Money-laundering liability can extend to a bribe payer who knowingly joins the corrupt transfer of tainted funds.

A person who knowingly participates in handing over bribe money with corrupt intent may fall within Section 3 of the Prevention of Money Laundering Act, 2002, because the definition of proceeds of crime covers property derived from a scheduled offence and the provision extends to anyone involved in any process or activity connected with such property. The Court noted that offences under the Prevention of Corruption Act, 1988 are scheduled offences and that the requisite intent to pay a bribe exists before delivery, bringing the payer within the statutory reach of money-laundering liability. The High Court's quashing was held incorrect and the prosecution was restored.

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Issues: Whether a person alleged to have handed over bribe money can be proceeded against under the Prevention of Money Laundering Act, 2002 on the basis that the amount became proceeds of crime only upon its receipt by the public servant.

Analysis: The definition of proceeds of crime covers property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence. Offences under the Prevention of Corruption Act, 1988 are scheduled offences. Section 3 of the Prevention of Money Laundering Act, 2002 is wide enough to include any person who knowingly assists, is a party to, or is actually involved in any process or activity connected with proceeds of crime, including possession, acquisition, use, or projecting it as untainted property. The requisite intent to pay money as a bribe exists before the money is handed over, and such prior intent places the payer within the activity connected with proceeds of crime. The complaint disclosed prima facie involvement of the respondent in such activity.

Conclusion: The respondent can be proceeded against under the Prevention of Money Laundering Act, 2002 and the High Court's quashing of the proceedings was incorrect.

Final Conclusion: The prosecution under the money-laundering law was restored and the respondent was directed to face proceedings in accordance with law.

Ratio Decidendi: A person who knowingly participates in the handing over of bribe money with the requisite corrupt intent is involved in a process connected with proceeds of crime and may be proceeded against for money-laundering even though the money becomes tainted upon receipt by the public servant.

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