2023 (4) TMI 265 - HC - PMLA

Seeking grant of bail - Money Laundering - proceeds of crime - mandatory twin conditions u/s 45 of the PMLA satisfied or not - HELD THAT:- Section 3 (ii) of PMLA provides that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever. Bare perusal of the definition of “beneficial owner” as provided under Section 2 (1) (fa) of the Act makes it clear that it includes a person who exercises ultimate effective control over a juridical person.

In the case of Vijay Madanlal Choudhary and others vs. Union of India [2022 (7) TMI 1316 - SUPREME COURT] it was inter alia held that offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. It was further held that the process or activity can be in any form — be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Therefore, involvement in any one such process or activity connected with the proceeds of crime would constitute offence of money-laundering. Thus, this offence has nothing to do with the criminal activity relating to a scheduled offence — except that the proceeds of crime derived or obtained as a result of that crime - The intention of the legislature in enacting the PMLA is that money laundering poses a serious threat not only to the financial systems of countries but also to their integrity and sovereignty and, therefore, the legislature thought it fit to provide a comprehensive legislation for this purpose. Thus the courts while dealing with matters under PMLA have to take into account the object and purpose of legislation.

The statements made under Section 50 of PMLA have been held to be an admissible piece of evidence. The term ‘admissible evidence’ means that such evidence can be considered by the court at the time of appreciation of evidence. A statement recorded under Section 161 Cr.P.C. is not an admissible piece of evidence and can be used only for the limited purpose as provided under Section 162 Cr.P.C. - statements under Section 50 of PMLA carry much more weight than a statement recorded under Section 161 Cr.P.C. These are specific legislations enacted to handle specific crimes.

The rejection of MOU by the learned trial court cannot be faulted as it has admittedly been never presented before any authority and moreover it is a self serving document. The petitioners took a plea that the companies were doing business but even a shred of document has not even been shown to reflect any business being undertaken by them - the constant changing pattern of the shareholding in the companies clearly indicates that Sh. Satyendar Kumar Jain was indirectly controlling the affairs of the companies. The evidence on record though speaks in volumes but has not been discussed or examined in detail so as to not cause prejudice to the petitioner.

The order rejecting the bail applications are well-reasoned orders based on material on record - the bail applications are rejected.