Orissa High Court
Md. Intekhab Alam And Another vs Assistant Director on 18 July, 2025
THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.4405 of 2024
(In the matter of an application under Section 528 of the Bharatiya
Nagarik Suraksha Sanhita, 2023)
Md. Intekhab Alam and Another ....... Petitioners
-Versus-
Assistant Director,
Enforcement Directorate,
Government of India, Bhubaneswar ....... Opposite Party
For the Petitioners : Mr. P.N. Mishra, Senior Advocate
For the Opposite Party: Mr. Gopal Agrawal, Senior Advocate
for Enforcement Directorate
CORAM:
THE HONOURABLE SHRI JUSTICE SIBO SANKAR MISHRA
--------------------------------------------------------------------------------------
Date of Hearing: 04.03.2025 Date of Judgment: 18.07.2025
———————————————————————————
S.S. Mishra, J. The present petition under Section 528 of the
Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) has been filed
seeking quashing of the order of cognizance dated 03.12.2020
passed by the learned CBI-I cum-Special Judge (PMLA),
Bhubaneswar, now in the Court of the learned Sessions Judge,
Khurda at Bhubaneswar, as well as the consequential proceedings
pending in Criminal Misc. Case (PMLA) No.16 of 2020.
Page 1 of 23
.
2. The case arises out of allegations of illegal mining
operations by M/s. Serajuddin & Co. (Petitioner No.2), a
partnership firm comprising seven partners, including Md.
Mofazzalur Rehman (since deceased) and Md. Intekhab Alam
(Petitioner No.1). The Vigilance Department had registered FIR
Nos.54 and 55 of 2009 at Vigilance P.S., Balasore, Odisha,
leading to Charge Sheet Nos.3 and 4 dated 30.03.2012 against the
petitioners under the following provisions:
Sections 201, 379, 420, 120-B of the Indian Penal
Code, 1860 (IPC)
Section 21(1) of the Mines and Minerals
(Development and Regulation) Act, 1957
Section 2 of the Indian Forest Conservation Act, 1980
Section 13(2) read with 13(1)(d) of the Prevention of
Corruption Act, 1988
3. Based on the said Charge Sheets being the predicating/
scheduled offence, a complaint under Sections 3 and 45 of the
PMLA, 2002 was filed before the learned Special Judge (PMLA),
Bhubaneswar in Crl. Misc. (PMLA) Case No.16 of 2020, inter
Page 2 of 23
alia, on the allegation that the petitioners had received proceeds of
crime to the tune of ₹625,13,87,640.00/- (Six Hundred Twenty-
Five Crores Thirteen Lakh Eighty-Seven Thousand Six Forty
only) and the same is still retained by the Petitioner No.2 and, has
been laundered by the Petitioner firm, which is an offence under
Section 3 and punishable under Section 4 of the PMLA.
4. That it is also a matter of record that this Court vide order
dated 23.09.2022 passed in CRLMC No.2845 of 2021 and
CRLMC No.2272 of 2024, quashed the order of taking cognizance
passed by the trial court and the entire proceedings emanating
thereof against Md. Mofazzalur Rahman (deceased) and Md.
Intekhab Alam (Petitioner No.1). Pursuant to the order dated
23.09.2022 passed by this Court, the learned Special Judge
(Vigilance) Keonjhar vide order dated 01.11.2022 closed the case
against the aforesaid accused in so far as the scheduled offence is
concerned.
5. The petitioners, relying upon the order dated 23.09.2022
passed by this Court in CRLMC No.2845 of 2021 and CRLMC
No.2272 of 2024 and subsequent orders closing the case against
the petitioners by the court below, are now seeking quashing of the
Page 3 of 23
proceedings under the PMLA, 2002, pending before the learned
Special Judge, PMLA.
6. The primary grounds taken by the petitioners in support of
their prayer for quashing is that with the scheduled offences
having been quashed, there remains no basis for treating the
alleged amount as ‘proceeds of crime’ under Section 2(1)(u) of the
PMLA, 2002 and once there is no ‘proceeds of crime’, the
proceeding under PMLA does not survive.
