S. 44(1)(c) of PMLA Applicable After jurisdictional Court has taken cognizance of scheduled offences: Bombay HC [Read Order]

In a recent case, the Bombay High Court has held that section 44(1)(c) of the Prevention of Money Laundering Act, 2002 ('PML Act') applies after jurisdictional Court has taken cognizance of scheduled offences.

Amit Chandole, the petitioner sought to quash and set aside letters dated 7th September, 2022 , 15th September, 2022 in Special Case No. 1124 of 2020, pending on the file of Ld. Special PMLA Judge. Mumbai. The impugned Order has been passed by the Additional Chief Metropolitan Magistrate, 47th Court, Esplanade, Mumbai in C.C. No.2448/MISC/2021 below application filed by Prosecution For Directorate Of Enforcement for committal of the said proceedings before the PMLA Special Court at Mumbai.

The Additional Chief Metropolitan Magistrate by said impugned Order dated 18th July 2022 committed the said case to the PMLA Special Court. The said Order is challenged in Criminal Writ Petition No.6332 of 2024.

The Complainant, Shri Ramesh lyer, Ex-ViceChairman of Topsgrup Services Ltd., alleged that he learnt that there are various off the record transactions being carried out from the Company. Amongst other allegations, it was alleged that in theyear 2014, a contract was signed by M/s Topsgrup Services & Solutions Ltd, with Mumbai Metropolitan Regional Development Authority (MMRDA) as per which about 350 to 500 guards were to be deployed at MMRDA sites on a monthly basis.

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It is submitted that out of the same, only 70% of guards were actually deployed; however, the billing was done for all the guards (100% deployment) as per contract, and the wages-paid details were submitted to MMRDA for 100% of the contract value based on the number of guards to be deployed as per the contract and not on the basis of actual deployment of the guards. It is further submitted that accordingly, compliance documents like PF/ ESIC were submitted for 100% of the contract value and not on the basis of actual deployment of the guards.

The Complainant during investigation submittedthat huge cash amounts were withdrawn from bank accounts of M/s Topsgrup Services & Solutions Ltd. and were given to Mr. Niraj Bijlani, who is Ex-CEO of Topsgrup. In the year FY 2017-18, an amount of Rs. 92 lakhs approx. was handed over to Mr. Niraj Bijlani and there was an arrangement with a person namely Mr. Amit S. Chandole (Respondent No. 8) as per which 50% of the profits deployed is being paid to Amit Chandole (Respondent No. 8) and these amounts were paid by Topsgrup to the said accused. As per the details provided by the Complainant, for last 3 years i.e., from May 2017 till June 2020, amount aggregating to Rs. 2.36 crore has been shared as commission.

Out of the said amount, Rs. 90 Lakh has been paid through bank transfers to Mr. Amit S. Chandole and Mr. Sanket S. More. As per the Complainant, all these amounts were being paid from Topsgrup bank accounts and approx. commission of Rs. 7 Crore has been paid to Mr. Amit S. Chandole since 2014 i.e., from initiation of contract with MMRDA.

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One of the Order challenged is dated 14th September 2022, by which ‘C’ Summary Report was accepted by the Additional Chief Metropolitan Magistrate. A bare perusal of said Order shows that the Additional Chief Metropolitan Magistrate has not applied his mind to the said ‘C’ Summary Report and only on the ground that the Informant has given no objection, accepted said C-Summary Report.

It was found that if ‘C’ Summary Report is filed, then the Magistrate has three options. The Magistrate was duty bound to apply his mind to the facts of the case and to the ‘C’ Summary Report and the material annexed to the same and then pass order either accepting the ‘C’ Summary Report or rejecting the said ‘C’ Summary Report and taking cognizance of the offence and issuing process or the learned Magistrate may direct further investigation under sub-section (3) of Section 156.

A bare perusal of said Order dated 14th September 2022 shows that the ‘C’ Summary Report is accepted without application of mind and only on the ground that the First Informant has given no objection.

The SPP submitted that after setting aside said Order dated 14th September 2022 accepting CSummary, the matter be remanded back to the PMLA, Special Court. He pointed out Order dated 14th September 2022 passed by the learned Additional Chief Metropolitan Magistrate dated 14th September 2022 by which after accepting the C - Summary Report the Magistrate has sent the case to the PMLA, Special Court.

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The above Order dated 14th September 2022 is passed on the basis of Order dated 18th July 2022 passed by the Additional Chief Metropolitan Magistrate, by which it has been directed that the C Summary Report deserved to be committed to PMLA, Special Court for simultaneous trial as directed by PMLA Special Case. Accordingly, by said Order dated 18th July 2022 the case was directed to be committed to PMLA, Special Court. As noted herein above, Additional Chief Metropolitan Magistrate after accepting C-Summary, sent the said case to the PMLA, Special Court.

Justice Madhav J. Jamdar held that the stage that has been contemplated under Section 44(1)(c) of the PMLA, 2002 will be after the jurisdictional Court has taken cognizance of the scheduled offences. The said stage will come if the Additional Chief Metropolitan Magistrate by rejecting the C-Summary Report takes cognizance of the offence and issues process.

The court set aside the order dated 14th September 2022 directing that papers of CC No.2448/MISC/2021 in MECR No.5 of 2020 be sent to PMLA, Special Court and remanded the matter to the Additional chief Metropolitan Magistrate, 47th Court, Esplanade, Mumbai for considering ‘C’ Summary Report afresh.

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