Jacqueline Fernandez v. Directorate of Enforcement

(iii) Rs.1.89 crores was sent to Bahrain for purchase of two vehicles for petitioner’s parents.

(iv) Horse called Espuela purchased by Sukesh costing Rs.57 lakhs for petitioner and Rs.[7] lakhs was paid for allotment of stable and membership of the horse. (v) 4 cats to petitioner (vi) 15 pairs of earrings (vii) 5 Birkin bags

(viii) High-end bags from Chanel, Gucci, YSL

(ix) Clothes and shoes from super luxury brands

(x) Cartier bangles, bracelets and chains.

(xi) Hermes bangles

(xii) Tiffany Bracelet and Rings

(xiii) Watches from Rolex, Roger Dubuis, Franck Muller

(xiv) A Mini Cooper (which was returned by the petitioner)

(xv) Cash of Rs. 15 lakhs given to Ms, Advaita Kala, who was a screen writer and had been approached by the petitioner for writing a script for a web series being produced by the petitioner.

(xvi) Private jet trips and hotels stays for the petitioner on various occasions.

13. As per the impugned ECIR, following aspects are noted with regard to the dissipation of proceeds of crime (paragraph 18.[5] of the impugned ECIR): 13.[1] Accused Deepak Ramnani, in his statement recorded on 17th October 2021 under Section 50 of PMLA, inter alia admitted that he CRL.M.C. 9462/2023 6/95 had arranged transfer of funds into the bank account of Geraldine J. Walker, sister of petitioner, through Avtar Singh Kocher, on directions of petitioner. (paragraph 18.5.1.[4] ECIR) 13.[2] Accused Pradeep Ramdanee in his statement recorded on 6th October 2021, admitted that he had gone to the house of Ms. Advaita Kala in Gurgaon/Gurugram and delivered a parcel containing Rs.15 lakhs on directions of his brother, Deepak Ramnani. (paragraph 18.5.1.[5] ECIR. 13.[3] In a statement under Section 50 of PMLA, recorded of Sukesh, it was inter alia stated that petitioner was a close friend and he had given lots of expensive gifts like bags, jewellery, high-end clothing, earrings, bags from ultra-luxury brands, bangles and bracelets, watches, all of which cost about Rs.[7] crores. He further stated he had helped her sister Geraldine with a car, a new BMW X[5], and gave an amount of USD 1,80,000, sent through Deepak Ramnani. He also stated that he had brought her parents a Maserati car and her mother a Porsche car in Bahrain, and also gave USD 50,000 to her brother in Australia. 13.[4] Statement of Shaan Muttathil, make-up artist of petitioner, was recorded on 28th October 2021. He stated that in January 2021, he was contacted by a lady named Angel who introduced him to Sukesh (as Shekhar), through video call and requested to introduce Sukesh to the petitioner. He stated that he got a call which was stated to be from the Home Minister and was asked to get in touch with Sukesh, as he was an important person with the Government (which was a spoof call). 13.[5] Statement of Pinky Irani was recorded on 30th November 2021 and 1st December 2022. She stated that she introduced Shaan Muttathil to Sukesh; numbers were exchanged and subsequently, petitioner got in CRL.M.C. 9462/2023 7/95 touch with Sukesh. As per instructions of Sukesh, she used to visit showrooms of luxury bags, clothes, shoes and used to select items and after receipt of payment confirmation, she used to pick up those items and deliver them to petitioner, either herself or through her manager Prakash. She further stated that two Gucci shoes, one Louis Vuitton

(LV) bag and one sling bag had also been given to Shaan Muttathil.

13.[6] Statements of petitioner had been recorded on 30th August 2021 and 20th October 2021. A complaint was filed before the ASJ on 4th December 2021 wherein petitioner was not an accused. Statements were then recorded on 8th December 2021. 1st supplementary complaint was filed on 5th February 2022 by the ED in which petitioner was not an accused. Statements of petitioner were then recorded on 20th May 2022 and 27th June 2022. 2nd supplementary complaint was filed on 17th August 2022 where petitioner was arrayed as accused no.10. Subsequently, a 3rd supplementary complaint was filed on 6th September 2022 and a 4th supplementary complaint on 6th April 2023.

14. Petitioner was admitted to bail by the ASJ on 15th November 2022 and bail conditions were subsequently modified by order dated 10th August 2023.

15. In the 3rd supplementary complaint dated 06th September 2022, ED recorded that petitioner had joined the investigation and was asked to go through the documents which form part of ED’s charge sheet and were retrieved from her mobile phone by ED or produced by her.

16. Petitioner inter alia confirmed the following: a) Communication with Ms. Advaita Kala, in respect of receipt of Rs.15 lakhs. b) List of gifts/ articles given to her by Sukesh through Pinky Irani and Leepakshi Ellawadi. CRL.M.C. 9462/2023 8/95 c) E-mails disclosing dates on which she visited Kerala, Chennai and Bangalore. d) Papers relating to Porsche Car, Maserati Car, BMW X[5], bank account statements of commonwealth bank account of her brother, Wells Fargo Bank Account of the sister, Standard Chartered Bank account of Ms. Tan Kim Yok, petitioner’s own bank accounts, the bank accounts of her father in Ahli, United Bank. e) Petitioner further produced the articles which were detailed as part of the supplementary complaint. Though the list is long (at page no.34- 35 of the 3rd supplementary charge-sheet of FIR No.208/2021), but for purposes of reference, the categories and numbers of articles are being tabulated as under: Sr. No.

ARTICLES (i) 47 number of clothes of brands Burberry, Louis Vuitton, Kenzo Tiger, McQueen, Elisabetta Franchi, Varana World, Zimmermann, Dolce, Alexis, Gucci, Rhode, Dior, Givenchy, Chloé, Fuschia. (ii) 62 number of shoes of brands Louboutin, Balenciaga, Dior, Louis Vuitton, Gucci, Alaïa, Burberry, Alexander McQueen, Valentino, YSL (Saint Laurent), Fendi, Hermes, Bottega Veneta. (iii) 5 number of watches of brands Piaget, Roger Dubuis, Franck Muller, Rolex, Chopard Imperiale. (iv) 32 number of bags of brands Dior, YSL Rive Gauche, Louboutin, Chanel, Dior, Fendi, Hermes, Bottega, Birkin, Louis Vuitton, YSL (Saint Laurent), Balenciaga, Dior, Gucci. (v) 20 number of bags of brands Chanel, Serpenti Viper, Tiffany, Cartier, Louis Vuitton. (vi) 4 sunglasses of brands Dior, Ever Dior, Fendi. (vii) 1 chair of brand Osim. (viii) 1 LG Dishwasher. (ix) 2 Mini Saddles and Whips of brand Hermes. (x) 13 number of belts of brands Louis Vuitton and Gucci. CRL.M.C. 9462/2023 9/95 (xi) 1 Dinner Set of brand Versace. (xii) 9 number of paintings.

CASE PUT UP BY PETITIONER

17. Mr. Sidharth Aggarwal, Senior Counsel for petitioner, highlighted following aspects in context of the factual background stated above: 17.[1] Investigation revealed that Sukesh was running a crime syndicate from Rohini Jail. EOW first detected activities of the syndicate in July 2021 after Ms. Aditi Singh's predicate offence complaint on 6th August 2021. Before 6th August 2021, there was no public information about the criminal syndicate and Ms. Aditi Singh. 17.[2] Petitioner was not part of the extortion racket being run by Sukesh with the aid of Deepak and Pradeep Ramdanee. 17.[3] Petitioner played no role in extortion of money from Ms. Aditi Singh and that she has been arrayed as a prosecution witness; she claims to have been defrauded by Sukesh. 17.[4] The proceeds of crime were used by Sukesh to bribe jail officials for getting special facilities and for undertaking air travels, giving highend branded gifts to Bollywood celebrities, and therefore, the proceeds had been put to multiple uses. 17.[5] Petitioner was reluctant to accept gifts from Sukesh but Pinky Irani played a substantial role in misleading her. As per the 3rd supplementary complaint, petitioner had no previous interaction with accused Sukesh and her interactions only started during the period of commission of the crime by the accused in the case. 17.[6] Petitioner had voluntarily given her statement under Section 164 of the Code of Criminal Procedure, 1973 (‘Cr.P.C.’) before the CRL.M.C. 9462/2023 10/95 Metropolitan Magistrate (MM), as she was an important prosecution witness. 17.[7] Allegations against petitioner were purely speculative in nature formed on the basis that she knew that gifts/ articles/ benefits received were proceeds of crime. 17.[8] ED’s case was that in addition to the petitioner, other celebrities also received gifts from Sukesh viz. Ms. Nora Fatehi, Ms. Nikita Tamboli, Ms. Chahat Khanna, Ms. Sophia Singh. 17.[9] All these celebrities had also been questioned by the EOW and had stated that Pinky Irani played a role in establishing contact between Sukesh and them and that Sukesh was using the alias, Shekhar.

17.10 Ms. Nikita Tamboli, Ms. Chahat Khanna and Ms. Sophia Singh also met Sukesh inside Tihar Jail.

17.11 In the statement of petitioner recorded under Section 164 of C.r.P.C, she stated that when she refused to speak to Sukesh, after becoming aware about his criminal antecedents, Pinky Irani convinced her that Sukesh was a billionaire who has been implicated due to his political background.

17.12 In these statements, petitioner stated that Pinky Irani continued to persuade her that she was making a wrong decision and that she should not believe what the media said, since Pinky Irani personally worked for Sukesh for 12 years.

17.13 Pinky Irani remained a member of the crime syndicate as per ED, as she concealed the real identity of members of the syndicate and never told Bollywood celebrities about Sukesh’s real identity. Pinky Irani had to create an aura, status and influence of Sukesh before various Bollywood celebrities so that they come under the influence of Sukesh CRL.M.C. 9462/2023 11/95 and he could easily dispose of the proceeds of crime. Petitioner’s counsel, therefore, contended that petitioner was ignorant of his criminal status. ED acted in a biased manner by presenting all other celebrities as witnesses while arraying petitioner as an accused.

17.14 Shaan Muttathil shared an article in February 2021 regarding Sukesh with the petitioner. The article had no whisper about the predicate offence of extortion of Rs. 200 crores and only mentioned other things about Sukesh.

17.15 On 15th February 2021 Pinky Irani went to meet the petitioner and re-assured her that Sukesh was a genuine guy and everything mentioned in the article was something of the past and due to political rivalry. She delivered a Tiffany’s diamond proposal ring which had ‘J’ and ‘S’ initials along with flowers and chocolates. Pinky Irani was promised Rs. 2 crores for introducing petitioner to Sukesh and Rs. 10 crores for sorting out the differences between him and petitioner.

17.16 Petitioner then remained in constant touch with Sukesh till he was arrested in August 2021 and news broke out regarding the extortion of at least Rs.200 crores having been committed by Sukesh. The articles were gifted to her between February to August 2021 while petitioner met Sukesh in June 2021. In this period, there was no whisper in any public space regarding the extortion of Rs. 200 crores from Ms. Aditi Singh by Sukesh.

17.17 Petitioner’s counsel relied upon ED’s complaint dated 04th December 2021, where it is stated that Sukesh had impersonated the Law Secretary and the Home Secretary in order to extort money and was a “master conman” with technology at his disposal. In these CRL.M.C. 9462/2023 12/95 circumstances, the benefit of doubt was to be given to petitioner of being ignorant about the predicate offence and the proceeds of crime.

17.18 ED was placing a huge burden on petitioner to be vigilant enough to escape from the web of con, led by Sukesh, to fraudulently establish a relationship with her.

17.19 ED was only relying on the knowledge of criminal antecedents of Sukesh which were diluted by the efforts of Pinky Irani in the mind of petitioner. The criminal antecedents were based on the sharing of the article dated 10th February 2020 which stated that Sukesh was lodged in Tihar Jail. ED stated that she had not made any efforts to find out what his status was. ED completely exonerated celebrities who actually travelled to jail and instead placed the highest burden on petitioner.

CASE PUT UP BY ED

18. Mr. Zoheb Hossain, counsel for ED, pointed out the following aspects based on the factual background stated above: 18.[1] Petitioner had admitted the receipt of articles as tabulated and listed above, as also, the amounts transferred to her parents, brother and sister, as also, the purchase of cars. She had further admitted the communication with Ms. Advaita Kala and the receipt by Ms. Kala of Rs. 15 lakhs on her behalf. 18.[2] Petitioner was aware about the criminal antecedents of Sukesh, the fact that Sukesh was lodged in Tihar Jail and the fact that Ms. Leena Maria Paul was the ‘partner’ of Sukesh, in February 2021 itself, when Shaan Muttathil shared the news article, as also, through Pinky Irani. 18.[3] The article mentioned the Look-Out Circular (‘LOC’) issued by the Central Bureau of Investigation (‘CBI’) against Leena Maria Paul CRL.M.C. 9462/2023 13/95 in a bank fraud case and also stated that Leena Maria Paul as being the ‘partner’ of Sukesh. 18.[4] The article further mentions involvement of Sukesh in three criminal cases, namely, arrest in TTV Dinakaran case, arrest of Leena Maria Paul and Sukesh in the 2013 Canara Bank fraud case (Rs. 19 crores) and arrest of Leena Maria Paul and Sukesh in the year 2015 by EOW, Mumbai Police for defrauding people in the name of investments in their bogus firms. 18.[5] Petitioner admitted to have found various articles on Google search on Sukesh, which reflected his criminal antecedents and despite that, received gifts and money in cash and through banking channels, between February 2021 to July 2021, till he was arrested by the Delhi Police. 18.[6] Petitioner continued to receive financial benefits from Sukesh (which are nothing but proceeds of crime) despite being aware of his criminal activities. 18.[7] Petitioner never revealed the truth of financial transactions and concealed facts till confronted with evidence. Petitioner wiped out entire data from her mobile phone after the arrest of Sukesh and therefore tampered with evidence. She also asked her colleagues to destroy evidences. Thus, petitioner was knowingly involved in possession and use of the proceeds of crime. 18.[8] Petitioner was summoned on five occasions to tender her statement under Section 50 of PMLA. The statements reveal that petitioner deliberately varied the narration of facts to mislead the investigation. She initially denied knowing the actual name of Sukesh, which, later on, upon being confronted with evidence, was admitted by CRL.M.C. 9462/2023 14/95 her. As regards cash transactions with Ms. Advaita Kala, of money delivered by, she first denied having entered into any such transaction, but upon being confronted with evidence, was admitted by her. 18.[9] Petitioner continued to receive, enjoy and possess, the proceeds of crime, for herself and her family members. She initially did not admit the factum of having received huge monies and valuable gifts transferred to her parents, brother and sister, in India and abroad.