7. Mr. Mishra, the learned Senior Counsel for the petitioners,
has strongly contended that the foundation of an offence under
Section 3 of PMLA, 2002, is the existence of ‘proceeds of crime’,
which must originate from a scheduled offence. Since the
scheduled offences have been quashed by this Court, there exists
no legal basis to treat any amount in the hands of the Petitioners as
proceeds of crime.
8. It has been further argued on behalf of the Petitioner No.2
that under partnership law, a firm is merely a collective name for
its partners and partnership firm is not a juristic person. Since only
two partners were being prosecuted for the scheduled offence,
namely, Md. Mofazzalur Rehman (deceased) and Md. Intekhab
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Alam (Petitioner No.1) and against the proceedings under the
scheduled offence have already been quashed, the firm itself
cannot be prosecuted independently.
9. The petitioners also relied on the judgment of the Hon’ble
Supreme Court in the case of “Indrani Patnaik vs Enforcement
Directorate” W.P. (C) No.368 of 2021, whereby the Hon’ble Apex
Court has quashed the proceedings under PMLA against another
accused company on similar grounds after the scheduled offence
was quashed. The relevant paragraph of the judgment passed in the
aforesaid case is extracted for ready reference:
“Learned senior counsel has submitted that in the present case,
prosecution of the petitioners in relation to the scheduled
offence, on which the proceedings under the Prevention of
Money-laundering Act, 2022 (PMLA) were based, have
already come to an end with the petitioners having been
discharged from V.G.R. Case No.59 of 2009 (T.R. Case No.80
of 2011) by the order dated 27.11.2020, as passed by the High
Court of Orissa in Criminal Revision No.831 of 2018. Learned
counsel would submit that in the given state of facts and the
law declared by this Court, there cannot be any prosecution
for the alleged offence of money-laundering in relation to the
said offence for which, the petitioners have already been
discharged. Learned Additional Solicitor General appearing
for the respondents though has not disputed the order dated
27.11.2020 passed by the High Court, discharging the from the
scheduled offence but has submitted that he has not received
further instructions as to whether the prosecuting agency has
challenged the said order or not. The record as it stands today,
the petitioners stand discharged of the scheduled offence and
therefore, in view of the law declared by this Court, there
could arise no question of they being prosecuted for illegal
gain of property as a result of the criminal activity relating to
the alleged scheduled offence. That being the position, we find
no reason to allow the proceedings against the petitioners
under PMLA to proceed further. However, taking note of the
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submissions made by the learned Additional Solicitor General
and in the interest of justice, we reserve the liberty for the
respondents in seeking revival of these proceedings if the order
discharging the petitioners is annulled or in any manner
varied, and if there be any legitimate ground to proceed under
PMLA. Subject to the observations and liberty foregoing, this
petition is allowed while quashing the proceeding in
Complaint Case No.05 of 2020 dated 10.01.2020 pending in
the Court of Sessions Court, Khurdha at Bhubaneswar cum
Special Court under the Prevention of Money-laundering Act,
2002.”
10. It has been strenuously argued on behalf of the petitioner
that under the scheme of PMLA, the offence of money laundering
is linked to the commission of a scheduled offence as defined
under Section 2(1)(y) of the Act. If there is no predicate offence,
then there can be no proceeds of crime, and consequently, no
offence of money laundering can arise. It is further submitted that
the Delhi High Court in Directorate of Enforcement v. Akhilesh
Singh (2024 SCCOnline DEL 3051) has taken the view that once
the predicate offence is quashed, proceedings under PMLA cannot
continue, as it is contingent upon the scheduled offence.
11. The petitioners have placed heavy reliance on the judgment
of the Hon’ble Supreme Court in Vijay Madanlal Choudhary &
Ors. v. Union of India (2022 SCC OnLine SC 929), where the
Court categorically held that:
“If the person is finally discharged/acquitted of the scheduled
offence or the criminal case against him is quashed by the court
of competent jurisdiction, there can be no offence of money
laundering against him or any one claiming such property beingPage 6 of 23
the property linked to stated scheduled offence through him.”
