Amlendu Pandey vs Deputy Director, Directorate Of Enforcement, Mumbai

FPA-PMLA-1431/MUM/2016

Directorate of Enforcement had registered a case vide ECIR/02/MZO/2007 on 8.1.2007 against Hasan Ali Khan Kashinath Tapuriah under the

Prevention of Money Laundering Act, 2002.

A Criminal Case bearing FIR No. RC0682016E0013 dated 19.09.2016 was registered in Central Bureau of Investigation, EOE, Mumbai against

Hassan Ali Khan, unknown public servants and others under Section 120-B read with Section 420 of Indian Penal Code and Section 13(2) read with

Section13(1)(d) of Prevention of Corruption Act,1988 on the basis of complaint filed by Enforcement Directorate on 09.09.2016.

The allegations of FIR are as under:-

(i) Mr. Hassan Ali Khan either individually or along with his associates is maintaining account (s) with Union Bank of Switzerland(UBS), Zurich, in

which it is believed that substantial funds to the tune of US dollars 8 billion were stashed in December, 2006. There are reasons to believe that part of

such funds slashed in the account of Mr. Hassan Ali Khan at UBS, Zurich and other foreign banks has come from illegitimate and illegal sources and

could possibly be funds against sale of Arms/ammunition/weapons to India/other countries in collusion with the renowned arms dealer Mr. Adnan

Khashoggi.

(ii) There are also reasons to believe that Mr. Hassan Ali Khan is only a front man and is holding such foreign account (s) as a power of attorney

holder for some influential politician/bureaucrat of Government of India who is / are the actual beneficial owner(s) of such account(s) / amount earned

through corrupt and illegal means. Mr. Hassan Ali Khan is also believed to be dealing in illegal sale of antique items and is also involved in Hawala

transactions / money laundering activities.

In view of the said allegations, searches were conducted at various places including the residence of Amlendu Pandey where on 9th February,

2016, Indian currency amounting to Rs.26,30,000/- was recovered and seized.

By the impugned order dated 28.06.2016, the adjudicating authority has allowed the application under Section 17(4) filed by the respondent on the

ground that the retention is satisfied. By this order, I only propose to decide the case of Amlendu Pandey. As far as other defendants are concerned,

no opinion can be expressed by this Tribunal.

The Amlendu Pandey admittedly expired on 25th May, 2017 and the factum of the death was recorded in the Order dated 13.7.2017, the photo

copy of death certificate was also produced. Thereafter, the legal representative had filed the application of the deceased Amlendu Pandey and the

same was allowed by order dated 19th December, 2017. Ms. Shivani Kumari was impleaded as legal representative of the deceased. All the orders

were passed within the knowledge of the respondent as well as the respondent counsel.

The counsel for the appellant has informed that no charge-sheet under schedule offence was pending against the deceased. It was also informed

that Amlendu Pandey has nothing to do with the other defendants and has not committed any offence directly or indirectly. On his behalf, it is

submitted that once he expired, all the proceedings against him are abated. It is stated that no prosecution complaint was filed when he was alive.

After his death, no complaint is maintainable against the dead person.

The Hon’ble Supreme Court in the matter of U. Subhadramma & Ors. Vs. State of Andhra Pradesh, Crl. Appeal No. 1596 of 2011 decided on

July 4, 2016. The paras from 6 to 12 reads as under:

The Learned Senior counsel for the appellants submitted that the scheme of the Criminal Law Amendment Ordinance, 1944 does not

permit the District Judge to confirm any attachment of the property though the criminal court has not validly convicted and found the

accused or the person whose property is sought to be attached as guilty. The Learned counsel submitted that in this case, it was not possible

for the criminal court to have convicted or found Ramachandraiah guilty since he expired in 1991 during the trial. In fact, according to the

appellants, no application for attachment could have been made under these circumstances. The Learned counsel for the respondents

strongly opposed the prayer and submitted that the appellants may not to be allowed to retain property obtained by ill-gotten means and it

was legal for the learned District Judge to have passed the order of attachment in respect of such property which was admittedly the subject

matter of the charge-sheet. It has, therefore, become necessary for us to examine whether the property of a person which was merely case of

an offence of misappropriation but who died during the pendency of the criminal trial can be attached in the hands of his legal

representatives under the provisions of Criminal Law Amendment Ordinance, 1944.

As far as making the application for attachment, we find that the law authorises the State Government to make such an application even

though proceedings against the person may not yet have resulted in a conviction. This is by virtue of Section 3[2] which empowers the

Government to authorise making of such an application to the District Judge where it has reason to believe that any person has committed

any scheduled offence. But, however Section 3 requires the Government to make such an application to the District Judge within the local

limits of whose jurisdiction the said person ordinarily resides or carries on business; thus clearly requiring the existence of such a person.

