Case Law Details
Directorate of Enforcement Vs Akhilesh Singh & Ors (Delhi High Court)
The Directorate of Enforcement filed a petition against an order passed by the Special Judge regarding the discharge of respondents accused of offenses under the Prevention of Money Laundering Act (PMLA). The case originated from FIR No. 21/2017 filed by the Jharkhand police against the respondents under various sections of the Indian Penal Code (IPC). Subsequently, the Directorate of Enforcement initiated criminal proceedings under the PMLA against the respondents based on the same offenses.
However, the respondents were acquitted of the charges in the predicate offense by the Chief Judicial Magistrate of Jamshedpur. Consequently, they filed an application seeking discharge from the offense of money laundering, which the Special Judge granted. The judge reasoned that since the accused had been acquitted of the predicate offense, the proceedings under the PMLA could not be continued as there were no proceeds of crime.
The Directorate of Enforcement argued that the acquittal in the predicate offense had not attained finality as an appeal was pending. However, the court held that until the judgment of acquittal in the predicate offense was reversed, the effects of the acquittal would continue to operate, and the proceedings under the PMLA could not be sustained.
The court referred to several precedents, including the decision of the Supreme Court in Vijay Madanlal Choudhry v. Union of India, which emphasized that the offense under the PMLA depended on the illegal gain of property as a result of criminal activity relating to a scheduled offense. Therefore, if a person was acquitted or discharged of the scheduled offense, the charge of money laundering would not survive.
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