Dismissed

V.Veeraswamy, Hyderabad., v. the Govt. of India, Rep Dir of Enforcement, Spl.Pp.

Telangana HC16 Jun 2023CRLRC/2892/2016

Case brief

AI extract

What is this about?

The High Court dismissed a criminal revision seeking discharge from money laundering charges, holding that prima facie incriminating material existed based on specific allegations of role as an authorized signatory and lack of evidence regarding the timing of employment versus alleged transactions.

What did the court decide?

Criminal Revision Case dismissed confirming the lower court order denying the discharge petition.

V.Veeraswamy, Hyderabad., Vs the Govt. of India, Rep Dir… — Money Laundering | Telangana HC (2023)

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[³³⁰⁴ ]

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IN THE HIGH COURT FOR THE STATE OF TELANGANA

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AT HYDERABAD

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FRIDAY, THE SIXTEENTH DAY OF JUNE

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TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO

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CRIMINAL REVISIO N CASE NO: 2892 OF 2016

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Criminal Revision Case under Section 397 & 401 of Cr.P.C against the Order dated 05/10/2016 made in Crl.MP No.848/2016 in SC No.105/2015 on the file of the Court of the Metropolitan Sessions Judge, Hyderabad.

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Between:

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V.Veeraswamy, S/o Suryanarayana Murthy, Aged 52^years, Occ:^{Former Employee} of M/s. Sarita Steels & lndustries Limited, Rio^{Flat No.407, Shurthi Nagar, Padma} Colony, Nallakunta, Hyderabad 44

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...PETITIONER/PETITIONER/ ACCUSED NO.7

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AND

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The Government of lndia, rep. by the Assistant Director, Directorate of^Enforcement, Govemment of lndia, Ministry of Finance, Department of Revenue, 3''^{Floor, Shakar} Bhavan, Fatehmaidan Road, Hyderabad^- 4, Represented by the Special^Public Prosecutor, High Court of Judicature at Hyderabad for the State^{of Telanganaand} the state of Andhra Pradesh'

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...RESpoNDENT/ RESpoNDENT/ coM'LATNANT

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CRLRCMP. NO: 4493 OF 2016

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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 Revision Case, the High Court may be pleased to stay all further proceedings in S.C. No.105/2015 on the file of the Court of the Metropolitan Sessions Judge, Hyderabad.

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For the Petitioner : SRI KARRI MURALI KRISHNA, Advocate

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For the Respondent : SRI ANIL PRASAD TIWARI^(SC FOR ED)

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The Court made the following: ORDER

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RRN,] (-r IiC No 28'a2 of 20L6

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THE HON'BI,I; SiRI JUSTICE NAMAVARAPU ITAJEJ}TW,,IR RAO CRI IVIINAL REVISION CASE No. 2892 oF 2O:t6

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ORDER:

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f. i; Criminal Revision Case rs tlled under Sections l]!)' ;ind 40l of the Code of Cr mirriil ['roce<lure by thc revisiorr pctitioner/ accuscd No.7, aggrrt:vt::l by thc order dated 0; l(.)^)..)l6 in Crl.M.l) No.848 of 120 lti in S.C. No.105 of 2015, r.r thr: file of the Metropolitan Sc'';sions Judge, Hyderztlr:rrl . wherein the pclition filed or^,l is;ch;rrge under section^'22'i ol Code of Criminal Proceclure, r,,:rs dismissed b1' the leelr.n 'c Sessions Judge

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2 '[' r< brief fercts leading to the lilirrll ,rf t.he present criminal r',.rv s ion casr: bcforc lhis Courl arr: t lurt before the Iearned Scs ii,)ns Juclge thc accused Nos.l] [. tnd 6 filed Cr1. I\4 P^t1,t.875 of 2016 and the plc scrrt revls1011 petitioncr',/tr :r used No.7 liled Crl.M.P N,t 848 of 2016 under se<:liln 227 ol Cr.P.C praying to dis:l rarge them in S.C. N<..lll.' of 20 15 Uporr r:onsideratron cl tht: facts and other- rtsltr'r: s. the lc,antc,<l Scssions Ju dgr: clrsr-rLisscd both the Cr[.N4.1'}r r ioe a c()mlrron orde r as stirtcd sr rlrr:r

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RNN,J Crl. RC No.2892 of 2015

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It would be appropriate to reler to the observation of

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the learned Sessions Judge in dismissing the petition filed

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for discharge and the same is reproduced hereunder:

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"5. Accused No.5 who was discharged in this case stands totally on a different footing. Even as per the complaint, the role of these accused is different from the role of A5. Hence, these petitioners/accused cannot take advantage of the discharge of A5. The statements of the above accused would clearly show that they were transacting on behalf of the company during the period in which they worked in the company.

