Karnataka High Court
Sri. Nara Bharath Reddy vs Deputy Director on 5 August, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 05TH DAY OF AUGUST, 2025
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
WRIT PETITION No.18668 OF 2024 (GM - RES)
C/W
WRIT PETITION No.17779 OF 2024 (GM - RES)
WRIT PETITION No.22717 OF 2024 (GM - RES)
WRIT PETITION No.22808 OF 2024 (GM - RES)
WRIT PETITION No.23142 OF 2024 (GM - RES)
WRIT PETITION No.23287 OF 2024 (GM - RES)
WRIT PETITION No.23356 OF 2024 (GM - RES)
IN WRIT PETITION No.18668 OF 2024
BETWEEN:
1. M/S. SREE RAGHAVENDRA ENTERPRISES
NO.51, GOPAL SWAMY ROAD
GANDHINAGAR, BALLARI - 583 103
REP. BY ITS PARTNER
SMT. N.SUVARNA
(REGISTERED PARTNERSHIP FIRM).
2. SMT. N.SUVARNA
W/O SRI N.SURYNARAYANA REDDY
AGED ABOUT 66 YEARS
R/AT D.NO.21(2), 2ND CROSS
XVIII WARD, NEHRU COLONY
2
GANDHINAGAR, BALLARI - 583 103.
... PETITIONERS
(BY SRI M.V.SESHACHALA, SR. ADVOCATE FOR
SRI NAGHARISH G. S., ADVOCATE)
AND:
1. DEPUTY DIRECTOR
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
2ND FLOOR, VISTAAR COMMERCIAL COMPLEX
2-22/6, AIRPORT ROAD, YEYYADI
MANGALORE - 575 008.
2. JOINT DIRECTOR
BANGALORE ZONAL OFFICE
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
3RD FLOOR, 'B'-BLOCK, BMTC
SHANTINAGAR, TTMC
K.H. ROAD, SHANTINAGAR
BENGALURU - 560 027.
3. DIRECTOR
DIRECTORATE OF ENFORCEMENT
DELHI ZONAL OFFICE - I, C-BLOCK
PRAVARTAN BHAWAN
DR. APJ ABDUL KALAM ROAD
NEW DELHI - 110 011.
4. ADJUDICATING AUTHORITY
THE PREVENTION OF MONEY
LAUNDERING ACT, JEEVAN DEEP BUILDING
4TH FLOOR, SANSAD MARG
NEW DELHI - 110 001
3
REP. BY ITS CHAIRPERSON.
... RESPONDENTS
(BY SRI MADHUKAR DESHPANDE, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF CR.
P.C., PRAYING TO QUASH THE ECIR/MGSZO/01/2024 REGISTERED
BY THE R-1 U/S 3 OF THE PMLA ACT, DTD. 06.02.2024 ANNX-K IN
RESPECT OF BOTH THE PETITIONERS.
IN WRIT PETITION No.17779 OF 2024
BETWEEN:
1. M/S. INDIAN MINERALS AND GRANITE CO.,
NO. 51, GOPAL SWAMY ROAD
GANDHINAGAR, BALLARI - 583 103.
REPRESENTED BY ITS PARTNER
SMT. N.SURVARNA
(REGISTERED UNDER REGISTRATION ACT)
2. SMT. N.SUVARNA
W/O SRI N.SURYNARAYANA REDDY
AGED ABOUT 66 YEARS
R/AT D.NO. 21(2), 2ND CROSS, XVIII WARD
NEHRU COLONY, GANDHINAGAR
BALLARI - 583 103.
... PETITIONERS
(BY SRI M.V.SESHACHALA, SR. ADVOCATE FOR
SRI NAGHARISH G. S., ADVOCATE)
AND:
1. DEPUTY DIRECTOR
DIRECTOR OF ENFORCEMENT
4
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
2ND FLOOR, VISTAAR COMMERCIAL COMPLEX
2-22/6, AIRPORT ROAD, YEYYADI
MANGALORE - 575 008.
2. JOINT DIRECTOR
BANGALORE ZONAL OFFICE
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
3RD FLOOR, 'B' BLOCK, BMTC
SHANTINAGAR, TTMC
K.H.ROAD, SHANTINAGAR
BENGALURU - 560 027.
3. DIRECTOR
DIRECTORATE OF ENFORCEMENT
DELHI ZONAL OFFICE - 1
C-BLOCK, PRAVARTAN BHAWAN
DR. APJ ABDUL KALAM ROAD
NEW DELHI - 110 011.
4. ADJUDICATING AUTHORITY
THE PREVENTION OF MONEY LAUNDERING ACT
JEEVAN DEEP BUILDING
4TH FLOOR, SANSAD MARG
NEW DELHI - 110 001
REPRESENTED BY ITS CHAIRPERSON.
... RESPONDENTS
(BY SRI MADHUKAR DESHPANDE, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF
CR.P.C., PRAYING TO QUASH THE ECIR/MGSZO/01/2024
REGISTERED BY THE R-1 U/S 3 OF THE PMLA ACT, DTD.
06.02.2024 ANNX-K IN RESPECT OF BOTH THE PETITIONERS.
5
IN WRIT PETITION No.22717 OF 2024
BETWEEN:
SRI NARA SHARATH REDDY
S/O N.SURYANARAYANA REDDY
AGED ABOUT 39 YEARS
R/AT NO.551, 16TH CROSS
INDIRANAGAR, BENNAMANGALA II
STAGE, BENGALURU - 560 038.
... PETITIONER
(BY SRI M.V.SESHACHALA, SR. ADVOCATE FOR
SRI NAGHARISH G. S., ADVOCATE)
AND:
1. DEPUTY DIRECTOR
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
2ND FLOOR, VISTAAR COMMERCIAL COMPLEX
2-22/6, AIRPORT ROAD, YEYYADI
MANGALORE - 575 008.
2. JOINT DIRECTOR
BANGALORE ZONAL OFFICE
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
3RD FLOOR, B-BLOCK, BMTC
SHANTINAGAR, TTMC, K.H.ROAD
SHANTINAGAR, BENGALURU - 560 027.
3. DIRECTOR
DIRECTORATE OF ENFORCEMENT
DELHI ZONAL OFFICE-1
C-BLOCK, PRAVARTAN BHAWAN
6
DR. APJ ABDUL KALAM ROAD
NEW DELHI - 110 011.
