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SUPREME COURT OF INDIA
UDAY UMESH LALIT, CJI., BELA M. TRIVEDI, J.
Directorate of Enforcement - Appellant
Versus
Padmanabhan Kishore - Respondent
Criminal Appeal No. 1864 of 2022 (Arising out of SLP (Crl.) No. 2668 of 2022)
Decided On : 31-10-2022
Prevention of Money Laundering Act, 2002 – Sections 3 and 4 – Prevention of Corruption Act, 1988 – Sections 7, 12, 13(1)(d) read with Section 13(2) – Indian Penal Code, 1860 – Section 120B – Money laundering – Quashing petition – So long as amount is in hands of a bribe giver, and till it does not get impressed with requisite intent and is actually handed over as a bribe, it would definitely be untainted money – If money is handed over without such intent, it would be a mere entrustment – If it is thereafter appropriated by public servant, offence would be of misappropriation or species thereof but certainly not of bribe – Crucial part is requisite intent to hand over amount as bribe and normally such intent must necessarily be antecedent or prior to moment amount is handed over – Requisite intent would always be at the core before amount is handed over – Without such active participation on part of person concerned, money would not assume character of being proceeds of crime – Respondent was prima facie involved in activity connected with proceeds of crime – Judgment and order passed by High Court set aside – Consequently, respondent shall continue to be arrayed and proceeded against in accordance with law in E.C.I.R. registered by Enforcement Directorate. (Paras 16, 17 and 20)
Facts of the case:
Present appeal challenges final judgment and order dated 1.3.2021 passed by the High Court of Judicature at Madras in Writ Petition. Writ petition was filed by the respondent seeking quashing of proceedings initiated against him under provisions of Prevention of Money Laundering Act, 2002.
Findings of Court:
View taken by the High Court that the respondent cannot be held liable for the offence under PML Act is thus completely incorrect.
Result : Appeal allowed.
Yes, because the PC Act offences are scheduled offences under Paragraph 8 of Part-A of the PML Act schedule, and any property derived from criminal activity relating to these scheduled offences constitutes proceeds of crime under Section 2(1)(u). (Para 9 , 10 , 11 , 13 )
Yes, because by handing over money with the requisite bribe intent, the person knowingly assists or is a party to an activity connected with proceeds of crime, including possession or acquisition thereof. Section 3's expressions are wide enough to cover such a role. (Para 14 , 15 , 16 )
No, the High Court's view was incorrect because the requisite intent to give a bribe is antecedent to handing over the money, and by handing over money with such intent, the person is involved in a process connected with proceeds of crime under the PML Act. (Para 18 , 19 , 20 )
JUDGMENT :
Uday Umesh Lalit, CJI.
1. Leave granted.
2. This appeal challenges the final judgment and order dated 1.3.2021 passed by the High Court of Judicature at Madras in Writ Petition No. 25670/2019.
3. The aforestated writ petition was filed by the respondent herein seeking quashing of proceedings initiated against him under the provisions of the Prevention of Money Laundering Act, 2002 (“PML Act”, for short).
4. The basic facts which led to the filing of said writ petition stand captured in paragraphs 2.1 to 2.3 of the judgment under appeal, as under: -
“2.1 One Andasu Ravinder (A1), IRS, was working as Additional Commissioner of Income Tax, Chennai. On intelligence, the Central Bureau of Investigation (for brevity “the CBI”) checked a car that was parked in front of the premises of the said Andasu Ravinder's (A1) house on 29.08.2011 and recovered a sum of Rs.50,00,000/- in cash. It is alleged that Andasu Ravinder (A1) and one Uttam Chand Bohra (A3) were in that car at that time.
2.2 During investigation, it came to light that the sum of Rs.50,00,000/- was handed over to the said Andasu Ravinder (A1) by one Padmanabhan Kishore (A2), petitioner herein, whose income tax file was pending with Andasu Ravinder (A1) for clearance. Since Padmanabhan Kishore (A2) wanted certain benefits, he had allegedly paid the sum of Rs.50,00,000/- as bribe to Andasu Ravinder (A1).
2.3 In connection with this seizure, the CBI registered an FIR in R.C.No.MA1 2011 A 0033 on 29.08.2011 and after completing the investigation, filed charge sheet in C.C.No.3 of 2013 before the Special Court for the CBI Cases, Chennai, for the offences under Section 120-B IPC and Sections 7, 12, 13(1)(d) r/w 13(2) of the Prevention of Corruption Act, 1988, against Andasu Ravinder (A1), Padmanabhan Kishore (A2), Uttam Chand Bohra (A3), Ramakrishnan (A4), T. Banusekar (A5) and P. Chandrasekaran (A6). Since the case registered by the CBI disclosed the commission of a 'schedule offence' under the Prevention of Money Laundering Act, 2002 (for brevity “the PML Act”), the Enforcement Directorate registered a case in E.C.I.R.No.13 of 2016 and after completing the investigation, filed a complaint in C.C.No.60 of 2018 against Everonn Education Limited and three others including Padmanabhan Kishore (A2) for the offences under Section 3 r/w 4 of the PML Act, for quashing which, Padmanabhan Kishore (A2) is before this Court.”
5. As is evident from the quoted portion, the respondent had allegedly handed over a sum of Rs.50,00,000/- (Rupees fifty lakhs only) to a public servant, which transaction and the surrounding circumstances were projected in FIR dated 29.8.2011, leading to registration of crime under Section 120B, Indian Penal Code, 1860 (“IPC”, for short) and Sections 7, 12, 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 (“PC Act”, for short). Later, a case was registered by the Enforcement Directorate against the accused including the respondent under Sections 3 and 4 of the PML Act.
6. The basic submission advanced on behalf of the respondent was that the amount in question, as long as it was in the hands of respondent, could not be said to be tainted money; that it assumed such character only after it was received by the public servant; and as such the respondent could not be said to be connected with proceeds of crime and could not be proceeded against under the provisions of the PML Act. The submission was accepted by the High Court with the following observations: -
“7. For attracting the penal provisions of the PML Act, the accused should have projected the proceeds of a crime as untainted money. In this case, the sum of Rs.50,00,000/- as long as it was in the hands of Padmanabhan Kishore (A2) could not have been stated as a tainted money because it is not the case of the CBI in C.C.No.3 of 2013 that Padmanabhan Kishore (A2) had mobilised Rs.5
Money laundering – Crucial part is requisite intent to hand over amount as bribe and normally such intent must necessarily be antecedent or prior to moment amount is handed over.
The Prevention of Money Laundering Act proceedings are independent of the predicate offence and must proceed without delay, reflecting the urgency in addressing economic crimes.
The trial under the Prevention of Money Laundering Act is independent of any pending trial for the predicate offence, as affirmed by the court.
The main legal point established in the judgment is the wide scope of Section 3 of the Prevention of Money-Laundering Act, 2002 to cover all persons involved in any process or activity connected with....
The offence of money laundering under the Prevention of Money Laundering Act, 2002 is an independent offence regarding the process or activity connected with the proceeds of crime, which has nothing ....
Assisting in the generation of proceeds of crime does not constitute an offence of money laundering under the Prevention of Money Laundering Act without involvement in subsequent activities related t....
Possession of proceeds of crime infers necessary knowledge for prosecution under the Prevention of Money Laundering Act, regardless of whether the individual is charged in underlying predicate offenc....
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