As per the case facts, an appeal challenged a High Court judgment that upheld proceedings under the Prevention of Money Laundering Act (PMLA). The appellant argued that the PMLA prosecution ...
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 738 OF 2022
(Arising out of Special Leave Petition (Crl.) No. 8305 of 2021)
J.Sekar @Sekar Reddy …Appellant
Versus
Directorate of Enforcement ...Respondent
J U D G M E N T
Leave granted.
2. This appeal arises out of the judgment dated
04.02.2021 passed by the Division Bench of the High Court of
Madras in Crl. O.P. No. 24200 of 2017 which was filed for
quashing of the proceedings in C.C. No. 2 of 2017. The High
Court, while dismissing the petition under Section 482 of the
Criminal Procedure Code (for short ‘Cr.P.C.’) interalia rejected
the argument of the appellant that the FIR with respect to
schedule offence was closed for want of evidence and in
absence of connected evidence with a crime of schedule
1
offence, the prosecution for offences under Sections 3 & 4
of the Prevention of Money Laundering Act, 2002 (for short
“PMLA”) is unsustainable. It is also held that though the
commission of schedule offence is a fundamental pre
condition for initiating the proceedings but the offence of
money laundering is independent of the schedule offence
because the PMLA deals with the process or activity with
respect to the proceeds of crime including concealment,
possession, acquisition or use, however in the light of the
explanation of Section 44(1) of PMLA, the argument of the
appellant was repelled. The High Court further held that if
any observation has come in the bail application, having no
material to connect with the commission of any offence,
would not be enough to quash the proceedings. The Court
relied upon the seizure made by the I.T. Department
including that of the currency notes of denomination of Rs.
2000 in the context that the currency notes of
denomination of Rs. 500 and Rs. 1000 ceased to be legal
tender by order of the Government at the time of
demonetization and the people were in queue to exchange
2
those old currency notes for new ones. As the seizure of
currency notes of Rs. 33 crores in the denomination of Rs.
2000 was made, therefore, the closure report made by
Central Bureau Investigation (in short ‘CBI’) in schedule
offence cannot be relied upon.
2. Briefly, the facts relevant for the purpose of the
appeal are that the appellant J. Sekar Reddy is the
Managing Partner of M/s SRS Mining which is a
partnership firm engaged in sand mining since 2013 and
he had deposited Rs 312.64 Crores in three bank accounts
of the firm. On 08.12.2016 and 09.12.2016, the Income Tax
Department, Chennai (for short “I.T. Department”)
conducted search in the official/commercial premises of the
appellant and others and seized currency amounting to
Rs.106,98,89,800/ and 128.495 kg of gold (valued at
Rs.36,72,07,311).
3. Thereafter, from 08.12.2016 to 12.12.2016, appellant
joined inquiry before the IT Department about the seizure
of currency notes and gold. Subsequently on 19.12.2016,
the CBI registered RC 40(A) 2016/CBI/ACB/CHENNAI for
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offences under Sections 120B r/w 409, 420 of Indian
Penal Code (in short ‘IPC’) and Section 13(2), r/w 13(1)(c)
and 13(1)(d) of the Prevention of Corruption Act,1988 (in
short ‘PC Act’) against the appellant and two others.
4. The Enforcement Directorate after perusing the FIR
of the CBI felt that in addition to the scheduled offences,
the provisions under Sections 2(1)(x) and 2(1)(y) of the
PMLA would attract, however registered the offence at ECIR
No. 19 of 2016 dated 19.12.2016 against the appellant and
others. The respondent had enquired and conducted the
investigation and, recorded the statement of the appellant
and others and found new currency notes of denomination
of Rs.2,000/ of a total value of Rs.33,74,92,000/ in a
subsequent search on the official and commercial premises
of the appellant.
5. In the meantime, the CBI had filed the custody
petition which was dismissed by the Special Court vide
order dated 30.12.2016. The CBI had also registered two
FIRs being Crime No. RC MA1 2016 A0051 at 1500 hrs.
and RC MA1 2016 A0052 at 1510 hrs on 30.12.2016 by a
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margin of ten minutes time. The appellant filed the bail
application in RC MA1 2016 A0040 and RC MA1 2016
A0051 before the Principal Special Judge for CBI Cases,
Chennai. The Special Court, by order dated 17.3.2017
granted bail to the appellant imposing certain conditions.