4. ADJUDICATING AUTHORITY
THE PREVENTION OF MONEY
LAUNDERING ACT, JEEVAN DEEP BUILDING
4TH FLOOR, SANSAD MARG
NEW DELHI - 110 001
REPRESENTED BY ITS CHAIRPERSON.
... RESPONDENTS
(BY SRI MADHUKAR DESHPANDE, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF
CR.P.C., PRAYING TO ISSUE A WRIT OF CERTIORARI TO QUASH
THE ECIR/MGSZO/01/2024 REGISTERED BY THE FIRST
RESPONDENT U/S. 3 OF THE PMLA ACT, DATED 06.02.2024
ANNEXURE-H AND CONSEQUENTLY QUASH ORDER IN
OA.NO.1152/2024 DATED 18.07.2024 ANNEXURE-K PASSED BY
FOURTH RESPONDENT IN RESPECT OF THE PETITIONER SO FAR AS
PETITIONER IN CONCERN.
IN WRIT PETITION No.22808 OF 2024
BETWEEN:
SRI N.SURYANARAYANA REDDY
S/O LATE GOWRANNA
AGED ABOUT 70 YEARS
R/AT D.NO.21(2), 2ND CROSS
XVIII WARD, NEHRU COLONY
GANDHINAGAR, BALLARI - 583 103.
... PETITIONER
(BY SRI M.V.SESHACHALA, SR. ADVOCATE FOR
SRI NAGHARISH G. S., ADVOCATE)
7
AND:
1. DEPUTY DIRECTOR
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
2ND FLOOR, VISTAAR COMMERCIAL COMPLEX
2-22/6, AIRPORT ROAD, YEYYADI
MANGALORE - 575 008.
2. JOINT DIRECTOR
BANGALORE ZONAL OFFICE
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
3RD FLOOR, B-BLOCK, BMTC
SHANTINAGAR, TTMC, K.H.ROAD
SHANTINAGAR, BENGALURU - 560 027.
3. DIRECTOR
DIRECTORATE OF ENFORCEMENT
DELHI ZONAL OFFICE - I, C-BLOCK
PRAVARTAN BHAWAN
DR. APJ ABDUL KALAM ROAD
NEW DELHI - 110 011.
4. ADJUDICATING AUTHORITY
THE PREVENTION OF MONEY LAUNDERING ACT
JEEVAN DEEP BUILDING
4TH FLOOR, SANSAD MARG
NEW DELHI - 110 001
REPRESENTED BY ITS CHAIRPERSON
... RESPONDENTS
(BY SRI MADHUKAR DESHPANDE, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF
8
CR.P.C., PRAYING TO QUASH THE ECIR/MGSZO/01/2024
REGISTERED BY THE FIRST RESPONDENT U/S 3 OF THE PMLA ACT,
DATED 06/02/2024 ANNX-K AND CONSEQUENTLY QUASH ORDER
IN OA NO. 1152/2024 DATED 18/07/2024 ANNX-M PASSED BY
FOURTH RESPONDENT IN RESPECT OF THE PETITIONER.
IN WRIT PETITION No.23142 OF 2024
BETWEEN:
SRI C.ANIL KUMAR REDDY
S/O C.GOPAL REDDY
AGED ABOUT 49 YEARS
R/AT D.NO. 147, 3RD CROSS
XVIII WARD, NEHRU COLONY
GANDHINAGAR, BALLARI - 583 103.
... PETITIONER
(BY SRI M.V.SESHACHALA, SR. ADVOCATE FOR
SRI NAGHARISH G. S., ADVOCATE)
AND:
1. DEPUTY DIRECTOR
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
2ND FLOOR, VISTAAR COMMERCIAL COMPLEX
2-22/6, AIRPORT ROAD, YEYYADI
MANGALORE - 575 008.
2. JOINT DIRECTOR
BANGALORE ZONAL OFFICE
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
3RD FLOOR, B-BLOCK, BMTC
SHANTINAGAR, TTMC
9
K.H.ROAD, SHANTINAGAR
BENGALURU - 560 027.
3. DIRECTOR
DIRECTORATE OF ENFORCEMENT
DELHI ZONAL OFFICE - I
C-BLOCK, PRAVARTAN BHAWAN
DR. APJ ABDUL KALAM ROAD
NEW DELHI - 110 011.
4. ADJUDICATING AUTHORITY
THE PREVENTION OF MONEY LAUNDERING ACT
JEEVAN DEEP BUILDING, 4TH FLOOR
SANSAD MARG, NEW DELHI - 110 001
REPRESENTED BY ITS CHAIRPERSON.
... RESPONDENTS
(BY SRI MADHUKAR DESHPANDE, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF
CR.P.C., PRAYING TO QUASH THE ECIR/MGSZO/01/24
REGISTERED BY THE R1 U/S 3 OF THE PMLA ACT, DTD 06.02.24
ANNEXURE-E AND CONSEUQENTLY QUASH ORDER IN OA NO.
1152/24 DTD 18.07.24 ANNEXURE-G PASSED BY FOURTH
RESPONDENT IN RESPECT OF THE PETITIONER SO FAR AS
PETITIONER CONCERNED.
IN WRIT PETITION No.23287 OF 2024
BETWEEN:
SRI NARA BHARATH REDDY
S/O N.SURYANARAYANA REDDY
AGED ABOUT 33 YEARS
R/AT D.NO. 21(2), 2ND CROSS
XVIII WARD, NEHRU COLONY
GANDHINAGAR, BALLARI - 583 103.
... PETITIONER
(BY SRI M.V.SESHACHALA, SR. ADVOCATE FOR
10
SRI NAGHARISH G. S., ADVOCATE)
AND:
1. DEPUTY DIRECTOR
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
2ND FLOOR, VISTAAR COMMERCIAL COMPLEX
2-22/6, AIRPORT ROAD, YEYYADI
MANGALORE - 575 008.
2. JOINT DIRECTOR
BANGALORE ZONAL OFFICE
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
3RD FLOOR, B-BLOCK, BMTC
SHANTHINAGAR, TTMC
K.H. ROAD, SHANTHINAGAR
BENGALURU - 560 027.
3. DIRECTOR
DIRECTORATE OF ENFORCEMENT
DELHI ZONAL OFFICE - I
C-BLOCK, PRAVARTAN BHAWAN
DR. APJ ABDUL KALAM ROAD
NEW DELHI - 110 011.
