Introduction
In the case of Jeevan Kumar v. Directorate of Enforcement[i], a petition was filed in the High Court of Delhi (‘Court’) under s. 482 of the Code of Criminal Procedure, 1973 (‘CrPC’) on behalf of the petitioner, seeking quashing of the complaint filed by the Directorate of Enforcement (‘ED’) under s. 3 of the Prevention of Money Laundering Act, 2002 (‘PMLA’), punishable under s. 4 of PMLA, along with all consequential proceedings arising thereto.
Brief Facts
This case originated from an FIR registered under s. 420 of the Indian Penal Code, 1860 (‘IPC’) and ss. 18/19 of the Transplantation of Human Organs Act, 1994 (‘TOHO Act’), alleging fraudulent activities and illegal organ transplantation.
The CBI’s investigation identified the case as a predicate offence under various IPC sections and the TOHO Act, focusing on an illegal kidney transplantation racket. The investigation alleged that the petitioner, along with others, was involved in an illegal kidney transplantation racket, which included offences under the IPC and the TOHO Act.
The ED registered an enforcement case information report (‘ECIR’) based on the alleged income derived from criminal activities by the petitioner and others, accused of assisting in projecting the income as untainted property.
The petitioner was acquitted of all charges by the trial court and this decision remained unchallenged and attained finality. The main issue before the Court was whether prosecution by the ED could continue if an accused person were acquitted or discharged in the predicate offence.
Held
The Court allowed the petition, thereby quashing the said ECIR and all consequential proceedings arising thereto, stating that the complaint could not survive in the absence of a conviction in the predicate offence. Additionally, liberty was given to the ED to initiate appropriate proceedings / revive the matter, if circumstances changed or based on the final decision of the Supreme Court in a related matter.
The Court relied on the landmark decision in Vijay Madanlal Choudhary v. Union of India[ii] to conclude that an acquittal in a predicate offence precludes the establishment of an offence of money laundering against the accused under PMLA. The Court further noted that similar issues were addressed in previous judgments such as Harish Fabiani v. ED[iii] and Nayati Healthcare and Research (P) Ltd. v. Union of India[iv]. Based on legal principles and precedents, the Court concluded that if an accused is acquitted or discharged in the predicate offence, prosecution by the ED cannot continue.
Analysis
This case serves as a significant precedent affirming the legal principle that when an accused is acquitted by the trial court for the predicate offence, any subsequent money laundering charges become legally untenable. This judgment makes a valuable contribution to the jurisprudence surrounding money laundering cases, ensuring that accused persons are not subjected to protracted legal battles based on allegations that lack a foundation in proven criminal conduct. It highlights the judiciary’s unwavering commitment to upholding the rule of law, safeguarding accused persons from unwarranted legal pursuits, and preserving the integrity of the criminal justice system. In essence, the Court’s conclusion reinforces the fundamental notion that justice must be founded on robust legal principles and a fair assessment of the evidence presented. Additionally, this case also highlights the importance of adhering to legal precedents and principles in determining the continuation of prosecutions by enforcement agencies.
End Notes:
[i] 2024 SCC OnLine Del 271
[ii] 2022 SCC OnLine SC 929
[iii] 2022 SCC OnLine Del 3121
[iv] 2023 SCC OnLine Del 7301
Authored by Nitish Solanki, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.