Delhi High Court
Jacqueline Fernandez vs Directorate Of Enforcement on 3 July, 2025
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on : 24th April 2025
Pronounced on : 03rd July 2025
+ CRL.M.C. 9462/2023 CRL.M.A. 35362/2023 CRL.M.A. 35363/2023
JACQUELINE FERNANDEZ .....Petitioner
Through: Mr. Siddharth Aggarwal, Sr.
Advocate along with Mr. Aman
Nandrajog, Mr. Prashant Patil, Mr.
Gaurav Arora, Ms. Arshiya Ghosh,
Advocates.
versus
DIRECTORATE OF ENFORCEMENT .....Respondent
Through: Mr. Zoheb Hossain, Special Counsel
for ED with Mr. Vivek Gurnani, Panel
Counsel for ED along with Mr.
Kartik Sabharwal, Mr. Pranjal
Tripathi, Mr. Kanishk Maurya and
Mr. Sai M Sud, Mr. S. Vats,
Advocates.
CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT
INDEX
I. Factual Background ……………………………………..3
II. Case put up by Petitioner ………………………………..9
III. Case put up by ED………………………………………12
IV. Submissions on behalf of Petitioner……………………..18
Signature Not Verified
Digitally Signed
By:MANISH KUMAR CRL.M.C. 9462/2023 1/95
Signing Date:04.07.2025
10:35:46
V. Submissions on behalf of ED …………………………….25
VI. Submissions in Rejoinder made on behalf of Petitioner…36
VII. Analysis ………………………………………………….41
VII.A. Vijay Madanlal Choudhary & Ors……………………45
VII.B. Pavana Dibbur v. ED ………………………………..50
VII.C. Re: Petitioner’s ‘knowledge’…………………………55
VII.D. Re: Petitioner’s Omission…………………………..59
VII.E. Re: Petitioner as ‘witness’ …………………………..61
VII.F. Re: MCOCA and exoneration ……………………….65
VII.G. Re: Pick and choose by ED ………………………….72
VII.H. Re: Quashing ………………………………………..73
VII.I. Re: Petitioner’s Conduct…….. ………………………82
VIII. Conclusion …………………………………………………..95
ANISH DAYAL, J.
1. This petition has been filed by the petitioner seeking quashing of
ECIR/DLZO-II/54/2021 dated 8th August 2021 (‘impugned ECIR’) and 2nd
supplementary complaint dated 17th August 2022 (‘impugned complaint’)
filed under Sections 3 & 4 of The Prevention of Money Laundering Act 2002,
(‘PMLA’) by the Directorate of Enforcement / Respondent (‘ED’) and all
subsequent proceedings emanating therefrom, pending before the ASJ /
Signature Not Verified
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By:MANISH KUMAR CRL.M.C. 9462/2023 2/95
Signing Date:04.07.2025
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Special Court PMLA, Patiala House Courts, Delhi in Complaint Case
123/2021.
I. FACTUAL BACKGROUND
2. In August 2021, a complaint was lodged by Mrs. Aditi Shivinder Singh
(‘complainant / Ms. Aditi Singh’) before DCP Special Cell, alleging
extortion of crores of money from her since June 2020. She alleged that she
had been receiving calls from persons impersonating as senior officials of the
Government of India and had been duped into parting with funds of about
Rs.200 crores.
3. On 7th August 2021, complainant informed that a further demand of
Rs.1 crore had been made. A trap was accordingly laid to trap the receiver
of the extortion money.
4. Pardeep Ramdanee was apprehended during the trap who disclosed
that he used to collect money on the directions of Deepak Ramnani. Deepak
Ramnani disclosed that he used to collect money for Sukesh Chandrashekhar
(‘Sukesh’), who was lodged in Rohini Jail No.10. Raids were conducted and
Sukesh was arrested with two mobile phones, a charger and some documents.
5. During interrogation, he apparently disclosed that he impersonated a
Senior Officer and extorted monies from the complainant on the pretext of
providing relief to her husband in the nature of release from Tihar Jail.
6. Sukesh was arrested on 8th August 2021 and remanded to custody. On
the basis of the complaint of extortion, F.I.R. No.208/2021 was lodged by the
Special Cell for offences punishable under Sections
170/384/386/388/419/420/506/120 B of the Indian Penal Code,1860 (‘IPC‘)
and Section 66 (D) of the Information Technology Act 2000 (‘IT Act‘)
[predicate offence]. Since Sections 384/386/388/419/420 and 120 B of IPC
forms part of scheduled offences in the Schedule, Part A of PMLA, ED
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registered the impugned ECIR on the 8th August 2021 to investigate the
offences under PMLA.
7. As regards the predicate offence, after conclusion of investigation,
Economic Offence Wing (‘EOW’) filed a charge sheet under Sections
170/186/353/384/386/388/406/409/419/420/468/471/353/506/120B of IPC,
Section 66 D of IT Act, and Section 3 and 4 of the Maharashtra Control of
Organised Crime Act, 1999 (‘MCOCA’) against Sukesh, Leena Paulose,
Dharam Singh Meena (Asst SI, Rohini Jail), Subhash Batra (DSP, Rohini
Jail), B. Mohanraj, Arun Muthu, Joel Daniel Jose, D. Kothari, Deepak
Ramnani, Pradeep Ramdanee, Avtar Singh Kochar, Kamal Poddar, Jatinder
Narula and Avinash Kumar.
8. In the 3rd supplementary charge sheet, petitioner was arrayed as a
prosecution witness (PW-4) on the basis that she had been defrauded by
Sukesh.
9. The alleged extorted amount of Rs. 200 crores arising out from the
predicate offence constitutes the ‘proceeds of crime’, as defined under
Section 2 (1) (u) of PMLA. EOW’s investigation revealed that extorted
money was put to multiple uses by Sukesh, one of which was gifting branded
goods to models /actresses to secure friendship with them. For such
purchases, Sukesh channelized the proceeds of crime into various bank
accounts of his associates, accommodation entry providers in Chennai,
Kerala, Mumbai, etc. and arranged payments through banking channels.
10. As part of this modus operandi, Sukesh contacted the petitioner, who
was a well-known and reputed actor in the film industry, through accused
Pinky Irani. Sukesh was apparently introduced to petitioner as a business
tycoon based in South India and owner of Sun TV.
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11. It also transpired that aside from the petitioner, a number of other
celebrities also received gifts from Sukesh, contact being established through
Pinky Irani alias Angel, who was an associate of Sukesh. It is alleged that
petitioner received gifts worth at least Rs.5.71 crores from Sukesh, knowing
fully well of his criminal antecedents. The monies were received through
Pinky Irani as well as Leepakshi Ellawadi.
12. A broad list of gift items received by the petitioner from Sukesh, as per
ED was tabulated as under:
Sr. No. Gift Item
(i) USD 172913 transferred into foreign bank account of petitioner's sister
Geraldine J. Walker
(ii) AUD 26740 transferred into foreign bank account of petitioner's brother
Warren J. Fernandez, for purchase of a SUV.
(iii) Rs.1.89 crores was sent to Bahrain for purchase of two vehicles for
petitioner's parents.
(iv) Horse called Espuela purchased by Sukesh costing Rs.57 lakhs for
petitioner and Rs.7 lakhs was paid for allotment of stable and membership
of the horse.
(v) 4 cats to petitioner
(vi) 15 pairs of earrings
(vii) 5 Birkin bags
(viii) High-end bags from Chanel, Gucci, YSL
(ix) Clothes and shoes from super luxury brands
(x) Cartier bangles, bracelets and chains.
(xi) Hermes bangles
(xii) Tiffany Bracelet and Rings
(xiii) Watches from Rolex, Roger Dubuis, Franck Muller
(xiv) A Mini Cooper (which was returned by the petitioner)
(xv) Cash of Rs. 15 lakhs given to Ms, Advaita Kala, who was a screen writer
and had been approached by the petitioner for writing a script for a web
series being produced by the petitioner.
(xvi) Private jet trips and hotels stays for the petitioner on various occasions.
13. As per the impugned ECIR, following aspects are noted with regard to
the dissipation of proceeds of crime (paragraph 18.5 of the impugned ECIR):
13.1 Accused Deepak Ramnani, in his statement recorded on 17th
October 2021 under Section 50 of PMLA, inter alia admitted that he
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had arranged transfer of funds into the bank account of Geraldine J.
Walker, sister of petitioner, through Avtar Singh Kocher, on directions
of petitioner. (paragraph 18.5.1.4 ECIR)
13.2 Accused Pradeep Ramdanee in his statement recorded on 6th
October 2021, admitted that he had gone to the house of Ms. Advaita
Kala in Gurgaon/Gurugram and delivered a parcel containing Rs.15
lakhs on directions of his brother, Deepak Ramnani. (paragraph
18.5.1.5 ECIR.
13.3 In a statement under Section 50 of PMLA, recorded of Sukesh,
it was inter alia stated that petitioner was a close friend and he had given
lots of expensive gifts like bags, jewellery, high-end clothing, earrings,
bags from ultra-luxury brands, bangles and bracelets, watches, all of
which cost about Rs.7 crores. He further stated he had helped her sister
Geraldine with a car, a new BMW X5, and gave an amount of USD
1,80,000, sent through Deepak Ramnani. He also stated that he had
brought her parents a Maserati car and her mother a Porsche car in
Bahrain, and also gave USD 50,000 to her brother in Australia.
13.4 Statement of Shaan Muttathil, make-up artist of petitioner, was
recorded on 28th October 2021. He stated that in January 2021, he was
contacted by a lady named Angel who introduced him to Sukesh (as
Shekhar), through video call and requested to introduce Sukesh to the
petitioner. He stated that he got a call which was stated to be from the
Home Minister and was asked to get in touch with Sukesh, as he was an
important person with the Government (which was a spoof call).
13.5 Statement of Pinky Irani was recorded on 30th November 2021
and 1st December 2022. She stated that she introduced Shaan Muttathil
to Sukesh; numbers were exchanged and subsequently, petitioner got in
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touch with Sukesh. As per instructions of Sukesh, she used to visit
showrooms of luxury bags, clothes, shoes and used to select items and
after receipt of payment confirmation, she used to pick up those items
and deliver them to petitioner, either herself or through her manager
Prakash. She further stated that two Gucci shoes, one Louis Vuitton
(LV) bag and one sling bag had also been given to Shaan Muttathil.
13.6 Statements of petitioner had been recorded on 30th August 2021
and 20th October 2021. A complaint was filed before the ASJ on 4 th
December 2021 wherein petitioner was not an accused. Statements
were then recorded on 8th December 2021. 1st supplementary complaint
was filed on 5th February 2022 by the ED in which petitioner was not an
accused. Statements of petitioner were then recorded on 20 th May 2022
and 27th June 2022. 2nd supplementary complaint was filed on 17th
August 2022 where petitioner was arrayed as accused no.10.
Subsequently, a 3rd supplementary complaint was filed on 6th September
2022 and a 4th supplementary complaint on 6thApril 2023.
14. Petitioner was admitted to bail by the ASJ on 15th November 2022 and
bail conditions were subsequently modified by order dated 10th August 2023.
15. In the 3rd supplementary complaint dated 06th September 2022, ED
recorded that petitioner had joined the investigation and was asked to go
through the documents which form part of ED’s charge sheet and were
retrieved from her mobile phone by ED or produced by her.
16. Petitioner inter alia confirmed the following:
a) Communication with Ms. Advaita Kala, in respect of receipt of Rs.15
lakhs.
b) List of gifts/ articles given to her by Sukesh through Pinky Irani and
Leepakshi Ellawadi.
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c) E-mails disclosing dates on which she visited Kerala, Chennai and
Bangalore.
d) Papers relating to Porsche Car, Maserati Car, BMW X5, bank account
statements of commonwealth bank account of her brother, Wells Fargo
Bank Account of the sister, Standard Chartered Bank account of Ms.
Tan Kim Yok, petitioner’s own bank accounts, the bank accounts of her
father in Ahli, United Bank.
e) Petitioner further produced the articles which were detailed as part of
the supplementary complaint. Though the list is long (at page no.34-
35 of the 3rd supplementary charge-sheet of FIR No.208/2021), but for
purposes of reference, the categories and numbers of articles are being
tabulated as under:
Sr. No. ARTICLES
(i) 47 number of clothes of brands Burberry, Louis Vuitton, Kenzo
Tiger, McQueen, Elisabetta Franchi, Varana World, Zimmermann,
Dolce, Alexis, Gucci, Rhode, Dior, Givenchy, Chloé, Fuschia.
(ii) 62 number of shoes of brands Louboutin, Balenciaga, Dior, Louis
Vuitton, Gucci, Alaïa, Burberry, Alexander McQueen, Valentino,
YSL (Saint Laurent), Fendi, Hermes, Bottega Veneta.
(iii) 5 number of watches of brands Piaget, Roger Dubuis, Franck
Muller, Rolex, Chopard Imperiale.
(iv) 32 number of bags of brands Dior, YSL Rive Gauche, Louboutin,
Chanel, Dior, Fendi, Hermes, Bottega, Birkin, Louis Vuitton, YSL
(Saint Laurent), Balenciaga, Dior, Gucci.
(v) 20 number of bags of brands Chanel, Serpenti Viper, Tiffany,
Cartier, Louis Vuitton.
(vi) 4 sunglasses of brands Dior, Ever Dior, Fendi.
(vii) 1 chair of brand Osim.
(viii) 1 LG Dishwasher.
(ix) 2 Mini Saddles and Whips of brand Hermes.
(x) 13 number of belts of brands Louis Vuitton and Gucci.
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(xi) 1 Dinner Set of brand Versace.
(xii) 9 number of paintings.
II. CASE PUT UP BY PETITIONER
17. Mr. Sidharth Aggarwal, Senior Counsel for petitioner, highlighted
following aspects in context of the factual background stated above:
17.1 Investigation revealed that Sukesh was running a crime
syndicate from Rohini Jail. EOW first detected activities of the
syndicate in July 2021 after Ms. Aditi Singh’s predicate offence
complaint on 6th August 2021. Before 6th August 2021, there was no
public information about the criminal syndicate and Ms. Aditi Singh.
17.2 Petitioner was not part of the extortion racket being run by
Sukesh with the aid of Deepak and Pradeep Ramdanee.
17.3 Petitioner played no role in extortion of money from Ms. Aditi
Singh and that she has been arrayed as a prosecution witness; she claims
to have been defrauded by Sukesh.
17.4 The proceeds of crime were used by Sukesh to bribe jail officials
for getting special facilities and for undertaking air travels, giving high-
end branded gifts to Bollywood celebrities, and therefore, the proceeds
had been put to multiple uses.
17.5 Petitioner was reluctant to accept gifts from Sukesh but Pinky
Irani played a substantial role in misleading her. As per the 3 rd
supplementary complaint, petitioner had no previous interaction with
accused Sukesh and her interactions only started during the period of
commission of the crime by the accused in the case.
17.6 Petitioner had voluntarily given her statement under Section 164
of the Code of Criminal Procedure, 1973 (‘Cr.P.C.’) before the
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Metropolitan Magistrate (MM), as she was an important prosecution
witness.
17.7 Allegations against petitioner were purely speculative in nature
formed on the basis that she knew that gifts/ articles/ benefits received
were proceeds of crime.
17.8 ED’s case was that in addition to the petitioner, other celebrities
also received gifts from Sukesh viz. Ms. Nora Fatehi, Ms. Nikita
Tamboli, Ms. Chahat Khanna, Ms. Sophia Singh.
17.9 All these celebrities had also been questioned by the EOW and
had stated that Pinky Irani played a role in establishing contact between
Sukesh and them and that Sukesh was using the alias, Shekhar.
17.10 Ms. Nikita Tamboli, Ms. Chahat Khanna and Ms. Sophia Singh
also met Sukesh inside Tihar Jail.
17.11 In the statement of petitioner recorded under Section 164 of
C.r.P.C, she stated that when she refused to speak to Sukesh, after
becoming aware about his criminal antecedents, Pinky Irani convinced
her that Sukesh was a billionaire who has been implicated due to his
political background.
17.12 In these statements, petitioner stated that Pinky Irani continued
to persuade her that she was making a wrong decision and that she
should not believe what the media said, since Pinky Irani personally
worked for Sukesh for 12 years.
