Madras High Court
Shri Anuraag Jain vs Directorate Of Enforcement on 19 September, 2022
Author: P.N.Prakash
Bench: P.N.Prakash
Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 19.09.2022
Coram
THE HONOURABLE MR. JUSTICE P.N.PRAKASH
and
THE HONOURABLE MR. JUSTICE RMT. TEEKAA RAMAN
Crl.O.P.No.15357 of 2022
and
Crl.M.P.Nos.8626 & 8628 of 2022
1.Shri Anuraag Jain
S/o.Mathanlal Jain
2.Smt.K.Manjula
W/o.K.Kamalchand Jain ... Petitioners
Vs.
Directorate of Enforcement,
The Assistant Director,
Chennai Zonal Office-II,
II and III Floor,
Murugesa Naicker Complex,
84, Greams Road,
Chennai – 600 006. ... Respondent
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Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
Criminal Original Petition filed u/s.482 of the Code of Criminal
Procedure praying to call for the records in C.C.No.14 of 2018 on the file of
Principal Sessions Court [Special Judge for PMLA cases], Chennai and
quash the same.
For Petitioners : Mr.S.D.Venkateswaran, Senior Counsel
for Mr.P.Sathyanathan
For Respondent : Mr.P.Sidharthan
Special Public Prosecutor [ED]
*****
ORDER
[Made by P.N.PRAKASH, J.] Seeking to quash the proceedings in C.C.No.14 of 2018 on the file of the Special Court constituted u/s.43(1) of the Prevention of Money Laundering Act, 2002 [Principal Sessions Judge], Chennai, the present petition has been filed.
2. The minimum facts that are required for deciding this quash petition are as under:
2.1. On a complaint given by the Deputy Manager, Union Bank of India, Nodal Regional Office, No.139, Broadway, Chennai, the Central 2/10 https://www.mhc.tn.gov.in/judis Order dated : 19.09.2022 Crl.O.P.No.15357 of 2022 Bureau of Investigation [CBI] registered a case in RC No.8/E/2008-
CBI/BS&FC dated 25.09.2008 for the offences u/s.120-B r/w 420, 467, 468 and 471 IPC and Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988, against one R.Kannan, the then Chief Manager of Union Bank of India, Mount Road, Branch, Chennai and others including Anuraag Jain and Manjula.
2.2. The sum and substance of the allegation in the FIR is that, R.Kannan, the then Chief Manager of Union Bank of India, Mount Road, Branch, Chennai, has granted huge loans to M/s.National Medicines Private Limited [hereinafter referred to as "NMPL"], a company run by the family of Anuraag Jain, which later became an NPA.
2.3. On enquiry, it was found that NMPL had submitted documents of properties with existing encumbrance as collateral security for the loan amounting to Rs.4.25 crores. It may be pertinent to state here that at the time when the case was registered i.e. on 25.09.2008, Section 420 IPC was not a scheduled offence in the Prevention of Money Laundering Act, 2002 3/10 https://www.mhc.tn.gov.in/judis Order dated : 19.09.2022 Crl.O.P.No.15357 of 2022 [hereinafter referred to as the ‘PMLA’] and it was included only with effect from 01.06.2009. After its inclusion, the Enforcement Directorate registered a case in ECIR/61/CEZO/Z-II/2010 (VSK) on 23.11.2010 and took up investigation under the PMLA.
2.4. The Central Bureau of Investigation completed their investigation and filed a final report on 09.12.2009 in C.C.No.45 of 2009 in the Special Court for CBI cases, Chennai, against Kannan and five others including Anuraag Jain and Manjula. The Enforcement Directorate completed their investigation and filed a complaint in C.C.No.14 of 2018 in the Principal Sessions Court, Chennai (Special Court for PMLA cases) against five accused including Anuraag Jain [A2] and Manjula [A4] for quashing which, this petition has been filed.
3. Learned counsel on either side admitted that charges have been framed by the trial Court and the case is now ripe for trial. 4/10 https://www.mhc.tn.gov.in/judis Order dated : 19.09.2022 Crl.O.P.No.15357 of 2022
4. Learned counsel for the petitioners placed two submissions before us, viz.,
(i) The Assistant Director is not competent to lay the impugned complaint as he has not been given special authorisation for the same.
