Demonetised currency case: Major embarrassment for Panchkula police

Saurabh Malik

Chandigarh, March 14

In a major embarrassment for the police, the Punjab and Haryana High Court has quashed an FIR alleging cheating, criminal conspiracy and money laundering by two persons found with demonetised currency. The Bench held that the local police were not competent to investigate the allegations of money laundering. Besides, under no stretch of interpretation could it be concluded that the offence of cheating under Section 420 of the IPC was made out from the story put forth by the prosecution.

The matter was placed before Justice Sant Parkash after a petition was filed against the state of Haryana for quashing an FIR registered on November 29, 2016, under Section 4 of the Prevention of Money Laundering Act, with Sections 420 and 120-B of the IPC, at the Sector 20 police station in Panchkula.

The Bench, during the course of the hearing, was told that the petitioners were apprehended by the police party as they were found in conscious possession of Rs20 lakh in denominations of Rs2,000, Rs1,000 and Rs500. The petitioners were carrying the currency notes for getting them exchanged in Sector 20, Panchkula, “without there being any documentary evidence since the currency notes of denomination of Rs500 and Rs1,000 were declared illegal tender”.

Appearing before the Bench, their counsel submitted that the FIR registered against them was liable to be quashed as money laundering was a special statute. The police had no role to play as the investigation was to be conducted by the director or an authority appointed by the Central Government under special order. The petitioners were only exchanging old currency. Even during the course of the investigation, Section 4 of the Act was deleted. The money recovered was refunded with interest on explaining the source of income to the Income Tax Department.

The counsel added that Section 420 on cheating and Section 120-B on criminal conspiracy were not attracted in the facts and circumstances of the case as the petitioners had not cheated or conspired with anyone. The currency notes belonged to them. As such, the provisions of the IPC had been wrongly invoked by the local police.

Justice Sant Parkash agreed a perusal of the provisions made it crystal clear that the police were not competent to investigate the matter as only a director or an authority authorised by the Centre was competent to investigate or collect evidence.

“Admittedly, the petitioners intended to exchange the old currency with the general public. However, the prosecution failed to establish on the basis of any documentary evidence that the public had been cheated by the alleged act of petitioners….,” Justice Sant Parkash added, while quashing the FIR along with consequent proceedings.

What the Bench said

Admittedly, the petitioners intended to exchange the old currency with the general public. However, the prosecution failed to establish on the basis of any documentary evidence that the public had been cheated by the alleged act of petitioners…. — Justice Sant Parkash