 9256, 9282 and 9283 of 2023) are disposed of as closed. Crl.MP No.9244 of 2023 is dismissed. There shall be no order as to costs.
(M.S.,J.) (R.S.V.,J.) 29.09.2023 Index : Yes Speaking order Neutral Citation : Yes mk / vvk Page Nos.57/58 https://www.mhc.tn.gov.in/judis Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 M.SUNDAR, J., and R.SAKTHIVEL, J., mk/vvk To
1.The Assistant Director Directorate of Enforcement Government of India, Department of Revenue 2nd and 3rd Floors, Murugesa Naicker Complex No.84, Greams Road, Thousand Lights, Chennai-600 006.
2.The Assistant Director Office of the Joint Director Directorate of Enforcement, Chennai Zonal Office-I, Government of India, 5th and 6th Floor BSNL Administrative Building Kushkumar Road, Nungambakkam Chennai-600 034.
Crl.O.P.Nos.13132, 14795, 14804, 14860, 14899 & 14901 of 2023 and Crl.M.P.Nos.7975, 9244, 9229, 9231, 9256, 9282 & 9283 of 2023 29.09.2023 Page Nos.58/58 https://www.mhc.tn.gov.in/judis