Allowed

Sukesh Gupta v. Directorate of Enforcement

Telangana HC3 Apr 2023CRLP/431/2023

Case brief

AI extract

What is this about?

The High Court quashed Enforcement Directorate proceedings (ECIR) initiated against the petitioner for alleged money laundering arising from a commercial gold transaction. The court held that outstanding liability due to forex fluctuation under an MOU does not constitute 'Proceeds of Crime' in the absence of criminal activity or intent.

What did the court decide?

Proceedings in ECIR/05/HYZ0/2014 registered by the Enforcement Directorate were quashed; Criminal Petition allowed.

Sukesh Gupta Vs Directorate of Enforcement — Pension and Retirement Benefits | Telangana HC (2023)

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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MONDAY, THE THIRD DAY OF APRIL TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE SRI JUSTICE K.SURENDER

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CRIMINAL PETITION No: 43'l OF 2023

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Between:

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Sukesh Gupta, S/o. Prakash Chand Gupta Aged about 47^yea's, Occ. Business, ...Petitioner H.No. 3-5-784, B and C, King Koti, Hyderabad AND

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1 . Directorate of Enforcement, Hyderabad Zonal Office 5-10-174,3rd Floor, Shakar Bhavan Basheerbagh, Hyderabad.

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...Respondent No.1/Complainant

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T.S. Rao, S/o. T. Subbaiah Aged about 48 years, Occ. General Manager;t Regional Office MMTC Limited, Hyderabad, R/o. Flat No.301 Vasavi Exotica, Opp. SBH Training Centre, West Maredpally, Secunderabad.

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...Respondent No.ZDe-facto Complainant

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Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to quash the ECIR/05/HYZ0|20'14 dated 2510212014 registered by the Enforcement Directorate, Hyderabad Zonal Otfice, at Hyderabad

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l.A. NO: 1OF 2023

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Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to dispense with the filing of the certified copy of the ECIR/OSiHYZO12014 daled 2510212014, registered at Enforcement Directorate, Hyderabad Zonal Office dispensed with in the interest of^justice.

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l.A. NO: zOF 2023

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Petition under Section 482 of Cr.P .C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court^may be pleased to stay all the Proceedings in ECIR/05/HYZO|2014 registered^{by the} Enforcement Directorate, Hyderabad, including not to arrest the Petitioner^and from taking any coercive actions against the Petitioner

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This Petition coming on for hearing, upon perusing the Memorandum of Grounds of criminal Petition and upon hearing the arguments of Sri s. NIRANJAN REDDY, sri AVTNASH DESAT, Sri RAV| K|RAN RAo, Learned Senior counsel for sri RAJESH KUMAR HERUR, counsel for the petitioner and of Sri A.R.lv- suNDARESAlv, learned senror counsel/Additionat Solicitor General of lndia, appearing for Sri V. RAIVA KRISHNA REDDy, learned Centrat Government Standing counsel appearing for the Respondent/Enforcement Directorate and None Appeared for Respondent No.2

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The Court made the following: ORDER

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HON'BLE SRI JUSTICE K.SURENDER

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CRIMINAL PETITION No.431 of 2o23

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ORDER:

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The petitioner is questioning the ongoing investigation by Enforcement Directorate, Hyderabad in trCIR/05/HYZO / 2OI4. 2. A criminal complaint was registered by the CBI under Section 13 of the Prevention of Corruption Act against this petitioner and others on 03.01.2013. Thereafter, the company of the petitioner filed arbitration application and also MMTC lrled civil suits. On 25.O2.2014, present ECIR/05/HYZO/2OI4 was registered under Section 3 of Prevention of MoneyJ Laundering AcL, 2OO2 on the basis of FIR thar was registered by CBI.

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The crux of the allegation is that the petitioner being Director of MBS group of companies, received gold from MMTC on buyers Credit loan basis by keeping the forex position open. On account of the rupee fluctuation, lowering the value of the rupee, the petitioner was liable to pay additional 5%o margin money in accordance with the MOU. According to MMTC, the company suffered a loss to the tune of Rs.22O

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Crores. CBI in its charge shcet alleged that this petitioncr entered into crirninal conspiracy with public servants ol MMTC and received gold.

