Allowed

Sri. S K Paramesh v. Union of India

Karnataka HC2 Sept 2024WP/4884/2020

Case brief

AI extract

What is this about?

Petitioners sought quashing of ECIR dated 04.01.2017 and a private complaint for offences under Sections 4 and 8(5) of the PML Act after a co-ordinate bench quashed the predicate Prevention of Corruption Act proceedings in Crl.P.No.8969/2018, unchallenged on appeal. Relying on Vijay Madanlal Choudhary, the High Court held no money-laundering offence could stand once the predicate offence was quash

What did the court decide?

Criminal proceedings in Special CC No.462/2019 under Sections 4 and 8(5) PML Act quashed; liberty reserved to respondent to revive if the predicate-offence quashing order is set aside.

Sri. S K Paramesh Vs Union of India — Money Laundering | Karnataka HC (2024)

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1 - NC: 2024:KHC:35612 WP No. 4884 of 2020

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 2^ND DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE MRS JUSTICE M G UMA WRIT PETITION NO. 4884 OF 2020 (GM-RES)

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BETWEEN:

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SRI. S.K. PARAMESH AGED ABOUT 66 YEARS (SENIOR CITIZEN BENEFIT NOT CLAIMED) S/O LATE SHRI. KEMPE GOWDA R/O NO.34-B, SAPTHAGIRI NILAYA, 1^ST "A" MAIN, RMV 2^ND STAGE, BANGALORE - 560 094

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DR. V. ANURADHA AGED ABOUT 59 YEARS W/O SRI. PARAMESH S.K R/O NO.34-B, SAPTHAGIRI NILAYA, 1^ST "A" MAIN, RMV 2^ND STAGE, BANGALORE - 560 094

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Digitally signed by SWAPNA V Location: high court of karnataka

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DR. NIKHIL S.P. AGED ABOUT 32 YEARS S/O SRI. PARAMESH S.K. R/O NO.34-B, SAPTHAGIRI NILAYA, 1^ST "A" MAIN, RMV 2^ND STAGE, BANGALORE - 560 094

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(BY SRI. SAMMITH .S., ADVOCATE)

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…PETITIONERS

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AND:

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UNION OF INDIA, DEPARTMENT OF REVENUE, THROUGH THE DEPUTY DIRECTOR, OFFICE OF THE DIRECTORATE OF ENFORCEMENT, BENGALURU ZONAL OFFICE, 3^RD FLOOR, 'B' BLOCK, BMTC BUILDING, SHANTHINAGAR, K.H. ROAD, BENGALURU - 560 027.

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NC: 2024:KHC:35612 WP No. 4884 of 2020

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STATE OF KARNATAKA, THROUGH THE KARNATAKA LOKAYUKTHA POLICE, BANGALORE URBAN DISTRICT, BANGALORE - 560 001.

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CHAIRPERSON, PMLA ADJUDICATING AUTHORITY, 1^ST JEEVAN TARA BUILDING, SANSAD MARG, JANPATH, CONNAUGHT PLACE, NEW DELHI - 110 001 (DELETED AS PER ORDER DATED 12.03.2020)

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CHAIRPERSON, PMLA APPELLATE AUTHORITY, LOK NAYAK BHAVAN, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, 4^TH FLOOR, 'A' WING, KHAN MARKET, NEW DELHI - 110 003. (DELETED AS PER ORDER DATED 12.03.2020)

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…RESPONDENTS

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(BY SRI. JAYAKARA SHETTY .H., ADVOCATE FOR R1 (VOI) SRI. V.S. ARABATTI, ADVOCATE FOR R2/SPL.P.P. FOR LOKAYUKTHA)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, READ WITH SECTION 482 OF CRIMINAL PROCEDURE CODE, 1973 PRAYING TO QUASH THE ECIR DATED 04.01.2017 AS CONTAINED IN ANNEXURE-E AND THE PRIVATE COMPLAINT FILED BEFORE THE LEARNED PRINCIPAL CITY CIVIL AND SESSIONS JUDGE AND SPECIAL COURT BENGALURU DATED 12.04.2019 AS CONTAINED IN ANNEXURE-P AND ETC.,

