Karnataka High Court
Shri H N Aravind vs The Deputy Director on 10 November, 2021
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF NOVEMBER, 2021
BEFORE
THE HON'BLE MR. JUSTICE SREENIVAS HARISH KUMAR
WRIT PETITION No.6974 OF 2021 (GM-RES)
BETWEEN
1. Shri. H.N.Aravind
S/o H.K.Nagabhushan Rao,
Aged about 51 years,
No.1305, Hebbal 1st Stage,
Mysuru-570016.
2. Smt. Binu H Aravind
W/o Mr.H.N.Aravind
Aged about 42 years,
No.1305, Hebbal 1st Stage,
Mysuru-570016.
...Petitioners
(By Sri. M.S.Shyamsundar, Advocate)
AND
The Deputy Director,
Directorate of Enforcement,
Government of India,
Ministry of Finance,
Department of Revenue,
No.9/1, State Bank Road,
Bengaluru-560001.
...Respondent
(By Sri P.Prasannakumar, Advocate)
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This Writ Petition is filed under Article 226 and
227 of Constitution of India read with Section 482 of
Cr.P.C. praying to quash the orders passed by the
concurrent charges of XLVII Additional City Civil and
Sessions Judge and Special Judge for CBI Cases
Bengaluru, dated 02.03.2021 in Sl.C.C.No.78/2011
vide annexure-E to the W.P. for the offences
punishable under Section 3 of PMLA in so far as the
petitioners are concerned and etc.
This Writ petition having been heard and
reserved on 27.10.2021, coming on for
pronouncement this day, the court pronounced the
following:
ORDER
This writ petition filed under Articles 226 and 227 of the Constitution of India r/w Section 482 of Cr.P.C. is for quashing the order dated 2.3.2021 in Spl.C.C.78/2011 on the file of XLVII Addl. City Civil and Sessions Judge and Special Court constituted under Prevention of Money Laundering Act, Bengaluru. The events leading to this writ petition are as follows:
2. The first petitioner is the husband of the second petitioner and they are accused no.1 and 2 3 respectively in Spl.C.C.No.78/2011. The first petitioner was working as a Technician (Grade - I) at Central Institute of Plastic Engineering and Technology (CIPET), Mysuru, which is a Government of India undertaking. The allegations against them are that the first petitioner conspired with other accused, opened a current account bearing No.19 in the name of CIPET at Cauvery Gramina Bank, Mysuru with initial deposit of Rs.2,000/-. He also got printed the letter heads in the name of CIPET Poly Consulting Engineers by showing his residential address. He used the current account opened by him to encash the cheques and the demand drafts issued in favour of CIPET and thus he fraudulently collected a sum of Rs.1,25,71,209 in the said account. He then transferred different sums of money to his mother and wife, and also to his savings branch account. It is alleged that by siphoning of the money, purporting to 4 be proceeds of crime, he purchased some immovable property in his and his wife's name. The CBI held investigation and filed charge sheet against the petitioners for the offences punishable under Sections 409, 420, 468, 471 and 477 IPC and Section 13(2) r/w 13(1)(c) and (d) of Prevention of Corruption Act.
3. The petitioners are also prosecuted for the offence punishable under Section 4 of Prevention of Money Laundering Act ('PMLA' for short). The petitioners made an application under Section 227 Cr.P.C. for discharging them, and the said application having stood dismissed, the petitioner have filed this writ petition.
4. Assailing the impugned order, Sri. M.S. Shyamsundar put forward his argument on the following three lines.5
(i) The Special Court ought not to have proceeded against the petitioners for the offence under Section 4 of PMLA without the case being committed to it by the Magistrate. Section 44 of PMLA deals with offences triable by the Special Court. Since Section 44 (1)(b) states that the Special Court may take cognizance of the offence without the accused being committed to it for trial and that the Special Court is constituted only for the purpose of holding trial, the Magistrate must commit the case to the Special Court. This procedure being not followed, the entire proceeding vitiates.
(ii) The case instituted against the petitioners' is in violation of Article 20(1) of the Constitution of India and Section 300 of Cr.P.C. For the same set of facts, the petitioners were prosecuted by the CBI for the offences under Sections 409, 420, 468, 471 and 477 of IPC and Section 13(2) r/w Section 13(1)(c) and
(d) of Prevention of Corruption Act. The 6 prosecution launched against the petitioners under PMLA amounts to double jeopardy.
(iii) The petitioners have been implicated of offence under Section 4 of PMLA based on the voluntary statements said to have been given by them when they were interrogated according to Section 50 of the PMLA. These statements cannot be used against them in view of the bar under Article 20(3) of the Constitution of India. On this point, he has placed reliance on the judgment of the Supreme Court in the case of State of Bombay Vs. Kathi Kalu Oghad - AIR 1961 SC 1808.
