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TMI Blog2025 (3) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in a case for offences under the Prevention of Money Laundering Act, 2002 PMLA. 3. The appellant had approached the High Court through a Criminal Revision Application No. 66 of 2018, challenging the order dated 08.01.2018 passed by the Special Judge (PMLA), Ahmedabad, in PMLA Case No. 02 of 2016. The Special Judge had rejected the discharge application filed by the appellant under Section 227 of the Code of Criminal Procedure, 1973 CrPC seeking discharge from the case registered under the PMLA. The appellant had been implicated based on allegations of money laundering arising out of scheduled offences under the PMLA. 4. The case against the appellant arose from an alleged economic offence wherein the respondent no. 1 - Enforcement Directorate ED initiated proceedings against him under the PMLA. The primary allegation was that the appellant was involved in financial transactions related to proceeds of crime, generated through fraudulent activities causing significant financial losses to the State of Gujarat. The prosecution alleged that the appellant had actively facilitated the process of money laundering by utilizing banking channels and other financial instruments to conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant is involved in Hawala, that is, illegal transfer of money to foreign countries, he also appears to be in possession of proceeds of crime, and prima facie appears to be involved in offences likely to affect the economy of the country. It was further held that it appears from the material on record that the appellant is prima facie involved in Hawala transaction of crores of rupees as well. Further, in the Trial Court's opinion, the appellant had miserably failed to discharge the burden of proof under Section 24 of the PMLA which had shifted upon him to show that proceeds of crime are untainted property. Such prima facie material sufficient to infer the appellant's involvement in such a serious case did not warrant interference in the opinion of the Special Judge (PMLA) and therefore the Trial Court refused to SLP(CRL). No. 6185 of 2023 Page 6 of 40 discharge the appellant, thereby rejecting his application under Section 227 of the CrPC. 9. Aggrieved, the appellant approached the High Court seeking to quash and set aside the above judgment of the Special Judge. The appellant contended before the High Court that the allegations against him were baseless and did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant in the alleged offence. The High Court held that, in light of the charge sheet and the documents to be considered at the stage of charge framing, without going into the evidence produced by the accused, the order of the Trial Court does not suffer from any illegality, irregularity or impropriety. 15. The High Court found no procedural irregularity or legal infirmity in the Special Judge's order warranting interference under its revisional jurisdiction. It also emphasized that economic offences of this nature require a strict approach, and courts must be cautious while exercising their discretionary powers to quash proceedings at an early stage. In light of these findings, the High Court concluded that the rejection of the appellant's discharge application was justified and did not warrant interference. The revision application was accordingly dismissed. 16. The appellant, aggrieved by the High Court's decision, has now approached this Court in appeal, seeking to challenge the correctness of the judgment. 17. We have heard Mr. Kapil Sibal, learned senior counsel for the appellant and Mr. Tushar Mehta, learned Solicitor General appearing for the respondents at length. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Paragraph 467 of this judgment do not address the issue of retrospectivity. Currently, a three-judge bench of this Court is deliberating on the retrospective application of the PMLA and its amendments in ED v. M/s Obulapuram Mining Company Pvt. Ltd. (Criminal Appeal No. 1269/2017) and related cases. 18.3 It is further the argument of the appellant that the allegations in the eight predicate offence FIRs primarily concern actions allegedly taken by the accused during his tenure as Collector at Bhuj and Rajkot. It is alleged that he approved large-scale land allotments in 2004 and 2005 to private companies and individuals, exceeding his authorized power, thereby committing offences under Section 420 IPC. Further, it is claimed that he hastily approved the conversion of land use from agricultural to industrial to unduly benefit certain persons, thereby committing offences under Sections 420 and 467 IPC. Additionally, he allegedly facilitated land allotments at below-market rates, causing notional losses to the government in 2004 and 2005, amounting to