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THIS WRIT PETITION, COMING ON FOR HEARING - INTERLOCUTORY APPLN, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MRS JUSTICE M G UMA

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3 - NC: 2024:KHC:35612 WP No. 4884 of 2020

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ORAL ORDER

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The petitioners being accused Nos.1 to 3 are seeking to quash the ECIR dated 04.01.2017 and the private complaint filed before the learned Principal City Civil and Sessions Judge and Special Court, Bengaluru dated 12.04.2019 and the proceedings in Special CC No.462/2019 on the file of the XLVII Additonal City Civil and Sessions Judge and Special Judge, Bengaluru for the offence punishable under Section 4 and 8(5) of Prevention of Money laundering Act, 2002 (for short 'the PML Act, 2002).

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Heard Sri H. Sammith.S, learned counsel for the petitioner, Sri.Jayakara Shetty H, learned counsel for respondent No.1 and Sri.V.S.Arabatti, learned Special PP for respondent No.2-Lokayukta. Perused the materials on records.

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In view of the rival contentions urged by the learned counsel for both the parties, the point that would arise for my consideration is:

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“Whether the Petitioners have made

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out any grounds to allow the petition?"

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NC: 2024:KHC:35612 WP No. 4884 of 2020

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My answer to the above point is in ‘Affirmative’ for the following:

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R E A S O N S

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Learned counsel for the petitioners submits that the Co-ordinate Bench of this Court in Crl.P.No.8969/2018 vide order dated 31.05.2024 quashed the criminal proceedings for the predicate offence i.e., offence under Sections 13(1)(e) R/w 13(2) of the Prevention of Corruption Act for having a disproportionate to his known sources of income.

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He placed reliance on the decision of the Hon'ble Apex Court in ' Vijay Madanlal Choudhary and others Vs. Union of India and others '¹ to contend that when the criminal proceedings against the petitioners for predicate offence is quashed, no offence under the PML Act, 2002 could be alleged against them.

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Learned counsel further submitted that even though the period for preferring the appeal is already lapsed, respondents have not challenged the order of the Coordinate

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1 2022 Live Law (SC) 633

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NC: 2024:KHC:35612 WP No. 4884 of 2020

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Bench of this Court in Crl.P.No.8969/2018. Hence, he prays for allowing the petition in the interest of justice.

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Per contra, learned counsel for respondent No.1 admitted that the criminal proceedings for the predicate offence is already quashed by the co-ordinate Bench of this Court as contended by the learned counsel for the petitioner and also the fact that no appeal is yet preferred challenging the said order, submits that respondent No.1 is taking legal opinion for the purpose of challenging the said order. However, the fact remains that, till date, the said order is not challenged.

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When it is clear from the admitted facts that the criminal proceedings against the petitioners for the predicate offence is already quashed by the co-ordinate Bench of this Court and same is not challenged till date, no offence under Sections 4 and 8 (5) of the PML Act, 2002 could be made out.

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The Hon’ble Apex Court in Vijay Madanlal Choudhary (supra) made it very clear while concluding at para 187 and holding that:

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"if a person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money laundering against him or any one claiming such property being

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6 - NC: 2024:KHC:35612 WP No. 4884 of 2020

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the property linked to stated scheduled offence through him".

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Therefore, I do not find any reason to keep the criminal proceedings pending for the offence under Section 4 and 8(5) of the PML Act, 2002 against the petitioners. Hence, the same is liable to be quashed. Accordingly, I answer the above point in the Affirmative and proceed to pass the following:

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ORDER

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(i) The petition is allowed.

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(ii) Criminal proceedings initiated against petitioners pending in Special CC.462/2019 pending on the file of XLVII Additional City Civil and Sessions Judge and Special Judge, Bengaluru for the offence under Sections 4 and 8(5) of Prevention of Money Laundering Act, 2002 is quashed.

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Liberty is reserved with respondent No.2 to revive the criminal proceedings, if in case the order quashing the predicate offence is set-aside.

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Sd/(M G UMA) JUDGE

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BH List No.: 2 Sl No.: 12

Sri. S K Paramesh v. Union of India

Case brief

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Sri. S K Paramesh v. Union of India

Case brief

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