(ii)Section 420 IPC was not a scheduled offence under the PMLA when the case was registered by the CBI on 25.09.2008.
5. Mr.P.Sidharthan, learned Special Public Prosecutor [ED], refuted the aforesaid contentions.
6. Coming to the first submission, the answer lies in Sections 48 and 49 of the PMLA r/w Notification vide G.S.R.441(E), dated 01.07.2005 as amended by G.S.R.579(E), dated 29.08.2013, S.O.1275(E) dated 13th September 2005, issued by the Central Government and Order in F.No.6/14/2008-ES dated 11.11.2014 of the Government of India, Ministry of Finance, Department of Revenue, New Delhi. Section 48 (c) ibid., clearly classifies the Assistant Director as an "authority for the purposes of this Act". Thus, when the statute itself classifies the Assistant Director as an 5/10 https://www.mhc.tn.gov.in/judis Order dated : 19.09.2022 Crl.O.P.No.15357 of 2022 authority, we are afraid no further authorisation is required for him to file a complaint for the Special Court to take cognizance of the offence u/s.44(b) of the PMLA.
7. Insofar as the second submission is concerned, it is true that Section 420 IPC was not a scheduled offence under the PMLA on 25.09.2008 when the case was registered by the CBI and that it was included in the statute only with effect from 01.06.2009. In this case, the Enforcement Directorate has registered the case only after 01.06.2009, viz., on 23.11.2010.
8. It may be apposite to extract paragraph No.270 from the judgment of the Supreme Court in Vijay Madanlal Choudhary and others v. Union of India and others1.
"270. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money-laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing 1 2022 SCC OnLine SC 929 6/10 https://www.mhc.tn.gov.in/judis Order dated : 19.09.2022 Crl.O.P.No.15357 of 2022 offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money-laundering under the 2002 Act - for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of money-laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of Clause (ii) in Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all."
(emphasis supplied)
9. A reading of the above clearly shows that irrespective of the fact as to when the scheduled offence was committed, if the proceeds of crime that is generated from the commission of a scheduled offence is laundered after the coming into force of the PMLA, 2002, then one can be prosecuted u/s.3 r/w 4 of the PMLA.
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10. Learned Special Public Prosecutor submitted that the petitioners have raised other grounds in the quash petition for which, the learned counsel for the petitioners submitted that he is not pressing them. However, learned counsel for the petitioners requests this Court to dispense with the presence of Manjula before the trial Court for all the hearings as she is a house wife.
11. We are inclined to accept the request of learned counsel for the petitioners. Manjula shall be present before the trial Court for answering the charges, for questioning u/s.313 Cr.P.C. and on the date of judgment. If any identification by a witness is necessary, the Public Prosecutor in the trial Court shall intimate the same to the trial Court and the trial Court could insist upon her presence for any particular hearing. For the rest of the hearing, the trial Court may entertain application u/s.317 Cr.P.C. liberally and dispense with her presence.
12. Manjula cannot claim prejudice for non-identification by any witness during trial. If Anuraag Jain and Manjula were not arrested and 8/10 https://www.mhc.tn.gov.in/judis Order dated : 19.09.2022 Crl.O.P.No.15357 of 2022 released on bail or if they are not on anticipatory bail, the trial Judge shall obtain a bond u/s.88 Cr.P.C. for Rs.25,000/- [Rupees twenty five thousand only] with two sureties each from them, if not already obtained.
In the result, this Criminal Original Petition is dismissed with the above directions. Consequently, connected miscellaneous petitions are closed.
[PNP, J.] [TKR, J.]
19.09.2022
Index: Yes/No
gm
To
1.The Principal Sessions Court
[Special Judge for PMLA cases],
Chennai.
2.The Directorate of Enforcement,
The Assistant Director,
Chennai Zonal Office-II,
II and III Floor,
Murugesa Naicker Complex,
84, Greams Road,
Chennai – 600 006.
3.The Public Prosecutor,
High Court, Madras.
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https://www.mhc.tn.gov.in/judis
Order dated : 19.09.2022
Crl.O.P.No.15357 of 2022
P.N.PRAKASH, J.
and
RMT. TEEKAA RAMAN, J.
gm
Crl.O.P.No.15357 of 2022
19.09.2022
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