Case Law Details
M. Ramachandra Vs Directorate of Enforcement (Karnataka High Court)
Material Facts
The petitioners challenged an order dated 27.02.2025 by which the Special Court rejected their application under Section 216 of the Code of Criminal Procedure, 1973 seeking alteration of the charge in proceedings under the Prevention of Money Laundering Act, 2002 (PMLA).
The petitioners had earlier been prosecuted in Crime No.16/2009 for offences under Sections 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act. Following investigation, a charge sheet was filed. Separately, the Enforcement Directorate registered an Enforcement Case Information Report and filed a complaint, leading to registration of Spl.C.C. No.357/2016 for offences under Sections 3 and 4 of the PMLA.
Subsequently, by judgment dated 08.11.2024, the petitioners were convicted in the predicate offence. The conviction recorded that the disproportionate assets which the petitioner failed to satisfactorily explain were restricted to ₹42,48,188.50. The petitioners thereafter sought alteration of the PMLA charge so as to restrict it to that amount. The Special Court rejected the application, leading to the present writ petition.
Procedural History
- Crime No.16/2009 was registered under Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act.
- The Enforcement Directorate initiated proceedings under the PMLA, resulting in Spl.C.C. No.357/2016.
- On 08.11.2024, the petitioners were convicted in the predicate offence, with disproportionate assets quantified at ₹42,48,188.50.
- The petitioners filed an application under Section 216 CrPC before the Special Court seeking alteration of the PMLA charge.
- The Special Court rejected the application on 27.02.2025.
- The rejection order was challenged before the Karnataka High Court.
Legal Issue(s)
- Whether the application under Section 216 of the Code of Criminal Procedure seeking alteration of the charge in the PMLA proceedings ought to have been allowed following the conviction in the predicate offence.
- Whether the charge in Spl.C.C. No.357/2016 should be restricted to the amount of disproportionate assets determined in the predicate offence.
Relevant Statutory Provisions
- Section 216, Code of Criminal Procedure, 1973.
- Sections 3 and 4, Prevention of Money Laundering Act, 2002.
- Sections 13(1)(e), 13(2) and 16, Prevention of Corruption Act, 1988.
Petitioners’ Submissions
The petitioners contended that:
- They had been convicted in the predicate offence only for being unable to satisfactorily account for disproportionate assets amounting to ₹42,48,188.50.
- Consequently, the PMLA proceedings could not continue beyond that amount.
- Their application seeking alteration of the charge under Section 216 CrPC ought to have been allowed.
Respondent’s Submissions
The learned Additional Solicitor General opposed the submissions but submitted that the PMLA trial had remained pending before the Special Court for nearly ten years and left the matter to the discretion of the Court.
Court’s Findings and Reasoning
The High Court noted that the conviction in the predicate offence specifically recorded that the petitioners had failed to satisfactorily account for assets worth ₹42,48,188.50, and that the disproportionate assets represented 97.75% of the known source of income.
The Court observed that the proceedings before the Special Court under the PMLA had travelled beyond the extent reflected in the subsequent conviction in the predicate offence.
The Court held that, in these circumstances, the application filed under Section 216 CrPC ought to have received favourable consideration. It found the reasons assigned by the Special Court for rejecting the application to be untenable and held that the petitioners’ request to bring the charge in Spl.C.C. No.357/2016 in line with the conviction deserved acceptance.
Final Ruling
The Karnataka High Court:
- Allowed the writ petition.
- Quashed the order dated 27.02.2025 of the XLVII Additional City Civil and Sessions Judge, Bangalore.
- Allowed the petitioners’ application under Section 216 CrPC.
- Directed the Special Court to alter the charge and try the petitioners for the disproportionate assets referred to in the conviction.
- Directed the Special Court to conclude the proceedings in Spl.C.C. No.357/2016 within three months from receipt of the High Court’s order.
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Section 216 CrPC Application Allowed; PMLA Charge Restricted to Predicate Offence Conviction: Karnataka HC
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioners are before the Court calling in question an order of the concerned Court dated 27.02.2025 by which an application filed by the petitioner seeking alteration of charge as obtaining under Section 216 of the Code of Criminal Procedure, 1973 (‘the Cr.P.C.’ for short) comes to be rejected.
2. Heard Sri. Nagendra Naik R., learned counsel appearing for the petitioners; Sri. Aravind Kamath, learned Additional Solicitor General along with Sri. H.R. Showri, learned counsel appearing for respondent No.1.
