Binod Kumar Vs State
of Jharkhand & Others
J U D G M E N T
Dalveer Bhandari, J.
1.
Leave
granted.
2.
This
appeal is directed against the judgment and order dated 04.08.2010 passed in Writ
Petition (PIL) No.4700 of 2008 by the High Court of Jharkhand at Ranchi.
3.
In
the impugned judgment, it is mentioned that the basic allegation is amassing of
illicit wealth by various former Ministers, including a former Chief Minister
of the State. The money alleged to have been so earned is of unprecedented
amounts. However, there is no clear allegation so far about its laundering in the
sense mentioned above, but there is an allegation of its investment in
property, shares etc. not only in India but also abroad.
4.
The
basic investigation requires determining whether money has been acquired by an abuse
of the official position amounting to an offence under the Prevention of Corruption
Act and under the Indian Penal Code, the persons by whom this has been done,
the amount which has been so earned and places where it has been invested.
5.
The
amount is alleged to run into several hundred crores. The investigations done so
far allege that the amount unearthed so far in one case is about one and a half
crore and in another case is about six and a half crores, which would appear to
be merely the tip of the iceberg. The investments having been made not only in various
States of the country outside the State of Jharkhand, but also in other countries
means that the investigation called for is not only multi-state but also
multi-national.
6.
The
matter on the face of it requires a systematic, scientific and analysed
investigation by an expert investigating agency, like the Central Bureau of Investigation.
It is incorporated in the affidavit that 32 companies have to be investigated and
the money acquired by illegal means being invested in Bangkok (Thailand), Dubai
(UAE), Jakarta (Indonesia), Sweden and Libya. It is also mentioned that there
are several companies in other countries in which there are huge investments by
the accused or with the help of their accomplices in foreign countries. The list
of countries and companies indicate prima facie that the amount involved could
not be a mere few crores, but would be nearer a few hundred crores.
7.
The
High Court in the impugned judgment has also mentioned that it is neither
possible nor desirable at this stage to give a positive finding about how much of
the crime proceeds have been `projected as untainted'. Therefore, there is an
area of overlap and the same cannot be allowed to form a tool in the hands of the
accused to scuttle the investigation. Looking to the gravity and magnitude of the
matter, after hearing learned counsel for the parties, the Division Bench of
the High Court referred the matter to the Central Bureau of Investigation. The
High Court also observed that the Central Government should exercise the powers
under section 45(1A) of the Prevention of Money Laundering Act, 2002 (for short
"the PML Act") for transferring investigation from the Enforcement Directorate
to the CBI. If such an order is not passed by the Central Government, any
material found by the CBI during investigation, which leads to an inference of
money laundering within the PML Act will be shared by the CBI with the Enforcement
Directorate from time to time, to enable the Enforcement Directorate to take such
action, as may be necessary.
8.
The
appellant, aggrieved by the said judgment preferred this appeal before this
court. Shri K.K. Venugopal, the learned senior counsel appearing on behalf of
the appellant formulated following substantial questions of law concerning the
impugned judgment and the interpretation of the PML Act. "1. Whether the PML
Act is a self-occupied Code while the Act constituting the CBI is limited? 2.
Whether, in light of Section 45(1A) read with Sections 43 and 44 of the PML
Act, the CBI has any authority to investigate offences which are the sole
domain of the Enforcement Directorate? 3. Whether the High Court was right in brushing
aside all the allegations against the PIL and directing investigation by the
CBI?"
9.
According
to the learned counsel for the appellant, the offence of money laundering, under
section 4 of the PML Act may be investigated only by the Enforcement
Directorate and tried only by the Special Court under the Act.
10.
Mr.
Venugopal submitted that the PML Act is a self-contained Code while the Act
constituting the CBI is limited.
11.
Mr.
Venugopal further submitted that the PML Act was enacted pursuant to the Political
Declaration adopted by the Special Session of the United Nations General
Assembly on 8th to 10th June, 1998, which called upon member States to adopt
national money-laundering legislation and programmes. (Preamble to the PML
Act).
12.
Learned
counsel for the appellant submitted that the Delhi Special Police Establishment
Act, 1946 (`DPSE Act') is limited to investigating offences in Delhi and the Union
Territories.
13.
Mr.
Venugopal submitted that the PML Act was enacted pursuant to Article 253 of the
Constitution and would prevail over any inconsistent State enactment. Reliance has
been placed on Maganbhai Ishwarbhai Patel Etc. v. Union of India and Another (1970)
3 SCC 400 at para 81 and S. Jagannath v. Union of India and Others (1997) 2 SCC
87 at para 48. This is however not the case with the DSPE Act.
14.