4. ADJUDICATING AUTHORITY
THE PREVENTION OF MONEY LAUNDERING ACT
JEEVAN DEEP BUILDING, 4TH FLOOR
SANSAD MARG, NEW DELHI - 110 001
REPRESENTED BY ITS CHAIRPERSON.
... RESPONDENTS
(BY SRI MADHUKAR DESHPANDE, ADVOCATE)
11
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF
CR.P.C., PRAYING TO QUASH THE ECIR/MGSZO/01/24
REGISTERED BY THE FIRST RESPONDENT U/S 3 OF THE PMLA ACT,
06.02.2024 ANNEXURE-H AND CONSEQUENTLY QUASH ORDER
OA.NO.1152/2024 DATED 18.07.2024 ANNEXURE-K PASSED BY
FOURTH RESPONDENT IN RESPECT OF THE PETITIONER.
IN WRIT PETITION No.23356 OF 2024
BETWEEN:
1. SRI SRINIVASULU T.H.R. ALIAS SEENA BABU
S/O T.H.RAMANJANEYALU
AGED ABOUT 27 YEARS
R/AT SIRUGUPPA ROAD
OPP. REMAND HOME
HOUSING BOARD COLONY
BELLARY - 583 101.
2. SRI SULTHAN BABU
S/O LATE T.RAJASAHEB
AGED ABOUT 38 YEARS
R/AT NO.187, SANJAY
GANDHI NAGAR
BELLARY - 583 101.
3. SRI K.MANJUNATHA
S/O K.HONNURAPPA
AGED ABOUT 40 YEARS
R/AT MIG -1/61
NEAR VASAVI SCHOOL
NETHAJI NAGAR
BELLARY - 583 101.
4. SRI N.P.SATHISH REDDY
S/O LATE N.P.SHIVARAMA REDDY
AGED ABOUT 34 YEARS
12
R/AT NO.22, MRV LAYOUT
MOKA ROAD, BELLARY - 583 103.
... PETITIONERS
(BY SRI M.V.SESHACHALA, SR. ADVOCATE FOR
SRI NAGHARISH G. S., ADVOCATE)
AND:
1. DEPUTY DIRECTOR
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
2ND FLOOR, VISTAAR COMMERCIAL COMPLEX
2-22/6, AIRPORT ROAD, YEYYADI
MANGALORE - 575 008.
2. JOINT DIRECTOR
BANGALORE ZONAL OFFICE
DIRECTOR OF ENFORCEMENT
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
3RD FLOOR, B-BLOCK, BMTC
SHANTINAGAR TTMC
K.H.ROAD, SHANTINAGAR
BENGALURU - 560 027.
3. DIRECTOR
DIRECTOR OF ENFORCEMENT
DELHI ZONAL OFFICE - I
C-BLOCK, PRAVARTAN BHAWAN
DR. APJ ABDUL KALAM RAOD
NEW DELHI - 110 011.
... RESPONDENTS
(BY SRI MADHUKAR DESHPANDE, ADVOCATE)
13
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF
CR.P.C., PRAYING TO ISSUE A WRIT OF CERTIORARI TO QUASH
THE ECIR/MGSZO/01/2024 REGISTERED BY THE FIRST
RESPONDENT U/S. 3 OF THE PMLA ACT, DATED 06.02.2024
ANNEXURE-B IN RESPECT OF THE PETITIONERS.
THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS
DAY, THE COURT MADE THE FOLLOWING:-
CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA
CAV ORDER
The petitioners, in these cases, raise a common challenge to
the proceedings instituted by the Enforcement Directorate in
ECIR/MGSZO/01/2024 under the Prevention of Money Laundering
Act, 2002 ('the Act' for short). A consequent mandamus is sought
to declare that the proceeds of crime traceable to original
complaints in P.C.R. Nos.73, 74, 75 & 76 of 2022 cannot be gone
into, in the light of quashment of crime itself by this Court.
2. Heard Sri M.V. Sheshachala, learned senior counsel
appearing for the petitioners and Sri Madhukar Deshpande, learned
counsel appearing for the respondents.
14
3. Facts, in brief, germane are as follows:-
The proceedings impugned in the case at hand are an
offshoot of registration of private complaints in P.C.R. Nos.73, 74,
75 & 76 of 2022 and several other private complaints registered.
The aforesaid private complaints along with several other
complaints against these petitioners become the subject matter of
challenge before this Court in Criminal Petition Nos. 8067, 8072,
8075, 8076, 8079, 8068, 8070, 8074, 8077 and 8078 of 2023. The
Enforcement Directorate is nowhere in the picture till this point.
This Court, exercising its jurisdiction under Section 482 of the
Cr.P.C., obliterates the very reference order under Section 156(3)
of the Cr.P.C., Therefore, it would suffice if the facts obtaining in
Crl.P.No.8076 of 2023 are paraphrased to capture the facts
necessary for consideration of the subject cases. The facts are as
follows:
".... .... ....
The 1st respondent is the complainant. The
complainant claims to have purchased land bearing
Sy.No.35/A totally measuring 10 acres in Gavarala Village,
Kukunoor Taluk, Koppal District including 2 guntas of kharab
land. The complainant purchases the said property on 23-12-
2002. The averment is that he has purchased the said land
from out of his own earnings and claims to be in possession
15
of the said land of 10 acres in total since then. It is alleged
that accused 3 to 6 are the relatives of the complainant and
accused 5 and 6, are husband and wife and accused No.4 is
the son of accused 5 and 6. Accused 5 and 6 are said to be
partners of M/s Sree Raghavendra Enterprises and M/s
Indian Minerals and Granite Company and accused Nos. 1
and 2 are said to be employees in the said partnership firm.
3. The complainant avers that he stayed in the
residence of the accused while he was pursuing his
Engineering degree in the years 1993 to 1997. Subsequent
upon completion of graduation, the complainant shifts to
United States of America to pursue his further studies. On
coming back to India, the complainant is said to have
assisted the management and administrative work of the
business affairs of both the afore-mentioned partnership
firms from 2002 to 2006. The narration is taken a little
further and the narration turns into allegations. The
complainant is said to have asked accused No.5 to return the
documents concerning the schedule property on the decision
of the complainant to quit of assisting and serving accused
No.5 in the partnership firms. It is then accused No.5
misrepresents and lies about the sale deed dated
23-12-2002 and other property papers missing and assured
the complainant that if the documents were traced, he would
return the same to the complainant immediately. This is in
the year 2005-2006.