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The statement of A7 a-Iso shows that he is an authorised signatory and he used to attend liasoning with the banks including SBI for matters relating to Finance as instructed bv his senior officers.

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Hence, the role of the above accused is prima facie evident. The contention that the Act calnot be applied retrospectively as it came into force only in the year 20O5 is not tenable, as according to the case of the prosecution, till 2010, the money has been flowing in the accounts of the company, as a result of the acts and transactions conducted by the above accused. This court also opines that unless full trial is conducted in this case, the role of each of the accused cannot be adjudged. Hence, discharge of the petitioners at this stage, would not be proper."

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Aggrieved by the dismissal of the petition hled for discharge u,ith the above reasoning, the revision

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RRN,J Crl. R(: No.2892 of²⁰¹⁶

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petitionerl z c :used No.7 challenged its^{k g} {i1y^{vide the} preseIr r'( '^jroll case.

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Ilearcl .eerrncd Counsel appearing fl; the^revision petitioncrT'r c:used No.7 and the learn,:d^{Sila -rd ng Counsel} appearingl or the respondent/compli narLt,^{F'erused the} recorcl and the^judgrnents filed in supltort^,rl the version^of both partie

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i.r:aln rcl Counsel for the revision^petjtic,ner contended that [he lea :rred Sessions^judge ought :o havt: s,]en that the rev1s1or1 y:e il ioner had u,orked in accused i'Io.1 Company for a Lrrie:f p,--riod i.c lrom March 2001^t-c, Irlovr:mber 2000 and thLat t rt: Prevention of Money Laun,1e..in11 Acl, 2OO2 came^jnt: r:;:istence and operation 1o ng ia-ltr;r the revision petitior-rel r:<:ased to be an employce o accused No.1 Compatnl . F[e further submitted that the le,,Lrned Sessions Judge gr,rs,;ly erred in rejecting the discharge petition filed by the revi ,;irr1 petitioner u,ithout keetinp; ir. v.ew that the Accr-rserd It c 5 is aiready dischargeci otr l0 03.2016 in Crl.M.P I'lr; 149 ol 2016. He also brought tt the notice of this Court 1. hat thc learned Sessions Juc.g : f ailed to see

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R R N,,J

Crl. RC No.2892^{of 2015}

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that originally the Accused No.7 was discharged by this Court vide orders dt.31.^12.20 i2 in Crl.R.C.No. 1975^of 2012. He also submitted that the learned Sessions Judge ought to have seen that the Enforcement Directorate during the investigation, had recorded the statement of this petitioner u/s. 50(2) and (3) of the Prevention of Money Laundering Act and said agreement itself is explanatoryⁱⁿ nature and does not inculpate the petitioner herein.^He also contended that there are no overt acts attributed^{to the} revision petitioner and as such, his involvement in^the crime is absent. Accordingly prayed to allow the revision case.

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7 Per contra, Learned Standing Counsel appearing for the respondent had vehemently contended that^the learned Sessions Judge was^justihed 1n dismissing the petition filed for discharge by the revision petitioner/accused No.7 by considering the allegations and the prima facie incriminating material available^{on record} against him. He lurther contended that the^offences charged against the revision petitioner under^{the provisions}

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RRN,] rl. F C No.2892 of 2016

