Amit Sharma and Laxmikant Khemka V. Union of India through Director of Enforcement

Cr.M.P./3245/2019

AI Insights

The case involves two petitions filed under the Prevention of Money Laundering Act, 2002 (PMLA), challenging the supplementary complaints and the cognizance orders issued against the petitioners, Amit Sharma and Laxmikant Khemka. The complaints were based on allegations that the petitioners were involved in laundering proceeds of crime linked to former Jharkhand Chief Minister Madhu Koda. The Enforcement Directorate (ED) alleged that the petitioners, through their companies, were involved in concealing and transferring these proceeds. The court dismissed the petitions, citing a precedent where similar complaints were upheld, and emphasized that the allegations, if taken at face value, prima facie constitute an offence under the PMLA.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 818940 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 25-10-2024
• Assessment Year: misc
• Other Referred Cases: Sanjay Rungta Vs. Union of India through ED, Dhruvaram Murlidhar Sonar v. State of Maharashtra, State of Haryana v. Bhajan Lal, Fakhruddin Ahmad v. State of Uttaranchal, State of A.P. v. Aravapally Venkanna, CBI v. Duncans Agro Industries Ltd., Vijay Mondal Choudhary and Ors. V. Union of India
• Laws Referred To: Prevention of Money Laundering Act, 2002
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AMIT DAS; SAURAV KUMAR
• Assessee Lawyers: CHADRAJIT MUKHERJEE
• Keywords: Cognizance order; Prevention of Money Laundering; Proceeds of Crime; Supplementary Complaint
• Section: 3; 4; 44; 45

Judgement Text

"- 1 - IN THE HIGH COURT OF JHARKHAND AT RANCHI ----- Cr. M.P. No. 3156 of 2019 ----- Amit Sharma, age 42 years, s/o Dayanand Sharma, r/o 56B, Kailash Bose Street, PO and PS Kalighat Kolkata, West Bengal. … … Petitioner Versus Union of India through Director of Enforcement, having its office at Kaushalya Chambers-II, Pee Pee Compound, P.O.- G.P.P., P.S.-Lower Chutia, District-Ranchi (Jharkhand) … … Opp. Party with Cr. M.P. No. 3245 of 2019 ---- Laxmikant Khemka, aged 54, S/o Late Radhe Shaym Khemka, r/o ND-11, Visakha Enclave, PO and PS Pitampura, District Delhi (UT), Director of M/s Bharat Glass Tube Pvt. Ltd., Ahmedabad, Gujarat . … … Petitioner Versus Union of India through Director of Enforcement, having its office at Kaushalya Chambers-II, Pee Pee Compound, P.O.- G.P.O., P.S.-Lower Chutia, District-Ranchi (Jharkhand) … … Opp. Party ------- CORAM: HON’BLE MR. JUSTICE SUJIT NARAYAN PRASAD ------ For the Petitioners : Mr. Chadrajit Mukherjee, Advocate For the Opp. Parties : Mr. Amit Kumar Das, Advocate Mr. Saurav Kumar, Advocate -------- Order No. 05 : Dated 25th October, 2024 Per Sujit Narayan Prasad J: Prayer: 1. Both the applications have been filed for quashing/setting aside of the complaint being Supplementary Complaint under Section 44 and 45 of the Prevention of Money Laundering Act, 2002 dated 03.05.2019 in ECIR 02/PAT/2009/AD, to the extent the same seeks to prosecute the petitioners for the offence under Section 4 of the - 2 - Prevention of Money Laundering Act, 2002, the consequent cognizance order dated 03.05.2019 for offences defined under Section 3 and punishable under Section 4 of the PMLA and the entire criminal proceeding with all consequences, emanating out of the said supplementary complaint dated 03.05.2019, presently pending in the court of learned Additional Judicial Commissioner-XVI-cum-Special Judge, PMLA, Ranchi. Factual Matrix: 2. The factual background of the criminal case in which the petitioners have been implicated is as follows: Prosecution case in Cr.M.P. No. 3156 of 2019 3. The writ petitions in the form of ‘Public Interest Litigations’ were filed before this Court alleging acquisition of properties by one Sri Madhu Koda through his accomplices, including Binod Sinha, Vikas Sinha, etc., 4. The Vigilance Bureau had registered an FIR being FIR No.9/2009 dated 2.7.2009 alleging commission of offences under sections 409, 420, 423, 424, 465, 120B of IPC and under Sections 7, 10, 11 and 13 of the Prevention of Corruption Act, against Madhu Koda and his accomplices, which eventually got transferred and re-registered by the CBI as RC No.5A/2010/AHD-Ranchi dated 11.8.2010, pursuant - 3 - to order passed by the Hon'ble High Court in the WP (PIL) No.4700/2008. 