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Having heard the arguments at the stage of admission on 20.O1.2023 my findings werc

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" 10. Duen a.cording to the ituestigation done^b11 the^{CBI and olso} the cose pro.jected by ED, the outslanding ltabllity of^{lhe petilioner's} compatLA stood at Rs. l8L39 Crores due^{to the} [orex^exchortqe Jluctuation^{and the rupee ualue craslting bg 27%and on accountoJ'} such Jluctuation, the alleged lnbilitg arose.^{Hotueuer,the saicl} liabititg unda such circumstances u)as occepted^{by this petittoner} nttd NIMTC corrtpanty in occordcttrce with^{the MOU.}

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The core qltestion that onses for consideration^andnol discus.sed earlier tn tLrc Ciminal Petition^No 5196^{of 2019 is tulth} regard to the outstanding cLaim by MMTC,^{tuhether such} outstanding futls trithin the defnition of^{'proceedsof cine'.In the} said circurtstunces, tuhen the^basis for^{prosed)tion underPMI' Act} is projecting proceeds of cime as untainted^{moneA, the} follouting point aises [or consideration.

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POINT: On occount of an.11 agreement or^{cond.ition in an MOtl} betueen parlies, uith respect^to forex Jluctuation^{(depending on} crashing or gaining of rupee ualue)^{resultsin an outstandingor} liabilitg pagabte bg one of the^parties, whetlrcr^{such an accntal of} 'outstanding'or 'liabilitg' amounts to 'Proceeds^{of Crlme' as} defrned under the Act.

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In the scenar[o of tlrc rupee ualue^{gainingin the process of} forex fluctuation,^{the petitionerutould lnue gained and MWC} u.tould hnue been lioble^to uhateuer ertent.

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In the said circumslances, when the alleged outstandinq bA the Petitioner pima facie is ,not on account of any ciminal actiuitg ?:,,^T-:::":*^{of .accepting} .tiabitity^{utith regardto forex} Jluctuarioi, rhts⁽ our1 deents it appropio tt_-r tt.s.tag alt further pioceedings in the f:;:;,;f;:f9,.,^{os/ Hyzo,20t 4. inn ine poii jo) ionsideration}

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Hcard Sri S.Niranjan Reddy, Sri Avinash Desai, Sri^Ravi Kiran Ilao, learned Senior Counsel lor^{the petitioner and Sri} A. R.M. Sundaresarn, learned Senior Counsel/Additiona-l Solicitor General of India, appearing for Sri V.Rama Krishna Reddy, Iearned Central Government Standing^Counsel

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appearing for the respondent/Enforcement Directorate.

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The undisputed facts are;

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i) Gold uas deLiuered bg MMTC only against the paAments made by the petitioner's companA ctnd not on credit;

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ii) There was an understanding in between MMTC and MBS thot the gold tuould be bought on bugers credit policg and MMTC also collected 596 extra margin moneA to couer fluctuation^{of rupeeand thendeliuered goLd.}

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iii) The outstanding of Rs.181.39 Crores as claimed bg MMTC is reJlected in the agreement that was entered into betueen MMTC and MBS Impex Piuate Limited on 25.1 1.2005 wherebg the petitioner accepted an outstanding of Rs.181.39 Crores on aecount of deualuation of rupee bg 27o/o.

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iu) Around 5800 kgs of gold was supplied to MBS group ouer a period. of nearlg 6 Aears to the tune of nearly Rs.20,000 Crores.

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u) Ttrc CBI completed inuestigation in the gear 2O14 and filed^{charge sheet, hotueuer, the ED is still continuing} inuestigation and recently attached properties in the case.

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Initial objection \'.rs raised by t1-re Enforcemeut

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Directorate regarding thc maintainability of the^{quash petition} Since Criminal Petition No.5196 of 2OI9^{filed by petitionerlor} similar prayer was dismissed^{and there being no changed} circumstances. the second^{Criminal Petitioncannot be} maintained.

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B. Sri A.R.M.sundaresan.^{learned Senior Counsel submitted} that the quash petition^{itsclI is not maintainablcas an ECIR is} not an FlR, lor u,hich reason,^{this Court under Section 482 ol} Cr.P.C cannot^{quashthe trCIRHe relied on the judgments ol} Hon'bie Supreme Court^{in the case of Simrikhia v'Dolley} Mukherjee and Chhabi^{Mukherjee and anothert, whereinit was} held that inherent^{jurisdictionof the High Court cannot be} invoked to override^{the powersof review under Section 362 of} Cr.P.C. Learned^{Senior Counsel argued that the present} petition which is the^{seconcl quash petition on the very same} grounds cannot be^{maintainedfor the reason of prohibition} under Section^{362 of Cr.P.C. He also relied on the judgmentof} Madras High Court in the case of S.Madan Kumar v.

