The Madras High Court has held that the enforcement directorate need not establish money trail.
The bench of Justice G.R.Swaminathan and Justice R.Poornima has observed that since concealment of the proceeds of crime is an offence, the accused can be held guilty of the same. The Enforcement Directorate need not demonstrate where the money eventually went. The accused after engineering a disappearing act cannot be heard to contend that they must be exonerated because proceeds of crime have not been identified.
The bench said, “if a rat has escaped into a hole, one can only point to the hole. The rat might even have exited through another end. The defence cannot argue that unless the rat is found, there cannot be a prosecution.”
The Assistant Director, Directorate of Enforcement, Chennai registered ECIR against the revision petitioners. Later, the authority filed a complaint under Section 44 of the Prevention of Money Laundering Act, 2002 on the file of the Special Court constituted under Section 43(1)against the revision petitioners for having committed the offence of money laundering.
M/s.Deepa Impex India Private Limited was granted lease to quarry minor minerals in Melur in the year 1989. K.C.Chandran and his wife C.Chandra are directors of the company.
They entered into criminal conspiracy and illegally quarried granite stones from the nearby lands and non-lease patta lands and transported more minerals than permitted.
The authorities of the Department of Geology and Mining conducted a detailed survey and valued the illegally quarried mineral at Rs.436.88 crores. It was specifically determined that the accused have made unlawful gain to the tune of Rs.261.89 crores.
Hence, Crime was registered against the accused on the file of the Keelavalavu Police Station for the offences under Sections 447, 379, 120(B), 114, 109, 511, 420, 434, 465, 467, 468, 471, 304(ii) IPC and Section 4 of TNPPDL Act, 1992 and Section 6 r/w. 3(a) and 4(a) of the Explosive Substances Act. Investigation was conducted and a final report was filed and the same was taken cognizance in C.C No.11 of 2018 on the file of the Judicial Magistrate, Melur. Totally eight persons including the revision petitioners herein had been arraigned as accused in the case.
Based on the scheduled offences, ECIR was registered against the revision petitioners. The revision petitioners were summoned under Section 50 of the Prevention of Money Laundering Act, 2002 and examined.
Investigation was conducted and information from various authorities was elicited. The investigation revealed that illegal quarrying had taken place right upto 2012 and that the petitioners herein had committed scheduled offences as defined under Section 2(1)(x) and (y) of the Prevention of Money Laundering Act, 2002.
As per the valuation report of the Department of Geology and Mining, the proceeds of the crime had been determined as Rs.261.89 crores. Out of this unlawfully generated income, properties have been purchased. One such property is covered under Doc No.1526 of 2010 registered on the file of the SRO, Periamet.
The revision petitioners have projected the said property as an untainted property. This property has been attached under Section 8(3) of the Act. The revision petitioners under Section 227 of Cr.Pc for discharging them from the case. The discharge petition was dismissed.
The petitioner contended that the property identified as purchased out of the proceeds of the crime was actually an untainted property. Even going by the averments set out in the complaint, no offence is made out against the revision petitioners. He pressed for discharge of the revision petitioners from the case.
The department contended that the petitioners herein as lease holders could not have entered into any transaction with Mr.P.R.Palanichamy for handing over the quarry. He added that the sale consideration set out in the sale deed dated 22.07.2010 does not reflect the actual market value. The guideline value during the relevant time was more than one crore. The court below rightly dismissed the petition for discharge and that it does not call for interference.
The court while dismissing the petition held that Section 24(a) of the Act will apply if charges have been framed against the accused. Section 24(b) of the Act will apply in the case of any other person. While Section 24(a) of the Act is a mandatory presumption, Section 24(b) is a discretionary presumption.
“Taking into account the quantum of money involved and the nature of allegation, this is a case in which the presumption under Section 24(b) has to be necessarily invoked. It is for the petitioner herein to rebut the presumption. But that can be done only during trial. The court below had approached the issue from a correct perspective and rightly dismissed the discharge petition filed by the revision petitioners,” the court said.
Case Details
Case Title: K.C.Chandran Versus ED
Case No.: Crl RC(MD)No.662 of 2024 and Crl MP(MD)No.6804 of 2024
Date: 27.11.2024
Counsel For Petitioner: A.Robinson
Counsel For Respondent: A.R.L.Sundaresan