17.13 Pinky Irani remained a member of the crime syndicate as per
ED, as she concealed the real identity of members of the syndicate and
never told Bollywood celebrities about Sukesh’s real identity. Pinky
Irani had to create an aura, status and influence of Sukesh before various
Bollywood celebrities so that they come under the influence of Sukesh
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and he could easily dispose of the proceeds of crime. Petitioner’s
counsel, therefore, contended that petitioner was ignorant of his criminal
status. ED acted in a biased manner by presenting all other celebrities as
witnesses while arraying petitioner as an accused.
17.14 Shaan Muttathil shared an article in February 2021 regarding
Sukesh with the petitioner. The article had no whisper about the
predicate offence of extortion of Rs. 200 crores and only mentioned
other things about Sukesh.
17.15 On 15th February 2021 Pinky Irani went to meet the petitioner
and re-assured her that Sukesh was a genuine guy and everything
mentioned in the article was something of the past and due to political
rivalry. She delivered a Tiffany’s diamond proposal ring which had ‘J’
and ‘S’ initials along with flowers and chocolates. Pinky Irani was
promised Rs. 2 crores for introducing petitioner to Sukesh and Rs. 10
crores for sorting out the differences between him and petitioner.
17.16 Petitioner then remained in constant touch with Sukesh till he
was arrested in August 2021 and news broke out regarding the extortion
of at least Rs.200 crores having been committed by Sukesh. The articles
were gifted to her between February to August 2021 while petitioner
met Sukesh in June 2021. In this period, there was no whisper in any
public space regarding the extortion of Rs. 200 crores from Ms. Aditi
Singh by Sukesh.
17.17 Petitioner’s counsel relied upon ED’s complaint dated 04 th
December 2021, where it is stated that Sukesh had impersonated the Law
Secretary and the Home Secretary in order to extort money and was a
“master conman” with technology at his disposal. In these
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circumstances, the benefit of doubt was to be given to petitioner of being
ignorant about the predicate offence and the proceeds of crime.
17.18 ED was placing a huge burden on petitioner to be vigilant
enough to escape from the web of con, led by Sukesh, to fraudulently
establish a relationship with her.
17.19 ED was only relying on the knowledge of criminal antecedents
of Sukesh which were diluted by the efforts of Pinky Irani in the mind
of petitioner. The criminal antecedents were based on the sharing of the
article dated 10th February 2020 which stated that Sukesh was lodged in
Tihar Jail. ED stated that she had not made any efforts to find out what
his status was. ED completely exonerated celebrities who actually
travelled to jail and instead placed the highest burden on petitioner.
III. CASE PUT UP BY ED
18. Mr. Zoheb Hossain, counsel for ED, pointed out the following aspects
based on the factual background stated above:
18.1 Petitioner had admitted the receipt of articles as tabulated and
listed above, as also, the amounts transferred to her parents, brother and
sister, as also, the purchase of cars. She had further admitted the
communication with Ms. Advaita Kala and the receipt by Ms. Kala of
Rs. 15 lakhs on her behalf.
18.2 Petitioner was aware about the criminal antecedents of Sukesh,
the fact that Sukesh was lodged in Tihar Jail and the fact that Ms. Leena
Maria Paul was the ‘partner’ of Sukesh, in February 2021 itself, when
Shaan Muttathil shared the news article, as also, through Pinky Irani.
18.3 The article mentioned the Look-Out Circular (‘LOC’) issued by
the Central Bureau of Investigation (‘CBI’) against Leena Maria PaulSignature Not Verified
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in a bank fraud case and also stated that Leena Maria Paul as being the
‘partner’ of Sukesh.
18.4 The article further mentions involvement of Sukesh in three
criminal cases, namely, arrest in TTV Dinakaran case, arrest of Leena
Maria Paul and Sukesh in the 2013 Canara Bank fraud case (Rs. 19
crores) and arrest of Leena Maria Paul and Sukesh in the year 2015 by
EOW, Mumbai Police for defrauding people in the name of investments
in their bogus firms.
18.5 Petitioner admitted to have found various articles on Google
search on Sukesh, which reflected his criminal antecedents and despite
that, received gifts and money in cash and through banking channels,
between February 2021 to July 2021, till he was arrested by the Delhi
Police.
18.6 Petitioner continued to receive financial benefits from Sukesh
(which are nothing but proceeds of crime) despite being aware of his
criminal activities.
18.7 Petitioner never revealed the truth of financial transactions and
concealed facts till confronted with evidence. Petitioner wiped out entire
data from her mobile phone after the arrest of Sukesh and therefore
tampered with evidence. She also asked her colleagues to destroy
evidences. Thus, petitioner was knowingly involved in possession and
use of the proceeds of crime.
18.8 Petitioner was summoned on five occasions to tender her
statement under Section 50 of PMLA. The statements reveal that
petitioner deliberately varied the narration of facts to mislead the
investigation. She initially denied knowing the actual name of Sukesh,
which, later on, upon being confronted with evidence, was admitted by
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her. As regards cash transactions with Ms. Advaita Kala, of money
delivered by, she first denied having entered into any such transaction,
but upon being confronted with evidence, was admitted by her.
18.9 Petitioner continued to receive, enjoy and possess, the proceeds
of crime, for herself and her family members. She initially did not admit
the factum of having received huge monies and valuable gifts
transferred to her parents, brother and sister, in India and abroad.
18.10 Petitioner kept on improving her statements about receipt of
gifts and luxury items from Sukesh. During recording of statements, she
initially denied the purchase of cars by Sukesh for her parents. Sukesh
then admitted the said fact, and when petitioner was confronted, she
admitted receipt of cars by her parents. It shows her connivance with
Sukesh to conceal proceeds of crime.
18.11 Petitioner continuously vacillated and changed her stand with
regard to the quantum of proceeds of crime. Till the recording of the last
statement, she continued to make new disclosures, like property
purchased by Sukesh in Sri Lanka.
18.12 In her statement recorded on 30th August 2021, she disclosed
certain number of gifts and later on increased the list of gifts. Till 8 th
December 2021, petitioner never disclosed anything about her
relationship with Pinky Irani.
18.13 The process of collection of evidence is going on and the
possibility that further proceeds of crime are used, concealed, possessed
and enjoyed by petitioner, could be unearthed.
18.14 Even Sukesh deleted the data from his mobile phone, the
investigation qua use and possession of proceeds of crime, depends onSignature Not Verified
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evidence such as disclosures made by Sukesh in his statements, Pinky
Irani’s phone data and statements of Shaan Muttathil, etc.
18.15 Petitioner has deliberately tried to create obstacles in the process
of investigation and hide the truth.
18.16 Petitioner stated in a statement on 8th December 2021, that in
February 2021 she came to know the real identity of accused Sukesh at
the instance of Shaan Muttathil. In a statement dated 20th May 2022, she
stated she saw various articles about him on Google, in that, he was
involved in a bank fraud case.
18.17 A search on Google would show various material in the form of
articles and videos reflecting criminal antecedents of Sukesh and Leena
Maria Paul, including their images. These articles exist even today and
have been there since 2013.
18.18 In the months of March, May and June 2021, transfers were
made to the bank accounts of petitioner’s sister and brother, even
though, she was only introduced to Sukesh as “Shekhar Ratna Vela” in
February 2021 i.e. within 14 days of petitioner having spoken to Sukesh
and them video calling each other on WhatsApp. The above conduct of
petitioner attributes knowledge and mens rea.
18.19 Section 3 of PMLA entails that the process or activity connected
with proceeds of crime is a ‘continuing activity’ and continues till such
time when a person is directly or indirectly enjoying the proceeds of
crime (by concealment/ possession/ acquisition/ use/ projecting or
claiming it as untainted property, in any manner).
18.20 To embellish ED’s argument as regards the change of stance in
statements made by petitioner (after being confronted with evidence), aSignature Not Verified
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table was presented by ED as part of written submissions, which has
been reproduced hereunder, for reference:
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19. Accordingly, it was stated by ED’s counsel that it was not a fit case for
quashing ECIR at a pre-charge stage in light of the fact that: (i) the scheduled
offence exists; (ii) proceeds of crime have been generated; (iii) proceeds of
crime have travelled to petitioner; (iv) petitioner has been involved in the
process of activity connected with the proceeds of crime including use,
possession, concealment.
IV. SUBMISSIONS ON BEHALF OF PETITIONER
20. Mr. Siddharth Aggarwal, Senior Counsel for petitioner inter alia made
the following submissions:
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20.1 The predicate offence emanates from FIR No. 208/2021
registered by the Special Cell, Delhi Police, against unknown person on
a complaint by Ms. Aditi Singh alleging extortion of Rs.200 Crores. The
impugned ECIR was registered on that basis on 08 th August 2021.
Petitioner’s statements were recorded on five occasions and she was not
arrested during the said period. On 02nd November 2021, a charge sheet
was filed in the predicate offence against 14 accused including Sukesh.
Sections 3(5) and 4 of MCOCA were added since investigation revealed
Sukesh along with others operated an organised crime syndicate.
20.2 Petitioner was arrayed as an accused only in the 2nd
supplementary prosecution complaint filed on 17th August 2022, on the
basis that she had received and enjoyed proceeds of crime. In the 3rd
supplementary charge sheet filed in the predicate offence on 14 th
January 2023, petitioner was presented as a prosecution witness and her
statement was recorded on 02nd January 2023. The matter was at the
stage of framing of charges. It was submitted that petitioner is,
therefore, effectively a witness in the duping case and at the same time
accused in PMLA.
20.3 Definition of ‘proceeds of crime’ under Section 2(i)(u) of
PMLA was similar to ‘property derived or obtained from commission
of organised crime’ under Sections 3(5) and 4 of MCOCA. A
comparison was presented of the MCOCA provisions with Section 3 of
PMLA asserting that MCOCA provisions were subsumed within
Section 3 of PMLA. Same was presented in the form of a table, which
is extracted as under:
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20.4 Therefore, if provisions of MCOCA which form part of the
predicate offence are subsumed under Section 3 of PMLA, it is illogical
and untenable that petitioner has been arrayed as an accused in PMLA
offence, whereas presented as a witness for the prosecution in the
predicate offence. Petitioner’s counsel relied on T.T. Antony v. State of
Kerala and Others (2001) 6 SCC 181, and Amitbhai Anilchandra Shah
v. Central Bureau of Investigation and Another (2013) 6 SCC 348, and
contended that ED cannot arrive at a different conclusion on the same
set of facts and, therefore, prosecution under Section 3 of PMLA ought
to be quashed.
20.5 The contradictory stands place petitioner in an irreconcilable
conflict and violated her constitutional right against self-incrimination
as she will have to record evidence on oath in the predicate offence and
on the same facts face prosecution under PMLA. Reliance was placed
on Explanation to Section 44(1)(d) of PMLA that trial under PMLA andSignature Not Verified
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that of the scheduled offence could not be considered as a joint trial.
The Trial Court, therefore, did not have power to look into the material
of the predicate offence and determine that petitioner’s prosecution
under PMLA would be antithetical.
20.6 There was no quarrel of attachment of the articles which were
given by Sukesh to petitioner, but there was an issue regarding the
implication under PMLA.
20.7 There was no evidence with ED to show that petitioner knew of
the original event of duping of Ms. Aditi Singh of Rs.200 Crores by
Sukesh and his associates. Petitioner herself was a victim of the same
modus operandi used in the predicate offence and similarly placed as
other victims who had not been prosecuted. The ‘pick and choose’
manner of prosecution was not permissible.
20.8 ED placed an unreasonable burden on petitioner, expecting
knowledge that Sukesh’s gift were proceeds of crime. No evidence
suggests public knowledge Sukesh’s jail status for Rs.200 Crores’
extortion.
20.9 ED acknowledges that Sukesh was a ‘master conman’ who was
using technology to brainwash people. Sukesh was using spoof calls to
contact petitioner’s staff, inducing them to introduce him to her.
Statements of Shaan Muttathil and Pinky Irani were relied on to show
that they corroborate the fact of duping through spoofed calls. However,
ED’s approach to others who were similarly placed shows striking
disparity. Actresses Nikita Tamboli, Chahat Khanna and Sofia Singh
admittedly met Sukesh inside Tihar Jail and yet received gift from him.
Reliance was placed on Ramesh Manglani v. Directorate of
Enforcement 2023 SCC OnLine Del 3234, Sanjay Jain v. Enforcement
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Directorate 2024 SCC OnLine Del 1656 and Sanjay Kansal v. Assistant
Director, Directorate of Enforcement 2024:DHC:3765, on disparate
treatment of similarly placed persons.
20.10 Test laid down in Pavana Dibbur v. The Directorate of
Enforcement 2023 INSC 1029, as to when a person can be made an
accused in PMLA even if they are not an accused in the predicate
offence, has not been met. Section 3 of PMLA includes any post facto
accessory who knowingly aids in the use, possession, or concealment of
the proceeds of crime. Petitioner cannot be termed as a post facto
accessory to the offence of money laundering as the role attributed to
her is not of aiding, utilization or concealing proceeds of crime.
20.11 Possession of gifts can constitute an offence only if petitioner
had any knowledge of the predicate offence. Such knowledge is
attributed to petitioner on the basis of a news article of February 2021.
Said article is dated 2020, which is prior to the scheduled offence and
does not pertain to the scheduled offence at all. It was ED’s own case
that petitioner confronted accused Pinky Irani about the said article and
was convinced by her and accused Sukesh that he was from a respectable
political family who had been targeted.
20.12 Prosecution case is, therefore, based on conjectures and
surmises i.e. the possibility that petitioner would have also found out
about the criminal activities of Sukesh if she ‘would have’ searched him
on Google. This does not translate to any positive evidence of
petitioner’s knowledge of the scheduled offence and, therefore, to make
out any offence under Section 3 of PMLA or establish foundational facts
to apply the presumption under Section 24 of PMLA. Reliance was
placed on Vijay Agarwal Through Parokar v. ED 2023 SCC OnLine
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Del 3176; C.P Khandelwal v. ED 2023 SCC OnLine Del 1094; Arvind
Kejriwal v. ED 2024 SCC OnLine SC 1703.
20.13 Provisions under Sections 3 (5) and 4 of MCOCA are similar to
Section 2 (1) (u) of PMLA, as noted above. While MCOCA covers
property derived or obtained from ‘commission of organized crime’, the
PMLA provision read under Section 3 of PMLA covers offences related
to proceeds of crime.
20.14 Petitioner being exonerated and not charged under MCOCA
provisions, is an admission by the prosecution that she does not derive
or obtain property from commission of organized crime. Quite in
contrast, petitioner has been accused in the PMLA matter. The question
is whether one can be prosecuted under PMLA while being a victim
under provisions of MCOCA.
20.15 Knowledge / mens rea of an accused under PMLA has to be of
‘proceeds of crime’ and not that the person from whom the property has
been received is a criminal.
20.16 Petitioner’s counsel focused on the issue of ‘relatability’ or
‘connection’ with the predicate offence. He argued that implicating the
petitioner is akin to holding somebody responsible for possession of
goods / possession downstream of articles being bought by proceeds of
crime. If the receiver of the articles, as is petitioner, was not in the
knowledge that they were proceeds of crime, not having any connection
with the original extortion complaint, the person cannot be implicated.
The fact that accused in the predicate offence, i.e. Sukesh, is ‘tainted’, it
may not matter; but what matters is that there is knowledge that what is
received from him, are proceeds of crime. An illustration was provided
in that accused may also advance certain gifts or articles which are not
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necessarily sourced from the proceeds of crime, but from legitimate
means.
20.17 Reliance was placed on the decision in paragraphs 15 and 17 of
Pavana Dibbur v. E.D (supra) on the issue of relatability and
knowledge. These aspects were relied upon by the High Court of
Karnataka in Razorpay Software Pvt. Ltd. V. UOI (2024) SCC OnLine
Kar 23, in paragraph 27. In this case, Razorpay was an intermediary
and had a statutory duty of due diligence and did not verify the
genuineness of person applying for accounts in which monies were
received, which were allegedly proceeds of crime. In paragraph 36 the
Court held that there was no evidence to suggest that the payment
gateway had knowledge that the fund transferred was derived from
criminal activity; at best, the accused would be negligent in setting up
merchant IDs, but the intent was essential to constitute an offence under
Section 3 of PMLA.
20.18 Prosecution for two offences, in which ingredients are the same,
cannot be done on the basis of Section 71 of IPC and Section 26 of the
General Clauses Act, 1897 (‘GCA’).
