Y. BALAJI versus KARTHIK DESARI & ANR. ETC.

ABCDEFGH1026SUPREME COURT REPORTS[2023] 8 S.C.R. [2023] 8 S.C.R. 10261026Y. BALAJIv.KARTHIK DESARI & ANR. ETC.(Criminal Appeal Nos. 1671-1673 of 2023)MAY 16, 2023[KRISHNA MURARI AND V. RAMASUBRAMANIAN, JJ.]Prevention of Money Laundering Act, 2002 – ss.3, 2(1)(u) –Offence of Money Laundering – Prevention of Corruption Act, 1988– Jobs-for-cash scam in the State of Tamil Nadu – Whether withoutidentifying the proceeds of crime/a property representing theproceeds of crime and any process or activity connected to proceedsof crime as required by s.3, which constitute the foundational/jurisdictional fact, can ED initiate an investigation and issuesummons – Held: All the three FIRs alleged that the accused hadcommitted offences included in the schedule by taking illegalgratification for providing appointment to several persons in thePublic Transport Corporation – It is the bribe money that constitutesthe proceeds of crime u/s.2(1)(u) – A public servant receiving illegalgratification is in possession of proceeds of crime – Mere generationof proceeds of crime is sufficient to constitute the offence of money-laundering – In s.3 there are 6 activities or process and one of themis “acquisition” – If a person takes a bribe, he acquires proceedsof crime, hence, activity of “acquisition” takes place – Even if hedoes not retain it but “uses” it, he will be guilty of offence of money-laundering, since “use” is one of the activities mentioned in s.3 –The FIRs for the predicate offences identify all the three componentsof s.3, persons; process; and product – Corruption money representsthe proceeds of crime – In the case of an offence of corruption, thecriminal activity and the generation of the proceeds of crime arelike Siamese twins – The contention that the investigation by EDwas triggered without any foundational/jurisdictional facts are aimedat hoodwinking the Court – Wherever there are allegations ofcorruption, there is acquisition of proceeds of crime which itselftantamount to money-laundering – Once an information relating tothe acquisition of huge amount of illegal gratification in the matterof public employment has come in the public domain, it is the dutyof the ED to register an Information Report – This is because ABCDEFGH1027“acquisition” is an activity amounting to money-laundering andthe illegal gratification acquired by a public servant represents“proceeds of crime”, generated through a criminal activity in respectof a scheduled offence – Receipt of bribe money is an act of money-laundering – All the arguments on facts and all the legal contentionsemanating from some portions of the judgment in Vijay MadanlalChoudhary, to challenge the validity of the proceedings initiated byED are completely unsustainable.Criminal Law – Matters pertaining to Jobs-for-cash scam inthe State of Tamil Nadu – Impugned order allowed de novoinvestigation on a ground not raised in the petition – Held: ‘D’,whose original complaint led to the registration of FIR in CrimeNo.441 of 2015 seems to have had a genuine grievance against theculprits at the bottom of the layer, but he later turned out to be aTrojan horse, willing to sabotage the investigation against influentialpersons – Order directing de novo investigation in all the three cases,actually inured to the benefit of the accused, but the High Courtput it on the ground that the credibility of the investigation shouldnot be eroded – In fact, the accused did not seek de novo investigationon the ground of slackness on the part of the Investigating Officer,but it was ‘D’ who sought it, with the able assistance of theInvestigating Officer – What is shocking is that the High Courtdirected reinvestigation to be started ab initio, wiping out the earlierinvestigation altogether – By issuing the said direction, the HighCourt not only directed the wiping out of the investigation carriedout so far, but virtually wiped out even the judgment of SupremeCourt dtd.08.09.2022 passed in the previous round of litigation –The problem with the impugned order is not merely one of improperusage of language, as sought to be diluted by the accused and thecomplainant, but something more – Prevention of Money LaunderingAct, 2002 –Prevention of Corruption Act, 1988.Doctrines/Principles – Doctrine of stare decisis – Whether inthe light of the fact that notice has been ordered in the review petitionand a few interim orders have been passed in some proceedings, itis necessary for this Court to tag these appeals along with a reviewpetition or defer the hearing of these matters until a decision isrendered in the review petition and other petitions – Held: A noticeordered in the review petition will not destroy or diminish theY. BALAJI v. KARTHIK DESARI & ANR. ETC. ABCDEFGH1028SUPREME COURT REPORTS[2023] 8 S.C.R.precedential value of Vijay Madanlal Choudhary – The argument ofthe counsel for the accused, if accepted, will not only destroy theprinciples of judicial discipline and the doctrine of stare decisis, butalso bring to a grinding halt, all pending investigation in the country– Accused is not entitled at all either to seek a reference to a largerBench or to seek to defer the matter till a decision is rendered in thematters involving larger issues – Appeals arising out of the order ofthe Division Bench of the High Court are allowed – Order of theDivision Bench of the High Court dtd. 01.09.2022 is set aside – EDentitled to proceed further from the stage at which their hands weretied by the impugned order – Prevention of Money Laundering Act,2002 –Prevention of Corruption Act, 1988 – Criminal Law.Prevention of Money Laundering Act, 2002 – History of –Discussed.Criminal Rules of Practice, 2019 – rr.231(3), 237 – Appellantcontended that the High Court overlooked the provisions of r.231(3)and also s.65B, Evidence Act – Held: Both the contentions are withoutsubstance – r.231 primarily deals with the grant of certified copiesof certain other documents to the accused, before filing of the FinalReport – It states that certified copies of unmarked documents shallnot be given – High Court has not passed any order directing thegrant of certified copies of unmarked documents – It has onlypermitted the ED to have an inspection of the documents u/r.237and thereafter to file a proper copy application – This is not contraryto r.231(3) – Further, it is not known how an argument revolvingaround s.65B, Evidence Act is raised – s.65B concerns theadmissibility of electronic records – Without certification, ED maynot be able to use those electronic records in evidence, in theprosecution under PMLA – But it does not mean that they cannoteven have a look at the electronic record – Evidence Act, 1872 –s.65B – Prevention of Money Laundering Act, 2002 –Prevention ofCorruption Act, 1988 – Criminal Law.Criminal Law – Matters pertaining to Jobs-for-cash scam inthe State of Tamil Nadu – Objection to the maintainability of theappeals by appellants, against the order of de novo investigation –Held: Criminal jurisprudence recognizes a limited role of victimsand it is the state which is entrusted with the onerous responsibilityof prosecuting the accused and getting them punished – These ABCDEFGH1029theories of law were developed when process of administration ofcriminal justice system was largely unpolluted – However, wheresome of the complainants and the accused have come together toform an unholy alliance, victims cannot be left at the mercy of suchpartnerships – What was compromised between the complainantand accused is not just their disputes, but justice, fair play, goodconscience and the fundamental principles of criminal jurisprudence– Investigation trail of a criminal case cannot be converted by thecomplainant and accused into a friendly match – Further,submissions made on the question of locus in the previous round oflitigation in were rejected by Supreme Court in the very sameproceedings in the first round – Therefore, the accused cannot raisethe question of locus again and again.Criminal Rules of Practice, 2019 – rr.207(12), 210 – Some ofthe appellants filed copies of the confession statements u/s.164,CrPC, as part of the paper book in the appeals – It was contendedthat the confession statements recorded before the Magistrate aresacrosanct and that the copies of the same cannot be made availableto third parties – Held: It is clear from r.207(12) that a confessionstatement is a confidential document till the time investigation iscomplete and Final Report filed – r. 210 enables “third parties toapply to the Court for the grant of copies of Judgment or order orany proceeding or document in the custody of a Court” – Therefore,it is not as though the appellants have filed something to which theycould have never had any access – Further, many of the documentshad started appearing in the public domain at the instance of severalpersons – Hence, it is futile to contend that the appeals are liable tobe thrown out on the ground that the appellants came up withdocuments to which they could not have had any access – Code ofCriminal Procedure, 1973 – s.164.Criminal Law – Matters pertaining to Jobs-for-cash scam inthe State of Tamil Nadu – Political vendetta alleged – On the basisof the timeline of events, it was alleged the Minister was implicatedin the case on 08.03.2021, for offences under the PC Act immediatelyafter the announcement of the elections to the Legislative Assembly,as he had switched over from the party in power to another – Held:That the Investigation Officer did not choose to include the offencesunder the PC Act from the year 2015 till 08.03.2021, cannot beY. BALAJI v. KARTHIK DESARI & ANR. ETC. ABCDEFGH1030SUPREME COURT REPORTS[2023] 8 S.C.R.taken to the credit of the Minister, but should be taken as a discreditof the prosecution – If the shield of office protected him from 2015till he formed part of the splinter group and the shield stoodtemporarily removed for a brief period of time until he again becamea Minister in the next regime, the same cannot be said to be a caseof political vendetta – Prevention of Corruption Act, 1988.Practice and Procedure – For all the accused in the PMLAcase, arguments were advanced for the grant of larger reliefs thanwhat they got under the impugned order, without even filing anyappeal against the same – Held: It is possible in law for a successfulparty (though in civil proceedings) to support the decree withoutsupporting the judgment – But what the accused sought to do beforeSupreme Court was to support the judgment and seek an enlargementof the decree, without independently filing appeals – Since theytook a chance by adopting such a course, they may not even beable to challenge the impugned order hereafter, once the seal ofapproval on the same is affixed by this Court and the doctrine ofmerger comes into play – Prevention of Money Laundering Act,2002 – Doctrines/Principles – Doctrine of merger.Disposing of the appeals, the CourtHELD: 1. The order directing de novo investigation in allthe three cases, has actually inured to the benefit of the accused,but the High Court put it on the ground that the credibility of theinvestigation should not be eroded. In fact, the accused did notseek de novo investigation on the ground of slackness on thepart of the Investigating Officer, but it was ‘D’ who sought it,with the able assistance of the Investigating Officer. The fact that‘D’s petition was intended to help the accused is also borne outby one more fact. His original complaint dated 29.10.2015 whichled to the registration of FIR in Crime No.441 of 2015 was againstten persons and the offences registered therein were only underSections 406 and 420 read with Section 34 IPC. On this complaint,a Final Report was filed under Section 173(2) of the Code on13.06.2017 and this resulted in the registration of Calendar Casein CC No.3627 of 2017. ‘D’ was happy with the fact that the Reportfiled under Section 173(2) did not include the offences under thePC Act. ‘D’ was not bothered at that time about the fact that theregister for entering the interview marks, sent to the Forensic ABCDEFGH1031Department had not been received. Suddenly, he became workedup after the filing of the Report under Section 173(8) leading tothe registration of Calendar Case No.24 of 2021 including theoffences under the PC Act. What is shocking is that the HighCourt directed reinvestigation to be started ab initio, wiping outthe earlier investigation altogether. One saving grace in this caseis that even the learned senior counsel appearing for ‘D’ and thelearned senior counsel appearing for the accused could notsupport the operative portion of the impugned order dated31.10.2022, in Criminal O.P. No.15122 of 2021. By issuing theaforesaid direction, the High Court not only directed the wipingout of the investigation carried out so far, but virtually wiped outeven the judgment of this Court dated 08.09.2022 passed inCriminal Appeal Nos.1514-1516 of 2022. This Court has said inparagraph 45 of the decision dated 08.09.2022 in Criminal AppealNos.1514-1516 of 2022 “We are constrained to say that even anovice in Criminal Law would not have left the offences underthe PC Act, out of the final report.” Ignoring the said opinion ofthis Court, the High Court has directed the Investigating Officerto find out afresh whether the offences under the PC Act aremade out or not. Therefore, the problem with the impugned orderis not merely one of improper usage of language, as sought to bediluted by the learned senior counsel for the accused and thecomplainant, but something more. [Paras 19-22, 25][1054-B-G;1055-D; 1056-C-D]2. It is true that criminal jurisprudence recognizes a limitedrole for victims and it is the State which is entrusted with theonerous responsibility of prosecuting the accused and gettingthem punished. But we must remember that certain theories oflaw were developed at a time when the process of administrationof the criminal justice system was in the hands of honest andresponsible Police officials and the stream remained largelyunpolluted. Today the situation is different. In cases of this nature,where some of the complainants and the accused have cometogether to form an unholy alliance, the victims of crime cannotbe left at the mercy of such partnerships. We have seen in thiscase, persons aspiring to secure public employment, paying illegalgratification, through persons who are public servants, to personsY. BALAJI v. KARTHIK DESARI & ANR. ETC. ABCDEFGH1032SUPREME COURT REPORTS[2023] 8 S.C.R.in power and later coming to the Court supporting the accusedon the basis of an out of Court settlement. What was compromisedbetween the complainant and accused is not just their disputes,but justice, fair-play, good conscience and the fundamentalprinciples of criminal jurisprudence. In fact, the case on hand isone where there are two teams just for the purpose of record,but no one knows who is playing for which team and where thematch was fixed. As a matter of fact, very vocal submissions weremade on the question of locus in the previous round of litigationin P. Dharamaraj vs. Shanmugam in Criminal Appeal Nos.1514-1516 of 2022. But the objections relating to maintainability wererejected by this Court in the very same proceedings in the firstround. Therefore, the accused cannot raise the question of locusagain and again. [Paras 33, 34][1060-D-H; 1061-A]3. It is clear from Rule 207(12) that a confession statementis a confidential document till the time investigation is completeand Final Report filed. The relevant portion of Rule 207(12) states“… not to make its contents public until the investigation iscompleted and final report filed”. Rule 210 extracted aboveenables “third parties to apply to the Court for the grant of copiesof Judgment or order or any proceeding or document in thecustody of a Court”. Therefore, it is not as though the appellantshave filed something to which they could have never had anyaccess. Many of the documents have started appearing in thepublic domain at the instance of several persons. Hence, it isfutile to contend that the appeals are liable to be thrown out onthe ground that the appellants have come up with documents towhich they could not have had any access. [Paras 39-41][1062-D-E, G-H;]4. That the Investigation Officer did not choose to includethe offences under the PC Act from the year 2015 till 08.03.2021,cannot be taken to the credit of the Minister, but should be takenas a discredit of the prosecution. If the shield of office protectedhim from 2015 till he formed part of the splinter group and theshield stood temporarily removed for a brief period of time untilhe again became a Minister in the next regime, the same cannotbe said to be a case of political vendetta. [Para 44][1064-D-F] ABCDEFGH1033Janata Dal vs. H.S. Chowdhary (1992) 4 SCC 305 :[1992] 1 Suppl. SCR 226; Simranjit Singh Mann vs.Union of India (1992) 4 SCC 653 – held inapplicable.5. What is worrisome is the fact that V. Ganesh Kumar is anemployee of the Transport Corporation. In the charge-sheet filedon his complaint, which has been taken on file as CC No.19 of2020, this V. Ganesh Kumar is stated to have collected amountsranging from Rs.2,00,000/- to Rs.4,50,000/- for every post ofDriver, Conductor or Mechanic, as the case may be. We do notknow whether the Transport Corporation has at least placed himunder suspension and initiated departmental proceedings. If theyhave not done so far, the Corporation should initiate disciplinaryaction against this V. Ganesh Kumar not only for being party to ajob-for-cash scam but also for turning turtle and supporting theaccused and thereafter coming to this Court to assail the orderof de novo investigation, despite being an employee of theCorporation. [Para 47][1065-C-D]6. ED registered an Information Report on 29.07.2021, onlyafter filing of a Final Report under Section 173(8) of the Code., inCC No.24 of 2021, including the offences punishable under thePC Act. This Final Report was in FIR No.441 of 2015, which wasoriginally registered as CC No.3627 of 2017 (it became CC No.24of 2021). The Final Report filed under Section 173(8) of the Codeon 08.03.2021, named Shri V. Senthil Balaji (Minister) as AccusedNo.1 and the offences charged against the accused were underSections 406, 419, 420 read with Section 34 and 120B, 465, 467,471 and 201 IPC read with Sections 7, 12, 13(2) read with Section13(1)(d) of the PC Act and Section 109 of IPC. Since the offencesunder Sections 120B, 419, 420, 467 and 471 of IPC and Sections7 and 13 of the PC Act are included in The Schedule to thePrevention of Money-laundering Act, 200211, the registration ofthe Information Report by ED on 29.07.2021 cannot be faulted.