Mahendra Dayal, J.:— The petitioner by means of this petition under section 482 Cr.P.C. has prayed for quashing of the order dated 30.04.2015 passed by the learned Sessions Judge, Lucknow in Complaint Case No. 5 of 2015, whereby the petitioner has been summoned to face trial under section 3/4 Prevention of Money-Laundering Act, 2002.
2. I have heard Sri Sanjay Mani Tripathi, Sri Umesh Kumar Yadav, Sri Rajiv Awasthi and learned Senior Advocate Sri Jyotindra Mishra on behalf of the petitioner and Sri Shiv P Shukla and Sri Ankit Srivastava learned counsel appearing for the Union of India.
3. The brief facts giving rise to this petition are that the opposite party no. 2 filed a complaint against the petitioner alleging therein that Directorate of Enforcement, Lucknow Zone registered a case lodged by Special Investigation Branch C.I.D. (Co-operative) against Govind Saran Srivastava and Anil Kumar Agarwal who were Chief Engineer and Accountant in the U.P. Labour and Construction Cooperative Federation Ltd. (in short LACCFED) for embezzlement of Government fund to the tune of more than Rs. 12,23,83,000/- during the year 2010-2011. The Special Investigation Branch C.I.D., after completion of investigation filed charge-sheet on 03.11.2012 against eight persons for violation of provisions of Prevention of Corruption Act. Thereafter supplementary charge-sheet was also filed against four persons on 12.03.2013. Thereafter on 25.09.2013 another second supplementary charge-sheet was filed against two persons, one of them was the petitioner and the other was Babu Singh Kushwaha, Ex Minister of U.P. Government. It was also stated in the complaint that all the chargesheeted accused persons were facing trial in the court of Special Judge (P.C. Act), Lucknow. In respect of the petitioner, it was stated that he was absconding and consequently a process under sections 82 and 83 Cr.P.C. was issued by the Court declaring him as absconder and his property was also attached and non-bailable warrant of arrest was also issued against him. It was further stated that the trial against him was pending in the court. It was also stated in the complaint that “the LACCFED” was approved as government construction agency by the order of the U.P. Government dated 24.05.2010 and as such the agency was entitled for executing construction work of standardized structure worth Rupees five crores and non standardized structure worth Rs. 2.50 crores for various departments of the government. Some work order was allotted to LACCFED by government departments and funds were also made available to the Society. The funds were deposited in the project related bank account. It was mandatory for the Society to release the payment in respect of a project by account payee cheque only. However, the then Chief Engineer in connivance with the Accountant, released payment under their joint signatures through bearer cheques favouring different departmental engineers. The amount of cheques was fraudulently withdrawn by the accused persons in cash for unlawful gain. It was also stated in the complaint that during investigation it was revealed that the petitioner was the person behind the scam. He became member of LACCFED on 01.04.2010 and was elected as Chairperson on 06.04.2010. He appointed Sri Praveen Kumar Singh as P.R.O. and embezzled government fund by fraudulently withdrawing funds through bearer cheques in the names of the different engineers which were allotted to certain construction work under different government sponsored schemes. It was also revealed during investigation that Sri Preveen Kumar Singh was an Advocate. He came close to the petitioner in a court case. It was further revealed that during the relevant period Babu Singh Kushwaha, who was the Cooperative Minister of U.P. Government also came close to the petitioner and helped him in his fraudulent work. It was also gathered during investigation that the petitioner acquired various immovable property in his name as well as in the name of his wife and the company of which he was Director. Giving details of the evidence collected during investigation, it was prayed that cognizance of the offence under Money Laundering Act be taken and the petitioner be punished for the offence of section 3 of Prevention of Money Laundering Act (PML Act). It was further prayed that an order be issued for confiscation of the property in terms of section 8 (5) of the Prevention of Money Laundering Act which were provisionally attached under section 5 of the Act. The learned Sessions Judge, Lucknow on perusal of the complaint formed an opinion that a case under section 3 of the Prevention of Money Laundering Act punishable under section 4 of the Act, is made out against the petitioner and accordingly he took cognizance and issued summons to him fixing a date for appearance. The aforesaid summoning order has been challenged by the petitioner before this Court by means of this petition under section 482 Cr.P.C.
