HC quashes PMLA proceedings filed before CBI as it would lead to abuse of process of Court

Madhu Koneru Vs Director of Enforcement (Telangana High Court)

Conclusion:  Since there was no material to proceed against assessee under Sections 3 and 4 of Prevention of Money Laundering Act, 2002 and High Court should quash the proceedings if it came to the conclusion that allowing the proceedings to continue, would be an abuse of the process of the Court and that the ends of justice required that the proceedings be required to be quashed.

Held: Assessee who was accused on the file of the Principal Special Judge for C.B.I. Cases-cum-Special Court under the Prevention of Money Laundering Act, 2002 filed this Criminal Petition under Section 482 Cr.P.C. to quash the proceedings against him. After completion of investigation, the C.B.I., Hyderabad, filed charge sheet for the aforesaid offences. On receipt of documents from C.B.I. like F.I.R., charge sheet etc., the respondent authorities made enquiries and having found that there was a prima facie case under the Prevention of Money Laundering Act, 2002 (PML Act) and as Section 120-B read with Section 420 of I.P.C. and Section 13 of the Prevention of Corruption Act were the scheduled offences under PML Act, the respondent authorities had registered Enforcement Case Information Report and took up the investigation.  During the course of investigation, summons were issued under Section 50 of PMLA to several persons and recorded their depositions, obtained financial accounts and bank statements of persons, who were associated with the transactions and their voluntary statements.  The role of assessee as alleged in the complaint was that he was an N.R.I. and his father was a Director of M/s. Emaar Hills Township Private Limited. He received an amount of USD 1,40,000 from one Suresh and USD 2,50,000 from Parthasarathy, who had purchased villa plots in Emaar Hills, as part of excess amount received from villa plot buyers. Later, assessee returned the amount of USD 2,50,000 to Parthasarathi in the guise of investment colour to the amount received from him. However, USD 1,40,000 received from Suresh was still lying with him. Hence, he was the recipient of part of proceeds of crime and still holding some of it knowingly. Thus, assessee knowingly received USD 3,90,000 and involved in the process of acquisition, possession of proceeds of crime and as such directly involved in the offence of Money Laundering in terms of Section 3 of the P.M.L. Act. It was held that there was no material to proceed against assessee under Sections 3 and 4 of Prevention of Money Laundering Act, 2002 and that there were no ‘schedule offences’ committed by him to proceed under the provisions of PML Act. In view of the Order of the Court in Crl.P. No. 3935 of 2016 dated 5.1.2018. High Court should quash the proceedings if it came to the conclusion that allowing the proceedings to continue, would be an abuse of the process of the Court and that the ends of justice required that the proceedings be required to be quashed. The Court opined that the proceedings against the assessee on the file of the Principal Special Judge for C.B.I. Cases-cum-Special Court under the Prevention of Money Laundering Act, 2002 were liable to be quashed.

FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT

The petitioner, who is Accused No.12, in S.C.No.1 of 2019 on the file of the Principal Special Judge for C.B.I. Cases-cum-Special Court under the Prevention of Money Laundering Act, 2002 at Nampally, Hyderabad, filed this Criminal Petition under Section 482 Cr.P.C. to quash the proceedings against him in the above S.C, arising out of E.C.I.R.No.08/HZO/2011.

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