Since the High Court has quashed the proceedings against the
petitioners, there is no offence of money laundering under Section
3 of PMLA, 2002 would survive.
12. Per contra, Mr. Agrawal, the learned Senior Counsel for the
Opposite Party-Enforcement Directorate argues that Charge Sheet
Nos.3 and 4 dated 30.03.2012 filed in the court of the learned
Special Judge (Vigilance), Balasore u/s.120B/420/379 of IPC r/w
Section 13(1)(d) of the P.C. Act, 1988, Section 21(1) of MMDR
Act, 1957 and Section 24 of the PMLA, 2002, raises a statutory
presumption that any money recovered from the petitioners
constitutes ‘proceeds of crime’ unless they prove otherwise at trial.
Thus, the petitioners must discharge their burden at the trial stage,
and the proceedings should not be quashed at the threshold by
scuttling the proceeding abruptly.
13. Reliance has been placed by the Opposite Party on the
judgment of the Madras High Court in P. Rajendran v. Assistant
Director, ED (Crl.O.P.No.19880 of 2022), where the court held
that PMLA proceedings do not depend on the survival of the
predicate offence. The court further observed that in a prosecution
under PMLA, there are two sets of accused – one in the predicate
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offence and the other in the prosecution initiated by the
Enforcement Directorate. Therefore, PMLA is a standalone
offence, distinct from the predicate offence. Further relying on
Assistant Directorate of Enforcement v. State & Ors.
(Crl.O.P.No.28289 of 2023, Madras HC), which reaffirmed that
even if the predicate offence is closed, ED can place the facts
before the High Court under Section 482 Cr.P.C. to prevent
miscarriage of justice.
14. The Opposite Party further contended that mere quashing of
the scheduled offence qua one accused does not automatically
establish that the seized amount is legitimate income, and an
independent inquiry under PMLA is still permissible. The
Opposite Party relied on Mohan Lal Rathi v. Union of India &
Ors. (MANU/UP/2866/2023, Allahabad HC), where the court
emphasized that money laundering is an independent offence, and
even if the predicate offence is closed, the proceedings under
PMLA can continue if the ED establishes that the accused was
engaged in money laundering.
15. It is also submitted that the charge of theft under Section
379 IPC still exists against M/s. Serajuddin & Co., which itself
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forms a basis for the PMLA proceedings.
16. The learned Senior Counsel has also placed reliance on
Vijay Madanlal Choudhary v. Union of India (2022 SCC OnLine
SC 929), where the Supreme Court held that the existence of a
predicate offence is only relevant at the stage of initiation of
PMLA proceedings, but once PMLA Court takes cognizance and
proceeds with the matter, there would be no bearing of the non-
existence of the scheduled offence.
17. Mr. Agrawal, the learned Senior Counsel further submitted
that in view of Section 70 of the PMLA, which permits
prosecution of a company and those in charge of its affairs, and in
line with the principles laid down in Vijay Madanlal Choudhary
(supra) and P. Rajendran (supra), proceedings under PMLA shall
continue against the firm, M/s. Serajuddin & Co. and more
particularly because the proceeds of crime has been routed through
the accounts of the firm.
18. He further brought to the notice of the Court that during the
pendency of the proceeding before the learned Special Court,
PMLA, Bhubaneswar, Md. Mofazzalur Rahman expired and his
name has been deleted by the Special Court (PMLA), so only
Page 9 of 23
against Md. Intekhab Alam, present petitioner no.1, the proceeding
under schedule offence has been quashed. But on 08.09.2023
supplementary complaint was filed against newly added accused
persons, namely, Mr. Seraj Yusha, Mr. Meraj Yusha and M/s.
Yazdani International Pvt. Ltd. represented through Mr. Seraj
Yusha and Mr. Meraj Yusha. The learned Special Court took
cognizance against the newly added accused persons and issued
summons. Therefore, the cognizance order passed by the learned
Special Court (PMLA) against other accused persons cannot be
quashed on the ground that the proceeding under the scheduled
offence has been quashed as against one of the accused.
19. The primary issue before this Court is whether proceedings
under the PMLA, 2002, can continue against the petitioners when
the scheduled offences forming the basis of the proceedings have
been quashed and whether a firm which has not been made an
accused in the predicate offence or against which no proceedings
under the scheduled offence are pending can be made to face the
proceedings under PMLA, 2002.
20. Before deliberating upon the legal issue that has arisen for
the consideration of this Court, it would be relevant to extract
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some of the provisions of PMLA, 2002.
“”person” includes–
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether
incorporated or not,
(vi) every artificial juridical person not falling within any of the
preceding sub-clauses, and
(vii) any agency, office or branch owned or controlled by any of
the above persons mentioned in the preceding sub-clauses;”
“”proceeds of crime” means any property derived or obtained,
directly or indirectly, by any person as a result of criminal activity
relating to a scheduled offence or the value of any such property
[or where such property is taken or held outside the country, then
the property equivalent in value held within the country] [or
abroad]:
[Explanation.–For the removal of doubts, it is hereby clarified
that “proceeds of crime” include property not only derived or
obtained from the scheduled offence but also any property which
may directly or indirectly be derived or obtained as a result of
any criminal activity relatable to the scheduled offence;]”
Offence of money-laundering.–Whosoever directly or indirectly
attempts to indulge or knowingly assists or knowingly is a party or
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is actually involved in any process or activity connected with the
[proceeds of crime including its concealment, possession,
acquisition or use and projecting or claiming] it as untainted
property shall be guilty of offence of money-laundering.
[Explanation.–For the removal of doubts, it is hereby clarified
that,–
(i) a person shall be guilty of offence of money-laundering if such
person is found to have directly or indirectly attempted to indulge
or knowingly assisted or knowingly is a party or is actually
involved in one or more of the following processes or activities
connected 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 crime is a
continuing activity and continues till such time a person is directly
or indirectly enjoying the proceeds of crime by its concealment or
possession or acquisition or use or projecting it as untainted
property or claiming it as untainted property in any manner
whatsoever.]Burden of Proof.–In any proceeding relating to proceeds of crime
under this Act,–(a) in the case of a person charged with the
offence of money-laundering under Section 3, the Authority or
Court shall, unless the contrary is proved, presume that such
proceeds of crime are involved in money-laundering; and(b) in
the case of any other person the Authority or Court, may presume
that such proceeds of crime are involved in money-laundering.]Explanation to Section 44
[Explanation.–For the removal of doubts, it is clarified that,–
(i) the jurisdiction of the Special Court while dealing with the
Page 12 of 23
offence under this Act, during investigation, enquiry or trial under
this Act, shall not be dependent upon any orders passed in respect
of the scheduled offence, and the trial of both sets of offences by
the same court shall not be construed as joint trial;
(ii) the complaint shall be deemed to include any subsequent
complaint in respect of further investigation that may be conducted
to bring any further evidence, oral or documentary, against any
accused person involved in respect of the offence, for which
complaint has already been filed, whether named in the original
complaint or not.]Section 70
Offences by companies.–(1) Where a person committing a
contravention of any of the provisions of this Act or of any rule,
direction or order made thereunder is a company, every person
who, at the time the contravention was committed, was in charge
of, and was responsible to the company, for the conduct of the
business of the company as well as the company, shall be deemed
to be guilty of the contravention and shall be liable to be
proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render
any such person liable to punishment if he proves that the
contravention took place without his knowledge or that he
exercised all due diligence to prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a
contravention of any of the provisions of this Act or of any rule,
direction or order made thereunder has been committed by a
company and it is proved that the contravention has taken place
with the consent or connivance of, or is attributable to any neglect
on the part of any director, manager, secretary or other officer of
any company, such director, manager, secretary or other officer
shall also be deemed to be guilty of the contravention and shall be
liable to be proceeded against and punished accordingly.
Explanation [1].–For the purposes of this section,–
(i) “company” means any body corporate and includes a firm or
other association of individuals; and
(ii) “director”, in relation to a firm, means a partner in the firm.
