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Andhra High Court · body

2013 DIGILAW 50 (AP)

N. Sridhar v. State of A. P.

2013-01-29

K.C.BHANU

body2013
ORDER This Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.) seeking to quash the proceedings in C.C. No. 662 of 2011 on the file of the I Additional Chief Metropolitan Magistrate, Hdyerabad. 2. The second respondent herein filed a complaint under Section 200 read with 190 Cr. P.C. before the learned Metropolitan Magistrate against the petitioner herein, for the offence under Section 166 IPC alleging as follows. He filed a private complaint in S.R. No. 489 of 2011, dated 21-1-2011 before the II Metropolitan Magistrate, L.B. Nagar Hyderabad, and the said court referred the matter to L.B. Nagar police, who registered it as a case in crime No. 193 of 2011, dated 31-1-2011; that the above complaint prima facie discloses that the accused therein misappropriated the amount to a tune of Rs. 30,81,97,625/-, which attracts the provisions of Sections 3 and 4 and Prevention of Money-Laundering Act, 2002 (hereinafter referred to as 'the PML Act, 2002'), which comes under the purview of the office of the petitioner herein as an investigation authority, who is responsible for implementation of the provisions of the Act, 2002, that he gave a complaint on 7-2-2011 along with the private complaint vide S.R. No. 489/2011, dated 21-1-2011 to the petitioner to take appropriate steps to punish all the accused and recover all the proceedings of crime from all the accused in crime No. 193 of 2011 as per the provisions of the Act, 2002; that he also furnished copy of the First Information Report in crime No. 193 of 2011 to the petitioner; but, the petitioner did not commence enquiry/investigation in crime No. 193 of 2011; that he also got issued notice dated 18-7-2011 to the petitioner to initiate appropriate proceedings on his complaint; that the petitioner received the notice on 19-7-2011, but there was no reply, and so, the acts of the petitioner would attract the offence under Section 166 IPC Hence, the present complaint. 3. 3. Learned counsel for the petitioner contended that the PML Act, 2002 requires that the Authorized Officer conducts enquiry only after a report has been forwarded by police under Section 173 Cr.P.C., in respect of a scheduled offence; that the Enforcement Directory cannot investigate into the schedule offences under Part B of the Schedule; that immediately after receipt of the complaint from the second respondent, the petitioner enquiry with L.B. Nagar police with regard to details of the First Information Report, and the police informed that no offence has been made out and they are going to file a final report to that effect; that it is not a case where the court directed the petitioner to register Enforcement Crime Information Report (ECIR), and so, the petitioner did not disobey any direction of law; that continuation of the impugned proceedings is nothing but abuse of process of court. 4. On the other hand, the second respondent, party-in-person, contended that under Section 44(b) of the PML Act, 2002, the petitioner is required to lodge a complaint before the Special Court for the purpose of taking cognizance for which the accused is committed to it for trial; that along with the complaint dated 7-2-2011, the second respondent also furnished the required information i.e. the complaint and also the First Information Report, and that after receipt of the same, the petitioner is bound to register a case and investigate into the same, or at any rate, he can seek permission from the court to conduct investigation as the Enforcement Directorate followed the procedure under the Manual in respect of RC No. 18(A) of 2011 of CBI, Hyderabad, and therefore, the petitioner disobeyed the directions of law, and hence, there are no grounds to quash the impugned proceedings. 5. The short point for consideration is whether the Directorate of Enforcement or the competent authority under the PML Act, 2002 is required to register Enforcement Crime Information Report (ECIR) and start investigation of the case? 6. Under Section 166 IPC, whoever, being a public servant, knowingly disobeys any direction of the law as to the way in which he is to conduct himself as such public servant intending to cause, or knowing it to be likely that he will, by such disobedience, cause injury to any person, is punishable. 6. Under Section 166 IPC, whoever, being a public servant, knowingly disobeys any direction of the law as to the way in which he is to conduct himself as such public servant intending to cause, or knowing it to be likely that he will, by such disobedience, cause injury to any person, is punishable. From the above provision, it is clear that the conduct of public servant in discharge of his official duty is regulated not merely by orders received directly from his superiors, but by laws which prescribed the course of proceedings to be followed. 