5. The crux of the allegation was that Sri Madhu Koda held the office of Minister of Mines and Cooperative from February, 2005 to September, 2006 and of the Chief Minister of Jharkhand from September, 2006 to August, 2008. During this period he acquired money through corrupt or illegal means and invested them in collusion with his accomplices in acquisition of properties. The properties so acquired were, thus, proceeds of crime, and as such the Enforcement Directorate registered a case vide ECIR/2002/PAT/2009/AD on 8.10.2009. 6. The CBI, in its investigation upon RC No.5A/2010/AHD-Ranchi filed two charge-sheets no.6/2010 dated 12.11.2010 and charge-sheet no.1/2013 dated 21.5.2013. 7. The Enforcement Directorate in its investigation under the PMLA filed successive complaints under section 45 of the PMLA against Madhu Koda, his accomplices and various companies allegedly involved in money laundering. The complaints so filed initially were taken cognizance upon, charges were framed and trials continued. 8. However, parallely the proceedings under the PMLA relating to attachment and confiscation of properties said to - 4 - be proceeds of crime were undertaken. Three provisional attachments were issued vide PAO No.4/2010 dated 10.11.2010, PAO No.1/2013 dated 28.2.2013 and PAO No.2/2014 dated 26.11.2014, all of which were confirmed by the Adjudicating Authority, PMLA, New Delhi vide its orders dated 6.4.2011, 27.2.2013 and 25.3.2015. 9. Out of the properties so attached provisionally, there were properties of M/s Khalari Cements Limited, which were attached by the PAO No.4/2010 dated 10.11.2010. The properties of Khalari Cements Limited so attached were share capital of Rs.26,62,39,000/- and fixed assets worth Rs.6,07,21,821/- as on 31.3.2009 (This fact finds mention in paragraph 8 of a supplementary complaint dated 17.7.2018 filed by the ED against Khalari Cements Limited. 10. The Adjudicating Authority, PMLA confirmed attachment qua fixed assets of Rs.6,07,21,821/- only, out of the properties of Khalari Cements Limited provisionally attached. 11. Later, on 17.7.2018 a Supplementary Complaint under section 45, PMLA was filed by the Enforcement Directorate against Khalari Cements Limited, apart from other companies. On this complaint, cognizance was taken by the learned Special Judge, CBI-cum-Special Judge, PMLA, Ranchi on 17.7.2018 itself. - 5 - 12. Thereafter the supplementary complaint dated 03.05.2019 was filed by the Enforcement Directorate, in which the Directors of the Companies, which were made accused in the previous complaint, were targeted. The petitioner in Cr.M.P. No.3156 of 2019 figures as accused no. 3 in the complaint in his capacity as Director of M/s Vinni Iron and Sponge Udyog Pvt. Limited, Kolkata. 13. Allegation made out against the Petitioner in Cr.M.P. No.3156 of 2019 is to the extent that he was an employee of M/s IAG Company where he joined on 26.12.2007. On instructions of one Vijay Joshi, the owner of M/s IAG Company, this petitioner became the director of M/s Vinni Iron and Steel Udyog Ltd. This Petitioner has stated 5,000 shares were allotted to him of M/s Vinni Iron and Steel Udyog Ltd without any payment while majority of shares were held by Vijay Joshi. On instructions of Vijay Joshi, this Petitioner has made signatures in banking transactions on behalf of M/s Vinni iron and Steel Udyog Ltd. 14. It is stated by the Enforcement Directorate in the said Supplementary Complaints is that after the investigation of the Vigilance Bureau and then by the CBI into commission of offences, the Enforcement Directorate made further investigation and found that illegally earned properties were channelized into various assets and it became proceeds of - 6 - crime. It is alleged that the proceeds of crime generated by Sri Madhu Koda were concealed, transferred and invested by his accomplices in various companies. One of his accomplices was Binod Sinha, who was also charged with commission of scheduled offences. His brother Vikas Sinha disclosed in statements made under section 50 of the PMLA that certain properties were purchased out of Binod Sinha's money, thereby investing proceeds of crime. The modus operandi for investing such proceeds of crime was that Vikas Sinha used to deliver cash himself or through his employees or through the employees of his Chartered Accountant-one S.K. Naredi. The cash was handed over to certain persons like Mr. Chandra Bhushan Jha, Sri Mridul Bhowmick, Mr. Vivek Kumar Goenka and Mr. Pradeep Kumar Paramsukha, who, in turn, would arrange for accommodation entries through certain companies engaged in the business of investment, trading and non-banking financial transaction with certain other