offences under Sections 420 and 467 IPC. Furthermore, between 2004 and 2009, certain private companies allegedly paid his mobile pho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments to M/s Wellspun in 2004 at the rate of Rs. 15/- and not Rs. 30/- per sq metre on 22.07.2004 caused a financial loss of Rs. 1,20,30,824/- to the government. An application dated 01.02.2005 was made by a company M/s Value Packaging in which the wife of the accused Pradip is a partner, for converting land from agricultural to nonagricultural use. Accused Pradip allowed this within 40 days by passing an order on 10.03.2005 which amounted to an offence punishable under Section 217/409/465/467/471/476 and 120-B IPC. vii. Accused Pradip received mobile sim card no. 9824001729 from Ranjit Singh Bhaktasingh Bhat, owner of M/s Ratan Enterprises Company and used it and the bill of Rs. 46,554/- was paid by Mr. Bhat for the period from 2004-2009 which was allegedly a bribe punishable under Section 7/11/13 of the Prevention of Corruption Act, 1988. PMLA not in force. Between 01.07.2005 and 01.06.2009 i. That during his tenure as Collector at Bhuj between 02.05.2003 and 03.07.2006 and thereafter in Rajkot till 28.03.2008, while in discharge of his official duties, he was in charge of a land revenue policy of 1997 [Circular dated 25.09.1997] that allowed allotment of fallow lands to priva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004-2009. This was in exchange for allotments of land to Wellspun in the year 2004 at an allegedly undervalued rate which was allegedly a bribe punishable under Section 7/11/13 of the Prevention of Corruption Act, 1988. ii. Accused Pradip received mobile sim car no. 9824001729 from Ranjit Singh Bhaktasingh Bhat, owner of M/s Ratan Enterprises Company and used it and the bill of Rs. 46,554/- was paid by Mr. Bhat for the period from 2004-2009 which was allegedly a bribe punishable under Section 7/11/13 of the Prevention of Corruption Act, 1988. iii. Accused Pradip got a SIM card while in custody at Palora Jail as an under trial offence was made out only if the total value involved in such offences is thirty lakh or more. PMLA was amended by the PMLA (Amendment) Act, 2009 which came into force on 01.06.2009: S. 420/467 IPC and S. 13 PC Act were in the PMLA Schedule (Part B) Which stipulated that the offence was made out only if the total value involved in such offences is R. 30 Lakhs or more. From 04.01.2013 No allegations PMLA in force. S.420/467 IPC and S.13 PC Act was in the PMLA schedule (Part A) with no minimum monetary value specified. 18.5 Thus, on the basis of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered a bribe under the Act. C. From 1st June 2009 to 4th January 2013, the PMLA (Amendment) Act, 2009 was in effect, which added Sections 420 and 467 IPC and Section 13 of the Prevention of Corruption Act to the PMLA schedule (Part B), again with a monetary threshold of thirty lakh rupees. During this time, the accused allegedly continued to benefit from mobile phone bills paid by companies in return for past land allotments. Moreover, it is alleged that while in custody at Palora Jail as an undertrial, he obtained a SIM card, though it is unclear whether this constitutes an offence under the PMLA. D. Finally, from 4th January 2013 onward, the PMLA was amended to include Sections 420 and 467 IPC and Section 13 of the Prevention of Corruption Act in Part A of its schedule, thereby removing any minimum monetary threshold. However, there are no allegations against the accused for actions taken during this period. 18.6 The primary submission made in light of the above timeline is that the allegations primarily pertain to acts committed before the PMLA was in force or during periods when the relevant offences were not scheduled under the Act. It is further the argument that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant on 09.06.2006, establishing the continuation of criminal conduct after PMLA came into force. The charge sheet under the Prevention of Corruption Act and IPC, filed in 2011, confirmed that the total proceeds of crime exceeded Rs. 1.32 crores, justifying the invocation of PMLA. 19.5 The respondent asserted that the amount allegedly laundered by the appellant is far in excess of the Rs. 30 lakhs threshold required for a Part B scheduled offence before the 2013 amendment. The charge sheet records that the total loss to the government was Rs. 1.20 crores, which by itself exceeds the threshold limit. Furthermore, the total proceeds of crime laundered amount to Rs. 1.32 crores, as identified through investigation and attachment proceedings under Section 5 of PMLA. The accused allegedly projected Rs. 22 lakhs received by his wife as profits from a business entity, which was in reality an attempt to disguise illegal gratification. Several hawala transactions linked to the accused involved