18.10 Petitioner kept on improving her statements about receipt of gifts and luxury items from Sukesh. During recording of statements, she initially denied the purchase of cars by Sukesh for her parents. Sukesh then admitted the said fact, and when petitioner was confronted, she admitted receipt of cars by her parents. It shows her connivance with Sukesh to conceal proceeds of crime.

18.11 Petitioner continuously vacillated and changed her stand with regard to the quantum of proceeds of crime. Till the recording of the last statement, she continued to make new disclosures, like property purchased by Sukesh in Sri Lanka.

18.12 In her statement recorded on 30th August 2021, she disclosed certain number of gifts and later on increased the list of gifts. Till 8th December 2021, petitioner never disclosed anything about her relationship with Pinky Irani.

18.13 The process of collection of evidence is going on and the possibility that further proceeds of crime are used, concealed, possessed and enjoyed by petitioner, could be unearthed.

18.14 Even Sukesh deleted the data from his mobile phone, the investigation qua use and possession of proceeds of crime, depends on CRL.M.C. 9462/2023 15/95 evidence such as disclosures made by Sukesh in his statements, Pinky Irani's phone data and statements of Shaan Muttathil, etc.

18.15 Petitioner has deliberately tried to create obstacles in the process of investigation and hide the truth.

18.16 Petitioner stated in a statement on 8th December 2021, that in February 2021 she came to know the real identity of accused Sukesh at the instance of Shaan Muttathil. In a statement dated 20th May 2022, she stated she saw various articles about him on Google, in that, he was involved in a bank fraud case.

18.17 A search on Google would show various material in the form of articles and videos reflecting criminal antecedents of Sukesh and Leena Maria Paul, including their images. These articles exist even today and have been there since 2013.

18.18 In the months of March, May and June 2021, transfers were made to the bank accounts of petitioner’s sister and brother, even though, she was only introduced to Sukesh as "Shekhar Ratna Vela" in February 2021 i.e. within 14 days of petitioner having spoken to Sukesh and them video calling each other on WhatsApp. The above conduct of petitioner attributes knowledge and mens rea.

18.19 Section 3 of PMLA entails that the process or activity connected with proceeds of crime is a ‘continuing activity’ and continues till such time when a person is directly or indirectly enjoying the proceeds of crime (by concealment/ possession/ acquisition/ use/ projecting or claiming it as untainted property, in any manner).

18.20 To embellish ED's argument as regards the change of stance in statements made by petitioner (after being confronted with evidence), a CRL.M.C. 9462/2023 16/95 table was presented by ED as part of written submissions, which has been reproduced hereunder, for reference: CRL.M.C. 9462/2023 17/95 CRL.M.C. 9462/2023 18/95

19. Accordingly, it was stated by ED’s counsel that it was not a fit case for quashing ECIR at a pre-charge stage in light of the fact that: (i) the scheduled offence exists; (ii) proceeds of crime have been generated; (iii) proceeds of crime have travelled to petitioner; (iv) petitioner has been involved in the process of activity connected with the proceeds of crime including use, possession, concealment.

SUBMISSIONS ON BEHALF OF PETITIONER

20. Mr. Siddharth Aggarwal, Senior Counsel for petitioner inter alia made the following submissions: CRL.M.C. 9462/2023 19/95 20.[1] The predicate offence emanates from FIR No. 208/2021 registered by the Special Cell, Delhi Police, against unknown person on a complaint by Ms. Aditi Singh alleging extortion of Rs.200 Crores. The impugned ECIR was registered on that basis on 08th August 2021. Petitioner's statements were recorded on five occasions and she was not arrested during the said period. On 02nd November 2021, a charge sheet was filed in the predicate offence against 14 accused including Sukesh. Sections 3(5) and 4 of MCOCA were added since investigation revealed Sukesh along with others operated an organised crime syndicate. 20.[2] Petitioner was arrayed as an accused only in the 2nd supplementary prosecution complaint filed on 17th August 2022, on the basis that she had received and enjoyed proceeds of crime. In the 3rd supplementary charge sheet filed in the predicate offence on 14th January 2023, petitioner was presented as a prosecution witness and her statement was recorded on 02nd January 2023. The matter was at the stage of framing of charges. It was submitted that petitioner is, therefore, effectively a witness in the duping case and at the same time accused in PMLA. 20.[3] Definition of ‘proceeds of crime’ under Section 2(i)(u) of PMLA was similar to ‘property derived or obtained from commission of organised crime’ under Sections 3(5) and 4 of MCOCA. A comparison was presented of the MCOCA provisions with Section 3 of PMLA asserting that MCOCA provisions were subsumed within Section 3 of PMLA. Same was presented in the form of a table, which is extracted as under: CRL.M.C. 9462/2023 20/95 20.[4] Therefore, if provisions of MCOCA which form part of the predicate offence are subsumed under Section 3 of PMLA, it is illogical and untenable that petitioner has been arrayed as an accused in PMLA offence, whereas presented as a witness for the prosecution in the predicate offence. Petitioner's counsel relied on T.T. Antony v. State of Kerala and Others (2001) 6 SCC 181, and Amitbhai Anilchandra Shah v. Central Bureau of Investigation and Another (2013) 6 SCC 348, and contended that ED cannot arrive at a different conclusion on the same set of facts and, therefore, prosecution under Section 3 of PMLA ought to be quashed. 20.[5] The contradictory stands place petitioner in an irreconcilable conflict and violated her constitutional right against self-incrimination as she will have to record evidence on oath in the predicate offence and on the same facts face prosecution under PMLA. Reliance was placed on Explanation to Section 44(1)(d) of PMLA that trial under PMLA and CRL.M.C. 9462/2023 21/95 that of the scheduled offence could not be considered as a joint trial. The Trial Court, therefore, did not have power to look into the material of the predicate offence and determine that petitioner's prosecution under PMLA would be antithetical. 20.[6] There was no quarrel of attachment of the articles which were given by Sukesh to petitioner, but there was an issue regarding the implication under PMLA. 20.[7] There was no evidence with ED to show that petitioner knew of the original event of duping of Ms. Aditi Singh of Rs.200 Crores by Sukesh and his associates. Petitioner herself was a victim of the same modus operandi used in the predicate offence and similarly placed as other victims who had not been prosecuted. The ‘pick and choose’ manner of prosecution was not permissible. 20.[8] ED placed an unreasonable burden on petitioner, expecting knowledge that Sukesh's gift were proceeds of crime. No evidence suggests public knowledge Sukesh's jail status for Rs.200 Crores' extortion. 20.[9] ED acknowledges that Sukesh was a ‘master conman’ who was using technology to brainwash people. Sukesh was using spoof calls to contact petitioner's staff, inducing them to introduce him to her. Statements of Shaan Muttathil and Pinky Irani were relied on to show that they corroborate the fact of duping through spoofed calls. However, ED's approach to others who were similarly placed shows striking disparity. Actresses Nikita Tamboli, Chahat Khanna and Sofia Singh admittedly met Sukesh inside Tihar Jail and yet received gift from him. Reliance was placed on Ramesh Manglani v. Directorate of Enforcement 2023 SCC OnLine Del 3234, Sanjay Jain v. Enforcement CRL.M.C. 9462/2023 22/95 Directorate 2024 SCC OnLine Del 1656 and Sanjay Kansal v. Assistant Director, Directorate of Enforcement 2024:DHC:3765, on disparate treatment of similarly placed persons.

20.10 Test laid down in Pavana Dibbur v. The Directorate of Enforcement 2023 INSC 1029, as to when a person can be made an accused in PMLA even if they are not an accused in the predicate offence, has not been met. Section 3 of PMLA includes any post facto accessory who knowingly aids in the use, possession, or concealment of the proceeds of crime. Petitioner cannot be termed as a post facto accessory to the offence of money laundering as the role attributed to her is not of aiding, utilization or concealing proceeds of crime.

20.11 Possession of gifts can constitute an offence only if petitioner had any knowledge of the predicate offence. Such knowledge is attributed to petitioner on the basis of a news article of February 2021. Said article is dated 2020, which is prior to the scheduled offence and does not pertain to the scheduled offence at all. It was ED's own case that petitioner confronted accused Pinky Irani about the said article and was convinced by her and accused Sukesh that he was from a respectable political family who had been targeted.

20.12 Prosecution case is, therefore, based on conjectures and surmises i.e. the possibility that petitioner would have also found out about the criminal activities of Sukesh if she ‘would have’ searched him on Google. This does not translate to any positive evidence of petitioner's knowledge of the scheduled offence and, therefore, to make out any offence under Section 3 of PMLA or establish foundational facts to apply the presumption under Section 24 of PMLA. Reliance was placed on Vijay Agarwal Through Parokar v. ED 2023 SCC OnLine CRL.M.C. 9462/2023 23/95 Del 3176; C.P Khandelwal v. ED 2023 SCC OnLine Del 1094; Arvind Kejriwal v. ED 2024 SCC OnLine SC 1703.

20.13 Provisions under Sections 3 (5) and 4 of MCOCA are similar to Section 2 (1) (u) of PMLA, as noted above. While MCOCA covers property derived or obtained from ‘commission of organized crime’, the PMLA provision read under Section 3 of PMLA covers offences related to proceeds of crime.

20.14 Petitioner being exonerated and not charged under MCOCA provisions, is an admission by the prosecution that she does not derive or obtain property from commission of organized crime. Quite in contrast, petitioner has been accused in the PMLA matter. The question is whether one can be prosecuted under PMLA while being a victim under provisions of MCOCA.

20.15 Knowledge / mens rea of an accused under PMLA has to be of ‘proceeds of crime’ and not that the person from whom the property has been received is a criminal.

20.16 Petitioner’s counsel focused on the issue of ‘relatability’ or ‘connection’ with the predicate offence. He argued that implicating the petitioner is akin to holding somebody responsible for possession of goods / possession downstream of articles being bought by proceeds of crime. If the receiver of the articles, as is petitioner, was not in the knowledge that they were proceeds of crime, not having any connection with the original extortion complaint, the person cannot be implicated. The fact that accused in the predicate offence, i.e. Sukesh, is ‘tainted’, it may not matter; but what matters is that there is knowledge that what is received from him, are proceeds of crime. An illustration was provided in that accused may also advance certain gifts or articles which are not CRL.M.C. 9462/2023 24/95 necessarily sourced from the proceeds of crime, but from legitimate means.

20.17 Reliance was placed on the decision in paragraphs 15 and 17 of Pavana Dibbur v. E.D (supra) on the issue of relatability and knowledge. These aspects were relied upon by the High Court of Karnataka in Razorpay Software Pvt. Ltd.

V. UOI (2024) SCC OnLine Kar 23, in paragraph 27. In this case, Razorpay was an intermediary and had a statutory duty of due diligence and did not verify the genuineness of person applying for accounts in which monies were received, which were allegedly proceeds of crime. In paragraph 36 the Court held that there was no evidence to suggest that the payment gateway had knowledge that the fund transferred was derived from criminal activity; at best, the accused would be negligent in setting up merchant IDs, but the intent was essential to constitute an offence under Section 3 of PMLA.

20.18 Prosecution for two offences, in which ingredients are the same, cannot be done on the basis of Section 71 of IPC and Section 26 of the General Clauses Act, 1897 (‘GCA’).

20.19 Conduct of petitioner, post reading the article relating to Sukesh being implicated in the crime, at best is an omission, which in criminal law is not actionable, unless it's an ‘illegal omission’. Prosecution must show that petitioner was legally bound to establish a connection based on the newspaper article. Reference is made to Sections 32 and 43 of IPC.

20.20 Considering there was a ring given to the petitioner with an inscription of ‘J’ and ‘S’ on it, even as per prosecution, the context of the gifting was that of a ‘suitor’. The articles were not given out of any CRL.M.C. 9462/2023 25/95 transaction or consideration and neither were received as that of an admirer to a fan.

20.21 The question arises whether there is a legal duty to verify articles and the context. Aspects of illegal omission are statutorily provided, for example Section 21 of the Protection of Children from Sexual Offences (POCSO) and Section 39 of Cr.P.C. This aspect gets conflated with use of phrase ‘knowingly, actually, willfully’ in the PMLA provisions.

