In view of the above legal position, the Criminal Revision Case stands allowed and the petitioner is discharged in C.C.No.61 of 2016. The connected Miscellaneous Petition is closed. (S.V.N.,J.) (A.D.J.C.,J.). Appellant    : Mr.K.K.Sivashanmugam For respondent : Mr.Rajinish Pathiyil, Special Public Prosecutor (Directorate of Enforcement)

IN THE HIGH COURT OF JUDICATURE AT MADRAS

 

Date :  24.8.2022

 

CORAM

 

THE HON’BLE MR.JUSTICE S.VAIDYANATHAN

AND

THE HON’BLE MR.JUSTICE A.D.JAGADISH CHANDIRA

 

Criminal Revision Case No.971 of 2022

and

Crl.M.P.No.10242 of 2022

 

Ambirsh Singh Ahluwalla                                    Petitioner

 

 

The Assistant Director,

Directorate Enforcement,

Chennai.                                                              Respondent

 

Criminal Revision Case filed under Section 397 read with Section 401 Cr.P.C. to call for the records pertaining to the case pending in Crl.M.P.No.4826 of 2020 in C.C.No.61 of 2016 pending on the file of the Principal Special Judge for CBI cases VIII Additional City Civil Court, Chennai (designated court for trial of PMLA cases) and to set aside the order dated 23.6.2022 passed therein and allow the same.

 

For Appellant    : Mr.K.K.Sivashanmugam

 

For respondent : Mr.Rajinish Pathiyil,

Special Public Prosecutor

(Directorate of Enforcement)

 

 

JUDGMENT

S.VAIDYANATHAN, J.

and

A.D.JAGADISH CHANDIRA,J.

 

The Criminal Revision Case has been filed seeking to set aside the order passed by the Principal Special Judge for CBI Cases, VIII Additional City Civil  Court, Chennai (designated court for trial of PMLA cases) dated 23.6.2022 in Crl.M.P.No.4826 of 2020 in C.C.No.61 of 2016, dismissing the petition filed for discharge filed under Section 227 of Cr.P.C.

2. Brief facts of the case are as under:-
3. i) The petitioner is arrayed as A6 in the complaint filed by the respondent in C.C.No.61 of 2016 for offences of money laundering under Section 3 of the Prevention of Money Launder Act, 2002 (in short PML Act) punishable under Section 4 thereof.
4. ii) Initially, based on a complaint lodged by one B.Surendran, the CBI, BS&FC, Bangalore, registered a case in FIR No RC.08/E/2010-BS&FC/BLR on 7.10.2010 against one S.Arivarasu, the then Business Development Manager of M/s Global Trade Finance Limited, presently known as M/s SBI Global Factors Ltd., Coimbatore; P.Venkatachalapathy, Managing Director and R.Manoharan, Director of M/s Kundrakudi Kandha Spinning Mills Pvt. Ltd. and others  under Section 120-B read with Sections 420, 467, 468 and 471 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

iii) Since, there appeared to be a case  relating to an offence of money laundering under Section 3 of the PML Act, which required further investigation in accordance with the provisions of the PML Act and the Rules framed therein, a case in ECIR No.05/2011 dated 3.1.2011 was registered in the office of the respondent against the said  Kundrakudi Kandha Spinning Mills Pvt. Ltd,  Udumalpet, Tamil Nadu and others.

22. iv) Subsequently, after completion of investigation in FIR No.RC 08/E/2010-BS&FC/BLR final report was filed in ECIR No.05/2011, dated 22.7.2011 under sec. 173 of Cr.P.C, for offences under Sections 120-B, 420, 467 & 471 of IPC and Section 13 of Prevention of Corruption Act, 1988 against the persons mentioned in the FIR and others and the case was taken by the II Additional District Judge (CBI cases), Coimbatore in C.C.No.9 of 2011, wherein the petitioner was arrayed as A5.
23. v) Meanwhile, the respondent/complainant, based on the investigation done in ECIR No.05/2011 dated 3.1.2011, filed a complaint against the accused in C.C.No.61 of 2016 before the Principal Sessions Judge, Chennai (Special Court constituted under Section 43(1) of PML Act, 2002).  The petitioner was arrayed as Accused No.6.
24. vi) The petitioner filed a discharge petition in C.M.P.No.1152 of 2011 in C.C.No.9 of 2011 on the file of the II Additional District Judge for CBI Cases Coimbatore under Section 239  Cr.P.C.  seeking to discharge him from the case.  The Trial Court, by an order dated 30.4.2013, had allowed the petition and discharged the petitioner in C.C.No.9 of 2011.  Against the discharge of the petitioner by the CBI Court, the CBI had filed a Criminal Revision in Crl.R.C.No.1000 of 2013 before this court and this court, by order dated 14.7.2014, dismissed the revision filed by the CBI confirming the order of discharge of the petitioner in C.C.No.9 of 2011, against which the Department has not preferred any appeal and the order of discharge of the petitioner stands confirmed.