4. The submission on behalf of the petitioner is that the offence of section 3 which is punishable under section 4 of the Act, requires possession of proceeds of crime as a necessary ingredient to attract the offence of section 3 of the Act. Therefore, unless it is prima facie proved that the petitioner is in possession of proceeds of crime, the cognizance under section 3 of Prevention of Money Laundering Act can not be taken. The proceeds of crime has been defined under section 2(1)(u) of the Act which 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. The submission on behalf of the petitioner is that the aforesaid definition makes it clear that criminal activity relating to the scheduled offences is an essential ingredient for the offence under section 3 of the Act. It has also been submitted on behalf of the petitioner that pursuant to the filing of the charge-sheet, the special court proceeded with the trial and vide judgment dated 12.02.2015 acquitted seven accused persons and held that the whole prosecution in respect to them was malafide and was initiated due to political rivalry. The petitioner had opted to approach the trial court with an application for discharge on the ground that no offence is made out against him and the trial court by a very detailed order dated 17.03.2015 discharged the petitioner from all the scheduled offences except the offence under section 174-A IPC. The offence under section 174-A IPC, is not a scheduled offence and the trial court found him guilty for this offence for the reason that the petitioner had not appeared before the court, in response to proclamation issued under sections 82 Cr.P.C. It has also been submitted by the learned counsel that against the order refusing to discharge the petitioner under section 174-A IPC, the petitioner approached this Court by way of filing application under section 482 Cr.P.C. and this Court after a detailed hearing found that the offence of section 174-A IPC is not made out against the petitioner. It also needs mention here that the revision filed by the State against the discharge order bearing Crl. Revision No. 348 of 2015 was also dismissed by this Court on 19.02.2016.
5. The submission on behalf of the petitioner is that once the petitioner is discharged from all the scheduled offences, and the order discharging him attained finality, the petitioner cannot be prosecuted for the offence of section 3 of Prevention of Money Laundering Act because it cannot be proved by the prosecution that the petitioner acquired any proceeds of crime. It is also a submission on behalf of the petitioner that the learned Special Judge while passing the judgment and order dated 12.02.2015 also held that the charge against Praveen Singh that he was the P.R.O. of the petitioner and has committed the offence in connivance with the petitioner, was also false and concocted. It was also held by the learned trial court that Praveen Singh was neither the P.R.O. of the petitioner nor the petitioner had any right or authority to appoint the P.R.O. It was only after the aforesaid judgment and order dated 12.02.2015 that the petitioner moved an application under section 227 Cr.P.C. for his discharge. It has also been submitted on behalf of the petitioner that it was stated in the complaint filed by the opposite party that the trial in respect of scheduled offences against the petitioner was pending while as a matter of fact, before filing the complaint on 26.06.2015, the discharge order had already been passed and as such no trial was pending on the date when the court took cognizance. The order dated 17.03.2015 passed on the discharge application of the petitioner, makes it clear that the petitioner has neither committed any scheduled offence nor committed any criminal activity nor derived any proceeds of crime from the alleged scheduled offences. The authorities of the Directorate of Enforcement have illegally and unlawfully investigated the scheduled offences and fabricated and concocted the evidence of the witnesses concerned and levelled false charges of scheduled offences and proceeds of crime against the petitioner. The judgment dated 12.02.2015 and the order dated 17.03.2015 was concealed from the court below otherwise the learned Sessions Judge could not have possibly passed the impugned summoning order. The impugned order passed by the learned Sessions Judge, therefore, suffers from non application of mind and the same is against the settled principles of law as laid down by the Hon'ble Supreme Court of India.
6. It has also been submitted on behalf of the petitioner that the petitioner remained Chairman of the Society during the period April 2010 to February 2011. However, it is not disputed that the period of the offence of embezzlement of funds of the Society, is between February 2011 to September 2011. It is admitted by the informant during trial of scheduled offences. It has also been submitted on behalf of the petitioner that the prosecution has failed to prove that the petitioner acquired any immovable property during this period. In these circumstances, when it was not proved that the petitioner received any proceeds of crime during this period, the offence under section 3 of the Prevention of Money Laundering Act cannot be said to have been made out against him. There is also no evidence to the effect that the petitioner received any amount either in cash or by way of cheque. The entire prosecution case rests on the presumption that being Chairman of the Society, the petitioner must have received the proceeds of crime. The petitioner was neither authorised to issue any cheque nor any financial power vested with him. The learned court below has, therefore, rightly discharged him from the scheduled offences on the ground that there was no credible offence against the petitioner to substantiate the charge of any of the scheduled offences.
