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2025 DIGILAW 2418 (MAD)

S. Nagarajan v. Directorate of Enforcement, Rep. by the Assistant Director, Government of India, Ministry of Finance, Department of Revenue

2025-04-30

G.R.SWAMINATHAN, R.POORNIMA

body2025
ORDER : (G.R. SWAMINATHAN, J.) The revision petitioner herein figures as Accused No.2 in the complaint filed by the Directorate of Enforcement in C.C.No.3 of 2020 on the file of the learned II Additional District Judge (CBI Cases) Madurai. The learned Special Judge took cognizance of the offence under Section 4 of the Prevention of Money Laundering Act, 2002 against the accused. The revision petitioner herein filed Crl MP No. 4274 of 2023 under Section 227 of Cr.PC to discharge him. The court below vide order dated 30.05.2024 dismissed the petition. Questioning the same, this criminal revision case has been filed. 2.The learned Senior Counsel appearing for the revision petitioner raised very many contentions both in law as well as on facts. He, however, made it clear that he would be satisfied if the impugned order is set aside and the matter is remitted to the file of the trial court for fresh consideration. 3.The learned Additional Solicitor General appearing for the Enforcement Directorate on the other hand submitted that there are sufficient grounds for proceeding against the revision petitioner and that the impugned order does not call for interference. 4.My esteemed Sister Judge has written a detailed order rejecting the contentions of the learned Senior Counsel for the revision petitioner and endorsing the stand of the learned Additional Solicitor General. I went through the same. I am, however, of the view that since the order of the learned trial Judge is virtually non-speaking and is further vitiated by non-application of mind, it has to be set aside on that sole ground and the matter remanded. While an appeal is a continuation of the original proceeding and the appellate court is obliged to re-examine the record both on facts and law, the revisional court has to primarily see if the order of the trial court suffers from any perversity or irregularity. While an appeal is a continuation of the original proceeding and the appellate court is obliged to re-examine the record both on facts and law, the revisional court has to primarily see if the order of the trial court suffers from any perversity or irregularity. 5.The impugned order concludes thus : “77.Considering the way in which the investigation was conducted by the respondent / complainant and the materials available in this case and the reports of Collector Shri.U.Sagayam IAS, Special Officer/Legal Commissioner appointed by Hon'ble Madurai Bench of Madras High Court and the report submitted by the Revenue Department, District Collector and the evaluation report submitted by the Shri.N.C.Mohandas, Deputy Director, Geology and Mines, this Court feels that there are materials to proceed against the petitioner for the alleged offences u/s. 120B of IPC r/w Sec.447, 379, 409, 411, 420, 434, 468, 471, 304 (ii), 109, 114, 511 r/w Section 109, 116, 119 & 202 of IPC and Section 6 r/w Section 3(a) & 4(a) of Explosive Substances Act, 1908 and Sec.4 of TNPPDL Act. Therefore this Court is not inclined to allow this Petition.” The learned Trial Judge has proceeded in the matter as if he is dealing with a discharge petition in the prosecution for predicate offences. He appears to have forgotten that he is dealing with PMLA prosecution. I am not able to gloss over the said paragraph as if it is a typing error. It is only from the written text, the mental process of the judge is often discerned. In matters concerning liberty, courts have to be extremely cautious. They cannot afford to be casual. Paragraph 77 of the impugned order is an instance of casual approach. The first 24 paragraphs of the impugned order repeat the contentions of the discharge petition. Paragraphs 25 and 26 refer to the erroneous dismissal of an earlier discharge petition and hold that the present discharge petition is maintainable. Paragraphs 27 to 73 reflect the stand of the Enforcement Directorate as set out in their counter. Para 74 to 76 are as follows : “74)Further the respondent has followed the procedure laid down under the PML Act u/s.5, 6, 17, 18, 19 and also recording the statement u/s.50 of said Act. Considering the procedure adopted by the respondent/ complainant under PML Act seems to be correct and proper. Para 74 to 76 are as follows : “74)Further the respondent has followed the procedure laid down under the PML Act u/s.5, 6, 17, 18, 19 and also recording the statement u/s.50 of said Act. Considering the procedure adopted by the respondent/ complainant under PML Act seems to be correct and proper. Therefore the contention of the petitioner as the respondent has no authority and the provision of PML Act will not applicable as untenable, considering the statement of the petitioner u/s.50 of PML Act it has to be appropriate elaborate trial only within the veracity of the facts mentioned in the statement given by the petitioner/ A2 could come to light. On perusal of the ECIR it has been clearly stated that the Assistant Director, Mr. Venkadesh Babu, Directorate of Enforcement has stated that there is loss to the Government Exchequer to the tune of 256.44 Crores and the proceeds of crime is quantified as 256.44 Crores. Even though the contention of the petitioner that this illusory and there is no independent investigation for the allegation of loss of Rs.256.44 Crores, there is prima facie based on the documents. This Court is of the view that there is prima facie for the loss to the tune of Rs.256.44 Crores to the Government. Therefore it has to be tried elaborately and the respondent/ complainant has to be given opportunity to prove the facts of loss cause against the petitioner/A2. 