Page 13 of 23
[Explanation 2.–For the removal of doubts, it is hereby clarified
that a company may be prosecuted, notwithstanding whether the
prosecution or conviction of any legal juridical person shall be
contingent on the prosecution or conviction of any individual.]
21. Bare reading of the aforementioned sections would make it
amply clear that:-
‘persons’ as defined U/s.2(1)(s)(4) includes a firm. Thus, for
the purpose of the offence of money laundering defined
U/s.3 of PMLA, 2002, a firm in its individual capacity and
in separation to its partners can be made an accused. The
intent of the legislature is very much clear that the purpose
of PMLA, 2002 is to prevent the creation and circulation of
‘proceeds of crime’ and remove the ‘proceeds of crime’
which have entered into the mainstream economy.
Therefore, legislature in its wisdom has brought under the
purview of the offence of money laundering, the juristic
personalities like companies and firms severally and
individually. The basic rationale behind such enactment is
to prevent the use of firms and companies to launder the
black money generated as ‘proceeds of crime’ by the
associates of the company/firm in their personal capacity,
however, using the shield of the company/firm.
Page 14 of 23
‘Proceeds of crime’ is not only derived or obtained from
scheduled offence but also includes any property which may
directly or indirectly be derived or obtained as a result of
any criminal activity related to the scheduled offences.
Thus, the legislature has consciously brought such gains
under the purview of the definition of ‘proceeds of crime’,
which are not only directly or indirectly derived from the
commission of scheduled offences but also relatable to
scheduled offences. Therefore, any income/gains/property
would fall under the category of ‘proceeds of crime’ if the
same is in some manner or the other relatable to the
scheduled offences. Thus, the prosecution in order to bring
the income/gains/property under the category of ‘proceeds
of crime’, has to prove relatebility of such property with the
scheduled offences. In the facts of the present case
proceedings under the scheduled offences are still pending
in the court of competent jurisdiction, although both the
petitioners are not parties to such proceedings anymore. But
the fact remains that proceedings under the scheduled
offence are still pending against other co-accused persons.
Page 15 of 23
Section 24 of PMLA, 2002 creates a presumption against
the accused to say that unless the contrary is proved, it
would be presumed that the alleged ‘proceeds of crime’ are
rooted in money laundering. Thereby, not only is a
presumption created against the accused but a positive
obligation is cast upon the accused to prove the contrary,
that is to say that ‘proceeds of crime’ are not involved in
money laundering.
Explanation to Section 44 clearly bifurcates proceedings
under the scheduled offence and proceedings under PMLA,
2002 making both the proceedings independent as both the
offences are independent.
22. In the present case, the closure of the predicate offence qua
Petitioner No.1, removes the very foundation on which the
proceeds of crime are alleged to have been generated by the
Petitioner No.1. The Enforcement Directorate has not
independently demonstrated that the petitioners personally
engaged in activities that would constitute an offence under
Section 3 of PMLA.
23. The Madras High Court, in P. Rajendran v. Assistant
Page 16 of 23
Director, ED (Crl.O.P.No.19880 of 2022), recognized that while
PMLA is a standalone offence, it cannot be sustained in cases
where the accused individuals are not actively engaged in money
laundering but are merely implicated due to their association with
the predicate offence.
24. Furthermore, in Mohan Lal Rathi v. Union of India
(MANU/UP/2866/2023, Allahabad HC), the court held that a
person accused under PMLA cannot be prosecuted indefinitely
when the predicate offence is no longer in existence, unless there
is specific evidence of money laundering against them.
25. It’s equally relevant to note that the Prevention of Money
Laundering Act, 2002, defines the offence of money laundering
under Section 3, which criminalizes activities involving the
proceeds of crime, when derived from a predicate offence.
However, the Supreme Court in Vijay Madanlal Choudhary v.
Union of India (2022 SCC OnLine SC 929) held that while
PMLA proceedings do not automatically cease if the predicate
offence is dropped, each case must be examined based on its
individual facts. The Supreme Court has observed in multiple
cases that criminal liability cannot be attributed to individuals
Page 17 of 23
merely by virtue of their position in a company/firm unless there is
direct involvement or mens rea (criminal intent). In the absence of
such evidence, individuals cannot be made to face prolonged
litigation.
