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HIGH COURT OF DELHI
W.P.(CRL) 1093/2021
Date of Decision: 3rd AUGUST, 2021 IN THE MATTER OF:
DR VIJAY KUMAR SHARMA & ANR. ..... Petitioners
Through Mr. Praveen Chaturvedi, Advocate
& ANR. ..... Respondents
Through Mr. Avi Singh, ASC with Mr. Tanuj Bhadana, Advocate
Mr. Amit Mahajan, CGSC for respondent No.2
JUDGMENT
1. This writ petition under Article 226 of the Constitution of India has been filed with the following prayers: "(a) issue a Writ of Prohibition or any other Writ of like nature thereby Prohibiting the Respondent No. 1, to proceed with the investigation in FIR No. 123/2019, PS: EOW, Delhi against the Petitioners herein, being excluded per se Section 45(1A) of the Prevention of Money Laundering Act, 2002; in view of ensuing Proceedings being OA no. 38812020 pending before Hon'ble Adjudicating Authority (PMLA); and (b) issue a Writ of Mandamus or any other Writ of like nature thereby commanding the Respondent No. 1 to abstain from taking any coercive action, enquiry against the Petitioners, pursuant to investigation in FIR No. 123/2019, PS: EOW, Delhi; and
(c) issue a Writ of Certiorari or any other Writ of
2021:DHC:2302 like nature and quash the notices dated 15.02.2021, 30.03.2021 15.04.2021 [Annexure(s) P-8, P-9 & P-1 l respectively] issued by the Respondent No. 1 to the Petitioner No. 2; and
(d) To pass such other direction/order as deemed appropriate in order to meet the ends of justice and in the interest of law."
2. Notice was issued on 04.06.2021. Status Report has been filed. As per the Status Report, a number of complaints were received against one Sanjay Bhati and others of M/s Garvit Innovative Promoters Limited, having its registered office at Plot No.1, Chiti, Dadri, District Gautam Budh Nagar, Uttar Pradesh, regarding cheating of approximately Rs.42 thousand crores. The Status Report reveals that the accused induced gullible victims to invest in a bike and receive monthly pay back, including principle and rental income on that bike for one year under the scheme. It is stated that being lured by the said scheme a number of persons invested money. It is stated that the accused absconded with the money and, on the basis of the allegation and inquiry conducted, FIR No.123/2019 dated 06.07.2019, was registered at Police Station Economic Offences Wing for offences under Sections 420/406/120B IPC. Investigation was carried out. During investigation it was found that M/s Garvit Innovative Promoters Limited, was not registered as a NBFC with the RBI and hence it was not authorized to initiate any collective investment scheme. Total 1544 complaints have been received from multiple victims till the filing of the Status Report. The role of the petitioner has been stated in the Status Report and the same reads as under:
3. Material on record indicates that the proceedings under the Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'The PMLA') have been initiated against the petitioner. An application under Section 17(4) of the PMLA was made by the petitioner on 23.03.2021 for retention of the seized records and properties. Show cause notices have been issued to the petitioner. The material on record indicates that proceedings under Section 5 of the PMLA have been initiated against the accused persons, including the petitioner herein, attaching various movable and immovable properties. Show cause notices have also been issued against the accused persons including the petitioner herein, under Section 5(5) of the PMLA stating as to why the properties attached on 20.07.2020 should not be confirmed. The petitioner approached this Court by filing W.P.(C) 3565/2021 with the following prayers: "A). issue a Writ of Mandamus or any other writ of like nature thereby directing that the Respondent No. 1 to dispense with the pronouncement of the order under Section 8(2) of Prevention of Money Laundering Act, 2002 in Original Application No. 388/2020 filed by the Respondent ho. 2 on 23.03.2020, and; B) issue a Writ of Mandamus or any other writ of like nature thereby direct the Respondent No. I to provide free certified copies of the orders so pronounced in OA No. 3880020 to the Petitioners," W.P.(C) 3565/2021 is pending.
4. The instant writ petition has been filed by the petitioner stating that the Economic Offence Wing (hereinafter referred to as "the EOW") cannot continue the investigation on the ground that parallel investigation is being undertaken by the respondent No.2 under the PMLA.
5. Heard Mr. Praveen Chaturvedi, learned counsel for the petitioner, Mr. Avi Singh, learned ASC for the State and Mr. Amit Mahajan, learned CGSC appearing for the respondent No.2 and perused the material on record.