7. It is next submitted on behalf of the petitioner that the offence under the Money Laundering Act is not an independent offence. It is dependent on the out come of the offence under the scheduled offence. Unless one is held guilty of the scheduled offence, he cannot be held guilty for the offence of maney laundering punishable under section 4 of the Prevention of Money Laundering Act. When it has been decided by a competent court that the petitioner has not committed any criminal activity and is not guilty of scheduled offence, the case of the opposite parties that the petitioner derived proceeds of crime as a result of criminal activity relating to scheduled offence, is absolutely unfounded and misleading. The opposite parties have concealed in the complaint filed by them that the petitioner has already been held not guilty for any of the scheduled offences. The petitioner was admittedly elected as Chairman of the Society on 06.04.20110 and the committee of management remained effective till 10.01.2012. It is not disputed that P. N. Singh Yadav, General Manager (Administration) of the aforesaid Society lodged the FIR regarding embezzlement of funds on 21.02.2012. The petitioner was neither named therein nor there was any allegation against him. It has been admitted by the informant that the embezzlement of money was done between February 2011 to September 2011 and the trial court placing full reliance on it, examined the matter in detail and came to the conclusion that there is absolutely no evidence to the effect that the petitioner received any proceeds of crime during this period. The petitioner is a government contractor and has its registered firm M/s. Arpita Associate having its bank account with Central Bank of India, Shashtri Nagar, Kanpur and this firm is regularly paying the income tax and the entire money earned by him is genuine and lawful. The petitioner has also been filing income tax returns regularly which is checked by the income tax authorities and no irregularity has yet been found by the income tax department. The properties attached by the authorities under section 5 of the Prevention of Money Laundering Act have been purchased by the petitioner and his wife from their genuine and lawful earning having no connection with proceeds of crime. A perusal of the deeds of purchase, would make it clear that all the properties were either agreed to be purchased or purchased prior to February 2011. Since the petitioner has been illegally summoned, he has approached this Court for quashing of the summoning order as well as the proceedings of the complaint on the ground that no prosecution can proceed against him when he has been discharged from the scheduled offences and it has not been proved that the petitioner received any proceeds of crime during the period February 2011 to September 2011.
8. Shri Shiv P. Shukla learned counsel appearing on behalf of Union of India and Enforcement Directorate has, on the other hand, submitted that by the amendment in the Prevention of Money Laundering Act, 2002 which was enforced on 03.01.2013, the ingredients to attract the offence of section 3 of the Act, have undergone considerable change and as per the substituted section, the proceeds of crime includes its concealment, possession, acquisition or dues and projecting or claiming it as untainted property. After the amendment, this aspect of the matter has been examined by various High Courts. It has been held that after the amendment in section 3 of the Act, it is no longer necessary that the person who is in possession of the property alleged to be proceeds of crimes, must also be charged with a scheduled offence. Now any person who directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property, shall be guilty of offence of money laundering and can be punished under section 4 of the Act. In this view of the matter, even if the petitioner has been discharged from the scheduled offences, he can still be prosecuted for the offence of section 3 of Prevention of Money Laundering Act.
9. The learned counsel for the Union of India has relied upon a Supreme Court decision which has been rendered by the Hon'ble Supreme Court in the case of Binod Kumar v. State of Jharkhand. In this case the Hon'ble Jharkhand High Court had directed the C.B.I. to investigate the scheduled offences with the allegation of offence under Prevention of Money Laundering Act against Binod Kumar. This order passed by the Hon'ble Jharkhand High Court was challenged by him before the Hon'ble Supreme Court on the ground that the scheduled offences connected with the Prevention of Money Laundering Act could only be investigated under the Prevention of Money Laundering Act and not by the C.B.I. The Hon'ble Supreme Court dismissed the appeal.