Learned
counsel for the appellant also submitted that the PML Act is a special
legislation enacted by Parliament and not only sets out the `Offences' (Chapter
II) but also the `manner of investigation', attachment and adjudication (Chapter
III), the power to summon, search, seizure and arrest (Chapter V),
establishment of Tribunals (Chapter VI), Special Courts (Chapter VII),
Authorities and their powers (Chapter VIII) and International arrangements
(Chapter IX).
15.
Mr.
Venugopal contended that the Act establishes a specialized agency which consists
of Police Officials, Revenue Officials, Income Tax Officials and various
specialized officials drawn from various departments. It also empowers the
Enforcement Directorate under Section 54 to call on assistance of officials
from: (a) Customs and Excise Department; (b) Under the NDPS Act; (c) Income
Tax' (d) Stock Exchange; (e) RBI; (f) Police; (g) Under FEMA; (h) SEBI; or (i) Any
Body Corporate established under an Act or by the Central Government
16.
Learned
counsel for the appellant also contended that the CBI is comprised only of the
police officers and does not have the expertise or wherewithal to deal with the
offences under the PML Act. In addition, as specifically defined in Section 55
(c) of the PML Act, the ED is empowered internationally to trace the proceeds
of crime, with great freedom accorded to the ED when the nexus is established with
a contracting state. The CBI does not possess such an advantage.
17.
Mr.
Venugopal placed reliance on the judgment of this Court in Central Bureau of Investigation
v. State of Rajasthan & Others (1996) 9 SCC 735 where the identical issue arose
of the CBI seeking to investigate offences under the FERA, which was the sole domain
of the ED, the Court held as follows: (i) The officers of the ED are empowered to
exercise the powers under the FERA as per Sections 3 & 4, and no other
authority has been empowered except as the Central Government may empower from
time to time. (ii) FERA is a special and a central legislation enacted later in
time than the DSPE Act, and Section 4(2) of the Cr.P.C. makes it clear that only
in the absence of any provision in any other law relating to investigation will
a member of the police force be authorized to investigate the offence. (iii) The
FERA Act is a complete code in itself. (iv) As the allegations in the case
related to FERA offences outside India, and the DSPE under Sections 1 and 2 are
authorized only to investigate offences inside India, the DSPE member is "not
clothed with the authority to investigate offences committed outside
India".
18.
Learned
counsel further submitted that in addition to the above, this court in Enforcement
Directorate and Another v. M. Samba Siva Rao and Others (2000) 5 SCC 431 at
para 5 reiterated that the provisions of the FERA constitute a complete code. The
provisions of the PML Act are identical, and in some ways more wide-ranging.
19.
Learned
counsel for the appellant further submitted that as the allegations in the
complaint against the appellant relate to so-called national and trans-national
offences, the only authority which is legally and factually equipped to
investigate the offences is the Enforcement Directorate.
20.
Mr.
Venugopal further submitted that in the light of section 45 (1A) read with
sections 43 and 44 of the PML Act, the CBI has no authority to investigate the
offences which are the sole domain of the Enforcement Directorate.
21.
Mr.
Venugopal referred various sections of the PML Act to demonstrate that only the
Enforcement Directorate can investigate the matter. He also submitted that the
conduct of investigation by the CBI is therefore contrary to both the intent of
the Legislature as well as the Executive and further if the plea of CBI is put to
test it leads to absurdity. It is submitted that in order to convict a person of
an offence punishable under section 4 of the PML Act, the Enforcement
Directorate has to first rule that the scheduled offence is committed which can
be an offence under the Indian Penal Code or the Prevention of Corruption Act
or Narcotics, Drugs, Psychotropic Substances Act or any other offence given in
any other Act in the schedule in the PML Act. Once this first part is proved then
the Enforcement Directorate has to prove how much money or what property was derived
from committing the scheduled offence and lastly how was it being projected as
untainted. The appellant prayed that the investigation by the CBI of Vigilance FIR
No.09/09 registered at Ranchi be set aside and the appellant be released from illegal
detention forthwith.
22.
The
written submissions have also been filed on behalf of the CBI and the Directorate
of Enforcement. It is mentioned in the written submissions that the Vigilance P.S.
Case No.09/2009 dated 02.07.2009 is instituted inter alia alleging commission
of offence under sections 409, 420, 423, 424, 465, 120-B of IPC and Sections 7,
10, 11, 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988.
The said complaint was registered on directions of the Special Judge,
Vigilance, Ranchi, who exercised powers under Section 156(3) of the Cr.P.C. It named
Shri Madhu Koda, former Chief Minister, Shri Kamlesh Singh, former Minister, Shri
Bhanu Prasad Shah, former Minister and Bandhu Tirky, former Minister of
Jharkhand.
23.
During
the course of investigation into the said complaint by the Vigilance, P.S.,
State of Jharkhand, involvement of the appellant Binod Kumar Sinha had surfaced.