V. SUBMISSIONS ON BEHALF OF ED

21. Mr. Zoheb Hossain, Counsel for ED, at the very threshold, submitted that petitioner seeks quashing of the FIR at the stage when charges itself have not been framed. ED has questioned the maintainability of the petition itself having been filed without challenge to the cognizance by order dated 1st September 2022, by the Special Court, of the ECIR along with the 2nd supplementary complaint. Further submissions were presented as under:

21.1. Reliance is placed on various decisions of the Supreme Court where the courts have been cautioned for invoking inherent jurisdiction to quash criminal proceedings at the stage of framing of charge. Attention was drawn to the decision in Rathish Babu Unnikrishnan v. State Govt. of NCT of Delhi &Anr. (2022) SCC online SC 513, in particular to paragraphs 14-17. Essentially, the Supreme Court has noted that quashing of criminal proceeding should be exercised very sparingly and with circumspection, and the Courts will not be justified in embarking upon inquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR. The Supreme Court therefore observes that at the pre-trial stage, when factual controversy is CRL.M.C. 9462/2023 26/95 in the realm of ‘possibility’, particularly because of a legal presumption, the Court should be slow to grant relief of quashing. 21.[2] ED’s Counsel refers to the legal presumption under Section 24 of PMLA which reverses the burden of proof. Section 24 of PMLA is adverted to which has two limbs. In case of a person charged with offence, the Court ‘shall’ presume that such proceeds of crime are involved in money laundering, unless the contrary is proved; and in case of any other person, the Court has a discretion to impose such presumption. ED’s counsel pointed out that challenge to the constitutionality of this provision was dismissed by the Supreme Court in the decision of Vijay Madanlal Chaudhary v. Union Of India & Ors. (2022) SCC OnLine SC 929 (Neutral Citation 2022:INSC:757, paragraphs and extracts of which are referred to herein by the Court.), in particular, paragraph 99. 21.[3] Adverting to the decision in Vijay Madanlal Chaudhary (supra), ED’s counsel focused on paragraph 95 to 99 of the said decision. The Supreme Court in interpreting the purport of Section 24 of PMLA, notes that prosecution should succeed in establishing three basic foundational facts: a. that the criminal activity relating to scheduled offence has been committed; b. the property in question is derived or obtained, directly or indirectly, as a result of the criminal activity; c. the person concerned is, directly or indirectly, involved in any process or activity connected with the said property. 21.[4] On establishing these foundational facts, a legal presumption arises under Section 24 of PMLA, which can be rebutted by the accused, showing that no causal connection exists. ED’s counsel underscored CRL.M.C. 9462/2023 27/95 that such a rebuttal is a factual rebuttal, which can only be done by producing evidence during the trial. 21.[5] Essentially the flow, as per the Supreme Court, is the establishment of the foundational facts, which triggers the legal presumption, which then, can be rebutted factually by leading evidence. ED’s counsel therefore submitted that accusation on the petitioner includes not only of possession but concealment as well, which comes within the purview of ‘process or activity’. Not only did petitioner confess to possession, but also admitted having received considerable and substantial gifts by her and her family only through successive disclosures. He therefore contends that this would amount to an ‘act of concealment’ which the prosecution would prove during trial. 21.[6] ED’s counsel relies upon Soma Chakravarty v. State (2007) 5 SCC 403 (paragraph 10) contending that at the stage of framing of charge, the Court can form an opinion that the accused ‘might’ have committed an offence and there is no requirement to arrive at a conclusion that the accused ‘has’ committed the offence. 21.[7] ED’s counsel reiterated that what is enough at this stage is that the accused “might have committed the offence”. To displace the implication, accused would have to place evidence in trial. 21.[8] Response of ED’s counsel to the defence taken by accused that she “did not know” was essentially based on Section 3(i) of PMLA. The elements which constitute an offence under Section 3 of PMLA have been slated to be disjunctive as per the Explanation. These elements are: concealment, possession, acquisition, use, projecting it as untainted property and claiming it as untainted property. He contended that possession of articles given by Sukesh were not disputed. He contended CRL.M.C. 9462/2023 28/95 that it is evident that there was concealment by petitioner since there were piecemeal disclosures, substantiated as under. 21.[9] The issue of projecting it as untainted property was also evident, since petitioner did not disclose various gifts given to her and her family in one go, but only during further investigation and interrogation.

21.10 ED’s counsel adverted to Section 3 (ii) of PMLA to contend that the process or activity connected with proceeds of crime is a “continuing activity” and continues till the person is directly or indirectly enjoying the proceeds of crime. Regarding the aspect of “knowingly”, it would have to be determined during trial, whether the accused is able to rebut the presumption imposed by Section 24 of PMLA.

21.11 ED’s counsel referred to the statements, particularly petitioner’s statement in relation to the issue of transaction with Advaita Kala. She was a known scriptwriter and had allegedly been paid for the web-series by Sukesh. In this regard, initially the accused in her responses, denied that the money had been given by Sukesh but later improved upon her statement. (statement of 20th October 2021). Sukesh was arrested on 9th October 2021 and gave his statement and thereafter all the improvements took place in petitioner’s statement.

21.12 In response to question 15, in statement recorded on 30th August 2021, petitioner stated that she did not pay the Rs.15 lakhs to Advaita Kala. In question 17, she agreed that there were WhatsApp conversations between her and Advaita Kala. In answer to question 20, when she was confronted with the photocopy of statement of Advaita Kala, stating that she had received cash of Rs.15 lakhs from accused through some person, accused responded and stated that she does not agree to sending her Rs.15 lakhs cash on that date or Rs.15 lakhs cash at CRL.M.C. 9462/2023 29/95 all. This was improved upon by petitioner in her statement recorded on 20th October 2021 where she stated in question 12 that she would like to correct her earlier statement relating to Advaita Kala. She stated that Sukesh was aware that she was in talks with Advaita Kala for a movie script and he was keen to produce it and then offered to send her an advance of Rs.15 lakhs cash. He arranged the cash and delivered it through his person, whom petitioner did not know. This aspect has been mentioned in the complaint where it stated that on being asked about cash transactions of Rs.15 lakhs with Advaita Kala, she denied having sent any money in cash and stated she had only sent chocolates and flowers to her.

21.13 ED’s counsel then focused on petitioner’s concealment of information by adverting to various gifts which were received by her family. In her statement of 20th October 2021, accused gave details of her family members and was asked whether petitioner’s sister Geraldine received USD 1,80,000 from Sukesh and she admitted she had received USD 1,50,000 from Sukesh but qualified the same as a loan from Sukesh for a mortgage on the house which was transferred to her sister's bank account. She was asked about whether Sukesh had purchased a new BMW car 5 series for her sister and she denied it. She admitted that the funds of AUD 26740 were transferred to her brother in Australia by Sukesh and not USD 50000 as claimed by Sukesh. She admitted that Sukesh had purchased a horse called Espuela which she was free to use. She further admitted that 4 cats had been received from Sukesh. She denied that Sukesh had purchased any cars for her parents in Bahrain.

21.14 It was pointed out by ED’s counsel that in the statement recorded on 30th August 2021, accused had not disclosed the details of CRL.M.C. 9462/2023 30/95 the amounts received by her sister and her brother from Sukesh or about receiving the horse, cats and other gifts. On 20th October 2021, she did not disclose these facts on her own but only when she was asked about the same.

21.15 During the statements recorded on 30th August 2021 and 20th October 2021, accused had been silent on the role played by Pinky Irani and how the articles had been reaching her. Accused admitted to have received gifts but did not disclose details from Sukesh, that were sent through Pinky Irani but she did not disclose the important part played by Pinky Irani in this process.

21.16 Petitioner later admitted in statement dated 8th December 2021 that her parents had received two cars in April 2021, as also that sister received USD 172913 in her bank account as also gave a list of gift items received through either Pinky Irani or Leepakshi. (Leepakshi was a stylist friend. who had been allegedly employed by Sukesh as a personal shopper). This is in contrast to her statement on 20th October 2021when she denied that Sukesh had gifted BMW car to her sister and two cars to her parents and that Pinky Irani was aware of the gifting of these cars to her parents. ED’s counsel also focused on the destruction of evidence by her. In her statement of 20th May 2022, accused was trying to portray that she was a victim of manipulative actions by Sukesh. She relied on evidences in the form of photos and videos sent by Sukesh but the same have been destroyed by her by deleting the data on the mobile. She then stated that Sukesh had told her that he had coal mines as well and is into arms and ammunition business with Russia. She never disclosed these details earlier. CRL.M.C. 9462/2023 31/95

21.17 ED’s counsel drew attention to the fact that in the continued relationship with Sukesh, knowing that he was a businessman and had been searching about him on Google, it was surprising that she never bothered to find out whether Sukesh owned Kalyan Jewelers or that he had coal mines or that he had 50% ownership of Leela Hotel in Chennai, as had been represented by Sukesh.

21.18 In statement of 27th June 2022, she admitted that she had deleted her mobile phone data on 11 August 2021 after knowing about the arrest of Sukesh. On being confronted that she had earlier lied about the issue with Advaita Kala and the number of gifts received from Sukesh, she stated that she did it on account of fear or was unable to recollect. It was only when she was confronted with the evidence, she admitted to having received gifts from Sukesh. She stated that she was stressed and she wanted to save the reputation of her and the family members.

21.19 As per the complaint, she also admitted that she had requested Shaan, Leepakshi and Prashant to delete data from their phone with respect to the messages, chats, pictures with Sukesh.

21.20 Accused was shown a news article dated 10th February 2020, which related to Look-Out Notice against actress Leena Maria Paul in CBI case, where cases were reported against Sukesh, which included TTV Dhinakaran case, EOW Mumbai case and Canara Bank fraud case. Accused denied having received these articles, and later claimed that she had received another news article from 2017 related to Sukesh and some South Indian politician controversy. However, she was shown WhatsApp conversations between Shaan Muttathil and Pinky Irani on 11th February 2021 to 13th February 2021, where the news article of 10th CRL.M.C. 9462/2023 32/95 February 2020 was shared and then she admitted that the news article had been shared with her.

21.21 As per prosecution she had clearly admitted that she had gone through various articles on the internet after searching for Sukesh but she accepted the explanations offered by Pinky Irani and Sukesh himself and ignored his earlier antecedents.

21.22 At time of framing of charges, the probative value of the material on record cannot be gone into and material brought on record by prosecution has to be accepted as true. Whether the accused has committed the offence or not, can only be decided in trial.

21.23 For quashing of charge, principle to be adopted is that if the entire evidence produced by the prosecution is to be believed would it constitute an offence or not. Reliance was placed on State of Maharashtra v. Salman Salim Khan and Another (2004) 1 SCC 525.

21.24 Truthfulness, sufficiency, and acceptability of material produced cannot be gone into at the time of framing of charge which can only be done at the stage of trial. Reliance was placed on Umesh Kumar v. State of Andhra Pradesh and Another (2013) 10 SCC 591, in particular paragraph 30. The Supreme Court in Saranya v. Bharathi and Another (2021) 8 SCC 583, held that at the stage of framing of charge the Court has to consider the material only with a view to find out if there was ground for presuming that the accused had committed the offence. At that stage, the High Court was not required to appreciate the evidence on record and considered the allegation on merits.

21.25 Mens rea aspect could only be examined at the stage of trial. The case of petitioner is that ECIR should be quashed since she had no knowledge that she was in receipt of proceeds of crime and, therefore, CRL.M.C. 9462/2023 33/95 it is alleged by her that element of mens rea was absent which is essential pre-requisite. Mens rea or knowledge is a triable issue and can only be examined at the stage of trial upon leading evidence. Reliance was on the decision of Supreme Court in Anoop Bartaria v. Dy. Directorate of Enforcement, 2023 INSC 413 in paragraphs 27 and 28 and Bholu Ram v. State of Punjab & Anr., (2008) 9 SCC 140 in paragraph 61. The disputed defence of the accused can only be appreciated by the Trial Court. Reliance was placed on the decision of the Supreme Court in S. Krishnamoorthy v. Chellammal (2015) 14 SCC 559.

21.26 The Supreme Court categorically stated in Anoop Bartaria (supra) that determining knowledge of the accused that they were dealing with the proceeds of crime would be a condition precedent or sine qua non for the prosecution for lodging a complaint. The direct involvement of the petitioners in the activities that the proceeds of crime would require trial.

21.27 There was no bar on prosecution under PMLA if a person is arrayed as a witness in the predicate offence. Reliance was also placed on Pradeep Nirankarnath Sharma v. Directorate of Enforcement & Anr., 2025 SCC OnLine SC 560 where it was held that in case is involving of such magnitude a trial is imperative to establish the full extent of wrongdoing and to ensure accountability.

21.28 Reliance was also placed in Amit Katyal v. Directorate of Enforcement, 2024:DHC:7113 where it was reiterated that predicate offence and the offence under PMLA are independent offences, and even if a person is not an accused in the predicate offence they can still be arrayed as an accused under PMLA. CRL.M.C. 9462/2023 34/95

21.29 Reliance was also placed of this Court’s decision in Sanjay Kansal v. ED (supra) and Satish Babu Sana v. Directorate of Enforcement 2024: DHC: 5335-DB, where the Division Bench of this Court held that proceedings under PMLA are separate and distinct from that of the predicate offence. On this issue, reliance was also placed on State of Bombay v. Kathi Kalu Oghad, 1961 SCC OnLine SC 74, Laxmipat Choraria & Ors. v. State of Maharashtra, 1967 SCC OnLine SC 30 and of the Allahabad High Court in Mohan Lal Rathi v. Union of India through Directorate of Enforcement 2023:AHC-LKO:59826, wherein it was held that pardon under Section 306 of Cr.P.C. to a person and scheduled offence could not ipso facto result is acquitted in the offence under PMLA. The matter was further appealed before the Supreme Court and was dismissed as withdrawn. Reliance was also placed on Deepak Chandak v. State of Jharkhand through CBI 2004 SCC OnLine Jhar 672 and State (Delhi Admn) v. Jagjit Singh, 1989 Supplementary (2) SCC 770.

