2023 Supreme(SC) 1184

SUPREME COURT OF INDIA
ABHAY S. OKA, PANKAJ MITHAL, JJ.
Pavana Dibbur - Appellant
Versus
The Directorate of Enforcement - Respondent
Criminal Appeal No.2779 of 2023
Decided on : 29-11-2023

IMPORTANT POINTS
(1) Offence of money laundering – Existence of proceeds of crime is sine qua non for offence under Section 3 of PMLA – Condition precedent for existence of proceeds of crime is existence of a scheduled offence – Offence under Section 3 can be committed after a scheduled offence is committed.
(2) Every crime which may generate proceeds of crime need not be a scheduled offence.
(3) Penal statutes are required to be strictly construed – Penal laws must be construed according to legislative intent as expressed in the enactment.

Headnote:

(A) Prevention of Money Laundering Act, 2002 – Section 3 – Offence of money laundering – Existence of proceeds of crime is sine qua non for offence under Section 3 of PMLA – Condition precedent for existence of proceeds of crime is existence of a scheduled offence – Offence under Section 3 can be committed after a scheduled offence is committed – It is not necessary that a person against whom offence under Section 3 of PMLA is alleged must have been shown as accused in scheduled offence – In a given case, if prosecution for scheduled offence ends in acquittal of all accused or discharge of all accused or proceedings of scheduled offence are quashed in its entirety, scheduled offence will not exist and no one can be prosecuted for offence punishable under Section 3 of PMLA as there will not be any proceeds of crime – In such a case, accused against whom complaint under Section 3 of PMLA is filed will benefit from scheduled offence ending by acquittal or discharge of all accused – Similarly, he will get benefit of quashing proceedings of scheduled offence – However, an accused in PMLA case who comes into picture after scheduled offence is committed by assisting in concealment or use of proceeds of crime need not be an accused in scheduled offence – Such an accused can still be prosecuted under PMLA so long as scheduled offence exists. (Paras 12, 14, 15 and 16)

(B) Prevention of Money Laundering Act, 2002 – Section 45(1) – Criminal Procedure Code, 1973 – Section 482 – Offence of money laundering – Cognisance of complaint – Allegation against appellant in complaint is that she purchased property worth Crores, though she did not have source of income which would generate enough money to buy subject properties – Issue of whether appellant used tainted money to acquire second property can be decided only after evidence is adduced – This is not a case where any material is placed on record to show that sale consideration was paid from a particular Bank Account of appellant – Every crime which may generate proceeds of crime need not be a scheduled offence – Offence punishable under Section 120B of IPC will become a scheduled offence only if conspiracy alleged is of committing an offence which is otherwise a scheduled offence – Impugned order quashed and set aside and complaint pending before Special Court for PMLA cases, quashed only insofar as present appellant is concerned. (Paras 17, 25, 26, 27 and 28)

(C) Interpretation of Statute – Penal statutes are required to be strictly construed – Penal laws must be construed according to legislative intent as expressed in the enactment – While giving effect to Legislature's intention, if two reasonable interpretations can be given to a particular provision of a penal statute, Court should generally adopt interpretation that avoids imposition of penal consequences – More lenient interpretation of the two needs to be adopted. (Paras 23 and 24)

Facts of the case:

Respondent–Directorate of Enforcement filed a complaint under the second proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002 before the Special Court for PMLA cases at Bengaluru. Appellant was shown as accused no.6 in the said complaint. By order dated 17th March 2022, Special Court took cognisance of said complaint. Appellant filed a petition before High Court of Karnataka at Bengaluru under Section 482 of Code of Criminal Procedure, 1973 seeking relief of quashing of the said complaint. By impugned judgment and order dated 27th September 2022, petition for quashing the complaint has been dismissed.

Findings of Court:

Except for Section 120B of the IPC, no other offence in the schedule has been applied. Therefore, in this case, the scheduled offence does not exist at all. Hence, appellant cannot be prosecuted for offences punishable under Section 3 of the PMLA.

Result : Appeal allowed.