The FIR also contains clear allegations against the appellant. The Central
Bureau of Investigation is investigating into the commission of these offences
alone and is not investigating any offence under the PML Act, 2002 since the
investigation under the said Act is solely and exclusively within the jurisdiction
and domain of the Enforcement Directorate, which is of course subject to the
exercise of powers by the Central Government under section 45 (1-A) of the said
Act.
24.
In
the written submissions, comprehensive information about investigation has been
submitted. It is also incorporated that the appellant, who was an absconder and
evaded arrest, is not entitled to any relief in exercise of discretionary
jurisdiction of this court under Article 136 of the Constitution of India. It is
also prayed that this appeal which challenges the order transferring investigation
of Vigilance P.S. No. 09/2009 to the CBI deserves to be dismissed.
25.
It
is also incorporated that the appellant is involved in a multi crore scam -
corruption in the matter of grant of iron ore mine leases and other acts as
more particularly set out. It is incorporated in the affidavit that a perusal of
various provisions of the Act would show that the said Act does not empower the
Enforcement Directorate to investigate offences under IPC or Prevention of
Corruption Act, 1988 or any of the scheduled offences. It is the PML Act which authorizes
the Enforcement Directorate only to investigate offences of money laundering as
defined under Section 3 and punishable under Section 4 thereof. It also provides
attachment, adjudication and confiscation of the property involved in money laundering
and setting up of Special Courts.
26.
Section
2(p) defines Money Laundering as under: "money-laundering" has the meaning
assigned to it in section 3"
27.
Section
2(ra) defines offence of cross border implications and the same is reproduced
hereunder:- "offence of cross border implications", means--
i.
any
conduct by a person at a place outside India which constitutes an offence at
that place and which would have constituted an offence specified in Part A, Part
B or Part C of the Schedule, had it been committed in India and if such person
remits the proceeds of such conduct or part thereof to India; or
ii.
any
offence specified in Part A, Part B or Part C of the Schedule which has been
committed in India and the proceeds of crime, or part thereof have been transferred
to a place outside India or any attempt has been made to transfer the proceeds
of crime, or part thereof from India to a place outside India. Explanation.--
Nothing contained in this clause shall adversely affect any investigation, enquiry,
trial or proceeding before any authority in respect of the offences specified in
Part A or Part B of the Schedule to the Act before the commencement of the Prevention
of Money-laundering (Amendment) Act, 2009.
28.
Section
2(u) defines proceeds of crime and the same is reproduced hereunder:(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;
29.
Section
2(x) defines Schedule and the same is reproduced hereunder : "Schedule"
means the Schedule to this Act".
30.
Section
2(y) defines Scheduled Offences and the same is reproduced hereunder :- (2y)
"scheduled offence" means--
i.
the
offences specified under Part A of the Schedule; or
ii.
the
offences specified under Part B of the Schedule if the total value involved in
such offences is thirty lakh rupees or more; or
iii.
the
offences specified under Part C of the Schedule.
31.
Sections
3 and 4 are reproduced hereunder:-
"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 proceeds of crime and projecting it as untainted property shall be guilty
of offence of money-laundering.
"4. Punishment
for money-laundering.-- Whoever commits the offence of money-laundering shall be
punishable with rigorous imprisonment for a term which shall not be less than
three years but which may extend to seven years and shall also be liable to fine
which may extend to five lakh rupees:
Provided that where the
proceeds of crime involved in money-laundering relates to any offence specified
under paragraph 2 of Part A of the Schedule, the provisions of this section shall
have effect as if for the words "which may extend to seven years", the
words "which may extend to ten years" had been substituted."
32.
Mr.
H.P. Raval, learned Additional Solicitor General appearing for the C.B.I. submitted
that a bare perusal of the above provisions makes it clear that the offence of money
laundering is a stand alone offence within the meaning of the said Act and its
investigation alone is in the exclusive domain of the Enforcement Directorate.
33.
He
also submitted that the provisions of the said Act do not contemplate the investigation
of any of the Indian Penal Code, Prevention of Corruption Act or any of the scheduled
offences by the Enforcement Directorate.
34.
Mr.
Raval contended that having regard to the terminology of section 3, any process
or activity connected with the proceeds of the crime and projecting it as
untainted property is the offence of money laundering which is made punishable
under section 4.
35.
Mr.
Raval submitted that section 5 (1) of the said Act provides that the Director
or Authorised Officer has reason to believe, to record in writing on the basis of
material in his possession that any person is in possession of any proceeds of crime,
that such person has been charged of having committed the scheduled offence and
such proceeds of crime are likely to be conceded, transfer or dealt with in any
manner which may result in frustrating any proceedings relating to confiscation
of such proceeds of crime under Chapter III of the said Act, then by an order in
writing such property may be provisionally attached for a period not exceeding
150 days.
36.
