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Showing contexts for: Offence under Section 3 of PMLA in Sukesh Gupta vs Government Of India on 23 February, 2022Matching Fragments
1. Binod Kumar and others Vs. State of Bihar and another1
2. Rishipal Singh Vs. State of Uttar Pradesh and another2
3. State of Haryana and others Vs. Bhajan Lal and others3
4. Naresh Prasad Agarwal and another Vs Inspector of Police, ACB, CBI, Chennai4
4. On the other hand, the learned Additional Solicitor General of India appearing on behalf of respondent No.1, while taking this Court through several factual aspects involved in the matter, vehemently contended that though the commission of scheduled offence is a fundamental pre-requisite for initiating proceedings under the PMLA, the offence of money laundering is independent of the scheduled offences. The scheme of the PMLA indicates that it deals only with laundering of money acquired by committing the scheduled offence. In other words, PMLA deals only with the process or activity of proceeds of crime, including its concealment, possession, acquisition or use and it has nothing to do with the launch of prosecution for scheduled offence and continuation thereof. Scheduled offence is only a trigger point to initiate investigation under PMLA and once ECIR is recorded, case registered under PMLA is independent, distinct and stand alone. 2014 (10) Supreme Court Cases 663 2014 (7) Supreme Court Cases 215 1992 Supp (1) Supreme Court Cases 335 Dr.SA, J Even if the predicate/scheduled offences are compromised, compounded, quashed or even in case the accused is acquitted, it does not affect proceedings under PMLA. In a recent judgment in Dalmia Cement (Bharat) Ltd, New Delhi and another Vs. Assistant Director, Enforcement Directorate, Hyderabad5, the erstwhile High Court for the State of Telangana and Andhra Pradesh, observed that "when ECIR is lodged with the Directorate of Enforcement, there is no Magisterial Intervention unlike a FIR and mere registration of ECIR against the suspects of offence under Section 3 of PMLA cannot go to mean that such persons are accused under Section 3 of PMLA. Consequently, the protection against testimonial compulsion as under Cr.P.C as well as under
Further, as per Technical Circular No.03/2020, dated 13.02.2020, the money laundering investigation is to be done in cases where the amount involved exceeds Rs.25 Crores. Later, by amendment of Finance Act, 2015, the amount of Rs.30 lakhs was substituted with Rs.1 crore. In the instant case, as on today, the petitioner is not charged with any offence under Section 3 of the PMLA. On the basis of material available in predicate offence, the investigation under PMLA is being undertaken, pursuant to which, the petitioner was summoned under Section 50 of PMLA for examination. The petitioner, instead of cooperating with the investigation, filed this quash petition, which is nothing but a premature attempt to escape from his criminal liability. Till date, twelve summons were issued to the petitioner, but however, he attended before the authorities only once. Since the petitioner obtained stay in this criminal petition, the investigation is being stalled. ECIR is only step-in-aid to take up investigation and it cannot be compared or 2016 (4) ALD 47 Dr.SA, J equated with FIR. The present stage of the case is only at the summoning of the accused for the purpose of examination. After fulfilling the requirements under Section 3 of the PMLA, prima facie the Enforcement Directorate registered the subject ECIR and is proceeding with the investigation. ECIR is an administrative document, which is like a GD entry in police station. Further, as per Section 44(1)(b) of the PML Act, a Special Court may, upon a complaint made by an authority authorised in this behalf under this Act, take cognizance of the offence for which, the accused is committed to it for trial. Section 3 of PMLA comes into play when complaint is filed before the designated Special Court. The petitioner is required to appear before the ED authorities in relation to the subject ECIR to prove his innocence. If the petitioner could substantiate that he is innocent, he will not be charged with any offence under PMLA. A statutory duty is cast upon the petitioner to appear before the ED authorities, pursuant to the subject ECIR. Further, the so called One Time Settlement said to have been entered between the petitioner and MMTC would not absolve the criminal liability of the petitioner. No grounds, much less valid grounds, are made out by the petitioner to quash the subject ECIR and ultimately prayed to dismiss the criminal Dr.SA, J petition. In support of his contentions, learned Additional Solicitor General of India had relied on the following decisions.
12. Various contentions have been raised by both the learned counsel with regard to the factual matrix of the matter. The core contentions raised on behalf of the petitioner are that since none of the alleged scheduled offences are prima facie made out against the petitioner, registration of the subject ECIR, which is based on the scheduled offences, is unsustainable; continuation of proceedings against the petitioner in the subject ECIR amounts to abuse of process of law and that the registration of the subject ECIR against the petitioner and investigating into the same is liable to be quashed in the interest of justice. On the other hand, the prime contentions raised on behalf of the respondents are that commission of scheduled offence is only a trigger point to initiate investigation under PMLA and once ECIR is recorded, case registered under PMLA is independent, distinct and stand alone; There is no magisterial intervention unlike a FIR and mere registration of ECIR against the suspects of offence under Section Dr.SA, J 3 of PMLA cannot go to mean that such persons are accused under Section 3 of PMLA; The petitioner is not an accused, but only a suspect of commission of offence under Section 3 of PMLA and therefore, all the contentions raised on behalf of the petitioner, as if he is accused, are misconceived; The petitioner is required to appear before the ED authorities in relation to the subject ECIR to prove his innocence; If the petitioner could substantiate that he is innocent, he will not be charged with any offence under PMLA; A statutory duty is cast upon the petitioner to appear before the ED authorities, pursuant to the subject ECIR.
27. Here, it is apt state that PMLA is a special enactment, enacted with a specific purpose and object, i.e., to track and investigate the cases of money laundering. The predicate/scheduled offence is necessary only for launching prosecution under PMLA. Once the crime is registered under PMLA, then the Enforcement Directorate has to take it to a logical conclusion, as contemplated under Section 44 of PMLA. So, after registration of crime, the Enforcement Directorate has to investigate into as to whether the offence, as enunciated under Section 3 of PMLA, has been committed or not. The Enforcement Directorate, after completion of investigation, detects that there are proceeds of crime, the criminal activity relates to scheduled offence/s, the petitioner is party to such crime and crime proceeds or actually involved in any proceeds of crime which includes its concealment, possession acquisition or use and projected or claimed as untainted property, would proceed against the petitioner under Section 3 of PMLA, by filing a complaint before the Dr.SA, J Designated Special Court. If no offence is made out in terms of Section 3 of PMLA, a 'closure report' would be filed before the Designated Special Court. Whether the petitioner has committed the offence under Section 3 of PMLA punishable under Section 4 of PMLA, it is a matter of investigation, which has not been concluded yet. The requirement under Section 154 of Cr.P.C. to issue FIR and requirement to register an ECIR under PMLA stand on different footings.