Smt. Nandani Ramchandani And Ors. Vs. The State Of U.P And Ors.

Allahabad High Court (Single Judge)

APPLICATION U/s 482, 1568 of 2015, Judgment Date: May 29, 2015

Section 3 of PML Act clearly speaks that whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of the crime and projecting it as untainted property shall be guilty of the offences of money laundering. Therefore, it is crystal clear that the person who acquired the proceeds of crime is being helped by anybody directly or indirectly knowingly to convert that money claiming it untainted as of his own may be prosecuted under Section 3 of PML Act. 
It is not necessary to the person who indirectly or directly indulged or knowingly involved in any process of activity connected with the proceeds of crime and claiming the same as untainted property shall come in the clutches of Section 3 of PML Act. The burden to prove that property is untainted is upon the person who claims to be the untainted property.In view of above, I am of the firm view that when a person commits a scheduled offence within the meaning of PML Act and acquired money being proceeds of crime and against whom a report under Section 173 of Cr.P.C. has been filed for such scheduled offence would be sufficient for constituting one of the essential ingredients of Section 3 of PML Act and if anybody other than that who acquired the proceeds of crime helped such person directly or indirectly in processing the proceeds of crime claiming it to be untainted will fall within the ambit of Section 3 of PML Act but for those it is not necessary that they should also be charge-sheeted under Section 173 of Cr.P.C. for committing scheduled offence under PML Act. The scope of inquiry contemplated under PML Act and under the common criminal law is entirely different. Therefore, at this stage, it cannot be said that no offence is made out against the petitioners. Hence, this petition lacks merit and deserves to be dismissed. 
 

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH 

AFR 
COURT NO.21 Reserved on 23.04.2015 
Delivered on 29.05.2015 

CRIMINAL MISC. CASE NO.1568 OF 2015 
(U/s 482 of Code of Criminal Procedure) 

1. Smt. Nandani Ramchandani aged about 34 years 
Wife of Shri Hinish Ramchandani, Partner 
M/s SRS Investment Co., M/s SRS Developers, 
M/s SRS Laminators and M/s Tejal Agencies 
7/92, Tilak Nagar, Police Station Swaroop Nagar, 
Kanpur, Uttar Pradesh 

2. Smt. Preeti Sewani aged about 33 years 
Wife of Sri Ashish Sewani Prop. 
M/s BKS Centre, Kanpur and Partner in M/s SRS Investment 
Co., M/s SRS Laminators & M/s SRS Developers, 
7.92, Tilak Nagar, PS Swaroop Nagar, Kanpur 
Resident of House No.122/454, Shastri Nagar, PS Kakadeo 
Kanpur. 

3. Shri Ashish Sewani aged about 37 years, Prop. M/s SRS 
Developers & M/s SRS Laminators, 7/92, Tilak Nagar, Kanpur 
Resident of 122/454, Shastri Nagar, PS Kakadeo, Kanpur 

4. M/s SRS Developers, Regd. Office-17, Radians Town, 
Swaroop Nagar, Kanpur, Present address: 7/92, Tilak Nagar, 
Police Station Swaroop Nagar, Kanpur through its 
Partners Mr. Hinish Ramchandani, Smt. Nandani 
Ramchandani, Smt. Preeti Sewani and Shri Ashish Sewani. 

5. M/s Rajiv Motors, 7/92, Tilak Nagar, 
Police Station Swaroop Nagar, Kanpur through its 
Partner Mr. Hinish Ramchandani 

6. M/s Rajiv Filling Station Pvt. Ltd., 7/92, Tilak Nagar, 
Police Station Swaroop Nagar, Kanpur through its 
Director, Mr. Hinish Ramchandani 

7. M/s SRS Laminators, 101-A, Dada Nagar, P.S. Govind Nagar, 
Kanpur through its Partners Mr. Hinish Ramchandani, Smt. Nandani 
Ramchandani, Smt. Preeti Sewani and Shri Ashish Sewani 

8. M/s Tejal Agencies, 7/92, Tilak Nagar, 
Police Station Swaroop Nagar, Kanpur through its 
Partner Smt. Nandani Ramchandani 

9. M/s T.M. Buildcon Pvt. Ltd., 18, 7/33, Tilak Nagar, PS Swaroop 
Nagar, Kanpur through its Partners Smt. Nandani Ramchandani 
and Smt. Preeti Sewani ..... Petitioners 
Versus 

1. The State of Uttar Pradesh 
2. Union of India through Directorate of Enforcement, 
Government of India, Princeton Business Park, 
IInd Floor, 16 - Ashok Marg (Near SIDBI), 
Lucknow - 226001 
3. Complainant Shri B. Hazra, Deputy Director, Directorate of 
Enforcement, Government of India, Princeton Business Park, 
IInd Floor, 16 - Ashok Marg (Near SIDBI), 
Lucknow - 226001 
...... Opposite Parties 

Counsel for Petitioner:- Sri P. Chakravarty 
Counsel for Respondent :- AGA, Sri S.B. Pandey, ASG, 
Sri Ankit Srivastava 

Hon'ble Vishnu Chandra Gupta,J. 