20.19 Conduct of petitioner, post reading the article relating to Sukesh
being implicated in the crime, at best is an omission, which in criminal
law is not actionable, unless it’s an ‘illegal omission’. Prosecution must
show that petitioner was legally bound to establish a connection based
on the newspaper article. Reference is made to Sections 32 and 43 of
IPC.
20.20 Considering there was a ring given to the petitioner with an
inscription of ‘J’ and ‘S’ on it, even as per prosecution, the context of
the gifting was that of a ‘suitor’. The articles were not given out of any
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transaction or consideration and neither were received as that of an
admirer to a fan.
20.21 The question arises whether there is a legal duty to verify articles
and the context. Aspects of illegal omission are statutorily provided, for
example Section 21 of the Protection of Children from Sexual Offences
(POCSO) and Section 39 of Cr.P.C. This aspect gets conflated with use
of phrase ‘knowingly, actually, willfully’ in the PMLA provisions.
V. SUBMISSIONS ON BEHALF OF ED
21. Mr. Zoheb Hossain, Counsel for ED, at the very threshold, submitted
that petitioner seeks quashing of the FIR at the stage when charges itself have
not been framed. ED has questioned the maintainability of the petition itself
having been filed without challenge to the cognizance by order dated 1 st
September 2022, by the Special Court, of the ECIR along with the 2nd
supplementary complaint. Further submissions were presented as under:
21.1. Reliance is placed on various decisions of the Supreme Court
where the courts have been cautioned for invoking inherent jurisdiction
to quash criminal proceedings at the stage of framing of charge.
Attention was drawn to the decision in Rathish Babu Unnikrishnan v.
State Govt. of NCT of Delhi &Anr. (2022) SCC online SC 513, in
particular to paragraphs 14-17. Essentially, the Supreme Court has
noted that quashing of criminal proceeding should be exercised very
sparingly and with circumspection, and the Courts will not be justified
in embarking upon inquiry as to the reliability or genuineness or
otherwise of the allegations made in the FIR. The Supreme Court
therefore observes that at the pre-trial stage, when factual controversy is
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in the realm of ‘possibility’, particularly because of a legal presumption,
the Court should be slow to grant relief of quashing.
21.2 ED’s Counsel refers to the legal presumption under Section 24
of PMLA which reverses the burden of proof. Section 24 of PMLA is
adverted to which has two limbs. In case of a person charged with
offence, the Court ‘shall’ presume that such proceeds of crime are
involved in money laundering, unless the contrary is proved; and in case
of any other person, the Court has a discretion to impose such
presumption. ED’s counsel pointed out that challenge to the
constitutionality of this provision was dismissed by the Supreme Court
in the decision of Vijay Madanlal Chaudhary v. Union Of India & Ors.
(2022) SCC OnLine SC 929 (Neutral Citation 2022:INSC:757,
paragraphs and extracts of which are referred to herein by the Court.),
in particular, paragraph 99.
21.3 Adverting to the decision in Vijay Madanlal Chaudhary
(supra), ED’s counsel focused on paragraph 95 to 99 of the said
decision. The Supreme Court in interpreting the purport of Section 24
of PMLA, notes that prosecution should succeed in establishing three
basic foundational facts:
a. that the criminal activity relating to scheduled offence has
been committed;
b. the property in question is derived or obtained, directly or
indirectly, as a result of the criminal activity;
c. the person concerned is, directly or indirectly, involved in
any process or activity connected with the said property.
21.4 On establishing these foundational facts, a legal presumption
arises under Section 24 of PMLA, which can be rebutted by the accused,
showing that no causal connection exists. ED’s counsel underscored
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that such a rebuttal is a factual rebuttal, which can only be done by
producing evidence during the trial.
21.5 Essentially the flow, as per the Supreme Court, is the
establishment of the foundational facts, which triggers the legal
presumption, which then, can be rebutted factually by leading evidence.
ED’s counsel therefore submitted that accusation on the petitioner
includes not only of possession but concealment as well, which comes
within the purview of ‘process or activity’. Not only did petitioner
confess to possession, but also admitted having received considerable
and substantial gifts by her and her family only through successive
disclosures. He therefore contends that this would amount to an ‘act of
concealment’ which the prosecution would prove during trial.
21.6 ED’s counsel relies upon Soma Chakravarty v. State (2007) 5
SCC 403 (paragraph 10) contending that at the stage of framing of
charge, the Court can form an opinion that the accused ‘might’ have
committed an offence and there is no requirement to arrive at a
conclusion that the accused ‘has’ committed the offence.
21.7 ED’s counsel reiterated that what is enough at this stage is that
the accused “might have committed the offence”. To displace the
implication, accused would have to place evidence in trial.
21.8 Response of ED’s counsel to the defence taken by accused that
she “did not know” was essentially based on Section 3(i) of PMLA. The
elements which constitute an offence under Section 3 of PMLA have
been slated to be disjunctive as per the Explanation. These elements are:
concealment, possession, acquisition, use, projecting it as untainted
property and claiming it as untainted property. He contended that
possession of articles given by Sukesh were not disputed. He contended
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that it is evident that there was concealment by petitioner since there
were piecemeal disclosures, substantiated as under.
21.9 The issue of projecting it as untainted property was also evident,
since petitioner did not disclose various gifts given to her and her family
in one go, but only during further investigation and interrogation.
21.10 ED’s counsel adverted to Section 3 (ii) of PMLA to contend that
the process or activity connected with proceeds of crime is a “continuing
activity” and continues till the person is directly or indirectly enjoying
the proceeds of crime. Regarding the aspect of “knowingly”, it would
have to be determined during trial, whether the accused is able to rebut
the presumption imposed by Section 24 of PMLA.
21.11 ED’s counsel referred to the statements, particularly petitioner’s
statement in relation to the issue of transaction with Advaita Kala. She
was a known scriptwriter and had allegedly been paid for the web-series
by Sukesh. In this regard, initially the accused in her responses, denied
that the money had been given by Sukesh but later improved upon her
statement. (statement of 20th October 2021). Sukesh was arrested on 9th
October 2021 and gave his statement and thereafter all the
improvements took place in petitioner’s statement.
21.12 In response to question 15, in statement recorded on 30thAugust
2021, petitioner stated that she did not pay the Rs.15 lakhs to Advaita
Kala. In question 17, she agreed that there were WhatsApp
conversations between her and Advaita Kala. In answer to question 20,
when she was confronted with the photocopy of statement of Advaita
Kala, stating that she had received cash of Rs.15 lakhs from accused
through some person, accused responded and stated that she does not
agree to sending her Rs.15 lakhs cash on that date or Rs.15 lakhs cash at
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all. This was improved upon by petitioner in her statement recorded on
20th October 2021 where she stated in question 12 that she would like to
correct her earlier statement relating to Advaita Kala. She stated that
Sukesh was aware that she was in talks with Advaita Kala for a movie
script and he was keen to produce it and then offered to send her an
advance of Rs.15 lakhs cash. He arranged the cash and delivered it
through his person, whom petitioner did not know. This aspect has been
mentioned in the complaint where it stated that on being asked about
cash transactions of Rs.15 lakhs with Advaita Kala, she denied having
sent any money in cash and stated she had only sent chocolates and
flowers to her.
21.13 ED’s counsel then focused on petitioner’s concealment of
information by adverting to various gifts which were received by her
family. In her statement of 20th October 2021, accused gave details of
her family members and was asked whether petitioner’s sister Geraldine
received USD 1,80,000 from Sukesh and she admitted she had received
USD 1,50,000 from Sukesh but qualified the same as a loan from Sukesh
for a mortgage on the house which was transferred to her sister’s bank
account. She was asked about whether Sukesh had purchased a new
BMW car 5 series for her sister and she denied it. She admitted that the
funds of AUD 26740 were transferred to her brother in Australia by
Sukesh and not USD 50000 as claimed by Sukesh. She admitted that
Sukesh had purchased a horse called Espuela which she was free to use.
She further admitted that 4 cats had been received from Sukesh. She
denied that Sukesh had purchased any cars for her parents in Bahrain.
21.14 It was pointed out by ED’s counsel that in the statement
recorded on 30thAugust 2021, accused had not disclosed the details of
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the amounts received by her sister and her brother from Sukesh or about
receiving the horse, cats and other gifts. On 20th October 2021, she did
not disclose these facts on her own but only when she was asked about
the same.
21.15 During the statements recorded on 30thAugust 2021 and 20th
October 2021, accused had been silent on the role played by Pinky Irani
and how the articles had been reaching her. Accused admitted to have
received gifts but did not disclose details from Sukesh, that were sent
through Pinky Irani but she did not disclose the important part played
by Pinky Irani in this process.
21.16 Petitioner later admitted in statement dated 8th December 2021
that her parents had received two cars in April 2021, as also that sister
received USD 172913 in her bank account as also gave a list of gift items
received through either Pinky Irani or Leepakshi. (Leepakshi was a
stylist friend. who had been allegedly employed by Sukesh as a personal
shopper). This is in contrast to her statement on 20th October 2021when
she denied that Sukesh had gifted BMW car to her sister and two cars to
her parents and that Pinky Irani was aware of the gifting of these cars to
her parents. ED’s counsel also focused on the destruction of evidence
by her. In her statement of 20th May 2022, accused was trying to portray
that she was a victim of manipulative actions by Sukesh. She relied on
evidences in the form of photos and videos sent by Sukesh but the same
have been destroyed by her by deleting the data on the mobile. She then
stated that Sukesh had told her that he had coal mines as well and is into
arms and ammunition business with Russia. She never disclosed these
details earlier.
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21.17 ED’s counsel drew attention to the fact that in the continued
relationship with Sukesh, knowing that he was a businessman and had
been searching about him on Google, it was surprising that she never
bothered to find out whether Sukesh owned Kalyan Jewelers or that he
had coal mines or that he had 50% ownership of Leela Hotel in Chennai,
as had been represented by Sukesh.
21.18 In statement of 27thJune 2022, she admitted that she had deleted
her mobile phone data on 11 August 2021 after knowing about the arrest
of Sukesh. On being confronted that she had earlier lied about the issue
with Advaita Kala and the number of gifts received from Sukesh, she
stated that she did it on account of fear or was unable to recollect. It
was only when she was confronted with the evidence, she admitted to
having received gifts from Sukesh. She stated that she was stressed and
she wanted to save the reputation of her and the family members.
21.19 As per the complaint, she also admitted that she had requested
Shaan, Leepakshi and Prashant to delete data from their phone with
respect to the messages, chats, pictures with Sukesh.
21.20 Accused was shown a news article dated 10th February 2020,
which related to Look-Out Notice against actress Leena Maria Paul in
CBI case, where cases were reported against Sukesh, which included
TTV Dhinakaran case, EOW Mumbai case and Canara Bank fraud case.
Accused denied having received these articles, and later claimed that
she had received another news article from 2017 related to Sukesh and
some South Indian politician controversy. However, she was shown
WhatsApp conversations between Shaan Muttathil and Pinky Irani on
11th February 2021 to 13th February 2021, where the news article of 10th
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February 2020 was shared and then she admitted that the news article
had been shared with her.
21.21 As per prosecution she had clearly admitted that she had gone
through various articles on the internet after searching for Sukesh but
she accepted the explanations offered by Pinky Irani and Sukesh himself
and ignored his earlier antecedents.
21.22 At time of framing of charges, the probative value of the
material on record cannot be gone into and material brought on record
by prosecution has to be accepted as true. Whether the accused has
committed the offence or not, can only be decided in trial.
21.23 For quashing of charge, principle to be adopted is that if the
entire evidence produced by the prosecution is to be believed would it
constitute an offence or not. Reliance was placed on State of
Maharashtra v. Salman Salim Khan and Another (2004) 1 SCC 525.
21.24 Truthfulness, sufficiency, and acceptability of material
produced cannot be gone into at the time of framing of charge which
can only be done at the stage of trial. Reliance was placed on Umesh
Kumar v. State of Andhra Pradesh and Another (2013) 10 SCC 591,
in particular paragraph 30. The Supreme Court in Saranya v. Bharathi
and Another (2021) 8 SCC 583, held that at the stage of framing of
charge the Court has to consider the material only with a view to find
out if there was ground for presuming that the accused had committed
the offence. At that stage, the High Court was not required to appreciate
the evidence on record and considered the allegation on merits.
21.25 Mens rea aspect could only be examined at the stage of trial.
The case of petitioner is that ECIR should be quashed since she had no
knowledge that she was in receipt of proceeds of crime and, therefore,
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it is alleged by her that element of mens rea was absent which is
essential pre-requisite. Mens rea or knowledge is a triable issue and can
only be examined at the stage of trial upon leading evidence. Reliance
was on the decision of Supreme Court in Anoop Bartaria v. Dy.
Directorate of Enforcement, 2023 INSC 413 in paragraphs 27 and 28
and Bholu Ram v. State of Punjab & Anr., (2008) 9 SCC 140 in
paragraph 61. The disputed defence of the accused can only be
appreciated by the Trial Court. Reliance was placed on the decision of
the Supreme Court in S. Krishnamoorthy v. Chellammal (2015) 14
SCC 559.
21.26 The Supreme Court categorically stated in Anoop Bartaria
(supra) that determining knowledge of the accused that they were
dealing with the proceeds of crime would be a condition precedent or
sine qua non for the prosecution for lodging a complaint. The direct
involvement of the petitioners in the activities that the proceeds of crime
would require trial.
21.27 There was no bar on prosecution under PMLA if a person is
arrayed as a witness in the predicate offence. Reliance was also placed
on Pradeep Nirankarnath Sharma v. Directorate of Enforcement &
Anr., 2025 SCC OnLine SC 560 where it was held that in case is
involving of such magnitude a trial is imperative to establish the full
extent of wrongdoing and to ensure accountability.
21.28 Reliance was also placed in Amit Katyal v. Directorate of
Enforcement, 2024:DHC:7113 where it was reiterated that predicate
offence and the offence under PMLA are independent offences, and
even if a person is not an accused in the predicate offence they can still
be arrayed as an accused under PMLA.
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21.29 Reliance was also placed of this Court’s decision in Sanjay
Kansal v. ED (supra) and Satish Babu Sana v. Directorate of
Enforcement 2024: DHC: 5335-DB, where the Division Bench of this
Court held that proceedings under PMLA are separate and distinct from
that of the predicate offence. On this issue, reliance was also placed on
State of Bombay v. Kathi Kalu Oghad, 1961 SCC OnLine SC 74,
Laxmipat Choraria & Ors. v. State of Maharashtra, 1967 SCC OnLine
SC 30 and of the Allahabad High Court in Mohan Lal Rathi v. Union
of India through Directorate of Enforcement 2023:AHC-LKO:59826,
wherein it was held that pardon under Section 306 of Cr.P.C. to a person
and scheduled offence could not ipso facto result is acquitted in the
offence under PMLA. The matter was further appealed before the
Supreme Court and was dismissed as withdrawn. Reliance was also
placed on Deepak Chandak v. State of Jharkhand through CBI 2004
SCC OnLine Jhar 672 and State (Delhi Admn) v. Jagjit Singh, 1989
Supplementary (2) SCC 770.
21.30 ED’s counsel relied upon Section 132 proviso of the Indian
Evidence Act 1872 (‘IEA’). The said provision does not excuse the
witness from answering on the ground that the answer will incriminate
him. While the proviso protects the witness in stating that no answer
given by the witness shall subject him to any arrest or prosecution. At
the stage, it was merely being stated that there was an apprehension that
the petitioner who was a witness in the predicate offence was handling
proceeds of crime which would be proved in trial.
21.31 Reliance was also placed on Section 44(d) of PMLA,
Explanation (i) clearly indicated that the trial of predicate offence under
the predicate/scheduled offence and that of the PMLA could not
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constitute a joint trial. In this regard, reliance was placed on Vijay
Madan Lal (supra) paragraphs 112 and Pavana Dibbur (supra)
paragraphs 15-17 on the issue that except for the proceeds which
emanated from the crime every other aspect was different between the
predicate offence and in this offence.
21.32 Section 3(5) and Section 4 of MCOCA and Section 3 of PMLA
being similar cannot restrain the ED from prosecuting the petitioner. It
was submitted that the offence of money laundering was a standalone
offence and the investigation conducted by the predicate agency cannot
impact the same and was not binding the ED. Merely because a
petitioner is not charge-sheeted it does not mean he is acquitted or
exonerated by the investigating agency. Reliance was placed on
Laxmipat Choraria (supra) noting that a person is often made a witness
or an otherwise being the character of an accused to enable the
prosecution to gather evidence against other main accused persons. It
was well settled that investigation into money laundering was
independent and Parliament being conscious of such eventuality to
introduce Explanation (i) to Section 44(1)(d), upheld in Vijay Madan
Lal Chaudhary (supra) in paragraph 112.