6. Subsequently, Deputy Director (ED), Chennai in
ECIR CEZO/19/2016 passed an order for provisional
attachment in exercise of the power under Section 5(1) of
PMLA for a specified period of one month. On submitting
the complaint OC No. 785 of 2017 before the Adjudicating
Authority for confirmation of the order of provisional
attachment, it refused to confirm the order of attachment
and dismissed the same. In the order, the Adjudicating
Authority stated that the description of the bank or bank
officers is not on record. In absence of any identification,
who were the bank officers who converted the
denomination of old currency notes into new and that too
from which bank, there was no material with the Deputy
Director for making a reasonable belief for change of old
into new currency notes through the bank officers and
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observed that the said allegation is based on speculations,
which are not legally tenable.
7. It is relevant to note that RCMA1 2016 A0051 and
RCMA1 2016 A0052 were challenged by the appellant as
well as other coaccused before the Madras High Court by
filing Crl. O.P. Nos. 24200 and 24202 of 2017 invoking the
power under Section 482 Cr.P.C., which were decided by a
common order dated 27.6.2018 and the High Court in para
32 quashed the RC MA1 2016 A0051 and RC MA1 2016
A0052 against the appellant and other coaccused giving
liberty to the CBI to treat the allegations made in FIRs as
supplementary allegations or to merge the same in first FIR
RC MA1 2016 A0040.
8 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
6
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.
9 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
7
Authority that money so seized was accounted money or
tax paid.
10.The appellant contending all the above facts,
approached the High Court of Madras invoking the
jurisdiction under Section 482 Cr.P.C. seeking quashment
of the proceedings related to PMLA case and prayed for the
following reliefs:
(i)To stay all further proceedings in CC No. 2 of 2017
on the file of the Hon’ble Principal Sessions Court,
Chennai pending disposal of the above criminal
original petition.
(ii)To call for the records in CC No. 2 of 2017 on the file
of the Hon’ble Principal Sessions Court, Chennai and
quash the same and pass such further other order,
orders as deemed fit and proper in the circumstances
of the case and thus render justice.
By the impugned order dated 4.2.2021, the High Court of
Madras dismissed the said petition.
11. We have heard Shri Vikram Chaudhari, learned
Senior Counsel for the appellant and Shri S.V. Raju,
learned Additional Solicitor General on behalf of the
respondent.
8
12 Learned senior counsel for the appellant urged that
for invocation of PMLA, preexisting 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
9
cannot be continued. Reliance has been placed on the
judgments of this Court in Radheshyam Kejriwal Vs.
State of West Bengal (2011)3SCC 581 and Ashoo
Surendranath Tewari vs. Deputy Superintendent of
Police, EOW, CBI and Another (2020) 9 SCC 636.
13.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.
14.After having heard learned counsels and on perusal
of the material available on record, it is clear that the I.T.
Department made search in the official/commercial
premises of the appellant and other connected persons.
Later, I.T. Department vide communication dated
10
16.5.2019 which was issued in response to the letter of the
appellant dated 13.5.2019 was satisfied that the cash
which was recovered from the officials/commercial
premises of the appellant is explained and tax was paid in
the selfassessment for the Financial Year 201617. The
said letter is reproduced as thus:
“GOVERNMENT OF INDIA
OFFICE OF THE JOINT DIRECTOR OF INCOME-TAX(INV)(OSD) UNIT-2(1),
Room No. 223, 2
nd
Floor, Income Tax Investigation Wing, M G Road Nungambakkam,
Chennai-600 034. Telefax : 044-28253651
Kg.arunraj@incometax.gov.in
UNIT2(1)/2019-20 16.05.2019
To:
The Managing Partner
M/s SRS Mining
317, Elite Empire
G-12, Valluvarkottam High Road
Nungambakkam
Chennai-34
Sir,
Sub: Search in the case of M/s SRS Mining and others-request to provide
information-Reg
Ref: Your letter dated 01.05.2019 received in this office on 13.05.2019
****
Please refer to the above.