7. According to the second respondent, disobedience of the law is not following the mandate under Section 5 of the PML Act, 2002. Section 5 of PML Act, 2002 reads thus; "5. Attachment of property involved in money-laundering:- (1) Where the Director, or any other officer not below the rank of Deputy Director authorized by him for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that- (a) any person is in possession of any proceeds of crime; (b) such person has been charged of having committed a scheduled offence; and (c) Such proceeds of crime are likely to be concealed, transferred or dealt within any manner which may result in frustrating any proceedings relating to confiscating of such proceeds of crime under this Chapter, He may, by order in writing, provisionally attach such property for a period not exceeding one hundred and fifty days from the date of the order, in the manner provided in the Second Schedule to the Income Tax Act, 1961 (43 of 1961) and the Director or the other officer so authorized by him, as the case may be, shall be deemed to be an office under sub-rule (e) of Rule 1 of that Schedule." From the above provision, it is clear that when the Director, or any other officer not below the rank of Deputy Director authorized by him, has reason to believe on the basis of the material in his possession and in the circumstances mentioned in the section, he may provisionally attach such property for a period not exceeding 150 days from the date of such order. 8. 8. First proviso to Section 5 of PML Act, 2002 reads thus: "Provided that no such order of attachment shall be made unless, in relation to the schedule offence, a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorized to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be." A perusal of the above provision makes it clear that no attachment order shall be made unless, in relation to the scheduled offence, a report has been forwarded to the Magistrate under Section 173 Cr.P.C. or a complaint has been filed by a person authorized to investigate the offence mentioned in the schedule, before the Magistrate or a Court, for taking cognizance of the scheduled offence, as the case may be. Therefore, the proviso controls Section 5 of the Act. Unless a report under Section 173 Cr.P.C. is forwarded to the magistrate or a complaint been filed by a person authorized to investigate the offence is laid before the Magistrate concerned, no order of attachment under Section 5 of the Act shall be made. 9. The second respondent relied on Section 44(b) of the PML Act, 2002 which provides for taking cognizance by a Special Court upon a complaint made by an authority authorized in this behalf under this Act, take cognizance of the offence for which the accused committed to it for trial. Section 44(b) of the Act cannot be read in isolation. This section and the first proviso to Section 5 of the Act have to be read in juxta position as they have got to be. In such a case, the question of provisional attachment comes into play only when the Enforcement Directorate formally registers Enforcement Crime Information Report (ECIR) basing on the final report forwarded under Section 173 Cr.P.C. or a complaint filed by an authorized person. 10. Both the parties relied on the Manual on Prevention of Money Laundering Act, 2002. In such a case, the question of provisional attachment comes into play only when the Enforcement Directorate formally registers Enforcement Crime Information Report (ECIR) basing on the final report forwarded under Section 173 Cr.P.C. or a complaint filed by an authorized person. 10. Both the parties relied on the Manual on Prevention of Money Laundering Act, 2002. Clause 2.2 of the Manual reads thus: 2.2 Enforcement Case Information Report (ECIR): On the basis of information or material, relating to an offence of money laundering, the Director or Additional Director of Joint Director or Deputy Director or Assistant Director, as the case may be, may record reasons to believe that an offence of money laundering under Section 3 of the PMLA has been committed. The Investigating Officer shall reduce such material and reasons into writing as per Format No. 1. Enforcement Case Information Report shall be compiled in Register No. 2." According to the Manual, following are the sources for information/material relating to commission of an offence of money laundering under Section 3 of the PML Act, 2002. (a) Enforcement Preliminary Enquiry (EPE); (b) Financial Intelligence Unit (FIU); (c) Police Report relating to scheduled offences under Section 173 of Cr.P.C.; (d) Police Report or Complaint relating to scheduled offences under the NDPS Act, 1985; (e) a Contracting State; (f) Any direction from the Court; or (g) Any other source. 11. The second respondent relied on the words 'any other source' in the aforesaid sources and contended that though he placed relevant material before the petitioner for the purposes of registration of ECIR and also proceeding further, he did not follow the direction of law. A reading of the Manual would go to show that the Director of Enforcement is the only agency in India which is empowered to investigate an offence under PML Act, 2002. But, the process of investigation such as search, seizure and attachment are predicative on the police report under Section 173 Cr.P.C. or a complaint under Section 36(1) of the NDPS Act, 1985. Therefore, registration of ECIR to initiate the process of investigation is only upon filing a police report under Section 173 Cr.P.C. or a police report or a complaint under Section 36(1) of the NDPS Act, 1985. 