According
to Mr. Raval, a bare reading of the said provision makes it clear that the
jurisdiction to initiate action of attachment has to be founded on a reasonable
belief of a person being in possession of any proceeds of the crime and not on a
concluded investigation of the person being in possession of the proceeds of the
crime. The distinction is clear and it follows from Section 5(1)(b) that the second
condition for initiation of action of attachment of property involved in money
laundering is that such person in respect of whom there is reason to believe
that he is in possession of any proceeds of the crime, has been charged of
having committed a scheduled offence.
37.
Mr.
Raval contended that if the contentions of the appellant were true, then the sections
of the said Act would have been differently worded. He also submitted that the contention
of the appellant on the basis of provisions of sections 43 to 45 that any of
the scheduled offences can only be investigated exclusively by the Enforcement Directorate
is not justified and tenable at law.
38.
Mr.
Raval submitted that the embargo from taking cognizance by the Special Court of
any offence as provided in the second proviso of sub section (1) of section 45
is only with respect to an offence punishable under section 4. It is only in respect
of an offence punishable under section 4 of the Prevention of Money Laundering
Act that cognizance is barred to be taken by the Special Court except on a complaint
in writing as provided in sub clause (1) and (2) thereof.
39.
He
also submitted that this provision cannot be construed to mean that the Enforcement
Directorate has the exclusive jurisdiction to investigate any of the scheduled offences.
40.
Mr.
Raval contended that the contention of the appellant that merely because under section
44 of the PML Act, the Special Court constituted in the area in which the
offence has been committed, has been authorized statutorily to try the scheduled
offence and the offence punishable under section 4 is equally unsustainable in law
since nothing in the said provision of section 44 of the said Act envisages the
exclusive investigation of the scheduled offences by the Enforcement Directorate.
Mr. Raval submitted that the trial of the scheduled offence is distinct and different
from investigation under the PML Act.
41.
The
above contention of the respondent is buttressed having regard to provisions contained
in Section 43(2) which provides that while trying an offence under the Prevention
of Money Laundering Act (which means the offence of Money Laundering alone) the
Special Court shall also try an offence other than referred to sub section (1)
of section 43 with which the accused under the Code of Criminal Procedure be
charged at the same trial.
42.
He
contended that the scheme of the Act would, therefore, not construe the
submission of the appellant that in case of there being an allegation of offence
of money laundering, the scheduled offence also has to be exclusively investigated
by the Enforcement Directorate. Such a contention is not supported by the
provisions of the Act since there is no provision restricting the investigation
of offence other than that of money laundering by any appropriate investigating
agency.
43.
Mr.
Raval submitted that the money alleged to have been so earned is of
unprecedented amounts. It is further recorded that, however, there is no clear allegation
so far about its laundering in the sense mentioned in the PML Act. It is further
observed that there is an allegation of his investment in the property, shares
etc. not only in India, but, also abroad. Having so observed it is recorded that
therefore the basic investigation requires determining whether money has been acquired
by abuse of official position amounting to an offence under the Prevention of
Corruption Act and under the Indian Penal Code and persons by whom the same has
been done the amount of money which has been so earned and the places where it
has been invested.
44.
According
to the learned counsel for the respondents, the High Court in the impugned order
has recorded cogent reasons for directing the investigation by the Central Bureau
of Investigation. Even this court while issuing notice vide order dated 01.09.2010
has directed the CBI to continue to investigate as directed by the High Court. Under
the circumstances, the appellant is not entitled to any relief as contended.
45.
Mr.
Raval informed the Court that the charge sheet in fact has been filed on 12.11.2010
before the Court of Competent Jurisdiction alleging inter alia commission of offence
under section 120-B IPC, Section 9, Section 13 (2) read with section 13(1) (d)
of the Prevention of Corruption Act, 1988 against various accused including the
appellant Shri Binod Kumar Sinha. It is further submitted that the
investigation is still on and subsequent charge sheets may be filed as and when
during investigation sufficient material surfaces on other aspects.
46.
In
written submission it is categorically stated that the Central Bureau of Investigation
is investigating into the commission of these offences alone and presently is not
investigating any offence under the PML Act as the investigation under the PML Act
is solely and exclusively within the jurisdiction and domain of the Enforcement
Directorate, which is of course subject to the exercise of powers by the Central
Government under Section 45 (1-A) of the said Act.
47.
We
have heard the learned counsel for the parties at length and perused the
written submissions filed by them. On consideration of the totality of the
facts and circumstances, we are clearly of the view that no interference is
called for.
48.
The
appeal being devoid of any merit is accordingly dismissed.
49.
In
the facts and circumstances of the case, we direct the parties to bear their
own costs.
...........................................J.
(DALVEER BHANDARI)
...........................................J.
(DEEPAK VERMA)
New
Delhi;
March
29, 2011.
Back
