New Delhi: National Conference leader and former Jammu and Kashmir Chief Minister Farooq Abdullah said he is “thankful to the high court for bringing out the truth” and proving that the allegations against him were “imposed, false and meant only to tarnish (his) image”. He was speaking to ThePrint soon after the J&K High Court quashed Enforcement Directorate (ED) chargesheets naming him and others in the alleged Jammu and Kashmir Cricket Association (JKCA) scam.
There was no ‘scheduled’ offence, nor could the ED ‘assume’ a misdeed, said the court Wednesday.
Justice Sanjeev Kumar in the judgment noted the ED could not initiate a money-laundering case and take action on the “assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed”.
Scheduled offences, as defined in the Prevention of Money Laundering Act (PMLA) are those that are mentioned in the Schedule to the Act and refers to any type of property or assets derived from proceeds of crime or used in the commission of crime in relation with these offences. Scheduled offences are a prerequisite for a money-laundering probe.
The court added the Central Investigation Bureau (CBI), during its probe, had registered an FIR under Section 406 (criminal breach of trust) and 409 (criminal breach of trust in respect of a property) of the Ranbir Penal Code, both of which were not scheduled offences.
The judge explained that Section 120B (criminal conspiracy) invoked by CBI, only becomes a scheduled offence if the conspiracy alleged was of committing an offence which too are scheduled offences. This was not the case in this instance, the court added.
“It is, thus, argued that commission of scheduled offence is a sine qua non (requirement) for offence of money laundering and, therefore, in the absence of commission of scheduled offence, there could be no proceeds of crime and no offence under PMLA,” the court said.
The court, however, said the ED could register a fresh case if the Chief Judicial Magistrate ultimately framed charges in the CBI case which were specifically mentioned in the schedule of PMLA.
But for the moment, it has said, the CBI chargesheet made it evident that the offence of money laundering, as defined under Section 3 of the PMLA, was not made out.
“The complaint, the chargesheet and the charges framed by the designated Special Court (Principal Sessions Court, Srinagar) are quashed,” the court ruled.
The ‘scam’
The alleged scam pertains to the misappropriation of Rs 113 crore sent by the Board of Control for Cricket in India (BCCI) to the Jammu and Kashmir Cricket Association (JKCA).
Abdullah was the president of JKCA when the alleged embezzlement took place in 2012. In September 2015, the J&K High Court officially handed over the case to the CBI.
The ED case is based on an FIR filed by the CBI, which booked former JKCA office-bearers, including Mohammed Saleem Khan and Ahsan Ahmad Mirza. In 2018, the CBI filed a chargesheet, naming Abdullah and three others for allegedly misappropriating over Rs 43 crore from grants given by the BCCI.
Also read: ‘I won’t be your son If I don’t shake all of India,’ Farooq Abdullah once angrily told father
Abdullah, then JKCA general secretary Saleem Khan, former treasurer Ahsan Ahmad Mirza and J&K Bank executive Bashir Ahmad Misgar were charged under the Ranbir Penal Code (RPC) provisions related to criminal conspiracy and criminal breach of trust. The RPC was applicable in the erstwhile state under Article 370.
‘ED cannot preempt outcome of an exercise’
Additional Solicitor General of India, S.V. Raju, argued that although the CBI has filed a chargesheet for criminal breach of trust and conspiracy, the agency would further reveal that offences made out under Section 411 (dishonestly receiving stolen property) and 424 (dishonest or fraudulent removal or concealment of property) — both of which are scheduled offences.
The court, however, reminded Raju of the legal position on this, saying the offence punishable under Section 120-B RPC or IPC cannot be considered a scheduled offence by itself. Unless the alleged conspiracy was for committing a scheduled offence.
“The ED cannot be permitted to preempt the outcome of an exercise, which is yet to be undertaken by a competent court of law at the stage of charge/discharge,” the court said.
The court reiterated the chargesheet filed by CBI was not in respect to any scheduled offence based on which a money-laundering probe could begin.
“In the instant case, indisputably, the CBI has not registered any case for commission of any scheduled offence. In the absence of there being any case registered for commission of scheduled offence or any case pending enquiry or trial in respect of scheduled offence, authorities under PMLA have no jurisdiction to register ECIR and launch prosecution for offence of money laundering under Sections 3/4 of PMLA,” the court said.
“When there is no scheduled offence having been registered or pending inquiry or trial, there are no proceeds of crime and, thus, there is no offence of money laundering under Section 3 of the Act,” it added.
‘ED not superior to CBI’
Raju also argued that the ED was not bound by the conclusions drawn by the CBI and it could independently look into the material contained in the chargesheet to “come to a conclusion that the petitioner has committed a scheduled offence to justify registration of case under PMLA”.
The court did not accept this argument, noting the ED was not an authority or investigating agency in any manner superior to the CBI, nor did it have the power and jurisdiction to sit in appeal against the investigation made and conclusion drawn by the latter.
The ED, a parallel investigating agency in respect of crimes under PMLA, “must accept the investigation carried by another investigating agency and the conclusion drawn by them in respect of commission of the offences other than the offences under PMLA”, the court said.
The judge further stated that the CBI had investigated the matter and presented a chargesheet before the Chief Judicial Magistrate, Srinagar for offences not specifically mentioned in the schedule. It was now for that court to consider the entire material collected during investigation and determine what offences were to be made out against the accused.
The ED, the court said, may approach the magistrate and “canvass before it that apart from the offences of Section 120(B), 406 and 409 RPC, scheduled offences like Section 411 and 424 RPC are also made out”.
It said the ED can register a fresh case if the magistrate framed charges for any of the scheduled offences.
(Edited by Tikli Basu)
Also read: Don’t delay J&K polls, announce timeline for restoration of statehood — human rights panel report