companies. Such latter set of companies who were dealing with investment, non-banking finance, etc. provided accommodation entries by issuing cheques in the name of former set of companies connected with these four individuals named above. The companies receiving cheques would then issue cheques in the name of those companies where investments were intended to be made by Vikas Snha, - 7 - through share capital or otherwise. These companies who were ultimate recipient of these cheques would receive them as share application or unsecured loan. The companies issuing cheques at the behest of the individuals like Sri Chandra Bhsushan Jha and others were doing so as against a small percentage of the money that came from Vikas Sinha, by keeping some percentage as what was called as service charge. 15. The allegation is that the companies which have received cheques by way of share application money or loan have actually received the proceeds of crime and as such any investment made therein should be treated as investment of proceeds of crime in those companies. M/s Vinni Iron and Steel Udyog Ltd, is one such company. As such they are said to be involved in the process or activity connected with the proceeds of crime which are projected or claimed to be untainted property. Prosecution case in Cr.M.P. No. 3245 of 2019 16. The instant case has been filed upon a complaint filed by Shri Swapan Bose, Assistant Director, E.D. by way of a supplementary complaint under section 45 of the PMLA Act 2002 in ECIR/02/PAT/09/AD wherein it has been alleged by the complainant that Laxmikant Khemka (petitioner in Cr.M.P. No. 3245 of 2019) who is the Director of M/s Bharat - 8 - Glass Tube Pvt. Ltd., during his statement u/s 50 of PML Act, 2002, inter alia, has stated that M/s Bharat Glass Tube Pvt. Ltd. was incorporated with the Registrar of Companies in the year 1983 and during the period 2007-2010, the petitioner along with Chandra Kant Khemka, BK Rungta, PM Chauhan were the Directors of the company and has further stated that he was the responsible person for day to day business of the company and was also responsible for taking decisions about the company affairs. 17. The complainant has further alleged that the petitioner has also stated that in October 1999, M/s Bharat Glass Tube Pvt. Ltd. acquired the controlling share of IAG Company Ltd. The petitioner and his brother Chandra Kant Khemka became the Directors of IAG Company Ltd. and both of them were responsible for taking decisions of the company in the year 2007, however, his father sold the company to Vijay Joshi and upon Vijay Joshi's statement being recorded, he has stated that in the year 2007-08 he had acquired the controlling shares of M/s IAG Pvt. Ltd. 18. It has also been alleged by the complainant that the petitioner, who is the Director of M/s Bharat Glass Tube Pvt. Ltd., had purchased the controlling shares of IAG company in the year 1999 and sold the same to Shri Vijay Joshi in the year 2007. Further, he along with one Shri B K Rungta, - 9 - another Director were the authorized signatories of M/s Bharat Glass and responsible persons for conducting the day to day business of the company during the period in which the proceeds of crime were concealed and invested in the said company. 19. Further the accommodation entries of Rs 31 lakhs each have been taken through M/s Raina Commodities Pvt. Ltd., M/s Sekhar Commerce Pvt. Ltd. and M/s VDR Consultants Pvt. Ltd. in the form of share application money from Manoj Sinha, Vikas Kumar Sinha and Vijay Joshi respectively and have committed the offence of money laundering and hence this complaint. Submission of the Petitioners: 20. Learned counsel for the petitioner in Cr.M.P. No. 3156 of 2019 has submitted that the allegation against the petitioner is that he being the director of the company is said to be responsible for day-to-day business and banking transactions of M/s Vinni Iron and Steel Udyog Ltd. It is alleged that Vijay Joshi in connivance with the petitioner concealed and transferred proceeds of crime generated by Madhu Koda in an attempt to project the same as untainted. 21. Submission has been made that the petitioners are innocent and has committed no offence. Further, the ingredients of the offence, as alleged, are not attracted - 10 - against the petitioners. Further, the Enforcement Directorate has not given any finding on the basis of the investigation and has not produced any material to show that the petitioner has known to Binod Sinha or Vikas Sinha in respect to their activities, which later on became the basis for imputing allegation upon him of complicity with Mr. Madhu Koda or laundering of money generated out of commission of any scheduled offence. 