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I ( I 990) 2 Supreme Courl ( ases 4:.]7

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)

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f t I 1

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K.Arjunan2, wherein it is held that a person cannot approach the I{igh Court in insta-llments seeking remedy in the^very same case by withholding part of his case and filing another petition with similar relief. Reliance was a-lso placed on the judgment of Division Bench of Madras High Court in the case of N.Dhanraj Kochar and others v. The Director, Directorate of Enforcement, New Delhi and another3, wherein it was held that the ECIR is not registered under the Code of Criminal Procedure and it is not akin to FIR registered under Section 154 of Cr.P.C. Accordingly, the ECIR registered by rhe Enforcement Directorate cannot be the subject matter of judicial review under Section 482 of Cr.P.C.

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The Honble Supreme Court in the judgment reported in

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the case of Anil Khadkiwala v. State (Government of NCT of Delhi)a held that the second application for quashing the complaint cannot be refused only for the reason of dismissal of earlier application. It was further held that the second

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2006 (l) lvl WN(Cr.) l(DCC).

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' Crl.O.P.No.SR 46-176 of 2021

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' iU^{O tOlt} I Supremc Coun Cascs^29.1

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application filed r.r,ill not la11 within the bar under Section 362 Cr.P.C.

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lO. According to the learned counsel for the petitioner, alter dismissaL of the earlicr Criminal Petition, properties were attached under Section 5 o[ Prevention of Money-Laundering Act2OO2^(For short'the Act').

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1 1. As seen lrom Section 5 of the Act, any attachment can be done on the basis of proof available with the concerned authority of the Enforcemerlt Directorate that any^{person is in} possession of any^proceccls of crime and such^proceedsof crime are likety to be concealcd, transferred^{or dea,1t within} any manner,^rvhich may result in frustrating^{any proceedings} reiating to conhscation ol^{such proceeds of crime by the} Enforcement Directorate.^{'lhe earlier Criminal Petition was} dismissed mainiy on^{the roundthat the investigationis stili} pending. The trCIR was registered in 2014 and Criminal Petition was^hled in^{2019.Since the EnforcementDirectorate} has attached the^{propert ies recentiy, itmeans that the} Enforcement Directorate subsequent to the dismissal of the criminal petition had *basis to believe that the petitioner was in

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I I t I I I I I t{ il

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possession of proceeds of crime. The said attachment^wouldbe sulficient ground to entertain the^{presentapplication.} Moreover in the back ground of this Court^{framing the point} for consideration which rs Whether an outstanding^{aising out} of aru1 agreement or condition in MOU between^{the portieswith} respect to forex Jluctuation amounts to proceeds of cime.

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The said aspect whether the outstanding as projected by the Dn forcement Directorate falls within the definition ol 'Proceeds of Crime' or not was not determined in the earlier order. Accordingly, the petilion is maintainable.

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The other ground raised by the learned Senior Counsel for ED is that an ECIR calnot be quashed since it is not an FIR registered under Section 154 of Cr.P.C.

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The Honble Supreme Court has dealt with the inherent powers of the High Court under Section 482 of Cr.P.C in respect of nature, scope and circumstances under which the power can be exercised. The Honble Supreme Court in the State of Harayana v. Bhajanlal reported in (1992) SUPP 1 page 335 observed atgaragraph 60 as follows:

" . . .. . . . But if a polic'e offi.cer transgresses the circumscribed limits and irnproperlq rtn cl illegallg exercises his inuestigatorg poLuers in breach of amy statutory prouision causing senous prejudice to lhe persontrl libefty arud^qlso propertg of a citizen, then the courl on being aJtproached by the person aggneued for the redress of ang gneuttnce, has to consider the nature and extent of the redress of any gieuance, hos to consider the nature and extent of the breach and pass appropriate orders as maA be called for tuithout leauing the citizens to the mercg of police echelons since huntan dignitg is a dear ualue of our Constitution.''

