Person against whom offence u/s. 3 of PMLA is alleged need not be shown as accused in scheduled offence

Pavana Dibbur Vs Directorate of Enforcement (Supreme Court of India)

Supreme Court held that it is not necessary that a person against whom the offence under Section 3 of the Prevention of Money Laundering Act (PMLA) is alleged must have been shown as the accused in the scheduled offence.

Facts-

The respondent–the Directorate of Enforcement, filed a complaint under the second proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002 before the Special Court for PMLA Cases at Bengaluru. The appellant–Pavana Dibbur was shown as accused no.6 in the said complaint. By the order dated 17^th March 2022, the Special Court took cognisance of the said complaint. The appellant filed a petition before the High Court of Karnataka at Bengaluru u/s. 482 of the Code of Criminal Procedure, 1973 seeking the relief of quashing of the said complaint. By the impugned judgment and order dated 27^th September 2022, the petition for quashing the complaint has been dismissed.

For a period of five years, i.e. from 2010 to 2015, the appellant’s husband–Dr. Ayyappa Dore, was the Vice Chancellors of the Alliance University. The appellant also acted as the Vice­ Chancellor of the Alliance University for a brief period. On 11^th November 2017, a First Information Report (FIR) was registered on the complaint of the Registrar of the Alliance University against accused no.1–Madhukar Angur, alleging that he collected a sum of Rs.107 crores from the students by claiming himself as the Chancellor of the Alliance University. The allegation was that he collected the said amount between January 2017 and November 2017, which was deposited in the account of Srivari Education Services. Subsequently, crores of rupees were transferred to the account of the accused no.1.

An Enforcement Case Information Report (ECIR) was registered on 16^th October 2020 by the ED against accused nos.1, 2 and 3, namely Madhukar Angur, his wife Priyanka Angur and Mr Ravikumar, Partner, Srivari Education Services and other unknown accused alleging the commission of the offence of money laundering u/s. 3 of the PMLA.

The allegation against the appellant in the complaint filed under the second proviso of Section 45(1) of the PMLA is that she has entered into a conspiracy with accused no.1– Madhukar Angur by getting executed nominal sale deeds in respect of the first and second properties in her name for the benefit of accused no.1. The allegation of the ED is that the appellant facilitated the accused no.1 to use her bank accounts to siphon the university funds, thereby, assisting the accused no.1 in the activity connected with the proceeds of crime. By the impugned judgment, the learned Single Judge of the High Court dismissed the petition filed by the appellant.

Conclusion-

Held that 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.

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 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 chargesheet filed in the scheduled offences deserves to be rejected.

FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER

1. The respondent–the Directorate of Enforcement (for short, ‘ED’), filed a complaint under the second proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002 (for short, ‘the PMLA’) before the Special Court for PMLA Cases at Bengaluru. The appellant–Pavana Dibbur was shown as accused no.6 in the said complaint. By the order dated 17^th March 2022, the Special Court took cognisance of the said complaint. The appellant filed a petition before the High Court of Karnataka at Bengaluru under Section 482 of the Code of Criminal Procedure, 1973 (for short, ‘Cr. PC’) seeking the relief of quashing of the said complaint. By the impugned judgment and order dated 27^th September 2022, the petition for quashing the complaint has been dismissed.

2. In the year 2011, Alliance Business School (for short, ‘ABS’) purchased a property bearing Khata no.37/22 at Gollahalli Village, Jigani Hobli, Anekal Taluk, Bengaluru for the consideration of Rs.13.05 crores. The area of the said property is approximately five acres. For the sake of convenience, we are describing the said property as ‘the First Property’. On 1^st July 2013, the appellant purchased the first property from ABS by a registered sale deed for a consideration of Rs.13.5 crores. The accused no.1–Madhukar Angur, purchased a property measuring 4 acres and 0.4 Guntas bearing survey nos.61, 62 and 63 at Karpur Village, Kasaba Hobli, Anekal Taluk, Bengaluru. For the sake of convenience, we are describing this property as ‘the Second Property’. The appellant purchased the second property by a registered sale deed on 29^th June 2019 for a consideration of Rs.2.47 crores from accused no.1–Madhukar Angur.

3. For a period of five years, i.e. from 2010 to 2015, the appellant’s husband–Dr. Ayyappa Dore, was the Vicechancellors of the Alliance University. The appellant also acted as the Vice­Chancellor of the Alliance University for a brief period. On 11^th November 2017, a First Information Report (FIR) was registered on the complaint of the Registrar of the Alliance University against accused no.1–Madhukar Angur, alleging that he collected a sum of Rs.107 crores from the students by claiming himself as the Chancellor of the Alliance University. The allegation was that he collected the said amount between January 2017 and November 2017, which was deposited in the account of Srivari Education Services. Subsequently, crores of rupees were transferred to the account of the accused no.1.

4. An Enforcement Case Information Report (ECIR) was registered on 16^th October 2020 by the ED against accused nos.1, 2 and 3, namely Madhukar Angur, his wife Priyanka Angur and Mr Ravikumar, Partner, Srivari Education Services and other unknown accused alleging the commission of the offence of money laundering under Section 3 of the PMLA. The ECIR was based on four FIRs, the details of which are as under: