2023 (7) TMI 1124 - HC - Money Laundering

Trial Ordered for Money Laundering Case as Court Dismisses Discharge Applications; Prima Facie Case Established.

Mili Ghosh Versus The Union of India & anr.

The HC dismissed the revisional applications, determining that a prima facie case against the petitioner existed, warranting a trial. The court found the ... Money Laundering - proceeds of crime - scheduled offence - it is alleged that a part of the laundered money was parked with the husband of the petitioner in his account - HELD THAT:- The proceeds of crime means not only a property derived or obtained directly, but also indirectly as a result of criminal activity relating to a scheduled offence. The explanation to the provision would make it further clear that the proceeds of crime would also include property derived or obtained as a result of criminal activity relatable to a scheduled offence - In the present case, it is alleged that a part of the laundered money was parked with the husband of the petitioner in his account. This was, in turn, used by the petitioner and her said husband for purchasing a property. Therefore, the monetary trail would make it abundantly clear that the altered form of such tainted money can fairly be termed as proceeds of crime. Section 3 of the PMLA Act, 2002 practically brings within the ambit of money laundering any activity or process connected to an act of money laundering. A person can be hauled up for money laundering if he either directly or indirectly attempts to indulge in or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime. So far as the present petitioner is concerned, she could come within its swipe, if not for directly or indirectly attempting to indulge, at least for knowingly assisting or knowingly being a party or for actually getting involved in a process or activity connected to the proceeds of crime - The explanation to Section 3 of the said Act sets out the process or activities connected with the proceeds of crime that could attract the offence of money laundering, their concealment or possession or acquisition or use or projecting as untainted property or claiming as untainted property. In the present context, the petitioner could be held responsible for any of the above referred processes or activities. Thus, it cannot be said that no prima facie case is made out against the petitioner, more particularly in the peculiar circumstance that not only was the tainted money used for purchasing a property in the joint names of the petitioner and the husband, but the petitioner had also been a shareholder in the company the transfer of whose shares was itself a subject matter of the case of money laundering - Even if the petitioner wants to deny any knowledge of the money used being obtained by fraudulent means, she has to do the same if and once a trial commences. Before that, on the present facts it may have to be presumed, in terms of Section 24 of the PML Act, that such proceeds of crime were involved in money laundering. The decision of the Hon’ble Apex Court in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT] only further strengthens the case against the petitioner. There, Section 24 of the PML Act was held to be constitutionally valid. As prima facie case is made out against the present petitioner in the facts and circumstances of the present case, she cannot be exonerated from the charges at this stage and before a full-fledged trial commences - the revisional applications are dismissed. Issues Involved:1. Legitimacy of the impugned orders rejecting the discharge applications.2. Applicability of Section 3 of the Prevention of Money Laundering Act (PMLA) against the petitioner.3. Interpretation and application of Section 24 of the PMLA regarding the presumption of money laundering.Summary:Issue 1: Legitimacy of the Impugned Orders Rejecting the Discharge ApplicationsThe applications under Sections 397/401 read with Section 482 of the Code of Criminal Procedure sought to set aside the impugned orders dated 19.09.2018, which rejected the petitioner's discharge applications in cases under Section 45 read with Section 3 and Section 4 of the PMLA. The petitioner argued that she was not named in the original complaint, FIR, or charge-sheet and had no knowledge of the alleged money laundering activities. The court, however, found that a prima facie case was made out against the petitioner, and thus, she could not be exonerated from the charges at this stage.Issue 2: Applicability of Section 3 of the PMLA Against the PetitionerThe petitioner contended that she had no connection with the tainted money and was merely a shareholder in the Dheklapara Tea Company Ltd., not a director. The court noted that Section 3 of the PMLA encompasses any activity or process connected to money laundering, including knowingly assisting or being involved in such activities. The petitioner, being a shareholder in the company whose shares were fraudulently transferred and using the tainted money to purchase property in joint names with her husband, fell within the ambit of Section 3.Issue 3: Interpretation and Application of Section 24 of the PMLAThe respondents argued that the petitioner failed to show that the funds used to buy the property were distinct from the proceeds of crime originating from Gopi Nath Das. Section 24 of the PMLA shifts the onus to the accused to rebut the presumption that the proceeds of crime were involved in money laundering. The court held that the petitioner must rebut this presumption during the trial, and the prima facie satisfaction existed to presume money laundering involvement under Section 24(b).Conclusion:The court dismissed the revisional applications, stating that a prima facie case against the petitioner was established, necessitating a trial. The observations made were specific to deciding the revisional application and should not influence the trial court. Consequently, the petitioner's discharge applications were rejected, and the trial was to proceed.