Allowed

Central Bureau of Investigation Thru. S.P. A.C.B. Lucknow v. U.O.I. Thru. Asstt. Director Enforcement Directorate Alld.

Allahabad HC30 Nov 2022/451/2021

Case brief

AI extract

What is this about?

In this criminal revision, the Allahabad High Court quashed an order transferring a corruption and cheating case to a PMLA designated court. The Court held that a PMLA Special Court cannot try cases cognized under the Prevention of Corruption Act unless it is a notified Special Court under Section 3 of that Act, as the trial must follow PC Act procedures.

What did the court decide?

The impugned order transferring the case to the PMLA designated court was quashed; the file directed to be sent back to the Special Judge, CBI, Lucknow.

Central Bureau of Investigation Thru. S.P… — Criminal Trial and Appeal | Allahabad HC (2022)

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Court No. - 10

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Case :- CRIMINAL REVISION No. - 451 of 2021 Revisionist :- Central Bureau Of Investigation Thru. S.P. A.C.B. Lucknow Opposite Party :- U.O.I. Thru. Asstt. Director Enforcement Directorate Alld. Counsel for Revisionist :- Shiv P. Shukla

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Counsel for Opposite Party :- A.S.G.

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Hon'ble Dinesh Kumar Singh,J.

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Present Criminal Revision No.465 of 2021 under Sections 397/401 Cr.P.C. has been filed seeking quashing of the order dated 09.03.2021 passed by learned Special Judge, CBI Court No.3, Lucknow in Criminal Case No.11 of 2010: R.C. No.3(E) of 2009, under Sections 120B, 420, 477A, 201 IPC, 13(2)/13(1)(c) and 13(1)(d) of the Prevention of Corruption Act, 1988, Police Station CBI/ACB, Lucknow.

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Facts of the case are that CBI registered a case being FIR No.RC/BD1/2009/E/0003 (CBI vs A.K. Dutta & Others) on 03.02.2009, on the basis of written complaint of Mr.G.Satya Prasad, Chief Regional Manager, Indian Overseas Bank, Regional Office, Navchetana Kendra, 3rd Floor, 10 Ashok Marg, Lucknow alleging that accused-A.K. Dutta, the then Senior Manager, I.O.B., Varansai Cantonment Branch in conspiracy with Vijay Jaiswal, proprietor of M/s Shiva Distributors, Varanasi and unknown others were parties to a criminal conspiracy to cheat the Bank to the tune of Rs.852.61 Lakh in the matter of (a) Issuing Banker's cheques without receipt of consideration and thereafter substituting the same by cheques/debit vouchers; (b) Sanctioning of Term Loan against the norms of the bank; (c) Purchasing of cheques beyond discretionary powers; (d) Making fictitious debit and credit entries in the said account; (e) Allowing excess drawings in the account etc.

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After completing the investigation, charge-sheet was filed in the Court on 11.06.2010 against the named accused under Sections 120B, 420, 477A, 201

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IPC, 13(2)/13(1)(c) and (d) of the PC Act. Cognizance was taken on 15.11.2010 and the trial is pending before Court of Special Judge/ Sessions Judge, Allahabad (Designated Court under the PMLA).

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This revision relates to offence under Sections 120B, 420, 477A, 201 IPC, 13(2)/13(1)(c) and (d) of the Prevention of Corruption Act, Police Station CBI/ACB, District Lucknow in respect of criminal conspiracy and causing loss to the Indian Overseas Bank to the tune of Rs.852.67 Lakhs.

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5. In this case, an application under Sections 44(1)(c) of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as "PMLA") was filed by Assistant Director, Directorate of Enforcement, Sub Zonal Office, Allahabad in the Court of Special Judge, CBI (Central), Lucknow for seeking transfer/committal of these cases to the Court of Special Judge/District Judge, Allahabad, a designated Special Court under P.M.L.A. It is stated in the application that sections mentioned in the charge-sheet in this case are scheduled offences under PMLA, which shall be triable only by Special Court/Sessions Court, District Court designated under PMLA. CBI filed its written objections, however, learned Special Judge, CBI, Lucknow vide impugned order has allowed the application filed by Assistant Director, Enforcement Directorate, Zonal Office Allahabad, and transferred the said cases to the designated Special Court under PMLA at Allahabad.

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In this case, there has been a direction by this learned CBI Court to conclude the trial in time bound manner.

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In this case, the dispute has arisen due to conflict of jurisdiction to try the case. Section 4(1) of the PC Act provides that "Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or in any other law for the time being in force, the offences specified in sub-section (1) of section 3 shall be tried by special judges only."

