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of <h1>Resolution Professional qualifies as public servant under Prevention of Corruption Act, discharge denied in money laundering case under Section 3 PMLA</h1> <h3>Sanjay Kumar Agarwal Versus Union of India, though the Directorate of Enforcement, (Government of India), Kolkata.</h3> Sanjay Kumar Agarwal Versus Union of India, though the Directorate of Enforcement, (Government of India), Kolkata. - TMI 1. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment include:(a) Whether the petitioner, acting as a Resolution Professional (RP) under the Insolvency and Bankruptcy Code, 2016, qualifies as a 'public servant' under the Prevention of Corruption Act, 1988.(b) Whether the petitioner was rightly charged under Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA) for allegedly accepting a bribe, thus engaging in money laundering activities.(c) Whether the trial court's decision to dismiss the petitioner's discharge application was justified based on the evidence presented.2. ISSUE-WISE DETAILED ANALYSIS(a) Qualification as a 'Public Servant':- Relevant Legal Framework and Precedents: The Prevention of Corruption Act, 1988 defines 'public servant' under Section 2(c). The court examined whether a Resolution Professional (RP) falls within this definition. The court referred to prior judgments, including the decision in Cr.M.P. No. 1048 of 2021, which held that RPs perform functions akin to public duties.- Court's Interpretation and Reasoning: The court reasoned that the nature of duties performed by an RP involves public interest, thereby qualifying them as public servants under the Prevention of Corruption Act. The court emphasized that the definition of 'public servant' is broad and includes those performing public duties, even if they are not directly employed by the government.- Key Evidence and Findings: The court relied on the duties and responsibilities of an RP as outlined in the Insolvency and Bankruptcy Code, 2016, which involve managing corporate insolvency resolution processes, thereby impacting public interest.- Conclusions: The court concluded that the petitioner, as an RP, is a public servant under the Prevention of Corruption Act, 1988.(b) Charges under PMLA:- Relevant Legal Framework and Precedents: Section 3 of the PMLA defines the offense of money laundering, which includes activities related to the proceeds of crime, such as concealment, possession, acquisition, and use.- Court's Interpretation and Reasoning: The court noted that the petitioner was allegedly caught accepting a bribe, which constitutes proceeds of crime under the PMLA. The court emphasized that the PMLA captures every process or activity connected with proceeds of crime, not just the final act of integration into the formal economy.- Key Evidence and Findings: Evidence presented included a recorded conversation and the recovery of bribe money from the petitioner. The prosecution argued that the petitioner knowingly acquired and possessed proceeds of crime.- Application of Law to Facts: The court applied the definition of 'proceeds of crime' and found that the petitioner's actions fell within the scope of money laundering under Section 3 of the PMLA.- Treatment of Competing Arguments: The petitioner argued that the bribe money was not in his possession due to the CBI's trap operation. The court dismissed this argument, emphasizing that possession and acquisition of proceeds of crime are sufficient for charges under the PMLA.- Conclusions: The court concluded that there was sufficient evidence to proceed with charges under Section 3 of the PMLA against the petitioner.(c) Dismissal of Discharge Application:- Relevant Legal Framework and Precedents: The court referred to legal principles governing discharge applications, emphasizing that at this stage, the court must assume the prosecution's evidence to be true and determine if a prima facie case exists.- Court's Interpretation and Reasoning: The court reasoned that the evidence presented by the prosecution, including witness statements and documentary evidence, established a prima facie case against the petitioner.- Key Evidence and Findings: The court highlighted the recovery of bribe money and the petitioner's admissions during the investigation as evidence supporting the charges.- Application of Law to Facts: The court applied the principles of discharge, noting that the evidence presented was sufficient to presume the commission of the offense, warranting a trial.- Treatment of Competing Arguments: The petitioner argued that the evidence was insufficient for conviction. The court clarified that the probative value of evidence is not assessed at the discharge stage.- Conclusions: The court upheld the trial court's decision to dismiss the discharge application, allowing the trial to proceed.3. SIGNIFICANT HOLDINGS- The court held that a Resolution Professional, due to the nature of their duties, qualifies as a 'public servant' under the Prevention of Corruption Act, 1988.- The court established that the petitioner's actions, as alleged, constituted money laundering under Section 3 of the PMLA, given the acquisition and possession of proceeds of crime.- The court affirmed the principle that at the discharge stage, the court must assume the prosecution's evidence to be true and determine if a prima facie case exists, without delving into the probative value of the evidence.- The court dismissed the petitioner's application for discharge, allowing the trial to proceed based on the evidence presented.
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