Will Quashing FIR In Predicate Offence On Technical Grounds Exonerate Person From PMLA Proceedings? Madras HC To Examine

The Madras High Court is set to examine if quashing an FIR in the predicate offence on technical grounds becomes a ground for exonerating a person under the proceedings under the Prevention of Money Laundering Act. The bench of Justice SM Subramaniam and Justice V Sivagnanam were hearing a petition to quash the PMLA proceedings initiated against two men, Maneesh Parmar and Sunil Khetpalia on the ground that a single judge had already quashed the FIR in the predicate offence. The court noted that quashing PMLA proceedings based on quashing of predicate offence would have to be considered on a case-to-case basis and the PMLA proceedings could not be quashed blanketly upon quashing the FIR in the predicate offence. “It is not as if every PMLA proceedings is to be quashed blanketly if the FIR in schedule offence is quashed. These aspects require further consideration from the hands of this Court and the application of legal principles are also necessarily to be considered,” the court noted. The court also noted that the legal principles laid down in the Vijay Madanlal case could not be applied bluntly and would depend upon the facts and circumstances of the peculiar case. The court noted that the PMLA proceedings were initiated based on the scheduled offence and thus, quashing the scheduled offence or a discharge in the scheduled offence would lead to quashing the PMLA proceedings also. The court however emphasised that there was a distinction between quashing an FIR on merits and quashing it on technical grounds. The court added that each and every quashing of a scheduled offence could not be construed as quashing it on merits and the issue had to be analysed on a case-to-case basis. “The initiation under PMLA is thus based on the schedule offence and if such schedule offence is quashed or the accused is discharged on merits, then the PMLA proceedings also is liable to be quashed. The distinction of quashing of FIR on technical grounds cannot be compared with the quashment of an FIR on merits or discharging a person on merits in a schedule offence. In this regard, a large analysis is required with reference to the legal principles settled by the Hon'ble Supreme Court of India,” the court said. Another aspect which required consideration, as per the court's opinion, was the practice of not impleading the ED as a party while challenging the scheduled offence. The court noted that in such cases, the ED had no opportunity to defend their case or to establish the circumstances with reference to the scheduled offence. In the present case, the Special Public Prosecutor for the ED, Advocate Ramesh, informed the court that the single judge had quashed the FIR despite the fact that the closure report was returned by the Special Court for compliance and was not represented to date. Ramesh informed the court that since an offence under the Prevention of Corruption Act was made out, the ED had filed the ECIR based on the FIR. Ramesh informed the court that the ED was not impleaded as a part of the quash petition whereas the ED had collected incriminating materials against the petitions during the courts of their investigation. He also informed the court that ED was taking appropriate actions to challenge the single judge's order before the Supreme Court by seeking leave. Noting this submission, the court decided to keep the matter pending till the SLP against the single judge's order was considered by the Supreme Court. The court also directed the ED to expedite the steps in the public interest. Case Title: Maneesh Parmar v The Assistant Director Case No: WP 15465 of 2024Click here to read/download the order

Will Quashing FIR In Predicate Offence On Technical Grounds Exonerate Person From PMLA Proceedings? Madras HC To Examine

Upasana Sajeev

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