In the High Court of Jharkhand at Ranchi
W.P.(Cr.) No.419 of 2009
Sanjay Kumar Choudhary .......................................Petitioner
VERSUS
Government of India through the
Director, Directorate f Enforcement and another... Respondents
CORAM: HON'BLE MR. JUSTICE R.R.PRASAD
For the Petitioner: M/s.Indrajit Sinha and Kumar Vimal
For the Respondents: M/s. A.K.Das and A. Arohi Bhalla
Reserved on 19.11.09. Pronounced on 2.12.09.
4. 2.12.09
. A complaint bearing complaint case no.9 of 2009 was lodged
in the court of Special Judge (Vigilance) -cum- Additional Judicial
Commissioner, Ranchi by the complainant Rajiv Sharma alleging
therein that the then Chief Minister Shri Madhu Koda, on being
elected from one of the Assembly Constituencies, held office of the
Minister, Mines and Co-operative, from February, 2005 to
September, 2006 and then the office of the Chief Minister from
September, 2006 to August, 2008. During the aforesaid period he
amassed huge properties moveable as well as immovable by
indulging in corrupt practices for embezzlement of the public fund
in collusion with Vinod Sinha and Sanjay Kumar Choudhary
(petitioner). While holding the said offices, he entered into an
agreement (M.O.U) with 44 big Industrial Houses to set up the
industries in the State of Jharkhand and thereby he received bribe
through Vinod Sinha and this petitioner. Having acquired ill-gotten
money in crores in connivance with Vinod Sinha and this petitioner,
they purchased/invested money in number of Companies not only
in India but also at abroad including Dubai where crores of rupees
were transferred through Hawala. That apart, money was also
invested in crores in purchasing land and also in purchasing Mines
in a foreign country, namely, Liberia. The complainant has also
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alleged that other Ministers named in the complaint petition also
amassed huge properties by illegal means.
Learned court below on receiving the said complaint
forwarded it to the Officer-in-Charge, Vigilance Police Station,
Ranchi under section 156(3) of the Code of Criminal Procedure for
its institution and investigation. Accordingly, it was registered as
Vigilance P.S. case no. 9 of 2009 under Sections 420, 423, 424,465
read with Section 120B of the Indian Penal Code and also under
Sections 7, 10,11 and 13 of the Prevention of Corruption Act,
1988.Subsequently, on the basis of the allegation made in the
vigilance case, Enforcement Directorate lodged Enforcement Case
Information Report ( ECIR) against Shri Madhu Koda and other
Ministers including this petitioner and other persons alleging therein
that there has been reasons to believe from the facts disclosed in
the vigilance case that the accused persons under criminal
conspiracy acquired huge assets both in India and outside India by
indulging themselves in criminal act under the Indian Penal Code
and also under the Prevention of Corruption Act and as such, prima
facie, materials or there to form an opinion that the offence of
money laundering has been committed which is punishable under
Section 4 of the prevention of Money Laundering Act, 2002
(hereinafter referred to as ‘the Act’).
Being aggrieved with the lodgment of the said Enforcement
Case Information Report (ECIR), the instant application has been
filed on behalf of the petitioner praying therein to quash the entire
criminal proceeding of Enforcement Case Information Report
No.ECIR/0/PAT/09/AD.
The said prosecution has been sought to be quashed on the
ground that unless and until it is established that accused persons
acquired properties by committing an offence under Sections 420,
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423, 424 read with Section 120B of the Indian Penal Code, one in
terms of Section 3 of Act can not be said to have acquired property
with the proceeds of crime and projected it as untainted property.
Thus, it was submitted that the instant prosecution by the
Enforcement Directorate under Section 4 of the Act is pre-matured
and is liable to be quashed.
Learned counsel appearing for the petitioner in this respect
submits that one can be held liable for an offence under Section 4
of the Act, if he is involved in any process or activities with the
proceeds of Schedule offence and not any other offence but
surprisingly, the petitioner and others are being prosecuted on the
premise that the properties acquired by the money are proceeds of
the crime committed under Sections 420, 423, 424 of the Indian
Penal Code but those offences were declared to be the Scheduled
offences under the prevention of Money Laundering (Amendment)
Act, 2009 which came into force with effect from 6.3.2009
whereas Shri Madhu Koda did hold post of Chief Ministership from
September, 2006 to August, 2008 and, therefore, the petitioner or
any other accused cannot be said to have acquired properties in
connivance with other accused with the proceeds of the crime and
as such, the prosecution under Section 4 of the Act is quite bad.
Learned counsel further submits that before proceeding with
the prosecution under Section 4 of the Act, the prosecuting agency
needs to establish that Scheduled crime/crimes have been
committed and out of proceeds of such crime properties have been
acquired which have been projected as untainted properties which
stand gets substantiated from the provision of the Act relating to
attachment as proviso to Section 5 does stipulate that unless
report in terms of Section 173 of the Code of Criminal Procedure in
relation to Scheduled offence is submitted, provision of attachment
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needs not be resorted to. Thus, when such restriction has been put
under the statute in the matter of attachment of the property
acquired by the tainted money, one can easily comprehend that the
Legislature would not have intended to get the prosecution
launched under the Act unless it is established first that any
Scheduled offence has been committed. But, surprisingly, instant
prosecution has been launched only on the vague allegations that
too nastly on Newspaper reportings about the indulgence of the
accused persons in the schedule offence and hence, the instant
proceeding is nothing but an abuse of the process of law and
hence, it be quashed.
