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Prevention Of Money Laundering Act (PMLA): All India Annual Digest 2024
LIVELAW NEWS NETWORK
9 Feb 2025 3:30 AM
SUPREME COURTWhether the High Court was justified in quashing the summons issued to the respondent merely on the premise that the respondent was discharged in the predicate offence. The permissibility of continuing proceedings under the PMLA, despite the discharge in the predicate offence. Held, the issuance of summons cannot be quashed solely because the respondent has been discharged in...
SUPREME COURT
Whether the High Court was justified in quashing the summons issued to the respondent merely on the premise that the respondent was discharged in the predicate offence. The permissibility of continuing proceedings under the PMLA, despite the discharge in the predicate offence. Held, the issuance of summons cannot be quashed solely because the respondent has been discharged in the predicate offence. The question of whether the respondent can be arrayed as an accused in the PMLA proceedings is to be addressed at a subsequent stage. The respondent retains the right to challenge his potential arraignment as an accused under the PMLA by raising all relevant contentions, including reliance on the quashing of the predicate offence. The Court clarified that the present matter pertains only to the issuance of summons and does not preclude the respondent from raising objections during later stages of the proceedings. The Supreme Court set aside the impugned order of the High Court and allowed the appellant to proceed pursuant to the summons. The respondent, however, was directed not to be arrested, provided he continues to cooperate with the investigation. Director, Enforcement Directorate v. Vilelie Khamo, 2024 LiveLaw (SC) 1045
Whether the observations made by the Special Court regarding the conduct of the Enforcement Directorate (ED) and its Public Prosecutors require clarification - Held, Public Prosecutors must act fairly and in accordance with binding precedents but may oppose bail petitions if the ED is not at fault for trial delays. The ED or its Director cannot dictate the conduct of Public Prosecutors beyond providing case-specific facts. The Special Court's observations (Paragraph 7.20 of its order) were clarified to ensure Public Prosecutors retain independence in their duties as officers of the court. Masih Zeeshan Haider v. Directorate of Enforcement, 2024 LiveLaw (SC) 992
Propriety of granting bail under PMLA - Consideration of prolonged pre-trial detention and its impact on personal liberty under Article 21 of the Constitution of India - Assessment of the risk of tampering with evidence or influencing witnesses - The appellant, a Member of the West Bengal Legislative Assembly and former State Education Minister, was implicated in a recruitment scam involving corruption and money laundering. The Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) initiated investigations based on allegations of corrupt practices in the recruitment of teachers and staff, leading to the arrest of the appellant. Substantial cash and incriminating documents were recovered from the appellant's associate's premises. The Supreme Court, while acknowledging the appellant's prolonged incarceration and health issues, balanced these considerations against the gravity of the allegations and the risk of evidence tampering. The Court directed that the trial court expedite proceedings, particularly the examination of key witnesses. The appellant be released on bail subject to conditions ensuring cooperation and non-interference with the trial process. The appellant shall not hold any public office during the pendency of the trial. This judgment emphasizes the principle of personal liberty under Article 21, while also underscoring the importance of preventing interference in judicial processes in cases involving serious allegations of corruption and money laundering. Partha Chatterjee v. Directorate of Enforcement, 2024 LiveLaw (SC) 987
Section 65 makes the provisions of the CrPC applicable to all proceedings under the PMLA, provided the same are not inconsistent with the provisions contained in the PMLA. The words 'All other proceedings' include a complaint under Section 44 (1)(b) of the PMLA. Held, considering the object of Section 197(1) of the CrPC, its applicability cannot be excluded unless there is any provision in the PMLA which is inconsistent with Section 197(1). Therefore, the provisions of Section 197(1) of CrPC are applicable to a complaint under Section 44(1)(b) of the PMLA. Directorate of Enforcement v. Bibhu Prasad Acharya, 2024 LiveLaw (SC) 940
Section 71 - Overriding Effect - While Section 71 of the PMLA provides overriding authority, it does not negate the procedural requirements of prior sanction for prosecution under CrPC when acts are integrally connected to official duties. Directorate of Enforcement v. Bibhu Prasad Acharya, 2024 LiveLaw (SC) 940
Undertrial Prisoners - The Court applied the provisions of Section 479(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), in conjunction with Section 436A of the Code of Criminal Procedure, 1973, regarding the detention of undertrial prisoners. The Court observed that the appellant had not been convicted for any offense in the past and had undergone detention for a period exceeding one-third of the maximum imprisonment for the alleged offense under the Customs Act, 1862. The Court held that the first proviso to Section 479(1) of the BNSS applied, entitling the appellant to be released on bail. The appeal was allowed, and the appellant was directed to be produced before the Special Court within one week for bail. The Special Court was instructed to release the appellant on appropriate terms, ensuring cooperation with the courts for the early disposal of the case, including both the scheduled offense and the offense under the Prevention of Money-Laundering Act (PMLA). Badshah Majid Malik v. Directorate of Enforcement, 2024 LiveLaw (SC) 835
Section 4 - Bail – Scheduled Offence – Prolonged Incarceration - The appellants had been in custody for 2 years and 1 year 9 months, respectively. Initially, an FIR under various sections of the IPC was registered, but no scheduled offence under PMLA was present at the time of filing the charge-sheet. Subsequently, Section 384 IPC was added, but its validity as a scheduled offence was in question. Whether the appellants were entitled to bail under Section 4 of the PMLA Act, considering the absence of a valid scheduled offence at the time of filing the PMLA complaint and the prolonged incarceration. Held, the Supreme Court granted bail to the appellants, observing that at the time of filing the PMLA complaint, there was no scheduled offence under the Act. The addition of Section 384 IPC later did not retrospectively validate the absence of a scheduled offence at the relevant time. Continued incarceration of the appellants violated their fundamental rights under Article 21 of the Constitution. Laxmikant Tiwari v. Directorate of Enforcement, 2024 LiveLaw (SC) 787
Higher thresholds for granting bail in stringent penal statutes like the PMLA, UAPA, and NDPS Act cannot be a tool to keep an accused incarcerated without trial. V. Senthil Balaji v. Deputy Director, 2024 LiveLaw (SC) 750 : AIR 2024 SC 4760
Provisions of PMLA will prevail over Cr.P.C. in relation to the summoning of a person. Abhishek Banerjee v. Directorate of Enforcement, 2024 LiveLaw (SC) 674 : AIR 2024 SC 439 : 2024 Cri LJ 4193 : (2024) 9 SCC 22
Section 50 - Overriding Effect over Cr.P.C. – Summons to Witnesses and Accused Persons – Validity and Compliance - The provisions of the PMLA override those of the Code of Criminal Procedure, 1973 (Cr.P.C.), as explicitly provided under Sections 65 and 71 of the PMLA. The PMLA constitutes a self-contained code governing all matters related to the prevention of money laundering, including attachment, confiscation of proceeds of crime, and inquiry/investigation leading to prosecution. Section 50 of the PMLA empowers the designated authorities to summon any person for evidence or production of documents during the inquiry process, which is deemed a judicial proceeding under Section 50(4) of the Act. The inquiry conducted under Section 50 is distinct from a criminal investigation under Chapter XII of the Cr.P.C., and the safeguards applicable under Section 160/161 Cr.P.C. do not extend to such proceedings. Consequently, Article 20(3) of the Constitution, which protects against self-incrimination, is not attracted at the stage of issuing summons unless the person is formally arrested. The statements recorded under Section 50 are admissible evidence, unlike statements recorded under Section 161 Cr.P.C., which are limited in evidentiary value. The procedural safeguards under the PMLA, including the issuance of summons in the prescribed format as per Rule 11 of the 2005 Rules, are sufficient and enforceable. In the instant case, summons issued by the Directorate of Enforcement were held valid, and the appellants' failure to comply with the summons led to proceedings under Section 63 PMLA read with Section 174 IPC. The Court rejected the appellants' challenges, emphasizing the overriding nature of PMLA and the validity of Section 50 proceedings. Appeals dismissed; summons under Section 50 PMLA upheld. Abhishek Banerjee v. Directorate of Enforcement, 2024 LiveLaw (SC) 674 : AIR 2024 SC 439 : 2024 Cri LJ 4193 : (2024) 9 SCC 22
Section 197(1) of CrPC, which provides that prior sanction from the government is required to prosecute public servants and judges for offences alleged while discharge of public duties, will apply to cases under the Prevention of Money Laundering Act. Directorate of Enforcement v. Bibhu Prasad Acharya, 2024 LiveLaw (SC) 670
Here the accused is lodged in jail for a considerable period and there is little possibility of trial reaching finality in the near future. The liberty guaranteed under Article 21 of the Constitution does not get abrogated even for special statutes where the threshold twin bar is provided and such statutes, in our opinion, cannot carve out an exception to the principle of bail being the rule and jail being the exception. The cardinal principle of bail being the rule and jail being the exception will be entirely defeated if the petitioner is kept in custody as an under-trial for such a long duration. This is particularly glaring since in the event of conviction, the maximum sentence prescribed is only 7 years for the offence of money laundering. (Para 12) Vijay Nair v. Directorate of Enforcement, 2024 LiveLaw (SC) 644
Section 45 - Scope of Inquiry - In assessing bail applications under Section 45 of the PMLA, the Court need not delve deeply into the merits of the case. The inquiry is limited to determining whether there are "reasonable grounds for believing" that the accused is guilty, based on the material collected during the investigation. This does not require proof beyond reasonable doubt, but rather an assessment of the broad probabilities of the case. Thus, Section 45 requires the Court to assess the genuineness of the case against the accused, but not to conclusively determine guilt at this stage. (Para 13) Prem Prakash v. Union of India, 2024 LiveLaw (SC) 617 : AIR 2024 SC 4286 : 2024 Cri LJ 4018 : (2024) 9 SCC 787
