CHENNAI: The Madras High Court has raised concern over the increasing trend of those involved in money laundering cases escaping conviction under the Prevention of Money Laundering Act (PMLA) by getting their predicate offence FIR quashed on technical grounds.
Hearing a quash petition, a division bench of Justices SM Subramaniam and V Sivagnanam observed the recent trend among the litigants to escape the clutches of PMLA proceedings by challenging the scheduled offence FIR filed by another agency, saying, “On certain technical grounds if it is quashed, they are seeking exoneration from the proceedings initiated (by the ED) under PMLA.”
The bench remarked that the “legal principles” cannot be applied “bluntly dehors the facts” placed before the court.
“The distinction of quashing of FIR on technical grounds cannot be compared with quashing or discharging on merits. In this regard, a large analysis is required with reference to the legal principles settled by the Supreme Court of India,” the bench stated.
It said the PMLA proceedings cannot be quashed in a blanket manner if the predicate offence is quashed.
The observations and comments were made on a petition filed by Sunil Khetpalia and Manish Parmer, directors of KLP Projects Private Limited engaged in housing constructions, to quash an ECIR filed by the Enforcement Directorate.
They sought to quash an ECIR registered in February 2024 based on an FIR lodged by the Directorate of Vigilance and Anti-Corruption (DVAC) over their company’s alleged payoffs of `50 crore to politicians and government officials for a construction project on Perambur Barracks Road.
They contended that the DVAC had erroneously named them in the FIR only on the basis of a statement of another promoter T Udayakumar of Landmark Housing Projects Private Limited and without taking into account the fact that an interim settlement board of the income tax had considered the said amount as “incidental expenses”.
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