4. In the year 2019, the firms and the houses of
accused Nos. 4 to 6 were searched by the Income Tax
officials and search led to seizure. The seizure was of several
documents in possession of accused Nos. 4 to 6. The
property papers which belonged to the complainant also
became a subject matter of seizure. It is then a notice comes
to be issued by the Income Tax Department to the
complainant and he was summoned with regard to the affairs
and business of the aforesaid partnership firms. It is then the
complaint avers that the complainant realized that accused 4
to 6 along with others have played fraud upon the
complainant. The fraud is that accused 4 to 6 have usurped
the self-acquired properties of one N.Deva Reddy. The said
N.Deva Reddy is the father-in-law of the complainant. It is
then the subject complaint comes to be registered on the
16
score that a General Power of Attorney ('GPA' for short) that
was executed in the year 2012 is a product of fraud and
based upon the said General Power of Attorney, properties
have changed hands by forging the signatures of the
complainant. Based upon these incidents, the private
complaint comes to be registered. The learned Magistrate,
on perusal at the private complaint, refers the matter for
investigation under Section 156(3) of the CrPC. Referring the
matter to investigation is what has driven the petitioners to
this Court in the subject petition. Since the 1st petitioner is a
Member of the Legislative Assembly, the matter is placed
before this Special Bench constituted to hear cases
concerning political representatives.
.... .... ....
9. The afore-narrated facts are not in dispute. The 1st
respondent-complainant is said to be one of the relatives of
accused Nos. 4 to 6, the petitioners herein. He was working
in the partnership firms of accused 4 and 5 between 2002
and 2006. It is his claim that he had purchased the subject
property in Sy.No.35/3 on 23-12-2002 and travels to United
States of America for his higher studies; comes back,
executes a GPA in favour of accused No.1. Accused No.1 on
the strength of the GPA executes a sale deed in favour of
accused No.4 on 06.08.2012 after execution of the GPA. 9
years have passed by. A complaint is sought to be registered
before the jurisdictional Police on 12-08-2021 contending
that the GPA that he is said to have executed on 04-08-2012
is said to be forged and sought investigation at the hands of
the Police. Preliminary inquiry was conducted by the Police in
terms of the judgment of the Apex Court in the case of
LALITA KUMARI v. GOVERNMENT OF U.P.- (2014) 2 SCC
1. The result of the preliminary inquiry was closure of the
complaint in terms of the endorsement dated 25-10-2021
holding that the issue is purely civil in nature.
10. After about 4 months, a private complaint comes
to be registered on 24-02-2022, on the very same ground
that signatures of the complainant on the GPA were forged
inter alia. Certain paragraphs of the complaint become
germane to be noticed and they read as follows:
17
"7. Recently after the Complainant realized the fraud
played by Accused persons and seeing few documents at
the office of the Income Tax Dept., Ballari which showed
further transactions with regard to the Schedule
Property, Complainant procured RTCs for Schedule
Property and after enquiring at the office of Sub-
Registrar. Yelburga, Complainant discovered that vide
Sale Deed dated 06.08.2012, Accused No. 1 has sold the
Schedule Property to Accused No. 4. The Accused No. 4 to 6
conspired to usurp the Schedule Property owned by
Complainant and by forging his signature on the GPA, they
have created a GPA dated 04-08-2012 appointing Accused
No. 1 as the alleged Lawful Attorney of Complainant.
Accused No. 1 being fully aware of the fact that the
said GPA dated 04.08.2012 was not executed and
signed by the Complainant, has accepted the
authority or power allegedly vested on him by virtue
of the said forged and concocted GPA and has
executed a Sale Deed in favour of Accused No. 4.
Accused No. 2 and 3 being fully aware that the said
GPA dated 04.08.2012 is a forged and concocted
document created by Accused No. 1, 4 to 6 and other
family members or employees of Accused No. 5 and
that Complainant had never authorized the Accused
No. 1 to deal with the Schedule Property, placed their
signatures as Attesting witnesses. Neither have
Accused No. 2 and 3 placed their signatures in the
presence of Complainant nor has the Complainant
placed his signature in the presence of Accused No. 1
to 3. Complainant had never executed the said the said
GPA. Accused No. 2 and 3 have abetted the offences
committed by Accused No. 1 and 4 to 6, they were present
while Accused No. 1, 4 to 6 committed the offence of
forgery. Certified copy of the GPA dated 04.08.2021
obtained from the office of the Sub-Registrar, Yelburga
under Right to Information Act is produced herewith as
Document No. 8.
8. Subsequently based on the power vested on
Accused No. 1 under GPA dated 04.08.2012 concocted
and forged by Accused No. 4 to 6, Accused No. 1 has
executed a sale deed dated 06-08-2012
(registered as Document No. YBG-1-02445-2012-13,
Book 1, stored in CD No. YBGD63, in the office of
Sub-Registrar, Yelburga) in favour of Accused No. 4
who is the son of Accused No. 5. It is pertinent to
note here that both the GPA and sale deed has been
18
created fraudulently to usurp the lands belonging to
Complainant. A copy of the Sale Deed dated
06.08.2012 is produced as Document No. 9. Accused
No. 7 and 8 Have acted as the witnesses to the
alleged sale deed Dated 06.08.2012 in favour of
Accused No.4. Accused No. 7 and 8 being fully aware
that Accused No. 1 is not a lawfully appointed
attorney or Agent of the Complainant and that
Accused No. 1 to 6 have connived and conspired to
usurp the Schedule Property belonging to
Complainant and accordingly have forged and
concocted a GPA dated 04.08.2012 have placed their
signatures as attesting witnesses to the Sale Deed
dated 06.08.2012. It is submitted that the alleged
GPA has been executed on 04-08-2012 and the
alleged sale deed executed by Accused No.1 in favour
of Accused No.4 on 06-8-2012 within a span of two
days which itself shows that the fraudulent set of the
above said Accused persons in committing the above
said offence.
9. It is pertinent to submit that all the above said misdeeds
have been committed at the instance of Accused No. 4 to 6
and all the accused have conspired for commission of the
offences, and all are equally responsible for the offence
committed by them. It is submitted that the Accused No.1
to 8 all have put together their bands in commission of the
offence.