[Para 50][1066-B-D]7. The High Court has not quashed the summons issued byED. The High Court had merely injuncted ED from proceedingfurther till the clog on the cases relating to the predicate offencesis removed. Interestingly, none of the accused has come up withany appeal challenging the order of the High Court datedY. BALAJI v. KARTHIK DESARI & ANR. ETC. ABCDEFGH1034SUPREME COURT REPORTS[2023] 8 S.C.R.01.09.2022, on the ground that the High Court ought to havequashed the summons issued by the ED in total, on other grounds.Instead, the accused appeared through counsel only to defendthe impugned order dated 01.09.2022. Therefore, in law, (i) oncethe dismissal of the petition for discharge has attained finalitywith the dismissal of Criminal Revision Case No.224 of 2021; (ii)once the order for de novo investigation in Criminal O.P.No.15122 of 2021 is set aside; (iii) once the order of the HighCourt dated 30.03.2022 relating to right of the ED to secure thecopies of documents is dealt with; (iv) once the order of the HighCourt dated 30.07.2021 quashing one of the criminal cases is setaside; and (v) once the stay operating in two of the criminal casesfor predicate offences is vacated, then the temporary reprievethat has been granted by the High Court to the accused in theimpugned order would automatically go. Realising this difficultyin law, the accused changed the theme of the song completelybefore us, despite the fact that they were ordained as respondentsin the appeals only to support the impugned order of the HighCourt. In fact, all the learned senior counsel appearing for all theaccused in the PMLA case, advanced arguments for the grant oflarger reliefs than what they got under the impugned order,without even filing any appeal against the same. It is possible inlaw for a successful party (though in civil proceedings) to supportthe decree without supporting the judgment. But what the accusedsought to do before us was to support the judgment and seek anenlargement of the decree, without independently filing appeals.Since they took a chance by adopting such a course, they may noteven be able to challenge the impugned order hereafter, oncethe seal of approval on the same is affixed by this Court and thedoctrine of merger comes into play. [Paras 67-70][1072-A-F]8.1 If the main part of Section 3 is dissected with forensicprecision, it will be clear that Section 3 addresses itself to threethings (we may call them 3 ‘P’s) namely, (i) person; (ii) processor activity; and (iii) product. Insofar as persons covered by Section3 are concerned, they are, (i) those who directly or indirectlyattempt to indulge; or (ii) those who knowingly assists; or (iii)those who are knowingly a party; or (iv) those who are actuallyinvolved. Insofar as process is concerned, the Section identifies ABCDEFGH1035six different activities, namely (i) concealment; (ii) possession;(iii) acquisition; (iv) use; (v) projecting; or (vi) claiming asuntainted property, any one of which is sufficient to constitutethe offence. Insofar as product is concerned, Section 3 identifies“proceeds of crime” or the property representing the proceedsof crime as the product of the process or activity. Out of the threethings that Section 3 addresses, namely (i) person; (ii) process;and (iii) product, the first two do not require any interpretationor definition. The third aspect namely “product”, which Section3 refers to as “proceeds of crime” requires a definition and henceit is defined in Section 2(1)(u). [Paras 96 and 97][1088-A-D]8.2 All the three FIRs allege that the accused herein hadcommitted offences included in the Schedule by taking illegalgratification for providing appointment to several persons in thePublic Transport Corporation. In one case it is alleged that asum of more than Rs.2 crores had been collected and in anothercase a sum of Rs.95 lakhs had been collected. It is this bribemoney that constitutes the ‘proceeds of crime’ within the meaningof Section 2(1)(u). It is no rocket science to know that a publicservant receiving illegal gratification is in possession of proceedsof crime. The argument that the mere generation of proceeds ofcrime is not sufficient to constitute the offence of money-laundering, is actually preposterous. As we could see from Section3, there are six processes or activities identified therein. Theyare, (i) concealment; (ii) possession; (iii) acquisition; (iv) use;(v) projecting as untainted property; and (vi) claiming as untaintedproperty. If a person takes a bribe, he acquires proceeds of crime.So, the activity of “acquisition” takes place. Even if he does notretain it but “uses” it, he will be guilty of the offence of money-laundering, since “use” is one of the six activities mentioned inSection 3. The FIRs for the predicate offences identify all thethree components of Section 3, namely, (i) persons; (ii) process;and (iii) product. Persons accused in the FIRs are those whohave indulged in the process or activity. The illegal gratificationthat they have taken, represents the proceeds of crime. The (i)acquisition of such illegal gratification in the first instance; (ii)the possession of the tainted money before putting it to use; and(iii) today projecting it as untainted money, is the process orY. BALAJI v. KARTHIK DESARI & ANR. ETC. ABCDEFGH1036SUPREME COURT REPORTS[2023] 8 S.C.R.activity in which the accused have indulged. The corruption moneyrepresents the proceeds of crime. [Paras 99, 100][1089-A-F]8.3 It is true that there are some offences, which, thoughscheduled offences, may or may not generate proceeds of crime.For instance, the offence of murder punishable under Section302 is a scheduled offence. Unless it is a murder for gain or murderby a hired assassin, the same may or may not generate proceedsof crime. It is in respect of such types of offences that one maypossibly argue that mere commission of the crime is not sufficientbut the generation of proceeds of crime is necessary. In the caseof an offence of corruption, the criminal activity and the generationof the proceeds of crime are like Siamese twins. Even if anintangible property is derived as a result of criminal activityrelating to a scheduled offence, it becomes proceeds of crimeunder Section 2(1)(u). In view of the above, we are not impressedwith the contention that the investigation by ED was triggeredwithout any foundational/jurisdictional facts. In our view, theallegations in the FIR point out to (i) involvement of persons incriminal activity relating to scheduled offences; (ii) the generationas well as (iii) laundering of the proceeds of crime within themeaning of Section 3. This is in view of the fact that whereverthere are allegations of corruption, there is acquisition ofproceeds of crime which itself tantamount to money-laundering.[Paras 102, 104][1089-G-H; 1090-A, E-F]8.4 Once an information relating to the acquisition of hugeamount of illegal gratification in the matter of public employmenthas come into the public domain, it is the duty of the ED to registeran Information Report. This is because “acquisition” is an activityamounting to money-laundering and the illegal gratificationacquired by a public servant represents “proceeds of crime,”generated through a criminal activity in respect of a scheduledoffence. Therefore, it does not require any expedition, much lessa fishing expedition for someone to say that the receipt of bribemoney is an act of money-laundering. The contention that therewas no explanation for the delay on the part of the ED inregistering the Information Report, is a self-serving argument.If the ED registers an Information Report immediately upon the ABCDEFGH1037registration of a FIR for a predicate offence, ED will be accusedof acting in haste. If they wait until the drama unfolds up to aparticular stage, ED will be attacked as guilty of delay. Theaccused should be thankful to ED for giving a long rope from2016 till 2021. Therefore, all the arguments on facts and all thelegal contentions emanating from some portions of the judgmentin Vijay Madanlal Choudhary, to challenge the validity of theproceedings initiated by ED are completely unsustainable. [Paras112-114][1092-B-F]9. A notice ordered in the review petition being ReviewPetition (Crl.) No.219 of 2022, will not destroy or diminish theprecedential value of Vijay Madanlal Choudhary. The argumentof the learned counsel for the accused, if accepted, will not onlydestroy the principles of judicial discipline and the doctrine ofstare decisis, but also bring to a grinding halt, all pendinginvestigation in the country. In fact, the order dated 25.08.2022passed in Review Petition (Crl.) No.219 of 2022 discloses thatprima facie the Court was of the view that at least two of theissues raised in the review petition require consideration. Thoughit is not precisely spelt out in the order, those two issues relateto (i) not providing the accused with a copy of the ECIR; and (ii)reversal of the burden of proof and presumption of innocence.The points that the respondents are canvasing in this case, havenothing to do with those two issues. Therefore, the accused cannothave a piggyback ride on the review petition. In fact, as we havepointed out elsewhere, the accused have not come up with anyappeal challenging the order of the High Court dated 01.09.2022.Therefore, they are entitled at the maximum, to argue only forthe dismissal of the appeals filed by ED and others against thesaid decision. Suppose we agree with the learned counsel for theaccused and dismiss the appeals filed by ED, even then theycannot have an escape route since the impugned order of theHigh Court protects them only till the other proceedings are keptat bay. Therefore, the accused is not entitled at all either to seeka reference to a larger Bench or to seek to defer the matter till adecision is rendered in the matters involving larger issues. Inview of the above, the appeals arising out of the order of theDivision Bench of the High Court are liable to be allowed.Y. BALAJI v. KARTHIK DESARI & ANR. ETC. ABCDEFGH1038SUPREME COURT REPORTS[2023] 8 S.C.R.Accordingly, these appeals are allowed and the order of theDivision Bench of the Madras High Court dated 01.09.2022 isset aside. ED will now be entitled to proceed further from thestage at which their hands were tied by the impugned order. [Paras116-119][1093-A-F]Vijay Madanlal Choudhary vs. Union of India 2022SCC OnLine SC 929 – referred to.10. The grievance of the appellant in this appeal is that theHigh Court has overlooked the provisions of Rule 231(3) of theRules, 2019 and also Section 65B of the Indian Evidence Act,1872. But both the above contentions are without substance. Rule231 primarily deals with the grant of certified copies of certainother documents to the accused, before filing of the Final Report.Rule 231(3) states that certified copies of unmarked documentsshall not be given. The High Court has not passed any orderdirecting the grant of certified copies of unmarked documents.All that the High Court has done is permitting the ED to have aninspection of the documents under Rule 237 and thereafter tofile a proper copy application. This is not contrary to Rule 231(3).We do not know how an argument revolving around Section 65Bof the Evidence Act is raised. Section 65B concerns theadmissibility of electronic records. Without certification, ED maynot be able to use those electronic records in evidence, in theprosecution under PMLA. But it does not mean that they cannoteven have a look at the electronic record. Therefore, we find nomerits in the appeal. Hence, the appeal challenging the order ofthe High Court dated 30.03.2022 passed in Criminal O.P. No.5726of 2022 is dismissed. [Paras 122-124][1094-C-F]11. The appeals arising out of the order for de novoinvestigation are allowed. That portion of the order of the HighCourt dated 31.10.2022 passed in Criminal O.P. No. 15122 of2021 is set aside. The directions issued in the said original petitionfor de novo investigation are set aside. The Investigation Officershall proceed with further investigation in all cases by includingthe offences under the PC Act. Any let up on the part of theInvestigation Officer in this regard will pave the way for this Courtto consider appointing a Special Investigation Team in future. (ii) ABCDEFGH1039The appeals arising out of the order of the Division Bench of theHigh Court dated 01.09.2022 are allowed. The order dated01.09.2022 is set aside. All the three writ petitions challengingthe initiation of proceedings by ED shall stand dismissed. (iii)The appeal arising out of the order of the High Court dated30.03.2022 is dismissed. (iv) The appeal challenging the ordersdated 27.11.2019 and 01.11.2021 of the High Court relating toextension of time for completion of investigation is dismissed.The Investigation Officer shall proceed with further investigationand file Further/Final Reports within two months. (v) TheContempt Petitions and I.A. No. 26257 of 2023 are dismissed.[Para 133][1096-F-H; 1097-A-C]P. Dharamaraj vs. Shanmugam 2022 SCC OnLine SC1186; Dharmaraj vs. Shanmugam 2022(13) SCALE142; Vinay Tyagi vs. Irshad Ali alias Deepak (2013) 5SCC 762 : [2012] 13 SCR 1005; Arun Kumar vs. Unionof India (2007) 1 SCC 732 : [2006] 6 Suppl. SCR 290;Bihta Co-operative Development and Cane MarketingUnion Ltd. vs. Bank of Bihar AIR 1967 SC 389 : [1967]SCR 848; Union of India vs. Ganpati Dealcom PrivateLimited (2023) 3 SCC 315; Shauqin Singh vs. DesaSingh (1970) 3 SCC 881; Enforcement Directorate vs.Gagandeep Singh 2022 SCC Online Del 514; ParvathiKollur vs. State through ED Crl. Appeal No.1254/2022dt.16.08.2022; Jairam Ramesh vs. Union of India SLP(C) No.13103 of 2019; Thomas Franco Rajendra Devvs. Union of India WP (C) No.366/2022 dated12.05.2022; Kantaru Rajeevaru (Right to Religion, Inre-9 J.) vs. Indian Young Lawyers Association (2020) 9SCC 121; Asgar Ali vs. State of Jammu and Kashmir2022 SCC Online SC 3095; Central Board of DawoodiBohra Community vs. State of Maharashtra 2023 SCCOnline SC 129; Badrinath vs. Government of TamilNadu (2000) 8 SCC 395 : [2000] 3 Suppl. SCR 573;State of Kerala vs. Puthenkavu N.S.S. Karayogam(2001) 10 SCC 191; State of Punjab vs. Davinder PalSingh Bhullar (2011) 14 SCC 770: [2011] 15 SCR 540;Management of the Northern Railway Co-operativeY. BALAJI v. KARTHIK DESARI & ANR. ETC. ABCDEFGH1040SUPREME COURT REPORTS[2023] 8 S.C.R.Credit Society Ltd., Jodhpur vs. Industrial Tribunal,Rajasthan, Jaipur (1967) 2 SCR 476; Sakshi vs. Unionof India (2004) 5 SCC 518 : [2004] 2 Suppl. SCR 723;Central Board of Dawoodi Bohra Community vs. Stateof Maharashtra (2005) 2 SCC 673 : [2004] 6 Suppl.SCR 1054 – referred to.Street Tramways vs. London County Council (1898) AC375 (378); Redcliffe vs. Ribble Motor Services (1939)AC 215 (245) – referred to.Case Law Reference[2012] 13 SCR 1005referred topara 26[1992] 1 Suppl. SCR 226held inapplicablepara 45(1992) 4 SCC 653referred topara 45[2006] 6 Suppl. SCR 290referred topara 60[1967] SCR 848referred topara 72(2023) 3 SCC 315referred topara 74(1970) 3 SCC 881referred topara 78[2006] 6 Suppl. SCR 290referred topara 78(2020) 9 SCC 121referred topara 81[2000] 3 Suppl. SCR 573referred topara 82(2001) 10 SCC 191referred topara 82[2011] 15 SCR 540referred topara 82[1967] 2 SCR 476referred topara 84[2004] 2 Suppl. SCR 723referred topara 85[2004] 6 Suppl. SCR 1054referred topara 85CRIMINAL APPELLATE JURISDICTION : Criminal AppealNos.1671-1673 of 2023.From the Judgment and Order dated 01.09.2022 of the High Courtof Judicature at Madras in WP Nos.18213, 18209 and 12159 of 2022.With ABCDEFGH1041Criminal Appeal Nos.1674, 1677, 1675-1676, 1678, 1658-1661,1663-1664, 1662, 1679 of 2023, Contempt Petition (C) Nos.750-751 of2023 And Criminal Appeal Nos.1680, 1681-1682, 1665 of 2023Tushar Mehta, Solicitor General, Ms. Aishwarya Bhati, A.S.G.,Amit Anand Tiwari, A.A.G., Gopal Sankaranarayan, C.A. Sundaram,Mukul Rohatgi, Kapil Sibal, Sidharth Luthra, Siddharth Dave, SiddharthAgarwal, Ranjit Kumar, Ms. V. Mohana, Sr. Advs., A. Lakshminarayanan,B. Karunakaran, Nar Hari Singh, Balaji Srinivasan, Ms. Gauri Pasricha,Ms. Aakriti Priya, Shiva K., Devamshu Behl, Rohan Dewan, LakshmiRao, Ms. Jhanvi Dubey, D. Raghu, K. Sathiresan, Scv Vimal Pani, Ms.Garima Jain, Balaji Srinivasan, Ms. Misha Rohatgi, Nakul Mohta, Ms.Riya Dhingra, Devansh Srivastava, Bharat Monga, Ms. Rohini, Zafar,Mukesh Kumar Maroria, Prashant Bhushan, N Subramaniyan, PranavSachdeva, Jatin Bhardwaj, Ms. Neha Rathi, Ms. Aakriti, S. Senthil, C.Pandian, M. Thangathurai, Aditya Kishor Tyagi, T.S. Nanda Kumar,Yusuf, Dr. Ram Sankar, N. Bharani Kumar, Ms. Anusha Nagarajan,Ms. Rupali Samuel, Ms. Sumedha Roy Sarkar, Anand Kumar V., G. JaiSingh, M/s. Ram Sankar & Co, Senthil Jagadeesan, Sajal Jain, Ms.Anasuya Choudhury, Rudraditya Khare, Ms. Misha Rohatgi, NakulMohta, Ms. Riya Dhingra, Bharat Monga, Ms. Alina Merin Mathew,Samyak Jain, Mohd. Owais, Aakash Kumar, Gaurav Agrawal, MayankPandey, Ashish Kumar Pandey, Arkaj Kumar, Madhav Sinhal, Ms.Deepabali Dutta, Kanu Agarwal, Vivek Gupta, Zoheb Hussain, Dr. JosephAristotle S., Ms. Devyani Gupta, Shobhit Dwivedi, Ms. Vaidehi Rastogi,Kanu Agarwal, Vivek Gupta, Sarad Kumar Singhania, Zoheb Hussain,Ms. Bhavya Pande, Ms. Sneha Botwe, Advs. for the appearing parties.The Judgment of the Court was delivered byV. RAMASUBRAMANIAN, J.Permission to file special leave petition(s) is granted.2. Delay condoned.3. Leave granted.4. Aggrieved by two independent orders, one passed by a learnedJudge of the Madras High Court on 31.10.2022 disposing of a batch ofcriminal petitions and the other passed by the Division Bench of theMadras High Court on 01.09.2022, putting on hold an investigation bythe Enforcement Directorate1, various persons such as (i) the de-facto1 For short, “ED”Y. BALAJI v. KARTHIK DESARI & ANR. ETC. ABCDEFGH1042SUPREME COURT REPORTS[2023] 8 S.C.R.complainants; (ii) third parties; (iii) the accused; and (iv) the ED havecome up with these batch of appeals. Other than the batch of appealsarising out of the said two orders of the High Court, there are also twoappeals, one challenging the refusal of the High Court to extend the timefor completion of investigation and another challenging an order passedby the Division Bench of the High Court granting limited relief to theEnforcement Directorate to access certain documents available on recordin the Special Court trying the predicate offences. Apart from theseappeals, there are also two contempt petitions and an application seekingthe constitution of a Special Investigation Team.5. We have heard Shri Tushar Mehta, learned Solicitor Generalappearing for the ED, Shri Gopal Sankaranarayan, learned senior counsel,Shri Prashant Bhushan and Shri Balaji Srinivasan, learned counselappearing for one set of parties (victims and a NGO), Shri Kapil Sibal,Shri C.A. Sundaram, Shri Sidharth Luthra, Shri Mukul Rohatgi, learnedsenior counsel appearing for another set of parties (accused), Ms. V.Mohana and Shri Siddharth Agrawal, learned senior counsel appearingfor the de facto complainants and Shri Ranjit Kumar, learned seniorcounsel appearing for the State of Tamil Nadu.Background Facts6. The background facts necessary to understand the complexitiesof the batch of cases on hand are as follows:(i) In November 2014, the Metropolitan Transport Corporation,wholly owned by the State of Tamil Nadu issued five Advertisements, inAdvertisement Nos.1/2014 to 5/2014, calling for applications forappointment to various posts such as Drivers (746 posts), Conductors(610 posts), Junior Tradesman (Trainee) (261 posts), Junior Engineer(Trainee) (13 posts) and Assistant Engineer (Trainee) (40 posts);(ii) After interviews were held on 24.12.2014 and the Select Listgot published, one Devasagayam lodged a complaint on 29.10.2015 withthe Chennai PS CCB against 10 individuals, alleging that he paid a sumof Rs.2,60,000/- to a Conductor by name Palani for getting the job ofConductor in the Transport Corporation for his son. However, his sondid not get a job and when he confronted Palani, he was directed toseveral persons. When he demanded at least the refund of money, hedid not get it. Therefore, he lodged a complaint which was registered asFIR No.441 of 2015 for alleged offences under Sections 406, 420 read ABCDEFGH1043with Section 34 of the Indian Penal Code, 18602. In this complaint, theaccused who are now before us, including the one who is holding thepost of Minister in the Government of Tamil Nadu were not implicated.(iii) Similarly, one Gopi gave a petition dated 07.03.2016 to theCommissioner of Police claiming that he had applied for the post ofConductor and that after the interviews, he was approached by oneAshokan claiming to be the brother and one Karthik claiming to be thebrother-in-law of the Minister Senthil Balaji, demanding a bribe forsecuring appointment and that he had paid a sum of Rs.2,40,000/- tothose persons. Complaining that the Police did not register his complaint,the said Gopi filed a petition in Crl. OP No.7503 of 2016 on the file of theHigh Court of Judicature at Madras under Section 482 of the Code ofCriminal Procedure, 19733 seeking a direction to the Commissioner ofPolice to register his complaint and investigate the same.(iv) The said Crl. OP No.7503 of 2016 filed by Gopi was disposedof by a learned Judge of the High Court by an Order dated 20.06.2016.In the said order, it was recorded that according to the Additional PublicProsecutor, 81 persons had given similar complaints to the Police andthat the complaint given by Devasagayam had been registered as FIRNo.441 of 2015. The Additional Public Prosecutor took a stand beforethe High Court in the said petition filed by Gopi that all the 81 personsincluding Gopi will be enlisted as witnesses in the complaint registered atthe instance of Devasagayam.(v) When it was stated by the Additional Public Prosecutor at thetime of hearing of the petition filed by Gopi that all 81 persons includingGopi will be cited as witnesses, in the complaint filed by Devasagayam,the petitioner Gopi objected to the same on the ground that Devasagayamhad already been won over by the accused. In fact, it was pointed outthat the Minister did not figure as an accused in the complaint ofDevasagayam. A specific grievance was projected by Gopi that the Policeare not going beyond the lower level officers. Accepting his statement,the High Court passed an Order dated 20.06.2016 in Crl. OP No.7503of 2016 filed by Gopi, holding that the Police is duty bound to probebeyond the lower level minions to find out where the money had gone.After so holding, the Court directed the Assistant Commissioner of Police,Central Crime Branch (Job Racketing) to take over the investigation in2 For short “IPC”3 For Short “the Code”Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1044SUPREME COURT REPORTS[2023] 8 S.C.R.FIR No.441 of 2015 and also directing the Deputy Commissioner ofPolice to monitor the same. The Court also held that since a FIR hasalready been registered at the behest of Devasagayam, it is not necessaryto have another FIR registered on the complaint/representation made byGopi.