HYDERABAD: While setting aside the orders passed by the single judge in a private property case, a division bench of the Telangana High Court made it clear that if a person is finally discharged or acquitted of the scheduled offense or the criminal case against that person is quashed by a court of competent jurisdiction, there can be no offense of money laundering against him.
A single-judge bench of the court held that the existence of a scheduled offense and proceeds of crime, defined as property derived or obtained as a result of criminal activity relating to the scheduled offense, are required not only to initiate, but also to continue, prosecution under the Prevention of Money Laundering Act (PMLA). Without these two prerequisites, the special court dealing with the crime under PMLA would be unable to rule on the guilt or innocence of the individual accused of money laundering, the division bench comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji said.
It is worth mentioning that in 2009, P Sudheer Reddy (de facto complainant) filed a complaint at the Patancheru police station under several sections of the IPC against Maturi Shashi Kumar. Following the police investigation, a charge sheet was filed in the Court of Additional First Class Judicial Magistrate, Sangareddy, which was registered upon cognizance. Then, the Enforcement Directorate (ED) registered an Enforcement Case Information Report (ECIR) under PMLA and attached the properties of Shashi Kumar and his wife.
Later, the de facto complainant and the appellant reached an agreement before Lok Adalat and were cleared of the criminal matter. The petitioner then requested that the attached assets be released by the ED officials. However, the ED did not react to the petitioner’s request. The plea was then rejected by a single judge in the High Court. The petitioner then filed this writ appeal and received favourable ruling.
‘Single judge erred’
Returning to the circumstances of the current case, it is clear that there is no scheduled crime against the appellants once the criminal matter is closed and the appellant is acquitted on discharge. The topic of criminal profits would not arise if there were no crime, the division observed.
“We are therefore of the opinion that the single judge erred in refusing to grant relief to the appellants by concluding that the appellants’ acquittal was based on compromise rather than merit and relegating the appellants to the forum of the designated court. When there is no offense since the criminal prosecution concerning the predicate offense has been closed, continuing attachment of appellants’ possessions is not justifiable,” the division bench ruled.
In the circumstances, we grant this writ appeal and vacate the single judge’s ruling. As a result, we instruct the respondents to release the appellants’ possessions from attachment,” the bench added.