Case Law Details
J. Sekar @ Sekar Reddy Vs Directorate of Enforcement (Supreme Court of India)
It is most relevant to note that CBI after investigation in the main case in RC MA1 2016 A0040 submitted the closure report before the Additional Sessions Judge, CBI Court, Chennai in exercise of power under Section 173(2) Cr.P.C. The said report was accepted vide order dated 25.9.2020 with an observation that for lack of sufficient evidence, nothing incriminating is found which may surface on the part of accused persons. Therefore, from the above facts, it is clear that the CBI registered three cases out of which in the main case RC MA1 2016 A0040, the final closure report was submitted by CBI itself which was accepted by the Court and in remaining two cases bearing Nos. RC MA1 2016 A0051 and RC MA1 2016 A0052, the High Court quashed the FIRs with respect to schedule offence.
So far as the investigation made by the I.T. Department on the basis of search is concerned, the same is closed. The appellant sought information from the I.T. Department vide communication dated 11.5.2019. In respect to the same, the I.T. Department vide letter dated 16.5.2019 provided the details of seizure made by it from the appellant. It is apparent that the new currency notes of denomination of Rs. 2000 belonged to M/s SRS Mining which is recorded in its cash book. Those currency notes seized are from the proceeds of the sand sales by M/s SRS Mining. The details of the tax, paid before or after self-assessment for Financial Year 201617 satisfied the Authority that money so seized was accounted money or tax paid.
Learned senior counsel for the appellant urged that for invocation of PMLA, pre-existing occurrence of the scheduled offence is required because the proceeds of crime are essential property derived from criminal activity of the said offence. The Adjudicating Authority dealt with the order of the Deputy Director (ED) and for lack of evidence refused to pass an order for attachment. As per the material available on record, the offence of money laundering specified in Section 2(1)(p) and also in Section 3 of PMLA is not made out. It is further urged that as per Section 8(1) of PMLA, a show cause notice may be issued regarding the attached property if the said Authority is having reason to believe that any person has committed an offence under Section 3 or is in possession of proceeds of crime. The adjudication proceedings and criminal proceedings are independent to each other but the material for commission of offence recorded by the authorities in those proceedings may be a relevant factor, in particular when for lack of evidence, the Authority itself is satisfied that the attachment of the proceedings in PMLA case cannot be continued.
On the other hand, Shri S.V. Raju, learned Additional Solicitor General on behalf of the respondent contends that the order passed by the Adjudicating Authority under Section 5(5) PMLA is subject to the appeal which is pending before the Appellate Authority. Therefore, the order of the Adjudicating Authority and the finding recorded therein are not sufficient to quash the proceedings in the present case. Learned ASG is not in a position to controvert the arguments on merits as advanced by the learned senior counsel for the appellant.
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