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of Preverrl ion of \4oney Launderinp; ,,c1, 2CO2 in the sessiorls c rse are independcnt to thal c,f -l:Lc olfences and allegations a ttribute:d to the revision petil ic ner under the provisrons r' the Indian penal code. Ile fu rt her contended that the re rision petitioner admitted in hi,; ste,tement that he rvas an lrthorized signatory to the bills o' e,-<change and the letters r-,f credit, u,hich alone is enorrl:;h to stand to establish i: I)rima fa,cie case against t-re re v sir,n petitioner uncler the rror.isions of the Prevention of rr c ne.r laur-rdering ,act,2OO2.. lt has also been contended that t.te stand taken by the' rev .s Lon petitioner that he wcrke,C in the accused company i. L the year 2000 and as per the, c:rmplaint of the enforc,3mel Lt clirectorate the alleged m.c,rrey laundering pertain s tr , 11-r" vears 2005 to 201 I eirrrl he cannot be chargc d ar d tried lor the same, canr.ot b: en tertained as out of mor ey laundering is a continu ing lt.t rvhich arises out of the ,:ommission of a scheduleci olfenr;e. Accordingly prayecl to c i,.miss the revision case

RR N,J

Crl. RC No.2892^{of 2016}

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It would first be appropriate to refer to Sections^{3 and}

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4 of the Prevention of Money^{LaunderingAct,2OO2.}

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Section 3. Offence of monev -laundering Whosoever directly or indirectly attempts^{to indulge} or knowingly assists or knowingly is^{a party or is} actually involved in any^{process or activity connected} with the fproceeds of crime^{including its} concealment, possession,^{acquisition or use ald} projecting or claiming] it as untainted^{property shall} be guilty of offence of money-laundering.

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[Explanation.-For^{the removal of doubts,it is} hereby clarilied that. -

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(i) a person sha-ll be guilty of offence of^money- laundering if such^person is^{found to have} directly or indirectly attempted^{to indulge or} knowingiy assisted or knowingly^{is a party or} is actuaily involved in one or^{more of the} following processes or activities^{connectedwith} proceeds of crime, namely:-

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(a) concealment; or

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(b) possession; or

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(d) use; or

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(e) projecting as untainted^{property; or}

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(f) claiming as untainted property,

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in any manner whatsoever;

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(ii) the process or activity connected^with proceeds of crime is a continuing^activityand continues till such time^{a person is directly or} indirectly enjoying^{the proceeds of crimeby its} concealment or^{possession or acquisition or} use or projecting it^{as untaintedpropertyor}

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RRN,J a R(l No.2892 of 2016

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claim ng it as untainted prol)ert.y in any ntartr 3r- rvhatsoeve r. ]

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Sectio_n 4. Punishment for monev-laurxlet:ing.-

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W'hc,e, e- commits tl-re offence of noney laundering shall l:c l,unishable with rigorous .mpr s,>nrnent for a t.errrr',rlLich shall not be less thal thre,.: y,:ars but whrch uray extend to seven years irnd r;hall also be liable to line:

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Provid r:r[ that r,vhere the proceeds cf crine involved in t.none^{,r'laundering} relates to any offt:rrr e r;pecified under 1:iuagraph 2 of Part A of the !l:l.Lr:dule, the pro.,zis Lo rs of this section shall have ef^-e,:t as if for the wrr .[s. "which. may extend to s;ever yee Lrs", the words " ,v.rich may extend to ten year i' h.td been substitu^r-e d.

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9 I s seen [r'om the above, th: <letilLiticn ttself

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suggesls t}:iir. whosoever directiy or indirect..y zLttempts to indulgr:^, rr knowingly assists or knou,ingl1, is a party or 1s actr- rrlly invcrlved in any prccess lr activity connectecL ,v:th the proceeds of a crimc in :iuding its concealmer L. possession, acquisitiorr o.- use and project.Lnp; c r claiming it as untainted prope r-ty, shall be guilty c,f c1I rnce of money-laundering.

