Allahabad HC Refuses To Quash Proceedings Against Former SP Minister Gayatri Prajapati In Money Laundering Case

The Bench headed by Justice Subhash Vidyarthi held that “The allegations clearly make out a case for trial of the applicant for commission of offence under Section 3 of the PMLA as upon consideration of the record of the case and the documents submitted therewith, it does not appear that there is not sufficient ground for proceeding against the applicant. There appears to be no illegality in the order passed by the Trial Court rejecting the application for discharge filed by the applicant and in the order framing charges against him”.

Rejecting the Application under Sector 482 CrPC, the Court stated “The E.D. has filed the complaint after conducting investigation, when the evidence collected prima facie established commission of offence under PMLA and there appears to be no illegality in the order passed by the trial Court. The application lacks merit and the same is, accordingly, rejected.”

Advocate Indu Prakash Singh appeared on behalf of the Applicant while Advocate Kuldeep Srivastava appeared for the Respondent.

The Applicant, Gayatri Prasad Prajapati, was a minister in the Samajwadi Party (SP) Govt. In the year 2013, he was appointed as Minister of State for Irrigation and later he was appointed as the Minister of State for Mining. The applicant remained a Minister till 2017.

On November 26, 2020, the U.P Vigilance Establishment filed a First Information Report (F.I.R) against the Applicant under Sections 13(1) (b) and 13 (2) of the Prevention of Corruption Act, 1988. It was alleged that the Applicant which serving as a minister had earned ₹49,93,149/- from declared sources of income. However, he spent ₹3,48,21,760/- on other assets including properties while being a minister. There was a disproportion in his income in excess of over 2.98 crores.

The E.D. carried out its enquiry and filed a complaint in Special Court for Prevention of Money Laundering Act (PMLA) Cases on April 08, 2021 invoking prosecution and punishment under Section 4 of the PMLA.

The Applicant filed a discharge application under Section 227 CrPC stating that no charge sheet has been filed against him and there is no prima facie material to establish guilt. Vide order dated December 22, 2022, the Trial Court rejected the Discharge Application citing the decision of Supreme Court in Vijay Madanlal Choudhary v. Union of India, Special Leave Petition (Criminal) No. 4634 OF 2014 and further framed charges under PMLA against the accused.

The present petition is filed before the High Court challenging the decision of the Special Court. The Court while examining the charges and looking at the facts of the case stated that “The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money laundering. However, when the arrested person is produced before the Special Court, it is open to the Special Court to look into the relevant records presented by the authorized representative of ED for answering the issue of need for his/her continued detention in connection with the offence of money laundering.”

Further the Court stated that “The statutory provisions regarding discharge of an accused person and framing charges against him, are contained in Sections 227 and 228 of the Criminal Procedure Code. We have already noticed that the legislature in its wisdom has used the expression. There is ground for presuming that the accused has committed an offence". This has an inbuilt element of presumption once the ingredients of an offence with reference to the allegations made are satisfied, the Court would not doubt the case of the prosecution unduly and extend its jurisdiction to quash the charge in haste. However, while framing charges, the Court is not required to form a definite opinion that the accused is guilty of committing an offence.”

The Application was dismissed accordingly on lack of merit.

Cause Title: Gayatri Prasad Prajapati v. Directorate of Enforcement

Click here to read/download judgment