2.The details requested by you are given below point wise:-
(i)The date of initiation of search action in the case of M/s SRS Mining and others
is 08.12.2016. This office didn’t refer the case to the CBI and the CBI suo-moto
initiated proceedings after news of seizure of huge amount of new Rs 2000 notes
emerged.
(ii)The seized cash and gold belong to M/s SRS Mining, a partnership firm whose
partners are Shri S. Ramachandran, Shri K.Rethinam and Shri J.Sekar
(iii) From the residence of Shri J.Sekar cash of Rs. 12,00,000/- in old
currencies was seized
(iv) The details of seizure of new currencies of Rs. 2000 notes made in the
various premises are given below:-
S.No. Name and address of the assessee New
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Denomination
Rs. 2000 seized
(in Rs.)
1M/s SRS Mining, No.36, Sudhamma Building,
Flat No. 1, First Floor, Rear Block,
Vijayaragava Road, T. Nagar, Channai – 600
017
8,00,00,000
2M/s SRS Mining, 26/14, Yogammbai Street, T
Nagar, Chennai – 600 017
1,63,06,000
3M/s SRS Mining, 3
rd
Floor, VBC Solitaire, No.
47 & 49, Bazullah Road, T Nagar, Chennai –
600 017
13,16,000
4G.Venkatesh, Venu Jewellers, No. 127, shop
No. 18, NSC Bose Road, Adinath complex,
Sowcarpet, Chennai – 600 079
11,86,000
5K. Umapathy, Royal India Gems & Jewels P
Ltd., No. 226, Old No. 124, Shop No. 18,19,20
4
th
Floor, Adinath Complex, Chennai – 600 079
1,00,000
6M/s SRS Mining, Tata Ace Vehicle TN23 BC
5757
24,00,00,000
Total 33,89,08,000
The new currencies belong to M/s SRS Mining and they were recorded in
the parallel cash book of M/s SRS Mining.
(v)As per the seized documents, the source of new currencies seized
is from proceeds of sand sales by M/s SRS Mining.
(vi)The details of prepaid tax paid by SRS Mining before the search
action are given below:-
Sl.
No.
AY Advance tax
Rs.
TDS/TCS
Rs.
Total prepaid tax paid
Rs.
1 2016-1712,00,00,000/-58,35,283/- 12,58,35,283/-
2 2017-1818,00,00,000/-42,98,471/- 18,42,98,471/-
Total 31,01,33,754/-
Post Search, M/s SRS Mining has paid Rs. 22,00,00,000/- towards self-
assessment tax for AY 2017-18 relevant to FY 2016-17.
Yours faithfully
(K G ARUNRAJ IRS)
Joint Director of Income Tax (Inv.) (OSD)
Unit 2 (1), Chennai”
Therefore, the proceedings started on the basis of intriguing
recovery of cash and other items in fact, does not exist and
the I.T. Department itself was satisfied with the recovery
12
after investigation in the year 2019. Therefore, the finding
recorded in the impugned order by the High Court in
paragraph 14 with regard to recovery of new currency
notes of denomination of Rs. 2000 cannot be
countenanced.
15.Reverting to the issue of registration of the main FIR
by the CBI bearing No. RC MA1 2016 A0040 and thereafter
two other cases RC MA1 2016 A0051 and RC MA1 2016
A0052 are based upon the information furnished by the I.T.
Department. As discussed above, the cases bearing Nos.
