Mrs. Kanchana L Rao Peshve and Mr. N. Lakshamana Rao Peshve and Mr. Subbarao Gnaneshwar Rao and Mr. P.L. Narayana Rao V. The Assistant Director Director of Enforcement, Government of India, Bengaluru Zonal Office

CRL.P/6130/2017

AI Insights

The case involves a challenge by the petitioners against the criminal proceedings initiated under the Prevention of Money Laundering Act, 2002, specifically targeting the order taking cognizance of the offence and the subsequent proceedings. The petitioners, related by family ties and residing in the same apartment complex, were implicated following a corruption case against petitioner No.2, who was a public works engineer. The Karnataka Lokayukta Police initially registered a case under the Prevention of Corruption Act, 1988, which led to further proceedings under the Money Laundering Act. However, significant developments, including the quashing of related proceedings and the absence of necessary sanctions, led to the High Court's decision to quash the ongoing proceedings against the petitioners.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 688000 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 07-03-2023
• Assessment Year: misc
• Other Referred Cases: Vijay Madanlal Choudhary and others vs. Union of India and others [SLP (Criminal) No.4634/2014, D.D. 27.07.2022]
• Laws Referred To: Prevention of Money Laundering Act, 2002, Prevention of Corruption Act, 1988, Code of Criminal Procedure, 1973
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: UNNIKRISHNAN
• Assessee Lawyers: MANEESHA KONGOVI
• Keywords: Cognizance; Criminal Proceedings; Prevention of Money Laundering; Quash
• Section: 13(2); 3; 19; 4; 482; 13(1)(e)

Judgement Text

" - 1 - CRL.P No. 6130 of 2017 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF MARCH, 2023 BEFORE THE HON'BLE MR JUSTICE R. NATARAJ CRIMINAL PETITION NO. 6130 OF 2017 BETWEEN: 1. MRS. KANCHANA L RAO WIFE OF MR.N.LAKSHAMANA RAO PESHVE, AGED 43 YEARS, B 201, MANTRI PRIDE APARTMENTS, I BLOCK, JAYANAGAR, BANGALORE-560011 2. MR. N. LAKSHAMANA RAO PESHVE SON OF P.L. NARAYANA RAO, AGED 52 YEARS, B 201, MANTRI PRIDE APARTMENTS, I BLOCK, JAYANAGAR, BANGALORE-560011 3. MR. SUBBARAO GNANESHWAR RAO SON OF MR. LATE T.SUBBARAO, AGED 72 YEARS, NO.C 305, MANTRI GARDEN APARTMENTS, I BLOCK, JAYANAGAR, BANGALORE-560011 4. MR. P.L.NARAYANA RAO SON OF LATE MR. LAKSHMAN RAO AGED 81 YEARS, NO. 102, 8TH CROSS, 2ND MAIN, VIJAYNAGAR, TUMKUR-57212 …PETITIONERS (BY SMT. MANEESHA KONGOVI, ADVOCATE) AND: THE ASSISTANT DIRECTOR DIRECTOR OF ENFORCEMENT, GOVERNMENT OF INDIA, BENGALURU ZONAL OFFICE, 3RD FLOOR, 'B' BLOCK, BMTC, Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA - 2 - CRL.P No. 6130 of 2017 SHANTINAGAR TTMC, K.H. ROAD, SHANTHINAGAR, BENGALURU-560027 …RESPONDENT (BY SRI. UNNIKRISHNAN M., ADVOCATE) THIS CRL.P IS FILED UNDER SECTION 482 THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE CRIMINAL PROCEEDINGS IN SPL.C.NO.177/2017 WHICH IS PENDING BEFORE THE PRL. CITY CIVIL AND SESSIONS JUDGE, BANGALORE AND QUASH THE ORDER DATED 20.04.2017 IN SPL.C.NO.177/2017 WHICH IS PENDING BEFORE THE PRL. CITY CIVIL AND SESSIONS JUDGE, BANGALORE TAKING COGNIZANCE. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioners have challenged the legality and propriety of the criminal proceedings initiated against them in Spl.C.C.No.177/2017 pending trial before the Principal City Civil and Sessions Judge, Bengaluru (CCH - 1). They have also challenged the order dated 20.04.2017 taking cognizance of an offence under Section 3 punishable under Section 4 of the Prevention of Money Laundering Act, 2002 and directing the registration of a special criminal case. 2. The petitioner No.1 is the wife of the petitioner No.2, who was then employed as the Chief Engineer in the - 3 - CRL.P No. 6130 of 2017 Department of Public Works, Ports and Inland Water Transport, National Highways, Bengaluru. The petitioner No.3 is the father of petitioner No.1, while petitioner No.4 is the father of the petitioner No.2. The Karnataka Lokayukta Police, Bengaluru, registered Crime No.54/2012 on 21.06.2012 against the petitioner No.2 for the offence punishable under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988. Later, a charge-sheet was filed against the petitioner No.1 and 2. The Special Court constituted to take cognizance of the offences under the Prevention of Corruption Act, took cognizance in Spl.C.C.No.327/2015. The petitioner No.1 challenged the order taking cognizance before this Court in Crl.R.P.No.814/2015. This Court in terms of the order dated 24.02.2016 allowed the criminal revision petition and set aside the order taking cognizance of the offence against the petitioner No.1. This Court observed in the course of the order passed in Crl.R.P.No.814/2015 that the revised income tax assessment orders disclosing the agricultural and other income of petitioner No.1 must have been considered and that there was no evidence to establish that the petitioner No.1 had committed any offence. Despite the above observations, an - 4 - CRL.P No. 6130 of 2017 order dated 31.03.2016 was passed under Section 5(1) of the Prevention of Money Laundering Act, 2002, attaching her properties which was stayed by this Court in W.P.No.24336/2016. It is stated that notwithstanding the order of stay granted by this Court, the respondent has filed a private complaint under Section 45(1), 3 and 4 of the Prevention of Money Laundering Act, 2002 and the Trial Court took cognizance of the offence under Section 3 punishable under Section 4 of the Prevention of Money Laundering Act and issued process. 3. The learned counsel for the petitioners has placed on record an order dated 08.02.2023 passed by this Court in W.P.No.736/2018, by which, this Court quashed the proceedings initiated against the accused No.1/petitioner No.2 herein on the ground that the required sanction under Section 19 of the Prevention of Corruption Act was not obtained. The learned counsel therefore, submits that in view of the judgment of the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and others vs. Union of India and others [SLP (Criminal) No.4634/2014, D.D. 27.07.2022], the - 5 - CRL.P No. 6130 of 2017 proceedings under the Prevention of Money Laundering Act, 2002, would not survive. 4. The learned counsel for the respondent did not dispute the fact that the case against the accused No.1/petitioner No.2 herein, which was a schedule offence under the Prevention of Money Laundering Act, was quashed by this Court in W.P.No.736/2018 and therefore, in view of the judgment of the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary, referred above, the proceedings under the Prevention of Money Laundering Act would not survive. 5. In view of the above, this petition is allowed. The prosecution of the petitioners/accused for the predicate offence under Section 3 punishable under Section 4 of the Prevention of Money Laundering Act, 2002 in Spl.C.C.No.177/2017 pending before the Principal City Civil and Sessions Judge, Bengaluru (CCH - 1) is quashed. Consequently, the petitioners are set free. Sd/- JUDGE PMR List No.: 1 Sl No.: 20 "