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I is obser',,ed that the revisirtn pr:t tioner was at first, dis :l.rarged by the XIV ACMM Hlrle.rabad vide

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RRN,J crl. RC No.2892 0f²⁰¹⁶

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order dt.28.03.2077 in Crl.M.P No.1107 of 2017^{in C.C} No.BO2 of 2014, which is. It is after such discharge^of the revision petitioner in the C.C^{wherein the revision} petltloner was charged u,ith the offences^{under the} provisions of the Indian Penai Code, that the^revision petitioner preferred the discharge^{petition inthe} Sessions Case by contending that^{when the very} allegations of procuring money in^{a wrongfully b5'} cheating is not established, no^{question arises as to} mpney laundering. However, it^{is to be noted that the} respondent/complainant i.e the^{CBI in the C.C} preferred a Criminal Revision^{Petitionbeforethe} Metropolitan Sessions Judge,^{Hyderabadvide orders} dt.22.O3.2O22 in Cr1.R.P No.233^{of 2OL7 and the same} was allowed and the order of^{dischargeof the revision} petitioner in the C.C was reversed.^{Aggrieved thereby} the revision petitioner^{preferred a criminalrevisioncase} before this court and the^{same is pending. That would} mean that no finality is attained u,ith regard to^the

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RRN,] ':^{. R(- No.2892 of 2016}

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involr,clncrr^()r non-involvement of tr.: revision

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petitroncr r: he olfence as alleged in the tl.t-

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le;rrned Oounscl lor the rr:visrt,rr pctitioner

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reliecl rrporr tlre follos,ing jrrclgments

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1 I,ushil Kumar Katiyar Vs. Union of lrrdia and Ors. reported in I {,'tNU/UP/0777 12016, decid,:<l r-y the Ili;;h Court ol Allahabad.

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l*rjiv Chanana Vs. Dy. Dirr:ctor',

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I )ti:rectorate of Enforcement - irr t/.^, (C) ( 293 of 2014, decided by th e FIi ql L Court < I Delhi at New Delhi.

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1ti IIr's. Mahanivesh Oils & Foocls Pvt. I'td. Vs. Directorate of Enforcernent - ir \I'.P (C'r 1925 ot 2014, d,,'cidecl Ir1 the I:i;ih Court of Dclhi at Nev,, [)elhi.

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Lirrfirr unately, the above decisior: s d,c r ot come to the rescur: rf the revision petitione r as a c,art lul reading of tht: c1t-'c: 5is11s, particularly, the 1., dr:cis;irtrr, u-ould reveal thet t Lrer accused thcrein was rlischa:.ged of the schedulcrl tllences and as Lhe same atta r ccl fir-ra1ity, there u,ns r Lo question of thc involvem(tnl OI quilt ol the accusecl t[r:rein lor thc olfences punishabtr u.rcier the Prer.entiorr of Money Laundering Act, '2() l.l ol- n.ltich

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R RN,J Crl. RC No.2892^{of 2016}

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complaint was initiated^{after the said dischargeand in} the other cases, the^{point involved therein was with} regard to the release of^{the attached properties r'r'hich} were procured out of the^{allegedlaundered moneyand} as such the same^{does not apply to the facts in the} present case.

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t2. Learned Standing Counsel^{appearing for the} respondent relied upon^{the following judgments:}

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I Hari Narayan Rao^{Vs. UOI & Others} -ⁱⁿ W.P.(Cr) 325 of 2010,^{decided bY the} Jharkhald High^Court.

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11 Anoop Bartaria &^{Etc. Vs. Dy. Director} Enforcement Directorate^{& Anr.} -ⁱⁿ SLP(Cr1.) No. 2397-2398^{of 2079, decided} by the Hon'ble Supreme^{Court of India.}

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It was heid in the^{hrst decision lhat "uhatis} be ta eted b Section 3 and other rouisions o the Preuention of^Mone uLa^{undeirua Act is the} "launderinq^o f^{mone" acquiredb} u committinq the scheduled cimes and^therefo re, it utould be the date of "laundenn^{q" uhichwould be releuant. The} nses o "laundenn " as^{used inSection 3co} inuoluement in anu^{process or actiuitubu uthich the} illicit moneu is bein^{qDrote,cted as untainted.Thus} releuant date is not the^dateo f^{acqu isition of illicit}

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RRN,J ( - R: No.2 892 of 2016

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1'not,c;' iu.t the dole on which such nutrrey is beinq pro(e: s =cj or roiectinq it as untannted

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It was held ir-r the second Cecis i<. n at para\o.17 1l'iat "..,... In the instctn; cctse, ll7e direcl irt.uclL. :rn.ent ol' lhe petitioners tn th,: uctiuilies ct)tl'tt )t2d Luitl,t tlrc procee{ls ol crinu has been alleqp \ alonq with the materia' rrcur'.ieC tn the co-lJlp! Ll nl tuhtrch would require- ct 'rial to be cortdt ':lecl bu tlrc competent court."

