2023 (5) TMI 1429 - HC - Money Laundering

Money Laundering - proceeds of crime - acquisition and possession of assets disproportionate to known sources of income by the Petitioner and his wife and other family members - applicability of Section 45 read with Section 44 of the PML Act - HELD THAT - Prima facie the allegations appearing as reveals from the submission of the parties as well as the documents placed is one under Section 3 of the PML Act 2002 punishable under Section 4 of the Act. The submissions made in respect to various principles enunciated by the Apex Court as a guide to deal with an application under Section 438 Cr.P.C. need no further elaboration which the court of course has to look into. Coming to the case in the present it is found that the properties described to have been acquired and possessed which primarily comes within the definition of proceeds of crime in various analogy of the definition under the Act thereby makes the Petitioner amenable to the offence. Prima facie therefore the case stands against the Petitioner since he is involved in acquisition of the properties in dealing with the proceeds with crime . While this court is not inclined to accept the prayer for anticipatory bail it is directed that in the event the Petitioner appears before the Special Court in seisin over the matter and move for grant of regular bail the same shall be considered on its own merit keeping in view the developments in law vis- -vis the facts emerges in the case in hand in their proper prospective and further that the custodial interrogation of the Petitioner was not required during entire process of investigation so far which the Petitioner too has cooperated as acknowledged by the opposite party too and dispose of in accordance with law without being influenced or prejudice of any observation made herein. Conclusion - The proceedings under the PMLA are maintainable a prima facie case is established and the anticipatory bail is not warranted. The ABLAPL is disposed of.

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment include:

Whether the proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) are maintainable against the Petitioner given the allegations of disproportionate assets.
Whether the joint trial of the Petitioner and his spouse for the alleged offence is permissible under the law.
The applicability of Section 3 of the PMLA in the context of the alleged possession of disproportionate assets and whether a prima facie case is established.
The relevance and applicability of precedents cited by the Petitioner concerning anticipatory bail under the PMLA.

ISSUE-WISE DETAILED ANALYSIS

1. Maintainability of Proceedings under the PMLA

Relevant legal framework and precedents: The proceedings are based on the alleged commission of an offence under Section 3 of the PMLA, which deals with money laundering activities and is punishable under Section 4. The definition of a scheduled offence under Section 2(1)(y) of the PMLA is pivotal to the case.
Court's interpretation and reasoning: The Court considered the submissions regarding the maintainability of proceedings under the PMLA. It was argued that the offence being a scheduled offence, the proceedings were premature. However, the Court noted that the offence of money laundering is independent, focusing on activities connected with the proceeds of crime.
Key evidence and findings: The enquiry revealed substantial assets acquired by the Petitioner and his wife, allegedly disproportionate to their known sources of income.
Application of law to facts: The Court found that the properties acquired fall within the definition of "proceeds of crime," thereby making the Petitioner amenable to the offence under the PMLA.
Treatment of competing arguments: The Court considered the Petitioner's argument that the proceedings were vitiated due to the lack of evidence of proceeds of crime but concluded that the prima facie case stood against the Petitioner.

2. Joint Trial of Petitioner and Spouse

Relevant legal framework and precedents: The Petitioner argued against a joint trial, citing that both he and his spouse are public servants with separate incomes and expenditures.
Court's interpretation and reasoning: The Court did not explicitly address the joint trial issue in detail, focusing instead on the broader applicability of the PMLA to the alleged activities.
Conclusions: The Court implicitly rejected the argument against joint trial by proceeding with the analysis under the PMLA.

3. Applicability of Section 3 of the PMLA

Relevant legal framework and precedents: Section 3 of the PMLA defines the offence of money laundering. The Court referenced the Supreme Court's interpretation in Vijay Madanlal Choudhury v. Union of India regarding anticipatory bail under the PMLA.
Court's interpretation and reasoning: The Court emphasized the independent nature of the money laundering offence and the requirement of a prima facie case for proceedings under the PMLA. The allegations and evidence presented were deemed sufficient to establish a prima facie case.
Key evidence and findings: The assets in question were considered as "proceeds of crime," aligning with the definition under the PMLA.
Conclusions: The Court found a prima facie case under Section 3 of the PMLA, thereby justifying the proceedings.

4. Relevance of Precedents on Anticipatory Bail

Relevant legal framework and precedents: The Petitioner cited several cases, including Mahdoom Bava v. CBI and Siddarth v. State of U.P., to support his anticipatory bail application.
Court's interpretation and reasoning: The Court distinguished these precedents, noting that they did not specifically address Section 45 of the PMLA. Instead, the Court relied on the Supreme Court's decision in Vijay Madanlal Choudhury, which discusses anticipatory bail in the context of the PMLA.
Conclusions: The Court declined the anticipatory bail application, directing the Petitioner to seek regular bail from the Special Court.

SIGNIFICANT HOLDINGS

Core principles established: The judgment reinforces the principle that the offence of money laundering under the PMLA is independent and does not require prosecution for the scheduled offence. It also highlights the stringent nature of the PMLA in combating money laundering.
Final determinations on each issue: The Court concluded that the proceedings under the PMLA were maintainable, a prima facie case was established, and the anticipatory bail was not warranted. The Court directed the Petitioner to seek regular bail from the Special Court.

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