Section 50 - When an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker. The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind. It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice. (Para 32) Prem Prakash v. Union of India, 2024 LiveLaw (SC) 617 : AIR 2024 SC 4286 : 2024 Cri LJ 4018 : (2024) 9 SCC 787
Section 50 - Indian Evidence Act, 1872 - Section 30 - Enforcement Directorate cannot start with a statement of a co-accused to implicate the accused. An incriminating statement of a co-accused would not amount to substantive evidence. (Para 37) Prem Prakash v. Union of India, 2024 LiveLaw (SC) 617 : AIR 2024 SC 4286 : 2024 Cri LJ 4018 : (2024) 9 SCC 787
Section 24 - Foundational Facts and Legal Presumption of involvement in money laundering - Held, this presumption only arises once three basic facts are established by the prosecution: (i) the commission of a scheduled offence, (ii) the property in question being derived from the criminal activity, and (iii) the involvement of the accused in any process or activity related to the proceeds of crime. Once these foundational facts are established, a legal presumption arises that the proceeds of crime are involved in money laundering. However, the presumption is rebuttable, and the accused has the opportunity to disprove their involvement by presenting evidence within their personal knowledge. This presumption is not conclusive, and the accused must be given a fair opportunity to rebut it through cross-examination, presenting evidence, or under Section 313 of the Criminal Procedure Code. The provision, therefore, balances the burden of proof between the prosecution and the accused, ensuring that the presumption under Section 24(a) of the PMLA is neither unreasonable nor unconstitutional. (Para 14) Prem Prakash v. Union of India, 2024 LiveLaw (SC) 617 : AIR 2024 SC 4286 : 2024 Cri LJ 4018 : (2024) 9 SCC 787
Section 24 - Significance of the Counter to Bail Application under PMLA - The counter must establish a cogent case by demonstrating the three foundational facts required under Section 24 of the Act: (i) the commission of a scheduled offence, (ii) the derivation of proceeds of crime from that offence, and (iii) the accused's involvement in any process or activity related to those proceeds. Only after these foundational facts are prima facie established does the presumption under Section 24 arise, shifting the burden to the accused to rebut the same. The counter affidavit must crystallize the material relied upon, thereby assisting the court in making an informed decision at the bail stage under Section 45 of PMLA. It enables the court to assess whether there are reasonable grounds to believe the accused is not guilty, aligning with the framework laid down in Vijay Madanlal Choudhary, 2022 LiveLaw (SC) 633. (Para 15) Prem Prakash v. Union of India, 2024 LiveLaw (SC) 617 : AIR 2024 SC 4286 : 2024 Cri LJ 4018 : (2024) 9 SCC 787
Section 45 – Bail - Interpretation and Application - Court must balance the statutory twin conditions required for bail with the fundamental principle that "bail is the rule and jail is the exception." Even in cases under PMLA, the overarching principle of personal liberty under Article 21 of the Constitution prevails, ensuring that statutory conditions for bail should not override constitutional safeguards. Thus, courts should be guided by the higher constitutional mandate of speedy trial and personal liberty, especially where prolonged incarceration occurs without the conclusion of trial. (Para 11) Prem Prakash v. Union of India, 2024 LiveLaw (SC) 617 : AIR 2024 SC 4286 : 2024 Cri LJ 4018 : (2024) 9 SCC 787
Section 45 (1) - Proviso to Section 45(1) of PMLA extends special treatment to women, regardless of their social status or qualifications. Kalvakuntla Kavitha v. Directorate of Enforcement, 2024 LiveLaw (SC) 614 : AIR 2024 SC 4247
Section 45 (1) - Refusal to grant bail - The appellant, a political figure, sought bail after being charged with offenses related to money laundering. The appellant contended that since the investigation was complete and the charge sheet had been filed, her continued custody was unnecessary. Additionally, it was argued that the appellant, being a woman, was entitled to special treatment under the proviso to Section 45(1) of the PMLA, as affirmed in Manish Sisodia v. Directorate of Enforcement, 2024 LiveLaw (SC) 563. Held, detailed discussions on the merits of the case should be avoided at the bail stage to prevent prejudice during trial. The Court rejected the High Court's reasoning, which had denied the benefit of the proviso to Section 45(1) based on the appellant's educational qualifications and social standing, finding that the lower court misinterpreted the provision as applicable only to "vulnerable women." The Supreme Court reiterated that the statutory provision mandates special treatment for women, and such benefit should not be denied unless specific reasons are provided. The Court set aside the High Court's order, granted bail to the appellant, and imposed conditions to prevent tampering with evidence or influencing witnesses. Kalvakuntla Kavitha v. Directorate of Enforcement, 2024 LiveLaw (SC) 614 : AIR 2024 SC 4247
Continued custody is unnecessary once investigation and charge sheet are complete. Bail granted under the principle that prolonged pre-trial incarceration should not amount to punishment without trial. Kalvakuntla Kavitha v. Directorate of Enforcement, 2024 LiveLaw (SC) 614 : AIR 2024 SC 4247
No assertion in ED complaint that scheduled offences generated proceeds of crime - grants bail. Bhagwan Bhagat v. Directorate of Enforcement, 2024 LiveLaw (SC) 576
In order to avail the right to fair trial, the accused cannot be denied the right to have inspection of the documents including the “un-relied upon documents. Manish Sisodia v. Directorate of Enforcement, 2024 LiveLaw (SC) 563 : AIR 2024 SC 4053
Section 45 – Bail - In cases where there has been a delay in trial and the accused has spent a long period in custody, right to bail shall be read into Section 439 Cr.P.C. and Section 45 PMLA. The same will however depend on the nature of allegations, as well. Manish Sisodia v. Directorate of Enforcement, 2024 LiveLaw (SC) 563 : AIR 2024 SC 4053
ED can't arrest after court takes cognizance' : Supreme Court grants anticipatory bail to Odisha officer in money laundering case. Bijay Ketan Sahoo v. Enforcement Directorate, 2024 LiveLaw (SC) 532
Supreme Court relaxes Section 45 PMLA conditions, grants bail citing long custody and time needed to complete trial. Ramkripal Meena v. Directorate of Enforcement, 2024 LiveLaw (SC) 527
The Supreme Court grants bail to money laundering accused considering age and custody period. Humayun Suleman Merchant v. Directorate of Enforcement, 2024 LiveLaw (SC) 521
Section 45 gives primacy to the opinion of the Directorate of Enforcement (DoE) when it comes to grant of bail. DoE should act uniformly, consistent in conduct, confirming one rule for all. (Para 79) Arvind Kejriwal v. Directorate of Enforcement, 2024 LiveLaw (SC) 463
Arvind Kejriwal is an elected leader and the Chief Minister of Delhi, a post holding importance and influence. We have also referred to the allegations. While we do not give any direction, since we are doubtful whether the court can direct an elected leader to step down or not function as the Chief Minister or as a Minister, we leave it to Arvind Kejriwal to take a call. Larger Bench, if deemed appropriate, can frame question(s) and decide the conditions that can be imposed by the court in such cases. (Para 86) Arvind Kejriwal v. Directorate of Enforcement, 2024 LiveLaw (SC) 463
Section 19 - Power to arrest under Section 19(1) is not for the purpose of investigation. Arrest can and should wait, and the power in terms of Section 19(1) of the PML Act can be exercised only when the material with the designated officer enables them to form an opinion, by recording reasons in writing that the arrestee is guilty. (Para 41) Arvind Kejriwal v. Directorate of Enforcement, 2024 LiveLaw (SC) 463
Section 19 - (a) Whether the “need and necessity to arrest” is a separate ground to challenge the order of arrest passed in terms of Section 19(1) of the PML Act? (b) Whether the “need and necessity to arrest” refers to the satisfaction of formal parameters to arrest and take a person into custody, or it relates to other personal grounds and reasons regarding necessity to arrest a person in the facts and circumstances of the said case? (c) If questions (a) and (b) are answered in the affirmative, what are the parameters and facts that are to be taken into consideration by the court while examining the question of “need and necessity to arrest”? Questions referred to the larger bench. (Para 84) Arvind Kejriwal v. Directorate of Enforcement, 2024 LiveLaw (SC) 463
In the facts of this case, the appellant will complete 3½ years of incarceration on 26th May, 2024. Thus, he will complete half of the prescribed sentence. In this case, obviously the trial has not started, as the charge has not been framed. This Court has held that Section 436A of the Code of Criminal Procedure, 1973 (for short "CRPC") will apply even to a case under the PMLA. But the Court can still deny the relief owing to the ground such as where the trial was delayed at the instance of the accused. As stated earlier, here there is no occasion for the appellant to cause the delay in trial, as even charge has not been framed. Moreover, there is no other circumstance brought on record which will compel us to deny the benefit of Section 436A of the CRPC to the appellant. Ajay Ajit Peter Kerkar v. Directorate of Enforcement, 2024 LiveLaw (SC) 400
Once a complaint under Section 44 (1)(b) of the PMLA is filed, it will be governed by Sections 200 to 205 of the CrPC as none of the said provisions are inconsistent with any of the provisions of the PMLA. (Para 23 (a)) Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
If the accused was not arrested by the ED till filing of the complaint, while taking cognizance on a complaint under Section 44(1)(b), as a normal rule, the Court should issue a summons to the accused and not a warrant. Even in a case where the accused is on bail, a summons must be issued. (Para 23 (b)) Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
After a summons is issued under Section 204 of the CrPC on taking cognizance of the offence punishable under Section 4 of the PMLA on a complaint, if the accused appears before the Special Court pursuant to the summons, he shall not be treated as if he is in custody. Therefore, it is not necessary for him to apply for bail. However, the Special Court can direct the accused to furnish bond in terms of Section 88 of the CrPC. (Para 23 (c)) Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
In a case where the accused appears pursuant to a summons before the Special Court, on a sufficient cause being shown, the Special Court can grant exemption from personal appearance to the accused by exercising power under Section 205 of the CrPC. (Para 23 (d)) Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
If the accused does not appear after a summons is served or does not appear on a subsequent date, the Special Court will be well within its powers to issue a warrant in terms of Section 70 of the CrPC. Initially, the Special Court should issue a bailable warrant. If it is not possible to effect service of the bailable warrant, then the recourse can be taken to issue a nonbailable warrant. (Para 23 (e)) Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
