New Delhi: The Supreme Court has directed a Special Court under the Prevention of Money Laundering Act (PMLA) not to pass the judgement until charges are framed in a related Central Bureau of Investigation (CBI) case.
The Bench of Justice Bela M Trivedi and Justice Satish Chandra Sharma on Tuesday directed the Trial Court conducting the PMLA Trial that while it may proceed with the trial in accordance with the law, but it shall not pass the final judgement until the framing of charges in the predicate offence registered by the CBI.
The petitioner was the director of a Hong Kong-based company. CBI Chennai had registered an FIR in 2017 under various provisions of the Indian Penal Code and Prevention of Corruption Act against 19 Indian entities and unknown public officials alleging that multiple accounts had been opened fraudulently in Punjab National Bank, Chennai, and 100 per cent advance for imports (foreign exchange) to the tune of Rs 450 Crores had been remitted to entities in Hong Kong and Dubai but no corresponding goods were exported to India by these foreign entities.
Later, ED Chennai registered an ECIR for the same set of transactions. The petitioner was represented by Gaurav Gupta and Deepanshu Choithani, advocates.
It was submitted by the petitioner that even though the FIR was registered by CBI in 2017 but the investigation in the same is still pending and no chargesheet has been filed in the matter till date.
Also Read: Bombay High Court grants bail to gangster Chhota Rajan in 2001 Jaya Shetty murder case
It was argued that the petitioner was neither named in the CBI FIR nor was named in the ECIR but a prosecution complaint was later filed against him before the Special Court, PMLA, Chennai and charges came to be framed against him by the Court.
It was argued that this may lead to an anomalous situation that the ED Trial could conclude in the next few months since there are only 5 witnesses in the PMLA case, whereas the investigation may continue to be pending in the predicate CBI case.
There could be a scenario where the petitioner could get convicted by the PMLA Court but he may ultimately not even be chargesheeted by the CBI, or charges may also not be framed against him by the CBI Court.
It was also argued on behalf of the Petitioner that the High Court failed to apply the principle laid down by the Supreme Court in Vijay Madanlal Choudhary v. Union of India and Ors., with regard to Section 24 of PMLA, which entails a reverse burden of proof upon the Accused.
It was submitted that Section 24 is only applicable against a person who has already been charged by a competent Court and not before or during the stage of framing of charge. Whereas the High Court of Madras had held in this case that the Petitioner is liable to be charged due to the application of Section 24 and will have to prove his defence during the trial.
The petitioner also argued that as of date, there is no proof or even any allegation in the predicate CBI FIR that the amounts of foreign exchange sent aboard were proceeds of crime and were generated from any criminal activity. Therefore, even if there is any violation, it is at best a violation of FEMA which is not a scheduled offence and therefore the PMLA has no application in the present case.
—ANI