New Delhi: The Supreme Court on Monday quashed a money laundering case against a former civil servant, his son and others, in connection with the alleged liquor syndicate racket in Chhattisgarh. On Friday, the apex court had told the Enforcement Directorate that if there is no predicate offence, there are no proceeds of crime then there can’t be money laundering, while questioning ED’s proceedings against the civil servant, in the previous Bhupesh Baghel government, and others in connection with the alleged scam.
A bench comprising justices Abhay S Oka and Ujjal Bhuyan said: “Before taking cognizance, the special court has to apply its mind to the question whether prima facie an offence under section 3 of PMLA (Prevention of Money Laundering Act) is made out”.
“If it is of the view that no prima facie offence under Section 3 of PMLA is made out, he can exercise the powers under Section 203 of CrPC and dismiss the complaint and if prima facie is made out, he can take recourse to Section 204 of CrPC”, said the bench.
Justice Oka, pronouncing the order, said: “In this case, ex-facie the schedule offence is not in existence therefore there cannot be proceeds of crime. Thus, it follows that there cannot be an offence under Section 3 of PMLA. Therefore, no purpose is served by directing the special court to apply its mind under Section 203, read with 204 of CrPC”.
The apex court quashed the money laundering complaint against all the petitioners. The bench noted that the additional solicitor general (ASG), representing the ED, stated that based on another FIR, which involves scheduled offence proceedings under PMLA are likely to be initiated. “It is not necessary for us to go into the legality of proceedings which are likely to be initiated. Therefore, all contentions are kept open….”, said the bench.
The apex court was hearing a plea by former IAS officer Anil Tuteja and his son Yash Tuteja against the ED’s move to initiate an investigation against them under PMLA based on an income tax raid against them. On Friday, the apex court observed that the ED initiated an investigation in the absence of a predicate offence, a crime that is a component of a more serious crime and proceeds of crime.
“If there’s no predicate offence, there are no proceeds of crime. Therefore, there can’t be money laundering….”, the bench had told the ASG S V Raju, representing the ED.
Raju had argued that a fresh predicate offence was registered and the ED would file a fresh case on its basis. The ASG referred to the case registered in Uttar Pradesh in connection to the alleged fake holograms.
Senior advocate Mukul Rohatgi and advocate Malak Manish Bhatt represented Anil Tuteja and his son before the apex court. The ED has alleged that Anil Tuteja, who was considered close to the former Congress CM, is the kingpin of the over Rs 2,000 crore liquor syndicate racket in the state.
In May last year, both father and son moved the apex court claiming PMLA proceedings were premised on an income tax raid, which is not a predicate offence under the PMLA. In July last year, the apex court had restrained the ED from taking coercive action against them, apart from the other accused in the case.
Later, the ED complained to the Uttar Pradesh police about fake holograms being manufactured in a company near Noida and alleged that these holograms were used on bottles distributed in the illegal liquor syndicate.
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