New Delhi:
The Delhi High Court has held that the Enforcement Directorate (ED) has the power to investigate and investigate a crime of money laundering under the Prevention of Money Laundering Act (PMLA) only, and it cannot assume that a predicate offense has been committed.
The high court said the predicate offense must necessarily be investigated and tried by the authorities empowered by law to do so, and the ED cannot possibly usurp the power to investigate the alleged commission of those crimes.
“What should be emphasized is that the PMLA authorizes the ED to investigate Section 3 violations only. Its authority to investigate and inform is limited to the offense of money laundering as defined in that section. However, the same cannot be be read as making it possible to assume from the material, which it might conclude in the course of that investigation, that a predicate offense has been committed.
“The predicate offense must necessarily be investigated and tried by the authorities empowered by law,” Judge Yashwant Varma said in an 111-page verdict dated Jan. 24.
The Supreme Court said: “The primary duty to investigate and try such crimes remains and rests with authorities established under those independent statutes … of facts prove the commission of a planned offense and on that opinion take action under the PMLA.” It said that if, in the course of its investigation and investigation, the ED came to the conclusion that the material in its possession proves the commission of a crime committed under a different law, it would be required to provide necessary information about it. to the relevant authority for necessary action.
The Supreme Court verdict came while allowing two separate petitions filed by Prakash Industries Limited and Prakash Thermal Power Limited challenging the Provisional Attachment Orders (PAO) issued by the ED on November 29, 2018.
The proceeding drawn by the ED stems from an allocation of the Fatehpur Coal Block in Chhattisgarh.
It was alleged that the two companies misrepresented their net worths to buy the coal block. An FIR was filed by the CBI under the provisions of the Indian Penal Code and Prevention of Corruption Act. Based on the FIR, the ED filed an Enforcement Case Information Report on the allegations related to stock price manipulation and the generation of proceeds from such activities.
Later, coal block allocation was canceled after Supreme Court judgment in 2014.
The Supreme Court overturned the November 29, 2018 PAO and the original complaint. It also addressed the objection of ED’s counsel that, given directions from the Supreme Court, the Supreme Court would not be allowed to consider these petitions or hear the matter at issue.
Counsel for ED referred to the July 25, 2014 order issued by the Supreme Court in the issue of the coal block allocation, which held that any prayer for adjournment or any order impeding the progress of the investigation related to the allocation of coal blocks could be placed before the special court alone and that no other court could treat the same.
However, the high court said it was unable to address ED’s preliminary objection, saying that the special court that was being set up was designated to deal with and try exclusively crimes arising from coal block allocations and to try crimes charged with alleged to have been committed under the IPC, PC Act and PMLA.
“The direction for transfer of pending cases also appears to be clearly limited to criminal cases arising from coal block allocations,” it said, adding that those directions cannot possibly be taken or interpreted as an extension to PAOs potentially made under PMLA .
Judge Varma said the special judge appointed to hear criminal cases and offenses clearly has no authority to hear or judge the validity of any PAOs.
“If the complaint filed by and on behalf of the ED in this regard were to be accepted, it would also be tantamount to short-circuiting the arbitration mechanism in relation to attachment orders as structured and placed in terms of the provision of the law,” the Supreme Court said.
It said the Supreme Court’s directions cannot be construed as negating the Supreme Court’s jurisdiction to challenge a PAO and the exercise of power by the ED under Article 5 of the PMLA.
If ED’s comments are accepted, it would essentially be tantamount to recognizing the power of the special court not only to don the garb of the contracting authority, but also to deprive the appellate bodies of the power to rule on appeals against the decisions that can ultimately be made. be passed under Section 8 of the PMLA.
(This story has not been edited by DailyExpertNews staff and is auto-generated from a syndicated feed.)
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