Chandrashekhar vs Deputy Director Directorate Of Enforcement, Bangalore

,,

MP-PMLA-3101/BNG/2017 (Stay) & FPA-PMLA-1620/BNG/2017 MP-PMLA-3102/BNG/2017 (Stay) & FPA-PMLA-1621/BNG/2017,,

The above-mentioned two appeals have been filed under section 26 of PMLA, 2002 against the Order dated 20.12.2016 passed by the Adjudicating",,

Authority in OC no. 637 of 2016 whereby the Provisional Order no. 17/2016 dated 22.9.2016 was confirmed. The appellant in FPA-PMLA-,,

1621/BNG/2017 is Smt. Basavarajeshwari, who is the wife of Sri Chandrashekhar.",,

The brief facts are that Karnataka Lokayukta Police, Kalburgi registered a FIR in the Crime no. 09/2010, dated 03.08.2010 under 13(1) (e ) read",,

with 13(2) of the Prevention of Corruption Act, 1988 (in short PC Act, 1988) against Sri. Chandrashekar Kakkeri, S/o Late Amarappa Kakkeri, aged",,

57 years worked as Assistant Executive Engineer, Karnataka Irrigation Corporation Limited, Gamndori Canal Project Sub-Division, Mahagauv,",,

Kalaburagi Taluk & District and presently retired residing at House No. 213/1,â€ASWINI NILAYA†NGO Colony, Jevargi Road, Kalburgi. Sri.",,

Chandrashekar Kakkeri was trapped on 28/07/2010 while accepting Rs. 4 lakhs of illegal gratification at his residence and the said bribe amount was,,

seized by Karnataka Lokayukta Police, Kalburgi.",,

On completion of the investigation, the Karnataka Lokayukta Police, Gulbarga filed Charge Sheet no. 03/2015 dated 25.02.2015 before the District",,

Principal Sessions (Special) Court, Kalburgi against the said officer for an offence under the Sections 13(1) (e ) read with 13(2) of the Prevention of",,

Corruption Act,1988.",,

As per charge sheet, Sri Chandrashekar Kakkeri joined government service on04/05/1984 as Assistant Engineer, Special Minor Irrigation",,

Department, Government of Karnataka.",,

The allegations against him were that from 04/05/1984 to 27/07/2010 having worked in different places of irrigation department in Bidar, Chittapur,",,

Shahpur, Bengaluru, Kalaburagi Cities, he had amassed disproportionate assets beyond all known sources of income in different forms. It is stated that",,

he had possessed assets worth Rs.83,82,877/- in his name and in the names of his family members.",,

It was alleged that during the said period, he had totally spent Rs.40,42,295/-. The total of his immovable and movable assets including his expenses",,

was Rs.1,24,25,172/- whereas the total income from all known sources was Rs. 52,73,662/-. Therefore, assets disproportionate to known source of",,

income was Rs.71,51,510/- i.e.135.60%.",,

Deputy Director, Directorate of Enforcement, Bangalore Zone has filed original complaint V/s.5(5) of the Act and alleged that offences under",,

section 13(1) (e ) read with 13(2) of Prevention of Corruption Act,1988 are Scheduled Offences, in terms of section 2(1)(y) of the PMLA. As per the",,

charge sheet dated 25.02.2015 of Lokayukta Authorities, Sri Chandrashekar Kakkeri amassed wealth disproportionate to his known sources of",,

income, amounting to Rs.71,51,510/- respectively by misuse of his official position which are regarded as proceeds of crime in terms of section2(1) (u)",,

of PMA and projected as untainted property. Thus, there appeared to be, prima facie, a case against the Defendant No.1, relating to the offence of",,

money laundering under section 3 of PMLA, 2002, warranting further investigation in accordance with the provisions of the Act and the Rules made",,

there under. Therefore, a case under PMLA was registered by Directorate of Enforcement, Bangalore Zonal Office in File No.",,

ECIR/01/BGZO/2016, dated 09/02/2016, with a view to investigate the case involving commission of an offence of money laundering, being authorized",,

in terms of Section 48 and 49 of PMLA read with Notification No. 441(E ) dated 01/07/2005.,,

The details of the properties registered in his name, in the name of his wife, father and mother are mentioned in para-6 of the Impugned Order.",,