A bond furnished according to Section 88 is only an undertaking by an accused who is not in custody to appear before the Court on the date fixed. Thus, an order accepting bonds under Section 88 from the accused does not amount to a grant of bail;. (Para 23 (f), Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
In a case where the accused has furnished bonds under Section 88 of the CrPC, if he fails to appear on subsequent dates, the Special Court has the powers under Section 89 read with Sections 70 of the CrPC to issue a warrant directing that the accused shall be arrested and produced before the Special Court; If such a warrant is issued, it will always be open for the accused to apply for cancellation of the warrant by giving an undertaking to the Special Court to appear before the said Court on all the dates fixed by it. While cancelling the warrant, the Court can always take an undertaking from the accused to appear before the Court on every date unless appearance is specifically exempted. When the ED has not taken the custody of the accused during the investigation, usually, the Special Court will exercise the power of cancellation of the warrant without insisting on taking the accused in custody provided an undertaking is furnished by the accused to appear regularly before the Court. When the Special Court deals with an application for cancellation of a warrant, the Special Court is not dealing with an application for bail. Hence, Section 45(1) will have no application to such an application. (Para 23 (g). Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
When an accused appears pursuant to a summons, the Special Court is empowered to take bonds under Section 88 of the CrPC in a given case. However, it is not mandatory in every case to direct furnishing of bonds. However, if a warrant of arrest has been issued on account of nonappearance or proceedings under Section 82 and/or Section 83 of the CrPC have been issued against an accused, he cannot be let off by taking a bond under Section 88 of the CrPC, and the accused will have to apply for cancellation of the warrant. (Para 23 (h), Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
After cognizance is taken of the offence punishable under Section 4 of the PMLA based on a complaint under Section 44 (1)(b), the ED and its officers are powerless to exercise power under Section 19 to arrest a person shown as an accused in the complaint. (Para 23 (i), Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
If the ED wants custody of the accused who appears after service of summons for conducting further investigation in the same offence, the ED will have to seek custody of the accused by applying to the Special Court. After hearing the accused, the Special Court must pass an order on the application by recording brief reasons. While hearing such an application, the Court may permit custody only if it is satisfied that custodial interrogation at that stage is required, even though the accused was never arrested under Section 19. However, when the ED wants to conduct a further investigation concerning the same offence, it may arrest a person not shown as an accused in the complaint already filed under Section 44(1)(b), provided the requirements of Section 19 are fulfilled. (Para 23 (j), Tarsem Lal v. Directorate of Enforcement, 2024 LiveLaw (SC) 383 : AIR 2024 SC 2512 : (2024) 7 SCC 61 : 2024 Cri LJ 2705
Section 19(1) – Interpretation of the phrase 'inform him of the grounds for such arrest' – Held, the provision regarding the communication of the grounds of arrest to a person arrested contained in Section 43B(1) of the UAPA is verbatim the same as that in Section 19(1) of the PMLA – It is a statutory mandate requiring the arresting officer to inform the grounds of arrest to the person arrested under Section 43B(1) of the UAPA at the earliest. Both the provisions find their source in the constitutional safeguard provided under Article 22(1) of the Constitution of India and the requirement to communicate the grounds of arrest is the same in both the statutes. Hence, applying the golden rules of interpretation, the provisions which lay down a very important constitutional safeguard to a person arrested on charges of committing an offence either under the PMLA or under the UAPA, have to be uniformly construed and applied. (Para 17, 18, 22 & 34) Prabir Purkayastha v. State, 2024 LiveLaw (SC) 376 : AIR 2024 SC 2967 : 2024 Cri LJ 2450 : (2024) 8 SCC 254
Section 2(1) (y), 2(1) (u) & 3 and Criminal Procedure Code, 1973; Section 203 & 204 – Schedule offence – In absence of scheduled offence, there cannot be any proceeds of crime within the meaning Section 2(1) (u) of the PMLA. Proceeds of crime means 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. Existence of the proceeds of crime is a condition precedent for the applicability of Section 3 of the PMLA. If there are no proceeds of crime, the offence under Section 3 of the PMLA is not made out. Hence, there is no need of the Special Court to apply its mind in accordance with Section 203 r.w 204 of the Cr.PC to find out whether a prima facie case is made out or not. (Para 4, 6 & 7) Yash Tuteja v. Union of India, 2024 LiveLaw (SC) 310 : (2024) 8 SCC 465
Section 45 - The appellants have miserably failed to satisfy that there are reasonable grounds for believing that they are not guilty of the alleged offences. On the contrary, there is sufficient material collected by the respondent-ED to show that they are prima facie guilty of the alleged offences. (Para 30) Satyendar Kumar Jain v. Directorate of Enforcement, 2024 LiveLaw (SC) 240 : AIR 2024 SC 1576 : (2024) 6 SCC 715
Once cognizance of a complaint filed under Section 44 is taken by the Special Court under the PMLA Act, the power to arrest vesting under Section 19 of the PMLA Act cannot be exercised. Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Office, 2024 LiveLaw (SC) 191: AIR 2024 SC 2512
A very strange and unusual Writ Petitions have been filed by the State against the Directorate of Enforcement under Article 226 of the Constitution of India, before the High Court seeking relief, which would indirectly stall or delay the inquiry/investigation. The Writ Petitions filed, at the instance of the State Government, challenging summons issued to the District Collectors prima facie appears to be thoroughly misconceived, and the impugned order passed by the High Court also being under utter misconception of law. Directorate of Enforcement v. State of Tamil Nadu, 2024 LiveLaw (SC) 172
HIGH COURTS
BOMBAY HIGH COURT
Case Title: Shiv Charan v. Adjudicating Authority
Citation: 2024 LiveLaw (Bom) 123
The Bombay High Court held that the NCLT has the jurisdiction to direct the Enforcement Directorate (ED) to release attached properties of a corporate debtor once the resolution plan has been approved and immunity from prosecution is triggered under Section 32A of IBC, 2016.
A division bench of Justice BP Colabawalla and Justice Somasekhar Sundaresan upheld an NCLT order directing the ED to release the properties of a corporate debtor that were attached under the Prevention of Money Laundering Act, 2002 (PMLA).
Case Title: Sarang Wadhawan v. Directorate of Enforcement
Citation: 2024 LiveLaw (Bom) 190
The Bombay High Court directed the Registrar General of the High Court to assess and solve the problem of total backlog of cases, staffing levels, and the allocation of judges for both scheduled offenses and those under the Prevention of Money Laundering Act (PMLA) at the Mumbai City Civil and Sessions Court.
Justice SM Modak added that Registrar General may also seek necessary directions from the Chief Justice in order to mitigate problems faced by the prosecuting agency as well as by under trial prisoners. "It may happen that due to intervention of learned Registrar General, the City Civil Court administration may be boosted to deal with huge pendency for scheduled and PMLA offence", the court remarked.
Case Title: Ram Kotumal Issrani v. Directorate of Enforcement and Ors.
Citation: 2024 LiveLaw (Bom) 206
The Bombay High Court criticized the Enforcement Directorate for its practice of recording statements of persons summoned under section 50 of PMLA late at night, emphasizing the right to sleep as a basic human requirement.
“The `right to sleep' / 'right to blink' is a basic human requirement, inasmuch as, non-providing of the same, violates a person's human rights. It affects a person's health, may impair his mental faculties, cognitive skills and so on. The said person, so summoned, cannot be deprived of his basic human right i.e. right to sleep, by the agency, beyond a reasonable time. Statements must necessarily be recorded during earthly hours and not in the night when the person's cognitive skills may be impaired”, a division bench of Justice Revati Mohite Dere and Justice Manjusha Deshpande observed.
Case Title: Naresh Goyal v. ED
Citation: 2024 LiveLaw (Bom) 245
The Bombay High Court granted interim bail for two months to Jet Airways founder Naresh Goyal in a money laundering case arising out of an alleged loan default of Rs. 538 Crores given to Jet Airways by Canara Bank.
Justice NJ Jamadar observed "The broad submission that since the applicant has got best of the treatment, he does not deserve to be released on bail, looses sight of the precious value of personal liberty. To accept such a broad proposition that once a person gets the requisite treatment, he does not deserve bail, howsoever critical his health condition may be, would defeat the legislative intent of enacting the proviso and render the proviso otiose".
Case Title: Simpy Bhardwaj vs Union of India
Citation: 2024 LiveLaw (Bom) 522
Observing that she is the mother of a six year old, the Bombay High Court last week granted bail to Simpy Bhardwaj, booked under the stringent Prevention of Money Laundering Act (PMLA) by the Enforcement Directorate (ED) in 2023 for her alleged role in India's largest Bitcoin-based Ponzi scheme worth Rs 6,606 crore, related to a Delhi-based firm - Variable Tech Pvt Ltd.
Single-judge Justice Manish Pitale observed that since the applicant Bharadwaj is a woman, she is entitled to the benefit of the proviso to section 45(1) of the Act.
Case Title: Deepak Deshmukh vs Directorate of Enforcement
Citation: 2024 LiveLaw (Bom) 560
The Bombay High Court last week while granting bail to a man arrested by the Enforcement Directorate (ED) observed that the anti-money laundering agency "misused" its powers of arrest and acted as per this own "whims and fancies."
A division bench of Justices Revati Mohite-Dere and Prithviraj Chavan slammed the ED for arresting the petitioner Deepak Deshmukh in a predicate offence lodged way back eighty years ago (in 2016) in which he was neither named nor chargesheeted.
Bombay High Court Grants Bail To Jet Airways Founder Naresh Goyal On Medical Grounds
Case Title: Naresh Goyal v. ED
Citation: 2024 LiveLaw (Bom) 580
The Bombay High Court has made Jet Airways founder Naresh Goyal's interim bail absolute in relation to a money laundering case.
A single-judge bench of Justice Nijamoodin Jamadar, who had earlier granted interim bail to Goyal made it absolute.
CALCUTTA HIGH COURT
Case Title: Vishambhar Saran -Vs.- Bureau Of Immigration & Ors.