21.30 ED’s counsel relied upon Section 132 proviso of the Indian Evidence Act 1872 (‘IEA’). The said provision does not excuse the witness from answering on the ground that the answer will incriminate him. While the proviso protects the witness in stating that no answer given by the witness shall subject him to any arrest or prosecution. At the stage, it was merely being stated that there was an apprehension that the petitioner who was a witness in the predicate offence was handling proceeds of crime which would be proved in trial.

21.31 Reliance was also placed on Section 44(d) of PMLA, Explanation (i) clearly indicated that the trial of predicate offence under the predicate/scheduled offence and that of the PMLA could not CRL.M.C. 9462/2023 35/95 constitute a joint trial. In this regard, reliance was placed on Vijay Madan Lal (supra) paragraphs 112 and Pavana Dibbur (supra) paragraphs 15-17 on the issue that except for the proceeds which emanated from the crime every other aspect was different between the predicate offence and in this offence.

21.32 Section 3(5) and Section 4 of MCOCA and Section 3 of PMLA being similar cannot restrain the ED from prosecuting the petitioner. It was submitted that the offence of money laundering was a standalone offence and the investigation conducted by the predicate agency cannot impact the same and was not binding the ED. Merely because a petitioner is not charge-sheeted it does not mean he is acquitted or exonerated by the investigating agency. Reliance was placed on Laxmipat Choraria (supra) noting that a person is often made a witness or an otherwise being the character of an accused to enable the prosecution to gather evidence against other main accused persons. It was well settled that investigation into money laundering was independent and Parliament being conscious of such eventuality to introduce Explanation (i) to Section 44(1)(d), upheld in Vijay Madan Lal Chaudhary (supra) in paragraph 112.

21.33 Even under Section 319 of Cr.P.C., there is a power to array any person to an accused who may not have been charge-sheeted. Reliance was placed on Sukhpal Singh Khaira v. State of Punjab, (2023) 1 SCC

289. Merely because a petitioner is not made an accused in the predicate offence does not mean she has been exonerated and cannot impact the investigation by the ED.

21.34 It was also well settled that the same set of facts will give rise to an offence punishable under different laws. Reliance was placed on CRL.M.C. 9462/2023 36/95 Monica Bedi v. State of Andhra Pradesh (2011) 1 SCC 248. Both the concepts of autrefois acquit and autrefois convict do not apply in this case. Reliance was placed on Section 232 of Cr.P.C. contending that acquittal was a judicial process and the omission to make the petitioner is an accused in the predicate offence did not amount to an exoneration or an acquittal. Therefore, Article 20(2) benefit cannot be given to petitioner nor Section 300 of Cr.P.C. provision would benefit petitioner in any way.

21.35 It was, therefore, submitted that petitioner fulfils all the ingredients of offence under PMLA considering that she misled the investigation by first denying and then answering affirmatively after confrontation and, therefore, had concealed the proceeds of crime which is covered under Section 3(2) of PMLA and qualified by “in any manner whatsoever”. Further, it had been alleged by the ED that she had tampered evidence by wiping out data from her phone and that of her colleagues. Therefore, as far as ED was concerned, they have imputed knowledge to petitioner and it was for her to place her defence during trial.

SUBMISSIONS IN REJOINDER MADE ON BEHALF OF

PETITIONER

22. Mr. Siddharth Agarwal, Senior Counsel for petitioner, in his rejoinder essentially stated a under: 22.[1] The whole matter arises out of proceeds of crime emanating from the fraud which was allegedly perpetrated by Sukesh on Ms. Aditi Singh of about Rs.200 crores. The said Rs.200 crores, as per prosecution, was used for different purposes; one of the said purposes CRL.M.C. 9462/2023 37/95 was to give gifts to models and actresses and only one of these sets of gifts was given to petitioner. The issue asserted by the ED was that mere possession is enough. 22.[2] Countering this, Senior Counsel for petitioner submitted that six other persons, including those who have met Sukesh in the jail, were not being prosecuted, therefore why the differential treatment? 22.[3] He posed a question as to what was the distinguishing factor by the ED. He relied upon the decision in State of M.P. v. Sheetla Sahai & Ors., (2009) 8 SCC 617 where the Supreme Court stated that one cannot pick and choose at the stage of charge. He further relied on Radha Mohan Lakhotia v. Deputy Director 2010 SCC OnLine Bom 1116, stating that at best, the said proceeds in the hands of the petitioner would be liable for attachment, but not for prosecution. 22.[4] The basis of knowledge asserted by ED was twofold - first, the news report, and second, the assumption that petitioner ‘ought to have known’ about the criminal antecedents of Sukesh. He, therefore, asserted that this cannot impute knowledge to the petitioner that what she had received was coming from the proceeds of crime, i.e. the money of which Ms. Aditi Singh had been defrauded. There could be a possibility, at best, that the proceeds were from legitimate money. The presumption, therefore, being drawn out that the petitioner was in the know, that gifts she had received were coming from proceeds of crime was flawed. 22.[5] He contended that knowledge was necessary at the stage of charge as per the decision in State of Maharashtra v. Som Nath Thapa (1996) 4 SCC 659, which dealt with a case of customs officer under whose watch RDX had come through the customs for use in the Bombay CRL.M.C. 9462/2023 38/95 blasts. An argument had been taken that he was not in the know that this RDX was to be used for unlawful purposes. The Supreme Court, however, stated that RDX has no other legal use and therefore did not discharge Som Nath Thapa. 22.[6] Senior counsel therefore distinguished the petitioner’s case stating that what she had received were ‘regular articles of commerce’ and cannot be said to be unlawful; the goods did not come with a stamp that they were untainted and therefore knowledge cannot be imputed to the petitioner. 22.[7] He further countered the assertion of the ED's counsel on Section 24 of PMLA on the point of presumption. He cited the decision of Vijay Madanlal Choudhary (supra), and drawing attention to paragraphs 93 and 97, effectively stated that the foundational facts had to be established even for this purpose, which was not done by the ED. 22.[8] On the issue raised by the ED that these aspects will need to be considered during trial, Senior Counsel stated that trial is necessary when there are disputes relating to the facts, which was not there in this case. Petitioner was willing to admit the facts placed by the ED since she had none of her own facts to counter the same. The facts relating to receipt of the gifts by her were admitted by her, so therefore there was no dispute in that regard. However, the undisputed facts did not establish knowledge of the proceeds of crime in the hands of the petitioner. 22.[9] Senior counsel embellished the issue of the petitioner being witness to the predicate offence, but being accused in the other, on the basis that predicate offence included an offence of MCOCA, which was the same and, in some cases, wider than that of money laundering, for which he had referred to a table which was supplied previously. He CRL.M.C. 9462/2023 39/95 clarified that he was not arguing that a witness in one case could not be accused in the other, but was stating that in this specific case, being the predicate offence involving MCOCA, which is similar to and larger than the money laundering offence, the petitioner ought to have been excluded from accusation.

22.10 Definition of proceeds of crime under Section 2(1)(u) of PMLA is similar to “property derived or obtained from commission of organized crime” under Section 4 of MCOCA. Despite a specific punishment under Section 4 of MCOCA for possessing unaccountable wealth, petitioner has not been arraigned as an accused by EOW. Two different agencies carrying out investigation of offences intertwined with each other, presenting petitioner in two completely different and contradictory roles.

22.11 Petitioner has been arraigned, as a prosecution witness in the predicate offence, requiring her to be depose on oath before the Trial Court and face cross-examination, while she stands and as an accused in PMLA proceedings before the same Court. EOW had exonerated petitioner in the predicate offence on basis that she did not have any knowledge of the predicate offence and did not participate at any time before the predicate offence or post the commission of the same.

22.12 Reliance has been placed on TD Sonia v. Deputy Director, Director of Enforcement Government of India, Supreme Court order dated 2nd December 2022 in SLP Crl. No.10667/2022; Swarna Daga Mimani v. Director of Enforcement, Supreme Court order dated 13th March 2023, in SLP Crl. No. 345/2023; T.D. Tataji v. The Deputy Director of Enforcement, Government of India, Supreme Court order dated 21st November 2022 in SLP Crl. No. 10360/2022; and Directorate CRL.M.C. 9462/2023 40/95 of Enforcement v. Gagandeep Singh & Ors. 2022 SCC OnLine Del

514.

22.13 Petitioner did not have any knowledge about the predicate offence or proceeds of crime. Respondents’ entire case hinges on a solitary article published on 2020 which allegedly showed petitioner’s knowledge of Sukesh’s criminal antecedents. Regarding the article, petitioner relied upon the statements of Pinky Irani, who confirmed that she had assured petitioner and Shaan Muttathil that since Shekhar was a political bureaucrat, such things keep happening to taint Sukesh’s reputation. The article was a thing of the past. As per Pinky Irani, petitioner believed her and then started receiving gifts from him.

22.14 The article in any case did not have anything to do with the predicate offence in question. Petitioner's contention is that at best there is an omission on the part of the petitioner to conduct due diligence, but it cannot form the basis of prosecution under PMLA.

22.15 Omission to do an act for which there is no legal obligation cannot be said to be an ‘illegal omission’. From December 2020 till August 2021, there was nothing on any public forum/ newspaper about the extortion case of Aditi Singh and Sukesh.

22.16 Reliance was placed on Emperor vs. Bepin Behari Ganguly, 1931 SCC Online Cal. 230 (paragraphs 3-4); The Queen v. Anthony Udayan, (1883) ILR 6 Mad 280 (paragraph 2); Nanubhai Vastabhai Katariya v. State of Gujarat 1999 SCC OnLine Guj 235, (paragraphs 26 & 33). Prakash Industries Ltd. v. Union of India & Anr, 2023 SCC Online Del 336, (paragraphs 63-67). Razorpay Software Pvt Ltd v. Union of India (supra), (paragraphs 27-31,36-38). Dennis Sagaya CRL.M.C. 9462/2023 41/95 Jude v. Directorate of Enforcement, NC:2024:KHC:25046, (paragraphs 19, 24-25).

ANALYSIS

23. The petitioner seeks quashing of an ECIR registered under Section 3 and 4 PMLA, in which she has been arrayed as accused No. 10. The predicate offence, arises from FIR No.208/2021 lodged by the Special Cell, New Delhi, pursuant to which EOW (the investigating agency) filed the charge sheet under various sections of IPC and Section 3 and 4 of MCOCA against Sukesh and various other associates. The predicate offence was based on a complaint of extortion of about Rs. 200 crores by the complainant, Ms. Aditi Singh.

24. The gravamen of PMLA complaint relates to proceeds of crime and acts and omission by accused leading to the offence of money laundering under Section 3 PMLA. Said provision is extracted as under:

CRL.M.C. 9462/2023 42/95

(c) acquisition; or

(d) use; or

(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.

25. Section 2 (1) (u) PMLA defines ‘proceeds of crime’ extracted as under: “Section 2 (1): (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 [or where such property is taken or held outside the country, then the property equivalent in value held within the country] [or abroad]; Explanation.—For the removal of doubts, it is hereby clarified that “proceeds of crime” include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;”

26. The only other provision which is relevant for assessment of petitioner's case is Section 24 of PMLA, which creates a presumption against the accused and reverses the burden of proof. The said provision is extracted as under: CRL.M.C. 9462/2023 43/95

27. To support their prayer for quashing of ECIR, various grounds were asserted by petitioner, that can be usefully crystalized as under:

(i) Petitioner is not an accused in the predicate offence which arises from the same set of facts.

(ii) Petitioner was made a witness in the predicate offence and therefore it would compromise her position while giving evidence before the same court which tries both predicate and the PMLA offence and violates her constitutional right against self-incrimination;

(iii) Predicate offence includes provisions of MCOCA which also deals with property derived or obtained from commission of organized crime and is therefore akin to proceeds of crime under PMLA and petitioner has been exonerated from the predicate offence;

(iv) Petitioner herself was a victim of this modus operandi used by the accused Sukesh in the predicate offence;

(v) Other victims, similarly placed, of accused Sukesh in the predicate offence have not been proceeded under PMLA; ED is adopting pick-and-choose policy; CRL.M.C. 9462/2023 44/95

(vi) ED’s best case to impute knowledge to the petitioner regarding proceeds of crime relates to a 2020 article which was given to petitioner in February 2021. Not only is there evidence through statements of co-accused that petitioner was misled into believing that Sukesh was not associated with any real criminality, instead was victim of motivated and instigated actions. Further, at best, petitioner could be accused of an omission to not carry out due diligence regarding criminal antecedents of Sukesh, which, in itself, is not an illegal omission.

(vii) There was no dispute on facts of the case; petitioner had admitted receipt of all gifts / articles from Sukesh and therefore, she does not need to be subject to trial for this purpose or for any other factual determination. All the evidence placed by ED points out to an intricate modus operandi conceived, perpetuated and implemented by Sukesh through his associates primarily the Ramnani brothers and Pinky Irani in order to mislead, dupe and hoodwink the petitioner into receiving gifts/articles as tokens of Sukesh’s appreciation and admiration of the petitioner.

(viii) It's not uncommon for a petitioner, as a reputed actor, to receive gifts from her fans and this was an accepted practice in the film industry.

28. Each of these contentions need to be assessed, particularly in light of ED's response. The facts in question are largely not disputed between the petitioner and ED, particularly that there was a predicate offence, there existed proceeds of crime (though petitioner denies that she was aware that they were proceeds of crime), and petitioner and her family were recipient of CRL.M.C. 9462/2023 45/95 certain gifts, articles and money transactions emanating from the accused Sukesh.

29. Charges are yet to be framed as per the submission of counsels, proceedings are underway before the Trial Court.

30. Before venturing into a journey to assess these submissions, it is instructive to examine, at the outset, two decisions of the Supreme Court which have been widely referred by both parties viz. Vijay Madanlal Choudhary and Ors. (supra), a three-bench 2022 decision of the Supreme Court and, Pavana Dibbur (supra), a 2023 decision of the Supreme Court. VII.A. Vijay Madanlal Choudhary and Ors.