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The three Judge belich of Hon'ble Supreme Court in the case of State ol Karnataka v. M.Devendrappas held that the powers under Section 482 of Cr.P.C envisages three circumstalces under which the inherent^jurisdiction may'be exercised, namely, (r) to give effect to an order under the^Code, (izJ to prevent abuse of the process of court, and (iiz) to otherwise secure the ends of^justice. It is neither^{possible nor} desirable to 1ay down aly inflexible rule which would^govem the exercise of inherent^{jurisdiction.} No legislative enactment dealing with procedure can provide for all cases that may possibly arise. Courts, therefore, have inherent powers apart

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r 120021 I Suprerne Corrrl Cascs 89

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FT !]^{-r ,i'r} .,'

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lrom erpress provisions of law which are necessary for proper dischargc of functions and duties imposed upon them by la',v

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It rvas further held as follows:

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" Inherent power is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone courts eist. Authority of the court exists for aduancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to preuent abuse. !! would be an abuse of^process of the court to allou anU action which would result in in^justice and preuent promotion of iustice. In exercise of the^potuers court tuould be iustified to quash anu proceedinq if it finds tlqt initiation/ continuance of it amourtts to abuse of the^process of court or quashinq of these oroceedinqs would othenuise serue the ends of iustice." (Underlined by me)

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The said principles form basis for the High Court to invoke the inherent powers under Section 482 of Cr.p.C. If this' Court hnds that in a given case it is just and necessary to prevent abuse of process of the Court or in any criminal proceedings orders can be passed to se.rve the ends of justice. As discussed in earlier paras, this petition is not fited to recall or review the order made in Criminal^petition No.5196 of 2019, but filed under changed circumstalces. App\ring the principle laid down in Anil Khadkiwala,s case (supraf, this Criminal Petition is maintainable and Section 362 of Cr.P.C has no application.

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To prosecute und<:r Scction 3 of the Act, a person has to be actuaily involvcd in anv process or activity connectcd with 'Proceeds of Crime'.^'l)roceeds ol Crime' is defined under Section 2(t)(u) of the said Act, which is extracted hereunder:

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"proceeds of criure" rncans anv property derived or obtained, directly or indirectly, b), any person as a result of clirninal activit), relating to a scheduled oflence or the raluc of any such propert); or whcre such property is taken or held outsirlc the country, then the propcrfy cquivalent in valuc hcld rvithin thc countr\ or abroad."

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It is specifically stated that any property derived or obtained by any person as a re sult ol criminal activity relating to a scheduled olfence u'ould amount to 'Proceeds of Crime'.

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Criminal activity is not defined under the Act. However,

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any act, which is done intentionally, prohibited by law or an act which is made punishable under 1aw can be said to have committed a crime. It involr,es men-srea, which means a guilty mental state and lack of which would negate a crime. Mensrea is an essential element of err.ery offence. trxclude mensrea arrd person cannot be mulcted with criminal liability.

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Penal liability is indicated in the maxim actus non facit reum nisi mens sit rea which means the act does not alone amount to guilt, but it must be accompanied by a guilty mind.

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---f

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However, there can be an exemption made in a statute and unless the statute expressly or by necessary implication rules olrt mensrea, the elemenL of mensrea has to be read into all penal provisions

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L9. Even Indian Penal Code does not dehne 'Crime'. However, under Section 40 of IPC, the word 'offence' denotes a thing punishable under the Code

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The Act of 2OO2 was enacted to prevent money laundering and to provide for confiscation of the property derived there from

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Learned Senior Counsel Sri A.R.M.Sundaresam, appearing for the Enforcement Directorate would submit that the properfir obtained in any manner either directly or indirectly would fall within the definition of 'Proceeds of Crime'

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as delined under Section 2(1)(u) when read with 2(1)(v) of the Act. 'Property' is defined under Section 2(l)(v), which means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located.