(vi) Despite the direction issued by the High Court on 20.06.2016to the Police to go beyond lower level officers and find out where themoney trail ends (more than about 2 crores allegedly given to the Ministerduring January and March, 2015) and despite Gopi making specificaverments against the brother and brother-in-law of the Minister, thePolice filed a Final Report on 13.06.2017 under Section 173(2) of theCode, only against 12 individuals including those 10 persons named byDevasagayam. Upon the filing of the Final Report, the case got numberedas Calendar Case No.3627 of 2017 in FIR No.441 of 2015. Neither theMinister nor his brother or brother-in-law, were cited as accused, in theFinal Report. The accused named in the Final Report were charged onlyfor the offences under Sections 406, 420 and 419 read with Section 34IPC and not under any provisions of the Prevention of Corruption Act,19884.(vii) One V. Ganesh Kumar then lodged a criminal complaint inFIR No.298 of 2017 on 09.09.2017 with the Chennai PS CCB, againstfour persons including the Minister Senthil Balaji. It was stated in hiscomplaint that he was an employee of the Transport Department andthat one of his colleagues by name Annaraj and his friend R. Sahayarajanwere taken by one Prabhu (a relative of the Minister) to the house of theMinister Senthil Balaji and that the Minister instructed them to collectmoney from persons aspiring to get appointment as Drivers andConductors. It was further stated in the complaint that as per the directionsof the Minister, an amount totaling to Rs.95 lakhs was collected duringthe period from 28.12.2014 to 10.01.2015 and that though the amountwas given to Prabhu and Sahayarajan, the persons who parted withmoney did not get appointed. Therefore, persons who paid money startedexerting pressure upon V. Ganesh Kumar forcing him to lodge a complainton 09.09.2017. Even this complaint, registered as FIR No.298 of 2017,was only for offences under Sections 406, 420 and 506(1). A Final Reportwas filed on 07.06.2018 in FIR No.298 of 2017, against the MinisterSenthil Balaji and three others, only for offences punishable under4 For short, “PC Act” ABCDEFGH1045Sections 420 and 506(1) read with Section 34 IPC. This Final Reportwas filed before the Special Court and the case was numbered as CCNo.19 of 2020. Despite specific allegations, the offences under the PCAct were not included.(viii) Another complaint was lodged by one K. Arulmani, on13.08.2018 with the Commissioner of Police, Chennai City, complainingthat a huge amount of Rs.40,00,000/- was collected by his friends whowanted to get employment in the Transport Corporation and that themoney was actually paid to Shanmugam, PA to the Minister at theresidence of the Minister in the first week of January, 2015. It wasfurther stated in the complaint that after money was paid to Shanmugam,the complainant also met Ashok Kumar (brother of the Minister) andSenthil Balaji (Minister) and that the Minister assured to get appointmentorders issued. This complaint was registered by Chennai CCB PS asFIR No.344 of 2018, again for offences only under Section 406, 420 and506(1) IPC. We do not know why the State Police were averse to theidea of including the offences punishable under the PC Act, in anyof the three FIRs. While one may be averse to corruption, one cannotbe averse to the PC Act.(ix) As had happened in respect of the other two complaints, thecomplaint in FIR No.344 of 2018 was also investigated (or notinvestigated) and a Final Report was filed on 12.04.2019. Even this FinalReport, taken on record in Calendar Case No.25 of 2021 did not includethe offences under the PC Act.(x) At this juncture, a person by name R.B. Arun Kumar, workingas a Driver in the Metropolitan Transport Corporation and who wascited as witness LW 47 in the Final Report in CC No.3627 of 2017arising out of FIR No.441 of 2015 (Devasagayam’s complaint) movedthe Madras High Court by way of a petition under Section 482 of theCode in Crl. O.P No.32067 of 2019, seeking further investigation in thecase, on the ground that the State Police have not acted as per thedirections issued by the High Court in its order dated 20.06.2016 in Crl.O.P. No.7503 of 2016 to go beyond the lower level officers. In his petition,R.B. Arun Kumar also pointed out that the specific allegation of a hugeamount of more than Rs.2 crores, having been paid to the Minister SenthilBalaji, had been completely suppressed by the investigating agency andthat a dummy charge-sheet had been filed against minions. Therefore,by an order dated 27.11.2019, the High Court directed the AssistantY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1046SUPREME COURT REPORTS[2023] 8 S.C.R.Commissioner of Police, CCB (Job Racketing) to conduct furtherinvestigation in CC No.3627 of 2017 and to complete the same withinsix months.(xi) Emboldened by the non-inclusion of the offences under thePC Act in any of the three charge-sheets, Minister Senthil Balaji, arrayedas Accused No.1 in CC No.19 of 2020 arising out of FIR No.298 of2017 lodged by V. Ganesh Kumar, filed a petition in Criminal M.P.No.7968 of 2020 seeking his discharge in CC No.19 of 2020. But theSpecial Court dismissed the petition for discharge, by an order dated26.08.2020. Against the said order dismissing his discharge petition, theMinister filed a criminal revision petition in Crl. R.C. No.224 of 2021 onthe file of the High Court(xii) But in the meantime, a Final (further) Report under Section173(8) of the Code was filed in C.C.No. 24 of 2021 against 47 personsincluding the Minister Senthil Balaji and Shanmugam (PA to the Minister)in which the offences under the PC Act were included.(xiii) Upon coming to know of the way in which the entirerecruitment of candidates to various posts in the Transport Corporationhad gone on, candidates who appeared for the selection but did not getselected started filing writ petitions, challenging the entire selection. Awrit petition in WP No.9061 of 2021 was filed by one A. Nambi Venkateshseeking to set at naught, the appointment of Junior Engineers. Similarly,one P. Dharmaraj and M. Govindarasu filed a writ petition in WP No.8991of 2021, with regard to the post of Assistant Engineers.(xiv) In May, 2021 the political climate in the State changed.Though the principal actors changed, the script remained the samefor the victims and the political fortunes of the Minister continued,as he got a berth in the Cabinet, even in the new dispensation.(xv) Thereafter, the person alleged to be the PA to the Minister,namely, Shanmugam, who was arrayed as Accused No.3 in CC No.25of 2021 arising out of FIR No.344 of 2018 lodged by Arulmani, filed apetition in Crl.O.P No.13374 of 2021 on the file of the High Court seekingto quash CC No.25 of 2021. He claimed in the said petition that acompromise had been reached between the victims (Arulmani and othersand the accused) and that, therefore, the complaint may be quashed.Following suit, R. Sahayarajan who was Accused No.3 in CC No.19 of2020 also filed a quash petition in Crl.O.P No.13914 of 2021, enclosing a ABCDEFGH1047joint compromise memo seeking to quash CC No.19 of 2020. Similarly,one Vetrichelvan (Accused No.10) filed Crl. O.P No.6621 of 2021 forquashing the proceedings in CC No.24 of 2021.(xvi) By an order dated 30.07.2021, the High Court quashed CCNo.25 of 2021 on the basis of the Joint Compromise Memo. This orderwas passed completely overlooking the nature of the allegations, theoffences for which the accused ought to have been charged as well asthe previous orders passed by the High Court itself.(xvii) Just a day before the High Court passed orders quashingCC No.25 of 2021, the ED registered an Information Report on29.07.2021 in ECIR/MDSZO/21/2021 and issued summons to the MinisterSenthil Balaji.(xviii) At this stage, Devasagayam who filed the first complaint inFIR No.441 of 2015 and in whose case a Final Report was filed in CCNo.3627 of 2017, filed a very strange petition on the file of the HighCourt in Crl.O.P. No.15122 of 2021 seeking de novo investigation inCC No.24 of 2021. It must be recalled at this stage that Devasagayam’scomplaint was registered as FIR No.441 of 2015 dated 29.10.2015 anda Final Report was filed therein on 13.06.2017 leading to Calendar CaseNo.3627 of 2017. But by the orders of the High Court, the complaint ofGopi and others got clubbed with the investigation in Devasagayam’scase leading to the registration of a separate Calendar Case in CC No.24of 2021. The clubbing actually happened after an allegation was madebefore the High Court by Gopi, (petitioner in Crl. O.P No.7503 of 2016)to the effect that Devasagayam had been won over. While ordering thecomplaint of Gopi to be clubbed with the investigation in FIR No.441 of2015, the High Court did not perhaps realize that it may enableDevasagayam to derail (incidentally he had retired from Railwaysand the word “derail” suits him) even the proceedings in CC No.24of 2021.(xix) Finding that the offences under the PC Act were includedonly in one of the cases and not in others and that it had enabled theHigh Court even to quash one of the four calendar cases on the basis ofa Joint Compromise Memo, candidates who were unsuccessful in therecruitment and who had filed writ petitions in the High Court challengingthe process of selection, filed impleadment petitions, both in the quashpetitions in other cases as well as in the petition filed by Devasagayamfor de novo investigation.Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1048SUPREME COURT REPORTS[2023] 8 S.C.R.(xx) At this stage, ED filed miscellaneous petitions in CC Nos.19/20, 24/21 and 25/21 before the Trial Court seeking certified copies ofthe FIR, statements of witnesses, Final Report, etc. By an order dated09.11.2021, the Trial Court directed the supply of certified copies of theFIRs, complaints and the statements under Sections 161 and 164 of theCode. However, the Trial Court refused to issue certified copies ofunmarked documents.(xxi) As against the order dated 30.07.2021 passed by the MadrasHigh Court quashing CC No.25 of 2021 on the basis of the JointCompromise Memo, a special leave petition was filed by one P.Dharmaraj. It may be recalled that he was one of the unsuccessfulcandidates and he had filed a writ petition seeking to quash the entireselection.(xxii) An NGO by name Anti-Corruption Movement also filed aspecial leave petition against the order of the High Court quashing CCNo.25 of 2021.(xxiii) Aggrieved by one portion of the order of the Trial Courtrefusing to grant certified copies of unmarked documents, the ED filedpetitions before the High Court. By an order dated 30.03.2022 the HighCourt permitted ED to conduct an inspection under Rule 237 of theCriminal Rules of Practice, 20195 and thereafter to make third partycopy applications for supply of copies of documents. The High Courtalso noted that under Rule 238, ED was entitled even to take extractsand thereafter file a fresh third party copy application before the SpecialCourt. Challenging the limited relief granted by the High Court to ED inits order dated 30.03.2022, a person who is Accused No.3 in CC No.3627of 2017 (CC No.24/2021) has come up with a special leave petitionwhich forms part of the present batch of cases.(xxiv) Thereafter, three writ petitions came to be filed, one byMinister Senthil Balaji and another by Shanmugam, alleged to be hisSecretary and the third by Ashok Kumar (brother of the Minister),challenging the summons issued by ED. These writ petitions were allowedby the High Court by an order dated 01.09.2022, primarily on the groundthat one of the four calendar cases had already been quashed by theHigh Court by order dated 30.07.2021 on the basis of a Joint CompromiseMemo and that further proceedings in the other calendar cases hadbeen stayed by the High Court.5 For short “Rules, 2019” ABCDEFGH1049(xxv) But by a Judgment dated 08.09.2022, this Court overturnedthe order of the High Court dated 30.07.2021 and not only restored thecalendar cases back to file but also directed the inclusion of the offencesunder the PC Act.(xxvi) Despite the Judgment of this Court dated 08.09.2022, theHigh Court passed an order dated 31.10.2022 allowing the petition filedby Devasagayam and ordered a de novo investigation.(xxvii) Therefore, challenging the order of the High Court dated01.09.2022 quashing the summons issued by them, ED has come upwith three appeals and the candidate who was unsuccessful in theselection and who has filed a writ petition before the High Court hascome up with one appeal.(xxviii) Challenging the order of the High Court dated 31.10.2022directing de novo investigation, the ED has come up with one appeal,two candidates who were unsuccessful in the selection have come upwith two separate appeals, Anti-Corruption Movement has come up withone appeal, the person who compromised the matter with the accusedand supported the accused before the High Court for quashing thecomplaint has come up with one appeal and one of the accused hascome up with another appeal.(xxix) In other words, we have four appeals on hand arising outof the order of the High Court dated 01.09.2022 quashing the summonsissued by ED. Similarly, we have six appeals challenging the order dated31.10.2022 passed by the High Court directing de novo investigation.(xxx) We have two more appeals, which do not form part of themain stream. One of them is by an accused challenging the order of theHigh Court dated 30.03.2022, permitting the ED to conduct an inspectionof the documents before the Trial Court under Rule 237 of the Rules,2019. Another appeal is filed by the unsuccessful candidate challengingan order passed by the High Court dismissing a petition for extension oftime to complete investigation.(xxxi) Thus, we have on hand 12 appeals, four of them challengingthe quashing of summons issued by ED, six of them challenging theorder for de novo investigation, one of them challenging an orderpermitting ED to have inspection of documents and the last arising outof the order refusing to grant further time for completion of investigation.Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1050SUPREME COURT REPORTS[2023] 8 S.C.R.(xxxii) Other than the appeals, we also have two contempt petitionsfiled by the Anti-Corruption Movement, complaining willful disobedienceby the State of the directions issued by this Court in the order dated08.09.2022 in Criminal Appeal Nos.1515-1516 of 2022.(xxxiii) We also have an application in IA No.26527 of 2023 filedby the appellant in one of these appeals, who is an unsuccessful candidate.The prayer in this application is for the constitution of a SpecialInvestigation Team to undertake a comprehensive investigation into theentire scam and for the appointment of a senior lawyer of repute as theSpecial Public Prosecutor to prosecute the accused. This application istaken out on the ground that a similar prayer made in Criminal AppealNos.1514-1516 of 2022 was turned down by this Court, in the orderdated 08.09.2022, in the hope that the State Police would act fairly andimpartially. According to the applicant/appellant, the State Police hadbelied the hope expressed by this Court and that therefore it is now timeto constitute a Special Investigation Team.7. Since the batch of appeals on hand (not including the contemptpetitions and the application for constitution of a Special InvestigationTeam) arise out of four different orders of the High Court, let us dividethis Judgment into four parts, the first dealing with the challenge to theorder for de novo investigation; the second dealing with the challenge tothe order setting aside the summons issued by ED; the third dealing withthe order permitting the ED to have inspection of the records of the TrialCourt; and the fourth dealing with an order refusing to grant extensionof time to complete investigation.Part-I (Challenge to the order for de novo investigation) 8. As we have pointed out earlier, de novo investigation has beenordered by the High Court by its decision dated 31.10.2022 at the instanceof one Devasagayam, who was the first person to lodge a complaintway back on 29.10.2015 alleging that one C. Palani working in theTransport Corporation received a sum of Rs.2,60,000/- for securing thejob of a Conductor for his son and that he and his accomplices committedoffences punishable under Sections 406 and 420 read with Section 34IPC. This complaint was registered as FIR No.441 of 2015. Despite thefact that the allegations of Devasagayam related to payment of moneyto an employee of the Transport Corporation for procuring a job for hisson, the offences under the PC Act were not included in the FIR.Interestingly, Devasagayam is a retired employee of the Railways. While ABCDEFGH1051he was happy about paying illegal gratification for procuringemployment for his son, he was not unhappy about the Police notincluding the offences under the PC Act in FIR No.441 of 2015.9. This attitude of Devasagayam was responsible for an allegationbeing made against Devasagayam in a petition filed by another victim byname Gopi, in Criminal O.P. No.7503 of 2016, that Devasagayam hadbeen won over by the accused.10. On Devasagayam’s complaint, the Investigating Officer fileda Final Report on 13.06.2017, which led to the registration of a CalendarCase in CC No.3627 of 2017. Even in this Final Report, the offencesunder the PC Act were not included. Devasagayam did not bother toquestion the Police or move the Court as to why the offences under thePC Act were not included.11. But fortunately, pursuant to the order passed by the High Courtin the petition filed by Gopi, another Calendar Case came to be registeredin CC No.24 of 2021, on a further Report submitted by the Police underSection 173(8) of the Code. In this CC No.24 of 2021, the Minister andhis accomplices were included as accused and the offences under thePC Act were included.12. This further Report under Section 173(8) of the Code whichculminated in the registration of CC No.24 of 2021 was filed on08.03.2021.13. The inclusion of the name of the Minister and his accomplicesin the Final Report submitted under Section 173(8) and the inclusion ofthe offences under the PC Act seems to have bothered Devasagayammore than the Minister himself. Therefore, Devasagayam filed a petitionin Criminal O.P. No.15122 of 2021 in CC No.24 of 2021 seeking a directionto the Investigating Officer to conduct a de novo investigation.14. The grounds on which Devasagayam sought de novoinvestigation were quite strange. In his petition seeking de novoinvestigation, Devasagayam stated that though his specific complaintwas against one Baskar and nine others, the Final Report filed underSection 173(8) included other persons, who, according to Devasagayam,had no connection with the case. Devasagayam also stated in his petitionseeking de novo investigation that Baskar and Kesavan against whomhe made a specific complaint, are not shown as accused. In fact, theallegation made by Gopi in his petition before the High Court thatY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1052SUPREME COURT REPORTS[2023] 8 S.C.R.Devasagayam had been won over by the accused, was not withoutsubstance, as can be seen from a few averments made by Devasagayamin his petition Criminal O.P. No.15122 of 2021. For instance, in paragraph7 of his petition seeking de novo investigation, he stated as follows:“It is crystal clear that the Petitioner and his son has made aspecific complaint against one Baskar and Kesavan. The fictitiouspersons namely Baskar and Kesavan was arrayed as AccusedNo.1 and 2. …”15. It is not known whether Devasagayam was referring to thepersons against whom he made a specific complaint as fictitious personsor whether he was calling the Minister and the person alleged to be hisSecretary, named as accused in the Final Report as fictitious persons.16. In paragraph 9 of his petition seeking de novo investigation,Devasagayam even relied upon a judicial