vii) Whileso, the petitioner, based on the discharge from the case relating to the  predicate offence/scheduled offence in C.C.No.9 of 2011, had filed Crl.M.P.4826 of 2020 in C.C.No.61 of 2016 on the file of the Principal Sessions Judge  seeking for discharge.

viii) Apart from other grounds raised  in the petition seeking discharge, the petitioner had raised a ground that having been discharged in the case relating to schedule offences, the offence under the Prevention of Money Laundering Act against him does not survive without the commission of scheduled offence.

1. ix) The Trial Court, by virtue of the impugned order, had dismissed the discharge application by observing as under:-

“19. On the whole, on perusing of all records and available documents on the strengthen of the decision of the Hon’ble Apex Court cited above, this Court holds that the prosecution has submitted adequate materials to form an opinion to this Court about prima facie satisfaction to proceed further proceedings against the accused. The points in arguments raised by the learned counsel for the accused are to be decided only after full pledged trial but not at this stage. Therefore, the petitioner/A-6 is not entitled for discharge from the charges mentioned in the Complaint filed in C.C. No.61/2016 and therefore, this petition is liable to be dismissed.   … ….

In the result, this petition is dismissed with regard to the petitioner/A-6.”

1. x) Against the above order, the present revision has been filed.
2. Learned counsel for the revision petitioner would contend that if the accused is discharged or acquitted of the Criminal Case in respect of the scheduled offences, there can be no offence of money laundering against him and in such circumstances, the proceedings against the petitioner under the PML Act cannot be continued and the petitioner is entitled to be discharged.  He would also submit that the discharge of the petitioner in the case relating to the scheduled offences will entitle the petitioner for discharge in the subsequent case filed under the PML Act and thereby the Trial Court had erred in dismissing the petition for discharge.    In support of his contention, he would rely on the judgment of  a Three Judges Bench of the Apex Court in Vijay Madanlal Choudhary and others vs. Union of India and others in Special Leave Petition (Criminal) No.4634 of 2014 decided on 27.7.2022.
3. The respondent has filed counter.
4. Mr.Rajinish Pathiyil learned counsel appearing for the respondent would fairly submit that the petitioner has been discharged in the case relating to scheduled/predicate offence.
5. Heard the learned counsel appearing for the parties.
6. It is not in dispute that the petitioner has been discharged by the CBI Court in respect of scheduled/predicate offences in C.C.No.9 of 2011 on the file of the II Additional District Judge (CBI cases), Coimbatore. The Revision filed by the CBI against such discharge before this court in Crl.R.C.No.1000 of 2013 has also been dismissed by order dated  14.7.2014. In the case of Vijay Madanlal Choudhary and others vs. Union of India and others in Special Leave Petition (Criminal) No.4634 of 2014 decided on 27.7.2022,  the Hon’ble Apex Court has decided the issue in the following terms:-

“187. ….(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, 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.”

8. In view of the above legal position, the Criminal Revision Case stands allowed and the petitioner is discharged in C.C.No.61 of 2016. The connected Miscellaneous Petition is closed.

 

(S.V.N.,J.) (A.D.J.C.,J.)

24.8.2022.

Index: Yes/No.

Internet: Yes/No.

ssk.

 

To

 

1. Principal Special Judge for

CBI cases

VIII Additional City Civil Court,

Chennai.

(designated court for trial of PMLA cases)

 

2. The Assistant Director,

Directorate Enforcement,

Chennai.

 

3. The Special Public Prosecutor,

High Court, Madras.
S.VAIDYANATHAN, J.

and

A.D.JAGADISH CHANDIRA, J.

 

 

ssk.

 

 

 

 

 

 

 

Crl R.C. No.971 of 2022

 

 

 

 

 

 

 

24.8.2022.