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Further,^{according to t1'Le explanation,thc te rm 'prope rtr"} includes^{property of anv kind used in the commission of an} oflence^{underthis Act or anv of the scheduledoffences.The} dehnition^{underSection .2(1)(u) dcals with 'Proceedsof Crimc',} Section^{2(1)(v)deals with the'property'.They have to be read} in tandem^{and it indicates that any outstanding that arises} even in^{a commercial transaction wouldamount to 'Proceeds} of Crime'.^{Since an outstandingarose though on accountof} dollar-rupee^{fluctuation. the petitioneris iiable to pay and} non-payment^{of such accrltalof outstanding is a wrongfulgain} and falls^{within the definition of 'Proceeds of Crime''}

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The^{said argument of the learned Senior Counsel for the} Enforcement^{Directorateis wholly unacceptable. The intentof} introducing^{the enactmentis to prevent moneylaundering.} The said money/property^{should have been the resultof} committing a^{crimeand should fall within the deftnitionof} 'Proceeds of Crime'.

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Section 3 of the^{Act of 2OO2 reads} as^follows:

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offence of money-raundering. \rhosoever directly or indirectl_y attempts to indulge or knowingly assists or knorvingly is a parl) or is actually involved in ,ny proa"r, ",.^*U9"i, connecred with the lproceeds of crinrc including its con."ulm"nt, p".r"lr;";. ;.;;;ri;;;,;;

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use and projcctinq or claimingl it as untaintcd propeflv shall be guilty of ofibnce of money la u nderrng."

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In the present case there is no property which is derived consequent to aJly criminal acLivity. The question of proceeds of crime being concealed or being in possession or the question of acquiring the such property, does not arise.

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As argued by the learned Senior Counsel for the Enforcement Directorate, if every commercial business or loan transaction, where an outstanding would arise in the normal course of business falls within the dehnition of^,proceeds of Crime', it would have disastrous consequences. It would bring, into its fold, every civii dispute. It is not the intention of the legislature to get every civil dispute or commercia-l transaction to be prosecuted under the Act of 2OO2. Specihcaily in the scheme of the enactment there should be such property derived or obtained directly or indirectly as a result of criminal activity relating to the scheduled offence. Unless the basic ingredient of criminal activity is satisfred, the question of invoking Section 3 of the Act does not a_rise.

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The outstanding arose on account ol the MOU that has been entered into in bcts,een the MMTC ar-id MBS jewelers regarding dol1ar-rupee fluctuation. It is an understanding between two entities doing business. It is not in dispute that MMTC has not given any gold which was not paid for by the petitioner/MBS jewelers. There is no property that is generated on account ol the dollar-rupee fluctuation. The petitioner or his firm can do nothing about the devaluation of the rupee vis-a-vis US do1lar. In fact, in business terms^the outstanding that had to be paid by the^petitioner's firm^would be termed as a loss occurred during the normal^courseof business transaction.

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Further, the contention of the learned senior^counselfor ED is that since the charge sheet is already filed for^the predicate offence, the ED is^justified in proceeding with the investigation. The ED can as well^investigate to^{find out} whether arr oflence has been made out or not. The said^power is not in dispute. On the basis^of any suspicion that^a criminal activity has resulted in accrual of crime proceeds in the form of either money or property, the ED is entitlecl to investigate

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However, in the presenl case, ECIR was registered in the^year 2Ol4 on the basis of crime registered by the CBL The CBI^has filed charge sheet in 2Ol4 but the ED is still continuing investigation. The only reason given by Enforcement Directorate is that the petitioner has appeared only two times earlier to the orders of this Court in Criminal Petition No. 9588 of 2022.

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It is not in dispute that till the date of hearing the present petition, the petitioner had appeared more than ten times. The details of outstanding and all the alteged criminal acts of the petitioner are subject matters of civil cases pending, CBI charge sheet and a,lso the arbitration proceedings. There is nothing which is to the exclusive knowledge of this petitioner regarding the liability that arose to be payable to MMTC.

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The very basis for launching investigation under the Act of 2002 is the undertaking given by this petitioner to pay arl amount of Rs.181.39 Crores which admittedly was on account of dollar-rupee fluctuation and in accordaace with the MOU earlier entered into in between MMTC and MBS jewelers. It is 9,,|

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apparent lhat the trD is groping in the dark u.ithout laving a loundzrtion and after near'1y 10 vears of registratior-r ol ECII? stating that they are trving to find out whether any ofience is made out ol not, valuable time and resources of ED are rvasted. No doubt, AS argued by the learned Additional Solicitor General of India, relying on the^judgment in the case

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ol Neeharika Infrastructure Pvt. Ltd., v. State of