Citation: 2024 LiveLaw (Cal) 193
The Calcutta High Court bench of Justice Shampa Sarkar has held that mere apprehension that a person would flee India and no steps could be taken to recover the money is not enough to issue a Look Out Circular (LOC) against him.
The matter pertained to a writ petition which was filed by an erstwhile Director of Visa Power Limited ("company in liquidation"). The Petitioner argued that he was never a whole-time director of the company, which is undergoing liquidation following an order issued by the National Company Law Tribunal (NCLT) in Kolkata. The company obtained credit facilities from a consortium of banks, with Punjab National Bank (PNB) as the lead bank. This credit was intended for setting up a thermal power project in Raigarh district, Chhattisgarh, sanctioned around March 2010. However, due to the Supreme Court's decision canceling coal blocks, the thermal plant could not be established and operationalized thwarting the project's goal to supply power to contractors given coal block allocations.
Case: Sujay Krishna Bhadra v/s. Enforcement Directorate Kolkata Zonal Office-II
Citation: 2024 LiveLaw (Cal) 267
The Calcutta High Court has granted bail to recruitment scam accused Sujay Krishna Bhadra. Bhadra's firm was linked with transfer of proceeds of crime to M/S Leaps & Bounds Pvt Ltd, a company linked with AITC MP Abhishek Banerjee.
Justice Suvra Ghosh granted bail and held: The case essentially hinges on the statement of the petitioner and the co-accused and recovery made pursuant to the same. The prosecution has in fact commenced with the statement of Tapas Kumar Mondal and Kuntal Ghosh under section 50 of the PMLA. It is trite law that prosecution cannot commence with the statement of a co-accused under section 50 of the PMLA.
Case: Kunal Gupta v/s. Enforcement Directorate
Citation: 2024 LiveLaw (Cal) 270
The Calcutta High Court has granted bail to a man being investigated by the Enforcement Directorate under the PMLA for allegedly running a fake call centre and promising services to victims in exchange for money, which were never delivered. The alleged victims were from countries such as the US, UK, Germany, Australia, etc.
Justice Suvra Ghosh held: The charge sheet of the scheduled offence does not name the victims who are undoubtedly the best persons to substantiate the allegations against the petitioner. A constitutional Court cannot be restrained from granting bail to an accused on account of restrictive statutory provisions in a penal statute if it finds that the right of the accused-under trial under Article 21 of the Constitution has been infringed.
DELHI HIGH COURT
Title: NEERAJ SINGAL v. DIRECTORATE OF ENFORCEMENT
Citation: 2024 LiveLaw (Del) 31
The Delhi High Court has observed that oral communication of “grounds of arrest” to an accused is proper compliance of Section 19(1) of Prevention of Money Laundering Act, 2002, for arrests made prior to the Supreme Court ruling in Pankaj Bansal v. Union of India, delivered on October 3, 2023.
Justice Vikas Mahajan made the observation while upholding the arrest of Neeraj Singal, former Managing Director of Bhushan Steel Limited, in a money laundering case related to Enforcement Directorate's probe in a bank fraud case.
Title: MR MAHENDER KUMAR KHANDELWAL v. DIRECTORATE OF ENFORCEMENT & ANR.
Citation: 2024 LiveLaw (Del) 123
The Delhi High Court has observed that where the investigation under Prevention of Money-Laundering Act, 2002, extends beyond 365 days and does not result in any proceedings relating to any offence, the seizure of a property will lapse and must be returned to the person from whom it was so seized.
“The continuation of such seizure beyond 365 days, in absence of the pendency of any proceedings relating to any offence under this Act before a court or under the corresponding law of any other country before the competent court of criminal jurisdiction outside India, shall be confiscatory in nature, without authority of law and, therefore, violative of Article 300A of the Constitution of India,” Justice Navin Chawla ruled.
Title: SANJAY JAIN v. ENFORCEMENT DIRECTORATE
Citation: 2024 LiveLaw (Del) 285
The Delhi High Court has said that the confessional statement of a co-accused under Section 50 of Prevention of Money-Laundering Act, 2002, is not a substantive piece of evidence and can be used only for corroboration in support of other evidence to lend assurance to the Court in arriving at a conclusion of guilt.
Justice Vikas Mahajan reiterated that the statements of the witnesses recorded under Section 50 of the PMLA are to be meticulously appreciated only by the Trial Court during the course of the trial and there cannot be a mini-trial at the stage of bail.
Title: MR TALIB HASSAN DARVESH v. THE DIRECTORATE OF ENFORCEMENT
Citation: 2024 LiveLaw (Del) 304
The Delhi High Court has said that the summons issued by Enforcement Directorate (ED) cannot be quashed merely because relevant documents required for investigation or confrontation with an accused have not been specified in them.
Justice Anoop Kumar Mendiratta said the summoning, in exercise of statutory powers, cannot be stalled merely on mere apprehension that the accused may be arrested and prosecuted on basis of summons issued after registration of ECIR in the proceedings initiated by ED.
Case Title: Rajiv Channa Vs Union Of India
Citation: 2024 LiveLaw (Del) 452
The Delhi High Court has reiterated that if the elementary foundation i.e., the scheduled offence is itself removed, consequential proceedings under the Prevention of Money Laundering Act, 2002 shall also fall.
The division bench comprising Justices Purushaindra Kumar Kaurav And Yashwant Varma observed, “the appellant-Jeevan Kumar had already been acquitted of the scheduled offence, there can be no action for money-laundering against the other appellants in relation to the property linked to the stated scheduled offence. An inference can plausibly be drawn from the legal maxim sublato fundamento cadit opus which means that upon removal of the foundation, the work collapses.”
Title: ASHOK KUMAR SINGH AND ORS v. UNION OF INDIA AND ANR
Citation: 2024 LiveLaw (Del) 510
The Delhi High Court has refused to entertain a PIL seeking “authoritative interpretation” of Section 66 of PMLA, alleging that ED is pressurizing the police and CBI to file FIRs under predicate offence on the basis of the information shared by it with the agencies.
A division bench of Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora granted liberty to the petitioners, Ashok Kumar Singh and another individual, to raise the issue of interpretation before appropriate courts in appropriate proceedings.
Title: DIRECTORATE OF ENFORCEMENT v. AKHILESH SINGH & ORS.
Citation: 2024 LiveLaw (Del) 545
The Delhi High Court has ruled that once a person is discharged or acquitted from the scheduled offence, the properties attached under the PMLA cannot legally be treated as proceeds of crime or be viewed as property derived or obtained from criminal activity.
“A perusal of Section 8(6) of the PMLA makes amply clear that if an accused under the PMLA is discharged / acquitted, the learned Special Judge under Section 8(6) has no option but to pass an order releasing the properties attached under the PMLA,” Justice Vikas Mahajan said.
Title: ED v. Ajay S Mittal
Citation: 2024 LiveLaw (Del) 646
The Delhi High Court has set aside a trial court order transferring Bhushan Steel money laundering case from one judge to another, after one of the accused alleged that the judge passed a comment expressing "ED matters me kaun si bail hoti hai?”
Justice Swarana Kanta Sharma said that the alleged comment did not reflect any apprehension of bias against the accused or something in favour of the prosecuting agency.
Title: SATHISH BABU SANA v. DIRECTORATE OF ENFORCEMENT & ANR. and other connected matters
Citation: 2024 LiveLaw (Del) 798
The Delhi High Court has upheld the money laundering proceedings initiated against Businessman Sathish Babu Sana in relation to the PMLA case involving meat exporter Moin Qureshi and other persons.
A division bench comprising of Justice Suresh Kumar Kait and Justice Neena Bansal Krishna dismissed the appeal moved by Sana challenging the summons issued to him on July 19 and 25, 2019.
Land For Jobs Scam: Delhi High Court Grants Bail To Lalu Yadav's Aide Amit Katyal In PMLA Case
Title: AMIT KATYAL v. DIRECTORATE OF ENFORCEMENT GOVERNMENT OF INDIA
Citation: 2024 LiveLaw (Del) 1024
The Delhi High Court has granted bail to RJD chief Lalu Prasad Yadav's close aide Amit Katyal in a money laundering case related to the alleged land-for-jobs scam case.
Justice Neena Bansal Krishna observed that the investigations qua Katyal already stood concluded and the Prosecution Complaint was also filed by the Enforcement Directorate (ED).
Title: ADNAN NISAR v. ED & other connected matters
Citation: 2024 LiveLaw (Del) 1030
The Delhi High Court has held that an offence committed in a foreign country under laws of that nation can be treated as a predicate offence under PMLA if it has “cross border implications” and the proceeds of the crime have travelled to India.
Perusing various provisions under PMLA and Part C of the Schedule, Justice Vikas Mahajan said:
“…if an offence has been committed in a foreign country under the laws of that country, the same can be treated as a predicate offence provided such offence corresponds to any of the offences specified under Part C of the PMLA and it has cross border implications in the sense that the proceeds of such crime has travelled to India.”
Title: DIRECTORATE OF ENFORCEMENT v. RAHIL HITESHBHAI CHOVATIA
Citation: 2024 LiveLaw (Del) 1065
The Delhi High Court has held that bail cannot be denied under Prevention of Money Laundering Act, 2002, merely on the assumption that the property recovered from the accused must be proceed of crime.
Justice Dinesh Kumar Sharma rejected a plea moved by Enforcement Directorate (ED) against grant of bail to an accused, Rahil Hiteshbhai Chovatia, in a money laundering case on October 19, 2022.
Title: PANKAJ KUMAR TIWARI v. ED and other connected matter
Citation: 2024 LiveLaw (Del) 1181
The Delhi High Court has held that keeping an accused in custody by using Section 45 of PMLA as a tool for incarceration is not permissible where the delay in trial is not attributable to the accused.
“Flow of liberty cannot be dammed by Section 45 without taking all other germane considerations into account. It is the duty of Constitutional Courts to champion the constitutional cause of Liberty and uphold the majesty of Article 21,” Justice Manoj Kumar Ohri said.
