Miscellaneous Petition No. 392 of 2024 · The High Court · 2025

Counsel for the Petitioners: Sri Abhinav Krishna Uppaluri Counsel for the Respondent No. 1: Sri Anil Prasad Tiwari, SC for Enforcement Directorate Counsel for the Respondent No. 2: Public Prosecutor The Court made the following: ORDER HONOURABLE SRI JUSTICE E.V. VENUGOPAL CRIMINAL REVISION CASE No. L27O OF 2o24 ORDER: This Criminal Revision Case filed by the petitioners/ accused Nos. 18 & 19, under Sections 438 and 442 of Bharatiya Nagarik Suraksha Sanhita (BNSS), is directed against the order dated

09.09.2024 passed in Crl.M.P.No.392 of 2024 in S.C.No.328 of 2021 bv the learnerl Sessions Judge, Hyderabad.

2. Heard Sri Abhinav Krishna Uppaluri, learned counsel for the petitioners as well as Sri Anil Prasad Tiwari, learned Standing Counsel for Enforcement Directorate representing respondent No.1.

3. The case of the prosecution is that the Assistant Director, Directorate of Enforcement, lodged a complaint against M/s.Musaddilal .Jewellers lor commission of offence under Section 3 of Prevention of Money Laundering Act as it had shown 516 sale transactions and thereby created forged and fabricated receipts at the initial day of demonetization i.e., on 08.I 1.2016 and later, they have converted the gold with that of demonetized currency. The petitioners herein/accused Nos. 1B & 19 have purchased gold bullion in violation of instructions of Government of India @ t,a, 2 1 Rs.7,00,000/- and received gold chains and 100 grams of gold bullion from the said Musaddilal Jewellers and the said exchange of gold with the demonetized currency is in violation of the instructions of the Government of India and hence, they are liable to be prosecuted under Section 3 of Prevention of Money Laundering Act,2OO2.

4. Learned counsel for the petitioners would submit that the basis for the accusation made against them is the statement of Sri Praveen Kumar, who is arrayed as accused No. 17 in the said crime and after his examination, the officials of Enforcement Directorate have recorded the statements of the petitioners hcrein and after cross-checking the statements deposed on either side, including CCTV footage of SBI Bank, Som4iiguda Bralch, the prosecution lound the statement of accused No.17 as not correct and that the petitioners herein have met accused No. 17 and spent only five minutes time and not three hours as stated by accused No.17 and the prosecution disbelieved the version of accused No. 17 that the petitioners have paid Rs. 1.5 crores and converted the demonetized money into that of gold and concluded that the petitioners paid Rs.7 lakhs and purchased bullion gold and some gold chains. It is also contended by the petitioners that for the I I i I I I -) pu{pose of prosecuting an accused for the offence under Prevention of Money Laundering Act, there shall be a predicate offence, by virtue of which, the offence under Money Laundering Act has to be linked. But, in the present case, it is contended by the petitioners /accused Nos.18 & 19 that they are innocent and have not committed any offence and that during demonetization, the mother of accused No.18 informed accused No.19 that she had saved sum of Rs.7 lakhs and wanted to purchase gold and as accused No. 17 r s friend of accused No. 18, who is the owner of M/s.Satyanarayana Jewellers, Malakpet, he got purchased the gold and some small chains with the amount and therefore, they are no way connected with M/s.Musaddilal Jewellers Rrt.Ltd. and that they sent the amount through his son who handed over the same to Praveerr Kumar Agarwal/accused No.17. As such, they have not committed any offence and hence, they may be discharged from the said offence. In support of their contentions, the petitioners relied upon certain decisions of the Hon'ble Supreme Court viz., (l 2024 SCC Online SC 1709; (ii) 2024 SCC Online SC 533; (1111 (2022l' 7 Supreme Court Cases 37O; (i") (2OO2) 2 Supreme Court Cases 135; (v) (2019) 16 Supreme Court Cases 547; (vil 2022 Law Suit (SC) 1O8 ; (vii) 2016 Law Suit (All) 1417; (viii) 2022 SCC Online Del 3121 and (ix) 2022 SCC Online I t t\t\ .-! .1 Cal 4044 wherein, it is held by the Hon'ble Apex Court that whbn there is no scheduled offence, the proceedings initiated under the provisions of Prevention of Money Laundering Act, 2OO2 cannot stand alone

