In a first, PMLA court discharges two following Supreme Court’s predicate offence order

MUMBAI: In the first such order by a special PMLA court, observing that if it fails to apply the principles of the Supreme Court, it will certainly amount to “sun is there but light has gone”, a judge on Wednesday discharged Omkar Group promoters (developers) Babulal Varma and Kamalkishore Gupta from a money laundering case. The court accepted their plea, which cited a July 27 SC ruling that held that when there is no predicate or scheduled offence, the PMLA case cannot continue.
The court refused Enforcement Directorate’s plea to stay the order. The judge further said that as the case under PMLA cannot proceed, detention of accused becomes illegal. Taking a stern view against ED’s earlier objection to their release, special judge M G Deshpande said, “This court strongly feels that it cannot join hands with vengeful complainant like ED to humiliate accused… by continuing their judicial custody that too, in utter disregard to the recent law of the land.”
The cheating case against Varma and Gupta, based on which ED had registered its money laundering case, was closed last year. The duo were arrested over 18 months ago and were granted interim release on August 8 after they first sought relief citing the apex court ruling.
Making their interim release absolute, the judge, quoting the SC, said that “life bereft of liberty is without honour and dignity”. “It loses all significance and the life itself will not be worth living. That’s the reason why liberty is held the very quintessence of a civilized existence. Without the right to life with liberty, no other right can be enjoyed,” the judge said.
The judge said if its vital power to continue their custody is exercised in utter disregard to the mandate of law, the court, which is the protector of the rights of citizens (undertrial prisoners), will become ‘predator’ of the rights.
Accepting submissions made by advocates Vijay Aggarwal, Rahul Agarwal and Yash Agarwal for Varma and senior counsel Aabad Ponda for Gupta, the judge in a 46-page order held that in absence of the scheduled offence, there cannot be any proceeds of crime.
The court further said when there are no proceeds of crime, there cannot be money laundering and when there is no money laundering, prosecution under PMLA was not maintainable.
“When this situation is glaring, court cannot continue the trial of the present accused as if the court is Post Office to frame the charge at the behest of prosecution,” the special judge said. The court also said continuation of such a case will be nothing but futile work which, at the cost of detention of accused, is without any legal basis or justification.
In March 2020, an FIR was registered against Varma and Gupta in Aurangabad for cheating. Based on this predicate offence, a case was subsequently filed against them by ED. The police later filed a closure report. The purported victim in the case also gave ‘no objection,’ saying the FIR was based on a misunderstanding and the amount due has been paid. In 2021, the court in Aurangabad accepted the closure report and the matter was disposed of.
The special PMLA court said if this order is carefully examined, it “glaringly” indicated that the investigating officer had absolutely no evidence against the duo in the cheating case. It refuted ED’s arguments that closure reports in predicate offences were not considered by SC and it only ruled in relation to “acquittal, discharge or quashing of an FIR.”
The court said if this argument is considered, its horrific consequences would result in keeping the accused languishing in jail by denying their legitimate constitutional right.