22. Further submission has been made that for prosecution under Section 4 of the PMLA is to be proceeded only in case any property or money is found to be proceeds of crime but without coming to such conclusion, since supplementary complaint under Section 44 and 45 of the Prevention of Money Laundering Act, 2002 dated 03.05.2019 in ECIR 02/PAT/2009/AD has been filed and cognizance has been taken vide order dated 03.05.2009, the same requires to be quashed and set aside. 23. Learned counsel for the petitioner in Cr.M.P. No. 3245 of 2019 has stated that the petitioner is innocent and he has been falsely implicated in the said case with ulterior motive. 24. Learned counsel for the petitioner in Cr.M.P. No. 3245 of 2019 has further submitted that the entire allegation against the petitioner in the complaint petition are omnibus and not - 11 - specific in nature as it does not whisper of any allegation as against this petitioner. 25. Further submission has been made that the said IAG Company Ltd., formerly known as the Indo-Asahi Glass Company Ltd., was established at Bhurkunda, District Hazaribagh, Ranchi in the year 1953 by Japanese Company Asahi Glass Company Ltd. The company was running smoothly till 1980 and during this period, the people in this vicinity were willing to join to Indo Asahi Glass Company resigned even their government jobs. Thereafter, naxalite movement and labour trouble started to brew giving a second blow to the company in the year 1998-99. The Government of India had reduced controlling power of foreigners from 49% to 40%. At that time, Mr. Radhey Shyam Khemka was a glass manufacturer in India with his product glass sheet having control 70% of the market. Mr. C.S. Dubey came to know about this and approached Mr. Radhey Shyam Khemka to take over the management of IAG Company Ltd and Mr. Radhey Shyam Khemka accepted his request and took over the control by purchasing 41.7% of Shares. The said Mr. Radhey Shyam Khemka took over the management of IAG Company Ltd., and made the petitioner and Mr. Chandrakant Khemka directors along with existing directors of Indo Asahi - 12 - Glass Company Ltd., and later the name of company was changed to IAG Company Ltd. 26. It has further been submitted that Mr. Laxmikant Khemka, the petitioner herein, was looking after day to day activities such as production, purchase of raw materials, selling of finished goods and payment collection. The company was running smoothly as Mr. Radhey Shyam Khemka along with union leader Mr. C.S. Dubey had settled labour disputes till 2004. In the year 2007 sometime in November / December one Mr. Vijay Joshi approached Mr. Radhey Shyam Khemka and showed his interest to take over this unit. The management of IAG Company Ltd. and since Mr. Radhey Shyam Khemka was not keeping well it is not possible to control the management from Delhi to eastern part of India. He had offered controlling shares to Mr. Vijay Joshi. Mr. Vijay Joshi accepted his offer and purchased the controlling shares and simultaneously transferred along with assets and liabilities. Mr. Radhey Shyam Khemka who was head of the family and his sons along with other directors respected him for his decision to sale controlling shares to Mr. Vijay Joshi. Under these circumstances, controlling shares were sold to Mr. Vijay Joshi. 27. Therefore, submission has been made that none of ingredients of the Public Money Laundering Act is attracted - 13 - against the petitioner rather this case has been filed with ulterior motive of a covert dilatory tactics being adopted by filing repeated supplementary complaints, which may be quashed and set aside. Submission on behalf of respondent-ED 28. Mr. Amit Kumar Das, learned counsel for the respondent-Enforcement Director has vehemently opposed the prayer made by learned counsel for the petitioner and at the outset has placed before the court the copy of order passed in Cr. M.P. No. 2503 of 2019 and analogous cases wherein also prayer has been for quashing supplementary compliant under Section 44 and 45 of the Prevention of Money Laundering was made, which was refused by the Co- ordinate Bench of this Court vide order dated 19.09.2022 and submitted that case of the petitioner is squarely covered by this order. Response by the learned counsel for the petitioners 29. In response, learned counsel for the petitioners could not be able to deny the law down by Co-ordinate Bench of this Court in Cr. M.P. No. 2503 of 2019 and analogous cases wherein prayer made for quashing supplementary compliant under Section 44 and 45 of the Prevention of Money Laundering was made i.e., arising of the same set of - 14 - transaction, has been refused by the Co-ordinate Bench of this Court vide order dated 19.09.2022. Analysis 30. This Court has heard learned counsel for the parties, gone through the materials available on record as also the order dated 19.09.2022 passed in Cr. M.P. No. 2503 of 2019 and analogous cases [Sanjay Rungta Vs. Union of India through ED]. 