5. The respondent/ Investigating Agency filed its counter contending that M/s.Musaddilal Jewellers Private Limited, M/s.Musaddilal Gems and Jewels Private Limited and M / s.Vaishnavi Bullion Private Limited generated fake invoice s in the name of non-existing customers and collected Rs.1 1 1 crores deposited into their bank accounts in the name of conversion of gold bullion. As such, the petitioners were part of larger conspiracy with other accused. Further, accused No.17 accepted the fact that he had received Rs. 1 .5 crores cash in demonetized currency and his elder brother-accused No.16 accepted the fact that the petitioner/ accused No. 18 must have deposited around Rs. 1.5 crores of demonetized currency. Till date, the petitioners herein have not produced any proof showing that they are not involved in the offence of money laundering. The Investigating Agency also submits that the CCTV footage ciearly shows that bundies of cash were placed on the table which could be more thal Rs.7 lakhs. In order to avoid paying income tax, the cash I =------.- ,/ money was kept undisclosed artd was halded over t-o accused t No.17 who in turn provided the same to Nitin Gupta and related others, '"vho in tr.rrn deposited the same into the accounts of M/s.Musaddilal Jr:u,el1ers Pvt.Limited, M/s.Musaddiial Gems and Jewels Private Ltd. and M/s. Vaishnavi Bullion Private Limited by creating forged and fabricated invoices of non-existing persons. Mere filing of Income Tax does not absolve the petitioners from the offence of Money Laundering. Further, it is also contended that the money laundering offence takes place after the predicate offence and is cotnposed of 3 limbs i.e., placement, integration and layering and therefore, it is not always necessary and essential that only the accused of predicate offence shall be the accused of offence under Sections 3 read with 4 of Prevention of Money Laundering Act ilnd therefore prayed to dismiss the petition.

6. It is an admitted fact by the petitioners that they have purchased gold by paying an amount of Rs.7 lakhs, which is demonetized amount. But, as per the Investigating Agency, the said amount ranges to Rs. 1.5 crores but not Rs.7 lakhs as per CCTV footage. So a1so, in the light of the decision of the Hon'ble Supreme Court in Vijag Madanlal Chontdhary Vs.tJnion of '1 \ t I I o Indiar, the offence of Money Laundering is an independent offence and unless and until a fuli fledged trial is being conducted, the true facts would not come to light. As such, the petitioners/ accused Nos. 18 & 19 cannot be discharged of their \ > guilt at initial stage.

7. Hence, the Sessions Court had rightly arrived at a conclusion in dismissing the petition liled by petitioners/ accused Nos.lB & 19. This Court does not find any reason to interfere with the finding of the Tria-l Court which is in proper perspective. Hence, the Criminal Revision Case lacks merits and deserves for dismissal.

8. In the result, the Criminal Revision Case is dismissed without costs. Miscellaneous petitions pending, if any, shall stand closed. ' taoaa;scc onlfne ;cqal Sd/. T. VIJAY KUMAR EPUTY REGISTRAR //TRUE COPY// SECTION OFFICER I To,

1. The Sessions Judge, HYderabad. 2. One CC to Sri Abhinav Krishna Uppaluri, Advocate [OPUC] 3. One CC to Sri Anil Prasad Tiwari, Advocate [OPUC] 4. Two CD Copies VIl/PSt- ,b,L I ;>. HIGH COURT DATED: 0710112025 ORDER CRLRC.N0.1270 ot 2024 Y / ,) ! I lHE s14 I4. 0 ,1 ilil/ 2[25 \ s ., I (l --'- DISMISSING THE CRL.R.C. @ /1 { \tl I I I I