Sri Chandrashekar Kakkeri has also filed the written submission in support of his reply. In para 1 to 30, he has given the detailed reply to each and",,

every movable and immovable property about him as well as his wife, father and mother.",,

His case before the Adjudicating Authority was that all the properties are legally acquired by him and his family members and none of the,,

properties was purchased or acquired from the proceeds of the crime. The comprehensive details are mentioned in the Impugned Order dated,,

20.12.2016.,,

It was pleaded by the appellants that the Provisional Attachment Order No.17/2016 in ECIR No. 01/BGZO/2016 under section 5(1) of PMLA,,

Act,2002 has been based purely and only on FIR in crime no.09/2010 registered by Karnataka Lokayukta and also charge sheet No.03/2015 dated",,

25.02.2015 filed by Karnataka Lokayukta under section 13(1) (e ) & 13(2) of Prevention of Corruption Act, 1988.",,

The Adjudicating Authority has confirmed the Provisional Attachment Order No. 17/2016 on FIR in crime no.09/2010 registered by Karnataka,,

Lokayukta and also charge sheet No.03/2015 dated 25.02.2015 filed by Karnataka Lokayukta under section 13(1) (e ) & 13(2) of Prevention of,,

Corruption Act, 1988. Against the said order, the present appeals were filed. Replies to the appeals were filed. The stand taken by the respondent",,

remains the same as taken before the Adjudicating Authority, who is supporting the impugned order.",,

During the pendency of the appeals and prosecution complaint under Section 45 of the Act, the Judgement was delivered on 21.04.2017 whereby",,

the Special Judge (Lokayukta) and Principal Sessions Judge, Kalaburagi has struck down and set aside charge sheet no. 3 of 2015 filed by „the",,

Karnataka State, Lokayukta Police Station, Kalaburagi, whereby Sri Chandrashekhar S/o Late Amarappa Kakkeri is found not guilty of the offence",,

under section 13(1) (e ) R/W section 13(2) of the Prevention of Corruption Act, 1988. Accordingly, exercising the power under section 235(1) of",,

Cr.P.C., he was acquitted for the offence under section 13(1) (e ) R/W section 13(2) of the Prevention of Corruption Act, 1988.",,

It is evident from the said judgement that FIR and charge sheet in the case of appellant struck down and set aside by Special Court (Trial,,

Court),the order passed by the Adjudicating Authority confirming the Provisional Attachment Order has no any validity/legal support in eyes of law",,

and void ab initio.,,

Relevant extracts of the Judgement passed by the Special Court on 21.4.2017 by the Special Judge (Lokayukta) from paras 59 to 63 are,,

reproduced below :-,,

“59. In the instant case, every single amount received by the accused has been proved on record through the testimony of witnesses and",,

it is also supported by contemporaneous documents and intimations to the Government. It is not the case of the prosecution that the receipts,,

so projected were bogus or were part of a calculated device. The fact that these amounts were actually received from the sources so named,,

were satisfactorily proved by the accused. Furthermore, these amounts and assets are well reflected in the assets and liability statements",,

filed by the accused.â€​,,

Insofar as other assets and income as disclosed by the prosecution are not seriously disputed by the accused. After analysing each and,,

Total assets held by the accused and his family

members as per prosecution",,"Rs,83,82,877/-

The items liable to be deleted,,"Rs. 78,121/-

1.,"Difference   of   valuation   of  Â

the   house bearing No.213/1 situated at N.G.

Colony, Kalaburagi","Rs.1,63,000/-

2.,"Plot No.14 formed in Sy.No.95/1 situated

at Maka Layout,Kalaburagi acquired by

the     wife     of    Â

the     accused     viz.