26. Thus, in view of the law laid down in judgement passed by
the Hon’ble Apex Court in the case of “Vijay Madan lal
Chaudhary & Ors. Vs. Union of India & Ors.” (supra) and
“Indrani Patnaik vs. Enforcement Directorate” (supra) and on
the basis of ratio of other judgments as discussed above, the only
conclusion that could be arrived at is that the proceedings against
Petitioner No.1 under PMLA, 2002 cannot be maintained and are
liable to be quashed. Because, no schedule offence exists against
him, hence he can’t be related to the alleged proceeds of crime.
However, in respect of Petitioner No.2, the situation is somewhat
different. It appears from the observation made by the coordinate
bench of this Court dated 23.09.2022, the predicative offence vis-
à-vis the Petitioner No.1 was quashed solely on technical grounds.
At the same time, the complicity of Petitioner No.2, i.e., the firm
in the commission of the crime has been highlighted. An
inescapable inference that could be drawn from the judgment is
that by using the Partnership firm (Petitioner No.2) as a shield, the
Page 18 of 23
crime appears to have been committed. Therefore, the complaint
U/s.45 of PMLA against the firm survives particularly under the
aid of Section 70 of PMLA.
27. In financial and corporate fraud cases, courts have
distinguished between corporate liability and individual liability.
In Shiv Kumar Jatia vs. State Of Nct Of Delhi (AIR 2019
SUPREME COURT 4463), the Supreme Court held that-
“27. The liability of the Directors /the controlling authorities
of company, in a corporate criminal liability is elaborately
considered by this Court in the case of Sunil Bharti Mittal. In
the aforesaid case, while considering the circumstances when
Director/person in charge of the affairs of the company can
also be prosecuted, when the company is an accused person,
this Court has held, a corporate entity is an artificial person
which acts through its officers, Directors, Managing Director,
Chairman, etc. If such a company commits an offence
involving mens rea, it would normally be the intent and action
of that individual who would act on behalf of the company. At
the same time it is observed that it is the cardinal principle of
criminal jurisprudence that there is no vicarious Crl.A. @ SLP
(Crl.)No.8008/18 etc. etc. liability unless the Statute
specifically provides for. It is further held by this Court, an
individual who has perpetrated the commission of an offence
on behalf of the company can be made an accused, along with
the company, if there is sufficient evidence of his active role
coupled with criminal intent. Further it is also held that an
individual can be implicated in those cases where statutory
regime itself attracts the doctrine of vicarious liability, by
specifically incorporating such a provision.”
28. The PMLA recognizes corporate liability under Section 70,
and the law permits a company or a firm to be prosecuted
separately from its officers. In the present case, the firm has been
prosecuted separately and the predicating offence vis-a-vis the
Page 19 of 23
firm still going on. Independent evidence has been provided by the
Enforcement Directorate to establish the complicity of the firm
through money laundering transactions carried through the firm.
29. Moreover, quashing of PMLA proceedings at this stage
would create an anomalous situation because, in the event, it is
proved in the course of trial that the proceeds of crime has been
generated through the schedule offence for which the trial is
pending qua other co-accused person, for the reasons that illegal
mining activities have been conducted in the name of the
Petitioner No.2, which is the precise reasons for quashing of the
proceedings against the Petitioner No.1 by this Court vide order
dated 23.09.2022 passed in CRLMC No.2272 of 2021. In that
view of the matter, this Court is unable to accept the submission of
the learned Senior Counsel, Mr. Mishra in so far as Petitioner
No.2, i.e., the firm is concerned.
