C. Anandane Vs Directorate of Enforcement (Madras High Court)
Summary: The Madras High Court allowed a criminal revision petition challenging the order dated 18.12.2024 framing charges in Spl.C.C.No.2 of 2022 and a criminal original petition seeking quashing of the complaint filed by the Directorate of Enforcement under Sections 44(1) and 45(1) of the Prevention of Money Laundering Act, 2002. The Central Bureau of Investigation had registered the predicate offence against the petitioners under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988.
The petitioners, arrayed as accused Nos.1 and 2 in the predicate case, were convicted by the trial Court on 30.10.2018 and sentenced to one year’s rigorous imprisonment with fine. Based on that scheduled offence, the Directorate of Enforcement filed the PMLA complaint, which was taken on file as Spl.C.C.No.2 of 2022. Subsequently, the Madras High Court, by judgment dated 05.08.2026 in Crl.A.Nos.710 and 724 of 2018, allowed the petitioners’ appeals and set aside their conviction and sentence.
Relying on Vijay Madanlal Choudhary v. Union of India, the petitioners contended that the PMLA prosecution could not survive their acquittal in the predicate case. The High Court observed that the charge for the offence under Section 3 of the Prevention of Money Laundering Act, 2002 arose from the predicate case in which the petitioners had since been acquitted.
Applying the Supreme Court’s decision, the Court held that the complaint could not be permitted to proceed. It therefore set aside the order framing charges and quashed the complaint against the petitioners. The Directorate of Enforcement was, however, granted liberty to take appropriate steps in accordance with law if any subsequent decision was taken in the predicate case.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The criminal revision petition has been filed assailing the order of framing of charge dated 18.12.2024 in Spl.C.C.No.2 of 2022 on the file of Principal Sessions Judge-cum-Special Judge for Prevention of Money Laundering Act, 2002 cases at Puducherry.
2. The criminal original petition has been filed seeking to quash the complaint filed by the respondent before the Special Court under Sections 44(1) & 45(1) of the Prevention of Money Laundering Act, 2002.
3. The Central Bureau of Investigation registered predicate offence in Crime No.RC MA1 2006 A 0001 as against petitioners for the offence under Section 13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 which was taken on file in Spl.C.C.No.1 of 2008 before the learned Special Judge for Prevention of Corruption Cases/Principal Sessions Judge, Puducherry.
4. Petitioners in both cases, who are accused 1 and 2 in the predicate offence, came to be convicted by judgment of the trial Court dated 30.10.2018 and sentenced to undergo one year rigorous imprisonment along with fine.
5. In the meantime, respondent, pursuant to the investigation completed and based on the predicate case involving scheduled offences, filed the complaint before the Special Court under Sections 44(1) & 45(1) of the Prevention of Money Laundering Act, 2002, which was taken on file in Spl.C.C.No.2 of 2022.
6. As against the conviction and sentence imposed against petitioners, they preferred appeals before this Court in Crl.A.Nos.710 and 724 of 2018 and this Court, by judgment dated 05.08.2026, allowed both the appeals, setting aside the conviction and sentence against petitioners.
7. Learned counsel appearing for petitioners, relying on the decision of the Supreme Court in the case of Vijay Madanlal Choudhary v. Union of India 1 submitted that since the predicate case as against petitioners had ended in acquittal, the complaint filed by respondent cannot survive and therefore, sought to allow both the petitions by quashing the complaint and also setting aside the order of framing charges as against petitioners.
8. Learned counsel for respondent submitted that PMLA case came to be registered based on the predicate offence registered by the Central Bureau of Investigation and though petitioners suffered conviction before the trial Court, the said conviction and sentence (2023) 12 SCC 1 have been set aside by judgment of this Court dated 05.08.2026 and they have been acquitted from the predicate case.
9. Heard learned counsel for the parties and considered the materials on record.
10. It is not in dispute that petitioners are charged for the offence underSection 3 of the Prevention of Money Laundering Act, 2002 before the Special Court in Spl.C.C.No.2 of 2022. The case came to registered based on the predicate case registered by the Central Bureau of Investigation, which was taken on file in Spl.C.C.No.1 of 2008. Though petitioners were convicted for the offence under Section 13(1)(e) read with 13(2) of the Prevention of Corruption Act, 1988 by the Special Court in Spl.C.C.No.1 of 2008, this Court allowed the appeals preferred by petitioners in Crl.A.Nos.710 & 724 of 2018, setting aside the order of conviction and sentence.
11. Considering the fact that petitioners in both the cases have been acquitted from the predicate case, in view of the decision of the Hon’ble Supreme Court in Vijay Madanlal (supra), the complaint as against petitioners pending before the Special Court cannot be allowed to proceed.
12. In view of the above, both the petitions stand allowed and the order of framing charges by the trial Court dated 18.12.2024 is set aside and the complaint pending on the file of Principal Sessions Judge, Puducherry in Spl.C.C.No.2 of 2022 as against petitioners stand quashed. However, it is open to respondent to take appropriate steps in the manner known to law, in the event of any subsequent decision taken in the predicate case.
13. With the aforesaid, both the petitions are allowed.