Basavarajeshwari   from   her  Â

individual

income","Rs.1,63,000/-

3.,"Plot  No.845   situated  at  Dariyapur-

GDA Plot, Kalaburagi","Rs.34,410/-

4.,"Sy.No.58/1 measuring 4 acres 28 guntas

situated at Vankihal village","Rs.1,65,000/-

5.,"Plot No. 436/2 situated at Sangareddy

village.","Rs.20,000/-

6.,"Bank  balance  in  S.B.  Account Â

held  at Canara Bank i.e. Station BazarÂ

Branch, Kalaburagi","Rs.81,429/-

7.,"Bank  balance  in  S.B.  Account Â

held  at K.G.B.    Karuneshwar   Â

Nagar    Branch, Kalaburagi","Rs.6,578/-

8.,"Bank  balance  in  S.B.  Account Â

held  at S.B.H. Vidya Nagar Branch, Kalaburagi","Rs.2,31,5550/-

9.,"Deposit kept in K.G.B. Karuneshwar Nagar Branch,

Kalaburagi","Rs.80,850/-

10.,"STD deposit standing in the name of wife of Â

the  accused  at  K.G.B.Karuneshwar

Nagar Branch, Kalaburagi","Rs.50,000/-

11.,"Total  deposits  made  in  Sahara Â

India Finance in the name of wife of the accused

i.e.Basavarajeshwari","Rs.5,88,000/-

12.,"Amount kept in Savings Bank Account in

Basaveshwar Cooperative Society, Surpur

by     the     wife    Â

of     accused     viz.

Basavarajeshwari","Rs.1,816/-

13.,"Amount kept in Savings Bank account in

ING Vysya Bank","Rs.2,614/-

14.,"Deposits  made  by  the  father Â

of  the accused i.e. in the name of Sugamma who

is the mother of the accused including the FixedÂ

deposit amount which are standing in theÂ

name of father of the accused and

transferred in the name of Sugamma after the  Â

death   of   father   of   the  Â

accused i.e.Amarappa","Rs.17,41,202/-

15.,"Joint deposits made in the name ofÂ

wife and    father    of   Â

the    accused    viz.

Basavarajeshwari and Amarappa","Rs.1,80,000/-

16.,"Joint deposit made in the name of wife

and    mother    of    the   Â

accused    viz. Basavarajeshwari and

Suygamma","Rs.20,000/-

17.,"Deposits made by the wife of the accused viz.

Basavarajeshwari in U.T.I.","Rs.7,000/-

Expenditure incurred by the accused during the check period

as per the charge sheet",,"Rs.40,42,295/-

The items liable to be deleted,,

1.,"LIC policy premium of Rs.30,000/- (i.e. 2

instalments)  standing  in  the Â

name  of Ashwini which was wrongly calculated

as 3 instalments of Rs.15,000/- each, outÂ

of

which  one (1) instalment be deleted.","Rs.15,000/-

2.,"Difference of LIC policy instalment wrongly

included in the name of Basavarajeshwari","Rs.25,000/-

3.,"Difference of LIC policy instalment wrongly

included in the name of Ankita","Rs.10,000/-

4.,"Difference in payment of LIC premium in

the name of accused","Rs.67,967/-

5.,"KGID loan repayment which was wrongly

added in the expenditure account of the

accused","Rs.34,397/-

6.,Difference of Family expenditure,"Rs.4,14,717/-

,TOTAL,"Rs.5,67,081/-

,"Rs.4,04,2295/- (-) Rs.5,67,081/- =","Rs.34,75,214/-

“disproportionâ€​ for purposes of Section 5(1) of the Act.â€​,,

“62. In view of the discussion rendered above, at the most a sum of Rs.5,77,372/- remained unexplained. Accused entered into",,

Government service on 04.05.1984 and there is no breakup so far as assets and expenditures etc. are concerned in the charge sheet.,,

Though the check period was for the period of 26 years. Even if the said amount is spread over the period from 04.05.1984 to 27.07.2010,",,

the alleged unexplained income remains merely a marginal/ paltry sum, which any Government employee can save every year. (I am guided",,

by the decisions reported in 1) 1992 (4) SCC 49 in case of M. Krishana Reddy Vs. State and 2) 1997 (1) SCC 816 in case of Krishnanand,,

Vs. State of Madhya Pradesh).,,

On perusal of the entire evidence adduced by the prosecution as discussed by me supra, the prosecution has failed to produce cogent,",,

corroborative and satisfactory evidence to prove the charges levelled against the accused. The evidence produced by the prosecution is,,

insufficient to hold that the accused has committed the offence punishable under Section 13 (1) (e) R/W Section 13 (2) of the Prevention of,,

Corruption Act. Accordingly, I answer point No.2 in the negative. In the result, I proceed to pass the following order:",,

ORDER,,

Accused â€" Chandrashekar S/o Amarappa Kakkeri is found not guilty of the offence under Section 13 (1) (e) R/W Section 13 (2) of the,,