It excludes the possibility of proceedings against a dead person. Section 4 of the act empowers the District Judge to pass an order of ad

interim attachment on prima facie grounds for believing that the person in respect of whom the application is made has committed any

scheduled offence or has procured any money or property thereby. Sub- Section (2) requires the District Judge to issue a notice,

presumably at the address where the person ordinarily resides or carries on business (vide Section 3) along with copies of the order and the

application etc. Section 5 provides for an investigation of objections to the attachment who have been served with notices under Section 4.

Sub-Section (3) empowers the District Judge to pass an order making the ad interim order of attachment absolute or varying it by releasing

a portion of the property or withdrawing the order.

Section 13 requires the Government to inform the District Judge about the status of the criminal proceedings. It requires the Government

to furnish the District Judge with a copy of the judgment or order of the trial court and with copies of the judgment or orders, if any, of the

appellate or revisional court thereon. Sub-section 2 mandates that the District Judge shall forthwith withdraw any orders of attachment of

property made in connection with the offence if (a) cognizance of alleged scheduled offence has not been taken or (b) where the final

judgment and orders of the criminal court is one of acquittal. While, this clause is clear that the orders of attachment must be withdrawn if

cognizance of the offence has not been taken or there has been an acquittal; the clause is silent as to the effect of abatement of

prosecution. It is due to this silence that it is contended by the State Government in this case that the orders of attachment could not only

have been continued but could also have been confirmed. It is not possible for us to accept the submission. If the law requires that the

orders of attachment should be withdrawn upon acquittal it stands to reason that such orders must be withdrawn when the prosecution

abates or cannot result in a conviction due to the death of the accused, whose property is attached. Concept of abatement of a trial could

be subsumed in the clause where the final judgment and order of the Criminal Court is one of acquittal. In this context, the presumption of

innocence of an accused till he is convicted must be borne in mind and there is no reason to consider this presumption to have vaporized

upon the death of an accused. It may be noted that this Court has time and again reiterated the presumption of innocence of an accused till

he is convicted.

As far as the circumstances of this case are concerned, we find that there has been a gross mis-carriage of justice at several steps. In the

first place, the finding of the trial court that Ramachandraiah was alone responsible for the offences is completely vitiated as null and void

since Ramachandraiah had admittedly died on the date this finding was rendered. It is too well settled that a prosecution cannot continue

against a dead person. A fortiori a criminal court cannot continue proceedings against a dead person and find him guilty. Such

proceedings and the findings are contrary to the very foundation of criminal jurisprudence. In such a case the accused does not exist and

cannot be convicted. Consequently, the learned District Judge committed a gross error of law in acting upon such a finding and treating

Ramachandraiah as guilty of such offences while making the order of attachment and while confirming the said order of attachment of

properties.

In such circumstance, the courts below erred in recording the finding that Appellant No.1 had committed the offence as alleged by the

prosecution. Further, finding recorded by the learned Single Judge of the High Court that Appellant No.1 alone had committed the offence

and nor Appellant No.2, must be taken to have misappropriated the said amount is perverse:

“A criminal trial is not like a fairy tale wherein one is free to give flight to one’s imagination and phantasy. It concerns itself with the

question as to whether the accused arraigned at the trial is guilty of the crime with which he is charged. In arriving at the conclusion about

the guilt of the accused charged with the commission of a crime, the court has to judge the evidence by the yardstick of probabilities, its

intrinsic worthy and the animus of witness.

The facts involved herein did not warrant presumption of commission of offence by Appellant No.1 and thus the findings recorded by

the courts below are not tenable.

In fact, we find that the learned District Judge could not have proceeded with the attachment proceedings at all since the attachment

proceedings were initiated by the State against Ramachandraiah under Section 3 of the Criminal Law Amendment Ordinance, 1944, who

was actually dead. Section 3 contemplates that such an application must be made to the District Judge within the local limits of whose

jurisdiction the said person ordinarily resides or carries on business, in respect of property which the State Government believes the said

person to have procured by means of the offences. It is incomprehensible, therefore, that such an application could have been made in

regard to a dead person who obviously cannot be said to be ordinarily resident or carrying on business anywhere. There is no legal

provision which enables continuance of prosecution upon death of the accused. We must record that the proceedings and the decisions of

the courts below are disturbing, to say the least. In the first place, though the accused had died, the trial court proceeded with the trial and

recorded a conviction two years after his death. Then, this null and void conviction was used as a basis for making an attachment of his

properties before the Sessions Court. Astonishingly, all applications succeeded, the attachment was made absolute and over and above all,

the High Court upheld the attachment.