21.33 Even under Section 319 of Cr.P.C., there is a power to array any
person to an accused who may not have been charge-sheeted. Reliance
was placed on Sukhpal Singh Khaira v. State of Punjab, (2023) 1 SCC
289. Merely because a petitioner is not made an accused in the predicate
offence does not mean she has been exonerated and cannot impact the
investigation by the ED.
21.34 It was also well settled that the same set of facts will give rise to
an offence punishable under different laws. Reliance was placed on
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Monica Bedi v. State of Andhra Pradesh (2011) 1 SCC 248. Both the
concepts of autrefois acquit and autrefois convict do not apply in this
case. Reliance was placed on Section 232 of Cr.P.C. contending that
acquittal was a judicial process and the omission to make the petitioner
is an accused in the predicate offence did not amount to an exoneration
or an acquittal. Therefore, Article 20(2) benefit cannot be given to
petitioner nor Section 300 of Cr.P.C. provision would benefit petitioner
in any way.
21.35 It was, therefore, submitted that petitioner fulfils all the
ingredients of offence under PMLA considering that she misled the
investigation by first denying and then answering affirmatively after
confrontation and, therefore, had concealed the proceeds of crime which
is covered under Section 3(2) of PMLA and qualified by “in any manner
whatsoever”. Further, it had been alleged by the ED that she had
tampered evidence by wiping out data from her phone and that of her
colleagues. Therefore, as far as ED was concerned, they have imputed
knowledge to petitioner and it was for her to place her defence during
trial.
VI. SUBMISSIONS IN REJOINDER MADE ON BEHALF OF
PETITIONER
22. Mr. Siddharth Agarwal, Senior Counsel for petitioner, in his rejoinder
essentially stated a under:
22.1 The whole matter arises out of proceeds of crime emanating
from the fraud which was allegedly perpetrated by Sukesh on Ms. Aditi
Singh of about Rs.200 crores. The said Rs.200 crores, as per
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was to give gifts to models and actresses and only one of these sets of
gifts was given to petitioner. The issue asserted by the ED was that mere
possession is enough.
22.2 Countering this, Senior Counsel for petitioner submitted that six
other persons, including those who have met Sukesh in the jail, were not
being prosecuted, therefore why the differential treatment?
22.3 He posed a question as to what was the distinguishing factor by
the ED. He relied upon the decision in State of M.P. v. Sheetla Sahai &
Ors., (2009) 8 SCC 617 where the Supreme Court stated that one cannot
pick and choose at the stage of charge. He further relied on Radha
Mohan Lakhotia v. Deputy Director 2010 SCC OnLine Bom 1116,
stating that at best, the said proceeds in the hands of the petitioner would
be liable for attachment, but not for prosecution.
22.4 The basis of knowledge asserted by ED was twofold – first, the
news report, and second, the assumption that petitioner ‘ought to have
known’ about the criminal antecedents of Sukesh. He, therefore, asserted
that this cannot impute knowledge to the petitioner that what she had
received was coming from the proceeds of crime, i.e. the money of
which Ms. Aditi Singh had been defrauded. There could be a possibility,
at best, that the proceeds were from legitimate money. The
presumption, therefore, being drawn out that the petitioner was in the
know, that gifts she had received were coming from proceeds of crime
was flawed.
22.5 He contended that knowledge was necessary at the stage of
charge as per the decision in State of Maharashtra v. Som Nath Thapa
(1996) 4 SCC 659, which dealt with a case of customs officer under
whose watch RDX had come through the customs for use in the Bombay
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blasts. An argument had been taken that he was not in the know that this
RDX was to be used for unlawful purposes. The Supreme Court,
however, stated that RDX has no other legal use and therefore did not
discharge Som Nath Thapa.
22.6 Senior counsel therefore distinguished the petitioner’s case
stating that what she had received were ‘regular articles of commerce’
and cannot be said to be unlawful; the goods did not come with a stamp
that they were untainted and therefore knowledge cannot be imputed to
the petitioner.
22.7 He further countered the assertion of the ED’s counsel on
Section 24 of PMLA on the point of presumption. He cited the decision
of Vijay Madanlal Choudhary (supra), and drawing attention to
paragraphs 93 and 97, effectively stated that the foundational facts had
to be established even for this purpose, which was not done by the ED.
22.8 On the issue raised by the ED that these aspects will need to be
considered during trial, Senior Counsel stated that trial is necessary
when there are disputes relating to the facts, which was not there in this
case. Petitioner was willing to admit the facts placed by the ED since
she had none of her own facts to counter the same. The facts relating to
receipt of the gifts by her were admitted by her, so therefore there was
no dispute in that regard. However, the undisputed facts did not establish
knowledge of the proceeds of crime in the hands of the petitioner.
22.9 Senior counsel embellished the issue of the petitioner being
witness to the predicate offence, but being accused in the other, on the
basis that predicate offence included an offence of MCOCA, which was
the same and, in some cases, wider than that of money laundering, for
which he had referred to a table which was supplied previously. He
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clarified that he was not arguing that a witness in one case could not be
accused in the other, but was stating that in this specific case, being the
predicate offence involving MCOCA, which is similar to and larger than
the money laundering offence, the petitioner ought to have been
excluded from accusation.
22.10 Definition of proceeds of crime under Section 2(1)(u) of PMLA
is similar to “property derived or obtained from commission of
organized crime” under Section 4 of MCOCA. Despite a specific
punishment under Section 4 of MCOCA for possessing unaccountable
wealth, petitioner has not been arraigned as an accused by EOW. Two
different agencies carrying out investigation of offences intertwined
with each other, presenting petitioner in two completely different and
contradictory roles.
22.11 Petitioner has been arraigned, as a prosecution witness in the
predicate offence, requiring her to be depose on oath before the Trial
Court and face cross-examination, while she stands and as an accused
in PMLA proceedings before the same Court. EOW had exonerated
petitioner in the predicate offence on basis that she did not have any
knowledge of the predicate offence and did not participate at any time
before the predicate offence or post the commission of the same.
22.12 Reliance has been placed on TD Sonia v. Deputy Director,
Director of Enforcement Government of India, Supreme Court order
dated 2nd December 2022 in SLP Crl. No.10667/2022; Swarna Daga
Mimani v. Director of Enforcement, Supreme Court order dated 13th
March 2023, in SLP Crl. No. 345/2023; T.D. Tataji v. The Deputy
Director of Enforcement, Government of India, Supreme Court order
dated 21st November 2022 in SLP Crl. No. 10360/2022; and Directorate
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of Enforcement v. Gagandeep Singh & Ors. 2022 SCC OnLine Del
514.
22.13 Petitioner did not have any knowledge about the predicate
offence or proceeds of crime. Respondents’ entire case hinges on a
solitary article published on 2020 which allegedly showed petitioner’s
knowledge of Sukesh’s criminal antecedents. Regarding the article,
petitioner relied upon the statements of Pinky Irani, who confirmed that
she had assured petitioner and Shaan Muttathil that since Shekhar was
a political bureaucrat, such things keep happening to taint Sukesh’s
reputation. The article was a thing of the past. As per Pinky Irani,
petitioner believed her and then started receiving gifts from him.
22.14 The article in any case did not have anything to do with the
predicate offence in question. Petitioner’s contention is that at best there
is an omission on the part of the petitioner to conduct due diligence, but
it cannot form the basis of prosecution under PMLA.
22.15 Omission to do an act for which there is no legal obligation
cannot be said to be an ‘illegal omission’. From December 2020 till
August 2021, there was nothing on any public forum/ newspaper about
the extortion case of Aditi Singh and Sukesh.
22.16 Reliance was placed on Emperor vs. Bepin Behari Ganguly,
1931 SCC Online Cal. 230 (paragraphs 3-4); The Queen v. Anthony
Udayan, (1883) ILR 6 Mad 280 (paragraph 2); Nanubhai Vastabhai
Katariya v. State of Gujarat 1999 SCC OnLine Guj 235, (paragraphs
26 & 33). Prakash Industries Ltd. v. Union of India & Anr, 2023 SCC
Online Del 336, (paragraphs 63-67). Razorpay Software Pvt Ltd v.
Union of India (supra), (paragraphs 27-31,36-38). Dennis Sagaya
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Jude v. Directorate of Enforcement, NC:2024:KHC:25046,
(paragraphs 19, 24-25).
VII. ANALYSIS
23. The petitioner seeks quashing of an ECIR registered under Section 3
and 4 PMLA, in which she has been arrayed as accused No. 10. The predicate
offence, arises from FIR No.208/2021 lodged by the Special Cell, New Delhi,
pursuant to which EOW (the investigating agency) filed the charge sheet
under various sections of IPC and Section 3 and 4 of MCOCA against Sukesh
and various other associates. The predicate offence was based on a complaint
of extortion of about Rs. 200 crores by the complainant, Ms. Aditi Singh.
24. The gravamen of PMLA complaint relates to proceeds of crime and
acts and omission by accused leading to the offence of money laundering
under Section 3 PMLA. Said provision is extracted as under:
“3. Offence of money-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 26[proceeds of crime including
its concealment, possession, acquisition or use and
projecting or claiming] it as untainted property
shall be guilty of offence of money-laundering.
Explanation.–For the removal of doubts, it is
hereby clarified that,–
(i) a person shall be guilty of offence of money-
laundering if such person is found to have directly
or indirectly attempted to indulge or knowingly
assisted or knowingly is a party or is actually
involved in one or more of the following processes
or activities connected with proceeds of crime,
namely–
(a) concealment; or
(b) possession; or
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(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property,
in any manner whatsoever;
(ii) the process or activity connected with proceeds
of crime is a continuing activity and continues till
such time a person is directly or indirectly enjoying
the proceeds of crime by its concealment or
possession or acquisition or use or projecting it as
untainted property or claiming it as untainted
property in any manner whatsoever.
25. Section 2 (1) (u) PMLA defines ‘proceeds of crime’ extracted as under:
(u) “proceeds of crime” means any property
derived or obtained, directly or indirectly, by any
person as a result of criminal activity relating to a
scheduled offence or the value of any such property
[or where such property is taken or held outside the
country, then the property equivalent in value held
within the country] [or abroad];
Explanation.–For the removal of doubts, it is
hereby clarified that “proceeds of crime” include
property not only derived or obtained from the
scheduled offence but also any property which may
directly or indirectly be derived or obtained as a
result of any criminal activity relatable to the
scheduled offence;”
26. The only other provision which is relevant for assessment of
petitioner’s case is Section 24 of PMLA, which creates a presumption against
the accused and reverses the burden of proof. The said provision is extracted
as under:
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“24. Burden of proof.–In any proceeding relating
to proceeds of crime under this Act,–
(a) in the case of a person charged with the offence
of money-laundering under section 3, the Authority
or Court shall, unless the contrary is proved,
presume that such proceeds of crime are involved
in money-laundering; and
(b) in the case of any other person the Authority or
Court, may presume that such proceeds of crime
are involved in money-laundering.”
27. To support their prayer for quashing of ECIR, various grounds were
asserted by petitioner, that can be usefully crystalized as under:
(i) Petitioner is not an accused in the predicate offence which arises
from the same set of facts.
(ii) Petitioner was made a witness in the predicate offence and
therefore it would compromise her position while giving
evidence before the same court which tries both predicate and
the PMLA offence and violates her constitutional right against
self-incrimination;
(iii) Predicate offence includes provisions of MCOCA which also
deals with property derived or obtained from commission of
organized crime and is therefore akin to proceeds of crime under
PMLA and petitioner has been exonerated from the predicate
offence;
(iv) Petitioner herself was a victim of this modus operandi used by
the accused Sukesh in the predicate offence;
(v) Other victims, similarly placed, of accused Sukesh in the
predicate offence have not been proceeded under PMLA; ED is
adopting pick-and-choose policy;
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(vi) ED’s best case to impute knowledge to the petitioner regarding
proceeds of crime relates to a 2020 article which was given to
petitioner in February 2021. Not only is there evidence through
statements of co-accused that petitioner was misled into
believing that Sukesh was not associated with any real
criminality, instead was victim of motivated and instigated
actions. Further, at best, petitioner could be accused of an
omission to not carry out due diligence regarding criminal
antecedents of Sukesh, which, in itself, is not an illegal omission.
(vii) There was no dispute on facts of the case; petitioner had
admitted receipt of all gifts / articles from Sukesh and therefore,
she does not need to be subject to trial for this purpose or for any
other factual determination. All the evidence placed by ED
points out to an intricate modus operandi conceived, perpetuated
and implemented by Sukesh through his associates primarily the
Ramnani brothers and Pinky Irani in order to mislead, dupe and
hoodwink the petitioner into receiving gifts/articles as tokens of
Sukesh’s appreciation and admiration of the petitioner.
(viii) It’s not uncommon for a petitioner, as a reputed actor, to receive
gifts from her fans and this was an accepted practice in the film
industry.
28. Each of these contentions need to be assessed, particularly in light of
ED’s response. The facts in question are largely not disputed between the
petitioner and ED, particularly that there was a predicate offence, there
existed proceeds of crime (though petitioner denies that she was aware that
they were proceeds of crime), and petitioner and her family were recipient of
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certain gifts, articles and money transactions emanating from the accused
Sukesh.
29. Charges are yet to be framed as per the submission of counsels,
proceedings are underway before the Trial Court.
30. Before venturing into a journey to assess these submissions, it is
instructive to examine, at the outset, two decisions of the Supreme Court
which have been widely referred by both parties viz. Vijay Madanlal
Choudhary and Ors. (supra), a three-bench 2022 decision of the Supreme
Court and, Pavana Dibbur (supra), a 2023 decision of the Supreme Court.
VII.A. Vijay Madanlal Choudhary and Ors.
31. The Supreme Court was dealing with a batch of petitions with pleas
concerning validity and interpretation of provisions of the PMLA and the
procedure followed by ED while investigating offences under the PMLA, as
being violative of the constitutional mandate.
32. Certain aspects that have a bearing on determination in this matter,
forms part of the discussion and opinion of the Supreme Court. Firstly, is the
analysis of the purport of Section 24 of PMLA. It was specifically held in
paragraphs 95 to 99, 103 of the Supreme Court’s opinion that Section 24 had
reasonable nexus with the purposes and objects to be achieved by the Act and
cannot be regarded as arbitrary or unconstitutional. Relevant for this case are
the following extracts:
“95. …The respondents have rightly invited our
attention to several other statutes providing for
shifting of the burden of proof on the accused, as in
the case of Section 24 of the 2002 Act. The
constitutional validity of similar provisions has been
upheld by this Court from time to time. In the case of
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Noor Aga, it has been observed that the Court while
interpreting the provision, such as Section 24 of the
2002 Act, must keep in mind that the concerned Act
has been the outcome of the mandate contained in the
international convention, as is the case on hand.
Further, only because the burden of proof under
certain circumstances is placed on the accused, the
same, by itself would not render the legal provision
unconstitutional. The question whether the burden on
the accused is a legal burden or an evidentiary
burden, would depend on the statute and its purport
and object. Indeed, it must pass the test of the doctrine
of proportionality. In any case, as the burden on the
accused would be only an evidentiary burden, it can
be discharged by the accused by producing evidence
regarding the facts within his personal knowledge.
Again, in the case of Seema Silk & Sarees, this Court
restated that a legal provision does not become
unconstitutional only because it provides for reverse
burden as it is only a rule of evidence. So long as the
accused is entitled to show that he has not violated
the provisions of the Act, such a legal provision
cannot be regarded as unconstitutional. For, the
accused is then entitled to rebut the presumption.
96. Suffice it to observe that the change effected in
Section 24 of the 2002 Act is the outcome of the
mandate of international Conventions and
recommendations made in that regard. Further,
keeping in mind the legislative scheme and the
purposes and objects sought to be achieved by the
2002 Act coupled with the fact that the person
charged or any other person involved in money-
laundering, would get opportunity to disclose
information and evidence to rebut the legal
presumption in respect of facts within his personal
knowledge during the proceeding before the
Authority or the Special Court, by no stretch of
imagination, provision in the form of Section 24 of the
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reasonable nexus with the purposes and objects
sought to be achieved by the 2002 Act. In any case, it
cannot be perceived as manifestly arbitrary as is
sought to be urged before us.
