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Special Court Calls ED "Vengeful Complainant", Discharges Two Accused In PMLA Case

Sharmeen Hakim
24 Aug 2022 4:05 PM GMT
Special Court Calls ED Vengeful Complainant, Discharges Two Accused In PMLA Case
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Observing that the Enforcement Directorate was a "vengeful" complainant, a special court at Mumbai discharged two developers accused in the Yes Bank Money laundering case based on a clean chit in the predicate offence. Special Judge MG Deshpande relied on Supreme Court's recent judgement in Vijay Mandal Chaudhary & Ors. vs Union of India, which has held that a case under PMLA,...

Observing that the Enforcement Directorate was a "vengeful" complainant, a special court at Mumbai discharged two developers accused in the Yes Bank Money laundering case based on a clean chit in the predicate offence.

Special Judge MG Deshpande relied on Supreme Court's recent judgement in Vijay Mandal Chaudhary & Ors. vs Union of India, which has held that a case under PMLA, 2002 cannot stand if the scheduled offence doesn't exist anymore.

The court said it could not "join hands" with the ED that was opposing the builders' release despite this legal position.

"In the aforesaid premises, this Court strongly feels that it cannot join hands with vengeful complainant like ED to humiliate accused persons by continuing their judicial custody that too, in utter disregard to the recent law of the land. This was the background for granting interim relief, which requires to be made absolute," the order read.

Earlier, the same court directed their interim release based on an application that a 'C summary' report was filed in the cheating case (predicate offence) against them, therefore further extension of their custody was illegal. It was this interim order that was made absolute. The court said ED cannot "eccentrically and whimsically" seek extension of custody.

"The Hon'ble Apex Court time and again laid down that life bereft of liberty is without honour and dignity. It loses all significance and the life itself will not be worth living. That's the reason why liberty is held the very quintessence of a civilized existence. Without the right to life with liberty, no other right can be enjoyed."

Case Against the Accused

Enforcement Directorate in its case had alleged that accused Babulal Varma and Kamalkishore Gupta had availed a loan of Rs. 410 crore from Yes Bank which had been diverted and not used for the intended purpose and thereby committed offence of money laundering. The scheduled offence was for cheating under the IPC.

Senior Advocate Aabad Ponda appeared for one of the accused, while Advocate Vijay Aggarwal and Rahul Aggarwal appeared for the other.

Aggarwal submitted that he was moving the discharge application in view of the SC's recent judgement. He said there is no scheduled offence in existence as on date and the same has been closed pursuant to order passed by Court of competent jurisdiction. He further brought attention towards relevant portions from the C-summary report filed by State in scheduled offence where it is stated that there was no sufficient evidence to continue with the case.

The complainant himself had stated on affidavit that there was misunderstanding because of which he registered the FIR, Aggarwal said.

Special PP Hiten Venegaonkar, appearing for the ED, opposed the applications and argued that the judgement of Supreme Court has debatable points. He stated that the judgement does not cover closure of scheduled offence due to compounding, and thus the said judgement does not apply to the present case. He further argued that this is the first such application in the entire country, hence, if this court passes any order in favour of the applicants, it will be the first order in the country, which is likely to be followed and used by other Courts in the country, which will have great impact.

However, the court was of the opinion that Article 141 of the Constitution of India imposes a binding authority upon all subordinate courts within India to consider the judgement of the Hon'ble Supreme Court as declared law.

The judge said it was the court's duty to identify the situation and apply principles­ laid down by the Supreme Court. "If this Court fails to do so, certainly it will lead to a situation "Sun is there but light has gone".

"Considering the peculiar facts as now and henceforth, the PMLA case against both accused cannot proceed. That being so, detention of both accused becomes illegal."

The judge added that the Court –Judge is not only 'repository' but also a 'Custodia legis' of rights of the citizens, particularly that of under trial prisoners. "If this power is exercised in utter disregard to the mandate of law, the right of life and liberty enshrined under Art. 21 of the Constitution of India will be in danger of extinction, and, in this process, the Court who is the protector of the rights of citizens (under trial prisoners) will become 'predator' of the rights."

Therefore, courts should not hesitate even in granting interim release.

Click here to read/download the order



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