10. In another case Smt. Janata Jha v. Assistant Director the Hon'ble Orrisa High Court held that the Prevention of Money Laundering Act being a special statute has overriding effect over all other acts. The Hon'ble Orrisa High Court observed this by relying upon a Supreme Court decision which was rendered in the case of Union of India v. Hassan Ali Khan. The Hon'ble Supreme Court held that the allegations made in the complaint may not ultimately be established having been made but the burden of proof that the said money was not the proceeds of crime, is on the person who claims that the money in his possession is not proceeds of crime.
11. The submission on behalf of the opposite parties is that the offence of money laundering is an independent offence. A person who has not committed a scheduled offence can also be prosecuted for the offence of money laundering. The prosecution is not required to wait for the scheduled offence to be established. It can independently prosecute and place material to show that he had knowingly assisted or was responsible for laundering of the illicit wealth.
12. Learned counsel for the opposite parties has also placed reliance upon a judgment of Hon'ble Karnataka High Court rendered in the case of K. Sowbaghya v. Union of India. In this case the Hon'ble Karnataka High Court has examined it in detail as to whether a person against whom scheduled offence is not alleged, can be prosecuted for the offence of money laundering. The Hon'ble Karnataka High Court has observed that in such a situation in which the petitioner contemplates that a person who is acquitted of the scheduled offence cannot be prosecuted for an offence of money laundering, is also not correct since the judgment of the court acquitting for a scheduled offence would be relevant evidence for the proceedings of money laundering offences. There could also be a situation where a person accused of a scheduled offence may not be available on account of his death or if he absconds. There would also be cases where the accused may be acquitted on technical grounds. In these circumstances, it cannot be said that the offence of money laundering cannot be proved. It has also been observed that proceeds of crime is defined to include not merely property derived or obtained as a result of criminal activity relating to scheduled offence but the value of any such property as well. Under the amendment Act 2013, it is now contemplated that even if the case instituted in respect of a scheduled offence results in acquittal of the accused, a person could still be prosecuted under sections 3 and 4 of the Prevention of Money Laundering Act. Therefore, on acquittal in respect of such offence, it cannot be said that he cannot be prosecuted for the offence of money laundering.
13. The opposite parties while filing supplementary counter-affidavit have given details of the property acquired or purchased by the petitioner during the period he held the office of Chairman of the Society. A list of 12 properties has been given to show that these properties were purchased or acquired worth several crores of rupees and the source of acquiring such properties has not been disclosed by the petitioner which goes to suggest that these properties were acquired by him out of the proceeds of crime which he received during his tenure of holding the office of Chairman of the Society. It has also been submitted that by the order dated 09.12.2014, the aforesaid property has been attached by the competent authority relying upon the complaint, documents and the investigation conducted. The said properties are still under attachment. The discharge of the petitioner from the scheduled offence does not in any way affect his prosecution under section 3 of the Prevention of Money Laundering Act. The provision of the Act makes it clear that the petitioner need not be chargesheeted or convicted for the scheduled offence. The petitioner has been found to have knowingly possessed several valuable properties and this property was generated by the accused persons who have been convicted by the trial court. The accused persons so convicted are Govind Saran Srivastava, Pankaj Tripathi, B.P. Singh and Anil Kumar Agarwal. The investigation has established that during the period, he held the office of Chairman, he appointed Praveen Kumar Sing as his P.R.O. and certain other officers and with their help, the petitioner embezzled an amount of more than Rupees twenty two crores causing huge loss to the government exchequer. It was found during investigation that these funds were invested in acquiring immovable properties and were laundered in an attempt to project it as untainted in the form of immovable properties. The wife of the petitioner was also examined during investigation and her statement was also recorded in which she clearly stated that she was a house wife and the income of her husband is the only source of her income. She also admitted having signed several documents on the instruction of her husband. She has also shown her ignorance about the source of income. It has also been found during investigation that the petitioner formed several companies in his name as well as in the name of his wife and other family members to acquire various properties in the names of these companies. Many of these companies were not found doing any business but the property was acquired in the name of these companies. These facts prove beyond reasonable doubt that these properties were acquired by the petitioner out of the proceeds of the crime.