31. The Supreme Court was dealing with a batch of petitions with pleas concerning validity and interpretation of provisions of the PMLA and the procedure followed by ED while investigating offences under the PMLA, as being violative of the constitutional mandate.

32. Certain aspects that have a bearing on determination in this matter, forms part of the discussion and opinion of the Supreme Court. Firstly, is the analysis of the purport of Section 24 of PMLA. It was specifically held in paragraphs 95 to 99, 103 of the Supreme Court’s opinion that Section 24 had reasonable nexus with the purposes and objects to be achieved by the Act and cannot be regarded as arbitrary or unconstitutional. Relevant for this case are the following extracts:

CRL.M.C. 9462/2023 46/95 Noor Aga, it has been observed that the Court while interpreting the provision, such as Section 24 of the 2002 Act, must keep in mind that the concerned Act has been the outcome of the mandate contained in the international convention, as is the case on hand. Further, only because the burden of proof under certain circumstances is placed on the accused, the same, by itself would not render the legal provision unconstitutional. The question whether the burden on the accused is a legal burden or an evidentiary burden, would depend on the statute and its purport and object. Indeed, it must pass the test of the doctrine of proportionality. In any case, as the burden on the accused would be only an evidentiary burden, it can be discharged by the accused by producing evidence regarding the facts within his personal knowledge. Again, in the case of Seema Silk & Sarees, this Court restated that a legal provision does not become unconstitutional only because it provides for reverse burden as it is only a rule of evidence. So long as the accused is entitled to show that he has not violated the provisions of the Act, such a legal provision cannot be regarded as unconstitutional. For, the accused is then entitled to rebut the presumption.

96. Suffice it to observe that the change effected in Section 24 of the 2002 Act is the outcome of the mandate of international Conventions and recommendations made in that regard. Further, keeping in mind the legislative scheme and the purposes and objects sought to be achieved by the 2002 Act coupled with the fact that the person charged or any other person involved in moneylaundering, would get opportunity to disclose information and evidence to rebut the legal presumption in respect of facts within his personal knowledge during the proceeding before the Authority or the Special Court, by no stretch of imagination, provision in the form of Section 24 of the 2002 Act, can be regarded as unconstitutional. It has CRL.M.C. 9462/2023 47/95 reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act. In any case, it cannot be perceived as manifestly arbitrary as is sought to be urged before us.

97. Be that as it may, we may now proceed to decipher the purport of Section 24 of the 2002 Act. In the first place, it must be noticed that the legal presumption in either case is about the involvement of proceeds of crime in money-laundering. This fact becomes relevant, only if, the prosecution or the authorities have succeeded in establishing at least three basic or foundational facts. First, that the criminal activity relating to a scheduled offence has been committed. Second, that the property in question has been derived or obtained, directly or indirectly, by any person as a result of that criminal activity. Third, the person concerned is, directly or indirectly, involved in any process or activity connected with the said property being proceeds of crime. On establishing the fact that there existed proceeds of crime and the person concerned was involved in any process or activity connected therewith, itself, constitutes offence of money-laundering. The nature of process or activity has now been elaborated in the form of Explanation inserted vide Finance (No.2) Act, 2019. On establishing these foundational facts in terms of Section 24 of the 2002 Act, a legal presumption would arise that such proceeds of crime are involved in money-laundering. The fact that the person concerned had no causal connection with such proceeds of crime and he is able to disprove the fact about his involvement in any process or activity connected therewith, by producing evidence in that regard, the legal presumption would stand rebutted.

98. The person falling under the first category being person charged with the offence of moneylaundering, presupposes that a formal complaint has already been filed against him by the authority authorised naming him as an accused in the CRL.M.C. 9462/2023 48/95 commission of offence of money-laundering. As observed in P.N. Krishna Lal, the Court cannot be oblivious about the purpose of the law. Further, the special provisions or the special enactments as in this case is required to tackle new situations created by human proclivity to amass wealth at the altar of formal financial system of the country including its sovereignty and integrity. While dealing with such provision, reading it down would also defeat the legislative intent.

99. Be it noted that the legal presumption under Section 24(a) of the 2002 Act, would apply when the person is charged with the offence of moneylaundering and his direct or indirect involvement in any process or activity connected with the proceeds of crime, is established. The existence of proceeds of crime is, therefore, a foundational fact, to be established by the prosecution, including the involvement of the person in any process or activity connected therewith. Once these foundational facts are established by the prosecution, the onus must then shift on the person facing charge of offence of moneylaundering — to rebut the legal presumption that the proceeds of crime are not involved in moneylaundering, by producing evidence which is within his personal knowledge. In other words, the expression “presume” is not conclusive. It also does not follow that the legal presumption that the proceeds of crime are involved in money-laundering is to be invoked by the Authority or the Court, without providing an opportunity to the person to rebut the same by leading evidence within his personal knowledge. …..

103. We, therefore, hold that the provision under consideration namely Section 24 has reasonable nexus with the purposes and objects sought to be achieved by the 2002 Act and cannot be regarded as manifestly arbitrary or unconstitutional.” CRL.M.C. 9462/2023 49/95 (emphasis added)

33. The Supreme Court categorically stated that the burden on accused was an evidentiary burden to be discharged by producing evidence regarding the facts “within his personal knowledge”.

34. Legal presumption would arise on establishing at least three basic or foundational factors - that first, there is a scheduled offence; second, that the property in question has been derived from that criminal activity; and third, that person accused in PMLA is directly or indirectly involved in any process or activity connected with the said proceeds of crime.

35. Having established these foundational facts, the offence of money laundering gets triggered and a legal presumption arises that the proceeds of crime are involved in money laundering; that the accused has no causal connection with proceeds of crime and is able to disprove the fact about their involvement, by producing evidence, which would result in a rebuttal of the presumption.

36. The Supreme Court clarified that the onus flows from Section 106 of IEA and rebuttal can be through replies under Section 313 of Cr.P.C. or by cross-examining prosecution witness. The procedure entailed under Section 24 of PMLA was therefore not arbitrary or unreasonable.

37. ED emphasizes, underscores, and reiterates that these three foundational facts have been established in this matter and therefore presumption arising under Section 24 of PMLA can be rebutted by petitioner by leading evidence during trial. Plea for quashing is, therefore, premature and cannot be entertained.

38. This Court prima facie does not see any infirmity in the submission of ED. There is no dispute about the first and second foundational facts and the CRL.M.C. 9462/2023 50/95 only issue, at best, arises on the third foundational fact i.e. petitioner is directly or indirectly involved in any process or activity connected with the proceeds of crime.

39. Section 3 of PMLA itself provides the embellishment on what entails a ‘process or activity’ by virtue of the Explanation. Dissecting the Explanation, the following material aspects become evident: a) Accused can be directly or indirectly involved; b) Accused could have attempted to indulge, knowingly assisted, or knowingly be a party, or actually involved in concealment / possession / acquisition / use / projection as untainted property / claiming as untainted property; c) The above could be “in any manner whatsoever”; d) Process or activity is a ‘continuing activity’ and continues till the accused enjoys the proceeds of crime. VII.B. Pavana Dibbur v. ED

40. In Pavana Dibbur (supra), the Supreme Court was dealing with a complaint file by ED under Section 45(1) of PMLA in which the appellant Pavana Dibbur was accused. The appellant filed a petition before the High Court of Karnataka under Section 482 of Cr.P.C. seeking quashing of a complaint.

41. One of the submissions by counsel for the appellant was that she had not been arraigned as an accused in the charge sheets relating to the predicate offence and, therefore, could not be roped in as an accused for the offences under PMLA. Reliance was placed on Vijay Madan Lal Choudhary (supra), submitting that the Court held that if an accused in the predicate offence is acquitted/discharged, he cannot be prosecuted for an offence under PMLA. CRL.M.C. 9462/2023 51/95 This was refuted by the Counsel appearing for ED, submitting that a person can be held guilty of commission of an offence under PMLA even if not an accused in the predicate offence.

42. Dealing with this, the Supreme Court noted that an offence under Section 3 of PMLA can only be committed after predicate offences is committed. A specific example relating to extortion under Section 384-389 of IPC was adverted to by the Supreme Court, noting specifically that a person unconnected with the offence of extortion may assist the accused in the concealment of the proceeds of extortion and, therefore, can be guilty of the offence of money laundering.

43. In a case where prosecution for the predicate offence ends in acquittal, accused are discharged, or proceedings were quashed, the predicate offence will not exist. Since no one can be prosecuted for an offence under Section 3 of PMLA in such a scenario, as there will be no proceeds of crime, accused under PMLA will benefit. However, an accused in PMLA case who comes into the picture after the scheduled offences have been committed, by assisting in concealment or use of the ‘proceeds of crime’, need not be an accused in the scheduled offence. Such an accused can still be prosecuted under PMLA. The contention of appellant's counsel was, therefore, rejected. Relevant paragraphs from the decision are extracted as under:

CRL.M.C. 9462/2023 52/95 offences under Sections 384 to 389 of the IPC relating to “extortion” are scheduled offences included in Paragraph 1 of the Schedule to the PMLA. An accused may commit a crime of extortion covered by Sections 384 to 389 of IPC and extort money. Subsequently, a person unconnected with the offence of extortion may assist the said accused in the concealment of the proceeds of extortion. In such a case, the person who assists the accused in the scheduled offence for concealing the proceeds of the crime of extortion can be guilty of the offence of money laundering. Therefore, it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence. What is held in paragraph 270 of the decision of this Court in the case of Vijay Madanlal Choudhary[1] supports the above conclusion. The conditions precedent for attracting the offence under Section 3 of the PMLA are that there must be a scheduled offence and that there must be proceeds of crime in relation to the scheduled offence as defined in clause (u) of subsection (1) of Section 3 of the PMLA.

16. In a given case, if the prosecution for the scheduled offence ends in the acquittal of all the accused or discharge of all the accused or the proceedings of the scheduled offence are quashed in its entirety, the scheduled offence will not exist, and therefore, no one can be prosecuted for the offence punishable under Section 3 of the PMLA as there will not be any proceeds of crime. Thus, in such a case, the accused against whom the complaint under Section 3 of the PMLA is filed will benefit from the scheduled offence ending by acquittal or discharge of all the accused. Similarly, he will get the benefit of quashing the proceedings of the scheduled offence. However, an accused in the CRL.M.C. 9462/2023 53/95 PMLA case who comes into the picture after the scheduled offence is committed by assisting in the concealment or use of proceeds of crime need not be an accused in the scheduled offence. Such an accused can still be prosecuted under PMLA so long as the scheduled offence exists. Thus, the second contention raised by the learned senior counsel appearing for the appellant on the ground that the appellant was not shown as an accused in the charge sheets filed in the scheduled offences deserves to be rejected.

ACQUISITION OF THE FIRST AND SECOND PROPERTY

17. The allegation against the appellant in the complaint is that she purchased the property worth crores, though she did not have the source of income which would generate enough money to buy the subject properties. The allegation against the appellant is that she allowed and facilitated accused no.1– Madhukar Angur, to conceal the siphoned/misappropriated amounts by using her bank account. Another allegation is that she is shown to have purchased the second property from accused no.1, though she did not have the resources to pay the consideration. The allegation is that she allowed the accused no.1 to use her bank accounts to facilitate siphoning the proceeds of the crime. Another allegation is that both the first and second properties have been acquired out of the proceeds of crime. The first property, ex-facie, cannot be said to have any connection with the proceeds of crime as the acts constituting the scheduled offence took place after its acquisition. The case of the appellant is that she possessed a substantial amount, as can be seen from the declaration made by her under the Income Declaration Scheme, 2016 in September 2016 and therefore, at the time of the CRL.M.C. 9462/2023 54/95 acquisition of the second property, more than sufficient money was available with her to acquire the second property. The issue of whether the appellant used tainted money to acquire the second property can be decided only after the evidence is adduced. This is not a case where any material is placed on record to show that the sale consideration was paid from a particular Bank Account of the appellant. Therefore, it is not possible to record a finding at this stage that the Second property was not acquired by using the proceeds of crime. We also make it clear that we have considered the issue only in the context of the applicability of the PMLA. We have not dealt with the issues of valuation and legality of the sale deeds.”

44. Clearly the Supreme Court has categorically opined that an accused in a PMLA case may not necessarily be an accused in the predicate offence, and till the proceeding in the predicate offence ends in an acquittal/discharge of all accused or are closed in their entirety, the ‘proceeds of crime’ would still be in contention and PMLA offences would subsist, to be tried independently. Based on this assessment, for the purposes of this case, the first argument mooted by the petitioner's counsel would, therefore, stand to be rejected.

45. As regards the argument that petitioner herself was a victim and was misled and duped by the accused Sukesh, the contention has to be seen in light of the fact that the predicate offence subsists independently from the PMLA offence. The fact that these offences are independent has been conclusively determined in Vijay Madan Lal Choudhary (supra) in paragraph 112. In this regard, reference to Section 44(1)(d) of PMLA read with the Explanation (i) is relevant, which mandates that the trial of both sets of offences may be by the same Court but shall not be constituted as a joint CRL.M.C. 9462/2023 55/95 trial. For ease of refence to Section 44(1)(d) Explanation (i) is extracted as under: “44. Offences triable by Special Courts- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),— ……….

(d) a Special Court while trying the scheduled offence or the offence of money-laundering shall hold trial in accordance with the provisions of the Code of Criminal Procedure, 1973 ( 2 of 1974) as it applies to a trial before a Court of Session.] Explanation. —For the removal of doubts, it is clarified that,—

(i) the jurisdiction of the Special Court while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial;…..”

