Rakesh Brijal Jain v. State of Maharashtra

Case snapshot

Sections / provisions: PMLA 2(1)(u); PMLA 3

Questions before the Court / Tribunal

• See the source-driven case record below.

Material facts and background

me through the facts of the case and made the following five submissions:9.1.

At the outset he would submit that the present dispute is a

purely civil dispute and there is no overt criminal act on the part of Applicants and hence criminal proceedings ought to be quashed as the only apparent dispute raised by Complainant is due to delay in procuring OC for the subject premises. He would submit that the Commissioner of Police and Malad Police Station after a careful scrutiny of two previous 21

identical complaints filed by Respondent No.2 prior to filing of the third (present) complaint came to a definite conclusion that the allegations in those complaints did not constitute any criminal offence and advised Respondent No.2 to file a Civil Suit before the appropriate Court / forum for redressal of his grievances.

aforesaid Respondent No.2 persisted and filed a third private Complaint under Section 156 (3) of CrPC before the Metropolitan Magistrate Court, Andheri suppressing outcome of the above two complaints having been decided and consigned and once again persuaded the Metropolitan Magistrate Court to direct

Station this time. He would draw my attention to the order dated 09.06.2010 passed by this Court while grating Anticipatory Bail to the Applicant, wherein in paragraph No.4 this Court observed that ' .... it

appears prima facie that here does not appear to be any criminal act.... '. He would submit that Respondent No.2 has filed a Civil Suit in the City Civil Court bearing Suit No. 648 of 2015 in the year 2015 for recovery of amount of Rs.4,27,16,900/- alongwith interest being the consideration under the Renovation Agreement which is alleged to be the 'proceeds of crime' under PMLA by the ED in the present case. In support of this submission, he has referred to and relied on the following decisions of the

Appellant / assessee submissions

He would argue that to constitute offence of cheating under

Next he would argue on the maintainability of criminal

Revenue / respondent submissions

Station this time. He would draw my attention to the order dated 09.06.2010 passed by this Court while grating Anticipatory Bail to the Applicant, wherein in paragraph No.4 this Court observed that ' .... it

Court / Tribunal analysis and reasoning

been fully delivered even according to Respondent No.2 himself as acknowledged by him. He himself has paid Rs.30,67,500/- less than the total consideration agreed therein for the works which remained incomplete. Respondent No.2 has himself over a period of time acknowledged the progress of work, paid the due installments on time under the Renovation Agreement. ED has turned a convenient blind eye to this which is not only shocking but extremely serious. This submission of ED is therefore rejected. 11.3.

that the Special Judge has issued process against the Applicants and the same cannot be faulted and therefore would submit that the present CRA be dismissed and proceedings before the PMLA Special Court, Mumbai be allowed to be continued. 12.

of crime’ from M/s. Sadguru Enterprises. The second charge of ED to attribute this amount to ‘proceeds of crime’ is that M/s. Sadguru Enterprises has not delivered any of its services / obligations to the Complainant (Respondent No.2) under the Renovation Agreement and therefore the amount received from him and routed to M/s. Kamala Developers is alleged as ‘proceeds of crime’. Apart from the above two charges there is no other case made out by ED. To understand levy of this charge, one needs to understand what ‘proceeds of crime’ means under the PMLA. As delineated herein above, Section 2 (1)(u) of PMLA refers to ‘proceeds of crime’ as “any property derived or obtained directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence…”. The explanation to this definition provides that such property would include any property relatable to the scheduled offence mentioned in the PMLA. 16.

return nothing is provided. Such is clearly not the case here. Therefore to attribute the allegation of ‘proceeds of crime’ to the consideration amount under the Renovation Agreement dated 16.04.2007 is not only highly preposterous but a completely misconceived claim of ED which on the face of record can never be proved by the prosecution in trial. 23.

Rs.1,07,84,400/- after deducting an amount of 30,67,500/- therefrom upon which M/s. Sadguru Enterprises issued a No-Claim Certificate to Complainant on 24.10.2007 which is appended at page No. 113 of the Application. Therefore there cannot be any element of cheating whatsoever that is alleged. This is precisely the reason as to why the Commissioner of Police in the first instance and the Malad Police Station

under the IPC then there is no proceeds of crime involved under Section 2(1)(u) of PMLA and therefore there is no Money Laundering involved under Section 3 of PMLA in the present case. 39.

overcome the conclusion of the Malad Police Station has deliberately with a malafide intention concocted a story which is a complete afterthought about one transaction having taken place at Orchid Hotel in Vile Parle, so that the Vile Parle Police Station could investigate his complaint. This is nothing but a clear abuse of the process of Court and the police machinery. This issue of the territorial jurisdiction of the Vile Parle Police Station and the Metropolitan Magistrate, Andheri, goes to the root of the matter in this case. They do not have the jurisdiction to investigate and try the complaint. All investigations and actions undertaken by them are therefore a nullity. 42.8.

Operative decision and relief

No. 3 – ED is dismissed and disposed of accordingly.

Authorities and precedents appearing in the judgment

• Supreme Court in the case of Santoshchandra Ratanlal Shah vs. State of Gujarat
• Badshah Majid Malik vs Directorate Of Enforcement And

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on the statutory and factual issues recorded above. The operative result is classified as Disposed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with PMLA / Criminal. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Use the judgment as a fact-specific precedent: match the statutory version, assessment period, procedural stage and evidentiary record before relying on the result.
• Check whether a later High Court/Supreme Court order has affirmed, reversed, distinguished or rendered the decision academic.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

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