precedent and contended inparagraph 10 that the Final Report under Section 173(8) had been filedwithout issuing notice to him and that the charges contained in the Reportagainst the other accused are irrelevant to the facts of his own case.Paragraphs 28 to 30 of Devasagayam’s petition seeking de novoinvestigation show that he had gone to the extent of pleading the case ofthe main culprits. These paragraphs read as follows:“28. The gross violation and the irregularity in concluding the finalreport, with all the above it is pertinent to state that the final reportdid not warrant any commission of offence against anybody andthe crime registered is motivated. A Court proceeding ought notto be permitted to degenerate into a weapon of harassment ofprosecution.29. The allegations made in the Final report are so absurd andinherently Improbable on the basis of which no prudent personcan ever reach a just conclusion that there is sufficient ground forproceeding against the accused, but may escape from the clutchesof law.30. The present criminal proceeding is manifestly attended withmala fide and/or the proceeding is maliciously instituted with anulterior motive for wreaking vengeance on the accused and witha view to spite him due to private and personal grudge.”17. It appears that Devasagayam, originally seems to havehad a genuine grievance against the culprits at the bottom of the ABCDEFGH1053layer, but he later turned out to be a Trojan horse, willing to sabotagethe investigation against influential persons. This fact is borne outmore by his pleadings in paragraph 31 of the petition in Criminal O.P.No.15122 of 2021. The relevant portion of paragraph 31 reads as follows:“31. …Where criminal proceedings are initiated based onillicit material collected on search and arrest which are perse illegal and vitiate not only a conviction and sentencebased on such material but also the trial itself, the proceedingscannot be allowed to go on as it cannot but amount to abuse of theprocess of the court; in such a case not quashing theproceedings would perpetuate abuse of the process of thecourt resulting in great hardship and injustice to theaccused. In our opinion, exercise of power under section 482Cr.P.C. to quash proceedings in a case like the one on hand, wouldindeed secure the ends of justice.”18. It is seen from the above averment of Devasagayam, that hewas virtually pleading the case of the accused and seeking de novoinvestigation. But alas, Devasagayam was not the only one to beblamed. He had a silent partner in the prosecution which we shallsee now. If Devasagayam leapfrogged several miles to protect theactual culprits, the High Court seems to have gone one step furtherby ordering de novo investigation on a point not canvassed in thepetition filed by Devasagayam. In fact, in the main paragraph 21 ofthe impugned order of the High Court dated 31.10.2022, the High Courthas discussed elaborately the contentions advanced on behalf ofDevasagayam in support of his plea for de novo investigation. Thesecontentions were in sync with the averments contained in his petition inCriminal O.P. No.15122 of 2021.19. Though the original petition and the arguments recorded inparagraph 21 of the impugned order do not reflect one particular ground,the operative portion of the impugned order allows de novo investigationon a ground not raised in the petition. In paragraph 55 of the impugnedorder, it was recorded by the High Court that as per the affidavit filed bythe Investigating Officer, the investigating agency had seized the registerused for entering interview marks and sent the same to the ForensicDepartment for analysis to find out the manipulations and that the FinalReport under Section 173(8) of the Code was filed even before thereceipt of the report of the Forensic Department. It is on this contentionY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1054SUPREME COURT REPORTS[2023] 8 S.C.R.that the High Court thought fit to order de novo investigation not only inthe case in which Devasagayam sought de novo investigation but alsoin all the criminal cases. What is interesting is that the order directingde novo investigation in all the three cases, has actually inured tothe benefit of the accused, but the High Court put it on the groundthat the credibility of the investigation should not be eroded. In fact,the accused did not seek de novo investigation on the ground ofslackness on the part of the Investigating Officer, but it wasDevasagayam who sought it, with the able assistance of theInvestigating Officer.20. The fact that Devasagayam’s petition was intended to helpthe accused is also borne out by one more fact. His original complaintdated 29.10.2015 which led to the registration of FIR in Crime No.441of 2015 was against ten persons and the offences registered thereinwere only under Sections 406 and 420 read with Section 34 IPC. On thiscomplaint, a Final Report was filed under Section 173(2) of the Code on13.06.2017 and this resulted in the registration of Calendar Case in CCNo.3627 of 2017. Devasagayam was happy with the fact that the Reportfiled under Section 173(2) did not include the offences under the PCAct. Devasagayam was not bothered at that time about the fact that theregister for entering the interview marks, sent to the Forensic Departmenthad not been received. Suddenly, he became worked upafter the filingof the Report under Section 173(8) leading to the registration of CalendarCase No.24 of 2021 including the offences under the PC Act.21. What is shocking is that the High Court directedreinvestigation to be started ab initio, wiping out the earlierinvestigation altogether. One saving grace in this case is that eventhe learned senior counsel appearing for Devasagayam and thelearned senior counsel appearing for the accused could not supportthe operative portion of the impugned order dated 31.10.2022, inCriminal O.P. No.15122 of 2021. Paragraphs 79 to 81 of the impugnedorder dated 31.10.2022, needs to be extracted. They read as follows:“79. Therefore, I am of the view that reinvestigation to bestarted ab-initio wiping out the earlier investigationaltogether and to collect fresh evidence and material in the abovecriminal cases. Hence, I allowed the Crl.O.P.No. 15122 of2021in C.C.No.24 of 2021 for de-novo investigation along withC.C.No.19 of 2021. ABCDEFGH105580. Therefore, it is directed the investigation should be conductedab-initio comprehensively without reference to the earlierinvestigation on record covering all the aspects in relationC.C.No.19 of 2020 and C.C.No.24 of 2021 including whetherthe offence under Prevention of Corruption Act, 1988 aremade out against the accused. The special Court before whichC.C.No.19 of 2020 and C.C.No.24 of 2021 are pending will be atliberty to exercise power under Section 216 Cr.P.C, if there is anyreluctance on the part of the State/investigating Officer.81.Further, on completion of investigation, if the investigatingagency makes out a case for cognizance of offence against theaccused then the investigating agency of the predicate offenceshall provide the relevant materials/documents to the Directorateof Enforcement so as to enable it to invoke its jurisdiction tocommence its enquiry under the P.M.L.A Act thereafter.”22. By issuing the aforesaid direction, the High Court not onlydirected the wiping out of the investigation carried out so far, butvirtually wiped out even the judgment of this Court dated 08.09.2022passed in Criminal Appeal Nos.1514-1516 of 2022. Hail judicialdiscipline!23. Shri Kapil Sibal, learned senior counsel appearing for theaccused and Shri Siddharth Aggarwal, learned senior counsel forDevasagayam, contended before us that the problem reflected inparagraphs 79 to 81 of the impugned order is one of language andnot of law. According to them, the expression “wiped out” had beenused out of context and that what was sought to be removed by the HighCourt was only the conclusions reached by the Investigating Officer onthe basis of the materials already collected. In other words, theircontention was that the investigation so far made and the materials sofar collected can never be thrown into the dustbin but that the conclusionsreached by the Investigating Officer on the basis of those materialsalone required to be wiped out.24. It is true that English is not our mother tongue. It is alsotrue that some allowance (or discount ranging from 0 to 90%) canbe given at times to the use of certain loose expressions. But theexpressions used in paragraphs 79 to 81 of the impugned order donot reflect a mere deficiency in language or law, but somethingmore. As rightly pointed out by Shri Gopal Sankaranarayanan, learnedY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1056SUPREME COURT REPORTS[2023] 8 S.C.R.senior counsel, the High Court has used in the impugned order, severalwords and expressions such as, (i) reinvestigation to be started ab initio,(ii) wiping out the earlier investigation altogether; (iii) collect freshevidence and material; and (iv) without reference to the earlierinvestigation on record.25. Apart from the usage of the above words and phrases,which in our opinion, not merely opened up a small loophole in thelaw but opened up a huge black hole in the galaxy, the High Courtissued one more direction in paragraph 80. This direction is to theinvestigating agency to find out whether the offences under the PC Actare made out against the accused or not. Such a direction stares at whatthis Court has said in paragraph 45 of the decision dated 08.09.2022 inCriminal Appeal Nos.1514-1516 of 2022. This Court has said “We areconstrained to say that even a novice in Criminal Law would nothave left the offences under the PC Act, out of the final report.”Ignoring the said opinion of this Court, the High Court has directed theInvestigating Officer to find out afresh whether the offences under thePC Act are made out or not. Therefore, the problem with the impugnedorder is not merely one of improper usage of language, as sought to bediluted by the learned senior counsel for the accused and the complainant,but something more.26. Even while supporting the impugned order, the learned seniorcounsel for the accused and the learned senior counsel for Devasagayam,requested us to read down paragraphs 79 to 81 of the impugned orderand go by its intent. But it is easier said than done since we have hadprecedents of this Court reading down statutes but never one ofreading down a judgment. In view of the stand so taken even by thecounsel for the accused and counsel for Devasagayam, it may not bestrictly necessary to deal with the law relating to de novo investigation.Yet we would make a useful reference to the decision in Vinay Tyagivs. Irshad Ali alias Deepak6.27. Vinay Tyagi (supra) arose out of certain peculiar facts. TheSpecial Cell of Delhi Police registered a First Information Report againsttwo persons under some provisions of the Explosive Substances Act,1908, a few provisions of the IPC and Section 25 of the Arms Act. Theaccused filed a petition in the High Court of Delhi seeking a transfer ofinvestigation to CBI on the ground that they were working as Informers6 (2013) 5 SCC 762 ABCDEFGH1057for the Intelligence Agencies and that they have been falsely implicated.Though the High Court entertained the petition, no stay was granted.Therefore, the Special Cell of Delhi Police proceeded with theinvestigation and filed a charge-sheet. Thereafter, the High Court passedan order directing the CBI to undertake an inquiry and submit a report tothe Court. Accordingly, CBI undertook an inquiry and filed a report statingthat the investigation carried out by Delhi Police did not inspire confidenceand that further investigation was needed. Thereafter, CBI filed a closurereport. On the basis of the same, the accused sought discharge. Sincedischarge was not ordered, they approached the High Court, but theHigh Court remanded the matter back to the Sessions Court. It is thesaid order of remand that was challenged by the Investigating Officerbefore this Court. This Court framed two questions as arising forconsideration in Vinay Tyagi. They read as follows:-“Question 11.1. Whether in exercise of its powers under Section 173 of theCode of Criminal Procedure, 1973 (for short “the Code”), thetrial court has the jurisdiction to ignore any one of the reports,where there are two reports by the same or different investigatingagencies in furtherance of the orders of a court? If so, to whateffect?Question 21.2. Whether the Central Bureau of Investigation (for short“CBI”) is empowered to conduct “fresh”/ “reinvestigation” whenthe cognizance has already been taken by the court of competentjurisdiction on the basis of a police report under Section 173 of theCode?”28. While dealing with the First Question, this Court pointed outthat investigation can be of three kinds namely, (i) initial investigation;(ii) further investigation; and (iii) fresh or de novo or reinvestigation.After exploring the meaning of “initial investigation” in paragraph 21and the meaning of “further investigation” in paragraph 22, this Courtrecorded in paragraph 23, what a fresh investigation/reinvestigation/denovo investigation is and the circumstances under which the same canbe ordered. Paragraph 23 of the decision reads as follows:-“23. However, in the case of a “fresh investigation”,“reinvestigation” or “de novo investigation” there has to be adefinite order of the court. The order of the court unambiguouslyshould state as to whether the previous investigation, for reasonsY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1058SUPREME COURT REPORTS[2023] 8 S.C.R.to be recorded, is incapable of being acted upon. Neither theinvestigating agency nor the Magistrate has any power to orderor conduct “fresh investigation”. This is primarily for the reasonthat it would be opposed to the scheme of the Code. It is essentialthat even an order of “fresh”/”de novo” investigation passed bythe higher judiciary should always be coupled with a specificdirection as to the fate of the investigation already conducted.The cases where such direction can be issued are few and farbetween. This is based upon a fundamental principle of our criminaljurisprudence which is that it is the right of a suspect or an accusedto have a just and fair investigation and trial. This principle flowsfrom the constitutional mandate contained in Articles 21 and 22 ofthe Constitution of India. Where the investigation ex facie is unfair,tainted, mala fide and smacks of foul play, the courts would setaside such an investigation and direct fresh or de novo investigationand, if necessary, even by another independent investigatingagency. As already noticed, this is a power of wide plenitude and,therefore, has to be exercised sparingly. The principle of the rarestof rare cases would squarely apply to such cases. Unless theunfairness of the investigation is such that it pricks the judicialconscience of the court, the court should be reluctant to interferein such matters to the extent of quashing an investigation anddirecting a “fresh investigation”.29. In paragraphs 43 and 45, this Court held that the power toorder de novo investigation vests only with superior courts and that thesame has to be exercised sparingly in exceptional cases. In paragraph46, this Court pointed out that while ordering de novo investigation, thereare two options open to the superior court namely, (i) to direct the reportalready prepared or the investigation so far conducted, not to form partof the records of the case; or (ii) to direct the report already prepared orthe investigation so far conducted to form part of the record. If thesuperior court is silent on this aspect, the report already prepared or theinvestigation so far conducted will form part of the record. In otherwords, if the superior court intended that the investigation so far conductedand the report already filed should not form part of the record, it shouldspecifically say so.30. In the order impugned in these appeals, the High Court hasindicated by using four different expressions and phrases that theinvestigation so far conducted shall not form part of the record. But ABCDEFGH1059even according to the learned senior counsel for Devasagayam andlearned senior counsel for the accused, the operative portion of theimpugned order of the High Court need not be understood in such amanner. If that is so, all those phrases and expressions deserve tobe removed. If they are removed, the life gets ebbed out of theimpugned order, which in our opinion, it richly deserves.31. Before we wind up our discussion in Part-I, it may be necessaryto deal with a few preliminary objections raised on behalf of the accusedto the very maintainability of these appeals. The question of maintainabilityis raised on the basis of the status of the parties. Therefore, it is essentialto take stock of the status of parties who have filed appeals against theorder of the Madras High Court for de novo investigation. For easyappreciation, the status of parties who are the appellants in the appealsarising out of the order for de novo investigation and a brief indicationof who they are, are presented in a tabular column as follows:-Civil Appeals arising out of Special Leave Petitions and Diary Numbers Name of appellant Brief description of who he is and how he is aggrieved by the order of de novo investigation SLP (Crl.) Nos.1207-1208 of 2023 Director, Enforcement ED is aggrieved because any shadow cast on the investigation of the predicate offence, is taken advantage of by the accused to thwart the investigation of the offence of money laundering. SLP (Crl.) No.11396 of 2022 Y. Balaji He was one of the aspirants for the post of Assistant Engineer in the Transport Corporation. His grievance is that he did not get selected on account of the corrupt practices adopted by the Minister and others. He has also filed writ petition in WP No.24275 of 2021 seeking a direction to the Director, Vigilance and Anti-corruption to conduct further investigation in CC No.19 of 2020. The writ petition is pending. SLP (Crl.) No.11397 of 2022 S. Prithvirajan He is one of the aspirants for the post of Junior Engineer. He claims that his marks were tampered to accommodate less meritorious candidates who indulged in corrupt practices. SLP (Crl.) D.No.961 of 2023 Anti-Corruption Movement A NGO interested in combating corruption. SLP(Crl.)D.No. 10217 of 2023 V. Ganesh Kumar He was the complainant in FIR No.298 dated 09.09.2017, registered against (i) Minister Senthil Balaji; (ii) Prabhu; (iii)Sahayarajan; and (iv) Annaraj, for offences under Sections 406, 420 and 506(1) IPC. Interestingly, he entered into a compromise with the accused and supported them in their petition for quashing of the FIR. Now he is aggrieved by the order for de novo investigation for obvious reasons. SLP(Crl.)D.No. 10186 of 2023 R.Sahayarajan He is one of the accused in the complaint given by V. Ganesh Kumar and he filed a petition before the High Court seeking to quash the FIR and the charge-sheet on the ground of a compromise. Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1060SUPREME COURT REPORTS[2023] 8 S.C.R.32. Shri Mukul Rohatgi, Shri Kapil Sibal, Shri Sidharth Luthra,and Shri C.A. Sundaram, learned senior counsel appearing for differentaccused, uniformly raised a chorus, vociferously objecting to themaintainability of the appeals by each of those appellants, against theorder of de novo investigation. Their contention is that investigation of acriminal offence cannot be a free-for-all exercise and that one musthave locus to challenge the proceedings. According to the learned counsel,some of the appellants who are strangers, have not only come to courtwithout any locus, but are also guilty of coming with unclean hands ascan be seen from the fact that they have managed even to obtain copiesof the confession statements recorded under Section 164 of the Code. Itis also contended that some of the appellants before us are obviously setup by a rival political party and that therefore, this Court should notentertain the appeals filed by persons who have no locus standi.33. It is true that criminal jurisprudence recognizes a limited rolefor victims and it is the State which is entrusted with the onerousresponsibility of prosecuting the accused and getting them punished. Butwe must remember that certain theories of law were developed at atime when the process of administration of the criminal justice systemwas in the hands of honest and responsible Police officials and thestream remained largely unpolluted. Today the situation is different.In cases of this nature, where some of the complainants and theaccused have come together to form an unholy alliance, the victimsof crime cannot be left at the mercy of such partnerships. We haveseen in this case, persons aspiring to secure public employment, payingillegal gratification, through persons who are public servants, to personsin power and later coming to the Court supporting the accused on thebasis of an out of Court settlement. What was compromised betweenthe complainant and accused is not just their disputes, but justice,fair-play, good conscience and the fundamental principles ofcriminal jurisprudence. In fact, the case on hand is one where thereare two teams just for the purpose of record, but no one knows whois playing for which team and where the match was fixed.34. As a matter of fact, very vocal submissions were made on thequestion of locus in the previous round of litigation in P. Dharamarajvs. Shanmugam7 in Criminal Appeal Nos.1514-1516 of 2022. But theobjections relating to maintainability were rejected by this Court in the7 2022 SCC OnLine SC 1186 ABCDEFGH1061very same proceedings in the first round. Therefore, the accused cannotraise the question of locus again and again. But for the fact that thevictims came to this Court in the first round of litigation, a huge scamwould have been buried on the basis of a compromise.35. One more objection was raised about the locus of Y. Balaji,the appellant in one of these appeals, on the ground that he had alreadyfiled a writ petition in WP No.24275 of 2021 on the file of the High Courtseeking further investigation and that, therefore, he must pursue hisremedies only in that writ petition. But this argument seeks to sweepunder the carpet, the actual reality that by virtue of the impugned orderdated 31.10.2022 directing de novo investigation, the writ petition filedby Y. Balaji for further investigation has been rendered infructuous.Therefore, if such a person who participated in the selection but who didnot get appointment due to the corrupt practices adopted by the concernedpersons and who had already filed a writ petition seeking furtherinvestigation, does not have locus standi, we do not know who else willhave.36. The investigation and trial of a criminal case cannot beconverted by the complainant and the accused into a friendly match.If they are allowed to do so, it is the Umpire who will lose his wicket.37. Much ado was made about some of the appellants filing copiesof the confession statements under Section 164 of the Code, as part ofthe paper book in the appeals. It was contended by the learned seniorcounsel that the confession statements recorded before the Magistrateare sacrosanct and that the copies of the same cannot be made availableto third parties and that at any rate, the appellants have not even explainedas to whether they filed third party copy applications as stipulated in theRules, 2019 and obtained these copies officially.38. Reliance was placed upon Rule 207(12) and Rule 210 of theRules, 2019 in support of his contention. Rule 207(12) and Rule 210 readas follows:-“207(12) After recording the confession statement of an accused,the Magistrate shall arrange to take two photocopies of the sameunder his direct supervision and certify the same as true copies.The confession statement in original shall be sent in a sealed coverto the jurisdictional Court through a special messenger or byRegistered Post with Acknowledgment Due. One certified copyY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1062SUPREME COURT REPORTS[2023] 8 S.C.R.of the confession statement shall be immediately furnished to theInvestigating Officer free of cost with a specific direction to useit only for the purpose of investigation and not to make its contentspublic until the investigation is completed and final report filed.The other certified copy of the confession statement shall be keptin a sealed cover in safe custody of the Magistrate.210. Application for copies by third parties. – Application forthe grant of copies of judgment or order or any proceeding ordocument in the custody of a Court by a third party to the proceedingshall be allowed only by order of the Court obtained on a petitionsupported by an affidavit setting forth the purpose for which thecopy is required.”39. It is clear from Rule 207(12) that a confession statement is aconfidential document till the time investigation is complete and FinalReport filed. The relevant portion of Rule 207(12) states “… not tomake its contents public until the investigation is completed andfinal report filed”.40. Rule 210 extracted above enables “third parties to apply tothe Court for the grant of copies of Judgment or order or anyproceeding or document in the custody of a Court”. Therefore, it isnot as though the appellants have filed something to which they couldhave never had any access. It is an irony that persons who are victimsof a huge jobs-for-cash scam are alleged to have come to Courtwith unclean hands by persons whose hands were allegedly taintedwith corruption money.41. As a matter of fact, right from the time when Gopi approachedthe High Court with a petition in Crl. O. P. No. 7503 of 2016, there havebeen several proceedings before the High Court where the parties havefiled copies of several documents. There were also writ petitions filedby unsuccessful candidates challenging the selection. The counter filedby the Investigating Officer in those cases have been extracted by thisCourt in the Judgment dated 08.09.2022 in Dharmaraj vs. Shanmugam8.Therefore, many of the documents have started appearing in the publicdomain at the instance of several persons. Hence, it is futile to contendthat the appeals are liable to be thrown out on the ground that the appellantshave come up with documents to which they could not have had anyaccess.8 Criminal Appeal Nos.1514-1516 of 2022 ABCDEFGH106342. Though Shri Gopal Sankaranarayanan, learned senior counselappearing for the appellant in one of these appeals refrained from givingany political colour to the case on hand, it was contended by Shri KapilSibal, learned senior counsel that the appellant had been obviously set upby a rival political party. In support of his contention, he relied upon thetimeline of events that began after the lodging of the first complaint inFIR No.441 of 2015. Though we did not wish to go into these details, weare compelled at least to touch the peripheries, lest we shall be heldguilty of not dealing with an argument advanced across the Bar. Thetimeline of events provided by Shri Kapil Sibal, learned senior counsel isas follows:-29.10.2015 Complaint of Devasagayam against 10 individuals but not the Minister. 7/8.03.2016 Complaint of one Gopi alongwith several others alleging that the Minister, his brother and his brother-in-law demanded illegal gratification for making appointments. 20.06.2016 Criminal OP No.7503 of 2016 filed by Gopi was allowed by the High Court. 13.06.2017 A report under Section 173(2) of the Code was filed in the FIR lodged by Devasagayam, only for offences under Sections 406, 419 and 420 against 12 persons. The Minister was not named there. 22.08.2017 Minister Senthil Balaji formed part of the group of 18 MLAs who submitted a letter to the Governor. 09.09.2017 FIR No.298 of 2017 registered on the complaint of one V Ganesh Kumar against the Minister and three others. 18.09.2017 The Minister was disqualified. 13.06.2018 Cognizance was taken in CC No.19 of 2020 arising out of FIR No.298 of 2017 against the Minister and three others. 13.08.2018 A complaint is lodged by one Arulmani, naming the Minister, his brother Ashok Kumar and his PA Shanmugam. This results in the registration of FIR No.344 of 2018, albeit only for offences under Sections 406, 420 and 506 IPC 14.12.2018 The Minister defected to another political party. 12.04.2019 Final report filed in FIR No.344 of 2018 (becomes Calendar Case No.25 of 2021). 23.05.2019 Minister Senthil Balaji wins the by-elections, as a candidate of the party which he joined in 2018. 27.11.2019 Cognizance was taken in CC No.25 of 2021 arising out of FIR No.344 of 2018. 26.08.2020 The petition filed by Senthil Balaji for discharge is dismissed. 26.02.2021 General Elections to the State Assembly are announced. 08.03.2021 A final report under Section 173(8) of the Code is filed against the Minister and others, not only for the offences under the IPC but also for offences under the PC Act. 01.04.2021 Cognizance is taken in CC No.24 of 2021 02.05.2021 Results of the general election to the State Assembly are declared, the party in power is voted out, a new dispensation forms the Government and he becomes a Minister in the new regime. July, 2021 A quash petition is filed and a compromise is reached. 30.07.2021 The High Court quashes CC No.25 of 2021 on the basis of the Joint Compromise Memo. Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1064SUPREME COURT REPORTS[2023] 8 S.C.R.43. On the basis of the above timeline of events, it is contendedby Shri Kapil Sibal that the Minister was implicated in the case on08.03.2021, for offences under the PC Act immediately after theannouncement of the elections to the Legislative Assembly, as he hadswitched over from the party in power to another. Therefore, it is claimedthat the appellant is obviously set up by the political opponents in hotpursuit of the Minister.44. But all that we could make out of the above timeline of eventsis that trouble started for the Minister, even when he was a Minister in adifferent political dispensation and even before he became part of agroup of 18 MLAs in August, 2017. It must be remembered that theallegations in Criminal O.P. No.7503 of 2016, disposed of by the HighCourt on 20.06.2016, were made at a time when he was still a Ministerin the previous regime and it happened more than a year before hebecame part of a splinter group. In the order dated 20.06.2016, it wasrecorded as a contention of the counsel for the petitioner in paragraph 6that the Police had seen to it that the name of the Minister did not figurein the complaint, in order to shield him. That the Investigation Officerdid not choose to include the offences under the PC Act from theyear 2015 till 08.03.2021, cannot be taken to the credit of theMinister, but should be taken as a discredit of the prosecution. Ifthe shield of office protected him from 2015 till he formed part ofthe splinter group and the shield stood temporarily removed for abrief period of time until he again became a Minister in the nextregime, the same cannot be said to be a case of political vendetta.We do not know whether the complainants would have entered into acompromise in July, 2021 if he had not become a Minister again in thenew regime.45. The decisions in Janata Dal vs. H.S. Chowdhary9 andSimranjit Singh Mann vs. Union of India10, relied upon by the learnedsenior counsel for questioning the locus standi of the appellants, willnot go to their rescue. This Court has already dealt with the question oflocus in its Judgment dated 08.09.2022 in Criminal Appeal Nos.1514-1516 of 2022 in P. Dharamaraj (supra).46. Interestingly, we have two appeals challenging the correctnessof the order of the High Court dated 31.10.2022 directing de novo9 (1992) 4 SCC 30510 (1992) 4 SCC 653 ABCDEFGH1065investigation, one of which is by the complainant V. Ganesh Kumar inFIR No.298 of 2017 and other by the accused R. Sahayarajan, who wasarrayed as Accused No.3 in the complaint of the V. Ganesh Kumar.Both of them entered into a compromise and successfully trapped theHigh Court to quash the proceedings on the basis of the compromise.Fortunately, the order quashing the complaint was reversed by this Court.Yet both of them have the audacity to come before this Court attackingthe order of de novo investigation.47. What is worrisome is the fact that V. Ganesh Kumar is anemployee of the Transport Corporation. In the charge-sheet filed on hiscomplaint, which has been taken on file as CC No.19 of 2020, this V.Ganesh Kumar is stated to have collected amounts ranging fromRs.2,00,000/- to Rs.4,50,000/- for every post of Driver, Conductor orMechanic, as the case may be. We do not know whether the TransportCorporation has at least placed him under suspension and initiateddepartmental proceedings. If they have not done so far, theCorporation should initiate disciplinary action against this V. GaneshKumar not only for being party to a job-for-cash scam but also forturning turtle and supporting the accused and thereafter coming tothis Court to assail the order of de novo investigation, despite beingan employee of the Corporation. Interestingly, his attack on the orderof de novo investigation is not to achieve the same purpose as the victimswant to achieve, by assailing the same order. The victims assail theorder of de novo investigation for the purpose of ensuring that theoffences under the PC Act are properly investigated and tried. But theobject of V. Ganesh Kumar is not the same.48. This is why we made repeated queries to Ms. V. Mohana,learned senior counsel appearing for V. Ganesh Kumar as to what V.Ganesh Kumar eventually wants. The only answer that we got to thisquestion was that the power to order de novo investigation should beexercised sparingly and that this is not the case where the power requiresto be exercised. Thus, it is clear that V. Ganesh Kumar is in a differentcamp as of now.49. Therefore, the appeals challenging the impugned order of theHigh Court dated 31.10.2022 insofar as they are traceable to CriminalO.P. No.15122 of 2021 are concerned, deserve to be allowed.Accordingly, these appeals are allowed and the order dated 31.10.2022Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1066SUPREME COURT REPORTS[2023] 8 S.C.R.passed in Criminal O.P.No.15122 of 2021 is set aside. CriminalO.P.No.15122 of 2021 shall stand dismissed.Part-II (Concerning proceedings by EnforcementDirectorate)50. As we have narrated in the sequence of events, ED registeredan Information Report on 29.07.2021, only after filing of a Final Reportunder Section 173(8) of the Code., in CC No.24 of 2021, including theoffences punishable under the PC Act. This Final Report was in FIRNo.441 of 2015, which was originally registered as CC No.3627 of 2017(it became CC No.24 of 2021). The Final Report filed under Section173(8) of the Code on 08.03.2021, named Shri V. Senthil Balaji (Minister)as Accused No.1 and the offences charged against the accused wereunder Sections 406, 419, 420 read with Section 34 and 120B, 465, 467,471 and 201 IPC read with Sections 7, 12, 13(2) read with Section13(1)(d) of the PC Act and Section 109 of IPC. Since the offencesunder Sections 120B, 419, 420, 467 and 471 of IPC and Sections 7 and13 of the PC Act are included in The Schedule to the Prevention ofMoney-laundering Act, 200211, the registration of the Information Reportby ED on 29.07.2021 cannot be faulted.51. After registration of the Information Report, the ED startedissuing summons to the accused. ED also filed petitions before the SpecialCourt (in seisin of the predicate offences) seeking copies of documents.These petitions were partly allowed by the Trial Court by an order dated09.11.2021. As against the portion of the order of the Trial Courtdisentitling ED to certified copies of the unmarked documents, ED filedpetitions under Section 482 of the Code before the High Court. Thepetitions were partly allowed by the High Court by an order dated30.03.2022 permitting the ED to follow the procedure of conductinginspection under Rule 237 of Rules, 2019 and thereafter by filing a freshthird-party copy application before the Special Court.52. Thereafter, ED sent fresh summons to the Minister and othersin April, 2022. Immediately, the Minister and two others filed threeseparate writ petitions seeking the quashing of the summons issued byED.53. In the writ petition filed by the Minister in W.P. No.18213 of2022 for quashing the summons issued by the ED, he contended inter-alia: -11 For short “PMLA” ABCDEFGH1067(i) that he was falsely implicated in FIR Nos.441 of 2015, 15 of2016, 298 of 2017 and 344 of 2018;(ii) that FIR No.15 of 2016 had already been quashed;(iii) that FIR Nos.441 of 2015 and 298 of 2017 were stayed by theHigh Court;(iv) that FIR No.344 of 2018 was quashed by the High Court;(v) that in view of the above, the mandatory requirements of Section2(1)(y) and Section 3 of the PMLA, are not attracted;(vi) that the registration of ECIR was based upon those complaints;(vii) that since those complaints are the subject matter of scrutinyin the quash petitions, there is nothing for ED to proceed;(viii) that Section 63 of the PMLA prescribes a punishment forfalse information or failure to give information and hence the summonsissued under Section 50 will force him to give statements incriminatinghimself in the cases for the predicate offences, thereby infringing uponhis rights under Article 20(3) of the Constitution;(ix) that ED had not identified any proceeds of crime with theaccused, so as to enable them to proceed with the investigation;(x) that before the Trial Court and the High Court, ED wantedcopies of documents available with the State Police, on the ground thatwithout the copies of such documents, it was not possible for ED toproceed;(xi) that the initiation of investigation by the ED is vitiated bymalafide;(xii) that without any material being available with the ED eitherabout the proceeds of crime or about the act of money-laundering on thepart of the accused, ED cannot proceed; and(xiii) that without having any incriminating material against theaccused about money-laundering, ED cannot proceed further.54. The focus in the writ petitions challenging the summons issuedby the ED was primarily on: -(i) the stay of further proceedings in two criminal cases for thepredicate offences;Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1068SUPREME COURT REPORTS[2023] 8 S.C.R.