No prosecution against Co. under PMLA as entrusted person opened fake bank a/c

Case Details: VMT Spinning Mills India (P.) Ltd. v. Assistant Director, Directorate of Enforcement,Chennai - [2022] 136 taxmann.com 89 (Madras)

Judiciary and Counsel Details

• • P.N. Prakash and MS. R.N. Manjula, JJ. 
  • B. Kumar, Sr. Counsel and I. Abrar Mohamed Abdullah for the Petitioner. 
  • Ms. G. Hema, Spl. Public Prosecutor for the Respondent.

Facts of the Case

In the instant case, where one ‘S’, to whom affairs of petitioner ‘VMT Mills’ were entrusted in good faith by its owners to help it to come out of its financial crisis, had opened a fake bank account in name of said Mill with forged documents and without knowledge of true owner of mill and had parked funds that were generated by him by indulging in cheating.

High Court Held

In that account, it was held that ‘VMT Mills’ could not be prosecuted for offence of money laundering under sections 3 and 4 and accordingly, criminal petition for quashing of prosecution was to be allowed.