14. Learned Sessions Judge after examining the entire material and the contents of the complaint has passed the summoning order and this Court while exercising power under section 482 Cr.P.C. cannot go into the disputed questions of fact which can only be done by the trial court and as such the summoning order or proceedings of the complaint cannot be quashed under section 482 Cr.P.C. It has also been submitted on behalf of the opposite parties that it is a settled law that a prosecution can be quashed at the initial stage only if it is shown that the prosecution is barred by any statute or the contents of the complaint prima facie do not disclose the commission of any offence. In the present case, the property of the petitioner has already been attached by the competent authority and the contents of the complaint fully disclose the nature of the crime and the manner in which the crime has been committed, it will be decided only after trial as to whether the petitioner should be held guilty and punished or not. There is no ground for quashing of the summoning order when there is sufficient material on record to show that the offence has been committed by the petitioner.
15. After hearing the learned counsel for the parties and their pleadings and on perusal of the record, I find that the main controversy is as to whether the petitioner can be prosecuted for the offence of money laundering even in a case where he has been discharged of all the scheduled offences. If it is found that the petitioner can still be prosecuted even after discharge from the scheduled offences, the petitioner has no case but in case it is found that the offence of money laundering would be attracted only if the proceeds of crime have been received by committing the scheduled offences, then in that case he cannot be prosecuted for the offence of money laundering.
16. Before discussing the matter, it would be proper to examine the ingredients of the offence of money laundering which is defined section 3 of the Act. The same is reproduced as under:—
“3. Offence of money-laundering - Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering.”
17. A bare reading of section 3 makes it clear that proceeds of crime is a necessary ingredient to attract the offence of money-laundering. The proceeds of crime has been defined in section 2(1)(u) of the Act, which is reproduced as under:—
“(u) “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.”
18. The definition of proceeds of crime reveals that proceed 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. Thus, the proceeds of crime is any property obtained as a result of criminal activity relating to a scheduled offence. Thus, unless there is criminal activity relating to a scheduled offence, there can be no proceeds of crime.
19. Now it has to be examined in the light of the law laid down by the Hon'ble Supreme Court as well as various other High Courts as to whether a person can be prosecuted for the offence of money laundering in the absence of any scheduled offence and in the absence of any proof that the property was acquired by him as a result of criminal activity relating to scheduled offence.
20. Learned counsel for the opposite parties has laid much emphasis on a case of the Karnataka High Court given in the case of K. Sowbaghya v. Union of India Writ Petition No. 14649 of 2014 decided on 28.01.2016 and has submitted that in view of the law laid down by the Karnataka High Court, a person can be prosecuted for the offence of money laundering even if he has been acquitted of the charges of scheduled offences.
21. In the case before Karnataka High Court, the petitioner had challenged the amendment in the Money Laundering Act and had prayed that the amendments be declared ultra virus and unconstitutional.
22. The argument on behalf of the petitioner in this case was that after the amendment in section 3 of the Act, there is now no need to demonstrate the presence of mens rea to prosecute any person accused of money laundering. This circumstance, according to the petitioner, was never intended by the legislation. The amended section is, therefore, violative of Articles 14 and 21 of the Constitution of India. It was also contended on behalf of the petitioner that after the amendment the scheme of the Act envisaged two parallel proceedings. Firstly, in terms of section 5 of the Act, where the authorized officer can provisionally attach the property for a period of 180 days; and secondly, prosecution and punishment under sections 3 and 4 of the Act. The argument was that prior to the amendment, if a person is acquitted in the scheduled offence, the attachment of property would cease to have effect, meaning thereby that if there was no crime, there could be no question of the existence of proceeds of crime. Under the 2013 Amendment Act, the entire scheme is changed. After the amendment even if the person is acquitted of a scheduled offence, he could still be prosecuted under sections 3 and 4 of the PML Act. It was argued on behalf of the petitioner that if the genesis of action under the Money Laundering Act is the commission of scheduled offence, no action under the Act could be initiated unless there was a report under section 173 Cr.P.C. in relation to the scheduled offence. If there was an acquittal of the alleged scheduled offence, it would have a direct bearing on the proceedings under the Money-Laundering Act.