RC MA1 2016 A0051 and RC MA1 2016 A0052 have been
quashed by the High Court vide order dated 27.6.2018
passed in Criminal O.P. No. No. 409 of 2017. Thereafter in
the main FIR RC MA1 2016 A0040, CBI submitted its
closure report. The said closure report has been accepted
by the Court in exercise of the power under Section 173(2)
Cr.P.C. on 25.9.2020. The relevant extracts of closure
report find mention in the court order is reproduced thus:
“The Inspector of Police, CBI, ACB, Chennai has
submitted a final report through Senior Public
Prosecutor, CBI, praying an order to close the FIR
pending before this court in RC MA1 2016 A 0040
13
U/s 120B r/w 409, 420 IPC and Sec. 13(2) r/w 13
(1) (c) (d) of PC Act, 1989 ……………
3. This court perused all the relevant records
including the FIR, Statement recorded under Section
161 of Cr.P.C., the documents collected during
investigation, by the Investigating Officer and in the
final report it is submitted that this court may be
pleased to accept this Closure Report under Section
173(2) of Cr.P.C. and may drop the action against A1
to A6 for lack of sufficient Evidence. There was
nothing incriminating surfaced on the part of accused
persons, as these accused 1 to 6 had in conspiracy
with unknown bank officials and public servants
cheated the Government of India.
4. The evidence on record is not adequate to launch
prosecutable case against the accused persons
beyond reasonable doubt to establish that they
fraudulently converted the unauthorised cash held
by them in old currency notes in to NHD, thereby
depriving the public, in enforcing their right and thus
the accused 1 to 6 had in conspiracy with unknown
bank officials and public servants cheated the
Government of India.
6. The investigation has not established the
allegations levelled against A1 to A6. On the basis of
statement of witnesses of LW1 to 170 and
documents D1 to D879 and M.O.I to 8 collected
during the investigation, there is no sufficient
evidence to launch prosecution against the accused 1
to 6 persons, for the offences of Criminal Conspiracy,
Cheating, Criminal misconduct.
7. As per the oral and documentary evidence,
the allegations in the FIR to the effect that the
accused persons have caused wrongful loss
to the
Government of India to the tune of approximately
247.13 Crores and obtaining corresponding
wrongful gain to themselves, is not
substantiated with prosecutable evidence.
Hence the final report has been filed for
recommending closure of the case.
8. …..Hence this court is convinced and
satisfied to accept the prayer of closure of the
case…..
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9. …..The reasons submitted by the prosecution
for closure of F.I.R. in the absence of any
evidence is acceptable.”
Thus, it is clear that the FIR with respect to schedule
offence registered by the CBI with respect to proceeds of the
crime including property attached has been closed.
16.On the basis of the intimation given by the I.T.
Department and registration of the FIR by the CBI which
was closed, the Directorate of ED registered
ECIR/CEZO/19/2016 under Sections 3, 4 & 8(5) of PMLA .
After the said FIR, Deputy Director (ED) passed an order
under Section 5(1) of PMLA on 1.6.2017 attaching the
property. For confirmation of attachment, OC No. 785 of
2017 was filed by the Department which is rejected by the
Adjudicating Authority while exercising the power under
Section 5(5) of PMLA. The Adjudicating Authority observed
as thus:
“It is pertinent to note that about two years have lapsed
since passing of the said bail order dated 17.03.2017,
and over two years have passed after filing of FIR,
however till date no Final Report is filed by the
concerned Investigating Officer investigating the
scheduled offences. Most material is the fact that so far
no bank or bank officers are identified, either by the
15
officer investigating the schedule offences or even the
Enforcement Directorate, Chennai. In view of the
absence of any bank or bank officers having been
identified, it was necessary for the Deputy Director to
consider the absence and/ or nonidentification of any
bank or bank officers. Nothing is adduced or available
on record as to which banks and which bank officers
are involved, who have unauthorizedly converted
demonetized old currency into new currency. The
reasonable belief as is formed by the Deputy Director
reveals that the vital aspect concerning the fact that no
such bank or bank officers are existing or found is not
considered by the Deputy Director at all. The
Reasonable Belief is thus impaired. The Reasonable
Belief formed by the Deputy Director inter alia is that
the accused persons have laundered their unaccounted
money in conspiring with the bank officials of various
banks who helped them laundering the unaccounted
money. There is nothing on record which reveals the
name of even single bank, much less, the various banks
as stated by the Deputy Director. Similarly not a single
bank official is identified or named and there is nothing
on record which reveals any such detail. Consequently
the Reasonable Belief becomes baseless and is mere
speculation of the Deputy Director. Such a belief can
not be justified and sustained. The aspect concerning
nonidentification and/ or nonavailability of any bank
and bank officials, goes to the root of the formation of
the entire Reasonable Belief. The Additional Director/
Joint Director/ Deputy Director ought to have directed
the Enforcement Directorate Officers to investigate or
cause to be investigated the aspect concerning the bank
or bank officers. The Deputy Director ought to have
deliberated on the issue and proceeded, which is not
done. In the absence of such basic material the
Reasonable Belief entertained by the Deputy Director
specifically forming the Reasonable Belief that the
accused laundered their unaccounted money in
conspiring with the bank officials of various banks who
helped them in laundering the unaccounted money, can
not be legally tenable.
