The Supreme Court reaffirmed that allegations of corruption inherently establish proceeds of crime, allowing the ED to initiate investigations under the Prevention of Money Laundering Act, despite prior procedural irregularities.

JUDGMENT :

V. Ramasubramanian, J.

Permission to file special leave petition(s) is granted.

2. Delay condoned.

3. Leave granted.

4. Aggrieved by two independent orders, one passed by a learned Judge of the Madras High Court on 31.10.2022 disposing of a batch of criminal petitions and the other passed by the Division Bench of the Madras High Court on 01.09.2022, putting on hold an investigation by the Enforcement Directorate,¹[For short, “ED”], various persons such as (i) the de-facto complainants; (ii) third parties; (iii) the accused; and (iv) the ED have come up with these batch of appeals. Other than the batch of appeals arising out of the said two orders of the High Court, there are also two appeals, one challenging the refusal of the High Court to extend the time for completion of investigation and another challenging an order passed by the Division Bench of the High Court granting limited relief to the Enforcement Directorate to access certain documents available on record in the Special Court trying the predicate offences. Apart from these appeals, there are also two contempt petitions and an application seeking the constitution of a Special Investigation Team.

5. We have heard Shri Tushar Mehta, learned Solicitor General appearing for the ED, Shri Gopal Sankaranarayan, learned senior counsel, Shri Prashant Bhushan and Shri Balaji Srinivasan, learned counsel appearing for one set of parties (victims and a NGO), Shri Kapil Sibal, Shri C.A. Sundaram, Shri Sidharth Luthra, Shri Mukul Rohatgi, learned senior counsel appearing for another set of parties (accused), Ms. V. Mohana and Shri Siddharth Agrawal, learned senior counsel appearing for the de facto complainants and Shri Ranjit Kumar, learned senior counsel appearing for the State of Tamil Nadu.

Background Facts

6. The background facts necessary to understand the complexities of the batch of cases on hand are as follows:

(i) In November 2014, the Metropolitan Transport Corporation, wholly owned by the State of Tamil Nadu issued five Advertisements, in Advertisement Nos.1/2014 to 5/2014, calling for applications for appointment to various posts such as Drivers (746 posts), Conductors (610 posts), Junior Tradesman (Trainee) (261 posts), Junior Engineer (Trainee) (13 posts) and Assistant Engineer (Trainee) (40 posts);

(ii) After interviews were held on 24.12.2014 and the Select List got published, one Devasagayam lodged a complaint on 29.10.2015 with the Chennai PS CCB against 10 individuals, alleging that he paid a sum of Rs.2,60,000/- to a Conductor by name Palani for getting the job of Conductor in the Transport Corporation for his son. However, his son did not get a job and when he confronted Palani, he was directed to several persons. When he demanded at least the refund of money, he did not get it. Therefore, he lodged a complaint which was registered as FIR No.441 of 2015 for alleged offences under Sections 406 , 420 read with Section 34 of the INDIAN PENAL CODE , 1860,²[For short “IPC”]. In this complaint, the accused who are now before us, including the one who is holding the post of Minister in the Government of Tamil Nadu were not implicated.

(iii) Similarly, one Gopi gave a petition dated 07.03.2016 to the Commissioner of Police claiming that he had applied for the post of Conductor and that after the interviews, he was approached by one Ashokan claiming to be the brother and one Karthik claiming to be the brother-in-law of the Minister Senthil Balaji, demanding a bribe for securing appointment and that he had paid a sum of Rs.2,40,000/- to those persons. Complaining that the Police did not register his complaint, the