Research › Search › Judgment

Kerala High Court · body

2023 DIGILAW 707 (KER)

V. P. Nandakumar v. Assistant Director, Directorate of Enforcement

2023-09-12

DEVAN RAMACHANDRAN

body2023
JUDGMENT : The parties are ad idem that the Enforcement Case Information Report (hereinafter referred to as 'ECIR', for short) registered against the petitioner, has already been quashed by this Court in Crl.M.C.No.5167/2023. 2. The axiomatic question is whether Ext.P12 order assailed in this writ petition, issued under Section 17(1A) of the Prevention of Money Laundering Act, 2002 ('PMLA' for short), is now sustainable. 3. Sri. Mahesh Jethmalani – learned Senior counsel, instructed by Sri. D. Kishore, appearing for the petitioner, emphatically predicated that, with the foundational edificed on the case – registered by the Enforcement Director ('ED' for short) under the provisions of the 'PMLA' – having been abrogated by this Court in Crl.M.C.No.5167/2023, Ext.P12 order has lost its legs to stand on; and cannot, therefore, be now supported or justified to continue. The learned Senior Counsel, therefore, prayed that Ext.P12 be set aside. 4. Sri. Jaishankar V. Nair – learned Standing Counsel for the 'ED', however, argued in support of Ext.P12, saying that said order was issued at a time when the petitioner was facing a criminal charge under Section 420 of the Indian Penal Code (IPC), registered by the jurisdictional Police Authorities. He argued that since Section 420 of the IPC is one among the scheduled offences under Section 2(1)(y) of the 'PMLA', and the 'ECIR' having been registered on 06.09.2022; it became imperative that the properties covered by Ext.P12 be protected from depletion or destruction. He explained that, therefore, Ext.P12 was issued under the provisions of Section 17(1A) of the 'PMLA' on 04.05.2023 (shown incorrectly in Ext.P12 as 04.05.2022); and vehemently asserted that it was within the jurisdiction of the competent Authority to have done so. 5. However, to a pointed question from this Court, Sri. Jaishankar V. Nair was unable to cogently justify how the proceedings under the 'PMLA' is still maintained against the petitioner, when the 'ECIR' itself has been quashed by this Court. 5. However, to a pointed question from this Court, Sri. Jaishankar V. Nair was unable to cogently justify how the proceedings under the 'PMLA' is still maintained against the petitioner, when the 'ECIR' itself has been quashed by this Court. His explanation was that, it has been well settled in law by the Hon'ble Supreme Court in Vijay Madanlal Choudhary & others v. Union of India & others (2022 SCC OnLine SC 929), that the offence of money laundering is an independent offence relating to processes or activities connected with the proceeds of crime; and that, during the investigation conducted by the 'ED', it has come into possession of vital information against the petitioner, which has now been handed over to the police for further investigation. He submitted that this course was adopted under Section 66 of the 'PMLA' and, therefore, that unless the police complete their investigation on such additional inputs, made available to them by the officials of the ED, Ext.P12 order cannot be vacated. He thus prayed that this writ petition be dismissed and that competent Authority of the 'ED' be permitted to await further information from the Kerala Police, after investigation into the additional information favoured to them by the former. 6. Though this Court finds in favour of the law as afore explained by Sri. Jaishankar V. Nair, the singular fact remains that any investigation against the petitioner under the 'PMLA' is possible only if it is edificed on a crime registered. As matters now stand, the FIR registered by the jurisdictional police officers against the petitioner has been quashed by this Court; consequent to which, the 'ECIR' has also been quashed, as said above, through the judgment in Crl.M.C.No.5167/2023. 7. Of course, the 'ED' now asserts that, during their investigation, they have came to be in possession of certain other inputs, which would be sufficient to implicate the petitioner in various offences; and that they have handed over the same to the Kerala Police for further investigation. However, Sri. Jaishankar V. Nair was candid enough to admit that his clients have neither received any information from the Kerala Police qua such investigation yet; nor are they aware of any new FIR having been registered. 8. However, Sri. Jaishankar V. Nair was candid enough to admit that his clients have neither received any information from the Kerala Police qua such investigation yet; nor are they aware of any new FIR having been registered. 8. Indubitably, therefore, when there is no FIR registered, hypostised on which an 'ECIR' is also not available, any further investigation against the petitioner under the 'PMLA' will have to cease. 9. In such perspective, the acme question is whether Ext.P12 order should be allowed to continue. 10. I am certain, without any doubt, that in view of quashing of the 'ECIR' and in the absence of any further FIR being registered against the petitioner, Ext.P12 cannot be allowed to hold the field, particularly when it causes sure prejudice to the person against which it is issued. 11. That being said, I notice from the judgment in Crl.M.C.No.5167/2023, that this Court has made it abundantly clear that “in the event of the predicate offence getting revived, it would always be open for the ED to revive the proceedings under the Prevention of Money Laundering Act, 2002 as well.” Indubitably, this is the best protection that the 'ED' can have; and apodictically, therefore, as and when any such revival is to take place in law, they will be at full liberty to issue orders akin to Ext.P12 under Section 17 (1A) of the PMLA, 2002; for which, none of my observations in this judgment would be a fetter. With the afore clarification, I allow this writ petition and set aside Ext.P12. As a necessary corollary to the afore declaration, the respondent will return all the original documents of the properties covered by Ext.P12 without any avoidable delay, but within three weeks from the date of receipt of a copy of this judgment.