The Reasonable Belief of the Deputy Director further
upon it’s analysis indicates that the Deputy Director has
entertained the Reasonable Belief as stated in para 21,
26 & 27 of the Provisional Attachment Order, only in
respect of a part of the seized amount of Rs.
16
334792000/, without specifying as to what quantum
and as to what part of the seized amount of Rs.
334792000/ in the form of movable properties is
related to the schedule offences.
The formation of the Reasonable Belief only for part of
the seized amount and yet proceeding to attach the
entire seized amount vitiates the entire Reasonable
Belief and renders it as illegal. It is seen from the
Reasonable Belief that such an exercise was not carried
out by the Deputy Director.
The reasonable belief formed by the Deputy Director
that the new currency, which were seized by the Income
Tax Authorities are nothing but the currency received in
lieu of exchange of old currency notes (demonetized
currency) inclusive of commission for such exchange
received by S/ Shri J. Sekar Reddy, M. Premkumar, S.
Srinivaslu, S. Ramachandran & K. Rethinam, is neither
based on any specified material nor is justified.
It is therefore, concluded that the reasonable belief
formed by the Deputy Director in this regard cannot be
sustained, the same having been not based on any
specifically material and the same is merely surmises,
conjectures and speculation.
Considering the material in O.C., the written replies/
additional written reply/ submissions of the Defendants
and the arguments above referred, I find that the
property provisionally attached by PAO No. 14/2017
dated 12.06.2017, i.e. 49,480 kgs of gold valued of Rs.
13,96,88,246 mentioned in para 22 of PAO(para 1 of
this order) is not involved in money laundering. ”
17.In the said sequel of facts, the legal position emerges
by the judgment of Radheshyam Kejriwal (supra) is
relevant in which this Court has culled out the ratio of the
various other decisions pertaining to the issue involved and
has observed as thus:
17
“12 After referring to various judgments, this Court then
culled out the ratio of those decisions in para 38 as
follows: (Radheshyam Kejriwal Case)
38. The ratio which can be culled out from these
decisions can broadly be stated as follows:
(i) Adjudication proceedings and criminal
prosecution can be launched
simultaneously;
(ii) Decision in adjudication proceedings is
not necessary before initiating criminal
prosecution;
(iii) Adjudication proceedings and criminal
proceedings are independent in nature to
each other;
(iv) The finding against the person facing
prosecution in the adjudication
proceedings is not binding on the
proceeding for criminal prosecution;
(v) Adjudication proceedings by the
Enforcement Directorate is not
prosecution by a competent court of law
to attract the provisions of Article 20(2) of
the Constitution or Section 300 of the
Code of Criminal Procedure;
(vi) The finding in the adjudication
proceedings in favour of the person
facing trial for identical violation will
depend upon the nature of finding. If the
exoneration in adjudication proceedings
is on technical ground and not on merit,
prosecution may continue; and
(vii) In case of exoneration, however, on
merits where the allegation is found to be
not sustainable at all and the person
held innocent, criminal prosecution on the
same set of facts and circumstances
cannot be allowed to continue, the
underlying principle being the higher
standard of proof in criminal cases.”
13. It finally concluded: (Radheshyam Kejriwal case
18
“39. In our opinion, therefore, the yardstick
would be to judge as to whether the allegation
in the adjudication proceedings as well as the
proceeding for prosecution is identical and the
exoneration of the person concerned in the
adjudication proceedings is on merits. In case
it is found on merit that there is no
contravention of the provisions of the Act in
the adjudication proceedings, the trial of the
person concerned shall be an abuse of the
process of the court.