10. It is submitted that the Accused No. 5 N.
Suryanarayana Reddy has conspired with all the accused
persons, in order to cheat, dishonestly and fraudulently
usurp and grab the Properties belonging to Complainant by
forging and fabricating various documents mentioned above
but not limited to the same and has caused wrongful loss
Accused No. 5 in connivance with Accused No. 1 to 4, 6 and
other members of his family, friends and employees by
adopting a similar modus operandi has forged and
concocted another GPA dated 29.03-2006, wherein Accused
No. 2 who is an Employee of Accused No. 5 and 6 was
allegedly appointed as Attorney of Complainant in the said
GPA dated 29.03.2006. Accused No. 5 by virtue of immense
money and political power he wields has persuaded all other
Accused persons into supporting his illegal mis doings and
has instigated them into committing such illegals acts which
are punishable under the Indian Penal Code.
19
11. It is submitted that the Complainant herein had filed a
complaint before the S.H.O Gandhinagar police station
Ballari on 15/07/2021, however the S.H.O, Gandhinagar
Police Station did not conduct any preliminary enquiry or
register a case against the Accused persons though the
accused persons have committed the above said offences
and such being the fact the S.H.O Gandhinagar police
station has issued an endorsement stating that the
complaint is civil in nature. Hence the SHO, Gandhinagar
P.S. has refused to take cognizance of offences mentioned
in the complaint A notarised copy of the Complaint and
Acknowledgement dated 15.07.2021 and endorsement/
NCR dated 17.07.2021 issued by SHO, Gandhinagar Police
Station is produced herewith as Document No. 10, 11 and
12. Thereafter the complainant has approached the
Superintendent of Police, Ballari as contemplated U/s
154(3) of Cr.P.C on 12.08.2021 and the said complaint was
referred to Gandhinagar Police Station for further action and
again an endorsement to that effect in similar fashion that
the matter or the allegations made are civil in nature has
been issued. A copy of the said Complaint addressed to the
S.P., Ballari dated 12.08.2021 and endorsement issued by
Gandhinagar Police Station dated 25.10.2021 are produced
herewith as Document No. 13 and 14. The Police
authorities have acted hand in glove to shield the Accused
Persons and have assisted the Accused persons in achieving
and accomplishing their ill-motives. The Police authorities
have shirked from their duty and responsibility to act upon
the complainant lodged by Complaint within the framework
of law. Having no other means and aggrieved by the same,
the complainant is approaching this Hon'ble Court through
this Private complaint with the following prayer.
PRAYER
WHEREFORE, Complainant respectfully pray that this
Hon'ble Court be pleased to refer the above case for
investigation under section 156(3) of The Code of Criminal
Procedure, 1973 for offences committed by the Accused No.
1 to 8 under Section 420, 465, 468, 471, 406, read with
section 120-B, 114, 182. 191 and 192 of Indian Penal Code,
1860 before Jurisdictional Gandhinagar Police Station,
Ballari in the interest of justice."
(Emphasis added)
The averments in the complaint are all that have happened
in the year 2012. The forgery the complainant alleges is of
the year 2012. The narration in the complaint is that the
20
complainant is the owner of the property in Sy.No.37/1 and
the sale on the strength of the aforesaid forgery is in respect
of Sy.No.35/3. A search conducted by the Income Tax
department in the year 2020, in the house of other accused
is projected to be the cause of action for calling in question
the sale deed dated 06-08-2012. The learned Magistrate, on
the strength of the averments made in the complaint, refers
the matter for investigation. The order of reference reads as
follows:
"Heard learned counsel for complainant.
Complaint is filed alleging that accused No.1 to 8
have committed a offence punishable under Section 420,
465, 468, 471, 406 R/w Section 120(B), 114, 182, 191, 192
of IPC in respect of the property belongs to the
complainant. The complaint further discloses that, the
complainant has exhausted the Section 154 of Cr.P.C. by
giving complaint to the concerned Jurisdictional police and
approaching the higher authority of police to investigate the
case. But, the concerned police failed to investigate the
case. Hence, the complainant sought for refer the case to
the jurisdiction police to investigate the offence committed
by the accused.
The offence alleged to be committed by the
accused is forgery, cheating and the like. The said
allegation required to be throughly investigated by
obtaining the necessary records and the complainant
having been approached before the jurisdictional
police and higher authority of police but the
jurisdictional police declined to investigate the case.
Therefore, it is just and proper to refer the present
case for investigation. In view of the same court pass
following:
ORDER
By acting under Sectin 156(3) of Cr.P.C. the
present case is referred to jurisdictional police i.e.,
Gandhi Nagar Police Station to investigate the case
and to submit final report.
Call on 28.05.2021.
Sd/-
Prl.C.J & JMFC, Ballari.”
(Emphasis added)
21
All that the learned Magistrate records is that the offence
alleged is forgery, cheating and the like and further records
that the said allegation is required to be thoroughly
investigated and, therefore, the matter is referred for
investigation to the jurisdictional Police. The learned
Magistrate ought to have at least seen the dates that are
alleged in the complaint. The dates stop at the year 2012.
The complaint is registered in the year 2022 clearly 10 years
after the alleged incident.
11. Several documents are appended to the petition.
The learned senior counsel takes this Court through those
documents to demonstrate that the GPA that is executed in
the year 2012 i.e., on 04-08-2012 bears the signature of the
executant. The executant is the complainant. He would take
this Court through the affidavit filed along with the private
complaint. The signature in the affidavit is that of the
complainant. Even to bare eye, the signature completely
tallies, with the signature in the GPA. I have taken note of
all those averments and the documents only for the reason
that the complainant feigns ignorance and projects, forgery
of the GPA executed in the year 2012. On these facts, after
about 10 years in a matter which is seemingly civil in nature,
the complainant seeks to project forgery and create a cause
of action in his favour for registration of the complaint and
registers the complaint. The complaint is referred for
investigation.
