2022 (1) TMI 1335 - HC - PMLA
Money Laundering - untainted property - proceeds of crime - sin of having recklessly granted housing loans and personal loans to Vijayakumar and others - to be prosecuted under Section 3 read with Section 4 of the PML Act or not? - HELD THAT:- The explanation to Section 3 of the PML Act, cannot have the effect of expanding the horizons of the mother penal provision. The 'explanation' by itself cannot create a new offence. As held by the Supreme Court in Bihar Cooperative Development Cane Marketing Union Ltd. and Another Vs Bank of Bihar and Others [1966 (10) TMI 145 - SUPREME COURT], the explanation must be read as to harmonise with and clear up any ambiguity in the main section and that it should not be so construed as to widen the ambit of the section. The interpretation proffered by the learned Special Public Prosecutors that mere generation and possession of the proceeds of a crime by the commission of a criminal activity, would attract the penal provisions of PML Act, would lead to disastrous results, which we propose to demonstrate with the following illustration. Section 392 IPC-Robbery, is a scheduled offence under the PML Act. A person commits robbery of Rs.1 crore at knife point from the cashier at a bank and decamps with the booty.
The Enforcement Directorate had not registered 2023 ECIRs under the PML Act because, they are aware that mere generation of proceeds of crime via a criminal activity without anything more, cannot attract PML Act. In the above illustration, the robber should have projected the sum of Rs.1 crore, being the proceeds of crime, as untainted property. The Enforcement Directorate cannot be heard to say that every robber would be liable under the PML Act, but, that they would pick and choose only the best amongst them to prosecute under the PML Act. Thus, when a robber cannot be prosecuted under the PML Act for the offence of robbery simpliciter, his accessories like conspirators and abettors, cannot also be prosecuted under the PML Act, in the absence of any material to show that they had projected the fruits of the crime as untainted property.
Chandrasekaran is being prosecuted for the offence under Section 3 read with Section 4 of the PML Act, for having sanctioned the housing loans and personal loans to the co-accused in violation of banking rules. He is now facing seven prosecutions that have been launched against him by the CBI in the Special Court for CBI Cases, for having sanctioned the loans. In the absence of any material to show that Chandrasekaran had directly or indirectly assisted the borrowers in projecting the total loan amount of Rs.19.69 crores (Rs.5.21 crores + Rs.14.48 crores) as untainted property, the impugned complaints against Chandrasekaran under the PML Act are, in our opinion, an abuse of process of law.