14. From our point of view, para 38(vii) is important
and if the High Court has bothered to apply this
parameter, then on a reading of the CVC report on
the same facts, the appellant should have been
exonerated.”
In the case of Ashoo Surendranath Tewari (supra), this
Court relied upon the judgment of Radheyshyam
Kejriwal (supra) and setaside the judgment of the High
Court while exonerating the appellants because the chance
of conviction in a criminal case in the same facts appeared
to be bleak.
18.In view of the aforesaid legal position and on
analysing the report of I.T. Department and the reasoning
given by CBI while submitting the final closure report in RC
MA1 2016 A0040 and the order passed by the Adjudicating
Authority, it is clear that for proceeds of crime, as defined
under Section 2(1)(u) of PMLA, the property seized would be
19
relevant and its possession with recovery and claim thereto
must be innocent. In the present case, the schedule
offence has not been made out because of lack of evidence.
The Adjudicating Authority, at the time of refusing to
continue the order of attachment under PMLA, was of the
opinion that the record regarding banks and its officials
who may be involved, is not on record. Therefore, for lack
of identity of the source of collected money, it could not be
reasonably believed by the Deputy Director (ED) that the
unaccounted money is connected with the commission of
offence under PMLA. Simultaneously, the letter of the I.T.
Department dated 16.5.2019 and the details as
mentioned, makes it clear that for the currency seized, the
tax is already paid, therefore, it is not the quantum earned
and used for money laundering. In our opinion, even in
cases of PMLA, the Court cannot proceed on the basis of
preponderance of probabilities. On perusal of the
statement of Objects and Reasons specified in PMLA, it is
the stringent law brought by Parliament to check money
laundering. Thus, the allegation must be proved beyond
20
reasonable doubt in the Court. Even otherwise, it is
incumbent upon the Court to look into the allegation and
the material collected in support thereto and to find out
whether the prima facie offence is made out. Unless the
allegations are substantiated by the authorities and proved
against a person in the court of law, the person is innocent.
In the said backdrop, the ratio of the judgment of
Radheshyam Kejriwal (supra) in paragraph 38 (vi) and
(vii) aptly applicable in the facts of the present case.
19.As discussed above, looking to the facts of this case,
it is clear by a detailed order of acceptance of the closure
report of the schedule offence in RC MA1 2016 A0040 and
the quashment of two FIRs by the High Court of the
schedule offence and of the letter dated 16.5.2019 of I.T.
Department and also the observations made by the
Adjudicating Authority in the order dated 25.2.2019, the
evidence of continuation of offence in ECR CEZO 19/2016
is not sufficient. The Department itself is unable to collect
any incriminating material and also not produced before
this Court even after a lapse of 5
½ years to prove its case
21
beyond reasonable doubt. From the material collected by
the Agency, they themselves are prima facie not satisfied
that the offence under PMLA can be proved beyond
reasonable doubt. The argument advanced by learned
ASG regarding pendency of the appeal against the order of
Adjudicating Authority is also of no help because against
the order of the Appellate Authority also, remedies are
available. Thus, looking to the facts as discussed
hereinabove and the ratio of the judgments of this Court in
Radheshyam Kejriwal (supra) and Ashoo Surendranath
Tewari (supra), the chance to prove the allegations even for
the purpose of provisions of PMLA in the Court are bleak.
Therefore, we are of the firm opinion that the chances to
prove those allegations in the Court are very bleak. It is
trite to say, till the allegations are proved, the appellant
would be innocent. The High Court by the impugned order
has recorded the finding without due consideration of the
letter of the I.T. Department and other material in right
perspective. Therefore, in our view, these findings of the
High Court cannot be sustained.
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20.Accordingly, we setaside the impugned order passed
by the High Court. Consequently, this appeal is allowed.
ECR CEZO 19/2016 including Complaint bearing No. 2 of
2017 stands quashed.
………………………….J.
[ VINEET SARAN ]
……………………………J.
NEW DELHI ; [ J.K. MAHESHWARI ]
MAY 5, 2022.
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