23. The Hon'ble Karnataka High Court after examining the amendment incorporated in the Act, held that a bare perusal of the definition would go to show that the word ‘knowingly’ is used in section 3 so as to ensure that an element of mens rea is present to attract the offence of money laundering. In these circumstances, the question of any innocent person being prosecuted for the said offence does not arise. At any rate, even if in a given case, a person who is not guilty of money laundering is prosecuted erroneously then the remedy is to move the appropriate forum, for termination of such prosecution and not for striking down the section itself. The Hon'ble Karnataka High Court with the aforesaid findings came to the conclusion that striking down the amendment made under section 3 of the PML Act is not at all needed but it is open for a person who claims himself innocent, to approach the appropriate forum for termination of his prosecution.
24. So far as the power to attach the property provisionally is concerned, the Hon'ble Karnataka High Court held that this provision is not at all unconstitutional and the property of a person can be provisionally attached by the competent authority even if there is no FIR against such person and no prosecution is pending against him. It was held by the Hon'ble Karnataka High Court that the provision regarding attachment and confiscation of property in possession of a person not accused of having committed an offence under section 3, does not violate the provisions of the constitution.
25. The argument on behalf of the petitioner before the Hon'ble Karnataka High Court was that if the genesis of the proceedings is relatable only to the scheduled offence, no action could be initiated under the PML Act unless there was a report under section 173 Cr.P.C. in relation to a scheduled offence. Therefore, on acquittal in respect of such offence, should ipso facto, result in the proceedings under the PML Act coming to a close. In other words, without the guilt of the accused in the scheduled offence being proved there could be no proceedings under sections 3 and 4 of the PML Act. The Hon'ble Karnataka High Court held that there is substance in this contention of the petitioner because the definition of the phrase proceeds of crime read with section 3 if construed strictly, it can be said that having regard to the meaning attributed to proceeds of crime under the PML Act, whereby the crime contemplated is the alleged scheduled offence, the proceeds of crime, contemplated under sections 3 and 4 are linked to the scheduled offence and it is not possible to envision an offence under PML Act as a stand alone offence without the guilt of the offender in the scheduled offence being established.
26. Thus, upon consideration of the law laid down by the Hon'ble Karnataka High Court, it is clear that the amendment incorporated in the Money Laundering Act was not held unconstitutional and ultra virus, but it was observed by the Karnataka High Court that the property of a person can be attached without there being any prosecution for the offence of Money Laundering, but so far as the prosecution of a person for the offence of money laundering is concerned, the proceedings under section 3 of the PML Act can be initiated only in case the person is held guilty of receiving proceeds of crime as a result of commission of scheduled offence. The Karnataka High Court has also held that the complainant in such a case is not required to wait for the result of trial being held for the scheduled offence. A complaint can still be filed against such person, but if ultimately the person is acquitted of the charge for the scheduled offence, his prosecution under section 3 of the Act for the offence of Money-Laundering would also come to an end. It has also been kept open by the Karnataka High Court that a person against whom complaint under section 3 of the PML Act has been filed and he is being prosecuted for the offence of money-laundering, he can show before the court that he is innocent and has not received any proceeds of crime.
27. In the present case, the opposite parties have filed the complaint after the discharge of the petitioner from the scheduled offence alleging therein that the petitioner has received proceeds of crime by committing scheduled offences. The opposite parties by filing supplementary-affidavit have given details of the properties which have been allegedly acquired by the petitioner during his tenure as Chairman of the society.
28. The petitioner in his supplementary-affidavit has also given details of the properties which have been acquired by him. It has been contended by the learned counsel for the petitioner that there is only one property in respect of which the sale-deed was executed during the period of offence. This property is a house situated in Mohalla Kakadev Kanpur and the sale-deed of this house was executed in favour of the wife of the petitioner.