5. Sri. P. Prasanna Kumar, learned counsel for the respondents has argued thus:
(i) Section 44 of PMLA clearly states that the Special Court can take cognizance of the offence upon a complaint made by an authority, without the accused 7 being committed to it for trial. That means, committal proceeding under Section 209 Cr.P.C. is not permitted.
The section does not speak of a final report under Section 173 of Cr.P.C. to be filed, what is permitted is filing of a complaint under Section 45 of PMLA and whenever complaint is filed, the court to which complaint is submitted, can only take cognizance and there is no provision for committal.
(ii) The offence under Section 4 of PMLA is a stand alone offence; it is a very distinct offence which has to be tried in a Special Court. Distinguishing factor is concealment or possession or acquisition or using the proceeds of crime. There is a clear allegation against the petitioner that they used the money siphoned of from CIPET for acquiring immovable property. They can be prosecuted for the offence under Section 4 of PMLA and Article 20(1) of the Constitution of India and Section 8 300 Cr.P.C. are not applicable. In the context, he has relied upon two judgments of the co-ordinate benches of this court in the cases of Mr. Dyani Antony Paul and another (W.P.No.38642/2016 and connected cases) and Shri. Katta Subramaniyam Naidu Vs. Deputy Director (Criminal Petition No.5698/2019 and connected cases).
(iii) Article 20(3) of the Constitution of India is not applicable. When the petitioners were summoned by the authorized officers under PMLA, they were not accused. Section 50 of PMLA only enables the authorized authority to summon any person for the purpose requiring him to produce a document or give statement. This is a statutory right conferred on the authorized authority, any information that he collects during investigation cannot be brought within the purview of Article 20(3). He referred to a judgment of 9 High Court of Delhi in the case of Vakamulla Chandrashekar Vs. Enforcement Directorate and another [W.P.(Crl.) 852/2017].
(iv) The writ petition is devoid of merits. It requires to be set aside.
6. Considering the rival contentions, in regard to first point that Sri. M.S.Shyam Sundar advanced, it is to be stated that the question of committing a case to the Special Court does not arise, and Section 44 of PMLA does not contemplate that procedure. Section 44(1) (b) is so clear that cognizance of offence under Section 3 can be taken only upon a complaint made by an authorized authority. Merely for the reason that clause (a) of Section 44(1) states that Special Court is constituted for trial of offence under Section 4; it cannot be construed that the case has to be committed to the Special Court in accordance with Section 209 Cr.P.C. In the expression, 'without the 10 accused being committed, the word 'committed' does not take the meaning as can be ascribed to it in the context of Section 209 Cr.P.C. Here expression takes the meaning that even without production of accused before the court or even in the absence of the accused, the Special Court can take cognizance. Therefore argument of Sri. Shyamsundar on the first point fails.
7. The second point is in regard to the petitioner being vexed two times. Article 20(2) of the Constitution of India and Section 300 Cr.P.C. govern this principle. The allegation against the petitioners is that they acquired immovable property from the proceeds of crime. Section 2(4) of PMLA defines proceeds of crime as any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence, or the value of any such property or where such property is 11 taken or held outside the country, then the property equivalent in value held within the country. It is not in dispute that the petitioners were prosecuted by the CBI for the offences under Sections 409, 420, 468, 471 and 477 of IPC and Section 13(2) r/w Section 13(1)(c) and (d) Prevention of Corruption Act. The Court below has observed in the impugned order that the petitioners have been convicted for these offences. Now if the facts are analyzed, it becomes clear that the petitioners were prosecuted for offense under Indian Penal Code and Prevention of Corruption Act on the charges of opening a bank account in the name of CIPET and siphoning of its money. Since the 1st petitioner was also a public servant he was prosecuted under Prevention of Corruption Act. While these offences emanate from these events which constitute a crime, acquisition of immovable property from the proceeds of crime constitutes an independent 12 and distinct offence. To constitute an offence under Section 4 of PMLA, the requirement is an activity connected with proceeds of crime, that means, the proceeds of crime must be in existence. The result in the proceeding in relation to predicate offences is immaterial. As has been held by the coordinate benches of this court in Dyani Antony Paul and Katta Subramaniaym Naidu, the offences under PMLA is a stand alone offence. The CBI prosecuted the petitioners for the offences which are not same as offences under Section 4 of PMLA Act. Article 20(3) of the Constitution of India as also Section 300 of Cr.P.C. are applicable only when prosecution is launched for the second time for the same offence or offences in relation to a particular incident of crime, which is not the factual position here. Therefore this ground also fails.