amounts exceeding Rs. 1 crore, reinforcing the magnitude of the financial crime. These figures demonstrate that the case is well within the purview of PMLA, even under the preamendment l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force during the relevant period, or the predicate offences as alleged were not included in the schedule to the PMLA at the relevant time and, therefore, cannot be subject to proceedings under the PMLA. It has also been argued that these instances do not constitute continuing offences. This contention, however, is untenable. It is well established that offences under the PMLA are of a continuing nature, and the act of money laundering does not conclude with a single instance but extends so long as the proceeds of crime are concealed, used, or projected as untainted property. The legislative intent behind the PMLA is to combat the menace of money laundering, which by its very nature involves transactions spanning over time. 22. The concept of a continuing offence under PMLA has been well-settled by judicial precedents. An offence is deemed continuing when the illicit act or its consequences persist over time, thereby extending the liability of the offender. Section 3 of the PMLA defines the offence of money laundering to include direct or indirect attempts to indulge in, knowingly assist, or knowingly be a party to, or actually be involved in any process or activity connected with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... until fully exhausted. The SLP(CRL). No. 6185 of 2023 Page 32 of 40 offence of money laundering is not dependent on or linked to the date on which the scheduled offence, or if we may say so, the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31-7-2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of clause (ii) in the Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all." [ Emphasis supplied ] 24. In the present case, the material on record establishes that the misuse of power and position by the appellant, coupled with the alleged utilization and concealment of proceeds of crime, has had an enduring impact. The act of laundering money is not a one-time occurrence but rather a process that continues so long as the benefits derived from criminal activity remain in circulation within the financial system ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. 28. The respondent has categorically established that the amount in question far exceeds the threshold of Rs. 30 lakhs, even under the unamended provisions of the PMLA. The allegations against the appellant involve alleged land allotment transactions facilitated through forgery, cheating, and fraud, resulting in an alleged loss of over Rs. 1 crore to the government, along with hawala transactions of crores of rupees, and illegal gratification through his wife of around Rs. 22 Lakhs. The financial transactions in the alleged acts, as evidenced from the record, reveal a considerably higher amount of proceeds of crime, rendering the appellant's reliance on the threshold limit baseless. 29. Furthermore, it is settled law that the determination of the amount involved in a money laundering offence is not to be viewed in isolation but in the context of the overall financial trail and associated transactions. The totality of the evidence must be assessed, which is a matter of trial; but even on a prima facie assessment, it is clear that the proceeds of crime in the present case are significantly higher than the statutory threshold. The appellant has failed to substantiate his cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in multiple judicial pronouncements, cases involving economic offences necessitate a thorough trial to unearth the complete chain of events, financial transactions, and culpability of the accused. 34. The material submitted by the respondent, coupled with the broad legislative framework of the PMLA, indicates the necessity of allowing the trial to proceed and not discharging the appellant at the nascent stage of charge framing. The argument that the proceedings are unwarranted is devoid of substance in light of the statutory objectives, the continuing nature of the offence, and the significant financial implications arising from the alleged acts. Discharging the appellant at this stage would be premature and contrary to the principles governing the prosecution in money laundering cases. 35. Given the severe and grave nature of the allegations against the appellant, it is imperative that he must undergo thorough judicial scrutiny during trial. A proper trial is necessary to unearth the full extent of the offence, to evaluate the evidence produced by the appellant, to analyze the complete chain of final transactions, and find out the veracity of the severe allegations and the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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