29. The submission on behalf of the petitioner is that this property was agreed to be purchased in the year 2009 for a sum of rupess forty five lacs and a registered agreement to sell was executed in the year 2009 itself when the society was not in existence. Out of the total sale consideration of rupess forty five lacs, twenty eight lacs was paid to the owner in advance upto January 2010 and the remaining seventeen lacs was paid on 24.05.2011 by way of demand draft and the registered sale-deed was executed on 25.05.2011. The payment of the balance amount of sale consideration was made through demand draft and it has not been alleged that the amount in the bank account of the petitioner was obtained by him as a result of commission of any scheduled offence or receiving of proceeds of crime. So far as the other properties are concerned, the said properties were purchased prior to the period of offence as is evident from the dates of the sale-deeds executed by their respective owners. The crime period during which the offence is alleged to have been committed, is between February 2011 to September 2011. This is mentioned in the FIR itself which is the basis of prosecution of the petitioner and other accused persons. If there would have been any allegation of criminal activity relating to misappropriation of funds or deriving any proceeds of crime relating to the society, the informant must have named the petitioner in the FIR itself. The list of properties and the dates of purchase mentioned in front of each property, clearly reveals that all these properties were acquired by the petitioner prior to February 2011 which is earlier to the crime period mentioned in the FIR.
30. The learned counsel for the petitioner has relied upon a recent decision of the Delhi High Court rendered in the case of Mahanivesh Oils and Foods Pvt. Litd. v. Directorate of Enforcement Writ Petition (C) 1925 of 2014 decided on 25.01.2016. This case was filed by the petitioner for quashing of the provisional attachment of the property under section 5 of the Prevention of Money-Laundering Act. This petition was allowed on the ground that there was no material to suggest that the property sought to be attached was likely to be dealt with in a manner which would frustrate the confiscation of the property.
31. In the case of Ajanta Merchants Pvt. Ltd. v. Directorate of Enforcement Crl. Misc. Case No. 5581 of 2014 decided on 09.04.2014, the petitioner had approached the Hon'ble Delhi High Court by filing a petition under section 482 Cr.P.C. for quashing of the proceedings under sections 3 and 4 of the PML Act. This petition was allowed on the ground that the Enforcement Directorate could not produce any legally admissible evidence against the petitioner. In this case also the proceedings pending in the court of Special Judge Anti Corruption, Dehradoon were quashed by the Uttrakhand High Court and after that Delhi High Court held that there was no evidence to initiate the proceedings under section 3 of the PML Act.
32. In a similar case, the Hon'ble Delhi High Court in the case of Arun Kumar Misra v. Directorate of Enforcement Crl. Misc. Case No. 5508 of 2014 decided on 09.04.2015 while considering the petition under section 482 Cr.P.C. for quashing of the proceedings under section 3 of the Act, came to the conclusion that closure report had been filed by the C.B.I. which was accepted by the Special Judge C.B.I. The Hon'ble Delhi High Court also held that prior to the amendment in section 3, the presence of mens rea was a necessary ingredient. The Act of Money-Laundering, therefore, has to be traced to the point of time when the actual transaction took place. It has also been held by the Delhi High Court that it is a settled principles of law that the provisions of law can not be retrospectively applied.
33. After having given my anxious thought to the arguments advanced on behalf of the parties and having carefully gone through the record of the case and the relevant case laws cited by the learned counsel for the parties, one thing which is not disputed between the parties is that the complaint by the opposite party no. 2 against the petitioner was filed after the petitioner was discharged from all the scheduled offences by the court of competent jurisdiction and this order of discharge was not passed on technical grounds but on merits and a specific finding was recorded by the trial court that none of the offences as alleged are made out against the petitioner. It is also not disputed that in the FIR, the petitioner was not named and there was absolutely no allegation against him with regard to the embezzlement of government funds. It was during the course of investigation that the names of several other accused persons including the petitioner came into light and chargesheet and thereafter supplementary chargesheets were filed in the court. The present complaint in which the impugned summoning order has been passed, was filed by the opposite party no. 2 and after the order for discharge of the petitioner from all the scheduled offences was passed and this fact was not disclosed in the complaint.