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8. As regards the third ground about bar envisaged under Article 20(2) of the Constitution of India, I do not think that the judgment of the Supreme Court in Kathi Kalu Oghad (Supra) is of any help to him. Although the Supreme Court has held that the interest of an accused is protected under Article 20(2) of the Constitution of India if his statement is taken during investigation, it is also held that such statement must have been out come of compulsion during the time the accused is in police custody. Para 20 of the judgment which Sri. M.S.Shyamsundar referred to, states that the protection under Article 20(3) is available to accused in the court room and also outside the court during investigation if it is a compelled testimony. But the conclusions of the Supreme Court are found in Para
16. They are:
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"16. In view of these considerations, we have come to the following conclusions :-
(1) An accused person cannot be said to have been compelled to be a witness against himself simply because he made a statement while in police custody, without anything more.' In other words, the mere fact of being in police custody at the time when the statement in question was 'made would not., by itself, as a proposition of law, lend itself to the inference that the accused was compelled to make the statement, though that fact, in conjunction with other circumstances disclosed in evidence in a particular case, would be a relevant consideration in an enquiry whether or not the accused person had been compelled to make the impugned statement.
(2) The mere questioning of an accused person by a police officer, resulting in a voluntary statement, which may 15 ultimately turn out to be incriminatory, is not compulsion'.
(3) To be a witness' is not equivalent to garnishing evidence' in its widest significance ; that is to say, as including not merely making of oral or written statements but also production of documents or giving materials which may be relevant at a trial to determine the guilt or innocence of the accused.
(4) Giving thumb impressions or impressions of foot or palm or fingers or specimen writings or showing parts of the body by way of identification were not included in the expression to be a witness (5) 'To be a witness' means imparting knowledge in respect of relevant facts by an oral statement or a statement in writing, made or given in Court or otherwise.
(6) 'To be a witness' in its ordinary grammatical sense means giving oral 16 testimony in Court. Case law has gone beyond this strict literal interpretation of the expression which may now bear a wider meaning, namely, bearing testimony in Court or out of Court by a person accused of an offence, orally or in writing.
(7) To bring the statement in question within the prohibition of Art. 20(3), the person accused must have stood in the character of an accused person At the time he made the statement. It is not enough that he should become an accused, any time after the statement has been made."
9. Here it appears, the statements of the petitioners were recorded under Section 50 of PMLA. It is argued by Sri. P.Prasanna Kumar that the petitioners were not summoned as accused at that time and that they were not compelled to give statement. Sri. P.Prasanna Kumar has relied upon a ruling of the High Court of Delhi in Vakamulla 17 Chandra Shekhar Vs. Enforcement Directorate and another (2017 SCC online 12810). Paragraphs 48 and 49 are extracted here.
48. The submission of the petitioner that his fundamental right under Article 20(3) is violated - since he has been summoned u/s 50 to give evidence and to produce records in the course of investigation, without knowing whether he would eventually be cited as a witness or arrayed as an accused, if at all, has no merit. Article 20(3) of the Constitution, which provides that "No person accused of an offence shall be compelled to be a witness against himself" would come into play only, if and when, the petitioner is named as an accused in the complaint to be filed before the Special Court by an authority authorized in this behalf under the Act. That stage has not arrived. Therefore, there is no question of infringement of Article 20(3) of a person who may have been summoned under 18 Section 50(2) of the PMLA as a part of the investigative process.
49. We find merit in the submission of learned counsel for the respondent that during the stage of investigation, it would be premature on the part of the respondent to label the summoned person (u/s 50 (2) of the Act) either as a witness, or as an accused. The purpose of summoning a person u/s 50 is to record his/ her statement, and to require such person to produce evidence and records as a part of an ongoing investigation. Only upon scrutiny of the evidence collected, in case the officer authorized in this behalf forms the opinion that the offence u/s 3 of the Act is made out, would he file a complaint before the Special Court u/s 44 of the Act.
10. By applying the conclusions drawn by the Supreme Court in Kathi Kalu Oghad and the High Court of Delhi in the above referred case, the position that becomes clear is that if a person is examined 19 under Section 50 of PMLA during investigation, he cannot seek protection under Article 20(3) of the Constitution unless he was an accused at the time of investigation. If it is assumed that protection under Article 20(3) is still available even if a person is not shown as accused during investigation, the prosecution can still prove its case based on other evidence. In this view, third point of argument of Sri.M.S.Shyamsundar also fails.
If the impugned order is read, it cannot be said that it suffers from infirmities. Some of the grounds taken here appear to have not been taken before the court below and therefore there is no elaborate discussion. Yet the impugned order is sustainable. Consequently this petition is dismissed.
Sd/-
JUDGE sd