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Mumbai Court Relies on SC Judgment while Discharging Accused in Money Laundering Offence

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Money Laundering Law Insider

Shashwati Chowdhury

Published on: August 24, 2022 at 22:03 IST

After the Prevention of Money Laundering Act (PMLA) provisions were upheld by the Supreme Court, Special Judge MG Deshpande pronounced the verdict today.

According to the Supreme Court, acquittal or discharge in the predicate offence or the quashing of that offence will result in acquittal or discharge in the money laundering offence as well.

The Aurangabad City Police booked Babulal Verma and Kamalkishor Gupta in 2020 based on a first information report (FIR) filed against them for cheating and criminal breach of trust under the Indian Penal Code. They are currently released on bail.

Based on this FIR, the ED filed an Enforcement Case Information Report (ECIR) that same year.

The accused stated in the application submitted through Advocate Rahul Agarwal that the complainant had also provided a no-objection and that a closure report had been submitted with the FIR to the concerned Magistrate.

The Magistrate took cognizance of the report and accepted the closure of the investigation, in February 2021.

In January 2021, the accused was arrested by the ED. Until earlier last month, when the accused filed a motion with the special court contesting the extension of their judicial custody, their judicial custody had been regularly prolonged.

The Court directed the accused’s immediate release while continuing to post the case for a final hearing, noting that the investigation into the predicate offence against them was closed.

Although the High Court declined to give any relief in the case challenging this ruling, the accused filed a motion with the special court seeking discharge, which was fiercely argued and granted today.

In opposition to the application, ED claimed that the accused had no locus standi to request their release and that the request could not be upheld.

ED’s advocate, Hiten Venegaonkar, argued that the Supreme Court had overlooked the case of a scheduled offence being closed as a result of the filing of a closure report.

According to applicant’s advocate Vijay Aggarwal, ED has taken a contrary stand on the clarity of the judgement rendered with regard to the subject at hand in the current case.

Aggarwal added that they should ask the Supreme Court to clarify the ED’s assertion that the ruling is unclear and subject to debate.