Prevention of Corruption Act, 1988. Accordingly, exercising the power under Section 235 (1) of Cr.P.C. accused - Chandrashekar S/o",,

Amarappa Kakkeri is acquitted for the offence under Section 13 (1) (e) R/W Section 13 (2) of the Prevention of Corruption Act,1988.â€​",,

This fact was brought to the notice of this Tribunal. Copy of the Judgement was also filed. It was argued that once the appellant was acquitted,,

from the schedule offence and no appeal was filed, the attached properties are liable to be released.",,

It is argued on behalf of the appellants that one of the reason for quashing the PMLA complaint is that the amendment to the provisions of section,,

8(3)(b) of PMLA Act with effect from 15.02.2013 are as under:-,,

Prior to 15.02.2013,,

“The following clause substituted by the Prevention of Money â€" laundering (Amendment) Act,2002 (2 of 2013), which came into effect",,

from 15 February, 2013.â€​",,

(b) “become final after the guilt of the person is proved in the trial court and order of such trial court becomes final.â€​,,

After 15.02.2013,,

(b) “becomes final after an order of confiscation is passed under sub section (5) or sub-section (7) of section 8 or section 58B or sub-,,

section (2A) of section60 by the Adjudicating Authority.â€​,,

It is argued that the provisions of section 8(3)(b) of PMLA Act, 2002 are existed and prevailing as on the date of FIR/ date of search were of the",,

year 2010. The amended provisions of PMLA Act, 2002 are only applicable to cases which are registered/ initiated/ booked on or after 15.02.2013.",,

The said amended provisions to section 8(3)(b) are prospective in nature.,,

It is stated that even otherwise the appellant is entitled for relief as per amended provisions when it was mandated by the law that once the,,

accused is acquitted in schedule offence and the judgement is become final, then the attachment shall cease to exist.",,

Sri Chandrashekhar has already been acquitted in the offence on the basis of allegation made. On the basis of same allegation, prosecution",,

complaint under section 45 of the Act is pending. The attached immovable properties were purchased during the period 2001 to 2004. Section13 of PC,,

Act was added as schedule offence in PMLA, 2002 w.e.f. 1.6.2009. When the acquittal order was passed, the impugned order and prosecution",,

complaint were already available with the respondent.,,

No appeal has been filed against the acquittal order and quashing of charge sheet ( as informed by the parties). The complaint was decided on,,

merit. The respondent was aware about the said trial. No steps were taken to have the consolidated-trial under schedule offence and prosecution,,

complaint.,,

In para-8 of the Judgement, it was recorded that the prosecution has examined PWS-1 to 18 witnesses and documents were marked. The",,

statement of the accused u/s 313 of Cr.P.C.was also recorded. The case of the accused is of total denial. Income-tax returns of wife of the appellant,,

and copies of deeds, bank statement, documents pertaining to the agricultural income were produced",,

The respondent is now pressing for another/second trial under PMLA for the same offence/allegations against the appellant. It is not alleged by,,

the respondent that the investigation carried out by the respondent under PMLA disclosed additional materials which may require independent trial,",,

rather it is found that the investigation and allegation remain the same as conducted by the Police under the schedule offence.,,

I am of the considered view that once the appellant Sri Chandrashekhar has been acquitted by the Special Court under the Schedule Offence after,,

the trial and no appeal has been filed by the State against the said Judgement (as informed by the parties), the appeal is liable to be allowed. The",,

complaint under schedule offence was decided on merit after recording the evidence whereby FIR and charge sheet have been quashed by the,,

Special Court. Once the acquittal order is passed against the appellant holding that he was not involved in the Prevention of Corruption Act and he has,,

purchased/ acquired the properties in legal resources, the question of money laundering does not arise. The allegations are same and ECIR was",,

registered on the basis of charge sheet. There were only two options left after acquittal, either to file the appeal against the judgement and the trial",,

under PMLA ought to have been conducted along with the trial with the case registered under schedule offence. The respondent apparently did not,,

make efforts in this regard.,,

Thus, the present appeal is allowed. Both the orders dated 27.09.2016 (provisional attachment order) and impugned order dated 20.12.2016 are",,

set-aside.,,

As far as the attachment of properties under the provisional order is concerned, the same are liable to be released to the appellant.",,