30. In the present case, complaint has been filed against the
Petitioner No.1, i.e., Md. Intekhab Alam and Petitioner No.2, i.e.,
M/s. Serajuddin & Co. U/s.44 and 45 of PMLA, 2002 for
commissioning of offence of money laundering, U/s.3 punishable
U/s.4 of PMLA, 2002. The proceedings against accused No.1 in
Page 20 of 23
his individual capacity have already been quashed by this Court
pursuant to which the learned Special Judge (Vigilance),
Keonjhar, has closed the proceedings against two accused persons
vide its order dated 01.11.2022. Although, this Court vide order
dated 23.09.2022, has quashed the criminal proceedings against
Petitioner No.1 in the predicate offence, however, on perusal of
the said order, findings recorded by this Court would suggest that
petitioner No.1 was able to persuade this Court that the allegations
and the material brought on record by the prosecution in the
Charge Sheet was primarily against M/s. Serajuddin & Co
(Petitioner No.2) and there was no specific allegation against the
Petitioner No.1 in his personal and individual capacity, therefore,
he in his personal capacity cannot be made to face the criminal
trial in the predicate offence. Perusal of paragraph 13 of the said
judgement passed by this Court would indicate that this Court has
rather indicted M/s. Serajuddin & Co. (Petitioner No.2) with
allegations of illegal mining activities. The relevant paragraphs of
the order dated 23.09.2022 passed by this Court in CRLMC
No.2272 of 2021 are extracted herein below:
“13. In the case at hand, the documents relied on by the
petitioner do not appear to have been disputed by the Vigilance
Department. It further appears from the charge sheet and other
papers on record that the entire allegation is directed against
the Lessee-company, i.e., M/s. Serajuddin & Co.. There is
Page 21 of 23
hardly any allegation in specific against the petitioners
regarding their involvement in any of the alleged offences,
independent of the will, intent or interest of the Lessee-company.
The allegation against the Lessee-company appears to be
essentially regarding alleged violation, illegalities etc. in
relation to Mining activities, attracting the provisions of the
MMDR Act. Needless to mention that no prosecution for any
offence under the said Act can be initiated except on a complaint
by the Authorized Officer in view of Section 22 of the said Act. A
complaint is also required for launching a prosecution under
the Forest (Conservation) Act, 1980. Thus, statutory have not
been followed in the present case.”
“18. In view of the well settled principal of law, as apparent
form the decisions quoted above, the prosecution launched
against the petitioners is found to be legally not sustainable
although the petitioners are admittedly Partners of the Lessee-
company. Further, for the discussion made hereinbefore, the
offence of criminal conspiracy and other offences as alleged,
are found to be not made out against the petitioners, especially
when there is no specific allegation in that regard against them
either as an individual or a partner of the Lessee-company.
Hence, this court finds merit in the contention of the petitioners
that continuance of the criminal proceedings against them will
amount to abuse of the process of the Court. The CRLMC,
therefore, deserved to be allowed.”
31. Therefore, the proceedings against M/s. Serajuddin & Co.
(Petitioner No.2) for the offence of money laundering stand on a
different footing altogether. This Court finds merit in the argument
of the learned Senior Counsel for the Opposite Party that the
proceedings under the predicate offence are not quashed in its
entirety and same are still pending against other accused person
before the Vigilance Court and the issue with regard to whether the
money recovered and seized is proceeds of crime will finally be
determined in the course of trial. Moreover, in view of a statutory
presumption that any money/property recovered from the
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petitioners constitutes ‘proceeds of crime’ unless same is disproved
at trial, the petitioner No.2 must discharge its burden at the trial
alone, for which the proceedings ought not be quashed at the stage
of cognizance.
32. Consequently, the proceedings against the petitioners, Md.
Intekhab Alam and another are hereby quashed.
33. However, the proceedings against the company/firm shall
continue, and the Enforcement Directorate is free to proceed in
accordance with law regarding any further investigation or
prosecution of the company/firm under PMLA by strictly
complying the procedural safeguard provided under the Prevention
of Money Laundering Act, 2002, and any other applicable laws.
34. The CRLMC is partly allowed.
(S.S. Mishra)
Judge
The High Court of Orissa, Cuttack
The 18th day of July, 2025/Subhasis Mohanty
Signature Not Verified
Digitally Signed
Signed by: SUBHASIS MOHANTY
Designation: Personal Assistant
Reason: Authentication
Location: High Court of Orissa, Cuttack.
Date: 18-Jul-2025 18:55:59
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