6. The learned counsel for the petitioner states that EOW is conducting parallel proceedings qua Respondent No. 2, which amounts to infringing the fundamental rights of the Petitioner under Article 20(2) of the Constitution of India. The learned counsel for the petitioner contends that the matter being investigated by the EOW is already being undertaken by the respondent No.2 under the PMLA. The learned counsel for the petitioner relies on Section 45(1A) PMLA to contend that investigation by EOW is excluded when investigation is being undertaken by the respondent No.2 under the PMLA.
7. The provision of PMLA was brought in for preventing money laundering. Section 3 of PMLA which defines the offence of money laundering, reads as under:
8. Proceeds of crime has been defined under Section 2(u) of the PMLA which reads as under: "2.(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.”
9. Scheduled offence has been defined under Section 2(y) of the PMLA which reads as under: "2(y). “scheduled offence” means—
(i) the offences specified under Part A of the
(ii) the offences specified under Part B of the
(iii) the offences specified under Part C of the
10. Section 5 of the PMLA provides of attachment of property. Section 5(1) of the PMLA, which is relevant of the case reads as under: "5(1). Where the Director, or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that— (a) any person is in possession of any proceeds of crime; (b) such person has been charged of having committed a scheduled offence; and
(c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter, he may, by order in writing, provisionally attach such property for a period not exceeding 9 [one hundred and fifty days] from the date of the order, in the manner provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or the other officer so authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that Schedule: [Provided that no such order of attachment shall be made unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be: Provided further that, notwithstanding anything contained in clause (b), any property of any person may be attached under this section if the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section has reason to believe (the reasons for such belief to be recorded in writing), on the basis of material in his possession, that if such property involved in money-laundering is not attached immediately under this Chapter, the nonattachment of the property is likely to frustrate any proceeding under this Act.]" (emphasis supplied)
11. Section 19 of the PMLA which provides for power to arrest reads as under:
after arrest of such person under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed. (3) Every person arrested under sub-section (1) shall within twenty-four hours, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twentyfour hours shall exclude the time necessary for the journey from the place of arrest to the Magistrate’s Court." (emphasis supplied)
12. Section 45(1A) of the PMLA on which reliance has been placed by the learned counsel for the petitioner reads as under:
13. A perusal of the above mentioned provisions makes it clear that the purpose of enacting the PMLA was to prevent money laundering and to prevent confiscation of property derived from or involved in moneylaundering. The purpose of investigation under the PMLA is to unearth the proceeds of crime and attach the same and to punish the offenders who are involved in committing the offence of money-laundering. Section 45 (1A) mandates that no Police Officer shall investigate into an offence under the PMLA unless specifically authorised by a general or special order issued by the Central Government. Just because an investigation for an offence under the PMLA has to be conducted by an officer, unless specifically authorized, it cannot be said that no investigation can be conducted for offences which are mentioned in the schedule of the PMLA by other investigating agencies and that they are precluded from investigating those offences. The offences are distinct and a person can be convicted and sentenced to punishment under the IPC as well as under the PMLA. This Court, at this juncture, is not entering into the debate as to whether an offence under the PMLA is a "standalone" offence or not, and as to whether a person, even if he is acquitted of an offence mentioned in the first schedule, can still be convicted for an offence under the PMLA.
14. Be that as it may, since the offence under the IPC and the offence under the PMLA are distinct offences, investigations for offences under the IPC and for offences under Section 3 of the PMLA can be carried out by different agencies. Section 45(1A) of the PMLA does not exclude other agencies from conducting investigations into the offences mentioned in the schedule of the PMLA.
15. The prosecution for the offences under the IPC and other offences mentioned in the schedule of the PMLA, under which the petitioner is charged, are entirely different and mutually exclusive. It cannot be said that the rights of the petitioner under Article 20 (2) of the Constitution of India are infringed. The contention of the learned counsel for the petitioner that conducting two parallel investigations would infringe the rights of the petitioner under Article 20(2) of the Constitution of India is completely unfounded. The attempt of the petitioner is only to stall the investigation which is completely untenable and frivolous.
16. With these observations the writ petition is dismissed.
SUBRAMONIUM PRASAD, J. AUGUST 03, 2021 Rahul