As against this, learned counsel appearing for the
respondents submits that as per the allegation made in the ECIR,
the petitioner and other accused persons in collusion/connivance
with the public servant acquired huge properties not only in India
but even at abroad, description of which has been given in the said
report, by the proceeds of crime committed under the Indian Penal
Code and also under the Prevention of Corruption Act. Taking that
fact into consideration and also the assets of the public servants
including the then Chief Minister disclosed at the time of filing
nomination on the eve of election, there was every reason on the
part of the informant to believe that offence of money laundering
has been committed and as such, the said report never warrants to
be interfered with by this Court.
Before adverting to the submission advanced on behalf of
the parties, one needs to take notice of the provision as contained
in Section 3 of the Act which speaks about the offence of money
laundering:
” Office of money-laundering – Whosoever directly or
indirectly attempts to indulge or knowingly assists or
knowingly is a party or is actually involved in any
5process or activity connected with the proceeds of
crime and projecting it as untainted property shall be
guilty of offence of money-laundering.
Section 4 of the Act which prescribes the punishment of
money laundering reads as under:
“Punishment for money-laundering- Whoever commits
the offence of money-laundering shall be punishable
with rigorous imprisonment for a term which shall not
be less than three years but which may extend to
seven years and shall also be liable to fine which may
extend to five lakh rupees:
Provided that where the proceeds of crime involved
in money-laundering relates to any offence specified
under paragraph 2 of Part A of the Schedule, the
provisions of this section shall have effect as it for the
words “which may extend to seven years”, the words
“which may extend to ten years” had been
substituted.”
Amplitude of the provision as contained in Section 3 appears
to be quite wide as anyone who gets himself involved directly or
indirectly or assists in the activity connected with the proceeds of
crime and projecting it as untainted property shall be guilty for the
offence of money-laundering.
The allegations made in the complaint upon which first
information report was lodged by the vigilance and then ECIR was
drawn do indicate about the involvement of this petitioner in the
activities whether it relates to purchase of the companies or mines
or investment of monies in companies/mines at abroad or
purchase of the land by the proceeds of the crimes which were
committed under the Indian Penal Code and also under the
Prevention of Corruption Act with the aid and abetment of the
petitioner. However, submission advanced on behalf of the
petitioner that one cannot be said to have committed offence of
money-laundering unless it is established that, that person has
committed crime proceeds of which is being projected as untainted
property is only to be noticed to be rejected. The provision as
contained in Section 3 never does suggest that the offence of
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money-laundering can be launched only when one is found guilty of
a crime, proceeds of which has been projected as untainted
property, rather the offence of money-laundering as defined under
Section 3 unambiguously prescribes that anyone, who directly or
indirectly meddles with the property connected with the proceeds
of the crime projecting it as untainted property, is liable to be
punished for the offence of money-laundering. However, learned
counsel by taking cue of the first proviso of Section 5 of the Act
tried to impress upon that proceeding relating to attachment of the
property acquired through tainted money can only be initiated
under the Act after submission of the report under Section 173 of
the Code of Criminal Procedure. No doubt such provision is there
but that seems to have been made purposely as any proceeding
relating to attachment of the property would be affecting the right
of the parties. Moreover, the second proviso of Section 5 does
prescribe that authority can resort to the provision of attachment
before submission of the police report under Section 173 of the
Code of Criminal Procedure, if there has been reason to believe
that if the property involved in money-laundering is not attached, it
would likely to frustrate any proceeding under this Act. Thus, the
petitioner cannot draw any strength from the provision contained in
the first proviso of Section 5 that prosecution for offence of money-
laundering cannot be launched unless it is established that the
person has committed crime proceeds of which is being projected
as untainted property.
In the instant case, the officers of the Enforcement
Directorate having taken notice of assets of the then Chief Minister
possessing at the time of filing nomination and the ill-gotten money
acquired during his tenure as Minister and the Chief Minister which
was allegedly invested through this petitioner and other accused
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persons in acquiring number of companies in India and even at
abroad and also purchase of land of the value more than crores,
there was every reason to believe on the part of the officers of the
Enforcement Directorate that offence of money-laundering has
been committed.
The other submission is to the effect that the then Chief
Minister has been alleged to have acquired huge properties by
committing offence under Sections 420, 423, 424 read with Section
120B of the Indian Penal Code and proceeds thereof is a subject
matter of the offence of money-laundering but the aforesaid
offences has been incorporated in Part B of paragraph 1 with
effect from 6.3.2009 whereas tenure of Shri Madhu Koda as
Minister was from February, 2005 to September, 2006 and as Chief
Minister from September, 2006 to August, 2008 and therefore, the
petitioner even in the face of allegation that he associated himself
with the activities of the proceeds of the crime cannot be said to
have committed offence under Section 3 of the Act as the money
from which properties have been alleged to have been acquired
can not be said to be proceed of crime. Such submission is devoid
of any merit on the face of the provision as contained in Section 3
itself. I have already noticed that one can be said to have
committed offence of money- laundering if he directly or indirectly
associates himself with the activities connected with the proceeds
of the crime projecting it as untainted property. Proceeds of crime
as defined under section 2(u) means any property derived or
obtained, directly or indirectly, by any person as a result of criminal
activity relating to a scheduled offence or the value of any such
property. It be noted that during the period when the then Chief
Minister is said to have amassed the properties, Sections 7 and 10
of the Prevention of Corruption Act were very much scheduled
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offences and therefore, the properties found in India or abroad has
rightly been taken by the prosecuting agency to be proceeds of
crime. Admittedly, the petitioner is not a public servant but in view
of the allegation disclosing therein the act of abetment of this
petitioner towards commission of the said offences, he can not
escape from the liability of the offence under Section 7 of the
Prevention Act.
Thus, in the facts and circumstances as stated above, I do
not find any merit in this application. Hence, it is dismissed.
( R. R. Prasad, J.)
ND/