12. The ignorance of the complainant is belied by the
properties owned by the complainant himself, as is depicted
in the chart provided by the learned senior counsel for the
petitioners. It would read as follows:
“3.3. Thirdly, if all the title deeds of the complainant have
been retained by Sri. Suryanarayana Reddy the complainant
is the owner of other properties over which there is no such
allegations of retention of title deeds. These properties
owned by the complainant are:-
Sl. Date Particulars Total
No measurement
1 04.06.2001 Property bearing 2.70 acres
Sy.No.374B, situated
22
at Hosahalli Village,
Siraguppa Taluk,
Ballari
2 04.06.2001 Property bearing 10.53 acres
Sy.No.376A/2A1,
situated at Hosahalli
Village, Siraguppa
Taluk, Ballari
3 16.03.2002 Property bearing 5.15 guntas
Sy.No.37/1, situated at
Gavaral Village,
Kukanur Taluk, Ballari
4 F.Y.1995-96 Property bearing About 18
Sy.No.43(P), situated acres
at Kanekoppa Village,
Molakalmur Taluk,
Chitradurga District
5 11.03.2003 Property bearing 2.24 guntas"
Sy.No.26/B, situated at
Putthageri Village,
koppal District
The learned counsel for the 1ST respondent would admit the
said chart. Sy No.37/1 measuring 5 acres 15 guntas is still
owned by the complainant. It is admitted that Sy.No.35/3
which is the subject matter of crime is adjacent to
Sy.No.37/1. Therefore, knowing full well and having
executed the GPA, the allegation of forgery is now projected
against the petitioner without any explanation for the delay
of 10 years. Personal grievances are projected to be a
crime.
…. …. ….
15. Above all, the complaint is filed after 10 years
after execution of the document. What is projected in the
complaint is an incident which has happened on 06-08-2012.
The complaint is admittedly registered on 28-02-2022. There
is no explanation worth the name for the delay except
projection of a search in the firms by the Income Tax
Department, which is on the face of it, is unbelievable and
improbable, as the details of search of a firm will never be
divulged to a stranger. The stranger, I mean, the
complainant who is nobody to the search and the documents
seized in the search will not be divulged as it would amount
23to an offence under the Income Tax Act. Therefore, the
complaint is undoubtedly hit by gross delay.
….. …. ….
In the light of the aforesaid judgment of the Apex
Court in the case of CHANCHALPATI DAS, the
complaint ought to have been shown the doors by the
learned Magistrate himself under Section 203 of the
CrPC, without referring the matter for investigation
under Section 156(3) of the CrPC. The learned
Magistrate performs judicial function. Order of
reference is a judicial order. The least that the
Magistrate should undertake is a cursory perusal at
the complaint, so that it demonstrates some
semblance of application of mind. Bald and laconic
order of reference by the learned Magistrate in each
and every complaint preferred before it would
undoubtedly lead to docket explosion and clogging
either the criminal Court or this Court in petitions filed
there and here.
17. The learned Magistrate, therefore needs to
filter frivolous complaints, and such filtering would
require a little scrutiny of the contents of the
complaint, though not elaborate consideration, a
consideration that would demonstrate some
application of mind. Therefore, in the light of the
subject complaint shrouded with improbability, delay
and intentions suffering from want of bonafides, even
if the contents of the complaint are construed to be
true, they would not become the ingredients of the
crime. In the teeth of the aforesaid facts and the
preceding analysis, so also the law laid down by the
Apex Court in the afore-quoted judgments, if further
proceedings/investigation is permitted to continue,
would undoubtedly become an abuse of the process of
the law, degenerate into harassment and result in
patent injustice. Therefore, I find this case to be one
such which would require obliteration of the crime in
exercise of jurisdiction under Section 482 of the CrPC
24as elucidated by the Apex Court in the case of
MAHMOOD ALI (supra).
18. For the aforesaid reasons, I pass the following:
ORDER
(i) Criminal Petition is allowed and the private
complaint in P.C.R.No.74 of 2022 pending before
the Principal Civil Judge and JMFC, Ballari stands
obliterated qua the petitioners.
(ii) It is made clear that the observations made in
the course of the order are only for the purpose
of consideration of the case of the petitioners
under Section 482 of the CrPC and the same
would not bind any other proceedings pending
between the parties.”
(Emphasis supplied)
Identical orders are passed in all the cases obliterating the very
registration of PCRs and reference under Section 156(3) of the
CrPC. All the orders passed by this Court, one of which is quoted
supra, are challenged before the Apex Court in S.L.P. (Criminal)
Diary No.563 of 2024. The Apex Court on 19-07-2024 rejects the
S.L.P. by the following order:
“UPON hearing the counsel the Court made the
following:
ORDER
1. Delay condoned.
25
2. Heard learned senior counsel, Mr. Siddhartha
Dave for the petitioner(s).
3. We are not inclined to interfere with the
impugned order(s) passed by the High Court.
4. The Special Leave Petitions are, accordingly,
dismissed.
5. Pending applications, if any, shall stand dispose
of.”
(Emphasis supplied)
Between the dates i.e., the order passed by this Court quashing the
proceedings against all these petitioners and turning down of the
S.L.P. i.e., from 06-10-2023 to 19-07-2024 the Enforcement
Directorate had sprung into action, as Enforcement Case
Information Report (‘ECIR’) was registered on 6-02-2024. The
issue now would be, whether ECIR should be permitted to be
continued, in the light of obliteration of predicate offences and the
S.L.P. against the said obliteration being turned down.
4. The learned senior counsel Sri M.V. Sheshachala appearing
for the petitioners would vehemently contend that the Enforcement
Directorate has no independent locus to act. It can spring into
action only after registration of a predicate offence. As on today,
26
the predicate offence was not even investigated into. It was
quashed by this Court at the stage of reference. The quashment
was challenged by the complainants therein before the Apex Court.
That comes to be rejected. Therefore, there is no predicate offence
today in the case at hand. The learned senior counsel would submit
that the entire issue is now covered by the judgment rendered by
the Apex Court in the case of VIJAY MADANLAL CHOUDHARY v.
UNION OF INDIA1.