46. An argument was raised by petitioner that petitioner being a witness in the predicate offence indicates lack of mens rea and that she was not a post facto accessory to the offence of money laundering, as no role was attributed to her of aiding, utilizing, or concealing proceeds of crime. The test in Pavana Dibbur (supra), according to petitioner, was not satisfied on the facts of this case. Petitioner contends that possession of gifts can only constitute an offence if petitioner had any knowledge of the predicate offence. VII.C. Re: Petitioner’s ‘knowledge’

47. Knowledge of the predicate offence, as per petitioner, arose only on the basis of a news article of 2020 which petitioner became aware of in February 2021, handed over by Shaan Muttathil. The news article contained information about involvement of Sukesh along with his wife Leena Maria CRL.M.C. 9462/2023 56/95 Paul in bank fraud cases. However, petitioner claims that she was disabused of the criminality of Sukesh on the basis of vehement assertions made by Pinky Irani in favour of Sukesh. Petitioner does not state, in addition, that she had done any due diligence on Sukesh’s criminal background subsequently. There are two issues which arise on the aspect of knowledge: i) Firstly, petitioner being mere aware of Sukesh’s criminal antecedents in February 2021 and then being disabused of the perception; and ii) Secondly, lack of any due diligence by petitioner in this regard thereafter.

48. To substantiate the first aspect, petitioner's counsel seeks to rely upon statements of petitioner and that of Pinky Irani in this regard, in particular, which are extracted as under: Petitioner’s response to question no.2 in her statement recorded on 20th May 2022:

49. Petitioner's counsel for the purposes of plea of quashing, invites this Court to accept the statement of Pinky Irani at face value and also the impact of Pinky Irani’s efforts to disabuse petitioner of the notion of Sukesh's criminality. This, in the Court's opinion, cannot be an inviolable conclusion at this stage, particularly when the witnesses have not been examined and have been not been subjected to cross-examination. Whether the petitioner was in fact disabused of the notion in the true sense and, therefore, wiped the mental slate clean of any knowledge of Sukesh's criminality, importing to herself a notion that he had no criminal implications on him, requires assessment through examination of witnesses. The Court cannot reach a conclusion at this stage on what is a fairly nuanced issue.

50. It could very well be that the prosecution is able to establish in its favour that petitioner ignored the newspaper article completely, or took Pinky Irani's assertions at face value but retained the lurking suspicion that Sukesh was an offender, or that she chose to push these issues under the carpet, knowingly and consciously, in order to continue to receive the benefit of the gifts that she was receiving. All these are evidently a matter of trial.

51. Reliance placed on Vijay Aggarwal (supra), CP Khandelwal (supra) and Arvind Kejriwal(supra), on petitioner’s ignorance of predicate offence CRL.M.C. 9462/2023 59/95 may not be relevant, as Vijay Aggarwal (supra) and CP Khandelwal (supra) were matters of bail whereas Arvind Kejriwal(supra) was a matter challenging the validity of arrest.

52. Similarly, reliance on TD Sonia v. Deputy Director, Director of Enforcement Government of India (supra), Swarna Daga Mimani v. Director of Enforcement and Others (supra), T.D. Tataji v. The Deputy Director of Enforcement, Government of India (supra) and Directorate of Enforcement v. Gagandeep Singh & Ors (supra) may also not be relevant as these cases are peculiar on their facts and circumstances and do not apply to these facts or establish any legal principle. VII.D. Re: Petitioner’s Omission

53. On the second aspect of whether there was an omission by the petitioner to pursue due diligence post the reading of the article and Pinky Irani’s assertions, yet again the issue will need to be threshed out in trial. Petitioner's counsel states that the omission, if at all, cannot be an illegal omission since there was no duty cast on the petitioner. The Court, however, is not willing to accept that argument, particularly at this stage. The reason being that it is not merely about the omission being legal or illegal, but also the alleged inaction on the part of the petitioner to cross-check the criminality of Sukesh, particularly in the context of having received vast amounts of gifts for herself and her family. The prosecution's case is that the petitioner chose to brush things under the carpet but retained knowledge, or even a lurking or robust suspicion that there was criminality involved.

54. These are evidently matters of trial, and the plea of the petitioner, at this stage, even before charges are framed, cannot be accepted. The Court is being effectively asked by petitioner to take into account the fact of the CRL.M.C. 9462/2023 60/95 newspaper article being disclosed in February 2021, and Pinky Irani’s statements (which were misleading), and reach a conclusion that indeed the slate of petitioner's knowledge about Sukesh's criminality had been wiped clean, and no element of Section 3 of PMLA can stick. The arguments revolving around lack of knowledge being a determinative factor, which would invite a quashing of the ECIR, cannot therefore, be accepted, pre-trial.

55. The argument based on Sections 32 and 43 of IPC regarding there being no “illegal omission” is premature. The issue hinges upon the aspect upon knowledge under PMLA and is qualified in the Section 3 (i) Explanation of PMLA – directly or indirectly, attempt or assists, or in any manner whatsoever. Whether the offence would be made out against petitioner would involve an application of these aspects to the facts as fleshed out during trial. The prosecution’s case is based upon direct knowledge of petitioner on the criminal antecedents of Sukesh and her attempt to conceal facts and tamper with the evidence, all of which may potentially lead to establishing their case under PMLA.

56. Reliance to Razorpay (supra) might not be relevant considered it is based on its own peculiar facts- where Razorpay (supra) involved an obligation of statutory due diligence for a payment gateway. The Court held that at best it was negligent but there was no intention, on the basis that there was no prima facie material available to substantiate that the payment gateway knowingly facilitates the transfer.

57. Reliance on Emperor vs. Bepin (supra), on the issue of illegal omission may not be apposite, since it was related to an offence of abetment of some revolutionary songs being sung in an organization’s meeting, where accused was the President. The petitioner’s case is not a case of actionability or legality of not carrying out due diligence, but either establishing or CRL.M.C. 9462/2023 61/95 disproving the degree of knowledge of petitioner and its relevance to the PMLA provision.

58. Reliance of petitioner’s counsel on P. B. Desai v. State of Maharashtra & Anr. (2013) 15 SCC 481, is also not relevant for the purpose. The case dealt with medical negligence, professional misconduct and examined legal aspects of ‘omission’. ED’s case against the petitioner is not merely based on alleged ‘omission’, but inter alia on establishing ‘knowledge’ and thus the argument cannot subsist in isolation. VII.E. Re: Petitioner as ‘witness’

59. ED's submission that an individual who is a witness for predicate offence can be prosecuted as an accused under PMLA, needs to be examined. Reliance placed on Amit Katyal v. Union of India (supra) is apposite. Relevant extracts are as under:

CRL.M.C. 9462/2023 62/95

100. This aspect has been clarified by the Apex Court in the case of Pavana Dibbur, (supra) and Vijay Madanlal Chaudhary, (supra).”

60. The Division Bench of this Court in Satish Babu Sana (supra), was dealing with a similar assertion, wherein petitioners were arrayed as witnesses under scheduled offence, but a PMLA case had been registered against them as an accused. The Court taking into account Vijay Madanlal Choudhary (supra) stated as under:

dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trials. This, in fact, is reiteration of the earlier part of the same section, which envisages that even though both the trials may proceed before the same Special Court, it must be tried separately as per the provisions of the 1973 Code. In so far as clause (ii) of the Explanation, at the first glance, it does give an impression that the same is unconnected with the earlier part of the section. However, on closer scrutiny of this provision, it is noted that the same is only an enabling provision permitting to take on record material regarding further investigation against any accused person involved in respect of offence of money-laundering for which complaint has already been filed, whether he has been named in the complaint or not. Such a provision, in fact, is a wholesome provision to ensure that no person involved in the commission of offence of money-laundering must go unpunished. It is always open to the Authority authorised to seek permission of the court during the trial of the complaint in respect of which cognizance has already been taken by the court to bring on record further evidence which request can be dealt with by the Special Court in CRL.M.C. 9462/2023 64/95 accordance with law keeping in mind the provisions of the 1973 Code as well. It is also open to the Authority authorised to file a fresh complaint against the person who has not been named as accused in the complaint already filed in respect of same offence of money- laundering, including to request the court to proceed against such other person appearing to be guilty of offence under section 319 of the 1973 Code, which otherwise would apply to such a trial.””

61. ED's reliance on State (Delhi Admn.) v. Jagjit Singh, 1989 Suppl. (2) SCC 770 and the following extracted paragraphs is also relevant in context of Section 132 of IEA. Relevant extracts are extracted as under:

CRL.M.C. 9462/2023 65/95 therefore, not tenable. It is pertinent to refer in this connection the decision of this Court in Laxmipat Choraria v. State of Maharashtra [AIR 1968 SC 938: (1968) 2 SCR 624: 1968 Cri LJ 1124] wherein it has been observed by Hidayatullah, J. as he then was that: “Under Section 132 a witness shall not be excused from answering any question as to any matter relevant to the matter in issue in any criminal proceeding (among others) upon the ground that the answer to such question will incriminate or may tend directly or indirectly to expose him to a penalty or forfeiture of any kind. The safeguard to this compulsion is that no such answer which the witness is compelled to give exposes him to any arrest or prosecution or can it be proved against him in any criminal proceeding except a prosecution for giving false evidence by such answer.”

62. The apprehension of petitioner that any evidence would be selfincriminating cannot lead to quashing of the ECIR as statutory and constitutional protections are already provided and will have to be assessed in that rubric. This alone cannot assist the petitioner and release her from the yoke of prosecution under ECIR. VII.F. Re: MCOCA and exoneration

63. As regards the petitioner's assertion that offences under Sections 3(5) and 4 of MCOCA (which form part of the predicate offence) and Section 3 of PMLA are similar, it would be necessary to first extract the said MCOCA provisions hereunder: CRL.M.C. 9462/2023 66/95 “Section 2(1)(e) MCOCA: “Definitions.— (1) In this Act, unless the context otherwise requires,— (e) “organised crime” means any continuing unlawful activity by an individual, singly or jointly, either as a member of an organised crime syndicate or on behalf of such syndicate, by use of violence or threat of violence or intimidation or coercion, or other unlawful means, with the objective of gaining pecuniary benefits, or gaining undue economic or other advantage for himself or any other person or promoting insurgency;” Section 3(1)(5) MCOCA “Punishment for organised crime.—(1) Whoever commits an offence of organised crime shall, (5) Whoever holds any property derived of obtained from commission of an organised crime or which has been acquired through the organised crime syndicate funds shall be punishable with a term which shall not be less than three years but which may extend to imprisonment for life and shall also be liable to fine, subject to a minimum fine of Rupees Two lacs.” Section 4 MCOCA: “4. Punishment for possessing unaccountable wealth on behalf of member of organised crime syndicate.—If any person on behalf of a member of an organised crime syndicate is, or, at any time has been, in possession of movable or immovable property which he cannot satisfactorily account for, he shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to ten years and shall also be liable to fine, subject to a minimum fine of Rupees One lac and such property shall also liable for attachment and forfeiture, as provided by Section 20.” CRL.M.C. 9462/2023 67/95

64. Petitioners' counsel submitted that invocation of Sections 3 (5) and 4 of MCOCA in the predicate offence automatically invites the offence of holding any property derived or obtained from commission of an organized crime, which is similar to what Section 3 of PMLA provides (relating to proceeds of crime).

65. It was, therefore submitted, relying on T.T. Antony (supra), that the ED cannot arrive at a different conclusion on the same set of facts, and therefore, the ECIR ought to be quashed.

66. ED's response is based upon the standalone offence of money laundering, and that investigation by the ‘predicate offence agency’ cannot impact the same.

67. Reliance for this, was placed on Vijay Madanlal Choudhary (supra). Relevant paragraphs are extracted as under: “112. Reverting to clause (d) of sub-section (1) of Section 44, it postulates that a Special Court while trying the scheduled offence or offence of money laundering shall hold trial in accordance with the provisions of the 1973 Code as it applies to a trial before a Court of Session. Going by the plain language of this provision, no fault can be found for conducting trial in the respective cases in the same manner as provided in the 1973 Code. However, the grievance is about the insertion of the Explanation vide Finance (No. 2) Act, 2019. As a matter of fact, this insertion is only a clarificatory provision, as is evident from the opening statement of the provision which says that “for the removal of doubts, it is clarified that”. None of the clauses inserted by this amendment travel beyond the principal provision contained in clause (d). Clause

(i) of the Explanation enunciates that the jurisdiction of the Special Court while dealing with the offence being tried under this Act, shall not be CRL.M.C. 9462/2023 68/95 dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trials. This, in fact, is reiteration of the earlier part of the same section, which envisages that even though both the trials may proceed before the same Special Court, it must be tried separately as per the provisions of the 1973 Code. Insofar as clause (ii) of the Explanation, at the first glance, it does give an impression that the same is unconnected with the earlier part of the section. However, on closer scrutiny of this provision, it is noted that the same is only an enabling provision permitting to take on record material regarding further investigation against any accused person involved in respect of offence of money laundering for which complaint has already been filed, whether he has been named in the complaint or not. Such a provision, in fact, is a wholesome provision to ensure that no person involved in the commission of offence of money laundering must go unpunished. It is always open to the authority authorised to seek permission of the court during the trial of the complaint in respect of which cognizance has already been taken by the court to bring on record further evidence which request can be dealt with by the Special Court in accordance with law keeping in mind the provisions of the 1973 Code as well. It is also open to the authority authorised to file a fresh complaint against the person who has not been named as accused in the complaint already filed in respect of same offence of money laundering, including to request the court to proceed against such other person appearing to be guilty of offence under Section 319 of the 1973 Code, which otherwise would apply to such a trial.” CRL.M.C. 9462/2023 69/95

68. As per ED, merely because the petitioner was not accused in the predicate offence, would not mean that she has been exonerated or acquitted of the predicate offence.