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'tft.) .'.1 ,p1ying t1-re above obsr rvatiotrs to the pre sent c:, rsr: at hand, the argumen t of r ltc learned Counsel ft r the rr:r,,ision petitioner that t tc revision petitioner ',,'rLs working in the accused CorrLprany only in the ycar. 2r)00 and the alleged rrorrov landering pertains to tte years 2005 to 2011 anri that be ng so l-ie desera,es t< l;e discharged, is a baselesis gror. nc and the same iis rt: c:ted.

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t4 n addition to the abo,.,e f irdings and obser\atror rs, the clinching point woultl bc -Lrat. r,r,hether the learrrc., Sessions Judge was justitied dismissing

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RRN,] Crl. RC No.2892 of²⁰¹⁶

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the discharge petition by finding^primafacie incriminating material against^{the revision petitioner'}

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It is seen that there are specific^allegations with regard to the involvement^{of the revision petitioner} in the alleged offence of^{money laundering in view of the} existence of the Bills of^{exchange, letters of credits} tuning to Rs.8.81 crores,^{some being signed by the} revision petitioner, some by^{himscll along with one} Kamaraju, and his very own^{statement that he was} working as the Assistant General^{Manager (Finance)} and that he was the authorized^{signatoryof the accused} company. It is a-lso noticed from^{the statement of the} revision petitioner given to the^{ED that he and his} family members acquired certain^{propertiesduring the} years 2001 to 201O and the^{genuinenessof the same} cannot be commented upon^{unless a full-fledged trial is} conducted. Further, it is^{specificallyaverred in the} complaint hled by the respondent^{at para-No.29 of the} complaint that the all^{Accused, as we are concerned} with accused No.7, that^{he had the knowledgeand}

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RRN,] ( I I RC i']o.2892 of 2016

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knou,ing,lr, ssisted and committed the r;r:l-eduled offenc<:s arrr the offence under preve rtion :rf Mor-rey Laundering Act. Thus, the ground r:rrsc,.l l). the rer,ision 6rr: itioner l.hat there are no o .er, acts attribut.r.d Lo hinr, is rijected

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16 In -he ligl-rt of the above Iin1r-rgs and observations ,his court is of the conr;ider.,r cpinion that thc:re is rrima facie incriminating mttr.r.irrl :tvailable on record :rs rl nst the revision petitionr.r an rl as; such the reljcf pr rr.red lor cannot be gran..ed. T hus. the Crimirral Rr:i' sion Cast: is liable to be disrnissccl

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17 . I ri rl Le result, this Criminal Revisirtr Clase is dismissr:rl b.i' ctnfirming thc order dated 05. (..2()16 in Cr1.M.P No.S..E of 2016 in S.C No.1O5 ,>f 2Cll on rhe file of thr: I\4r:lropolitan Sessions Judge, Hvclt:rrbrrd. It is needlcss to sa). that the learned Sessicns .Jr-rrlgt. shall proceed r,, il L the matter uninfluencr:cj tr) the observatirrrrs nacle by this Court. KeepirLg in r,ir:r; that the m:r11cr- 1 ,:r'tzrins to tl-rc .year 2015, t_lL<: [,c:u.ngd

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RRN,J Crl. RC No.2892 of 2016

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Sessions Judge is directed to dispose of the case within

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a period of (O8) months from the date of receipt ol^a copy of this order.

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As a sequel, pending miscelianeous applications,^if aly pending, sha,ll stand^closed

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//TRUE COPY//

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Sd/-I.NAGA LAKSHMI DEPUTY REGISTRAR Lfr

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SECTION OFFICER

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The Metropolitan Sessions Judge, Hyderabad. 2. One CC to Sri Karri Murali Krishna, Advocate TOPUCI 3. Orre CC to Sri Anil Prasad Tiwari^(SC for^ED) [OPUC]

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