Omkar Group promoters Babulal Varma and Kamalkishor Gupta who were arrested in January were discharged from a case filed against them by the ED.
A special court in Mumbai Wednesday made its interim order absolute and discharged Omkar Group promoters in a money laundering case filed by the Enforcement Directorate (ED) noting that if there is no scheduled offence, the proceedings under the Prevention of Money Laundering Act (PMLA) cannot continue.
Omkar Group promoters Babulal Varma and Kamalkishor Gupta who were arrested in January were discharged from a case filed against them by the ED. Special Judge, M G Deshpande, had allowed their interim release on August 8.
“It is crystal clear that if there is no scheduled/predicate offence, the PMLA case cannot continue. Similarly, the PMLA court cannot have the jurisdiction to continue a PMLA case in the absence of a case relating to the scheduled offence. The guidelines of the honourable Supreme Court…are very clear. This court has no jurisdiction to extend judicial custody of the accused under PMLA when there is no scheduled offence,” special judge M G Deshpande had said in his order on August 8.
This is one of the first such decisions following the Supreme Court’s recent order upholding the constitutionality of PMLA.
It is likely to have an impact on other cases where there is no scheduled offence against the accused, including one case against NCP leader Chhagan Bhujbal, who was discharged in the scheduled offence by a special court last year.
The ED as a prosecuting agency can file a complaint under PMLA only to probe allegations of money-laundering of proceeds of crime. These proceeds, therefore, have to be linked to a separate criminal offence allegedly committed by the person based on which the ED files its independent complaint under PMLA. The separate criminal offence is called a scheduled offence or predicate offence.
The Supreme Court in its significant order on PMLA last month has observed that if a person is absolved by a court in the scheduled offence filed against him, there can be no separate action for money laundering against such a person.
The two accused, Babulal Varma and Kamalkishor Gupta, were arrested in January 2021 in an alleged money-laundering case against Omkar Realtors and Developers Pvt Ltd. The ED’s complaint against them and others, including actor-businessman Sachin Joshi, is related to an FIR filed in 2020 in Aurangabad on charges of cheating Aurangabad Gymkhana and its directors.
The lawyers Vijay Aggarwal and Rahul Agarwal argued on behalf of the two Omkar Group promoters before the court that the closure report filed by the police in that case in Aurangabad, Maharashtra, was accepted by a local court noting that the complaint was filed due to misunderstanding and that the commercial transactions dues were cleared by the accused. The lawyers submitted that a single minute spent by the two accused in custody amounted to illegal detention since there is no scheduled offence against them.
Referring to the Supreme Court order, lawyer Aggarwal submitted that since the closure report was accepted and there is no scheduled offence, the PMLA case by the ED cannot continue. He submitted that in such a scenario, the two cannot be kept in custody in the PMLA case against them.