Money Laundering, Illegal Mining and Granite Quarrying: Madras HC Dismisses Petition to Quash Complaint for want of Trial [Read Order]

The Madras High Court heard a petition concerning money laundering, illegal mining and granite quarrying. The petition was dismissed as the Court found sufficient averments disclosing cognizable offence against the petitioner, which would require a fair trial while noting that the case did not fall within the parameters for the Court to exercise its extraordinary jurisdiction under Section 482 Cr.P.C. for quashing the complaint at the threshold.

The matter was earlier heard by a Division Bench of the High Court; upon dismissal, the petitioner filed criminal appeals before the Supreme Court who set aside the order dated 8.2.2021 and remanded the matter to the High Court for reconsideration on merits and in accordance with law.

The facts are that the petitioner was doing quarrying business and purchased a property to do so by way of a registered sale deed dated 31.1.2000. The vendor had obtained two granite mining leases from the Government of Tamil Nadu in 1993.

In the year 2000, a request was applied to transfer the lease in favour of the petitioner. The Government accorded consent on 27.2.2001 for the remaining period till 2003. The petitioner got it renewed in 2004 for some of the property to extend the mining operations till 2008. No mining took place from 2008 to 2012. The act of money laundering was attached to the property in question by the Directorate of Enforcement (ED) in 2017.

The petitioner, R.R. Granites was summoned as implication was confirmed under the Prevention of Money Laundering Act, 2002 (PMLA). He filed the petition on the ground that RR Granites has no legal existence and the complaint thus is not maintainable. The respondent, Deputy Director of ED, claimed compliance with the law and accused the petitioner of illegal mining activity.

The High Court observed with reliance that ECIR is not equal to an FIR inasmuch as it is not a public record and need to be furnished to the accused, still the initiation of investigation by ED under PMLA begins with the registration of an ECIR. HC drew attention to Section 2(1)(u) which defines "proceeds of crime” and clarified that it includes the property derived and obtained from offence and also the result of any criminal activity relatable to the scheduled offence.

HC quantified the loss to the state at INR 46.53 crores and noted that RR Granites had been involved in large scale illegal mining. However, it relied on State of Haryana v. Bhajan Lal and held that the complaint disclosing a cognizable offence required a fair trial to exercise its extraordinary jurisdiction under Section 482 Cr.P.C. for quashing the complaint at the threshold.

The two judges, Chief Justice Manindra Mohan Shrivastava and Justice G. Arul Murugan, dismissed the petition as the Court is not expected to conduct a roving enquiry to see whether the averments in the complaint would result in ultimate conviction.

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