PMLA attachment and company prosecution: broad proceeds of crime definition and statutory appeal limited Section 482 interference
The Prevention of Money Laundering Act, 2002 was discussed on three points: the availability of an inherent-jurisdiction challenge under Section 482 CrPC despite a statutory appeal against provisional attachment, the scope of "proceeds of crime" under Section 2(1)(u), and corporate prosecution under Section 70. The text states that the statutory appeal weighed against interference at the Section 482 stage, that "proceeds of crime" extends broadly to equivalent value and is not defeated merely because property was acquired before the scheduled offence, and that a company can be prosecuted under the Act notwithstanding objections based on absence of vicarious liability.
Issues: (i) Whether the complaint under the Prevention of Money Laundering Act, 2002 could be quashed in exercise of inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 when an appellate remedy was available against the attachment order. (ii) Whether properties acquired before the scheduled offence could still be treated as proceeds of crime or be attached under Section 2(1)(u) of the Prevention of Money Laundering Act, 2002. (iii) Whether a company could be prosecuted under Section 70 of the Prevention of Money Laundering Act, 2002 and whether the plea of absence of vicarious liability was available.
Issue (i): Whether the complaint under the Prevention of Money Laundering Act, 2002 could be quashed in exercise of inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 when an appellate remedy was available against the attachment order.
Analysis: The availability of a statutory appeal under Section 26 of the Prevention of Money Laundering Act, 2002 against the provisional attachment order weighed against interference at the stage of a petition under Section 482 of the Code of Criminal Procedure, 1973. The challenge to the attachment and the merits of the attachment order were held to be matters for the appellate forum, while the complaint itself disclosed a prima facie case for proceeding further.
Conclusion: The challenge was rejected and the petitions were not entertained on this ground.
Issue (ii): Whether properties acquired before the scheduled offence could still be treated as proceeds of crime or be attached under Section 2(1)(u) of the Prevention of Money Laundering Act, 2002.
Analysis: The expression "proceeds of crime" was construed broadly to include not only property derived from criminal activity but also the value of such property, including equivalent value held within the country or abroad. On that construction, prior acquisition of the attached properties did not by itself defeat attachment where the statutory conditions were otherwise satisfied.
Conclusion: The objection to attachment on the basis of prior acquisition was rejected.
Issue (iii): Whether a company could be prosecuted under Section 70 of the Prevention of Money Laundering Act, 2002 and whether the plea of absence of vicarious liability was available.
Analysis: Section 70 of the Prevention of Money Laundering Act, 2002, including its explanation, was read as expressly permitting prosecution of a company notwithstanding the prosecution or conviction of individuals connected with it. The argument that a company could not be fastened with liability for the alleged laundering activity was held to be inconsistent with the statutory scheme.
Conclusion: The company prosecution objection failed and the plea of no vicarious liability was rejected.
Final Conclusion: The complaint and the connected proceedings were allowed to continue, and the inherent criminal petitions were dismissed for want of merit.
Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, a company can be prosecuted for money-laundering offences, and the definition of proceeds of crime is broad enough to include equivalent value held within India, so prior acquisition of the attached property does not by itself bar attachment or prosecution.