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Maharashtra and others6 that investigation into crimcs is^the prerogatirre of the police oflicer and the Court should be cautious and circumspect to interfere invoking^{the jurisdiction} under the inherent powers at the stage^of investigation

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The Hon'ble Supreme Court in Vijay^Madanlal Choudhary and others v. Union of^{India and othersT at}

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paragraphs 283 and 284 held as follows:

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" 283. Duen thouglt the 2002 Act is a^{complete Codein itself,it is onlgin} respect of matters connected uith offence of monetl-Laundeinq,^and for^that, existence of^proceeds of cime within^{the meaninq of Section 2(1)(u)of the Act is} quintessential. Absent existence of^proceeds of crime, as aforesaid,^the authoities under the 2002^Act cannot^{step in or init[ate ang proseantion.}

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IN othe:r words, the Authontu under the 2002 Act, is to prosecute a person for offence of moneg laundeing onlg if it hns reoson to belieue, which is "(202r)LLsct2II '2olt sct('ont_inc a29

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required lo be recorded in u.titing that the person ls in posses.sron of ,,proceeds of ctinte"

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The Hon'ble Supreme Court in the case of R.Nagender Yadav v. The State of Telangana in Criminal Appeal No.229O of 2022 held that a complaint disclosing civil transaction may also have a criminal texture. But the High Court must see whether the dispute which is in substance ol a civil nature is siven a cloak of a criminal offence. In such a situation, if civil remedy is available and is in lact adopted, the High Court should have quashed the criminal proceeding to prevent abuse of process of Court. In the case of Indian Oil Corporation v..r NtrPC India Limited ald otherss the Hon,ble Supreme Court held-

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"t2......

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(u) A given set of facts -i{ rn+:. out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil *ro.rg'"" aIsJ a crirninal offence. A commercial transaction or a contractua | .dlslpute, apart from fu..isfri.rg a cause of action for seeking remedy in civil iaw, may'also involve a criminal ollence. As the nature and scope of a civil p.o"."di.r! are d.ifferent from a criminal .^{proceeding,the rnere fact that} the coriplaint rerates to a commercial tralsacLion or breach of contract, for which a civil remedy is available or has been availed, is not by itself a g.orrrJ to quash the criminal proceedings. The test is whettrer the alegationl in the compra.int disclose a criminal offence or not.

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13.

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1:tltt61 6 SL,prcrne Coun Cases 7J6

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"lt rs to bc secn if a rnarter, which is esscntially of a civil nature, has becn givcr.r : cloak of criminal ollcnce. Criminal procecdirrgs are not a shorr cut of oLhi'r rcmeclics ar':iilairle in law. Bcforc issuing proccss a cnminal col.rrt has 1o cxcrcisc a grr.ai rleal o[caution. For the accused it is a scrious rrattcr l'hrs CoLrrt hirs iairi r e r t:iir-r principlcs on the basis of rvhich thc Iligh Court rs lo cxcrr:ise its lruisdiction under Section 482 ol the Codc. .lurisdiclron under Lhis sectiorl has to be cxercised to prcvent abusc of the proccss of irrl' court or othcr','rse to secure thc r:nds oljusticc."

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Every commercial activit5r where an outstanding arlses

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<sup>rou1d not fall within thc ambit of Section 3 of the Act. It is not merely crimirlai activity relating to commission of a predicate oflence but property has to be derived directly or indirectly as a result ol such criminal activity to be tried and prosecuted under Sectiorl 3 of thc Act. In the present case, no such property is dcrived or obtained either directly or indirectly by the petitioner herein either involving in criminal activity or handling any such property derived as a result of criminal activity. The question of concea-ling or being in^possession or acquiring such propert5r does not arise. The amount accrued as discussed earlier is on account of dollar- rupee fluctuation and it cannot in any manner be held that the petitioner had derived or obtained any property. Though, it was agreed that differential amount of rupec dollar fluctuation would be paid, at most it can be termed as an outstanding which can be

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rcco'crcd in a ci'il suit and by ,o stretch of imagination can it be called as 'Proceeds of Crime,, or the outstanding amount can be called as property' as defined under Section 2(1)(v) of the Act.

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Viewed from any angle, when there is no criminal activity nor any property which is derived as a consequence of criminal activity, I am of the firm opinion that the proceedings in ECIR/05/HYZOl2Ol4 cannot be permitted to continue.

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