Case title: Vaibhav Jain vs. Directorate Of Enforcement & Connected Matter
Citation: 2024 LiveLaw (Del) 1190
The Delhi High Court has granted bail to Vaibhav Jain and Ankush Jain in the money laundering case involving AAP leader Satyendra Jain.
A single judge bench of Justice Manoj Kumar Ohri granted them bail on the grounds that the main accused, Satyendra Jain has been enlarged on bail, they have been in custody for over 2 years and that the trial has not yet commenced.
The Court observed that the main accused, Satyendra Jain, has also been granted bail and that parity is applicable in Prevention of Money Laundering Act (PMLA) cases.
Title: SANJAY AGGARWAL v. ED
Citation: 2024 LiveLaw (Del) 1260
The Delhi High Court has held that it is not necessary for the Special Court under PMLA to record its reasons for taking cognizance of Enforcement Directorate (ED) complaint, unlike a private complaint under CrPC or BNSS.
Justice Chandra Dhari Singh observed that an initial complaint can be filed by ED under Section 44 of the PMLA, even if the investigation is not fully completed.
This, as per the Court, can be done especially in light of the Explanation-II introduced in the provision in 2019 which permits ED to file of a supplementary complaint.
Title: HARI OM RAI v. ED
Citation: 2024 LiveLaw (Del) 1261
The Delhi High Court has remarked that an accused in a money laundering case cannot be equated with those punishable with death, life imprisonment, ten years or more like offences such as murder, rape or dacoity.
Justice Manoj Kumar Ohri said that it is pertinent to keep in mind while dealing with the cases under the PMLA that except in a few exceptional cases, the maximum sentence can be of seven years.
Title: ARVIND DHAM v. UNION OF INDIA & ORS.
Citation: 2024 LiveLaw (Del) 1312
The Delhi High Court has held that the condition of supplying the “reasons to believe” by ED to a person arrested under PMLA as a separate document as per Supreme Court's ruling in Arvind Kejriwal case ought to be applied prospectively.
Justice Anish Dayal said that the ED could not be expected to comply with the additional condition, if the arrest was made in the pre-Arvind Kejriwal judgment period.
On July 12, the Supreme Court, while granting bail to Kejriwal in the liquor policy case, had held that arrest under Section 19 of PMLA cannot be made simply for the purposes of investigation. Rather, the power can be exercised only when the concerned officer is able to form an opinion, based on material in possession, and upon recording reasons in writing, that the arrestee is guilty.
Title: PARVEZ AHMED v. ED and other connected matters
Citation: 2024 LiveLaw (Del) 1315
The Delhi High Court has held that collection of funds in an illegal way to commit a scheduled offence in future is not an offence of money laundering under Prevention of Money Laundering Act.
In doing so, the court underscored that 'proceeds of crime' has to be generated as a result of the alleged criminal activity.
“The funds so collected are not proceeds of crime and can be proceeds of crime only when they were generated as a result of scheduled offence,” Justice Jasmeet Singh said.
JAMMU & KASHMIR AND LADAKH HIGH COURT
[PMLA] Charges Can't Proceed If Investigation Into Predicate Offence Is Stalled: J&K High Court
Case Title: Anil Kumar Aggarwal V/s Enforcement Directorate th. its Assistant Director, Jammu
Citation: 2024 LiveLaw (JKL) 44
The Jammu and Kashmir and Ladakh High Court ruled that charges under the Prevention of Money Laundering Act (PMLA) cannot proceed if the investigation into the original crime (known as the predicate offence) is stalled.
A bench of Justice Sanjay Dhar clarified,
“Offences under PMLA are stand alone offences, yet their origin is the Scheduled offences. Once the Scheduled offence ceases to exist or is extinguished, an accused cannot be proceeded against in respect of offences under PMLA”
Case Title: Dr. Junaid Vs Union Of India
Citation: 2024 LiveLaw (JKL) 164
Reinforcing the protections for individuals who, acting in good faith, suffer losses due to offences of money laundering the Jammu and Kashmir and Ladakh High Court ruled that they are entitled to approach the Special Court to seek restoration of the attached properties.
Citing Sec 8 Sub Sec 8 of the Prevention of Money Laundering Act, 2002, Justice Sanjeev Kumar observed,
“.. that a person, who has acted in good faith and has suffered a quantifiable loss as a result of the offence of money laundering, despite having taken all reasonable precautions and is otherwise not involved in money laundering, would be a claimant entitled to invoke the second proviso to sub-section (8) of Section 8 of the Act of 2002”.
J&K High Court Quashes PMLA Charges Against Dr Farooq Abdullah In Alleged Cricket Association Scam
Case Title: Ahsan Ahmad Mirza Vs Directorate Of Enforcement
Citation: 2024 LiveLaw (JKL) 234
The High Court of Jammu and Kashmir and Ladakh quashed the charge sheet filed against Dr Farooq Abdullah under the Prevention of Money Laundering Act (PMLA) in the Jammu and Kashmir Cricket Association (JKCA) scam.
The Court ruled that the Enforcement Directorate (ED) cannot act as an appellate authority over the conclusions drawn by the Central Bureau of Investigation (CBI), thereby setting a precedent on the limits of the ED's jurisdiction.
JHARKHAND HIGH COURT
Case Title: Mukesh Mittal vs Union of India through Directorate of Enforcement
LL Citation: 2024 LiveLaw (Jha) 32
The Jharkhand High Court has observed that individuals implicated in a PMLA (Prevention of Money Laundering Act) case, who become involved after the commission of the scheduled offense by aiding in the concealment or utilization of proceeds of crime, are not required to be accused in the scheduled offense.
The court emphasized that these individuals can still face prosecution under PMLA as long as the scheduled offense remains valid.
Case Title: Sri Hemant Soren vs Directorate of Enforcement
LL Citation: 2024 LiveLaw (Pat) 99
The Jharkhand High Court has granted bail to former Chief Minister Hemant Soren on Friday in an alleged money laundering case involving the illegal possession of 8.36 acres of land.
The Court observed that there was no evidence directly linking Soren to the possession of the land in question and that the ED's statements that their intervention prevented illegal possession of the land were ambiguous.
The Court further observed that in this case, the twin conditions under Section 45 of the PMLA had been satisfied and hence Soren had to be released.
Case Title: Sri Hemant Soren Vs The Directorate Of Enforcement Represented Thr Its Assistant Director Ranchi Zonal Office
LL Citation: 2024 LiveLaw (Jha) 103
The Jharkhand High Court granted bail to former Chief Minister Hemant Soren on Friday in connection with an alleged land scam case. The verdict follows the court's decision to reserve the order on June 13 regarding Soren's bail application.
The ruling was made by a single bench led by Justice Rongon Mukhopadhyay. Representing Soren, Senior Advocate Meenakshi Arora claimed that the charges against him were politically motivated and baseless. Senior Advocate Kapil Sibal, also argued for Soren's bail, asserting that the ED falsely implicated him.
KARNATAKA HIGH COURT
Case Title: Razorpay Software Private Limited AND Union of India
Case No: Writ Petition No 10329 OF 2023
Citation No: 2024 LiveLaw (Kar) 118
The Karnataka High Court has quashed the offences of Money laundering initiated against payment gateway company Razorpay, accused of being negligent in setting up the merchant IDs in the name of a co-accused who was involved in illegal money lending business.
A single judge bench of Justice Hemant Chandangoudar allowed the petition filed by the company and quashed the proceedings initiated by the Enforcement Directorate under Sections 3, 70 and 4 of Prevention of Money Laundering Act, 2002 and the summons issued against it by the Special court.
Karnataka High Court Quashes PMLA Case Against Former Chancellor Of Alliance University
Case Title: Dr Madhukar G Angur AND Directorate of Enforcement.
Case No: CRIMINAL PETITION NO.13205 OF 2023
Citation No: 2024 LiveLaw (Kar) 136
The Karnataka High Court has quashed a case registered by the Enforcement Directorate against Former Chancellor of Alliance University, Dr Madhukar G Angur initiated under provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
A single judge bench of Justice S Vishwajith Shetty quashed the case taking note of the Apex court judgment in the case of Pavana Dibbur vs The Directorate of Enforcement, CRL.P NO.13205 OF 2023.
Case Title: Manoj Mittal & ANR AND State of Karnataka
Case No: WP 19489/2024
Citation No: 2024 LiveLaw (Kar) 462
The Karnataka High Court on Friday (November 8) quashed the prosecution initiated against two Enforcement Directorate officers who are investigating Valmiki Corporation case and were alleged of coercing a witness to make statements against Chief Minister Siddaramaiah.
A single judge bench of Justice M Nagaprasanna allowed a petition filed by Deputy Director and Assistant Director of ED, Manoj Mittal and Murali Kannan, after the complainant in the case Kallesh B filed a memo in the court, stating that he did not want to pursue the complaint further.
KERALA HIGH COURT
Case Title: Satish Motilal Bidri v Union Of India
Citation: 2024 LiveLaw (Ker) 400
The Kerala High Court has held that properties subject to attachment under the PMLA must be properties acquired through proceeds of crime. It stated that provisions of PMLA cannot be unfairly and unreasonably used to attach properties that are unrelated to any criminal activity.
Case Title: N. Bhasurangan v The Assistant Director & Akhiljith J. B. v The Assistant Director
Citation: 2024 LiveLaw (Ker) 609
The Kerala High Court denied bail to former CPI leader N. Bhasurangan and his son in an alleged money laundering case, accused of allegedly indulging in several financial irregularities in the management of the Kandala Service Co-operative Bank.
A single judge bench of Justice C. S. Dias after considering the strict conditions imposed under Section 45 of the Prevention of Money Laundering Act (PMLA) to grant bail found that there is a prima facie case to deny bail to both of them.
"On a careful analysis of the facts and circumstances of the cases, the incriminating materials placed on record against the petitioners, the law on the point, and on considering that there are reasonable grounds to hold that the petitioners have committed the above offence and that they are likely to commit the offences if they are enlarged on bail, I am of the definite view that the petitioners are not entitled to be released on bail at this stage," the court said.