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Trial of an offence under PC Act can be conducted only by a Special Judge appointed by the Government by notification under the provisions of the PC Act. Hence, if a schedule offence is investigated by the CBI, and the case is pending before Special Judge under the PC Act which is committed to

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Sessions Court, it cannot be transferred under section 44(1)(c) of the PMLA to the designated court under PMLA unless it is a notified court under Section 3 of the PC Act. The said PMLA Court at Allahabad is not a notified court under Section 3 of the PC Act and, therefore, these cases cannot be tried by the Special Court designated under the PMLA.

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Further, Section 468 IPC is not a schedule offence under part A, paragraph 1 of the Schedule of PMLA for which the accused persons are facing trial besides other offence in the Court of Special Judge, CBI. It is important to note that in all the aforesaid cases, the offence under Section 468 IPC is also invoked.

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Section 44(1)(c) of the PMLA provides trial is to be transferred only in those cases where cognizance has been taken on the complaint of the offence of money laundering by some Court other than the Special Court under the PMLA. In the instant case, the Court of Special Judge, CBI has taken cognizance of the offence under the PC Act, 1988 and IPC and not under the PMLA, and it is only a Special Court notified under Section 3 of the PC Act which would be competent to conduct the trial in the case.

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Section 43 and 44 of the PMLA, which are relevant of the purposes of these cases, would read as under:-

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"43. (1) The Central Government, in consultation with the Chief Justice of the High Court, shall, for trial of offence punishable under section 4, by notification, designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.

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Explanation. —In this sub-section, "High Court" means the High Court of the State in which a Sessions Court designated as Special Court was functioning immediately before such designation.

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(2) While trying an offence under this Act, a Special Court shall also try an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial.

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(1) Notwithstanding anything contained in the Code of Criminal

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Procedure, 1973 (2 of 1974),—

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(a) an offence punishable under section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed :

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Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall continue to try such scheduled offence; or]

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(b) a Special Court may, [***] upon a complaint made by an authority authorized in this behalf under this Act take [cognizance of offence under section 3, without the accused being committed to it for trial]:

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[Provided that after conclusion of investigation, if no offence of money-laundering is made out requiring filing of such complaint, the said authority shall submit a closure report before the Special Court; or]

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(c) if the court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money-laundering under sub-clause ( b ), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed; or

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(d) a Special Court while trying the scheduled offence or the offence of money-laundering shall hold trial in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), as it applies to a trial before a Court of Session.]

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[Explanation.— For the removal of doubts, it is clarified that,— (i) the jurisdiction of the Special Court while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial; (ii) the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in

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respect of the offence, for which complaint has already been filed, whether named in the original complaint or not.]

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(2) Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause ( b ) of sub-section (1) of that section as if the reference to "Magistrate" in that section includes also a reference to a "Special Court" designated under section 43."

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From perusal of Section 43 of the PMLA, it is evident that trial under Section 43 of the PMLA is confined to Section 4 only with the punishment defined in proviso for procurement of proceeds of crime with the object defined in the Preamble of PMLA whereas under Section 3 and 4 of the PC Act, the constituted court of Special Judges try substantially the offences itself with the object defined in the Preamble of the PC Act.

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Under the PMLA a complaint is filed by the competent authority. In respect of offence under the provisions of PC Act, final report/charge-sheet is filed under Section 173 Cr.P.C. by the CBI after investigating the offence under PC Act and cognizance is taken without any committal proceedings in the light of Section 5 of the Prevention of Corruption Act, 1988.

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Special Court under PC Act can hold a trial only by procedure of trial as a warrant case by the Magistrate. However, under Section 46(1) of the PMLA, designated court is a court of Sessions and, as such, it has to follow the procedure as applicable to the trial before Sessions Court.

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Section 71 of the PMLA reads as under:-

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"71. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force."

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Section 71 of the PMLA does not create absolute overriding effect of the PMLA over all other statutes. It applies only in a limited sense that the Act will override to the extent of the inconsistency of other statutes over the PMLA.

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Considering the aforesaid provisions, impugned order passed by the CBI

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court is unsustainable and is hereby quashed. Designated Court under PMLA at Allahabad is directed to sent file of the case to the learned Special Judge/Court, CBI forthwith.

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Learned Special Judge/Court, CBI should proceed to conclude the trial of the case as directed by his Court.

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The petition is allowed.

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Order Date :- 30.11.2022 prateek

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Digitally signed by PRATEEK ARORA Date: 2022.12.05 18:50:17 IST Reason: Location: High Court of Judicature at Allahabad, Lucknow Bench

Central Bureau of Investigation Thru. S.P. A.C.B. Lucknow v. U.O.I. Thru. Asstt. Director Enforcement Directorate Alld.

Case brief

What is this about?

What did the court decide?

Central Bureau of Investigation Thru. S.P. A.C.B. Lucknow v. U.O.I. Thru. Asstt. Director Enforcement Directorate Alld.

Case brief

What is this about?

What did the court decide?

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