(ii) the quashing of one criminal case for a predicate offence; and(iii) the attempt of the ED to proceed with the investigation inwilderness, after getting copies of the basic documents from the SpecialCourt, without actually identifying the proceeds of crime. However, certainlegal arguments were developed before the High Court in the course oforal hearing.55. The arguments advanced before the High Court in the courseof arguments, revolved around:-(i) the law laid down by this Court in Vijay Madanlal Choudharyvs.Union of India12;(ii) the necessity for the existence of jurisdictional facts before anauthority or officer assumes jurisdiction;(iii) the absence of a combination of criminal activity amountingto a scheduled offence, the generation of proceeds of crime therefromand the act of money-laundering, which form the jurisdictional fact forED to step in; and(iv) the danger of allowing the ED to go on a fishing expeditionwithout any material.56. It is of interest to note that the accused argued before theHigh Court that their case was squarely covered by the decision in VijayMadanlal Choudhary (supra) . It will be worthwhile to extract therelevant portions of the order of the High Court dated 01.09.2022, inwhich the counsel for each of the accused is stated to have relied uponthe decision in Vijay Madanlal Choudhary.57. The argument of the counsel for R.V. Ashok Kumar, brotherof the Minister is extracted by the High Court in paragraph 3 as follows:-“3. Mr.Aryama Sundaram, learned Senior Counsel appearing forthe petitioner in Writ Petition No.l8209 of 2022 pleaded at theoutset that his client’s case is squarely covered by the judgmentof the Hon’ble Supreme Court in Vijay Madanlal Choudhuryand others case (supra) in his favour, again proceeding furthercontended that Mr.R. V.Ashok Kumar is the brother ofMr.V.Senthil Balaji, who was the former Transport Minister duringthe period from 2011 to 2015…”12 (2022 SCC OnLine SC 929 ABCDEFGH106958. The argument of the counsel appearing for Shanmugam(Accused No.3) is extracted by the High Court as follows:-“2. … there is no basis for proceeding against the petitioner underthe Prevention of Money-laundering Act, because the Hon’bleSupreme Court in Vijay Madanlal Chaudhary and others v.Union of India and others, 2022 (10) SCALE 577 has heldthat in the absence of proceeds of crime, the authorities under thePrevention of Money-laundering Act cannot step in or initiate anyprosecution, therefore, the writ petition deserves to be allowed,by quashing the impugned proceedings.59. Thus, it is seen from the impugned order that at least two outof three accused specifically argued before the High Court that theircase was squarely covered by the decision of this Court in VijayMadanlal Choudhary,but interestingly most of the argumentsadvanced before us turned out to be an attack on the correctness ofthe decision in Vijay Madanlal Choudhary. We are not suggestingthat this defection from one point of view to the other is covered bySchedule X. We are just recording this fact to show that most of thearguments were actually arguments of convenience.60. Keeping in mind what the accused argued before the HighCourt, let us now see what the High Court did. In paragraph 13 of theimpugned order, the High Court took note of Vijay Madanlal Choudharywith particular reference to paragraph 187(v)(d). In paragraph 14, theHigh Court took note of the quashing of the complaint for the predicateoffence in one case and the stay of further proceedings in the other twocases relating to predicate offences. In paragraph 15, the High Courtaddressed the question as to what is the effect of a stay order. The HighCourt concluded that if proceedings under the PMLA are permitted togo on during the operation of the stay order in respect of predicateoffences, it will cause damage to the reputation and goodwill of theparties and that therefore investigation by the ED cannot proceed. Inparagraph 16 of the impugned order, the High Court recorded that otherthan the three FIRs, the ED was not in possession of anything else toproceed under the PMLA. In paragraph 17, the High Court recordedthe contention relating to the non-existence of jurisdictional facts andreferred to the decision in Arun Kumar vs. Union of India13 in paragraph13 (2007) 1 SCC 732Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1070SUPREME COURT REPORTS[2023] 8 S.C.R.19. Thereafter, the High Court came to the conclusion in paragraph 20that the quashing of the complaint in one criminal case and the stay ofproceedings in other two Calendar Cases, showed that there was nojurisdictional fact or cause of action for the ED to initiate proceedings.61. Since lot of arguments were advanced before us as thoughthe ED proceeded without the existenceof jurisdictional facts, it isnecessary to extract paragraph 20 of the impugned order to show whatthe High Court thought to be a jurisdictional fact. Hence, paragraph 20of the impugned order is extracted as follows:“20. A mere perusal of the above judgment clearly shows that theexistence of jurisdictional fact is a condition precedent for theexercise of power by a Court of limited jurisdiction. Therefore, inthe cases on hand, when there is no cause of action, since theproceeding in one of the calendar cases was quashed by the orderdated 30.07.2021 in Criminal Original Petition No.13374 of 2021and the proceedings in two other calendar cases have been stayedby this Court, there is no jurisdictional fact or cause of action forthe respondent/department to initiate any proceedings during theperiod of order of stay operating against the two FIRs. Viz.C.C.No.l9/2020 and C.C.No.24 of 2021.”62. Again, in paragraph 22, the High Court recorded an opinionthat the grant of stay would amount to eclipsing the proceedings.Therefore, on this sole ground, the High Court concluded in paragraph22 of the impugned order that the ED has to await the outcome of theproceedings for quashing the criminal complaints, in which a stay orderwas in force. But the High Court made it clear that it was not enteringupon the merits and demerits of the proceedings initiated by the ED andthe High Court left all the questions to be dealt with in appropriateproceedings.63. Eventually, the High Court concluded in paragraph 23 of theimpugned order as follows:“23. … Therefore, as we have concluded that in view of thequashing of the proceedings in C.C.No.25 of 2021 and staying ofthe proceedings in C.C.No.l9 of 2020 & C.C.No.24 of 2021 ashighlighted above, the scheduled offence for the present is eclipsed,suspended or stop operating during the period of stay, therespondent Department has to await the finality of the said ABCDEFGH1071proceedings. Needless to mention, if the proceedings in C.C.No.l9of 2020 and C.C.No.24 of 2021 are quashed pursuant to the ordersin the applications filed by the respective persons to quash theproceedings, in which event, the respondent cannot step in or initiateany proceedings under the Prevention of Money-laundering Act,as held by the Hon’ble Supreme Court in Vijay MadanlalChaudhary and others and in Parvathi Kollur and another v. Stateby Directorate of Enforcement, 2022 LiveLaw (SC) 688 citedsupra. Therefore, the respondent is hereby refrained fromproceeding any further pursuant to the impugned proceedingsin ECIR/MDSZO/21/2021, till the disposal of the CriminalRevision Case No.224 of 2021, Criminal Original PetitionNo.15122 of 2021 and the SLP (Crl) Diary No.9957 of 2022(SLP (Crl) No.3841 of 2022).”64. Irrespective of the correctness of the reasonings given by theHigh Court in the impugned order, the conclusion of the High Court wasonly this, namely, that the ED cannot proceed, till the disposal of (i)Criminal Revision Case No.224 of 2021 filed by Minister-Senthil Balajiagainst the order of the Trial Court refusing to discharge him; and (ii)Criminal O.P. No.15122 of 2021, filed by Devasagayam seeking de novoinvestigation.65. Therefore, it is as clear as crystal, that the High Court, in theimpugned order dated 01.09.2022 has given only a temporary reprieveto the accused against the summons issued by the ED. Today, CriminalRevision Case No.224 of 2021 filed by the Minister against the dismissalof his discharge petition, has been rejected by the High Court by itsorder dated 31.10.2022. Though Criminal O.P. No.15122 of 2021, filedby Devasagayam has been allowed by the High Court, by the very sameorder dated 31.10.2022, the said order has been set aside by us in Part-I of this judgment.66. Insofar as the SLP (Crl.) No.3941 of 2022 @ Diary No.9957of 2022 is concerned, it arises out of the order of the High Court dated30.03.2022, which again is the subject matter of the present appeals.67. In other words, the High Court has not quashed thesummons issued by ED. The High Court had merely injuncted EDfrom proceeding further till the clog on the cases relating to thepredicate offences is removed.Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1072SUPREME COURT REPORTS[2023] 8 S.C.R.68. Interestingly, none of the accused has come up with any appealchallenging the order of the High Court dated 01.09.2022, on the groundthat the High Court ought to have quashed the summons issued by theED in total, on other grounds. Instead, the accused appeared throughcounsel only to defend the impugned order dated 01.09.2022.69. Therefore, in law, (i) once the dismissal of the petition fordischarge has attained finality with the dismissal of Criminal RevisionCase No.224 of 2021; (ii) once the order for de novo investigation inCriminal O.P. No.15122 of 2021 is set aside; (iii) once the order of theHigh Court dated 30.03.2022 relating to right of the ED to secure thecopies of documents is dealt with; (iv) once the order of the High Courtdated 30.07.2021 quashing one of the criminal cases is set aside; and (v)once the stay operating in two of the criminal cases for predicate offencesis vacated, then the temporary reprieve that has been granted by theHigh Court to the accused in the impugned order would automaticallygo. Realising this difficulty in law, the accused changed the theme of thesong completely before us, despite the fact that they were ordained asrespondents in the appeals only to support the impugned order of theHigh Court.70. In fact, all the learned senior counsel appearing for all theaccused in the PMLA case, advanced arguments for the grant of largerreliefs than what they got under the impugned order, without even filingany appeal against the same. It is possible in law for a successful party(though in civil proceedings) to support the decree without supportingthe judgment. But what the accused sought to do before us was to supportthe judgment and seek an enlargement of the decree, withoutindependently filing appeals. Since they took a chance by adopting sucha course, they may not even be able to challenge the impugned orderhereafter, once the seal of approval on the same is affixed by this Courtand the doctrine of merger comes into play.71. We may look at this from another angle also. Suppose wedismiss all the appeals challenging the order of the High Court dated01.09.2022, then the other portion of our order dealing with the challengeto the order of the High Court dated 31.10.2022 would automaticallyresult in lifting the injunction imposed by the Division Bench of the HighCourt in the ED case by its order dated 01.09.2022. Therefore, it is noteven necessary for us to deal with the contentions raised on behalf ofthe accused for the purpose of getting larger reliefs. But we do not wishto adopt this route. Therefore, we shall address the contentions raised. ABCDEFGH107372. The contentions of Shri Kapil Sibal, learned senior counselare:(i) that to constitute the offence of money-laundering, one musthave involved in any process or activity connected to the proceeds ofcrime;(ii) that none of the three FIRs which formed the basis for theregistration of an Information Report contained any allegation ofgeneration of proceeds of crime or the offence of money-laundering;(iii) that the ED was never in possession of any material to suspectthat the accused did any activity connected with the proceeds of crime;(iv) that this is why the ED filed applications before the SpecialCourt seeking copies of documents to find out if something could befound;(v) that under Section 66(2) of PMLA, the flow of informationcan be only from the ED to the other authorities about the contraventionof the provisions of any other law and not the other way about;(vi) that there are lot of inherent contradictions in the way theprovisions of the PMLA were interpreted in Vijay MadanlalChoudhary;(vii) that though Section 50(2) of PMLA empowers the Directorand his subordinates to summon any person whether to give evidence orto produce any record during the course of investigation, this Court heldin Vijay Madanlal Choudhary that it is not investigation in the realsense;(viii) that the power under Section 50(2) of PMLA is akin to thepower of the Police Officer under Section 160 of the Code;(ix) that with the amendment of PMLA by Finance (No.2) Act,2019 w.e.f. 01.08.2019, the requirement of mens rea was done awaywith and the Explanation inserted by the amendment made all processesor activities such as concealment, possession, acquisition, use, projectingas untainted property and claiming as untainted property, available in thealternative. In other words, while the main part of Section 3 uses theconjunction “and”, the Explanation under Section uses the expressiondisjunction “or”;Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1074SUPREME COURT REPORTS[2023] 8 S.C.R.(x) that the amendment of Section 3 goes completely contrary tothe law laid down in Bihta Co-operative Development and CaneMarketing Union Ltd.vs.Bank of Bihar14, to the effect that anExplanation cannot widen the scope of the main Section;(xi) that it is only where proceeds of crime are laundered that thePMLA comes into play, though the existence of proceeds of crime is asine qua non for the commission of an offence under PMLA;(xii) that if the ED were to have jurisdiction to investigate solelyon the basis of information that a predicate offence has been committed,involving the proceeds of crime, it would amount to empowering the EDto enter the domain of the State Police, thereby causing fissures in thefederal structure;(xiii) that the mere existence of proceeds of crime without thequantum of proceeds being specified/identified and without the proceedsof crime being laundered, an offence of money-laundering cannot bemade out;(xiv) that it was wrongly decided in Vijay Madanlal Choudharythat it was not a penal statute, though the object of the Act is to prosecuteand punish a person for the offence of money-laundering;(xv) that the procedural safeguards available under the Code arealso not available and hence Vijay Madanlal Choudhary has not beencorrectly decided. The learned counsel also drew our attention to severalpassages such as paragraphs 159, 163, 168 and 172 in the decision inVijay Madanlal Choudhary and it was contended that it was wronglydecided.73. According to Shri Kapil Sibal, learned senior counsel, certainfundamental questions arise in the present proceedings. They are:-What are the jurisdictional prerequisites for the ED to initiateinvestigation under the PMLA?Does the ED have the power to seek information fromauthorities investigating the predicate offence merely onthe basis that investigation of a predicate offence is ongoing,even without receiving any information that a cognizableoffence under the PMLA has occurred and being in14 AIR 1967 SC 389 ABCDEFGH1075possession of material that indicates the offence of money-laundering has taken place?Can the mere existence of proceeds of crime conferjurisdiction upon the ED to initiate investigation?What are the elements of “money-laundering”?What conditions need to be satisfied before the ED isempowered to issue summons under Section 50 of thePMLA?Can a summons under Section 50 PMLA be issued to aperson who is in the nature of an accused under the PMLAor in the predicate offence?Do Sections 50 and 63 of the PMLA violate the constitutionalsafeguards under Art.20(3) and 21 of the Constitution?74. Admitting the inevitable position in law that as a Two MemberBench, we are bound by the decision of the Three Member Bench inVijay Madanlal Choudhary, Shri Kapil Sibal argued that the mattermay be placed before a Three Member Bench for resolving theconundrum created by the PMLA. In this connection, he drew ourattention to paragraph 113 of the decision of another Three MemberBench in Union of India vs. Ganpati Dealcom Private Limited15,wherein this Court expressed an opinion that the ratio laid down in VijayMadanlal Choudhary with respect to confiscation proceedings underSection 8 of the PMLA, required further exposition in an appropriatecase and that without such exposition, much scope is left for arbitraryapplication. Learned senior counsel also drew our attention to an orderpassed by another Two Member Bench of this Court in a writ petitionbeing Writ Petition (Crl.) No.65 of 2023, challenging some of the provisionsof the PMLA. By an order dated 03.03.2023, a Two Member Bench ofthis Court directed the said writ petition to be placed when the Benchwould be sitting in a combination of three Judges. After it was so placedbefore a Three Member Bench, notice was ordered in the writ petition.Therefore, he contended that the present appeals arising out theproceedings initiated by ED may be placed before a larger Bench.75. In sum and substance, all the above arguments of Shri KapilSibal, learned senior counsel are aimed at convincing us that Vijay15 (2023) 3 SCC 315Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1076SUPREME COURT REPORTS[2023] 8 S.C.R.Madanlal Choudhary was wrongly decided and that therefore we mayrefer it to a larger Bench.76. Shri Sidharth Luthra, learned senior counsel appearing forone of the accused contended: -(i) that when ECIR was registered, ED did not have requisitefoundational materials, as admitted by them in their own counter affidavit;(ii) that there has been a long delay both in the registration ofFIRs for the predicate offence and the ECIR;(iii) that the period of the commission of offence, according to thede-facto complainants was between December, 2014 and January, 2015but the FIRs other than those filed by Devasagayam were of the year2017 and 2018 and the ECIR was registered in the year 2021;(iv) that there is no explanation on the part of the ED for such adelay;(v) that to make out an offence of money-laundering even primafacie, three things are essential, namely (i) the commission of a crime,which is a scheduled offence, (ii) generation of proceeds of crime; and(iii) the laundering of those proceeds, and that none of these threefoundational facts are present in this case.77. The arguments of Shri Sidharth Luthra, learned senior counselis actually two-fold, namely, (i) that in the absence of a jurisdictionalfact, which is a sine qua non or condition precedent for the exercise ofpower by ED, the summons issued by ED should go; or alternatively (ii)that in view of inherent contradictions contained in the decision in VijayMadanlal Choudhary and in view of this Court having ordered noticein the review petition, the appeals on hand should also be referred to alarger Bench.78. In support of his contention that the existence of a jurisdictionalfact is a condition precedent for the exercise of power by ED, the learnedsenior counsel relies upon the decisions in Shauqin Singh vs. DesaSingh16 and Arun Kumar vs. Union of India17.79. To demonstrate that there are inherent contradictions in thedecision in Vijay Madanlal Choudhary, the learned senior counsel relies16 (1970) 3 SCC 88117 (2007) 1 SCC 732 ABCDEFGH1077upon the decision of the Delhi High Court in Enforcement Directoratevs. Gagandeep Singh18and Parvathi Kollur vs. State through ED19.80. To show that a petition for review has been entertained bythis Court, the learned senior counsel relies upon the record of proceedingsof this Court dated 25.08.2022 in Review Petition (Crl.) No.219 of 2022in Karti P. Chidambaram vs. The Directorate of Enforcement.81. Lastly, it is contended that when certain questions of law arereferred to a larger Bench, all subsequent matters should be tagged ordeferred. In support of this contention, the learned senior counsel reliesupon the orders passed by this Court in Jairam Ramesh vs. Union ofIndia20, Thomas Franco Rajendra Dev21vs. Union of India, KantaruRajeevaru (Right to Religion, In re-9 J.) vs. Indian Young LawyersAssociation22, Asgar Ali vs. State of Jammu and Kashmir23 andCentral Board of Dawoodi Bohra Community vs. State ofMaharashtra24.82. Contending that when the very initiation of proceedings by theED was without the existence of jurisdictional facts, all subsequent actions,like a pack of cards should fall, the learned senior counsel relies uponthe latin maxim sublato fundamento cadit opus meaning that “if initialaction is not in consonance with law, all subsequent andconsequential proceedings fall through”. In support of this contention,the learned senior counsel has relied upon the following decisions: (i)Badrinath vs. Government of Tamil Nadu25; (ii) State of Kerala vs.Puthenkavu N.S.S. Karayogam26;and (iii) State of Punjab vs.Davinder Pal Singh Bhullar27.83. Shri C.A. Sundaram, learned senior counsel appearing forone of the accused, adopted a different line of argument. Instead ofattacking the correctness of Vijay Madanlal Choudhary, the learnedsenior counsel contended:-18 2022 SCC Online Del 51419 Crl. Appeal No.1254/2022 dt.16.08.202220 SLP (C) No.13103 of 201921 WP (C) No.366/2022 dated 12.05.202222 (2020) 9 SCC 12123 2022 SCC Online SC 309524 2023 SCC Online SC 12925 (2000) 8 SCC 39526 (2001) 10 SCC 19127 (2011) 14 SCC 770Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1078SUPREME COURT REPORTS[2023] 8 S.C.R.