31. Before adverting to the facts of the instant cases, this Court deems it fit and proper to discuss herein the ambit and scope of inherent jurisdiction of the Court conferred under Section 482 Cr.P.C. 32. The provision was crafted to confer discretionary powers upon the High Court to prevent abuse of the process of the court and secure justice. Whether it involves quashing baseless FIRs, rectifying biased investigations, or ensuring that legal processes are not weaponized for ulterior motives. High Courts exercise their discretion judiciously, intervening only when necessary to uphold the integrity of legal proceedings and safeguard the fundamental principles of fairness and equity. 33. The powers under Section 482 Cr.P.C. are the exception and not the rule. Under this section, the High Court has inherent powers to make such orders as may be necessary to - 15 - give effect to any order under the Code or to prevent the abuse of process of any court or otherwise to secure the ends of justice. But the expressions “abuse of process of law” or “to secure the ends of justice” do not confer unlimited jurisdiction on the High Court and the alleged abuse of process of law or the ends of justice could only be secured in accordance with law, including procedural law and not otherwise. Reference in this regard may be taken from the judgment as rendered by the Hon’ble Apex Court in the case of Dhruvaram Murlidhar Sonar v. State of Maharashtra, (2019) 18 SCC 191. 34. At this juncture it requires to refer herein the position of law for making interference by the court of law either in the F.I.R./complaint or in the order taking cognizance. The Hon'ble Apex Court in State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335] has laid down the guideline under paragraph 102 and 103. The relevant passages are extracted and quoted as under: “102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to - 16 - secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a noncognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive - 17 - for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. 103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice.” 35. The ratio laid down by the Hon'ble Apex Court in State of Haryana v. Bhajan Lal (Supra), has again been reiterated in Fakhruddin Ahmad v. State of Uttaranchal [(2008) 17 SCC 157] at paragraph 20 which reads as under: “20. So far as the scope and ambit of the powers of the High Court under Section 482 of the Code is concerned, the same has been enunciated and reiterated by this Court in a catena of decisions and illustrative circumstances under which the High Court can exercise jurisdiction in quashing the and Ors. proceedings have been enumerated. However, for the sake of brevity, we do not propose to make reference to the decisions on the point. It would suffice to state that though the powers possessed by the High Court under the said provision are very wide but these should be exercised in appropriate cases, ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist. The inherent powers possessed by the High Court are to be exercised very carefully and with great caution so that a legitimate prosecution is not stifled. Nevertheless, where the High Court is convinced that the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out a case against the accused or where the - 18 - allegations made in the FIR or the complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused, the powers of the High Court under the said provision should be exercised.” 