Case Title: Aravindakshan P. R. v Assistant Director, ED and Another
Citation: 2024 LiveLaw (Ker) 770
The Kerala High Court on Monday (December 2) granted bail to the former CPI(M) Municipal Councillor of Vadakkanchery Municipality Aravindakshan P. R. accused in the Karuvannur Bank Scam case investigated by the Enforcement Directorate.
Justice C. S. Dias also granted bail to the former Senior Accountant of the Bank, Jilise C. K. Both of them were alleged to have committed offences punishable under Section 4 (punishment for money laundering) of Prevention of Money Laundering Act.
Case Title: Davy Varghese v The Deputy Director
Citation: 2024 LiveLaw (Ker) 806
The Kerala High Court has observed that the Prevention of Money Laundering Act 2002 (PMLA) does not intend to attach or confiscate all properties of a person connected with crime, especially those properties that were acquired before even the commission of the crime.
A senior citizen and his wife have approached the Court seeking to quash an order of provisional attachment issued under the PMLA.
Justice Bechu Kurian Thomas thus set aside the order of provisional attachment of properties purchased by the petitioners in 1997, 1999 and 1987 which is much prior to the commission of the crime in 2014. The Court also noted that the PMLA came into existence only in 2002.
MADRAS HIGH COURT
Madras High Court Stays ED Summons To Private Contractors In Sand Mining Money Laundering Case
Case Title: A Rajkumar v Union of India
Citation: 2024 LiveLaw (Mad) 6
The Madras High Court on Friday stayed the operation of summons issued to private contractors in connection with the ongoing investigations by the Enforcement Directorate in the sand mining money laundering case.
Justice SS Sundar and Justice Sunder Mohan granted a stay on a plea by A Rajkuamr, partner of RS Construction, Shanmugam Ramachandran, and K Rethinam. The court had previously also stayed the operation of summons issued to the District Collectors in connection with the investigation.
Case Title: Pay Perform India Private Limited v The Union of India and Another
Citation: 2024 LiveLaw (Mad) 53
The Madras High Court recently held that the Adjudicating Authority under Section 6 of the Prevention of Money Laundering Act was neither a judicial nor a quasi-judicial tribunal merely because the procedures followed by the authority had some “judicial colour” to it.
The bench of Chief Justice SV Gangapurwala and Justice Bharatha Chakravarthy was hearing a plea challenging the constitutionality of Section 6(2), 6(3)(a)(ii), and 6(5)(b) of the Prevention of Money Laundering Act 2002.
Thus, the court observed that the adjudicating authority was an original authority exercising the administrative function under the Act. The court thus opined that the adjudicating authority was in place as a check and balance to ensure that the power was not solely exercised by the investigating officer.
Case Title: Nithesh Chaudhari v The Special Director
Citation: 2024 LiveLaw (Mad) 68
The Madras High Court has recently set aside a provisional attachment order made by the Deputy Director of ED and confirmed by the adjudicating authority after noting that the provisional attachment was not made per law. The court noted that even on the counter, the Department could not explain how the provisional attachment could be sustained on merits.
The bench of Justice MS Ramesh and Justice Sunder Mohan, however, gave liberty to the authorities to take action under the law if upon further investigation it was found that the sale made was a sham.
Though the court agreed that the petitioners had alternative remedies, the court also noted that since the attachment itself was not proper, the petitioners needn't be relegated to approach the authorities or Special Court. the court, thus set aside the provisional attachment order with respect to the petitioners' property.
Senthil Balaji Case: Madras High Court Refuses To Stay PMLA Trial In Cash For Jobs Scam
Case Title: V Senthil Balaji v Deputy Director
Citation: 2024 LiveLaw (Mad) 106
The Madras High Court has refused to stay the proceedings under the Prevention of Money Laundering Act against MLA and former Minister of Tamil Nadu Senthil Balaji in a case of cash-for-job scam.
Noting that it was too early to stay the trial, the bench of Justice MS Ramesh and Justice Sunder Mohan refused to grant any interim reliefs on the plea filed by the MLA and directed the Enforcement Directorate to file a counter to the plea by April 25th.
When the matter was taken up on Wednesday, Senior Advocate Mukul Rohatgi, appearing for Balaji contended that the trial in the money laundering case had to follow the trial in the predicate offence. He added that of Balaji was convicted in the ED trial and subsequently acquitted in the IPC offence, it would lead to manifest injustice. He also argued that deciding the money laundering case before the predicate offence would be like putting the cart before the horse.
Case Title: Ankit Tiwari v The State
Citation: 2024 LiveLaw (Mad) 114
The Madras High Court has dismissed the second bail petition filed by arrested Enforcement Directorate officer Ankit Tiwari. Ankit was arrested in December 2023 by the Directorate of Vigilance and Anti-Corruption. The DVAC had alleged that Ankit had demanded money from one Dr. Suresh Babu as a bribe to close the pending case against him.
Justice Dhandapani, while dismissing Tiwari's revision petition, observed that the court was bound to follow the ratio laid down by the Apex court and that its hands were tied from deciding the case on merits due to the reason that there was an interim stay by the Apex Court.
The court further observed that though the Supreme Court had permitted the High Court to consider the matter on merits, Tiwari would have been eligible for statutory bail only if the investigating agency had not filed the chargesheet within the stipulated time frame. In the present case, the court noted that the investigating agency was ready with the chargesheet on the 55th day itself but its hands were tied due to the order of the Supreme Court. Thus, the court granted liberty to the parties to approach the Apex Court to clarify the order.
Case Title: CM Raghavan v The Joint Director and others
Citation: 2024 LiveLaw (Mad) 168
The Madras High Court has dismissed a plea filed by an independent candidate seeking action under the Prevention of Money Laundering Act against the BJP and Congress candidates in Tirunelveli, following seizure of money.
A bench of Justice MS Ramesh and Justice Sunder Mohan dismissed the plea after noting that the offences alleged did not constitute scheduled offences warranting prosecution under the Act. A detailed order is expected soon.
The petition was filed by one CM Raghavan, an independent candidate from Tirunelveli constituency seeking directions to the ED to register a case against Nainar Nagendran and Robert Bruce, BJP and Congress candidates respectively.
Case Title: K Govindaraj v Union of India and Others
Citation: 2024 LiveLaw (Mad) 283
The Madras High Court recently restrained the Enforcement Directorate from carrying out its investigation under the Prevention of Money Laundering Act against private contractors in connection with alleged illegal sand mining.
The Court noted that there was no scheduled offence in the present case and hence the PMLA investigation was not sustainable. Till there was a scheduled offence registered and detection of the proceeds of crime, the ED cannot carry out its investigation.
The bench of Justice MS Ramesh and Justice Sunder Mohan observed that the ED had initiated the proceedings under the Prevention of Money Laundering Act without any basis and without identifying any proceeds of crime. It noted that sand mining was not covered under the scheduled offences under the PMLA. The court added that unless a case in the scheduled offence was registered and such an offence generated proceeds of crime, the ED could not have initiated any action. The court further observed that even if ED's materials were to be accepted, it would only show that they have unearthed large-scale illegal mining that generated illegal money.
Case Title: Anitha R Radhakrishnan v The Directorate of Enforcement and another
Citation: 2024 LiveLaw (Mad) 304
The Madras High Court on Wednesday dismissed a petition filed by the Tamil Nadu Fisheries Minister challenging the PMLA proceedings initiated by the Enforcement Proceedings against him.
Justice SM Subramaniam and Justice V Sivagnanam dismissed Radhakrishnan's plea and asked him to cooperate with the investigating agency to complete the probe in the money laundering case and allow it to file a final report before the special court.
The allegation against the Minister is that while serving as an MLA of Tiruchendur Assembly Constituency and subsequently as a Minister for Housing and Urban Development Department during the period from 2002-2006, he acquired assets disproportionate to his known sources of income to the tune of Rs.2,68,24,7555/- in his name, his wife's name, two brothers and three sons. Based on this, the Directorate of Enforcement filed an Enforcement Case Information Report (ECIR) which was sought to be quashed in the present case.
Case Title: Vijayraj Surana v Assistant Director
Citation: 2024 LiveLaw (Mad) 348
The Madras High Court has ruled that when an FIR in the predicate offense is quashed on technical grounds, it will not lead to an automatic quashing of the Enforcement Case Information Report (ECIR).
The bench of Justice SM Subramaniam and Justice V Sivagnanam ruled that the judgments in the case of Vijay Madanlal Choudhary cannot have a blanket application and shall be applied depending on the facts of each case. The court observed that when the FIR is quashed on mere technicalities or procedural irregularities, the ECIR would not be automatically quashed.
The court observed that when the courts are dealing with applications to quash the ECIR, it should look into the grounds on which the FIR concerning the scheduled offense is quashed and after careful examination, if it is found that the FIR was quashed on substantive grounds such as absence of prima facie offense, the ECIR would also lose its significance and could be quashed. The court added that if, on careful examination, the court finds that the FIR was quashed purely on technical grounds or procedural irregularities, then the PMLA proceedings would not end.
Case Title: Jaffer Sadiq v The Assistant Director
Citation: 2024 LiveLaw (Mad) 351
The Madras High Court recently dismissed the petition filed by former DMK functionary Jaffer Sadiq challenging his arrest by the Enforcement Directorate in connection with a PMLA case.
The bench of Justice SM Subramaniam and Justice V Sivagnanam noted that requirements under the Act had been met when Sadiq, who was already in judicial custody, was formally arrested. Thus, the court said that the petition was devoid of merits and dismissed the same.
Case Title: Pallab Sinha and another v The Deputy Director
Citation: 2024 LiveLaw (Mad) 354
The Madras High Court recently observed that Section 3 of the Prevention of Money Laundering Act had wider reach and that money laundering would include any activity or process of dealing with proceeds of crime, either directly or indirectly. The court made it clear that the offence was not limited to the final act of integrating tainted money into the economy.