69. Reliance was placed on Section 232 of Cr.P.C. while contending that acquittal is a judicial process and is not similar to an omission to array a person as an accused, and therefore, petitioner cannot be said to have been exonerated. In this regard, Section 232 of Cr.P.C. is extracted as under:

70. In Monica Bedi v. State of A.P. (supra), the Supreme Court drew a distinction between two separate offences, in that, the rule of double jeopardy would not be applicable if the offences were distinct. Relevant paragraph of the said judgment reads as under:

CRL.M.C. 9462/2023 70/95 of the Foreign Exchange Regulation Act, 1947 and the Sea Customs Act. The petitioners approached the Supreme Court for quashing of the proceedings pending against them in the Court of the Magistrate inter alia contending that in view of the provisions of Article 20(2) of the Constitution they could not be prosecuted and punished twice over for the same offence and the proceedings pending before the Magistrate violated the protection afforded by Article 20(2) of the Constitution. This Court rejected the contention and held that criminal conspiracy is an offence under Section 120-B of the Penal Code but not so under the Sea Customs Act, and the petitioners were not and could not be charged with it before the Collector of Customs. It is an offence separate from the crime which it may have for its object and is complete even before the crime is attempted or completed, and even when attempted or completed; it forms no ingredients of such crime. They are, therefore, quite separate offences. The Court relied on the view expressed by the United States Supreme Court in United States v. Rabinowich [59 L Ed 1211: 238 US 78 (1914)]”

71. In the opinion of this Court, arguments of the petitioners are unmerited in so far as they contend that the investigating agency, in the predicate offence, did not make the petitioner an accused. This will certainly not lead to a logical corollary that she cannot be accused for a PMLA offence.

72. Argument under Section 71 of IPC and Section 26 of GCA does not hold water considering petitioner has been implicated for only the offence under PMLA. The question for prosecution under two offences does not arise. CRL.M.C. 9462/2023 71/95

73. It is well settled that the offence and the trial, both for the scheduled offence and PMLA offence, are independent. In any event, the T. T. Antony (supra) line of cases relate to registration of second or multiple FIRs.

74. Moreover, as per Sukhpal Singh Khaira (supra), the Court under Section 319 of Cr.P.C, can also array a person as an accused, who may not have been charge-sheeted. Section 319 of Cr.P.C. reads as under:

75. Also, the determination in Pavana Dibbur (supra), in this regard, is also relevant, which has already been noted in paragraph 43 above. CRL.M.C. 9462/2023 72/95

76. In any event, as per the provisions of MCOCA, prosecution would have to prove that there was an ‘organized crime’ and an ‘organized crime syndicate’ and only then, property derived from the same would invite a conviction under Section 3(5) of MCOCA.

77. It would not mean that if the aspect of organized crime could not be proven, the criminality under the provisions of IPC would not subsist i.e. for extortion.

78. Even if the offence under MCOCA were not proven by the prosecution (in the proceedings for the predicate offence), the proceeds of crime would still remain, if the IPC offence stands proved.

79. At this stage (pre-trial and pre-charge), therefore, inviting the Court to quash the FIR on the basis of the similarity between the provisions contained in MCOCA and PMLA is unmerited and unwarranted. VII.G. Re: Pick and choose by ED

80. Petitioner’s submission is that ED, as a prosecutor, has adopted a pick and choose policy and did not proceed under PMLA against similarly placed persons who had also received gifts and articles from Sukesh Chandrasekhar. Essentially, the petitioner pleads that actresses Nikita Tamboli, Chahatt Khanna and Sophia Singh, met Sukesh inside Tihar Jail where he was lodged and also received gifts from him. Further, it was contended that a family member of actress Nora Fatehi received a BMW car from Sukesh.

81. Despite this, these individuals have not been arrayed as accused persons by the ED, despite having first-hand knowledge of Sukesh being in prison. This disparate treatment has been presented as yet another argument and a ground for quashing of the ECIR.

82. In this regard, the petitioner relies upon Ramesh Manglani (supra) Sanjay Jain (supra) and Sanjay Kansal (supra). CRL.M.C. 9462/2023 73/95

83. A perusal of the said decisions would show that they relate to grant of regular bail in connection with the ECIRs under the PMLA and not situations relating to quashing of ECIR, which is the subject matter of this case.

84. The issue of parity may be an aspect which the Court does consider while granting bail, however, the same cannot by extension or extrapolation, be made applicable to a case of quashing, which would erase the ECIR qua the accused petitioner, completely.

85. Whether the investigating agency chose a pick and choose policy or decided not to proceed against the others, based on the merits of the case, is not an issue under consideration before this Court; petitioner is always at liberty to raise this issue at an appropriate stage.

86. Petitioner’s arguments relating to ‘regular articles of commerce’ is too simplistic to be accepted. Som Nath Thapa (supra) was decided on its own peculiar facts and circumstances. The issue in the instant case, would be whether the goods were untainted and not the nature of articles, which again is a matter of trial. VII.H. Re: Quashing

87. Aside from the specific issues addressed above, what is most important to be considered is, whether quashing, in any event, can be considered at this stage. ED submits that it is a settled legal proposition that inherent jurisdiction of the Court should not be invoked to quash criminal proceedings at the stage of the framing of charge.

88. In this regard, the ED relies upon the judgment in Rathish Babu Unnikrishnan (supra), in particular, the following paragraphs:

CRL.M.C. 9462/2023 74/95 reading of the complaint and the order passed by the Magistrate, what is discernible is that a possible view is taken that the cheques drawn were, in discharge of a debt for purchase of shares. In any case, when there is legal presumption, it would not be judicious for the quashing Court to carry out a detailed enquiry on the facts alleged, without first permitting the trial court to evaluate the evidence of the parties. The quashing Court should not take upon itself, the burden of separating the wheat from the chaff where facts are contested. To say it differently, the quashing proceedings must not become an expedition into the merits of factual dispute, so as to conclusively vindicate either the complainant or the defence.

15. The parameters for invoking the inherent jurisdiction of the Court to quash the criminal proceedings under Section 482CrPC, have been spelled out by S. Ratnavel Pandian, J. for the two- Judge Bench in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335: 1992 SCC (Cri) 426: AIR 1992 SC 604], and the suggested precautionary principles serve as good law even today, for invocation of power under Section 482CrPC: (SCC p. 379, para

103)

CRL.M.C. 9462/2023 75/95

16. In the impugned judgment [Rathish Babu Unnikrishnan v. State (NCT of Delhi), 2019 SCC OnLine Del 12340], the learned Judge had rightly relied upon the opinion of J.S. Khehar, J. for a Division Bench in Rajiv Thapar [Rajiv Thapar v. Madan Lal Kapoor, (2013) 3 SCC 330: (2013) 3 SCC (Cri) 158], which succinctly express the following relevant parameters to be considered by the quashing Court, at the stage of issuing process, committal, or framing of charges: (Rajiv Thapar case [Rajiv Thapar v. Madan Lal Kapoor, (2013) 3 SCC 330: (2013) 3 SCC (Cri) 158], SCC p. 347, para 28)

17. The proposition of law as set out above makes it abundantly clear that the court should be slow to grant the relief of quashing a complaint at a pretrial stage, when the factual controversy is in the realm of possibility particularly because of the legal presumption, as in this matter. What is also of note is that the factual defence without having to adduce any evidence need to be of an CRL.M.C. 9462/2023 76/95 unimpeachable quality, so as to altogether disprove the allegations made in the complaint.

18. The consequences of scuttling the criminal process at a pre-trial stage can be grave and irreparable. Quashing proceedings at preliminary stages will result in finality without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e. the trial court is ousted from weighing the material evidence. If this is allowed, the accused may be given an unmerited advantage in the criminal process. Also because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to rebut the presumption.

19. Situated thus, to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial court. Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited.”

89. In Soma Chakravarty v State (supra), the Supreme Court was dealing with an appeal against dismissal of revision against the framing of charge. The Supreme Court reiterated the well-entrenched principle in the following paragraph: “10. It may be mentioned that the settled legal position, as mentioned in the above decisions, is CRL.M.C. 9462/2023 77/95 that if on the basis of material on record the court could form an opinion that the accused might have committed offence it can frame the charge, though for conviction the conclusion is required to be proved beyond reasonable doubt that the accused has committed the offence. At the time of framing of the charges the probative value of the material on record cannot be gone into, and the material brought on record by the prosecution has to be accepted as true at that stage. Before framing a charge the court must apply its judicial mind on the material placed on record and must be satisfied that the commitment of offence by the accused was possible. Whether, in fact, the accused committed the offence, can only be decided in the trial.”

90. What is highlighted in this decision and the paragraph referred to above is that, even if, at the stage of framing of charge, the Court arrives at a finding (basis the material on record) that the accused “might” have committed the offence, the charge in that regard may be framed based on such finding.

91. It is only through trial that the prosecution is to prove that accused has committed the offence. At the stage of framing of charge, probative value of the material cannot be gone into and the material brought by the prosecution has to be accepted. The fundamental principle which forms part of the paragraph extracted above is, “Whether, in fact, the accused committed the offence, can only be decided in the trial.”

92. For the petitioner to, therefore, push a plea of quashing of the ECIR, at this stage, when the arguments on charge are still going on, before the Trial Court and the charges have yet to be framed, is unwarranted and cannot be accepted. CRL.M.C. 9462/2023 78/95

93. It amounts to essentially making this Court assess the material on record, ignoring the probative value of the same and assuming that no other aspect would emanate during the trial which could potentially further the case of the prosecution.

94. The Court is effectively being asked to conduct a pre-trial trial, basis only the material on record and to arrive at a finding that the ECIR is liable to be quashed and no offence is made out.

95. What is important to underscore is that the petitioner's case itself relies upon the statements of witnesses inter alia Pinky Irani, Shaan Muttathil, the Ramnani brothers.

96. Whether these statements are complete, watertight, non-porous, not capable of eliciting further evidence, are clearly not conclusions that the Court can reach in these proceedings.

97. Petitioner is effectively asking the Court to reach a conclusion, even with regard to elements of ‘knowledge’, imputed to the petitioner, for having received the proceeds of crime and conclude that the element of mens rea was absent.

98. In this regard, it may be important to note that it is the submission of the petitioner that petitioner enjoys a high reputation in the film industry and is a well-known celebrity and was habituated and accustomed to getting very expensive gifts from fans and admirers and that the same is an accepted practice in the film industry and that her plea for ignorance is thus, merited.

99. The Court is being asked, on the basis of material on record, to effectively conclude that petitioner was innocent, devoid of any knowledge of Sukesh’s criminal antecedents and was conclusively and effectively duped and misled by Pinky Irani, to disabuse her as regards the information contained in February 2021 newspaper report. CRL.M.C. 9462/2023 79/95

100. In Anoop Bartaria (supra), the Supreme Court has noted as under: “30. Having regard to the definition contained in Section 3, it would be a folly to hold that the knowledge of the accused that he was dealing with the proceeds of crime, would be a condition precedent or sine qua non required to be shown by the prosecution for lodging the complaint under the said Act. As the definition itself suggests 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 including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering. Hence, apart from having knowledge, if a person who directly or indirectly attempts to indulge or is actually involved in the process or activity connected with the proceeds of crime, is also guilty of the offence of money laundering. In the instant case, the direct involvement of the petitioners in the activities connected with the proceeds of crime has been alleged, along with the material narrated in the complaint which would require a trial to be conducted by the competent court.”

101. In Anoop Bartaria (supra), the Supreme Court was dealing with a prayer to quash the prosecution complaint in the ECIR. The Court referred to State of Haryana v. Bhajan Lal 1992 Supp (1) SCC 335, to highlight that the power to quash a complaint should be exercised very sparingly and with circumspection and that too, in the rarest of rare cases. It would be instructive to extract the relevant passage from the judgment in Bhajan Lal (supra): CRL.M.C. 9462/2023 80/95

CRL.M.C. 9462/2023 81/95 Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.”

102. In Anoop Bartaria (supra), as also, in this case, the plea of the petitioner does not fall in any of the abovementioned parameters as laid down in Bhajan Lal (supra).

103. The judgment in Anoop Bartaria (supra), was relied upon, more recently by the Supreme Court in, Pradeep Nirankarnath Sharma v. Enforcement Directorate 2025 SCC OnLine SC 560. The Supreme Court was dealing with an appeal against a dismissal of the appellant’s criminal revision by the High Court, against an order rejecting the appellant’s discharge, in a PMLA case.

104. Two aspects are of significance in the decision of Pradeep Nirankarnath Sharma (supra). Firstly, that the Court highlighted that CRL.M.C. 9462/2023 82/95 judicial intervention at a preliminary stage must be exercised with caution and proceedings should not be quashed in absence of compelling grounds. Secondly, the concept of continuing offence under the PMLA was dealt with. In this regard the Court stated as under: “31. The illegal diversion and layering of funds have a cascading effect, leading to revenue losses for the state and depriving legitimate sectors of investment and financial resources. It is settled law that in cases involving serious economic offences, judicial intervention at a preliminary stage must be exercised with caution, and proceedings should not be quashed in the absence of compelling legal grounds. The respondent has rightly argued that in cases involving allegations of such magnitude, a trial is imperative to establish the full extent of wrongdoing and to ensure accountability.