75) With regard to fabrication of documents and application of sec.4, 5 of Explosive Acts can be decided only at the elaborate trial in this case. With regard to movable and immovable properties involved in this case has to be decided only in the trial by producing proper documents. The concept of proceeds of crime which also to be decided only by adducing evidence in the trial. The digging of pits which endangering the life of the living persons and creatures in the lease land and nearby Government Poromboke land which has to be decided only by adducing evidence and the allegation of damages caused by the petitioner and other accused to Public livestock which can be decided only at the time of trial. 76) Therefore on perusal of the available documents relied by the respondent/Complainant, this Court is of the view that there are prima facie evidence against the petitioner to proceed under PML Act and also for other offences. 76) Therefore on perusal of the available documents relied by the respondent/Complainant, this Court is of the view that there are prima facie evidence against the petitioner to proceed under PML Act and also for other offences. The allegation stated by the petitioner u/s.227 Cr.P.C cannot thrown away the materials by the respondent/complainant at the initial stage only by analyzing evidence adduced, this Court will come to the conclusion that the allegations against the petitioner is proved or not. Therefore for the above said reasons, this Court is of the view that the various allegations levelled by the petitioner against the respondent/ complainant cannot be decided without adducing elaborate evidence by the respondent/complainant. Further this Court is not inclined to allow this petition relying the allegations made by the petitioner /A2 and that too prima facie case against the petitioner/A2. The investigation conducted by the respondent/ complainant seems to be prima facie is proper and legal, if there is any contravention of Mines and Minerals Act, can be decided at later part of the trial.” 6.I am not able to notice any discussion of the materials on record. There is no demonstration as to how prima facie case is made out against the revision petitioner. Prosecution under PMLA is a serious thing. Reverse burden is cast on the accused. There are presumptive provisions against the accused. Therefore, the prosecution must establish the foundational facts which show that the offence of money laundering has been prima facie committed. The court below was obliged to scan the materials on record and give a finding if there is sufficient ground for proceeding against the accused. No such exercise appears to have been undertaken by the trial court. Such an exercise was warranted because in the complaint filed by the authorised officer of the ED, copies of confessional statements of the co-accused in the predicative offence have been relied upon. An order dismissing a discharge petition ought to contain proper reasons. Mere employment of stereotyped expressions would not suffice. For instance, the complaint relies on the statement of the revision petitioner recorded under Section 50 of the PMLA. In the impugned order, the learned Trial Judge merely refers to this and stops there. The contents of the statement have not even been adverted to. Of course, an order dismissing a discharge petition ought not to read like a judgment convicting the accused. In the impugned order, the learned Trial Judge merely refers to this and stops there. The contents of the statement have not even been adverted to. Of course, an order dismissing a discharge petition ought not to read like a judgment convicting the accused. But then, there must be a broad discussion of the factual matrix leading to the conclusion that there is sufficient ground for proceeding against the accused. Such an approach was not adopted in this case. The impugned order of the trial court is perverse. By saying so, I am not for a moment giving a clean chit to the revision petitioner. I would not even remotely remark that the conclusions arrived at by my esteemed Sister Judge are incorrect. I am not able to agree with the order proposed by my learned Sister only for the reason that there should be a proper exercise of the jurisdiction by the trial court under Section 227 of Cr.Pc in the first instance before it is tested in revisional jurisdiction. 7.In this view of the matter, the order impugned in this criminal revision case is set aside and the matter is remitted to the file of the learned trial Judge to pass orders afresh on merits and in accordance with law. It is needless to mention that the accused will have to be heard before a fresh order is passed. 8.The criminal revision petition is allowed on these terms. No costs. Connected miscellaneous petition is closed.