97. Be that as it may, we may now proceed to decipher
the purport of Section 24 of the 2002 Act. In the first
place, it must be noticed that the legal presumption in
either case is about the involvement of proceeds of
crime in money-laundering. This fact becomes
relevant, only if, the prosecution or the authorities
have succeeded in establishing at least three basic or
foundational facts. First, that the criminal activity
relating to a scheduled offence has been committed.
Second, that the property in question has been
derived or obtained, directly or indirectly, by any
person as a result of that criminal activity. Third, the
person concerned is, directly or indirectly, involved
in any process or activity connected with the said
property being proceeds of crime. On establishing the
fact that there existed proceeds of crime and the
person concerned was involved in any process or
activity connected therewith, itself, constitutes
offence of money-laundering. The nature of process
or activity has now been elaborated in the form of
Explanation inserted vide Finance (No.2) Act, 2019.
On establishing these foundational facts in terms of
Section 24 of the 2002 Act, a legal presumption would
arise that such proceeds of crime are involved in
money-laundering. The fact that the person
concerned had no causal connection with such
proceeds of crime and he is able to disprove the fact
about his involvement in any process or activity
connected therewith, by producing evidence in that
regard, the legal presumption would stand rebutted.
98. The person falling under the first category being
person charged with the offence of money-
laundering, presupposes that a formal complaint has
already been filed against him by the authority
authorised naming him as an accused in the
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commission of offence of money-laundering. As
observed in P.N. Krishna Lal, the Court cannot be
oblivious about the purpose of the law. Further, the
special provisions or the special enactments as in this
case is required to tackle new situations created by
human proclivity to amass wealth at the altar of
formal financial system of the country including its
sovereignty and integrity. While dealing with such
provision, reading it down would also defeat the
legislative intent.
99. Be it noted that the legal presumption under
Section 24(a) of the 2002 Act, would apply when the
person is charged with the offence of money-
laundering and his direct or indirect involvement in
any process or activity connected with the proceeds
of crime, is established. The existence of proceeds of
crime is, therefore, a foundational fact, to be
established by the prosecution, including the
involvement of the person in any process or activity
connected therewith. Once these foundational facts
are established by the prosecution, the onus must then
shift on the person facing charge of offence of money-
laundering — to rebut the legal presumption that the
proceeds of crime are not involved in money-
laundering, by producing evidence which is within his
personal knowledge. In other words, the expression
“presume” is not conclusive. It also does not follow
that the legal presumption that the proceeds of crime
are involved in money-laundering is to be invoked by
the Authority or the Court, without providing an
opportunity to the person to rebut the same by leading
evidence within his personal knowledge.
…..
103. We, therefore, hold that the provision under
consideration namely Section 24 has reasonable
nexus with the purposes and objects sought to be
achieved by the 2002 Act and cannot be regarded as
manifestly arbitrary or unconstitutional.”
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(emphasis added)
33. The Supreme Court categorically stated that the burden on accused was
an evidentiary burden to be discharged by producing evidence regarding the
facts “within his personal knowledge”.
34. Legal presumption would arise on establishing at least three basic or
foundational factors – that first, there is a scheduled offence; second, that the
property in question has been derived from that criminal activity; and third,
that person accused in PMLA is directly or indirectly involved in any process
or activity connected with the said proceeds of crime.
35. Having established these foundational facts, the offence of money
laundering gets triggered and a legal presumption arises that the proceeds of
crime are involved in money laundering; that the accused has no causal
connection with proceeds of crime and is able to disprove the fact about their
involvement, by producing evidence, which would result in a rebuttal of the
presumption.
36. The Supreme Court clarified that the onus flows from Section 106 of
IEA and rebuttal can be through replies under Section 313 of Cr.P.C. or by
cross-examining prosecution witness. The procedure entailed under Section
24 of PMLA was therefore not arbitrary or unreasonable.
37. ED emphasizes, underscores, and reiterates that these three
foundational facts have been established in this matter and therefore
presumption arising under Section 24 of PMLA can be rebutted by petitioner
by leading evidence during trial. Plea for quashing is, therefore, premature
and cannot be entertained.
38. This Court prima facie does not see any infirmity in the submission of
ED. There is no dispute about the first and second foundational facts and the
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only issue, at best, arises on the third foundational fact i.e. petitioner is
directly or indirectly involved in any process or activity connected with the
proceeds of crime.
39. Section 3 of PMLA itself provides the embellishment on what entails
a ‘process or activity’ by virtue of the Explanation. Dissecting the
Explanation, the following material aspects become evident:
a) Accused can be directly or indirectly involved;
b) Accused could have attempted to indulge, knowingly assisted,
or knowingly be a party, or actually involved in concealment /
possession / acquisition / use / projection as untainted property /
claiming as untainted property;
c) The above could be “in any manner whatsoever”;
d) Process or activity is a ‘continuing activity’ and continues till
the accused enjoys the proceeds of crime.
VII.B. Pavana Dibbur v. ED
40. In Pavana Dibbur (supra), the Supreme Court was dealing with a
complaint file by ED under Section 45(1) of PMLA in which the appellant
Pavana Dibbur was accused. The appellant filed a petition before the High
Court of Karnataka under Section 482 of Cr.P.C. seeking quashing of a
complaint.
41. One of the submissions by counsel for the appellant was that she had
not been arraigned as an accused in the charge sheets relating to the predicate
offence and, therefore, could not be roped in as an accused for the offences
under PMLA. Reliance was placed on Vijay Madan Lal Choudhary (supra),
submitting that the Court held that if an accused in the predicate offence is
acquitted/discharged, he cannot be prosecuted for an offence under PMLA.
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This was refuted by the Counsel appearing for ED, submitting that a person
can be held guilty of commission of an offence under PMLA even if not an
accused in the predicate offence.
42. Dealing with this, the Supreme Court noted that an offence under
Section 3 of PMLA can only be committed after predicate offences is
committed. A specific example relating to extortion under Section 384-389
of IPC was adverted to by the Supreme Court, noting specifically that a
person unconnected with the offence of extortion may assist the accused in
the concealment of the proceeds of extortion and, therefore, can be guilty of
the offence of money laundering.
43. In a case where prosecution for the predicate offence ends in acquittal,
accused are discharged, or proceedings were quashed, the predicate offence
will not exist. Since no one can be prosecuted for an offence under Section 3
of PMLA in such a scenario, as there will be no proceeds of crime, accused
under PMLA will benefit. However, an accused in PMLA case who comes
into the picture after the scheduled offences have been committed, by
assisting in concealment or use of the ‘proceeds of crime’, need not be an
accused in the scheduled offence. Such an accused can still be prosecuted
under PMLA. The contention of appellant’s counsel was, therefore, rejected.
Relevant paragraphs from the decision are extracted as under:
“15. Coming back to Section 3 of the PMLA, on
its plain reading, an offence under Section 3 can
be committed after a scheduled offence is
committed. For example, let us take the case of a
person who is unconnected with the scheduled
offence, knowingly assists the concealment of the
proceeds of crime or knowingly assists the use of
proceeds of crime. In that case, he can be held
guilty of committing an offence under Section 3
of the PMLA. To give a concrete example, the
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offences under Sections 384 to 389 of the IPC
relating to “extortion” are scheduled offences
included in Paragraph 1 of the Schedule to the
PMLA. An accused may commit a crime of
extortion covered by Sections 384 to 389 of IPC
and extort money. Subsequently, a person
unconnected with the offence of extortion may
assist the said accused in the concealment of the
proceeds of extortion. In such a case, the person
who assists the accused in the scheduled offence
for concealing the proceeds of the crime of
extortion can be guilty of the offence of money
laundering. Therefore, it is not necessary that a
person against whom the offence under Section 3
of the PMLA is alleged must have been shown as
the accused in the scheduled offence. What is
held in paragraph 270 of the decision of this
Court in the case of Vijay Madanlal Choudhary1
supports the above conclusion. The conditions
precedent for attracting the offence under
Section 3 of the PMLA are that there must be a
scheduled offence and that there must be
proceeds of crime in relation to the scheduled
offence as defined in clause (u) of subsection (1)
of Section 3 of the PMLA.
16. In a given case, if the prosecution for the
scheduled offence ends in the acquittal of all the
accused or discharge of all the accused or the
proceedings of the scheduled offence are
quashed in its entirety, the scheduled offence will
not exist, and therefore, no one can be
prosecuted for the offence punishable under
Section 3 of the PMLA as there will not be any
proceeds of crime. Thus, in such a case, the
accused against whom the complaint under
Section 3 of the PMLA is filed will benefit from
the scheduled offence ending by acquittal or
discharge of all the accused. Similarly, he will
get the benefit of quashing the proceedings of the
scheduled offence. However, an accused in the
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PMLA case who comes into the picture after the
scheduled offence is committed by assisting in
the concealment or use of proceeds of crime need
not be an accused in the scheduled offence. Such
an accused can still be prosecuted under PMLA
so long as the scheduled offence exists. Thus, the
second contention raised by the learned senior
counsel appearing for the appellant on the
ground that the appellant was not shown as an
accused in the charge sheets filed in the
scheduled offences deserves to be rejected.
ACQUISITION OF THE FIRST AND
SECOND PROPERTY
17. The allegation against the appellant in the
complaint is that she purchased the property
worth crores, though she did not have the source
of income which would generate enough money
to buy the subject properties. The allegation
against the appellant is that she allowed and
facilitated accused no.1- Madhukar Angur, to
conceal the siphoned/misappropriated amounts
by using her bank account. Another allegation is
that she is shown to have purchased the second
property from accused no.1, though she did not
have the resources to
pay the consideration. The allegation is that she
allowed the accused no.1 to use her bank
accounts to facilitate siphoning the proceeds of
the crime. Another allegation is that both the first
and second properties have been acquired out of
the proceeds of crime. The first property,
ex-facie, cannot be said to have any connection
with the proceeds of crime as the acts
constituting the scheduled offence took place
after its acquisition. The case of the appellant is
that she possessed a substantial amount, as can
be seen from the declaration made by her under
the Income Declaration Scheme, 2016 in
September 2016 and therefore, at the time of the
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acquisition of the second property, more than
sufficient money was available with her to
acquire the second property. The issue of
whether the appellant used tainted money to
acquire the second property can be decided only
after the evidence is adduced. This is not a case
where any material is placed on record to show
that the sale consideration was paid from a
particular Bank Account of the appellant.
Therefore, it is not possible to record a finding at
this stage that the Second property was not
acquired by using the proceeds of crime. We also
make it clear that we have considered the issue
only in the context of the applicability of the
PMLA. We have not dealt with the issues of
valuation and legality of the sale deeds.”
(emphasis added)
44. Clearly the Supreme Court has categorically opined that an accused in
a PMLA case may not necessarily be an accused in the predicate offence, and
till the proceeding in the predicate offence ends in an acquittal/discharge of
all accused or are closed in their entirety, the ‘proceeds of crime’ would still
be in contention and PMLA offences would subsist, to be tried independently.
Based on this assessment, for the purposes of this case, the first argument
mooted by the petitioner’s counsel would, therefore, stand to be rejected.
45. As regards the argument that petitioner herself was a victim and was
misled and duped by the accused Sukesh, the contention has to be seen in
light of the fact that the predicate offence subsists independently from the
PMLA offence. The fact that these offences are independent has been
conclusively determined in Vijay Madan Lal Choudhary (supra) in
paragraph 112. In this regard, reference to Section 44(1)(d) of PMLA read
with the Explanation (i) is relevant, which mandates that the trial of both sets
of offences may be by the same Court but shall not be constituted as a joint
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trial. For ease of refence to Section 44(1)(d) Explanation (i) is extracted as
under:
“44. Offences triable by Special Courts- (1)
Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974),–
……….
(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.]
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;…..”
(emphasis added)
46. An argument was raised by petitioner that petitioner being a witness in
the predicate offence indicates lack of mens rea and that she was not a post
facto accessory to the offence of money laundering, as no role was attributed
to her of aiding, utilizing, or concealing proceeds of crime. The test in
Pavana Dibbur (supra), according to petitioner, was not satisfied on the facts
of this case. Petitioner contends that possession of gifts can only constitute
an offence if petitioner had any knowledge of the predicate offence.
VII.C. Re: Petitioner’s ‘knowledge’
47. Knowledge of the predicate offence, as per petitioner, arose only on
the basis of a news article of 2020 which petitioner became aware of in
February 2021, handed over by Shaan Muttathil. The news article contained
information about involvement of Sukesh along with his wife Leena Maria
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Paul in bank fraud cases. However, petitioner claims that she was disabused
of the criminality of Sukesh on the basis of vehement assertions made by
Pinky Irani in favour of Sukesh. Petitioner does not state, in addition, that she
had done any due diligence on Sukesh’s criminal background subsequently.
There are two issues which arise on the aspect of knowledge:
i) Firstly, petitioner being mere aware of Sukesh’s criminal
antecedents in February 2021 and then being disabused of the
perception; and
ii) Secondly, lack of any due diligence by petitioner in this regard
thereafter.
48. To substantiate the first aspect, petitioner’s counsel seeks to rely upon
statements of petitioner and that of Pinky Irani in this regard, in particular,
which are extracted as under:
Petitioner’s response to question no.2 in her
statement recorded on 20th May 2022:
“Q. 2 What happened next?
Ans. Post Shaan informing me about Shekhar, I
decided not to communicate with him. He messaged
me countless times, but I didn’t respond for 2 days. On
the 3rd day Angel came to my house unannounced. She
said that Shekhar is very sorry and that he was
meaning to tell me in person about his past as he was
free man now, when he comes to Mumbai the
following week. She convinced me that she had been
working with Shekhar for 13 years and knows him and
his family very well. She described how she met him
and how he is working directly with the home ministry.
She also described how she goes to Delhi herself and
does meetings on behalf of Shekhar at the home
ministry. She mentioned that Shekhar is so busy now,
he has many people meeting him on a daily basis and
that his family is a very well educated successful one.
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She asked me to once speak to hi.in and he will tell me
the. Whole truth. That night I spoke to him and
Shekhar denied everything and stated that his name is
Shekhar and that is what he goes by. He also stated
that he works in politics as a political fixer which is.
A term I had never heard of or understood. He
explained that because of his political background
and work, he is usually made a scapegoat in the public
eye. He said this is just media stories and holds no
ground. he said if all of this is true then how can he be
talking to me and continuing with his business and still
be working in politics, which he proved to us many
times by calling from the home ministry’s office. he
also broke down and said he can’t do this work
anymore as it is now affecting his personal life and he
will only focus on his business not politics. I believed
what he was saying to me as I felt being in the media
eye maybe he was a target and if he was still
continuing with his life then the articles were not true.
I decided to continue speaking to Shekhar.
………
Pinky Irani’s response to question no.2 and 5 in her
statement recorded on 4th December 2021:
Q2. Did Jacqueline knew that Sukash was in jail?
Ans- No, she was not aware that Sukash/ Shekhar was
in jail. Though, once during the time of Valentine’s i.e.
14 February, 2021, Shan Mu had inquired me about
an article in which it was mentioned something about
a lady being in jail with him. But then, I had assured
them (Shan and Jacqueline) that since Shekhar was a
political bureaucrat and these things keep happening
to taint the reputation and that article and the said
lady was something of the past. She believed me and
then both of them were in good terms again and then
she again she started receiving gifts from him.
Q5. You are being shown a copy of mail with the
subject Reputation Management Inquiry. Please
explain the context of it.
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Ans- I have seen the copy of the mail and have put my
dated signatures on it. Shekhar wanted me to inquire
about the article that was showing on google during
valentines and as Jacqueline was linked to Shekhar,
she was scared for being associated with him and put
her reputation at stake. Therefore, he asked me to get
that article removed and I approached my son
Heroines to inquire if that could happen and this is the
same mail that he had sent to the concerned person in
Google. Later, I was told by Shekhar himself that he
paid 2-3 crores to get the article removed.”
49. Petitioner’s counsel for the purposes of plea of quashing, invites this
Court to accept the statement of Pinky Irani at face value and also the impact
of Pinky Irani’s efforts to disabuse petitioner of the notion of Sukesh’s
criminality. This, in the Court’s opinion, cannot be an inviolable conclusion
at this stage, particularly when the witnesses have not been examined and
have been not been subjected to cross-examination. Whether the petitioner
was in fact disabused of the notion in the true sense and, therefore, wiped the
mental slate clean of any knowledge of Sukesh’s criminality, importing to
herself a notion that he had no criminal implications on him, requires
assessment through examination of witnesses. The Court cannot reach a
conclusion at this stage on what is a fairly nuanced issue.