JUDGEMENT 

Heard Sri P. Chakravarty, learned counsel for the petitioners, learned A.G.A. and Sri S.B. Pandey, learned Assistant Solicitor General for the Union of India assisted by Sri Ankit Srivastava. 
By means of this petition, under Section 482 of Code of Criminal Procedure (in short Cr.P.C.), petitioners have prayed for quashing the Complaint Case No.2 of 2014 (B. Hazra Vs. Sri Hinish Ramchandani and others) filed against them under Section 4 of the Prevention of Money Laundering Act, 2002 (in short 'PML Act') pending before learned Sessions Judge, Lucknow along with the cognizance order dated 28.03.2014 passed by learned Sessions Judge, Lucknow. 
Brief facts for deciding this petition are that the Directorate of Enforcement Department, Lucknow registered a case having Case No.ECIR/01/PMLA/LKZO/2009 on 18.12.2009 under the provisions of PML Act on the basis of an FIR No.RCBD1/2009/E/0014 lodged by Central Bureau of Investigation (in short 'CBI'), Banking Securities & Fraud Cell, New Delhi on 20.08.2009 under Section 120-B read with Section 420 IPC and Section 13 (1)(d) of Prevention of Corruption Act, 1988 and for the substantive offences thereunder against Sri Hinish Ramchandani and partners of M/s SRS Investment Company, Kanpur and others for duping the bank of whopping Rs.46.42 crore during the period from June 2008 to July, 2009 in connivance with certain officers of State Bank of India, Main Branch, Kanpur by misusing the credit facilities without having sufficient funds in the account of M/s SRS Company and also by resorting to kites flying operation. 
After completion of investigation, the CBI submitted charge-sheet under Section 173 of Cr.P.C. on 25.03.2011 against Hinish Ramchandani, the partner of M/s SRS Investment Company, Kanpur for causing the loss of Rs.46.90 crore to State Bank of India, Main Branch, Kanpur under criminal conspiracy hatched with the officers of State Bank of India, Main Branch, Kanpur named in the charge-sheet. Thereafter, the Enforcement Department proceeded on the basis of report under Section 173 of Cr.P.C. against Hinish Ramchandani under the provisions of PML Act and during inquiry, it was found that petitioner nos. 1 to 9 had committed offence under Section 3 of PML Act punishable under Section 4 of PML Act in respect of the proceeds of crime acquired by Hinish Ramchandani. After inquiry, the aforesaid complaint was filed against the petitioners as well as Hinish Ramchandani and one another. On the basis of the aforesaid complaint, the learned Sessions Judge, Lucknow took cognizance by the impugned order dated 28.03.2014 (Annexure-2 to this petition). 
It has been contended by learned counsel for the petitioners that no police report under Section 173 of Cr.P.C. has been filed against the petitioners and, therefore, the offences under Section 3 of PML Act cannot be made out. 
Section 3 of PML Act reads as under for ready reference: 
"3. Offence of money-laundering - Whosoever directly or indirectly attempts to indulge or knowing assists or knowingly is a part or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering. 
The proceeds of crime has been defined in Section 2 (u) of PML Act, which reads as under: 
"2 (u). "proceeds of crime" 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;" 
The word "property" has been defined in Section 2 (v) of PML Act, which reads as under: 
"2(v) "property" means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located;" 
It is not in dispute that charge-sheet under Section 173 of Cr.P.C. has been led before the court against Hinish Ramchandani wherein he was found involved in generating a lot of money by committing the scheduled offences under PML Act as proceeds of crime for which he has been charge-sheeted by the CBI. 
Section 3 of PML Act clearly speaks that whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of the crime and projecting it as untainted property shall be guilty of the offences of money laundering. Therefore, it is crystal clear that the person who acquired the proceeds of crime is being helped by anybody directly or indirectly knowingly to convert that money claiming it untainted as of his own may be prosecuted under Section 3 of PML Act. 
It is not necessary to the person who indirectly or directly indulged or knowingly involved in any process of activity connected with the proceeds of crime and claiming the same as untainted property shall come in the clutches of Section 3 of PML Act. The burden to prove that property is untainted is upon the person who claims to be the untainted property. The Enforcement Department after inquiry found that the petitioners indulged in such activity with Hinish Ramchandani in respect of the proceeds of crime acquired by Hinish Ramchandani. It is not in dispute that Hinish Ramchandani is involved in a case which was and is a scheduled offence under PML Act. The report under Section 173 of Cr.P.C. has already been filed against Hinish Ramchandani for acquiring a huge quantity of money being proceeds of crime. The martial evidence collected by Enforcement Department before filing the complaint against the petitioners prima facie establish their involvement in respect of the proceeds of crime acquired by Hinish Ramchandani. 
In view of above, I am of the firm view that when a person commits a scheduled offence within the meaning of PML Act and acquired money being proceeds of crime and against whom a report under Section 173 of Cr.P.C. has been filed for such scheduled offence would be sufficient for constituting one of the essential ingredients of Section 3 of PML Act and if anybody other than that who acquired the proceeds of crime helped such person directly or indirectly in processing the proceeds of crime claiming it to be untainted will fall within the ambit of Section 3 of PML Act but for those it is not necessary that they should also be charge-sheeted under Section 173 of Cr.P.C. for committing scheduled offence under PML Act. The scope of inquiry contemplated under PML Act and under the common criminal law is entirely different. Therefore, at this stage, it cannot be said that no offence is made out against the petitioners. Hence, this petition lacks merit and deserves to be dismissed. 
However, if the petitioners surrender before the court below within three weeks from today and move bail application, the same shall be considered and disposed of expeditiously in accordance with law and also keeping in view the directions contained in the judgment delivered by the Apex Court in the case of Lal Kamlendra Pratap Singh Vs. State of U.P.; 2009 (3) ADJ 322 (SC). 
For three weeks or till the date of surrender, whichever is earlier, no coercive steps shall be taken against the petitioners. 
With this observations, this petition is finally disposed of at the admission stage. 
Dated:29.05.2015