36. Further the Hon’ble Apex Court in the case of State of A.P. v. Aravapally Venkanna, (2009) 13 SCC 443 has held that the exercise of power under Section 482 of the Code in a case of this nature is the exception and not the rule. The section does not confer any new powers on the High Court. It only saves the inherent power which the Court possessed before the enactment of the Code. Further the Hon’ble Apex Court has recorded three circumstances under which the inherent jurisdiction may be exercised, namely, (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice. For ready reference the relevant paragraph of aforesaid judgment is being quoted as under: 4. “5. Exercise of power under Section 482 of the Code in a case of this nature is the exception and not the rule. The section does not confer any new powers on the High Court. It only saves the inherent power which the Court possessed before the enactment of the Code. It envisages three circumstances under which the inherent jurisdiction may be exercised, namely, (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice. It is neither possible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction. No legislative enactment - 19 - dealing with procedure can provide for all cases that may possibly arise. Courts, therefore, have inherent powers apart from express provisions of law which are necessary for proper discharge of functions and duties imposed upon them by law. That is the doctrine which finds expression in the section which merely recognises and preserves inherent powers of the High Courts. All courts, whether civil or criminal, possess in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in [the] course of administration of justice on the principle quando lex aliquid alicui concedit, conceditur et id sine quo res ipsa esse non potest (when the law gives a person anything, it gives him that without which it cannot exist). While exercising powers under the section, the Court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone courts exist. Authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent such abuse. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of [these] powers court would be justified to quash any proceeding if it finds that initiation or continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto. - 20 - 6. In R.P. Kapur v. State of Punjab [AIR 1960 SC 866] this Court summarised some categories of cases where inherent power can and should be exercised to quash the proceedings : (AIR p. 869, para 6) (i) where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction; (ii) where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged; (iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge. 7. In dealing with the last category, it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is clearly inconsistent with the accusations made, and a case where there is legal evidence which, on appreciation, may or may not support the accusations. When exercising jurisdiction under Section 482 of the Code, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained. That is the function of the trial Judge. Judicial process, no doubt should not be an instrument of oppression, or, needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into consideration before issuing process, lest it would be an instrument in the hands of a private complainant to unleash vendetta to harass any person needlessly. At the same time the section is not an instrument handed over to an accused to short circuit a prosecution and bring about its sudden death. The scope of exercise of power under Section 482 of the Code and the categories of cases where the High Court may exercise its power under it relating to cognizable offences to prevent abuse of process of any court or otherwise to secure the ends of justice were set out in some detail by this Court in State of Haryana v. Bhajan - 21 - Lal [1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] . A note of caution was, however, added that the power should be exercised sparingly and that too in the rarest of rare cases. The illustrative categories indicated by this Court are as follows : (SCC pp. 378-79, para 102) ‘(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the Act concerned, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on - 22 - the accused and with a view to spite him due to private and personal grudge.’ 8. As noted above, the powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. … It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises, arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with. In a proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint/FIR has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant or disclosed - 23 - in the FIR that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint/FIR is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by [itself] be the basis for quashing the proceeding. 