- As per the SC ruling, if a person is discharged or acquitted in the predicate offence, then the charges of PMLA also go.
- As per the PMLA provisions, a prior FIR (scheduled offence) is a requisite for the ED to initiate action against a person involved with the process or activity.
NE LEGAL BUREAU
MUMBAI, AUG 24
A special PMLA court here on Wednesday allowed the discharge pleas of two businessmen in a money laundering case in the absence of ‘predicate’ (scheduled) offence which led to the case against them.
Omkar Group promoters Babulal Varma and Kamalkishor Gupta who were arrested in January were discharged from a case filed against them by the ED. Special Judge, M G Deshpande, had allowed their interim release on August 8.
“It is crystal clear that if there is no scheduled/predicate offence, the PMLA case cannot continue. Similarly, the PMLA court cannot have the jurisdiction to continue a PMLA case in the absence of a case relating to the scheduled offence. The guidelines of the honourable Supreme Court…are very clear. This court has no jurisdiction to extend judicial custody of the accused under PMLA when there is no scheduled offence,” special judge M G Deshpande had said in his order on August 8.
This is one of the first such decisions following the Supreme Court’s recent order upholding that a case under the Prevention of Money Laundering Act (PMLA) cannot continue if there is no scheduled offence and hence, the special court has no jurisdiction to extend the judicial custody of the persons arrested under the Act.
It is likely to have an impact on other cases where there is no scheduled offence against the accused, including one case against NCP leader Chhagan Bhujbal, who was discharged in the scheduled offence by a special court last year.
The Enforcement Directorate (ED) had booked the two accused, Babulal Verma and Kamalkishor Gupta, top executives of the Omkar Relators and Developers, under provisions of the PMLA.
The case pertains to alleged irregularities in the execution of the Slum Rehabilitation Authority (SRA) scheme in development of a housing society in Mumbai.
The company and the two executives are also facing allegations of “diverting” more than Rs 400 crore loan from the Yes Bank.
The money laundering case was based on a First Information Report (FIR) registered against the duo by the Aurangabad police in Maharashtra.
As per the PMLA provisions, a prior FIR (scheduled offence) is a requisite for the ED to initiate action against a person involved with the process or activity.
The Aurangabad police recently filed a closure report in the case (scheduled offence) against Verma and Gupta which was accepted by the court and the duo was discharged.
As per the SC ruling, if a person is discharged or acquitted in the predicate offence, then the charges of PMLA also go.
The lawyers Vijay Aggarwal and Rahul Agarwal argued on behalf of the two Omkar Group promoters before the court that the closure report filed by the police in that case in Aurangabad, Maharashtra, was accepted by a local court noting that the complaint was filed due to misunderstanding and that the commercial transactions dues were cleared by the accused. The lawyers submitted that a single minute spent by the two accused in custody amounted to illegal detention since there is no scheduled offence against them.
Referring to the Supreme Court order, lawyer Aggarwal submitted that since the closure report was accepted and there is no scheduled offence, the PMLA case by the ED cannot continue. He submitted that in such a scenario, the two cannot be kept in custody in the PMLA case against them.
The court after hearing arguments of both sides allowed the discharge applications of the duo.
The detailed order was not yet available.