34. The allegation against the petitioner is that during his tenure as Chairman of the society, he embezzled government fund of more than rupess twelve crores. It was also alleged in the complaint that the petitioner acquired immovable properties worth several crores of rupess out of the proceeds of crime which he received during the course of his Chairmanship of the society. These properties were purchased in the name of several companies and the wife of the petitioner. It is also not in dispute that the trial court while discharging the petitioner from the scheduled offence, did not find any evidence to the effect that the petitioner received any proceeds of crime. Apart from the petitioner, the other accused persons who were chargesheeted, faced trial and some of them who were actually guilty, have been convicted while some of the chargesheeted accused persons against whom no evidence was found, have been acquitted of the charges. The relevant period of crime as alleged is between February 2011 to September 2011, according to the own showing of the respondents. The immovable properties acquired by the petitioner, relate back to the year 2010, except the one of which the sale-deed was executed on 25.05.2011. In respect of this property, the petitioner has stated that this property was agreed to be purchased in the year 2009 and a considerable amount of sale consideration was paid to the seller in the year 2009 itself. The remaining amount of sale consideration was paid at the time of execution of sale deed in the year 2011 and the said amount was paid by way of demand draft of nationalized bank. Thus, prima facie, there is absolutely no evidence on record to show that the petitioner acquired any property during the crime period except the one of which sufficient explanation have been given by the petitioner.
35. The case of the petitioner was that after his discharge from the scheduled offences, his prosecution cannot be done for the offence of Money-Laundering under section 3 of the Act while the contention on behalf of the opposite parties was that after the amendment, the intention has no relevance and even if a person has been acquitted of the charge of scheduled offences, he can still be prosecuted for the offence of money laundering.
36. In this regard, I have examined the various case laws cited by the petitioner as well as the opposite parties and the legal position which emerges out after study of the various case laws, is that a person can be prosecuted for the offence of money laundering even if he is not guilty of scheduled offences and his property can also be provisionally attached irrespective of the fact as to whether he has been found guilty of the scheduled offences. The prosecution is not required to wait for the result of the conviction for the scheduled offences in order to initiate proceedings under section 3 of the PML Act. However, the person against whom there is an allegation of the offence of money laundering, can approach appropriate forum in order to show his bonafidie and innocence that he is not guilty of the offence of money laundering and has not acquired any proceeds of crime or any property out of the proceeds of crime. The opposite parties had challenged the order of discharge before this Court but this Court has upheld the order of discharge passed by the trial court. The said order has become final.
37. The Hon'ble Delhi High Court in the case of Rajeev Chanana v. Deputy Director Directorate of Enforcement Crl. Misc. Case No. 5508 of 2014 decided on 09.04.2015 has held that after the acquittal of a person from a scheduled offence, his trial for an offence under section 3 of the Money-Laundering Act will not survive. The observation of the Hon'ble Delhi High Court is that it is hard to imagine as to how a trial for an offence of Money-Laundering can continue where the fundamental basis that is the commission of a schedule offence, has been found to be disproved. It has also been held by the Hon'ble Delhi High Court that after acquittal from the scheduled offences, the attachment of the property under section 5 of the Act will also come to an end.
38. In view of what has been discussed above, I am of the view that the petitioner has been able to make out a good case for quashing of the summoning order for the simple reason that from the allegations made in the complaint, no offence under section 3 of the Money-Laundering Act is made out against the petitioner in view of the fact that the petitioner has been discharged from the scheduled offences and except the present complaint in which the impugned summoning order has been passed, no case is pending against him. The learned Sessions Judge while passing the impugned summoning order has not taken into account this fact that the petitioner has already been discharged of all the scheduled offences. The properties which were allegedly acquired by the petitioner during crime period, were also not acquired during the offence period, except the one of which sufficient explanation has been given by the petitioner. There was, thus, no sufficient ground to have summoned the petitioner for facing trial under section 3 of the Prevention of Money-Laundering Act. It is a settled law that summoning of a person to face trial in respect of an offence, is a serious matter and the court should examine in detail and record a finding that a person, prima facie, is guilty of an offence. A serious responsibility rests upon the courts before passing of the summoning order and the court must be satisfied that there is sufficient material to proceed against the accused person. In the present case, the opposite parties concealed the material fact in the complaint that the petitioner had already been discharged from the scheduled offence and no trial was pending against him. The impugned summoning order was passed by the learned Sessions Judge assuming that the trial in respect of the schedule offence was pending against him while as a matter of fact, no such trial was pending on the date when the complaint was filed and the summoning order was passed. The impugned summoning order therefore suffers from manifest error of law and is liable to be quashed.
39. In the result, the application under section 482 Cr.P.C. is partly allowed and the impugned summoning order dated 30.04.2015 passed by the Sessions Judge, Lucknow in complaint No. 5 of 2015 is set aside.