5. Per contra, the learned counsel Sri Madhukar Deshpande
appearing for the Enforcement Directorate would vehemently
contend that money has been laundered in the case at hand. Even
the decision in the case of VIJAY MADANLAL CHOUDHARY would
not absolve the issue of money laundering. It may be a fact that
predicate offence is quashed. He would submit that registration of
FIR is not even necessary for exercising power of attachment of
properties under the Act. He would seek to place reliance upon the
judgment of the High Court of Bombay in the case of SHIV
CHARAN v. ADJUDICATING AUTHORITY – Writ Petition (L)
1
2022 SCC OnLine SC 929
27
No.9943 of 2023 and connected case decided on 01-03-2024. He
would further contend that the Adjudicating Authority in
O.A.No.1152 of 2024 has confirmed the attachment orders passed
by the Enforcement Directorate, against which the petitioners have
a remedy to file an appeal before the Tribunal constituted under the
Act. In all he would submit that the petitions be dismissed and the
proceedings of attachment be permitted to be continued in the
ECIR.
6. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
7. The afore-narrated facts are not in dispute. The genesis of
the problem is registration of private complaints and reference
being made by the learned Magistrate under Section 156(3) of the
Cr.P.C. At that stage writ petitions had been preferred. Owing to
the law declared by the Apex Court, those proceedings were
obliterated. Against obliteration the complainants therein had
preferred S.L.P. which also comes to be rejected by the Apex Court.
Today, there is no predicate offence. The Enforcement Directorate
28
has registered ECIR on 06-02-2024 after quashment of crime itself.
Therefore, the Enforcement Directorate had registered the crime
without there being any predicate offence. Whether it could be done
or otherwise need not detain this court for long or delve deep into
the matter. A three judge Bench of the Apex Court in VIJAY
MADANLAL CHOUDHARY has considered this issue in elaboration
and has drawn up certain conclusions at paragraphs 467. They
read as follows:
"..... .... ....
CONCLUSION
467. In light of the above analysis, we now proceed to
summarise our conclusion on seminal points in issue in the
following terms: –
(i) The question as to whether some of the
amendments to the Prevention of Money-laundering Act,
2002 could not have been enacted by the Parliament by way
of a Finance Act has not been examined in this judgment.
The same is left open for being examined along with or after
the decision of the Larger Bench (seven Judges) of this Court
in the case of Rojer Mathew.
(ii) The expression “proceedings” occurring in
Clause (na) of Section 2(1) of the 2002 Act is contextual and
is required to be given expansive meaning to include inquiry
procedure followed by the Authorities of ED, the Adjudicating
Authority, and the Special Court.
(iii) The expression “investigation” in Clause (na) of
Section 2(1) of the 2002 Act does not limit itself to the
matter of investigation concerning the offence under the Act
29
and is interchangeable with the function of “inquiry” to be
undertaken by the Authorities under the Act.
(iv) The Explanation inserted to Clause (u) of
Section 2(1) of the 2002 Act does not travel beyond the
main provision predicating tracking and reaching upto the
property derived or obtained directly or indirectly as a result
of criminal activity relating to a scheduled offence.
(v)(a) Section 3 of the 2002 Act has a wider reach and
captures every process and activity, direct or indirect, in
dealing with the proceeds of crime and is not limited to the
happening of the final act of integration of tainted property in
the formal economy. The Explanation inserted to Section 3
by way of amendment of 2019 does not expand the purport
of Section 3 but is only clarificatory in nature. It clarifies the
word “and” preceding the expression projecting or claiming
as “or”; and being a clarificatory amendment, it would make
no difference even if it is introduced by way of Finance Act or
otherwise.
(b) Independent of the above, we are clearly of the
view that the expression “and” occurring in Section 3 has to
be construed as “or”, to give full play to the said provision so
as to include “every” process or activity indulged into by
anyone. Projecting or claiming the property as untainted
property would constitute an offence of money-laundering on
its own, being an independent process or activity.
(c) The interpretation suggested by the petitioners,
that only upon projecting or claiming the property in
question as untainted property that the offence of Section 3
would be complete, stands rejected.
(d) The offence under Section 3 of the 2002
Act is dependent on illegal gain of property as a result
of criminal activity relating to a scheduled offence. It
is concerning the process or activity connected with
such property, which constitutes the offence of money
laundering. The Authorities under the 2002 Act cannot
prosecute any person on notional basis or on the
assumption that a scheduled offence has been
committed, unless it is so registered with the
30
jurisdictional police and/or pending enquiry/trial
including by way of criminal complaint before the
competent forum. If the person is finally
discharged/acquitted of the scheduled offence or the
criminal case against him is quashed by the Court of
competent jurisdiction, there can be no offence of
money-laundering against him or any one claiming
such property being the property linked to stated
scheduled offence through him.
(vi) Section 5 of the 2002 Act is constitutionally
valid. It provides for a balancing arrangement to secure the
interests of the person as also ensures that the proceeds of
crime remain available to be dealt with in the manner
provided by the 2002 Act. The procedural safeguards as
delineated by us hereinabove are effective measures to
protect the interests of person concerned.
(vii) The challenge to the validity of sub-section (4)
of Section 8 of the 2002 Act is also rejected subject to
Section 8 being invoked and operated in accordance with the
meaning assigned to it hereinabove.
(viii) The challenge to deletion of proviso to sub-
section (1) of Section 17 of the 2002 Act stands rejected.
There are stringent safeguards provided in Section 17 and
Rules framed thereunder. Moreover, the pre-condition in the
proviso to Rule 3(2) of the 2005 Rules cannot be read into
Section 17 after its amendment. The Central Government
may take necessary corrective steps to obviate confusion
caused in that regard.
(ix) The challenge to deletion of proviso to sub-
section (1) of Section 18 of the 2002 Act also stands
rejected. There are similar safeguards provided in Section
18. We hold that the amended provision does not suffer from
the vice of arbitrariness.
(x) The challenge to the constitutional validity of
Section 19 of the 2002 Act is also rejected. There are
stringent safeguards provided in Section 19. The provision
does not suffer from the vice of arbitrariness.
31
(xi) Section 24 of the 2002 Act 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.
(xii)(a) The proviso in Clause (a) of sub-section (1) of
Section 44 of the 2002 Act is to be regarded as directory in
nature and this provision is also read down to mean that the
Special Court may exercise judicial discretion on case-to-
case basis.
(b) We do not find merit in the challenge to Section
44 being arbitrary or unconstitutional. However, the
eventualities referred to in this section shall be dealt with by
the Court concerned and by the Authority concerned in
accordance with the interpretation given in this judgment.
(xiii) (a) The reasons which weighed with this Court in
Nikesh Tarachand Shah706 for declaring the twin conditions
in Section 45(1) of the 2002 Act, as it stood at the relevant
time, as unconstitutional in no way obliterated the provision
from the statute book; and it was open to the Parliament to
cure the defect noted by this Court so as to revive the same
provision in the existing form.
