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Synopsis

The Delhi High Court recently held that a Special Court under the Prevention of Money Laundering (PMLA) does not need to record reasons for taking cognizance of complaints filed by the Enforcement Directorate (ED).

The court made the said observations while dismissing a plea filed by Sanjay Aggarwal, challenging the Trial Court's order, which had rejected his plea to drop the PMLA proceedings against him.

The bench led by Justice Chandra Dhari Singh while upholding the decision of the trial court said, "It is pertinent to state here that the Special Court under the PMLA doesn't need to record its reasons for the cognizance since the said complaint is filed by an investigating agency, unlike the private complaint under Section 190 of the CrPC (now Section 210 of the BNSS)".

Clarifying that Section 44(1)(b) of the PMLA allows the ED to file a complaint even when the investigation is ongoing, the court observed, "....that an initial complaint can be filed under Section 44 of the PMLA, even if the investigation is not fully completed, especially in light of the Explanation-II, introduced in the year 2019, which permits the filing of a supplementary complaint...".  

As the court addressed the issue of cognizance, it ruled that cognizance under Section 44 (1) (b) of the PMLA is based on the prosecution complaint filed by the ED under an investigation, and the said complaint duly incorporates the gist of the offences and how the offences were committed.

During the hearing, Advocate Naveen Malhotra, appearing for the petitioner, argued that the trial court did not take cognizance of the matter and that ED filed the complaint before completing the investigation, which violated Section 44(1)(b) of the PMLA. It was further contended that the petitioner's name was not mentioned in the FIR filed by the CBI or in the complaint filed by ED.

Opposing the said claims, Special Counsel  Anupam S Sharma, appearing for the, ED, contended that the trial court had properly taken cognizance. It emphasized that Section 44(1)(b) of the PMLA allows complaints to be filed during an investigation. Further, the ED submitted that the petitioner doesn't need to be named in the FIR.

Aligning with the ED, the court noted that when an investigating agency is authorized to conduct the investigation and carry out an additional investigation to collect further evidence, the concerned agency has the right to submit a supplementary complaint to present the newly collected material on record.

In view of this, the court disposed of the present application.

"The aforesaid discussions on facts as well as on law clearly states that there is no illegality committed by the learned Court below while passing the impugned order and the propositions put forth by the petitioner is rejected," it added.

For Petitioners: Mr. Naveen Malhotra and Mr. Ritvik Malhotra, Advocates

For Respondents: Mr Anupam S Sharma, Special Counsel, ED along with Mr Prakash Airan, Ms Harpreet Kalsi, Mr Vashisht Rao, Advocates with Mr Syamantak Modgil, AD (Through VC)

Case Title: CRL.M.C. 3146/2022 & CRL.M.A. 13287/2022 SANJAY AGGARWAL v DIRECTORATE OF ENFORCEMENT.