The Madras High Court has recently quashed the prosecution against Chartered Accountant Murali Krishna Chakrala observing that, he cannot be held guilty for the ingenuine documents submitted to him by the client.
The FIR is based on the commission of a scheduled offence under the Prevention of Money-Laundering Act (PMLA), 2002 pursuant to which the Enforcement Directorate registered a case.
The initial investigation had revealed that a sum of Rs.8 crores was sent out of India through seven banks to fictitious entities abroad. However, the Enforcement Directorate continued with the investigation of the case, though a complaint was filed as stated above. During investigation, the Enforcement Directorate stumbled upon some Form 15CB that were issued by CA Murali Krishna Chakrala, the petitioner.
The ED zeroed in on him and during interrogation, he revealed startling facts that one of his clients had approached him for issuance of Form 15CB under Rule 37 BB of the Income Tax Rules, 1962, and submitted documents in support of his request; accordingly, he (Murali Krishna Chakrala) perused those documents and issued certificates to the effect that it is not necessary to issue Form 15CB in respect of overseas payment of imports.
Aggrieved by the addition of him as accused in the case, the CA filed a discharge petition in the trial court which was rejected. Aggrieved by the order of the trial court, he proceeded with the present revision petition.
The Enforcement Directorate justified the prosecution of Murali Krishna Chakrala contending that there are prima facie materials against him for the trial to proceed further.
The Division Bench of Justice P N Prakash and Justice G Chandrasekharan observed that, “the submission of Mr.Nithyaesh Natraj, learned counsel, that mere issuance of five numbers of Form 15CB at the request of Kiyam Mohammed [A7], would not, by itself, bring Murali Krishna Chakrala into the net of conspiracy to indulge in money laundering, merits acceptance.”
The High Court thus held that “a Chartered Accountant is required to only examine the nature of the remittance and nothing more. The Chartered Accountant is not required to go into the genuineness or otherwise of the documents submitted by his clients.”
Applying the same, it was found that the prosecution of Murali Krishna Chakrala, in the facts and circumstances of the case at hand, could not be sustained.
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