3. Facts adumbrated are as follows:
The petitioners gets embroiled in a crime in Crime No.16/2009 registered for the offences punishable under Sections 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act (hereinafter referred to as ‘the Act’ for short). The Police conduct investigation and file a charge sheet before the concerned Court in the said offence. The issue does not relate to the offence that emanated from crime in Crime No.16/2009. The Enforcement Directorate register an Enforcement Case Information Report and file their complaint before the concerned Court. The concerned Court then register Spl.C.C.No.357/2016 for the offences punishable under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as ‘the PMLA’ for short). The petitioners then gets convicted in the predicate offence, the offence that emanated in Crime No.16/2009 in terms of the order of the concerned Court dated 08.11.2024. In the said order of conviction, the disproportionate assets which the petitioner could not explain is restricted to Rs.42,48,188.50/-. The petitioner then files an application before the Special Court in Spl.C.C.No.357/2016, which was trying the offence under the PMLA for alteration of charge to restrict the charge to the said amount of disproportionate assets that was found, in which he was convicted. The said application comes to be rejected. Rejection of which has driven the petitioners to this Court in the subject petition.
4. Sri Nagendra Naik R., learned counsel appearing for the petitioners taking this Court through the order of conviction contends that the petitioners have been convicted for being unable to satisfactorily account for assets of the said amount of Rs.42,48,188.50/-. Therefore, the PMLA now cannot proceed beyond that and he sought alteration of the charge that ought to have been permitted.
5. The learned Additional Solicitor General, though would refute the submissions, would contend that the trial has now stayed or is languishing before the Special Court for the last 10 years. In that light, he would leave the discretion to the hands of the Court.
6. In the light of the aforesaid submission and contra-submission, the only issue is whether the application filed by the petitioners did merit consideration at the hands of the concerned Court resulting in alteration of charge. The afore-narrated facts, dates, link in the chain of events are all a matter of record, which would not require any iteration. It would suffice to notice the order of conviction of the petitioners. The petitioners gets convicted on the following reasons:
“9. In the case on hand, the offence was committed during the check period from 1/7/1977 to 8/7/2009. Thus, the offence under Section 13(1) (e) of Prevention of Corruption Act, 1988 as on the date of offence was punishable with imprisonment which may extend to 7 years and minimum punishment shall not be less than one year and fine. As per Section 16 of the Prevention of Corruption Act, 1988, where sentence of fine is to be imposed under sub clause (2) of Section 13, the Court shall take into consideration the pecuniary resources or property for which the offender is unable to account satisfactorily, the case on hand, the accused has failed to satisfactorily account for the assets worth Rs.42,48,188-50.
10. After considering the facts and circumstances of the case, and for the reasons stated herein above, it is just and necessary to strike out the balance between the maximum and minimum sentence prescribed under the law. It is to be noted that, the Accused as a Guard and as a Excise Sub Inspector has amassed wealth to the extent of Rs.42,48,188-50 disproportionate to his known source of income which is 97.75%. Therefore, considering the above said all aspects and taking into account the decisions of Hon’ble Apex Court as discussed supra, and also considering the mitigating factors such as age of the offender, this court finds it proper to sentence him to undergo Rigorous Imprisonment for three years and to pay a fine of Rs.50,00,000/-. Accordingly, I proceed to pass the following:
ORDER
The accused is sentenced to undergo Rigorous Imprisonment for a period of THREE years and to pay a fine of Rs.50,00,000/-[Rupees Fifty Lakhs only), and in default of payment of fine, he shall undergo further period of Simple Imprisonment for SIX months.
Office is directed to furnish free copy of the Judgment to the accused forthwith.
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(Dictated to the Judgment Writer, transcribed and computerised by her, Script corrected and then pronounced by me in open court this the 8th day of November 2024.)”
They are convicted for the reason that the petitioners have failed to satisfactorily account for his assets worth Rs.42,48,188.50/- and the disproportionate known source of income is projected at 97.75%.
7. Ostensibly so, the proceeding before the Special Court under the PMLA travelled far beyond that, as the conviction comes about at a later point in time. In that light, the application filed by the petitioners under Section 216 of Cr.P.C. before the concerned Court ought to have merited favourable consideration at its hands. The reason so rendered by the Court, while rejecting the application is on the face of it untenable. In that light, the application so filed by the petitioner to bring the charge in the Spl.C.C.No.357/2016 on par with the conviction merits acceptance.
8. For the aforesaid reasons, the following:
ORDER
i. The writ petition is allowed.
ii. The order dated 27.02.2025 passed by the XLVII Additional City Civil and Sessions Judge, Bangalore stands quashed.
iii. The application filed by the petitioners under Section 216 of the Cr.P.C. stands allowed.
iv. The concerned Court shall now alter the charge and try the petitioners for the aforesaid disproportionate asset.
v. Since the Special C.C. is of the year 2016, I deem it appropriate to infuse finality and direct the concerned Court to conclude the proceedings within three months from the date of receipt of the copy of the order.
Ordered accordingly.
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