Justice SM Subramaniam and Justice V Sivagnanam noted that the wording of Section 3 should not be read conjunctively merely because the definition uses the word 'and'. The court added that if such an interpretation was accepted, the whole Section would be rendered less effective as one person would possess the proceeds of crime and another would project it as tainted money so that neither would be covered under the Act. The court thus observed that PMLA could be invoked against a person, who was no longer in possession and enjoyment of proceeds of crime.
Case Title: M/s.Sterling Futures and Holidays Ltd. v Directorate of Enforcement,
Citation: 2024 LiveLaw (Mad) 373
The Madras High Court recently observed that under the Prevention of Money Laundering Act, the properties that are acquired even before the alleged scheduled offence could be attached when criminal activity has taken place outside the country. The court highlighted that the properties sought to be attached need not be purchased from and out of the proceeds of crime.
The bench of Justice SM Subramaniam and Justice V Sivagnanam also noted that as per Section 70 of the Act, a company could be prosecuted and the prosecution or conviction of the company, which is a legal jurisdictional person will not be dependent on the prosecution or conviction of any individual.
Case Title: S.Srinivasan v The Assistant Director
Citation: 2024 LiveLaw (Mad) 380
The Madras High Court recently observed that the expression money laundering, as defined under Section 3 of the Prevention of Money Laundering Act has a wider meaning and the provisions of the Act could be invoked against a person for mere possession of proceeds of crime. The court added that since Section 3 is wider, the court could not restrict its meaning to restrain authorities from invoking the provisions of PMLA.
The bench of Justice SM Subramaniam and Justice AD Maria Clete noted that the expression money laundering ordinarily meant placing, layering and integrating tainted property in the formal economy, since the Section has wider reach it would capture every process and activity dealing with proceeds of crime, directly or indirectly and not limited to happening of the final act of integration.
Case Title: The Assistant Director (PMLA) v Ashok Anand
Citation: 2024 LiveLaw (Mad) 388
The Madras High Court recently observed that pendency of a criminal appeal against the conviction in a schedule offence is not a bar to proceed wit trial in the PMLA case.
The court stressed that the schedule case and the PMLA case are distinct and different and thus the trial in money laundering case could not be postponed merely on the pendency of a criminal appeal in the schedule case.
The bench of Justice SM Subramaniam and Justice AD Maria Clete observed that the offence of money laundering had wider ramifications and could not be equated with offence under penal laws. The court added that though schedule offence is a prerequisite for initiation of proceedings under PMLA, once initiated it became independent and had to be dealt with separately.
Case Title: M/s Challani Rank Jewellery and Others v Ashok Kumar Jain
Citation: 2024 LiveLaw (Mad) 405
The Madras High Court recently observed that even if an account is blocked or frozen by the Enforcement Department or the Income Tax Department, a complaint under Section 138 of the Negotiable Instruments Act would be maintainable if the complainant is able to prove that dehors the freezing, the account did not have sufficient balance to honour the debt.
Justice G Jayachandran observed that the drawer of the cheque, in such cases could take a defence that the account was blocked or frozen. The court relied upon the Supreme Court's decision in Laxmi Dyechem v. State of Gujarat (2012) and held that issuing a cheque without sufficient fund to honour it is the genus of the crime and the complaint would be maintainable.
The court also observed that a single complaint under Section 138 of the Negotiable Instruments Act was maintainable when all the cheques were presented on the same day and were returned on the same day relying on the earlier decision of the Madras High Court in Suryakant V Kanakia v. Muthukumaran and Manjula v. Colgate Palmolive (India) Ltd.
Case Title: The Assistant Director v The State and Others
Citation: 2024 LiveLaw (Mad) 409
The Madras High Court recently held that once a complaint under the Prevention of Money Laundering Act was registered, the Enforcement Directorate was within its right to challenge the closure report filed in the Predicate Offence if the same resulted in miscarriage of justice.
The bench of Justice SM Subramaniam and Justice V Sivagnanam reiterated that the PMLA was a standalone offence and that when a closure report was filed in the predicate offence, it would not automatically close the PMLA proceedings also. The court thus quashed a closure report filed by the State police and taken on file by the Magistrate in connection with a cases involving lottery baron Santiago Martin and his wife.
Case Title: KC Chandran and Others v Directorate of Enforcement
Citation: 2024 LiveLaw (Mad) 481
The Madras High Court recently held that since the concealment of proceeds of crime itself is an offence under the Prevention of Money Laundering Act (PMLA), the Enforcement Directorate is not required to establish where the money eventually went.
A division bench of Justice GR Swaminathan and Justice R Poornima added that the accused, who would have engineered the disappearance of the money, could not be exonerated from the charges merely because the proceeds of the crime had not been identified. The court thus underscored that it was enough if the prosecution established the generation of the proceeds of crime and the involvement of the accused in the process.
Case Title: M Venkatesan v Directorate of Enforcement
Citation: 2024 LiveLaw (Mad) 488
The Madras High Court has clarified that the trial under the Prevention of Money Laundering Act (PMLA) is distinct and different from the trial of the predicate offence and thus the accused cannot seek for a simultaneous or joint trial even if both are pending before the same court.
A division bench of Justice SM Subramaniam and Justice M Jothiraman noted that since the procedures contemplated under the PMLA for trial are different, there was no question of joint or simultaneous trial. The court also added that there was no impediment for the special court to continue the trial even if the trial for a predicate offence was pending.
The court noted that as per Explanation (i) to Section 44 of the PMLA, the jurisdiction of the Special Court, while dealing with the offence under the Act shall not be dependent upon any orders passed in respect of the Scheduled offence and the trial in both the sets of offences by the same court shall not be construed as joint trial.
PUNJAB AND HARYANA HIGH COURT
Citation: 2024 LiveLaw (PH) 84
Title: Gurinder Pal Singh @ Tinku v. ED
The Punjab & Haryana High Court has made it clear that in Prevention of Money Laundering Act (PMLA) cases when the investigating agency did not arrest, but the trial court wants judicial custody on filing the complaint, the Court must give reasons for denying bail. While granting anticipatory bail in a PMLA case, Justice Anoop Chitkara said, "When the Investigating agency did not arrest, but the trial court wants judicial custody on filing the complaint [ECIR], there must be reasons to deny bail, which are non-existent (in the present case)."
[S. 45 PMLA] Twin Conditions For Bail Not Required To Be Fulfilled When Release In Police Custody Ordered: Punjab & Haryana High Court
Citation: 2024 LiveLaw (PH) 90
The Punjab & Haryana High Court made it clear that the twin condition under Section 45 of the Prevention of Money Laundering Act (PMLA), is not required to be complied with when the Court has ordered release in police custody.
According to Section 45 of the PMLA, bail can be granted to an accused in a money laundering case only if twin conditions are satisfied - there should be prima facie satisfaction that the accused has not committed the offence and that he is not likely to commit any offence while on bail.
PMLA | Money Laundering Impedes Progress Of Nation, Rigours Of Bail U/S 45 Must Not Be Overlooked: Punjab & Haryana High Court
Title: Surjeet Kumar Bansal v. Central Bureau of Investigation and another
Citation: 2024 LiveLaw (PH) 112
The Punjab and Haryana High Court has declined bail to a man accused of money laundering involving a financial fraud amounting to Rs.1626.7 crore, observing that rigours of Section 45 of the Prevention of Money Laundering Act (PMLA) lay down an exceptionally high yardstick for granting bail.
As per Section 45, bail can be granted to an accused in a money laundering case only if twin conditions are satisfied - there should be prima facie satisfaction that the accused has not committed the offence and that he is not likely to commit any offence while on bail.
PMLA | ECIR Is Internal Administrative Document Of ED, Can't Be Quashed By Inherent Power U/S 482 CrPC: Punjab & Haryana High Court
Title: Pawan Insaa v. Directorate of Enforcement, Government of India, Chandigarh Zonal Office, Chandigarh
Citation: 2024 LiveLaw (PH) 113
The Punjab and Haryana High Court has made it clear that Enforcement Case Information Report (ECIR) lodged by Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA) cannot be quashed by the High Court by exercising its inherent power under Section 482 CrPC.
Justice Manjari Nehru Kaul said, "...the ECIR is an internal administrative document of the ED. Consequently, in the considered opinion of this Court, since the ECIR precedes the stage of criminal prosecution and proceedings, it thus falls outside the purview of the inherent jurisdiction conferred upon this Court by Section 482 of the Cr.P.C. Therefore, the prayer of the petitioner for quashing of the ECIR under Section 482 of the Cr.P.C. cannot be entertained."
"No Wall, No Plaster": Punjab & Haryana HC Says No Prosecution Under PMLA When Accused Acquitted In Predicate Offence/ Closure Report Filed
Title: Chetan Gupta v. Directorate of Enforcement and others
Citation: 2024 LiveLaw (PH) 134
The Punjab and Haryana High Court has said that when a closure report is filed in the predicate offence, the complaint filed by Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002 (PMLA) based on that predicate offence would also be closed.
Justice Anoop Chitkara elucidated that, "The proceedings under PMLA are always subservient and secondary to the primary proceedings under some principal criminal offense, which is termed the predicate offense. If the violations of the main criminal penal provisions are mentioned in the PMLA schedules, only then the Enforcement Directorate can inquire into such scheduled penal offenses against the persons who have laundered the money, including or excluding the persons named as accused in the primary offense."
No Illegality: High Court Dismisses Punjab AAP MLA Jaswant Singh's Plea Challenging His Arrest By ED
Title: Jaswant Singh v. UOI & Anr.
2024 LiveLaw (PH) 182
The Punjab and Haryana High Court has dismissed Aam Admi Party (AAP) Punjab MLA Jaswant Singh's plea challenging his arrest by the Enforcement Directorate (ED).
The Court rejected the contention that the material in possession against him, including the memo of arrest and the grounds of arrest had been sent to the Adjudicating Authority two days after the arrest whereas it should have been sent immediately.
Accused Cannot Directly Approach High Court Against Eviction U/S 8(4) PMLA When Appeal Pending Before Tribunal: Punjab & Haryana High Court
Title: VARINDER PAL SINGH DHOOT V. UNION OF INDIA AND ANR.
