2017 (12) TMI 1824 - DSC - Money Laundering

Money Laundering - allegations of irregularities and bribery - attachment of the properties, being the proceeds of crime - HELD THAT:- There is a schedule attached to the Act. It contains a list of various enactments and the offences created thereunder, which are to be treated as scheduled offences. Prevention of Corruption Act, 1988 is one of the Acts mentioned in the schedule. Section 7 of this Act pertains to public servant taking gratification other than legal remuneration in respect of an official act and Section 13 relates to criminal misconduct by a public servant. Both of these offences are thus scheduled offences as per Section 2(1)(y) of the Act - “proceeds of crime” is a property derived by any person as a result of criminal activity relating to a scheduled offence. Anyone who directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with proceeds of crime, including its concealment, possession, acquisition or use and projecting or claiming it as untainted property commits the offence of money­laundering. Thus, for commission of an offence of money­laundering, there should be a scheduled offence and out of that offence, the accused must have derived or obtained proceeds of crime and having obtained such proceeds, must have projected or claimed it as untainted.

Thus, “Proceeds of crime” is the essence and an indispensable element of the offence of money­laundering. It is the core constituent of the offence. Without the existence of proceeds of crime, there cannot be any commission of an offence of money­laundering. It is only when “proceeds of crime” is projected or attempted to be projected as untainted property, the offence of money­ laundering arises.

In nutshell, the existence of a scheduled offence and emergence of “proceeds of crime” therefrom, is sine qua non for the existence of the offence of money­laundering.

It is the case of the prosecution that subsequently on the registration of criminal case by CBI and arrest of Sh. A. Raja, this amount was returned and this was done by executing several ex­post documents to project this amount as untainted, that is, regular commercial transactions. Hence, this amount of ₹ 200 crore was derived from a criminal activity relating to a scheduled offence and, as such, constituted “proceeds of crime” and these “proceeds of crime” were projected, both during transfer from Dynamix Realty to Kalaignar TV (P) Limited and vice versa, as genuine business transactions and these acts constituted an offence of money­laundering by all the accused involved in the case - in the present case, the alleged “proceeds of crime” were generated for the favours allegedly shown by Sh. A. Raja to STPL in the matter of grant of thirteen UAS licences. Thus, the entire case hinges upon “proceeds of crime” of ₹ 200 crore, which were generated when DB Group paid an illegal gratification of ₹ 200 crore to Sh. A. Raja, which was parked in Kalaignar TV (P) Limited.

Since there are no “proceeds of crime”, there is no need to discuss other issues based on evidence led by the parties, as that would amount to an exercise, not only in speculation but also in futility, as the very basic fact required for constitution of an offence of moneylaundering, that is, “proceeds of crime”, is knocked out - all accused are entitled to be acquitted and are acquitted.

Application disposed off.