(i) that the object of PMLA is to prevent money-laundering;(ii) that to constitute an offence of money-laundering, a personshould have involved himself in any process or activity connected withthe proceeds of crime;(iii) that ED can assume jurisdiction only after identification of theproceeds of crime;(iv) that the mandate of ED does not extend to the prosecution ofany one for offences other than money-laundering;(v) that this is why Section 66(2) obliges the Director to share theinformation available with him with other authorities, whenever suchinformation discloses the contravention of the provisions of any otherlaw;(vi) that without the identification of a property which representsthe proceeds of crime, a jurisdictional fact for the initiation of proceedingsdoes not get triggered;(vii) that no summons can be issued under Section 50 withoutregistering an information report;(viii) that the power to issue summons under Section 50(2) can beexercised only during the course of any investigation or proceeding underthe Act;(ix) that in the case on hand, no property representing the proceedsof crime has been identified;(x) that this is why the High Court questioned the ED as to howSection 3 got invoked; and(xi) that therefore the initiation of proceedings by the ED cannotbe sustained even within the contours of law interpreted in VijayMadanlal Choudhary.84. Lastly, it is contended by Shri C.A. Sundaram, learned seniorcounsel for one of the accused that though the High Court allowed theprayer of the accused for reasons other than those argued now, theparty successful before High Court can always seek to sustain thejudgment, on grounds other than those stated in the impugned order. Insupport of this contention, the learned senior counsel relies upon thedecision of this Court in Management of the Northern Railway Co- ABCDEFGH1079operative Credit Society Ltd., Jodhpur vs. Industrial Tribunal,Rajasthan, Jaipur28.85. In response to the above submissions, it was argued by ShriTushar Mehta, learned Solicitor General:(i) that the offence of money-laundering is treated by the globalcommunity as an offence of international implication, affecting theeconomies of Nations;(ii) that the law could be traced to Palermo and Vienna Conventions;(iii) that the Conventions led to the establishment of Financial ActionTask Force29;(iv) that for a long time after the above Conventions and theformation of FATF, India was found to be lacking in curbing money-laundering and hence certain recommendations were made for the MutualEvaluation of Anti-Money Laundering and Combating the Financing ofTerrorism;(v) that the recommendations made by them were carried intoeffect by making suitable amendments to the Act;(vi) that the historical perspective of the Act and the amendmentsthereto are discussed in detail in Vijay Madanlal Choudhary;(vii) that almost all provisions of the PMLA were challenged inVijay Madanlal Choudhary and every ground of attack to each of theprovisions is dealt with in extenso by the Three Member Bench;(viii) that there cannot be repeated attempts to have several bitesat the cherry;(ix) that by doubting the correctness of the decision of a largerBench, a cloud of uncertainty cannot be created on the application of alaw;(x) that the decision in Vijay Madanlal Choudhary is a bindingprecedent and the doctrine of stare decisis should be given meaningand value;(xi) that the English precedents on the doctrine of stare decisis,such as those in Street Tramways vs. London County Council30 andRedcliffe vs. Ribble Motor Services31,have been followed by our Courts;28 (1967) 2 SCR 47629 For short, “FATF”30 (1898) AC 375 (378)31 (1939) AC 215 (245)Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1080SUPREME COURT REPORTS[2023] 8 S.C.R.(xii) that as laid down by this Court in Sakshi vs. Union of India32,the doctrine of stare decisis gives certainty to law and guides people tomould their affairs in the future;(xiii) that as held by this Court in Central Board of DawoodiBohra Community vs. State of Maharashtra33, a Bench of lesser coramcannot express disagreement with or question the correctness of theview taken by a Bench of larger coram;(xiv) that as opined by Chief Justice John Roberts of the SupremeCourt of the United States, ‘it is a jolt to the legal system when youoverrule a precedent’;(xv) that the ratio laid down by a larger Bench should not becomesuspect merely because another view is possible;(xvi) that in any case, Vijay Madanlal Choudhary has takennote of different views of several High Courts including the High Courtsof Bombay, Delhi, Jharkhand and Punjab and Haryana, etc.; and(xvii) that unsettling the law laid down in Vijay MadanlalChoudhary at a time when the ranking of the country in curbing themenace of money-laundering has improved, will derail the whole process.86. We have carefully considered the rival contentions. A carefulanalysis of the arguments advanced by all the three learned senior counselappearing for the accused namely Shri Kapil Sibal, Shri C.A. Sundaramand Shri Sidharth Luthra would show that a three-pronged strategy hasbeen formulated in their attack on the initiation of proceedings by theED. This three-pronged strategy goes as follows:(i) questioning the correctness of the decision in Vijay MadanlalChoudhary and seeking a reference to larger Bench (by Shri KapilSibal);(ii) accepting the decision in Vijay Madanlal Choudhary ascorrect and trying to demonstrate how the initiation of proceedings inthe present case falls foul of the ratio in Vijay Madanlal Choudhary(by Shri C.A. Sundaram); and(iii) relying upon some portions, but attacking some other portionsof Vijay Madanlal Choudhary so that any one of these provide anescape route (by Shri Luthra).32 (2004) 5 SCC 51833 (2005) 2 SCC 673 ABCDEFGH108187. In terms of issues, the arguments advanced by all the threelearned senior counsel can be crystallized and formulated into twofundamental questions that may have to be addressed by us. Thesequestions are:-(i) Whether without identifying the proceeds of crime or a propertyrepresenting the proceeds of crime and without identifying any processor activity connected to proceeds of crime as required by Section 3,which constitute the foundational/ jurisdictional fact, ED can initiate aninvestigation and issue summons?(ii) Whether in the light of the fact that notice has been ordered inthe review petition and a few interim orders have been passed in someproceedings, it is necessary for this Court to tag these appeals alongwith a review petition or defer the hearing of these matters until a decisionis rendered in the review petition and other petitions?88. Before we find an answer to these two questions, it is necessaryto take note of how and why PMLA came into existence and whatgeopolitical circumstances compelled India to bring the law. Accordingto United Nations Office on Drugs and Crime34, South Asia, corruptionis recognized as a crucial governance and security challenge in SouthAsia region. UNODC has estimated that corruption costs more than5% of global GDP (US$2.6 trillion) annually, with estimates of globalmoney-laundering at around $500 billion (works out to INR 40 lakhscrores) annually. Based upon a study conducted by Pune based ForensicAccounting Company by name “Indiaforensic” way back in the year2011 on “Ascertaining size of Corruption in India with respect tomoney laundering”, the Economic Times reported in its Edition dated17.07.2011 that money laundered out of India in the decade 2001-2010could be pegged at Rs.18,86,000 crores. This is why in May 2011, Indiabecame party to the United Nations Convention against Corruption(UNCAC) joining over 160 other countries who were party to this UNConvention.89. The history of the legislation on money-laundering is almostsix decades old. In brief, this history can be traced as follows:(i) In 1961, United Nations Convention on Narcotic Drugs wasadopted and it was amended by the protocol of the year 1972.34 For short, “UNODC”Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1082SUPREME COURT REPORTS[2023] 8 S.C.R.(ii) In 1971, United Nations Convention on PsychotropicSubstances was made.(iii) In 1974, a bank known as Herstatt Bank in Germany wasforced into liquidation by the Regulators. On the day on which it happened,a number of banks had released payments to Herstatt in exchange forUS dollars to be delivered in New York. But due to the time zonedifferences, Herstatt ceased operations between the times of therespective payments. As a result, payments were not made in NewYork. Therefore, a Standing Committee which came to be known asBasel Committee on Banking Supervision (BCBS) was formed by G-10countries namely Belgium, Canada, France, Germany, Italy, Japan,Netherlands, Sweden, Switzerland, UK and USA.(iv) In December 1988, two things happened. One was theadoption of a Convention by name UN Convention Against Illicit Trafficin Narcotic Drugs and Psychotropic Substances (popularly known asVienna Convention). The second was that at about the same time, theBasel Committee issued a general statement of ethical principles whichencourages banks’ management to put in place effective procedures toensure that all persons conducting business with their institutions areproperly identified, that transactions that do not appear legitimate are tobe discouraged and that cooperation with law enforcement agencies isachieved.(v) In 1989, the FATF was established at the G-7 summit held atParis, as an inter-governmental body by the member countries namelyCanada, France, Germany, Italy, Japan, UK and USA. Now FATFconsists of 39 members including India and over 200 jurisdictions aroundthe world have committed to the FATF recommendations.(vi) In 1990, the Member States of the Council of Europe signedand ratified a Convention known as The Convention on Laundering,Search, Seizure and Confiscation of the Proceeds from Crime, also knownas the Strasbourg Convention or CETS 141. Interestingly, Australiathough not a Member of the Council of Europe, also signed and ratifiedthis Convention. The Convention sought to facilitate international co-operation and mutual assistance in investigating crime and tracking down,seizing and confiscating the proceeds thereof. The purpose of bringingthe States together was to assist them in attaining a similar degree ofefficiency even in the absence of full legislative harmony. ABCDEFGH1083(vii) As part of United Nations office on Drugs and Crime, aGlobal Programme against Money Laundering (GPML) was establishedin 1987 to assist Member States to comply with UN Conventions andother instruments that deal with money-laundering and terrorismfinancing.(viii) On 15.11.2000, the UN General Assembly adopted the UnitedNations Convention against Transnational Organized Crime and it openedfor signature by Member States at a high level political Conferenceconvened at Palermo, Italy in December 2000 (now known as PalermoConvention).(ix) On October 31, 2003, the United Nations General Assemblyadopted the UN Convention against corruption and the Convention cameinto force in 2005.(x) Pursuant to the political Declaration adopted by the specialsession of the United Nations General Assembly held between 8th to10th June 1998 (of which India is one of the signatories) calling uponmember States to adopt Anti Money Laundering Legislation &Programme, the Parliament has enacted a special law called the‘Prevention of Money Laundering Act, 2002’ (PMLA 2002). The Acthas come into force with effect from 1st July 2005. It has been substantiallyamended, by way of enlarging its scope, in 2009 (w.e.f. 01.06.2009), byenactment of Prevention of Money Laundering (Amendment) Act, 2009.The Act was further amended by Prevention of Money-Laundering(Amendment) Act, 2012 (w.e.f. 15-02-2013).(xi) As part of the effort to assist jurisdictions prepare or upgradetheir legislative framework to conform with international standards andbest practices to implement anti-money laundering measures andcombating the financing of terrorism, UNODC issued in 2003, “ModelMoney-Laundering, Proceeds of Crime and Terrorist FinancingBill”.90. The Commonwealth Secretariat of the UNODC released inApril 2009 an updated version of the “Model Provisions on MoneyLaundering, Terrorist Financing, Preventive Measures and Proceedsof Crime”. Some of the provisions of the UN Model Law 2009 showthat PMLA has been brought in tune with the Model Law.91. The Drafting Note on self-laundering, contained in the ModelLaw deals with the question whether a person should necessarily beY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1084SUPREME COURT REPORTS[2023] 8 S.C.R.implicated in the predicate offence so as to be an accused in the offenceof money-laundering. It reads as follows:“Self-laundering:“As the section refers to “any person,” this includes both theperson who committed the predicate offence and third partylaunderers. Although generally not an issue in States in thecommon law tradition, there can be a question whether theoffence should be extended to the person who also committedthe predicate offence.The Vienna and Palermo Conventions provide an exceptionto the general principle that both the predicate offender andthird parties should be liable for money laundering wherefundamental principles of domestic law require that it not applyto the person who committed the predicate offence. In somecountries, constitutional principles prohibit prosecuting aperson both for money laundering and a predicate offence.In the case of most common law countries, there do not appearto be fundamental principles that prohibit the application ofthe money laundering offence to self-launderers. However, ifan exception is necessary, an additional provision, as “[t]heoffence of money laundering shall not apply to persons whohave committed the predicate offence” should beincorporated.If drafters believe that there is a need for additional claritybeyond the reference to “any person” to ensure that thosewho launder their own proceeds are covered, a provision canbe added as “[t]he offences set forth in Section 3(2) - (5)shall also apply to the person who has committed theoffence(s), other than money laundering, that generated theproceeds of crime.”92. Similarly, the portion of the Drafting Note in the Model Law,enlisting the kind of activities that may constitute the offence of moneylaundering reads as follows:“Kinds of Offences: As the UN’s Legislative Guide to thePalermo Convention and Legislative Guide for theImplementation of the United Nations Convention AgainstCorruption make clear, there are four general kinds of ABCDEFGH1085conduct that should be criminalized. The minimumrequirements for each are:1. Conversion or transfer of proceeds of crime. This includes“instances in which financial assets are converted from oneform or type to another, for example, by using illicitlygenerated cash to purchase precious metals or real estate orthe sale of illicitly acquired real estate, as well as instances inwhich the same assets are moved from one place or jurisdictionto another or from one bank account to another.” (See, e.g.,paragraph 231, in Legislative Guide for the implementationof the UN Corruption Convention). Regarding mentalelements, the conversion or transfer must be intentional, theaccused must have knowledge at the time of conversion ortransfer that the assets are criminal proceeds, and the actmust be done for either one of the two purposes stated –concealing or disguising criminal origin or helping any person(whether one’s self or another) to evade criminal liability forthe crime that generated the proceeds.2. Concealment or disguise of proceeds of crime. There aremany aspects noted in the provision as to which there can beconcealment or disguise – almost any aspect of, or informationabout, the property, so this section is broad. The concealmentor disguise must be intentional and the accused must haveknowledge that the property constitutes proceeds of crime atthe time of the act. This provision deals with the intentionaldeception of others. This will include the intentional deceptionof law enforcement authorities. True nature may be theessential quality of it having been derived from criminalactivity. Origin may be the physical origin, or its origin incriminality. For this second offence, there should not be arequirement of proof that the purpose of the concealment ordisguise is to frustrate the tracing of the asset or to concealits true origin. Although as a general matter this will be thepurpose of the concealing or disguising, the applicable UNConventions require that there be criminalization that is notdependent upon a showing of such purpose.3. Acquisition, possession or use of proceeds. This sectionimposes liability on recipients who acquire, possess or useY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1086SUPREME COURT REPORTS[2023] 8 S.C.R.property, and contrasts with the two provisions above thatdeal with liability for those who provide illicit proceeds. Theremust be intent to acquire, possess or use, and the accusedmust have knowledge at the time of acquisition or receipt thatthe property was proceeds.4. Participation in, association with or conspiracy to commit,attempts to commit and aiding, abetting, facilitating andcounselling. There are varying degrees of complicity orparticipation other than physical commission of the offence:assistance (aiding and abetting, facilitating) andencouragement (counselling). In addition, attempts are to becriminalized. Finally, this section includes conspiracy, acommon law concept, or as an alternative, an association ofpersons working together to commit an offence.Knowledge: The variants suggested are first, the basic oneof knowledge that the property is proceeds of crime (whichknowledge may be inferred from objective factualcircumstances); and secondly a more flexible standard ofknowledge or suspicion that the property is proceeds ofcrime.”Therefore, it is clear that the provisions of PMLA are in tune withthe Model Law drafted by UNODC. Keeping this in mind, let us nowsearch for an answer to the two questions.Question 1: Whether without identifying the proceeds ofcrime or a property representing the proceeds of crime andwithout identifying any process or activity connected to proceedsof crime as required by Section 3, which constitute thefoundational/jurisdictional fact, ED can initiate an investigationand issue summons?93. The common theme of the song of the learned counsel for theaccused is that the mere registration of a FIR for a predicate offence,even if it is a scheduled offence, is not sufficient for the ED to registeran Information Report and summon anyone. According to the learnedcounsel, the commission of the scheduled offence should have generatedproceeds of crime and those proceeds of crime should have beenlaundered by someone, for the ED to step in. Going a step further, it wascontended by the learned senior counsel that the ED should first identify ABCDEFGH1087some property as representing the proceeds of crime, before anInformation Report is registered and a summon issued under Section50(2).94. These contentions, in our opinion, if accepted, would amountto putting the cart before the horse. Unfortunately for the accused, thisis not the scheme of the Act.95. Section 3 of the Act which defines the offence of money-laundering reads as follows:“3. Offence of money-laundering.—Whosoever directly orindirectly attempts to indulge or knowingly assists or knowingly isa party or is actually involved in any process or activity connectedwith the proceeds of crime including its concealment, possession,acquisition or use and projecting or claiming it as untainted propertyshall be guilty of offence of money-laundering.Explanation.—For the removal of doubts, it is herebyclarified that,—(i) a person shall be guilty of offence of money-launderingif such person is found to have directly or indirectly attempted toindulge or knowingly assisted or knowingly is a party or is actuallyinvolved in one or more of the following processes or activitiesconnected with proceeds of crime, namely:—(a) concealment; or(b) possession; or(c) acquisition; or(d) use; or(e) projecting as untainted property; or(f) claiming as untainted property,in any manner whatsoever;(ii) the process or activity connected with proceeds of crimeis a continuing activity and continues till such time a person isdirectly or indirectly enjoying the proceeds of crime by itsconcealment or possession or acquisition or use or projecting it asuntainted property or claiming it as untainted property in any mannerwhatsoever.”Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1088SUPREME COURT REPORTS[2023] 8 S.C.R.96. If the main part of Section 3 is dissected with forensic precision,it will be clear that Section 3 addresses itself to three things (we maycall them 3 ‘P’s) namely, (i) person; (ii) process or activity; and (iii)product. Insofar as persons covered by Section 3 are concerned, theyare, (i) those who directly or indirectly attempt to indulge; or (ii) thosewho knowingly assists; or (iii) those who are knowingly a party; or (iv)those who are actually involved. Insofar as process is concerned, theSection identifies six different activities, namely (i) concealment; (ii)possession; (iii) acquisition; (iv) use; (v) projecting; or (vi) claiming asuntainted property, any one of which is sufficient to constitute the offence.Insofar as product is concerned, Section 3 identifies “proceeds of crime”or the property representing the proceeds of crime as the product of theprocess or activity.97. Out of the three things that Section 3 addresses, namely (i)person; (ii) process; and (iii) product, the first two do not require anyinterpretation or definition. The third aspect namely “product”, whichSection 3 refers to as “proceeds of crime” requires a definition andhence it is defined in Section 2(1)(u) as follows:-“2. Definitions. — (1) In this Act, unless the context otherwiserequires, —xxx xxx xxx(u) “proceeds of crime” means any property derived or obtained,directly or indirectly, by any person as a result of criminal activityrelating to a scheduled offence or the value of any such propertyor where such property is taken or held outside the country, thenthe property equivalent in value held within the country or abroad;Explanation.