2024 LiveLaw (PH) 169
The Punjab and Haryana High Court has made it clear that the accused cannot directly approach the High Court challenging eviction under Section 8 (4) of the Prevention of Money Laundering Act (PMLA) when the appeal in pending before the Tribunal.
The provision states that where the provisional order of attachment made is confirmed, the possession of such property may be taken in such manner as may be prescribed.
Accused Bound To Join Investigation Under PMLA But Cannot Be Compelled To Make Self-Incriminating Statement: Punjab & Haryana High Court
Title: Gurpreet Singh Sabharwal v. State of Haryana and others
Citation: 2024 LiveLaw (PH) 170
The Punjab & Haryana High Court has said that the accused is duty-bound to cooperate in the investigation as per the summon issued under 50(2) of the Prevention of Money Laundering Act, 2002 (PMLA) but cannot be compelled to make an incriminating statement against himself in terms of the protection granted under Article 20(3) of the Constitution of India.
Chief Justice Sheel Nagu and Justice Vikas Suri said, "The...fundamental right under Article 20(3) of the Constitution of India is available to be exercised as a shield by every accused in an offence punishable under the Prevention of Money Laundering Act which undoubtedly is a criminal law, promulgated to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering and for matters connected therewith or incidental thereto."
[PMLA] Order For Confiscating Property Is Not Interlocutory Since It Determines Interim Custody, Can Be Challenged In Revision Plea: P&H HC
Title: Union of Bank of India vs. Assistant Director, Directorate of Enforcement
Citation: 2024 LiveLaw (PH) 232
The Punjab & Haryana High Court has made it clear that an order for confiscation of property passed by the trial court can be challenged in a revision plea before the High Court.
In the present case, the property mortgaged in a Bank in lieu of credit facilities availed by an accused under the Prevention of Money Laundering Act, 2002 (PMLA), was confiscated by the Enforcement Directorate (ED). The Court rejected the objection raised by the ED that the plea challenging the confiscation order was not maintainable before the High Court.
ED Interrogations Lasting 14 Hrs "Not Heroic", Violate Human Dignity: Punjab & Haryana HC While Declaring Congress MLA's Arrest Illegal
Title: Surender Panwar v. Directorate of Enforcement
Citation: 2024 LiveLaw (PH) 242
The Punjab and Haryana High Court today asked the Enforcement Directorate to take remedial measures and sensitize its officers to follow some "reasonable time limit" for interrogations of suspects under PMLA, in one go.
Justice Mahabir Singh Sindhu said ED interrogation lasting for upto 15 hours in this case "is not heroic...rather it is against the dignity of a human being."
ED Arrest Illegal If Not Based On Well Documented 'Reason To Believe' U/S 19 PMLA: Punjab & Haryana High Court
Title: Neeraj Saluja v. UOI
Citation: 2024 LiveLaw (PH) 286
The Punjab & Haryana High Court has dismissed the plea of an industrialist accused of money laundering, challenging ED arrest, observing that grounds of arrest explicitly reveal and point to the effect that the Arresting Officer had conveyed his intention, reasons, grounds and belief to arrest the petitioner.
Neeraj Saluja was accused of illegally diverting over Rs.1,500 crores from the loan amount for a purpose other than it was sanctioned.
Can HC Entertain Writ Against ED's Provisional Attachment When Alternate Remedy Is Available Under PMLA? Punjab & Haryana HC Answers
Title: MGF Developments Limited v. Directorate of Enforcement and Another
Citation: 2024 LiveLaw (PH) 292
The Punjab & Haryana High Court has said that when an alternative remedy is available under the Prevention of Money Laundering Act 2002 (PMLA) against Provisional Attachment Order (PAO) issued by the Directorate of Enforcement, it would not be appropriate for it to entertain a writ petition even before the statutory 30 days' period from the date when PAO has been passed. Section 5(5) of PMLA stipulates that Director or any other officer of the ED who provisionally attaches any property shall, within a period of 30 days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority.
Punjab & Haryana High Court Directs ED To Arrest Former Congress MLA Dharam Singh Chhoker In PMLA Case
Title: Virender Singh v. State of Haryana and another
Citation: 2024 LiveLaw (PH) 315
The Punjab & Haryana High Court directed the Enforcement Directorate (ED) to forthwith arrest former Congress MLA from Haryana Dharam Singh Chhoker accused in a Prevention of Money Laundering Act, 2002 (PMLA) case. It is alleged that the Company owned by Chokker and his family, Mahira Infratech Pvt Ltd had collected Rs 363 crore from homebuyers for the construction of 1,500 flats to be delivered in 2021-2022. The company accounts, funds were allegedly siphoned off as advance loan to other firms as well as diverted for personal use and purchase of several properties. As per ED Chhoker is the director of the firms of Mahira Infratech Pvt Ltd.
Punjab & Haryana High Court Grants Bail To AAP MLA Jaswant Singh In Money Laundering Case
Title: Jaswant Singh v. ED
Citation: 2024 LiveLaw (PH) 323
The Punjab & Haryana High Court on Monday granted bail to Aam Admi Party (AAP) MLA Jaswant Singh in money laundering case. Singh is an MLA from Punjab's Amargarh constituency and was arrested by ED in November, 2023.
Justice Mahabir Singh Sindhu granted bail to Singh. However a detailed order is awaited.
Jaswant Singh was booked under PMLA for allegedly being a director and guarantor of a company M/s TCL, which had obtained loan and credit facilities of over Rs.46 crores.
Punjab & Haryana High Court Dismisses Ex-MLA Dilbag Singh's Plea Challenging ED's Provisional Attachment Order In Illegal Mining Case
Title: DILBAG SINGH @ DILBAG SANDHU v. UNION OF INDIA AND OTHERS
Citation: 2024 LiveLaw (PH) 346
The Punjab and Haryana High Court has dismissed a plea filed by Indian National Lok Dal's former MLA Dilbagh Singh and others, challenging the Provisional Attachment Order (PAO) passed by the Enforcement Directorate in connection with money laundering allegations in an illegal mining case. A division bench of Chief Justice Sheel Nagu and Justice Anil Kshetarpal opined that the PAO complied with the mandatory provisions of Section 5(1) of PMLA which allows the Director or any other officer not below the rank of Deputy Director to temporarily attach the property after recording 'reasons to believe'.
Judges Of PMLA Courts Not Supposed To Act Like "Extended Arm Of ED": Punjab & Haryana HC Quashes Unreasoned Custodial Interrogation Order
Title: Balwant Singh v. Directorate of Enforcement
Citation: 2024 LiveLaw (PH) 357
The Punjab and Haryana High Court has cautioned the Judicial Officers deployed at Special PMLA Courts to not act as an "extended arm" of the central investigating agency Enforcement Directorate, by passing orders of remand against the suspect as a matter of course.
Stating so, it set aside a Special Court's "routine order" granting ED custody for custodial interrogation of accused Balwant Singh in a PMLA case.
RAJASTHAN HIGH COURT
Title: Ram Kripal Meena v. Director Of Enforcement
Citation: 2024 LiveLaw (Raj) 27
Rajasthan High Court denied bail to Ram Kripal Meena, primarily accused of leaking and distributing question papers of the Rajasthan Eligibility Examination for Teachers, 2021 (REET) for a payment of Rs 1.20 crores.
The single judge bench of Justice Praveer Bhatnagar noted that 1.06 crores, cited by the prosecution as the 'proceeds of crime', was allegedly first received by the petitioner from two other accused in exchange for question papers. Later, this amount was recovered from eight other people as per the information received from the accused himself. Looking into the gravity of the offence and the pendency of investigation under Section 173 CrPC, the bench sitting at Jaipur deemed it fit to deny bail.
TELANGANA HIGH COURT
M/s Achyutha Electrical and Industries Private Ltd., vs. State of TS
Citation: 2024 LiveLaw (Tel) 30
The Telangana High Court has quashed a criminal case against M/s Achyutha Electrical and Industrial Private Ltd on account of the loan availed by it based on fabricated documents from Andhra Bank, holding that although the loan was sanctioned based on fabricated documents, the amount was repaid before the issuance of any proceedings or notice.
“No doubt, fabricated documents were produced for availing loan from Andhra Bank. However, even prior to issuance of any notice or any kind of proceedings either civil or criminal being initiated by the Bank, the amount was repaid. The Bank has ratified the transaction done by the 2nd petitioner and accepted the amounts without any objection. Further, the Bank has not lodged any complaint or proceeded against the 2nd petitioner.” Justice K Surender held.
The Directorate of Enforcement vs. M/s Karvy Realty India Ltd.
Citation: 2024 LiveLaw (Tel) 32
The Telangana High Court has held that the 'adjudicating authority' constituted under section 6 of the Prevention of Money Laundering Act, 2002 (PMLA) can be a body consisting of a single individual who need not have experience in the field of law.
The Division Bench of Chief Justice Alok Aradhe and Justice Anil Kumar Jukanti passed the order in a plea filed by the Directorate of Enforcement (ED) represented by the Assistant Director, Revenue Department.
WRIT PETITION No.3681 of 2024
Citation: 2024 LiveLaw (Tel) 160
The Telangana High Court has held that the Enforcement Directorate (ED) has the authority to issue summons under Section 50(2) and (3) of the Prevention of Money Laundering Act (PMLA) even after a complaint has been filed before a Special Court. The court held that such summons do not violate Article 20(3) of the Constitution and that the ED does not require prior permission from the Special Court to conduct further investigations or issue summons in ongoing cases.
It held: “The power conferred to the Enforcement Directorate to conduct further investigation/ issuing of summons to trade proceeds of the crime arising out of an offence under Section 3 of PMLA, cannot be restricted upon filing of the complaint on the file of Special Court, since even after filing of the complaint under Section 44 of the PMLA Act, the investigation agency is having power to file any subsequent complaint, in respect of further investigation that may be conducted to bring any further evidence against any accused."