12. Therefore, registration of ECIR to initiate the process of investigation is only upon filing a police report under Section 173 Cr.P.C. or a police report or a complaint under Section 36(1) of the NDPS Act, 1985. 12. A perusal of the above instructions would clearly go to show that only on the report filed by police under Section 173 Cr.P.C. or on filing a complaint under Section 36(1) of the NDPS Act, 1985, ECIR can be registered and investigation can be taken up by the competent authority. In this case, admittedly, as on the date of lodging the complaint by the second respondent before the petitioner on 7-2-2011, police have not filed a report as contemplated under Section 173 Cr.P.C. On the other hand, the petitioner was informed by police concerned that the complaint allegations do not disclose an offence under IPC and they are going to file a report before the II Metropolitan Magistrate, L.B. Nagar referring it a false case. As a matter of fact, on filing of report, under Section 173 Cr.P.C., it has been accepted by the learned Magistrate. Thereafter, a protest petition was also filed and the said petition was dismissed. It is subject matter of a Criminal Petition pending before this Court. Therefore, on a reading of Section 5 and 44(b) of the PML Act, 2002, a provisional attachment can only be passed after filing of the report under Section 173 Cr.P.C. or filing a complaint by authosized person before the Magistrate concerned. 13. The second respondent placed reliance on the affidavit filed by the Assistant Director, Directorate of Enforcement in Crl. M.P. No. 1853 of 2011 on the file of the Special Judge for CBI Cases, Hyderabad in relation to crime in R.C. No. 18(A)/2011, where under it is stated thus "1 submit that the Enforcement Directorate register ECIR (Enforcement Crime Information Report) basing on the FIR filed by the C.B.I. or by the local police if it is a schedule offence under the Prevention of Money Laundering Act and investigate into the matter under the PMLA. As such, to register ECIR against the accused, certified copy of the registered FIR is so imminently required for the purpose of registering ECIR and to conduct investigation by the Directorate of Enforcement under the Prevention of Money Laundering Act, 2002." Basing on the said affidavit, it is contended that the petitioner can as well seek permission from the Metropolitan Magistrate concerned for the purpose of registering the case and conducting investigation. 14. For registration of the case, the concerned authority under the Act, 2002 has reason to believe that an offence under Section 3 of the PML Act, 2002 has been committed by the accused. Subsequent to filing of the complaint by the second respondent, it seems the second respondent verified from the police with regard to registration of the First Information Report and conducting Investigation, and came to know that police, after completion of investigation, filed a report on 2-7-2011 referring the same as false. After giving of the complaint and before filing of the report on 2-7-2011, there is no other material placed before the petitioner for the purpose of registration of the case. The petitioner has to act basing on the complaint given by him coupled with the documents attached to the complaint. Since the First Information Report is referred as lack of evidence, the petitioner cannot register a case and investigate into the case. The second respondent failed to produce any prima facie material to show that an offence under Section 3 of the PML Act, 2002 has been committed. Therefore, prima facie there is no direction from the court to the petitioner to register a case against the accused in crime No. 193 of 2011 of L.B. Nagar police station. It is not a case where the petitioner having reason to believe that an offence under Section 3 of the PML Act, 2002 has been committed, has not registered the case. Consequently, the question of registration of the case does not arise. Further, Section 5 of the PML Act, 2002 has no application to the facts of the present case as it comes into play only after passing of the interim attachment. As seen from the Manual, it is clear that only when such material is available that an offence has been committed, the concerned authority has to register the case and investigate into the same. As seen from the Manual, it is clear that only when such material is available that an offence has been committed, the concerned authority has to register the case and investigate into the same. When there is no direction of law, the question of punishing the petitioner under Section 166 IPC does not arise. Therefore, continuation of the impugned proceedings is nothing but abuse of process of law. 15. The Criminal Petition is, accordingly, allowed quashing the proceedings in C.C. No. 662 of 2011 on the file of the I Additional Chief Metropolitan Magistrate, Hyderabad Miscellaneous Petitions pending, if any, in the Criminal Petition are dismissed.