50. It could very well be that the prosecution is able to establish in its
favour that petitioner ignored the newspaper article completely, or took Pinky
Irani’s assertions at face value but retained the lurking suspicion that Sukesh
was an offender, or that she chose to push these issues under the carpet,
knowingly and consciously, in order to continue to receive the benefit of the
gifts that she was receiving. All these are evidently a matter of trial.
51. Reliance placed on Vijay Aggarwal (supra), CP Khandelwal (supra)
and Arvind Kejriwal(supra), on petitioner’s ignorance of predicate offence
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may not be relevant, as Vijay Aggarwal (supra) and CP Khandelwal (supra)
were matters of bail whereas Arvind Kejriwal(supra) was a matter
challenging the validity of arrest.
52. Similarly, reliance on TD Sonia v. Deputy Director, Director of
Enforcement Government of India (supra), Swarna Daga Mimani v.
Director of Enforcement and Others (supra), T.D. Tataji v. The Deputy
Director of Enforcement, Government of India (supra) and Directorate of
Enforcement v. Gagandeep Singh & Ors (supra) may also not be relevant
as these cases are peculiar on their facts and circumstances and do not apply
to these facts or establish any legal principle.
VII.D. Re: Petitioner’s Omission
53. On the second aspect of whether there was an omission by the
petitioner to pursue due diligence post the reading of the article and Pinky
Irani’s assertions, yet again the issue will need to be threshed out in trial.
Petitioner’s counsel states that the omission, if at all, cannot be an illegal
omission since there was no duty cast on the petitioner. The Court, however,
is not willing to accept that argument, particularly at this stage. The reason
being that it is not merely about the omission being legal or illegal, but also
the alleged inaction on the part of the petitioner to cross-check the criminality
of Sukesh, particularly in the context of having received vast amounts of gifts
for herself and her family. The prosecution’s case is that the petitioner chose
to brush things under the carpet but retained knowledge, or even a lurking or
robust suspicion that there was criminality involved.
54. These are evidently matters of trial, and the plea of the petitioner, at
this stage, even before charges are framed, cannot be accepted. The Court is
being effectively asked by petitioner to take into account the fact of the
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newspaper article being disclosed in February 2021, and Pinky Irani’s
statements (which were misleading), and reach a conclusion that indeed the
slate of petitioner’s knowledge about Sukesh’s criminality had been wiped
clean, and no element of Section 3 of PMLA can stick. The arguments
revolving around lack of knowledge being a determinative factor, which
would invite a quashing of the ECIR, cannot therefore, be accepted, pre-trial.
55. The argument based on Sections 32 and 43 of IPC regarding there
being no “illegal omission” is premature. The issue hinges upon the aspect
upon knowledge under PMLA and is qualified in the Section 3 (i)
Explanation of PMLA – directly or indirectly, attempt or assists, or in any
manner whatsoever. Whether the offence would be made out against
petitioner would involve an application of these aspects to the facts as fleshed
out during trial. The prosecution’s case is based upon direct knowledge of
petitioner on the criminal antecedents of Sukesh and her attempt to conceal
facts and tamper with the evidence, all of which may potentially lead to
establishing their case under PMLA.
56. Reliance to Razorpay (supra) might not be relevant considered it is
based on its own peculiar facts- where Razorpay (supra) involved an
obligation of statutory due diligence for a payment gateway. The Court held
that at best it was negligent but there was no intention, on the basis that there
was no prima facie material available to substantiate that the payment
gateway knowingly facilitates the transfer.
57. Reliance on Emperor vs. Bepin (supra), on the issue of illegal
omission may not be apposite, since it was related to an offence of abetment
of some revolutionary songs being sung in an organization’s meeting, where
accused was the President. The petitioner’s case is not a case of actionability
or legality of not carrying out due diligence, but either establishing or
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disproving the degree of knowledge of petitioner and its relevance to the
PMLA provision.
58. Reliance of petitioner’s counsel on P. B. Desai v. State of
Maharashtra & Anr. (2013) 15 SCC 481, is also not relevant for the purpose.
The case dealt with medical negligence, professional misconduct and
examined legal aspects of ‘omission’. ED’s case against the petitioner is not
merely based on alleged ‘omission’, but inter alia on establishing
‘knowledge’ and thus the argument cannot subsist in isolation.
VII.E. Re: Petitioner as ‘witness’
59. ED’s submission that an individual who is a witness for predicate
offence can be prosecuted as an accused under PMLA, needs to be examined.
Reliance placed on Amit Katyal v. Union of India (supra) is apposite.
Relevant extracts are as under:
“97. The objection taken on behalf of the petitioner
is that he has been cited as a witness in the said RC,
wherein his statement has been recorded under
Section 164 of Cr. P.C., 1973. However, in the
ECIR, he has been made an accused. This position
of the petitioner in the two offences is incongruous
and irreconcilable under the law.
98. It is no longer res integra that the predicate
offence and the offence under PMLA, 2002 are
independent offences and even if the person is not
an accused in the predicate offence, he can still be
arrayed as an accused under PMLA, 2002.
99. The petitioner may have been an offender by
indulging in the scheduled offence, but there
is prima facie evidence to show that the proceeds of
crime generated through scheduled offences have
been laundered by him. The petitioner can be an
accused under PMLA, 2002 without being an
accused in the said RC/CBI case/predicate offence.
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100. This aspect has been clarified by the Apex
Court in the case of Pavana Dibbur, (supra)
and Vijay Madanlal Chaudhary, (supra).”
(emphasis added)
60. The Division Bench of this Court in Satish Babu Sana (supra), was
dealing with a similar assertion, wherein petitioners were arrayed as
witnesses under scheduled offence, but a PMLA case had been registered
against them as an accused. The Court taking into account Vijay Madanlal
Choudhary (supra) stated as under:
“85. Admittedly, in the present case, the petitioners in
the case registered by the CBI were arrayed as the
witnesses to a case under scheduled offences.
However, during the process of investigation, case
under the provisions of PMLA has been registered
wherein they have been arrayed as accused. The ratio
of law laid down by the Hon‟ble Supreme Court in
Vijay Madanlal (Supra), clearly spells out that it may
happen in cases that a person who is witness in
offences related to scheduled offences, during his
interrogation, may put-forth some material which
would indicate his involvement in the commission of
offence under PMLA. This Court in a catena of
decisions has already held that proceedings under the
scheduled offences and PMLA are separate and
distinct and have no binding upon each other.
86. The Hon‟ble Supreme Court in Vijay Madanlal
(Supra) further held as under:-
“112. Reverting to clause (d) of sub-section (1)
of section 44, it postulates that a Special Court
while trying the scheduled offence or offence of
money- laundering shall hold trial in accordance
with the provisions of the 1973 Code as it applies
to a trial before a court of sessions. Going by the
plain language of this provision, no fault can be
found for conducting trial in the respective cases
in the same manner as provided in the 1973
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Code. However, the grievance is about the
insertion of Explanation vide Finance (No. 2)
Act, 2019. As a matter of fact, this insertion is
only a clarificatory provision, as is evident from
the opening statement of the provision which
says that “for the removal of doubts, it is clarified
that”. None of the clauses inserted by this
amendment travel beyond the principal provision
contained in clause (d). Clause (i) of the
Explanation enunciates that the jurisdiction of
the Special Court while dealing with the offence
being tried 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 trials. This, in fact, is reiteration of the
earlier part of the same section, which envisages
that even though both the trials may proceed
before the same Special Court, it must be tried
separately as per the provisions of the 1973
Code. In so far as clause (ii) of the Explanation,
at the first glance, it does give an impression that
the same is unconnected with the earlier part of
the section. However, on closer scrutiny of this
provision, it is noted that the same is only an
enabling provision permitting to take on record
material regarding further investigation against
any accused person involved in respect of
offence of money-laundering for which
complaint has already been filed, whether he has
been named in the complaint or not. Such a
provision, in fact, is a wholesome provision to
ensure that no person involved in the commission
of offence of money-laundering must go
unpunished. It is always open to the Authority
authorised to seek permission of the court during
the trial of the complaint in respect of which
cognizance has already been taken by the court
to bring on record further evidence which
request can be dealt with by the Special Court in
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accordance with law keeping in mind the
provisions of the 1973 Code as well. It is also
open to the Authority authorised to file a fresh
complaint against the person who has not been
named as accused in the complaint already filed
in respect of same offence of money- laundering,
including to request the court to proceed against
such other person appearing to be guilty of
offence under section 319 of the 1973 Code,
which otherwise would apply to such a trial.””
(emphasis added)
61. ED’s reliance on State (Delhi Admn.) v. Jagjit Singh, 1989 Suppl. (2)
SCC 770 and the following extracted paragraphs is also relevant in context
of Section 132 of IEA. Relevant extracts are extracted as under:
“13. Therefore, a witness is legally bound to answer
any question which is relevant to the matter in issue
even if the answer to such question is likely to
criminate him directly or indirectly. Proviso to
Section 132 expressly provides that such answer
which a witness is compelled to give shall not subject
him to any arrest or prosecution nor the same can be
proved against him in any criminal proceeding
except a prosecution for giving false evidence by such
answer. The provisions of proviso to Section 132 of
the Indian Evidence Act clearly protect a witness
from being prosecuted on the basis of the answers
given by him in a criminal proceeding which tend to
criminate him directly or indirectly. In view of this
provision, the apprehension of the respondent that
his evidence as approver will be used against him in
the other four criminal cases where he figures as an
accused is without any basis. On the other hand, he
is absolutely protected from criminal prosecution on
the basis of the evidence to be given by him when
examined by the prosecution as an approver in the
said case. This submission of the respondent is,
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therefore, not tenable. It is pertinent to refer in this
connection the decision of this Court in Laxmipat
Choraria v. State of Maharashtra [AIR 1968 SC 938
: (1968) 2 SCR 624 : 1968 Cri LJ 1124] wherein it
has been observed by Hidayatullah, J. as he then was
that:
“Under Section 132 a witness shall not be excused
from answering any question as to any matter
relevant to the matter in issue in any criminal
proceeding (among others) upon the ground that
the answer to such question will incriminate or
may tend directly or indirectly to expose him to a
penalty or forfeiture of any kind. The safeguard to
this compulsion is that no such answer which the
witness is compelled to give exposes him to any
arrest or prosecution or can it be proved against
him in any criminal proceeding except a
prosecution for giving false evidence by such
answer.”
(emphasis added)
62. The apprehension of petitioner that any evidence would be self-
incriminating cannot lead to quashing of the ECIR as statutory and
constitutional protections are already provided and will have to be assessed
in that rubric. This alone cannot assist the petitioner and release her from the
yoke of prosecution under ECIR.
VII.F. Re: MCOCA and exoneration
63. As regards the petitioner’s assertion that offences under Sections 3(5)
and 4 of MCOCA (which form part of the predicate offence) and Section 3
of PMLA are similar, it would be necessary to first extract the said MCOCA
provisions hereunder:
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“Section 2(1)(e) MCOCA:
“Definitions.– (1) In this Act, unless the context
otherwise requires,–
(e) “organised crime” means any continuing unlawful
activity by an individual, singly or jointly, either as a
member of an organised crime syndicate or on behalf of
such syndicate, by use of violence or threat of violence
or intimidation or coercion, or other unlawful means,
with the objective of gaining pecuniary benefits, or
gaining undue economic or other advantage for himself
or any other person or promoting insurgency;”
Section 3(1)(5) MCOCA
“Punishment for organised crime.–(1) Whoever
commits an offence of organised crime shall,
(5) Whoever holds any property derived of obtained
from commission of an organised crime or which has
been acquired through the organised crime syndicate
funds shall be punishable with a term which shall not be
less than three years but which may extend to
imprisonment for life and shall also be liable to fine,
subject to a minimum fine of Rupees Two lacs.”
Section 4 MCOCA:
“4. Punishment for possessing unaccountable wealth on
behalf of member of organised crime syndicate.–If any
person on behalf of a member of an organised crime
syndicate is, or, at any time has been, in possession of
movable or immovable property which he cannot
satisfactorily account for, he shall be punishable with
imprisonment for a term which shall not be less than
three years but which may extend to ten years and shall
also be liable to fine, subject to a minimum fine of
Rupees One lac and such property shall also liable for
attachment and forfeiture, as provided by Section 20.”
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64. Petitioners’ counsel submitted that invocation of Sections 3 (5) and 4
of MCOCA in the predicate offence automatically invites the offence of
holding any property derived or obtained from commission of an organized
crime, which is similar to what Section 3 of PMLA provides (relating to
proceeds of crime).
65. It was, therefore submitted, relying on T.T. Antony (supra), that the
ED cannot arrive at a different conclusion on the same set of facts, and
therefore, the ECIR ought to be quashed.
66. ED’s response is based upon the standalone offence of money
laundering, and that investigation by the ‘predicate offence agency’ cannot
impact the same.
67. Reliance for this, was placed on Vijay Madanlal Choudhary (supra).
Relevant paragraphs are extracted as under:
“112. Reverting to clause (d) of sub-section (1) of
Section 44, it postulates that a Special Court while
trying the scheduled offence or offence of money
laundering shall hold trial in accordance with the
provisions of the 1973 Code as it applies to a trial
before a Court of Session. Going by the plain
language of this provision, no fault can be found
for conducting trial in the respective cases in the
same manner as provided in the 1973 Code.
However, the grievance is about the insertion of the
Explanation vide Finance (No. 2) Act, 2019. As a
matter of fact, this insertion is only a clarificatory
provision, as is evident from the opening statement
of the provision which says that “for the removal
of doubts, it is clarified that”. None of the clauses
inserted by this amendment travel beyond the
principal provision contained in clause (d). Clause
(i) of the Explanation enunciates that the
jurisdiction of the Special Court while dealing with
the offence being tried under this Act, shall not be
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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 trials. This, in fact, is reiteration of the
earlier part of the same section, which envisages
that even though both the trials may proceed before
the same Special Court, it must be tried separately
as per the provisions of the 1973 Code. Insofar as
clause (ii) of the Explanation, at the first glance, it
does give an impression that the same is
unconnected with the earlier part of the section.
However, on closer scrutiny of this provision, it is
noted that the same is only an enabling provision
permitting to take on record material regarding
further investigation against any accused person
involved in respect of offence of money laundering
for which complaint has already been filed,
whether he has been named in the complaint or not.
Such a provision, in fact, is a wholesome provision
to ensure that no person involved in the
commission of offence of money laundering must
go unpunished. It is always open to the authority
authorised to seek permission of the court during
the trial of the complaint in respect of which
cognizance has already been taken by the court to
bring on record further evidence which request can
be dealt with by the Special Court in accordance
with law keeping in mind the provisions of the 1973
Code as well. It is also open to the authority
authorised to file a fresh complaint against the
person who has not been named as accused in the
complaint already filed in respect of same offence
of money laundering, including to request the court
to proceed against such other person appearing to
be guilty of offence under Section 319 of the 1973
Code, which otherwise would apply to such a
trial.”
(emphasis added)
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68. As per ED, merely because the petitioner was not accused in the
predicate offence, would not mean that she has been exonerated or acquitted
of the predicate offence.
69. Reliance was placed on Section 232 of Cr.P.C. while contending that
acquittal is a judicial process and is not similar to an omission to array a
person as an accused, and therefore, petitioner cannot be said to have been
exonerated. In this regard, Section 232 of Cr.P.C. is extracted as under:
“232. Acquittal.–If, after taking the evidence for
the prosecution, examining the accused and
hearing the prosecution and the defence on the
point, the Judge considers that there is no evidence
that the accused committed the offence, the Judge
shall record an order of acquittal.”