37. The Hon‟ble Apex Court in the case of CBI v. Duncans Agro Industries Ltd., (1996) 5 SCC 591 while elaborately dealing with the situation that when the Court can quash the complaint has observed that for the purpose of quashing the complaint, it is necessary to consider whether the allegations in the complaint prima facie make out an offence or not. The relevant paragraph of the aforesaid judgment is being quoted as under: “26. After giving our careful consideration to the facts and circumstances of the case and the submissions made by the respective counsel for the parties, it appears to us that for the purpose of quashing the complaint, it is necessary to consider whether the allegations in the complaint prima facie make out an offence or not. It is not necessary to scrutinise the allegations for the purpose of deciding whether such allegations are likely to be upheld in the trial. Any action by way of quashing the complaint is an action to be taken at the threshold before evidences are led in support of the complaint. For quashing the complaint by way of action at the threshold, it is, therefore, necessary to consider whether - 24 - on the face of the allegations, a criminal offence is constituted or not. In recent decisions of this Court, in the case of Bhajan Lal [1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426] , P.P. Sharma [1992 Supp (1) SCC 222 : 1992 SCC (Cri) 192] and Janata Dal [(1992) 4 SCC 305 : 1993 SCC (Cri) 36] , since relied on by Mr Tulsi, the guiding principles in quashing a criminal case have been indicated.” 38. Now adverting to the facts of the instant case it is alleged that the petitioner in Cr.M.P. No. 3156 of 2019 joined as an employee of M/s IAG Company on 26.12.2007. However, on instructions of one Vijay Joshi, the owner of M/s IAG Company, the petitioner in Cr.M.P. No. 3156 of 2019 became the director of M/s Vinni Iron and Steel Udyog Ltd. It is alleged that 5,000 shares were allotted to the petitioner of M/s Vinni Iron and Steel Udyog Ltd without any payment while majority of shares were held by Vijay Joshi. 39. In the Supplementary Complaints, it is stated that after the investigation of the Vigilance Bureau and then by the CBI into commission of offences, the Enforcement Directorate made further investigation and found that illegally earned properties were channelized into various assets and it became proceeds of crime. It is alleged that the proceeds of crime generated by Sri Madhu Koda were concealed, transferred and invested by his accomplices in various companies. 40. Further, allegation is that the companies which have received cheques by way of share application money or loan - 25 - have actually received the proceeds of crime and as such any investment made therein should be treated as investment of proceeds of crime in those companies. M/s Vinni Iron and Steel Udyog Ltd, is one such company. As such they are said to be involved in the process or activity connected with the proceeds of crime which are projected or claimed to be untainted property. Thus, prima facie, case is made out against the petitioner in Cr.M.P No. 3156 of 2019. 41. During investigation, it is established that the proceeds of crime generated by the said Madhu Koda have been concealed, transferred and invested by his accomplices in many of the companies, including M/S Bharat Glass Tubes Ltd., of which petitioner in Cr.M.P. No. 3245 of 2019 was director and petitioner in Cr.M.P. No. 3156 of 2019 became the director of M/s Vinni Iron and Steel Udyog Ltd. 42. Further, the modus operandi adopted by the accused person was complicated in nature and the money was laundered by a complex web of layering starting from collection of cash through various parties and arranging accommodation entries through different companies including M/s Vinni Iron and Steel Udyog Ltd and M/S Bharat Glass Tubes Ltd. of which the petitioners are the directors. - 26 - 43. Furthermore, the co-ordinate Bench of this Court vide order dated 19.09.2022 passed in Cr. M.P. No. 2503 of 2019 and analogous cases [Sanjay Rungta Vs. Union of India through ED] in the same Supplementary Complaint under Section 44 and 45 of the Prevention of Money Laundering Act, 2002 dated 03.05.2019 in ECIR 02/PAT/2009/AD, has elaborately dealt with the prayer made for quashing the said supplementary complaint as also the order taking cognizance and thereafter refused to grant any relief. The relevant paragraph of the aforesaid order is being quoted as under: In the light