32. The PMLA was enacted to combat the menace of money laundering and to curb the use of proceeds of crime in the formal economy. Given the evolving complexity of financial crimes, courts must adopt a strict approach in matters concerning economic offences to ensure that perpetrators do not exploit procedural loopholes to evade justice.” VII.I. Re: Petitioner’s Conduct

105. In addition to the grounds raised by the petitioner and assessed above, certain pertinent issues raised by ED in relation to the conduct of petitioner have also informed the Court’s opinion in rejection of the petitioner’s plea. CRL.M.C. 9462/2023 83/95

106. Firstly, is the content of 2020 news article which was apparently shared by Shaan Muttathil with petitioner. A perusal of the article would show that it is dated 10th February 2020 and is titled as “Look Out Notice against actress Leena Maria Paul and CBI case”. The article mentioned that the CBI had issued a Look Out circular against Leena Maria Paul, a South Indian actress, who was accused of impersonation and extortion in connection with a bank fraud case.

107. CBI later revealed that the conspiracy was hatched by Leena Maria Paul, who was the partner of Sukesh. The article specifically mentioned as under: “Sukesh is accused in many cheating cases across the country. He is currently lodged in Tihar Jail in connection with a bribery case involving Amma Makkal Munnetra Kazhagam, leader T. T. V. Dhinakaran. He also faces charges of posing as a Supreme Court Judge in a phone call to a Delhi Judge in a bid to secure his release on bail.”

108. Then again, it mentions that: “Leena Maria Paul was first arrested along with Sukesh in 2013 for cheating Canara Bank of 19 crore rupees. They were again arrested in 2015 by the Economic Offences Wing of the Mumbai Police for trying to make people invest in a bogus firm on the promise of high returns.”

109. By any normal standards, as per ED, this would have been enough to alert a person about the criminal antecedents of Sukesh. However, ED submits that petitioner chose to bury this under the carpet and ignore it, pursuant to what she alleges as aggressive persuasion by Pinky Irani to disabuse her of the opinion. During this time, from February 2021 till July CRL.M.C. 9462/2023 84/95 2021 petitioner and her family continued to receive articles and gifts from the accused Sukesh.

110. Though petitioner stated that this was not the article she had received from Shaan Muttathil but that Shaan Muttathil had shared earlier news article dated 2017 which showed that Sukesh was involved in some political controversy, petitioner did admit that she was extremely upset and scared when she saw the article. In this regard, it may be useful to extract the statement of the petitioner recorded on 27th June 2022: “Q.[9] I am showing you the news article dated 10.02.2020 under the headline "Look Out Notice Against Actress Leena Maria. Paul in CBI Case" (Artnexure-2). As per the news article, the following cases were reported against Sukesh Chandrasekhar; (1) TTV Dinakaran Case - Delhi Police (2) Canara Bank Fraud Case (3) EOW Mumbai Case Do you agree? Ans. this was not the article sent to me by Shaan. There was an article with Sukesh and some South Indian politician controversy that was dated

2017. Q.10 I am showing you printouts of whatsapp conversation between Shaan Muthathil and Pinky Irani (Annexure 3) held on 11.02.2021 to 13.02.2021. In this conversation, Shaan Muthathil had shared aforesaid news article dated 10.02.2020 under the headline. "Look Out Notice Against Actress Leena Marla Paul in CBI Case” to Pinky Irani while you stated that Shaan Muthathil had shared the news article to you. From this whatsapp conversation it appears that ·Shaan Muthathil had shared this news article to you as well. Why are you lying ? CRL.M.C. 9462/2023 85/95 Ans. Shaan had shared a news article with me but it was not this one. I only remember at that time he shared a news article with me that only discussed Sukesh and not leena. Also, what shaan and pinky have discussed on whatsapp I am not aware of the conversations between them. Q.11 As per the news article, it is reported that Sukesh Chandrasekhar is lodged in Tihar Jail.Do you agree? Ans. when I received the article from shaan about a controversary that Sukesh was involved in, the first thing I saw was that his name was Sukesh and that was the full form of his name. not Shekhar Ratna vela like how he gave me. The article did not mention that he was in tihar jail at the time as it was an old article. Q.12 I am showing you printouts of whatsapp conversation between Shaan Muthathil and Pinky Irani (Annexure 4) held on 13.02.2021 between 11:24 AM to 3:39PM (Annexure 4). In this conversation, Shaan sent messages viz, "we saw a article”, “she is also to high profile and she has known ppl on high end. And she go to know the news. She is like is it all just soo froud’ "who is that girl who is in jail?" As per these messages, you had sent news article to Shaan which he had forwarded to Pinky Irani and you all were aware that Sukesh Chandrasekhar was lodged in Jail. Please comment on it. Ans. No Shaan had received this article from a contact of his which he did not mention to me. He forwarded me an article (the one with Sukesh and some political controversary) and forwarded an article to pinky as well, as per the messages. I did not forward any article to Shaan. Shaan also was very scared at the time as he saw the articles. l also was extremely upset and CRL.M.C. 9462/2023 86/95 scared at the time when I saw the article that Shaan had sent me. Q.13 As per the news article dated 10.02.2020 under the headline “Look Out Notice Against Actress Leena Maria Paul in CBI Case" wherein it is mentioned that "Sukesh Chandrasekhar is accused in many cheating cases across the country. He is currently lodged in Tihar Jail in connection with a bribery case involving Amma Makkal Munnetra Kazhagam leader TTV Dinakaran" This clearly shows that you, being a celebrity who conscious more about public image, were aware that Sukesh Chandrasekhar was lodged in Jail and despite you continued to receive gifts from him and enjoyed the same. Please comment. Ans. After I received the first news article from shaan dated 2017, I then read 2 to 3 more articles on Sukesh on the internet. I was extremely scared when I first saw all these articles and completely stopped talking to both Angel and Sukesh. After 2 days angel showed up to my house unannounced with a ring from Sukesh stating that he is very sorry for not sharing these articles with me and that he was planning to come down to Mumbai for Valentines day and tell me everything. She then went on to explain that in politics and the business world there is very cut throat competition and this scale of media fabrication is normal. And that she knew Sukesh for freely speaking to me, dressed in normal clothes from a normal location. For me there is no way a person if he was in jail would be able to communicate with me so freely and also have access to technology and be able to do purchases whenever he wanted. CRL.M.C. 9462/2023 87/95 Q.14 It clearly means that the person introduced to you was not Shekhar Ratna Vella but was Sukesh Chandrasekhar. Was that reason you got upset and stopped communicating with him? Ans. I stopped communicating with him because I got scared firstly that he had all these allegations made on him. Also I live alone and have no family in Mumbai so was scared that maybe my life or safety could be in danger. Secondly he had lied to me about his name which was really Sukesh and I felt cheated and betrayed.”

111. The said extract of statement is being reproduced above only to show the flow of the questioning and response by petitioner in this regard. Considering that the matter is at the stage of framing of charge and the trial has to begin, the Court is not passing any observation in this regard. However, for the purposes of this assessment, these set of circumstances do not persuade the Court that ECIR needs to be quashed.

112. Secondly, ED’s submission that when petitioner was searching about Sukesh on Google, she had not bothered to find out that Sukesh owned ‘Kalyan Jewelers’ or had ‘coal mines’ or not or had ‘50% ownership of Leela Hotel, Chennai’ as he claimed. In the same statement on 27th June 2022, petitioner apparently admitted that she had deleted her mobile phone data from iPhone 12 Pro on 11th August 2021 after learning about the arrest of Sukesh.

113. ED’s counsel highlighted that petitioner did not reveal the truth of financial transactions with Sukesh and concealed facts till confronted with evidence. Petitioner had also asked colleagues to destroy the evidence. Following aspects have been highlighted by ED: CRL.M.C. 9462/2023 88/95 i) Petitioner had initially denied knowing the actual name of accused Sukesh, and later on, when confronted with evidence, admitted that it was known to her. ii) With respect to cash transaction with Advaita Kala i.e., money delivered by Sukesh of Rs.15 Lacs to Advaita Kala, she initially denied having entered into any transaction, but later admitted the same later to be correct. Payment to Advaita Kala happened in August 2021, which was well after the arrest of Sukesh and knowledge of his criminal antecedents in February 2021. iii) Petitioner did not admit the factum of receiving huge monies and valuable gifts which were transferred to her parents, brother and sister. She kept improving the statements about the receipt of gifts and luxury items. During recording of statement, petitioner denied purchase of cars by Sukesh via her parents, but being confronted with the statement of Sukesh, she admitted the same. iv) She later admitted to new disclosures of property being purchased by Sukesh for her in Sri Lanka. v) Initially, in the first statement recorded on 30th August 2021, she disclosed a certain number of gifts but these were increased till 8th December 2021. vi) Disclosure about the relationship with accused Pinky Irani was made only on 8th December 2021. vii) Since data was wiped out from her phone as well as by Sukesh, the investigation is based upon evidence such as disclosures by accused Sukesh and Pinky Irani and statements of Shaan Muttathil and other witnesses. CRL.M.C. 9462/2023 89/95 viii) In the month of March, May and June 2021, transfers were made to the bank accounts of the sister and brother of the petitioner to the tune of USD 172913 and AUD 26740.

114. ED had submitted a tabulation to show improvement by petitioner in the statements; the said tabulation is extracted above in paragraph 18.20.

115. Further, ED has given another tabulation in the reply/counter basis the evidences collected during the investigation to provide a timeline/sequence of events. This table is also being extracted herein for ease of reference: CRL.M.C. 9462/2023 90/95 CRL.M.C. 9462/2023 91/95

116. In this regard, what ED highlights is that the Explanation to Section 3 of PMLA clearly indicates that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is ‘directly’ or ‘indirectly’ enjoying the proceeds of crime by its CRL.M.C. 9462/2023 92/95 concealment/possession/ acquisition/use/projecting it as untainted property or claiming it to be sold.

117. ED’s submission regarding “continuing activity” is basis that petitioner gave staggered disclosures. Factual aspects are narrated in paragraphs above [paragraph 21.12- about payment to Advaita Kala; paragraph 21.13 - in relation the gifts and amounts received by her family; paragraph 21.15 regarding the role played by Pinky Irani; paragraph 21.19 - regrading deletion of data from mobile phones and paragraph 21.20- regarding the denial of news article].

118. Taking into account these submissions of ED, the Court’s opinion that the ECIR is not amenable to be quashed, stands further endorsed and fortified.

119. ED’s reliance on Umesh Kumar (supra) which relied upon Salman Salim khan (supra) is instructive since it highlights that the Court cannot under Section 482 of Cr.P.C weigh the correctness and sufficiency of evidence and exercise may be too premature. Relevant paragraphs of Umesh Kumar (supra) are extracted as under:

CRL.M.C. 9462/2023 93/95 get protracted by the intervention of the superior courts. ***

8. … The High Court by the impugned order had allowed the said application and quashed the order made by the learned Sessions Judge framing a charge under Section 304 Part II IPC against the respondent herein while it maintained the other charges and directed the appropriate Magistrate's Court to frame de novo charges…. ***

12. We are of the opinion that though it is open to a High Court entertaining a petition under Section 482 of the Code to quash charges framed by the trial court, same cannot be done by weighing the correctness or sufficiency of evidence. In a case praying for quashing of the charge, the principle to be adopted by the High Court should be that if the entire evidence produced by the prosecution is to be believed, would it constitute an offence or not. The truthfulness, the sufficiency and acceptability of the material produced at the time of framing of charge can be done only at the stage of trial. … we think the High Court was not justified in this case in giving a finding as to the nonexistence of material to frame a charge for an offence punishable under Section 304 Part II IPC, therefore, so far as the finding given by the High Court is concerned, we are satisfied that it is too premature a finding and ought not to have been given at this stage.” CRL.M.C. 9462/2023 94/95

120. All aspects pleaded in the case put by petitioner (recorded in paragraph 17 above) are subjective issues which require to be established through trial. As an illustration, the petitioner contends that there was reluctance on her part, she was misled, hoodwinked, persuaded, she voluntarily participated in the investigation, she was ignorant, and was subjected to over indulgent actions of an admirer/fans/suitor, and in substance has been conned. All these aspects, are not established, crystallized, or proved yet. Ex facie these are subjective issues and petitioner is asserting that the Court accepts these as inviolable truths or as an optimistic interpretation of the facts in her favour. Conclusivity can only precipitate during the trial which is the filtration mechanism offered by the criminal justice process. Accepting these interpretations in favour of the petitioner at this stage would upend the process completely.

121. Whether Petitioner knew that what was received were ‘proceeds of crime’ is yet again an aspect tethered to establishing petitioner’s ‘knowledge’ regarding criminal antecedents of Sukesh and the credibility of assertion that she was completely persuaded and misled by Pinky Irani to ignore it. The nuance that petitioner’s counsel is attempting to draw between knowledge of criminality and knowledge that articles were proceeds of crime may not be disjunctive issues sitting in two separate silos. Attribution of knowledge for the purposes of PMLA implication may potentially bring in its fold the full range, spectrum and degrees of “knowing”. For example, whether turning a blind eye to an obvious fact or disturbing news or a critical disclosure of illegality, would amount to “knowing” or not is a matter that, in this Court’s opinion, can be determined post-trial, when the Court has all strands of evidence for appreciation. CRL.M.C. 9462/2023 95/95

CONCLUSION

122. In view of the above, the Court is of the opinion that the petition and plea of petitioner cannot be entertained for quashing of the ECIR/DLZO- II/54/2021 dated 8th August 2021 and 2nd supplementary complaint dated 17th August 2022.

123. The petition is, therefore, dismissed.

124. All observations made by this Court are purely for the assessment of this petition and are not meant to be any statement on the merits of the matter, particularly since proceedings are pending before the Special Court for arguments on charge.

125. Pending applications are rendered as infructuous.

126. Judgement be uploaded on the website of this Court.

JUDGE JULY 03, 2025 /SM/RK/MK/AK/tk+kp