70. In Monica Bedi v. State of A.P. (supra), the Supreme Court drew a
distinction between two separate offences, in that, the rule of double jeopardy
would not be applicable if the offences were distinct. Relevant paragraph of
the said judgment reads as under:
“26. What is the meaning of the expression used in
Article 20(2) “for the same offence”? What is
prohibited under Article 20(2) is, that the second
prosecution and conviction must be for the same
offence. If the offences are distinct, there is no
question of the rule as to double jeopardy being
applicable. In Leo Roy Frey v. Supdt., District
Jail [AIR 1958 SC 119 : 1958 Cri LJ 260 : 1958
SCR 822] , the petitioners therein were found guilty
under Section 167(8) of the Sea Customs Act and
the goods recovered from their possession were
confiscated and heavy personal penalties imposed
on them by the authority. Complaints thereafter
were lodged by the authorities before the
Additional District Magistrate under Section 120-
B of the Penal Code, 1860 read with the provisions
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of the Foreign Exchange Regulation Act, 1947 and
the Sea Customs Act. The petitioners approached
the Supreme Court for quashing of the proceedings
pending against them in the Court of the
Magistrate inter alia contending that in view of the
provisions of Article 20(2) of the Constitution they
could not be prosecuted and punished twice over
for the same offence and the proceedings pending
before the Magistrate violated the protection
afforded by Article 20(2) of the Constitution. This
Court rejected the contention and held that
criminal conspiracy is an offence under Section
120-B of the Penal Code but not so under the Sea
Customs Act, and the petitioners were not and
could not be charged with it before the Collector of
Customs. It is an offence separate from the crime
which it may have for its object and is complete
even before the crime is attempted or completed,
and even when attempted or completed; it forms no
ingredients of such crime. They are, therefore,
quite separate offences. The Court relied on the
view expressed by the United States Supreme Court
in United States v. Rabinowich [59 L Ed 1211 :
238 US 78 (1914)]”
(emphasis added)
71. In the opinion of this Court, arguments of the petitioners are unmerited
in so far as they contend that the investigating agency, in the predicate
offence, did not make the petitioner an accused. This will certainly not lead
to a logical corollary that she cannot be accused for a PMLA offence.
72. Argument under Section 71 of IPC and Section 26 of GCA does not
hold water considering petitioner has been implicated for only the offence
under PMLA. The question for prosecution under two offences does not arise.
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73. It is well settled that the offence and the trial, both for the scheduled
offence and PMLA offence, are independent. In any event, the T. T. Antony
(supra) line of cases relate to registration of second or multiple FIRs.
74. Moreover, as per Sukhpal Singh Khaira (supra), the Court under
Section 319 of Cr.P.C, can also array a person as an accused, who may not
have been charge-sheeted. Section 319 of Cr.P.C. reads as under:
“319. Power to proceed against other persons
appearing to be guilty of offence.–(1) Where, in
the course of any inquiry into, or trial of, an
offence, it appears from the evidence that any
person not being the accused has committed any
offence for which such person could be tried
together with the accused, the Court may proceed
against such person for the offence which he
appears to have committed.
(2) Where such person is not attending the Court,
he may be arrested or summoned, as the
circumstances of the case may require, for the
purpose aforesaid.
(3) Any person attending the Court, although not
under arrest or upon a summons, may be detained
by such Court for the purpose of the inquiry into,
or trial of, the offence which he appears to have
committed.
(4) Where the Court proceeds against any person
under sub-section (1) then–
(a) the proceedings in respect of such person shall
be commenced afresh, and the witnesses re-heard;
(b) subject to the provisions of clause (a), the case
may proceed as if such person had been an accused
person when the Court took cognizance of the
offence upon which the inquiry or trial was
commenced.”
75. Also, the determination in Pavana Dibbur (supra), in this regard, is
also relevant, which has already been noted in paragraph 43 above.
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76. In any event, as per the provisions of MCOCA, prosecution would
have to prove that there was an ‘organized crime’ and an ‘organized crime
syndicate’ and only then, property derived from the same would invite a
conviction under Section 3(5) of MCOCA.
77. It would not mean that if the aspect of organized crime could not be
proven, the criminality under the provisions of IPC would not subsist i.e. for
extortion.
78. Even if the offence under MCOCA were not proven by the prosecution
(in the proceedings for the predicate offence), the proceeds of crime would
still remain, if the IPC offence stands proved.
79. At this stage (pre-trial and pre-charge), therefore, inviting the Court
to quash the FIR on the basis of the similarity between the provisions
contained in MCOCA and PMLA is unmerited and unwarranted.
VII.G. Re: Pick and choose by ED
80. Petitioner’s submission is that ED, as a prosecutor, has adopted a pick
and choose policy and did not proceed under PMLA against similarly placed
persons who had also received gifts and articles from Sukesh Chandrasekhar.
Essentially, the petitioner pleads that actresses Nikita Tamboli, Chahatt
Khanna and Sophia Singh, met Sukesh inside Tihar Jail where he was lodged
and also received gifts from him. Further, it was contended that a family
member of actress Nora Fatehi received a BMW car from Sukesh.
81. Despite this, these individuals have not been arrayed as accused
persons by the ED, despite having first-hand knowledge of Sukesh being in
prison. This disparate treatment has been presented as yet another argument
and a ground for quashing of the ECIR.
82. In this regard, the petitioner relies upon Ramesh Manglani (supra)
Sanjay Jain (supra) and Sanjay Kansal (supra).
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83. A perusal of the said decisions would show that they relate to grant of
regular bail in connection with the ECIRs under the PMLA and not situations
relating to quashing of ECIR, which is the subject matter of this case.
84. The issue of parity may be an aspect which the Court does consider
while granting bail, however, the same cannot by extension or extrapolation,
be made applicable to a case of quashing, which would erase the ECIR qua
the accused petitioner, completely.
85. Whether the investigating agency chose a pick and choose policy or
decided not to proceed against the others, based on the merits of the case, is
not an issue under consideration before this Court; petitioner is always at
liberty to raise this issue at an appropriate stage.
86. Petitioner’s arguments relating to ‘regular articles of commerce’ is too
simplistic to be accepted. Som Nath Thapa (supra) was decided on its own
peculiar facts and circumstances. The issue in the instant case, would be
whether the goods were untainted and not the nature of articles, which again
is a matter of trial.
VII.H. Re: Quashing
87. Aside from the specific issues addressed above, what is most important
to be considered is, whether quashing, in any event, can be considered at this
stage. ED submits that it is a settled legal proposition that inherent
jurisdiction of the Court should not be invoked to quash criminal proceedings
at the stage of the framing of charge.
88. In this regard, the ED relies upon the judgment in Rathish Babu
Unnikrishnan (supra), in particular, the following paragraphs:
“14. Bearing in mind the principles for exercise of
jurisdiction in a proceeding for quashing, let us
now turn to the materials in this case. On careful
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reading of the complaint and the order passed by
the Magistrate, what is discernible is that a
possible view is taken that the cheques drawn were,
in discharge of a debt for purchase of shares. In
any case, when there is legal presumption, it would
not be judicious for the quashing Court to carry out
a detailed enquiry on the facts alleged, without first
permitting the trial court to evaluate the evidence
of the parties. The quashing Court should not take
upon itself, the burden of separating the wheat
from the chaff where facts are contested. To say it
differently, the quashing proceedings must not
become an expedition into the merits of factual
dispute, so as to conclusively vindicate either the
complainant or the defence.
15. The parameters for invoking the inherent
jurisdiction of the Court to quash the criminal
proceedings under Section 482CrPC, have been
spelled out by S. Ratnavel Pandian, J. for the two-
Judge Bench in State of Haryana v. Bhajan
Lal [State of Haryana v. Bhajan Lal, 1992 Supp
(1) SCC 335 : 1992 SCC (Cri) 426 : AIR 1992 SC
604] , and the suggested precautionary principles
serve as good law even today, for invocation of
power under Section 482CrPC : (SCC p. 379, para
103)
“103. We also give a note of caution to the
effect that the power of quashing a criminal
proceeding should be exercised very
sparingly and with circumspection and that
too in the rarest of rare cases; that the court
will not be justified in embarking upon an
enquiry as to the reliability or genuineness or
otherwise of the allegations made in the FIR
or the complaint and that the extraordinary or
inherent powers do not confer an arbitrary
jurisdiction on the court to act according to
its whim or caprice.”
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16. In the impugned judgment [Rathish Babu
Unnikrishnan v. State (NCT of Delhi), 2019 SCC
OnLine Del 12340] , the learned Judge had rightly
relied upon the opinion of J.S. Khehar, J. for a
Division Bench in Rajiv Thapar [Rajiv
Thapar v. Madan Lal Kapoor, (2013) 3 SCC 330 :
(2013) 3 SCC (Cri) 158] , which succinctly express
the following relevant parameters to be considered
by the quashing Court, at the stage of issuing
process, committal, or framing of charges : (Rajiv
Thapar case [Rajiv Thapar v. Madan Lal Kapoor,
(2013) 3 SCC 330 : (2013) 3 SCC (Cri) 158] , SCC
p. 347, para 28)
“28. The High Court, in exercise of its
jurisdiction under Section 482CrPC, must
make a just and rightful choice. This is not a
stage of evaluating the truthfulness or
otherwise of the allegations levelled by the
prosecution/complainant against the accused.
Likewise, it is not a stage for determining how
weighty the defences raised on behalf of the
accused are. Even if the accused is successful
in showing some suspicion or doubt, in the
allegations levelled by the
prosecution/complainant, it would be
impermissible to discharge the accused
before trial. This is so because it would result
in giving finality to the accusations levelled by
the prosecution/complainant, without
allowing the prosecution or the complainant
to adduce evidence to substantiate the same.”
17. The proposition of law as set out above makes
it abundantly clear that the court should be slow to
grant the relief of quashing a complaint at a pre-
trial stage, when the factual controversy is in the
realm of possibility particularly because of the
legal presumption, as in this matter. What is also
of note is that the factual defence without having to
adduce any evidence need to be of an
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unimpeachable quality, so as to altogether
disprove the allegations made in the complaint.
18. The consequences of scuttling the criminal
process at a pre-trial stage can be grave and
irreparable. Quashing proceedings at preliminary
stages will result in finality without the parties
having had an opportunity to adduce evidence and
the consequence then is that the proper forum i.e.
the trial court is ousted from weighing the material
evidence. If this is allowed, the accused may be
given an unmerited advantage in the criminal
process. Also because of the legal presumption,
when the cheque and the signature are not disputed
by the appellant, the balance of convenience at this
stage is in favour of the complainant/prosecution,
as the accused will have due opportunity to adduce
defence evidence during the trial, to rebut the
presumption.
19. Situated thus, to non-suit the complainant, at
the stage of the summoning order, when the factual
controversy is yet to be canvassed and considered
by the trial court will not in our opinion be
judicious. Based upon a prima facie impression, an
element of criminality cannot entirely be ruled out
here subject to the determination by the trial court.
Therefore, when the proceedings are at a nascent
stage, scuttling of the criminal process is not
merited.”
(emphasis added)
89. In Soma Chakravarty v State (supra), the Supreme Court was dealing
with an appeal against dismissal of revision against the framing of charge.
The Supreme Court reiterated the well-entrenched principle in the following
paragraph:
“10. It may be mentioned that the settled legal
position, as mentioned in the above decisions, is
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that if on the basis of material on record the court
could form an opinion that the accused might have
committed offence it can frame the charge, though
for conviction the conclusion is required to be
proved beyond reasonable doubt that the
accused has committed the offence. At the time of
framing of the charges the probative value of the
material on record cannot be gone into, and the
material brought on record by the prosecution has
to be accepted as true at that stage. Before framing
a charge the court must apply its judicial mind on
the material placed on record and must be satisfied
that the commitment of offence by the accused was
possible. Whether, in fact, the accused committed
the offence, can only be decided in the trial.”
(emphasis added)
90. What is highlighted in this decision and the paragraph referred to above
is that, even if, at the stage of framing of charge, the Court arrives at a finding
(basis the material on record) that the accused “might” have committed the
offence, the charge in that regard may be framed based on such finding.
91. It is only through trial that the prosecution is to prove that accused has
committed the offence. At the stage of framing of charge, probative value of
the material cannot be gone into and the material brought by the prosecution
has to be accepted. The fundamental principle which forms part of the
paragraph extracted above is, “Whether, in fact, the accused committed the
offence, can only be decided in the trial.”
92. For the petitioner to, therefore, push a plea of quashing of the ECIR, at
this stage, when the arguments on charge are still going on, before the Trial
Court and the charges have yet to be framed, is unwarranted and cannot be
accepted.
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93. It amounts to essentially making this Court assess the material on
record, ignoring the probative value of the same and assuming that no other
aspect would emanate during the trial which could potentially further the case
of the prosecution.
94. The Court is effectively being asked to conduct a pre-trial trial, basis
only the material on record and to arrive at a finding that the ECIR is liable
to be quashed and no offence is made out.
95. What is important to underscore is that the petitioner’s case itself relies
upon the statements of witnesses inter alia Pinky Irani, Shaan Muttathil, the
Ramnani brothers.
96. Whether these statements are complete, watertight, non-porous, not
capable of eliciting further evidence, are clearly not conclusions that the
Court can reach in these proceedings.
97. Petitioner is effectively asking the Court to reach a conclusion, even
with regard to elements of ‘knowledge’, imputed to the petitioner, for having
received the proceeds of crime and conclude that the element of mens rea
was absent.
98. In this regard, it may be important to note that it is the submission of
the petitioner that petitioner enjoys a high reputation in the film industry and
is a well-known celebrity and was habituated and accustomed to getting very
expensive gifts from fans and admirers and that the same is an accepted
practice in the film industry and that her plea for ignorance is thus, merited.
99. The Court is being asked, on the basis of material on record, to
effectively conclude that petitioner was innocent, devoid of any knowledge
of Sukesh’s criminal antecedents and was conclusively and effectively duped
and misled by Pinky Irani, to disabuse her as regards the information
contained in February 2021 newspaper report.
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100. In Anoop Bartaria (supra), the Supreme Court has noted as under:
“30. Having regard to the definition contained in
Section 3, it would be a folly to hold that the
knowledge of the accused that he was dealing with
the proceeds of crime, would be a condition
precedent or sine qua non required to be shown by
the prosecution for lodging the complaint under
the said Act. As the definition itself suggests
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 proceeds of crime
including its concealment, possession, acquisition
or use and projecting or claiming it as untainted
property shall be guilty of offence of money
laundering. Hence, apart from having knowledge,
if a person who directly or indirectly attempts to
indulge or is actually involved in the process or
activity connected with the proceeds of crime, is
also guilty of the offence of money laundering. In
the instant case, the direct involvement of the
petitioners in the activities connected with the
proceeds of crime has been alleged, along with the
material narrated in the complaint which would
require a trial to be conducted by the competent
court.”
(emphasis added)
101. In Anoop Bartaria (supra), the Supreme Court was dealing with a
prayer to quash the prosecution complaint in the ECIR. The Court referred to
State of Haryana v. Bhajan Lal 1992 Supp (1) SCC 335, to highlight that
the power to quash a complaint should be exercised very sparingly and with
circumspection and that too, in the rarest of rare cases. It would be instructive
to extract the relevant passage from the judgment in Bhajan Lal (supra):
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“102. In the backdrop of the interpretation of the
various relevant provisions of the Code under
Chapter XIV and of the principles of law
enunciated by this Court in a series of decisions
relating to the exercise of the extraordinary power
under Article 226 or the inherent powers under
Section 482 of the Code which we have extracted
and reproduced above, we have given the following
categories of cases by way of illustration wherein
such power could be exercised either to prevent
abuse of the process of any court or otherwise to
secure the ends of justice, though it may not be
possible to lay down any precise, clearly defined
and sufficiently channelised and inflexible
guidelines or rigid formulae and to give an
exhaustive list of myriad kinds of cases wherein
such power should be exercised.
(1) Where the allegations made in the first
information report or the complaint, even if they
are taken at their face value and accepted in their
entirety do not prima facie constitute any offence
or make out a case against the accused.
(2) Where the allegations in the first information
report and other materials, if any, accompanying
the FIR do not disclose a cognizable offence,
justifying an investigation by police officers under
Section 156(1) of the Code except under an order
of a Magistrate within the purview of Section
155(2) of the Code.
(3) Where the uncontroverted allegations made in
the FIR or complaint and the evidence collected in
support of the same do not disclose the commission
of any offence and make out a case against the
accused.
(4) Where, the allegations in the FIR do not
constitute a cognizable offence but constitute only
a non-cognizable offence, no investigation is
permitted by a police officer without an order of a
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Magistrate as contemplated under Section 155(2)
of the Code.
(5) Where the allegations made in the FIR or
complaint are so absurd and inherently
improbable on the basis of which no prudent
person can ever reach a just conclusion that there
is sufficient ground for proceeding against the
accused.