—For the removal of doubts, it is herebyclarified that “proceeds of crime” including property not onlyderived or obtained from the scheduled offence but also anyproperty which may directly or indirectly be derived or obtainedas a result of any criminal activity relatable to the scheduledoffence;”98. Keeping in mind these essential elements that make up themolecular structure of Section 3, if we go back to the case on hand, wewill find (i) that the offences under Sections 120B, 419, 420, 467 and471 IPC are scheduled offences included in paragraph 1 of the Schedule; ABCDEFGH1089and (ii) that the offences under Sections 7 and 13 of the PC Act areincluded in paragraph 8 of the Schedule.99. All the three FIRs allege that the accused herein had committedoffences included in the Schedule by taking illegal gratification forproviding appointment to several persons in the Public TransportCorporation. In one case it is alleged that a sum of more than Rs.2crores had been collected and in another case a sum of Rs.95 lakhs hadbeen collected. It is this bribe money that constitutes the ‘proceeds ofcrime’ within the meaning of Section 2(1)(u). It is no rocket science toknow that a public servant receiving illegal gratification is inpossession of proceeds of crime. The argument that the mere generationof proceeds of crime is not sufficient to constitute the offence of money-laundering, is actually preposterous. As we could see from Section 3,there are six processes or activities identified therein. They are, (i)concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting asuntainted property; and (vi) claiming as untainted property. If a persontakes a bribe, he acquires proceeds of crime. So, the activity of“acquisition” takes place. Even if he does not retain it but “uses” it,he will be guilty of the offence of money-laundering, since “use” is oneof the six activities mentioned in Section 3.100. The FIRs for the predicate offences identify all the threecomponents of Section 3, namely, (i) persons; (ii) process; and (iii)product. Persons accused in the FIRs are those who have indulged inthe process or activity. The illegal gratification that they have taken,represents the proceeds of crime. The (i) acquisition of such illegalgratification in the first instance; (ii) the possession of the tainted moneybefore putting it to use; and (iii) today projecting it as untainted money,is the process or activity in which the accused have indulged. Thecorruption money represents the proceeds of crime.101. Therefore, all the arguments as though there are nofoundational facts or jurisdictional facts, are simply aimed at hoodwinkingthe Court.102. It is true that there are some offences, which, thoughscheduled offences, may or may not generate proceeds of crime.For instance, the offence of murder punishable under Section 302is a scheduled offence. Unless it is a murder for gain or murder bya hired assassin, the same may or may not generate proceeds ofcrime. It is in respect of such types of offences that one may possiblyY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1090SUPREME COURT REPORTS[2023] 8 S.C.R.argue that mere commission of the crime is not sufficient but thegeneration of proceeds of crime is necessary. In the case of anoffence of corruption, the criminal activity and the generation ofthe proceeds of crime are like Siamese twins.103. In fact, PMLA defines the word “property” in Section 2(1)(v)as follows:“2. Definitions.—(1) In this Act, unless the context otherwiserequires,—xxx xxx xxx(v) “property” means any property or assets of every description,whether corporeal or incorporeal, movable or immovable, tangibleor intangible and includes deeds and instruments evidencing titleto, or interest in, such property or assets, wherever located;Explanation.—For the removal of doubts, it is herebyclarified that the term “property” includes property of any kindused in the commission of an offence under this Act or any of thescheduled offences;”104. Therefore, even if an intangible property is derived as a resultof criminal activity relating to a scheduled offence, it becomes proceedsof crime under Section 2(1)(u). In view of the above, we are notimpressed with the contention that the investigation by ED was triggeredwithout any foundational/jurisdictional facts. In our view, the allegationsin the FIR point out to (i) involvement of persons in criminal activityrelating to scheduled offences; (ii) the generation as well as (iii)launderingof the proceeds of crime within the meaning of Section 3. This is in viewof the fact that wherever there are allegations of corruption, there isacquisition of proceeds of crime which itself tantamount to money-laundering.105. A lot of heat and dust was generated about the ED registeringan Information Report on 29.07.2021 without any material whatsoeverand thereafter indulging in a fishing expedition both by summoning therespondents and by seeking copies of various documents from the SpecialCourt before which the complaints relating to the predicate offences arepending. But we do not see any substance in these arguments. Thereason why we say so will be understood if we rewind and go back to afew facts. ABCDEFGH1091106. On 29.10.2015, Devasagayam made a complaint. It wasagainst ten different persons, but not against the Minister, his brotherand his Secretary. But on 07/08.03.2016, one Gopi made a complaintnaming the brother of the Minister and claimed that a total amount ofmore than Rs.2 crores was paid. Gopi then filed Criminal O.P. No.7503of 2016 on the file of the High Court in which the High Court passed anorder on 20.06.2016, to expand the investigation and go against the realculprits. But a Final Report under Section 173(2) of the Code was filedon 13.06.2017. This was followed by another complaint filed by V. GaneshKumar on 09.09.2017 in FIR No.298 of 2017. In this FIR, a Final Reportwas filed on 07.06.2018. Similarly, one Arulmani filed a complaint on13.08.2018 in FIR No.344 of 2018 in which a Final Report was filed on12.04.2019.107. Subsequently, at the instance of one R.B. Arun Kumar, furtherinvestigation was ordered in FIR No.441 of 2015, by an order of theHigh Court dated 27.11.2019. Thereafter, a discharge petition was filedby the Minister in one of those cases and after the same was dismissed,he filed a revision before the High Court. During the pendency of therevision, a Final Report was filed under Section 173(8) in one of thosecases.108. Around the same time, writ petitions were filed pointing outthat there was a huge jobs-for-cash scam. In those writ petitions, theAssistant Commissioner of Police filed counter affidavits.109. Thus, the information about all complaints, the nature ofthe complaints, the amount of money allegedly collected towardsillegal gratification had all come into public domain. To say thatthe ED should have adopted an Ostrich like approach, without tryingto find out where and to whom the huge money generated in thescam had gone, is something unheard of.110. In fact, ED was not trying to access any document whichwas inaccessible. In several proceedings before the High Court, such as(i) petitions for further investigation; (ii) writ petitions; and (iii) quashpetitions, some of the documents whose certified copies were sought bythe ED were already annexed. All that the ED wanted was authenticatedcopies of those documents and nothing more.111. In fact, the FIRs as well as Final Reports are now uploadedin the websites of the Police Department in some of the States. In theY. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1092SUPREME COURT REPORTS[2023] 8 S.C.R.State of Tamil Nadu, Police started uploading FIRs online, way back in2016. In all Police Stations, a Crime and Criminal Tracking Network andSystems, popularly known as ‘CCTNS’ is installed. Therefore, theinformation relating to FIRs is in the public domain.112. Once an information relating to the acquisition of hugeamount of illegal gratification in the matter of public employment hascome into the public domain, it is the duty of the ED to register anInformation Report. This is because “acquisition” is an activityamounting to money-laundering and the illegal gratification acquiredby apublic servant represents “proceeds of crime,” generated through acriminal activity in respect of a scheduled offence. Therefore, it doesnot require any expedition, much less a fishing expedition forsomeone to say that the receipt of bribe money is an act of money-laundering.113. The contention of Shri Sidharth Luthra that there was noexplanation for the delay on the part of the ED in registering theInformation Report, is a self-serving argument. If the ED registersan Information Report immediately upon the registration of a FIRfor a predicate offence, ED will be accused of acting in haste. Ifthey wait until the drama unfolds up to a particular stage, ED willbe attacked as guilty of delay. The accused should be thankful toED for giving a long rope from 2016 till 2021.114. Therefore, all the arguments on facts and all the legalcontentions emanating from some portions of the judgment in VijayMadanlal Choudhary, to challenge the validity of the proceedingsinitiated by ED are completely unsustainable.Question No. 2: Whether in the light of the fact that noticehas been ordered in the review petition and a few interim ordershave been passed in some proceedings, it is necessary for thisCourt to tag these appeals along with a review petition or deferthe hearing of these matters until a decision is rendered in thereview petition and other petitions?115. Now let us come to the contention revolving around thecorrectness of some portions of the decision in Vijay MadanlalChoudhary.116. First of all, we should point out that a notice ordered in thereview petition being Review Petition (Crl.) No.219 of 2022, will not ABCDEFGH1093destroy or diminish the precedential value of Vijay MadanlalChoudhary. The argument of the learned counsel for the accused, ifaccepted, will not only destroy the principles of judicial discipline and thedoctrine of stare decisis, but also bring to a grinding halt, all pendinginvestigation in the country. In fact, the order dated 25.08.2022 passedin Review Petition (Crl.) No.219 of 2022 discloses that prima facie theCourt was of the view that at least two of the issues raised in the reviewpetition require consideration. Though it is not precisely spelt out in theorder, those two issues relate to (i) not providing the accused with acopy of the ECIR; and (ii) reversal of the burden of proof andpresumption of innocence. The points that the respondents are canvasingin this case, have nothing to do with those two issues. Therefore, theaccused cannot have a piggyback ride on the review petition.117. In fact, as we have pointed out elsewhere, the accused havenot come up with any appeal challenging the order of the High Courtdated 01.09.2022. Therefore, they are entitled at the maximum, to argueonly for the dismissal of the appeals filed by ED and others against thesaid decision. Suppose we agree with the learned counsel for the accusedand dismiss the appeals filed by ED, even then they cannot have anescape route since the impugned order of the High Court protects themonly till the other proceedings are kept at bay.118. Therefore, the accused is not entitled at all either to seek areference to a larger Bench or to seek to defer the matter till a decisionis rendered in the matters involving larger issues.119. In view of the above, the appeals arising out of the order ofthe Division Bench of the High Court are liable to be allowed. Accordingly,these appeals are allowed and the order of the Division Bench of theMadras High Court dated 01.09.2022 is set aside. ED will now be entitledto proceed further from the stage at which their hands were tied by theimpugned order.PART-III (Permission to ED to inspect the records of theSpecial Court trying the predicate offences)120. To recapitulate, ED registered an Information Report on29.07.2021. Thereafter, ED filed applications before the Special Courtseeking certified copies of the FIR, statements of witnesses, etc. By anorder dated 09.11.2021, the Special Court allowed the application partlyand directed the issue of certified copies of FIR, complaint, statements,etc., but refused to provide certified copies of unmarked documents.Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1094SUPREME COURT REPORTS[2023] 8 S.C.R.121. As against the said order, ED moved the High Court underSection 482 of the Code. These petitions were partly allowed by theHigh Court by an order dated 30.03.2022, permitting ED to haveinspection of the documents under Rule 237 of the Rules, 2019 andthereafter, to file a fresh third party copy application. It is against thisorder that one of the accused by name M. Karthikeyan (Accused No.3)in the Final Report filed under Section 173(8) of the Code in CC No.24of 2021 has come up with an appeal.122. The grievance of the appellant in this appeal is that the HighCourt has overlooked the provisions of Rule 231(3) of the Rules, 2019and also Section 65B of the Indian Evidence Act, 187235. But both theabove contentions are without substance. Rule 231 primarily deals withthe grant of certified copies of certain other documents to the accused,before filing of the Final Report. Rule 231(3) states that certified copiesof unmarked documents shall not be given. The High Court has notpassed any order directing the grant of certified copies of unmarkeddocuments. All that the High Court has done is permitting the ED tohave an inspection of the documents under Rule 237 and thereafter tofile a proper copy application. This is not contrary to Rule 231(3).123. We do not know how an argument revolving around Section65B of the Evidence Act is raised. Section 65B concerns the admissibilityof electronic records. Without certification, ED may not be able to usethose electronic records in evidence, in the prosecution under PMLA.But it does not mean that they cannot even have a look at the electronicrecord.124. Therefore, we find no merits in the appeal. Hence, the appealchallenging the order of the High Court dated 30.03.2022 passed inCriminal O.P. No.5726 of 2022 is dismissed.PART – IV (Extension of time to complete furtherinvestigation)125. There is one appeal filed by Y. Balaji, whose status is indicatedby us in a tabular column elsewhere. His appeal challenges an orderpassed by the High Court originally on 27.11.2019 directing the prosecutionto complete further investigation in CC No.3627 of 2017 within sixmonths. When a petition for extension of time was moved, the Courtrejected it by an order dated 01.11.2021 on the ground that the prayer35 For short “the Evidence Act” ABCDEFGH1095had become infructuous. Therefore, worried about the fate of furtherinvestigation, the victim has come up with the above appeal. But theworry of the appellant is baseless. Merely because the High Court hasnot granted extension of time, it does not mean that the direction toconduct further investigation has become infructuous. On the contrary,a Final Report has already been filed under Section 173(8) of the Codeon 08.03.2021 in CC No.3627 of 2017 and the same has now becomeCC No.24 of 2021.126. Therefore, the appeal challenging the orders dated 27.11.2019and 01.11.2021 is dismissed.Contempt Petitions 127. Anti Corruption Movement has come up with petitionsseeking the initiation of contempt proceedings against the Police Officialswho are in-charge of the investigation, on the ground (i) that the offencesunder the PC Act have not been included in CC No.25 of 2021; (ii) thatsteps were not taken to have the interim stay vacated in two criminalcases; and (iii) that a misleading picture was projected before the HighCourt as though the investigation was incomplete.128. Shri Ranjit Kumar, learned senior counsel appearing for theState and Shri Tiwari, learned AAG for the State submitted that therewas no willful disobedience of the orders passed by this Court and thatthe State actually took steps to vacate the stay. According to the learnedsenior counsel, the hands of the investigating agency were tied due tothe stay order and that once the appeals arising out of the two substantialorders of the High Court dated 01.09.2022 and 31.10.2022 are disposedof, the State will take expeditious steps.129. For the present, we would accept the explanation offeredby the alleged contemnors. This is for the reason that the allegedcontemnors alone are not to be blamed for where we are. The entirecase turned out to be a match where it became impossible to identifywho was playing for which team. Despite this Court’s order dated08.09.2022, the High Court passed the order dated 31.10.2022, whichpractically has the effect of wiping out the directions issued by this Court.In its order dated 31.10.2022, the High Court referred to our order atvarious places and eventually destroyed the effect of the order of thisCourt. Therefore, the Police Officers alone cannot be held guilty ofwilful disobedience. Hence, the contempt petitions are dismissed.Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.] ABCDEFGH1096SUPREME COURT REPORTS[2023] 8 S.C.R.However, if the future course of investigation shows any disobedienceof the orders of this Court, it will always be open to the petitioner tocome up again. With this observation, the contempt petitions aredismissed.I.A.No. 26257 of 2023130. This is an application taken out by Y. Balaji, appellant insome of these appeals, seeking the constitution of a Special InvestigationTeam and the appointment of a Special Public Prosecutor. This applicationis filed on the ground that the hope expressed by this Court in its orderdated 08.09.2022 that the State Police would do a proper job, has beenbelied by subsequent events. Therefore, the applicant prays that time isnow ripe for the constitution of a Special Investigation Team.131. The application is opposed on the ground, (i) that a prayer ofthis nature cannot be made by way of an interlocutory application; and(ii) that the allegation of the prosecution being influenced by the Ministerdoes not stand substantiated.132. As we have pointed out while dealing with the contemptpetitions, the entire blame for this fiasco cannot be laid at the doorstepof the Police alone. We find several coparceners. Hence, we rejectthis I.A. at this stage with liberty to the applicant to come back with asubstantial petition seeking such a prayer, at a later point of time, whena foul play is suspected. Accordingly, I.A. No.26257 of 2023 is dismissedwith the above liberty.Results summed up133. The result of the entire discussion is summed up as follows:(i) The appeals arising out of the order for de novo investigationare allowed. That portion of the order of the High Court dated 31.10.2022passed in Criminal O.P. No. 15122 of 2021 is set aside. The directionsissued in the said original petition for de novo investigation are set aside.The Investigation Officer shall proceed with further investigation in allcases by including the offences under the PC Act. Any let up on the partof the Investigation Officer in this regard will pave the way for thisCourt to consider appointing a Special Investigation Team in future.(ii) The appeals arising out of the order of the Division Bench ofthe High Court dated 01.09.2022 are allowed. The order dated 01.09.2022 ABCDEFGH1097is set aside. All the three writ petitions challenging the initiation ofproceedings by ED shall stand dismissed.(iii) The appeal arising out of the order of the High Court dated30.03.2022 is dismissed.(iv) The appeal challenging the orders dated 27.11.2019 and01.11.2021 of the High Court relating to extension of time for completionof investigation is dismissed. The Investigation Officer shall proceedwith further investigation and file Further/Final Reports within twomonths.(v) The Contempt Petitions and I.A. No. 26257 of 2023 aredismissed.Application for impleadment is dismissed.Pending application(s), if any, shall also stand disposed of.Divya PandeyAppeals disposed of.(Assisted by : Shevali Monga, LCRA)Y. BALAJI v. KARTHIK DESARI & ANR. ETC.[V. RAMASUBRAMANIAN, J.]