(b) We are unable to agree with the observations in
Nikesh Tarachand Shah707 distinguishing the enunciation of
the Constitution Bench decision in Kartar Singh708; and
other observations suggestive of doubting the perception of
Parliament in regard to the seriousness of the offence of
money-laundering, including about it posing serious threat to
the sovereignty and integrity of the country.
(c) The provision in the form of Section 45 of the
2002 Act, as applicable post amendment of 2018, is
reasonable and has direct nexus with the purposes and
objects sought to be achieved by the 2002 Act and does not
suffer from the vice of arbitrariness or unreasonableness.
(d) As regards the prayer for grant of bail,
irrespective of the nature of proceedings, including those
under Section 438 of the 1973 Code or even upon invoking
32
the jurisdiction of Constitutional Courts, the underlying
principles and rigours of Section 45 may apply.
(xiv) The beneficial provision of Section 436A of the
1973 Code could be invoked by the accused arrested for
offence punishable under the 2002 Act.
(xv) (a) The process envisaged by Section 50 of the
2002 Act is in the nature of an inquiry against the proceeds
of crime and is not “investigation” in strict sense of the term
for initiating prosecution; and the Authorities under the 2002
Act (referred to in Section 48), are not police officers as
such.
(b) The statements recorded by the Authorities under
the 2002 Act are not hit by Article 20(3) or Article 21 of the
Constitution of India.
(xvi) Section 63 of the 2002 Act providing for
punishment regarding false information or failure to give
information does not suffer from any vice of arbitrariness.
(xvii) The inclusion or exclusion of any particular
offence in the Schedule to the 2002 Act is a matter of
legislative policy; and the nature or class of any predicate
offence has no bearing on the validity of the Schedule or any
prescription thereunder.
(xviii) (a) In view of special mechanism envisaged by
the 2002 Act, ECIR cannot be equated with an FIR under the
1973 Code. ECIR is an internal document of the ED and the
fact that FIR in respect of scheduled offence has not been
recorded does not come in the way of the Authorities
referred to in Section 48 to commence inquiry/investigation
for initiating “civil action” of “provisional attachment” of
property being proceeds of crime.
(b) Supply of a copy of ECIR in every case to the
person concerned is not mandatory, it is enough if ED at the
time of arrest, discloses the grounds of such arrest.
(c) However, when the arrested person is produced
before the Special Court, it is open to the Special Court to
33
look into the relevant records presented by the authorised
representative of ED for answering the issue of need for
his/her continued detention in connection with the offence of
money-laundering.
(xix) Even when ED manual is not to be published
being an internal departmental document issued for the
guidance of the Authorities (ED officials), the department
ought to explore the desirability of placing information on its
website which may broadly outline the scope of the authority
of the functionaries under the Act and measures to be
adopted by them as also the options/remedies available to
the person concerned before the Authority and before the
Special Court.
(xx) The petitioners are justified in expressing serious
concern bordering on causing injustice owing to the
vacancies in the Appellate Tribunal. We deem it necessary to
impress upon the executive to take corrective measures in
this regard expeditiously.
(xxi) The argument about proportionality of
punishment with reference to the nature of scheduled
offence is wholly unfounded and stands rejected.”
(Emphasis supplied)
The Apex Court holds that the offence under Section 3 of the Act is
dependent on illegal gain of property, as a result of criminal activity
relating to a scheduled offence and if a person is finally discharged
or acquitted of the scheduled offence or quashed by the competent
Court, there can be no offence of money laundering against any one
34
claiming such property, being the property linked to the stated
scheduled offence.
8. After quashment of the proceedings by this Court, there
begins the impugned proceedings by the Enforcement Directorate.
As observed hereinabove, by then the scheduled offence/predicate
offence had been obliterated. In the light of obliteration, the
impugned proceedings cannot be permitted to be continued. The
assessment of proceedings of crime in the ECIR reads as follows:
“…. …. ….
7. Material relating to commission of offence:
FIR No.0024 of 2023 dated 15/03/2023 registered at
Gandhinagar Police Station, Ballari, Ballari District.
Assessment of proceeds of crime:
• As per the FIR No.0024 of 2023 dated
15/03/2023 registered at Gandhipuram
Police Station, Ballari, it was mentioned that
the accused, Sh. Nara Suryanarayana Reddy,
who is the Managing Partner in M/s. Sree
Raghavendra Enterprises (SRE group) and
M/s. Indian Minerals and Granite Company
(IMGC) and his two sons namely, Sh. Nara
Bharath Reddy and Sh. Nara Sharath Reddy
along with other accused persons have
created fake GPAs and registered business
properties of partners in their names. Further,
Sh. Nara Bharath Reddy’s aides like his P.S.
Sh. Ratna Babu, Sh. Seena Babu, Sh. Satish
35Reddy, have given death threats to the
complainants regarding property dispute.
• The offences under Sections 389, 506, 34 &
120B of IPC 1860 invoked in the FIR No.0024
of 2023 dated 15/03/2023 registered at
Gandhinagar PS, Ballari are scheduled
offences under Section 2(1)(x) and 2(1)(y) of
the Prevention of Money Laundering Act,
2002.”
(Emphasis added)
The proceeds of crime are directly linked to the crime so registered
pursuant to the reference order. What is appended to the ECIR is
documents of search and seizure. In the light of ECIR proceedings
itself basing its foundation to the predicate offence/scheduled
offences, all offences under Sections 406 and 420 inter alia and
those proceedings having been quashed, the Enforcement
Directorate cannot now independently, in the peculiar facts of these
cases, initiate the impugned proceedings. All the judgments that
the learned counsel for the Enforcement Directorate would seek to
place reliance upon would not become applicable, as the predicate
offence is no longer in subsistence. When the foundation is no
longer in existence, the superstructure cannot be permitted to be in
subsistence.
36
9. For the aforesaid reasons, the following:
ORDER
(i) Writ Petitions are allowed.
(ii) ECIR/MGSZO/01/2024 dated 06-02-2024 registered by
the 1st respondent stands quashed qua the petitioners
in all the petitions.
Pending applications if any, also stand disposed.
SD/-
(M.NAGAPRASANNA)
JUDGE
bkp
CT:SS
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