(6) Where there is an express legal bar engrafted
in any of the provisions of the Code or the
concerned Act (under which a criminal proceeding
is instituted) to the institution and continuance of
the proceedings and/or where there is a specific
provision in the Code or the concerned Act,
providing efficacious redress for the grievance of
the aggrieved party.
(7) Where a criminal proceeding is manifestly
attended with mala fide and/or where the
proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the
accused and with a view to spite him due to private
and personal grudge.”
102. In Anoop Bartaria (supra), as also, in this case, the plea of the
petitioner does not fall in any of the abovementioned parameters as laid down
in Bhajan Lal (supra).
103. The judgment in Anoop Bartaria (supra), was relied upon, more
recently by the Supreme Court in, Pradeep Nirankarnath Sharma v.
Enforcement Directorate 2025 SCC OnLine SC 560. The Supreme Court
was dealing with an appeal against a dismissal of the appellant’s criminal
revision by the High Court, against an order rejecting the appellant’s
discharge, in a PMLA case.
104. Two aspects are of significance in the decision of Pradeep
Nirankarnath Sharma (supra). Firstly, that the Court highlighted that
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judicial intervention at a preliminary stage must be exercised with caution
and proceedings should not be quashed in absence of compelling grounds.
Secondly, the concept of continuing offence under the PMLA was dealt with.
In this regard the Court stated as under:
“31. The illegal diversion and layering of funds
have a cascading effect, leading to revenue losses
for the state and depriving legitimate sectors of
investment and financial resources. It is settled
law that in cases involving serious economic
offences, judicial intervention at a preliminary
stage must be exercised with caution, and
proceedings should not be quashed in the absence
of compelling legal grounds. The respondent has
rightly argued that in cases involving allegations
of such magnitude, a trial is imperative to
establish the full extent of wrongdoing and to
ensure accountability.
32. The PMLA was enacted to combat the menace
of money laundering and to curb the use of
proceeds of crime in the formal economy. Given
the evolving complexity of financial crimes,
courts must adopt a strict approach in matters
concerning economic offences to ensure that
perpetrators do not exploit procedural loopholes
to evade justice.”
(emphasis added)
VII.I. Re: Petitioner’s Conduct
105. In addition to the grounds raised by the petitioner and assessed above,
certain pertinent issues raised by ED in relation to the conduct of petitioner
have also informed the Court’s opinion in rejection of the petitioner’s plea.
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106. Firstly, is the content of 2020 news article which was apparently
shared by Shaan Muttathil with petitioner. A perusal of the article would
show that it is dated 10th February 2020 and is titled as “Look Out Notice
against actress Leena Maria Paul and CBI case”. The article mentioned that
the CBI had issued a Look Out circular against Leena Maria Paul, a South
Indian actress, who was accused of impersonation and extortion in
connection with a bank fraud case.
107. CBI later revealed that the conspiracy was hatched by Leena Maria
Paul, who was the partner of Sukesh. The article specifically mentioned as
under:
“Sukesh is accused in many cheating cases across
the country. He is currently lodged in Tihar Jail in
connection with a bribery case involving Amma
Makkal Munnetra Kazhagam, leader T. T. V.
Dhinakaran. He also faces charges of posing as a
Supreme Court Judge in a phone call to a Delhi
Judge in a bid to secure his release on bail.”
108. Then again, it mentions that :
“Leena Maria Paul was first arrested along with
Sukesh in 2013 for cheating Canara Bank of 19
crore rupees. They were again arrested in 2015 by
the Economic Offences Wing of the Mumbai Police
for trying to make people invest in a bogus firm on
the promise of high returns.”
109. By any normal standards, as per ED, this would have been enough to
alert a person about the criminal antecedents of Sukesh. However, ED
submits that petitioner chose to bury this under the carpet and ignore it,
pursuant to what she alleges as aggressive persuasion by Pinky Irani to
disabuse her of the opinion. During this time, from February 2021 till July
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2021 petitioner and her family continued to receive articles and gifts from the
accused Sukesh.
110. Though petitioner stated that this was not the article she had received
from Shaan Muttathil but that Shaan Muttathil had shared earlier news article
dated 2017 which showed that Sukesh was involved in some political
controversy, petitioner did admit that she was extremely upset and scared
when she saw the article. In this regard, it may be useful to extract the
statement of the petitioner recorded on 27th June 2022:
“Q.9 I am showing you the news article dated
10.02.2020 under the headline “Look Out
Notice Against Actress Leena Maria. Paul in
CBI Case” (Artnexure-2). As per the news
article, the following cases were reported
against Sukesh Chandrasekhar;
(1) TTV Dinakaran Case – Delhi Police
(2) Canara Bank Fraud Case
(3) EOW Mumbai Case
Do you agree?
Ans. this was not the article sent to me by Shaan.
There was an article with Sukesh and some South
Indian politician controversy that was dated
2017.
Q.10 I am showing you printouts of whatsapp
conversation between Shaan Muthathil and
Pinky Irani (Annexure 3) held on 11.02.2021 to
13.02.2021. In this conversation, Shaan
Muthathil had shared aforesaid news article
dated 10.02.2020 under the headline. “Look
Out Notice Against Actress Leena Marla Paul
in CBI Case” to Pinky Irani while you stated
that Shaan Muthathil had shared the news
article to you. From this whatsapp conversation
it appears that ·Shaan Muthathil had shared
this news article to you as well. Why are you
lying ?
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Ans. Shaan had shared a news article with me
but it was not this one. I only remember at that
time he shared a news article with me that only
discussed Sukesh and not leena. Also, what
shaan and pinky have discussed on whatsapp I
am not aware of the conversations between them.
Q.11 As per the news article, it is reported that
Sukesh Chandrasekhar is lodged in Tihar
Jail.Do you agree?
Ans. when I received the article from shaan
about a controversary that Sukesh was involved
in, the first thing I saw was that his name was
Sukesh and that was the full form of his name.
not Shekhar Ratna vela like how he gave me. The
article did not mention that he was in tihar jail at
the time as it was an old article.
Q.12 I am showing you printouts of whatsapp
conversation between Shaan Muthathil and
Pinky Irani (Annexure 4) held on 13.02.2021
between 11:24 AM to 3:39PM (Annexure 4). In
this conversation, Shaan sent messages viz, “we
saw a article”, “she is also to high profile and
she has known ppl on high end. And she go to
know the news. She is like is it all just soo froud’
“who is that girl who is in jail?” As per these
messages, you had sent news article to Shaan
which he had forwarded to Pinky Irani and you
all were aware that Sukesh Chandrasekhar was
lodged in Jail. Please comment on it.
Ans. No Shaan had received this article from a
contact of his which he did not mention to me. He
forwarded me an article (the one with Sukesh
and some political controversary) and
forwarded an article to pinky as well, as per the
messages. I did not forward any article to Shaan.
Shaan also was very scared at the time as he saw
the articles. l also was extremely upset and
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scared at the time when I saw the article that
Shaan had sent me.
Q.13 As per the news article dated 10.02.2020
under the headline “Look Out Notice Against
Actress Leena Maria Paul in CBI Case”
wherein it is mentioned that “Sukesh
Chandrasekhar is accused in many cheating
cases across the country. He is currently lodged
in Tihar Jail in connection with a bribery case
involving Amma Makkal Munnetra Kazhagam
leader TTV Dinakaran” This clearly shows that
you, being a celebrity who conscious more
about public image, were aware that Sukesh
Chandrasekhar was lodged in Jail and despite
you continued to receive gifts from him and
enjoyed the same. Please comment.
Ans. After I received the first news article from
shaan dated 2017, I then read 2 to 3 more
articles on Sukesh on the internet. I was
extremely scared when I first saw all these
articles and completely stopped talking to both
Angel and Sukesh. After 2 days angel showed up
to my house unannounced with a ring from
Sukesh stating that he is very sorry for not
sharing these articles with me and that he was
planning to come down to Mumbai for
Valentines day and tell me everything. She then
went on to explain that in politics and the
business world there is very cut throat
competition and this scale of media fabrication
is normal. And that she knew Sukesh for freely
speaking to me, dressed in normal clothes from
a normal location. For me there is no way a
person if he was in jail would be able to
communicate with me so freely and also have
access to technology and be able to do purchases
whenever he wanted.
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Q.14 It clearly means that the person
introduced to you was not Shekhar Ratna Vella
but was Sukesh Chandrasekhar. Was that
reason you got upset and stopped
communicating with him?
Ans. I stopped communicating with him because
I got scared firstly that he had all these
allegations made on him. Also I live alone and
have no family in Mumbai so was scared that
maybe my life or safety could be in danger.
Secondly he had lied to me about his name which
was really Sukesh and I felt cheated and
betrayed.”
111. The said extract of statement is being reproduced above only to show
the flow of the questioning and response by petitioner in this regard.
Considering that the matter is at the stage of framing of charge and the trial
has to begin, the Court is not passing any observation in this regard. However,
for the purposes of this assessment, these set of circumstances do not
persuade the Court that ECIR needs to be quashed.
112. Secondly, ED’s submission that when petitioner was searching about
Sukesh on Google, she had not bothered to find out that Sukesh owned
‘Kalyan Jewelers’ or had ‘coal mines’ or not or had ‘50% ownership of Leela
Hotel, Chennai’ as he claimed. In the same statement on 27th June 2022,
petitioner apparently admitted that she had deleted her mobile phone data
from iPhone 12 Pro on 11th August 2021 after learning about the arrest of
Sukesh.
113. ED’s counsel highlighted that petitioner did not reveal the truth of
financial transactions with Sukesh and concealed facts till confronted with
evidence. Petitioner had also asked colleagues to destroy the evidence.
Following aspects have been highlighted by ED:
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i) Petitioner had initially denied knowing the actual name of
accused Sukesh, and later on, when confronted with evidence,
admitted that it was known to her.
ii) With respect to cash transaction with Advaita Kala i.e., money
delivered by Sukesh of Rs.15 Lacs to Advaita Kala, she initially
denied having entered into any transaction, but later admitted the
same later to be correct. Payment to Advaita Kala happened in August
2021, which was well after the arrest of Sukesh and knowledge of his
criminal antecedents in February 2021.
iii) Petitioner did not admit the factum of receiving huge monies
and valuable gifts which were transferred to her parents, brother and
sister. She kept improving the statements about the receipt of gifts
and luxury items. During recording of statement, petitioner denied
purchase of cars by Sukesh via her parents, but being confronted with
the statement of Sukesh, she admitted the same.
iv) She later admitted to new disclosures of property being
purchased by Sukesh for her in Sri Lanka.
v) Initially, in the first statement recorded on 30th August 2021, she
disclosed a certain number of gifts but these were increased till 8 th
December 2021.
vi) Disclosure about the relationship with accused Pinky Irani was
made only on 8th December 2021.
vii) Since data was wiped out from her phone as well as by Sukesh,
the investigation is based upon evidence such as disclosures by
accused Sukesh and Pinky Irani and statements of Shaan Muttathil
and other witnesses.
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viii) In the month of March, May and June 2021, transfers were made
to the bank accounts of the sister and brother of the petitioner to the
tune of USD 172913 and AUD 26740.
114. ED had submitted a tabulation to show improvement by petitioner in
the statements; the said tabulation is extracted above in paragraph 18.20.
115. Further, ED has given another tabulation in the reply/counter basis the
evidences collected during the investigation to provide a timeline/sequence
of events. This table is also being extracted herein for ease of reference:
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116. In this regard, what ED highlights is that the Explanation to Section 3
of PMLA clearly indicates that the process or activity connected with
proceeds of crime is a continuing activity and continues till such time a
person is ‘directly’ or ‘indirectly’ enjoying the proceeds of crime by its
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concealment/possession/ acquisition/use/projecting it as untainted property
or claiming it to be sold.
117. ED’s submission regarding “continuing activity” is basis that petitioner
gave staggered disclosures. Factual aspects are narrated in paragraphs above
[paragraph 21.12- about payment to Advaita Kala; paragraph 21.13 – in
relation the gifts and amounts received by her family; paragraph 21.15 –
regarding the role played by Pinky Irani; paragraph 21.19 – regrading
deletion of data from mobile phones and paragraph 21.20- regarding the
denial of news article].
118. Taking into account these submissions of ED, the Court’s opinion that
the ECIR is not amenable to be quashed, stands further endorsed and
fortified.
119. ED’s reliance on Umesh Kumar (supra) which relied upon Salman
Salim khan (supra) is instructive since it highlights that the Court cannot
under Section 482 of Cr.P.C weigh the correctness and sufficiency of
evidence and exercise may be too premature. Relevant paragraphs of Umesh
Kumar (supra) are extracted as under:
“30. In State of Maharashtra v. Salman Salim
Khan [(2004) 1 SCC 525 : 2004 SCC (Cri) 337 :
AIR 2004 SC 1189] this Court deprecated the
practice of entertaining the petition under Section
482 CrPC at a premature stage of the proceedings
observing as under : (SCC pp. 527-29, paras 4, 8
& 12)
“4. … The arguments regarding the framing of
a proper charge are best left to be decided by
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get protracted by the intervention of the
superior courts.
***
8. … The High Court by the impugned order
had allowed the said application and quashed
the order made by the learned Sessions Judge
framing a charge under Section 304 Part II
IPC against the respondent herein while it
maintained the other charges and directed the
appropriate Magistrate’s Court to frame de
novo charges….
***
12. We are of the opinion that though it is open
to a High Court entertaining a petition under
Section 482 of the Code to quash charges
framed by the trial court, same cannot be done
by weighing the correctness or sufficiency of
evidence. In a case praying for quashing of the
charge, the principle to be adopted by the High
Court should be that if the entire evidence
produced by the prosecution is to be believed,
would it constitute an offence or not. The
truthfulness, the sufficiency and acceptability
of the material produced at the time of framing
of charge can be done only at the stage of trial.
… we think the High Court was not justified in
this case in giving a finding as to the non-
existence of material to frame a charge for an
offence punishable under Section 304 Part II
IPC, therefore, so far as the finding given by
the High Court is concerned, we are satisfied
that it is too premature a finding and ought not
to have been given at this stage.”
(emphasis added)
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120. All aspects pleaded in the case put by petitioner (recorded in paragraph
17 above) are subjective issues which require to be established through trial.
As an illustration, the petitioner contends that there was reluctance on her
part, she was misled, hoodwinked, persuaded, she voluntarily participated in
the investigation, she was ignorant, and was subjected to over indulgent
actions of an admirer/fans/suitor, and in substance has been conned. All these
aspects, are not established, crystallized, or proved yet. Ex facie these are
subjective issues and petitioner is asserting that the Court accepts these as
inviolable truths or as an optimistic interpretation of the facts in her favour.
Conclusivity can only precipitate during the trial which is the filtration
mechanism offered by the criminal justice process. Accepting these
interpretations in favour of the petitioner at this stage would upend the
process completely.
121. Whether Petitioner knew that what was received were ‘proceeds of
crime’ is yet again an aspect tethered to establishing petitioner’s ‘knowledge’
regarding criminal antecedents of Sukesh and the credibility of assertion that
she was completely persuaded and misled by Pinky Irani to ignore it. The
nuance that petitioner’s counsel is attempting to draw between knowledge of
criminality and knowledge that articles were proceeds of crime may not be
disjunctive issues sitting in two separate silos. Attribution of knowledge for
the purposes of PMLA implication may potentially bring in its fold the full
range, spectrum and degrees of “knowing”. For example, whether turning a
blind eye to an obvious fact or disturbing news or a critical disclosure of
illegality, would amount to “knowing” or not is a matter that, in this Court’s
opinion, can be determined post-trial, when the Court has all strands of
evidence for appreciation.
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VIII. CONCLUSION
122. In view of the above, the Court is of the opinion that the petition and
plea of petitioner cannot be entertained for quashing of the ECIR/DLZO-
II/54/2021 dated 8th August 2021 and 2nd supplementary complaint dated 17th
August 2022.
123. The petition is, therefore, dismissed.
124. All observations made by this Court are purely for the assessment of
this petition and are not meant to be any statement on the merits of the matter,
particularly since proceedings are pending before the Special Court for
arguments on charge.
125. Pending applications are rendered as infructuous.
126. Judgement be uploaded on the website of this Court.
(ANISH DAYAL)
JUDGE
JULY 03, 2025 /SM/RK/MK/AK/tk+kp
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