of the above submissions of the learned counsels appearing on behalf of the parties, the Court has gone through the materials on record and finds that there are allegations against the petitioners, the company as well as the Directors who are the petitioners in the respective petitions. In paragraph no.17 of the complaint it has been disclosed that their transactions were limited to provide accommodation entries in lieu of cash only that on receipt of cash, cheques were issued to the companies either as share application or loan. One of the witness Shri Mridul Bhowmick at paragraph no.18 of the complaint has stated that he is not knowing that whether any share certificate is in possession and he was not aware whether any share certificate has been issued at all. Vivek Kumar Goenka has said so in paragraph no.19 of the complaint. Thus, prima-facie it appears that intentionally the proceed of the crime has been transferred in the name of share to the petitioners and the petitioners’ firm. So far as the contention of Mr. Roy, the learned counsel for the petitioners with regard to mens rea is concerned that can only be decided at the time of trial.. It is well settled that when the prosecution relies upon the materials, strict standard of proof is not to be applied at the - 27 - stage of issuance of summons nor to examine the probable defence which the accused may take and all that the court is required to do is to satisfy itself as to whether there are sufficient grounds for proceeding before summoning the accused and the facts stated will have to be accepted as they appear on the very face of it. For issuance of process against the accused it has to be seen only whether there is sufficient ground for proceeding against the accused and for that the Court is not required to weigh the evidentiary value on the basis of materials on record and the only thing the Court is required is to apply its judicial mind and in the case in hand the learned court has taken cognizance by a speaking order. There is no illegality in the order taking cognizance. In the case of Dayle De’souza v. Government of India, Through Deputy Chief Labour Commissioner(supra) relied by Mr. Roy, the learned counsel for the petitioners that case was arising out under the Minimum Wages Act and considering section 22 of Minimum Wages Act, the Hon’ble Supreme Court has held at its paragraph nos.15, 16 and 17 which have been referred hereinabove. In the case in hand, some of the petitioners are Directors and the companies are also the petitioners and hence that judgment is not helping to the petitioners. In Cr.M.P.No.2193 of 2018 the facts and circumstances of that case was different in which section 276(B) of the Income Tax Act was the subject matter for consideration. Admittedly, section 23 of the Prevention of Money Laundering Act, 2002 speaks of presumption in interconnected transactions and the burden of proof is on the accused in light of section 24 of the said Act which can be proved in the trial. These two sections have been held to be legal in the case of Vijay Mondal Choudhary and Ors. V. Union of India by the Hon’ble Supreme Court. The Court is not required to examne such factual submissions which may be led by Mr. Rai, the learned counsel appearing on behalf of the petitioners, at this premature stage that the prosecution evidence is yet to be led in the trial. The complaint does base - 28 - on the certain statement, evidence of certain persons it is not necessary to obey the factual prosecution which is said out of running proceeds of crime and the Court is not required to go into the details of that statement while will hamper or embarrass the learned trial court. Moreover, the quashing application of the co-accused have been dismissed by this Court as discussed (supra). In view of the above facts and the submissions of the learned counsels for the parties as well as the reasons and the analysis, the Court is not willing to quash the entire proceeding including the order taking cognizance.” 44. For the discussions made hereinabove and order passed in in Cr. M.P. No. 2503 of 2019 and analogous cases [Sanjay Rungta Vs. Union of India through ED] in the similar complainant/supplementary complaint, this Court finds no merit in these petitions for quashing the entire proceeding including the order taking cognizance. 45. Accordingly, these instant petitions sans merit are hereby dismissed. 46. Pending Interlocutory Application(s), if any, stands disposed of. (Sujit Narayan Prasad, J.) Alankar/ A.F.R. "