Not implementing SC rules will amount to 'Sun without light', says Court; discharges 2 businessmen in PMLA case

If this court fails to apply Supreme Court guidelines and principles it will lead to a situation where Sun is there but light has gone observed a special PMLA judge on Wednesday while allowing the discharge pleas of two businessmen in a money laundering case in the absence of predicate scheduled offenceThe order comes following guidelines laid down by the SC last month specifying that a case under the Prevention of Money Laundering Act PMLA cannot continue if there is no scheduled offence and hence the special court has no jurisdiction to extend judicial custody of persons arrested under the tough legislationThe Enforcement Directorate ED can file a complaint under the PMLA only to investigate the allegations of proceeds of crime However these proceeds have to be linked to a separate criminal offence called scheduled offence committed by the personThe duos discharge pleas were allowed by special PMLA court judge MG Deshpande The judge had earlier granted interim bail to the two accused Babulal Verma and Kamalkishor Gupta senior executives of a real estate firmAlso Read SC to consider today review plea by Karti Chidambaram against PMLA judgmentThe PML Act read with the guidelines laid down by the Supreme Court in Vijay Choudhary referring to the SC case Duty is cast on the court to identify this situation and apply principles and guidelines laid down by the Supreme Court in this recent Authority Vijay Choudhary If this court fails to do so certainly it will lead to a situation Sun is there but the light has gone the special court saidThe judge opined the court is not only a repository but also a custodia legis in the custody of the law of rights of citizens particularly that of undertrial prisonersIf this power is exercised in utter disregard to the mandate of law the right of life and liberty enshrined in the Constitution will be in danger of extinction In this process the court which is the protector of the rights of citizens undertrial prisoners will become predator of the rights he observedThe judge said where it is expedient the court should not hesitate to exercise the power to issue interim release of the accused as done in the present case Such an act will effectively deter abuse of the process of criminal law for objects extraneous to its causeThe ED had booked the two Verma and Gupta top executives of Omkar Relators and Developers under provisions of the PMLAThe case pertains to alleged irregularities in the execution of a scheme under the Slum Rehabilitation Authority SRA for the development of a housing society in Mumbai The company and the two executives are also facing allegations of diverting more than Rs 400 crore loan taken from Yes BankThe money laundering case was based on a First Information Report FIR registered against the duo by the Aurangabad police in central MaharashtraAs per the PMLA provisions a prior FIR scheduled offence is a requisite for the ED to initiate action against a person under the ActThe Aurangabad police recently filed a closure report in the case scheduled offence against Verma and Gupta which was accepted by the court which discharged the duoAs per the SC ruling if a person is discharged or acquitted in the predicate offence then the charges of PMLA also goRelying on this ruling the duo through their lawyers Rahul Agrawal and Vijay Agrawal had moved the discharge applications before special judge DeshpandeThe lawyers had said Verma and Gupta should be discharged from the case as the PMLA case cannot stand on its ownSpecial public prosecutor SPP Hiten Venegaokar appearing for the ED had submitted it was the first such application after the Supreme court order in the countryHence if the special court passes any order in favour of the applicants it will be the first such order and is likely to be followed and used by other courts in the country said the ED counselThe special court has taken cognizance of the offence after filing of chargesheet because there were reasons to believe involvement of accused persons in an offence under PMLA on the basis of available material the SPP saidThe same material is available now then how it can be said that the accused are entitled to discharge or release Venegaokar askedFurther the SPP argued that regular bail applications of both the accused were already rejected provisional attachments were made by adopting procedure and there was tangible as well as credible evidence against the duoTherefore even after C Summary report is accepted the PMLA case continues the SPP saidAs per the provisions of the CrPC Code of Criminal Procedure C Summary report is filed in cases where the FIR is found to be based on mistake of factsThe special court held acceptance of the summary report by the first class magistrate amounted to permanent shutdown of the case relating to the scheduled offence by absolving both the accusedIt thus squarely falls within the categories prescribed by the Supreme Court that when there is no scheduled offence there is no proceeds of crime When there is no proceeds of crime there is no money laundering under the PML Act When there is no money laundering and there is no Scheduled Offence the PMLA case cannot be continued by detaining both accused behind bars as undertrial prisoners for an uncertain period the court notedThe special court observed considering the facts the PMLA case against the accused cannot proceedAdditionally the judge noted when there was no scheduled offence at all the continuation of the PMLA case will be nothing but a futile workSuch futile work at the cost of detention of the accused is absolutely without any legal basis or justification it addedThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion 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