Consequences after death

Mr. Rajiv Awasthi, learned counsel for the respondent has filed the short written synopsis wherein the respondent has flied the complaint no.

24/2018 under section 45 of PMLA, 2002. Para 5 of the written submission reads as under:-

“That the Answering Respondent has filed Complaint No. 24/2018 under Section 45 of Prevention of Money laundering Act, 2002 on 17.07.2018

against Hassan Ali Khan and 10 others including the Appellant herein who is the Accused No. 5 in the said case, under Section 45 for commission of

the offence of money laundering under section 3 punishable under section 4 of PMLA. The Hon’ble Special Court, PMLA had issued the process

against the Accused vide order dated 11.11.2018, on the basis of which summons were issued on 04.12.2018. The said complaint is in addition to the

Criminal Complaint No. 01/2011 filed in the Hon’ble Court of designated judge under the PMLA, 2002, Session Court, Mumbai on 06.05.2011.â€​

It is stated by him that Late Amlendu Pandey was the accused in the prosecution complaint. He, along with the main accused travelled to

Singapore via Kathmandu with a criminal intention to avoid immigration checks and also open an account in bank in Singapore. Therefore, the

appellant was not able to explain having the currency amounting to Rs.26,30,000/- which was recovered and seized by the respondent on 9.2.2016.

When Amlendu Pandey was alive, his case was that the said amount was no doubt recovered from his premises, it was the amount received with

regard to the prosecution of the properties and has nothing to do with receiving any amount from main accused i.e. Hasan Ali Khan.

As already mentioned in the retention order passed in the above said matter, no prosecution complaint was filed by the respondent when he was

alive. He expired on 25th May, 2017. The prosecution complaint was filed only on 17th July, 2018.

It is a matter of fact that the respondent as well as the counsel was fully aware that he expired on 25.5.2017, however, the prosecution complaint

which was filed on 17.7.2018 after the death of Amlendu Pandey. One is failed to understand how the prosecution complaint against the dead person

is maintainable. In the complaint, Amlendu Pandey is arrayed as appellant no. 5.

It is also a matter of record that when the legal representative of the deceased was brought on record on 19th December, 2017, still the complaint

has been filed against the dead person. The factum of his death has not been disclosed in the written submission by the respondent. The complaint

was filed on 17.7.2018 as he is still alive and the prosecution complaint which is pending against him. Filing of complaint against the dead person is an

abuse of process of court. Ms. Shivani Kumari who was impleaded as legal representative is not made as party in the prosecution complaint. The

statutory period of ninety days has already expired.

Mr. Awasthi, learned counsel for the respondent has referred sub-section (7) of Section 8 of PMLA, 2002 and submits that only the Special Court

is empowered to release the property and therefore the legal representative of the deceased be directed to withdraw the appeal and approach the

Special Court in order to claim the property if so acquired. The said submission of the learned counsel for the respondent has no force as sub-section7

of section 8 of PMLA, 2002 reads as under:-

Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed

offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the

Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3)

of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of

money-laundering after having regard to the material before it

There is no force for the learned counsel for the respondent, the intent of the said provision is that in case the trial cannot be conducted by the

reason of death of the accused or otherwise, the Special Court shall on an application moved by any party claiming to be entitled to the possession of a

property in respect of which an order has been passed under sub-section (3) of section 8 of the Act in the offence of money-laundering. Late

Amlendu Pandey was not convicted in the matter. He was not charge-sheeted.

As far as the mandate of sub-section 7 of section 8, no doubt, there is no dispute. However, in order to pass the order by the Special Court under

the said provision, there must be a prosecution complaint against the person concerned. In the present case, the prosecution complaint has been filed

against the dead person. Therefore, the complaint itself against the dead person is null & void against the late Amlendu Pandey. The question of

passing any order in the pending complaint against the dead person does not arise. Therefore, in the facts of the present case, the provision of sub-

section 7 of section 8 cannot be revoked by the respondent in the absence of pending valid complaint against him.

Admittedly, the prosecution complaint has not been filed in the above said appeal under section 8 of sub-section 3(a) of the Act even against the

legal representative before the Special Court within the knowledge of the respondent. Thus, in case no action is taken under the provision of sub-

section 3(a) of Section-8, the retention of seizure/ property lapses under the mandatory provisions of law. Therefore, the present appeal is allowed.

The impugned order is set aside, the property

No costs.