TaxTMI 
TaxTMI 
2023 (12) TMI 49
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....a Dibbur was shown as accused no.6 in the said complaint. By the order dated 17th March 2022, the Special Court took cognisance of the said complaint. The appellant filed a petition before the High Court of Karnataka at Bengaluru under Section 482 of the Code of Criminal Procedure, 1973 (for short, 'Cr.PC') seeking the relief of quashing of the said complaint. By the impugned judgment and order dated 27th September 2022, the petition for quashing the complaint has been dismissed. 2. In the year 2011, Alliance Business School (for short, 'ABS') purchased a property bearing Khata no.37/22 at Gollahalli Village, Jigani Hobli, Anekal Taluk, Bengaluru for the consideration of Rs.13.05 crores. The area of the said property is approximately five acres. For the sake of convenience, we are describing the said property as 'the First Property'. On 1st July 2013, the appellant purchased the first property from ABS by a registered sale deed for a consideration of Rs.13.5 crores. The accused no.1-Madhukar Angur, purchased a property measuring 4 acres and 0.4 Guntas bearing survey nos.61, 62 and 63 at Karpur Village, Kasaba Hobli, Anekal Taluk, Bengaluru. For the sake of convenience, we are de....
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....d with 34 of IPC 5. On 27th September 2021, the ED passed an order under Section 5 of the PMLA attaching first and second properties. A complaint was filed before the adjudicating authority on 13th October 2021, in which the appellant is shown as the fifth defendant. 6. The allegation against the appellant in the complaint filed under the second proviso of Section 45(1) of the PMLA is that she has entered into a conspiracy with accused no.1- Madhukar Angur by getting executed nominal sale deeds in respect of the first and second properties in her name for the benefit of accused no.1. The allegation of the ED is that the appellant facilitated the accused no.1 to use her bank accounts to siphon the university funds, thereby, assisting the accused no.1 in the activity connected with the proceeds of crime. By the impugned judgment, the learned Single Judge of the High Court dismissed the petition filed by the appellant. The learned Single Judge relied upon the decision of a Bench of three Hon'ble Judges of this Court in the case of Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. (2022) SCC Online SC 929. SUBMISSIONS OF THE APPELLANT 7. Ms Meenakshi Arora, the learn....
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.... stands on a better footing as she was not even shown as an accused in any scheduled/predicate offences. She would, therefore, submit that the cognizance of the crime under the PMLA could not have been taken against the appellant. 9. The third submission of the learned senior counsel appearing for the appellant is that out of the four scheduled/predicate offences, chargesheets have been filed in the case of three offences, and in these chargesheets, only one offence covered by the Schedule to the PMLA has been mentioned, which is Section 120B of IPC. She pointed out that in FIR no.119 of 2016 and FIR no.52 of 2017, Section 420 of IPC was included. However, in FIR no.119 of 2016, the closure report was filed, and in FIR no.52 of 2017, while filing the chargesheet, Section 420 of IPC was excluded. She contended that Section 120B of IPC alone, in the absence of any other scheduled offence, cannot sustain a charge under the PMLA. Unless there is an allegation regarding a conspiracy to commit any scheduled offence, the prosecution under the PMLA cannot lie. Relying upon the proviso to Section 120A of IPC, the learned senior counsel submitted that an illegal act or a legal act by ille....
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.... "3. Offence of moneylaundering.- Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of moneylaundering. Explanation.-For the removal of doubts, it is hereby clarified that,- (i) a person shall be guilty of offence of moneylaundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:- (a) concealment; or (b) possession; or (c) acquisition; or (d) use; or (e) projecting as untainted property; or (f) claiming as untainted property, in any manner whatsoever; (ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by....
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.... means- (i) the offences specified under Part A of the Schedule; or (ii) the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or (iii) the offences specified under Part C of the Schedule." 14. The condition precedent for the existence of proceeds of crime is the existence of a scheduled offence. On this aspect, it is necessary to refer to the decision of this Court in the case of Vijay Madanlal Choudhary^1. In paragraph 253 of the said decision, this Court held thus : "253. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for moneylaundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression "derived or obtained" is indicative of c....
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....ut if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of moneylaundering under the 2002 Act - for continuing to possess or conceal the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of moneylaundering 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 Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all." (underline supplied) 15. Coming back to Section 3 ....
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....of proceeds of crime need not be an accused in the scheduled offence. Such an accused can still be prosecuted under PMLA so long as the scheduled offence exists. Thus, the second contention raised by the learned senior counsel appearing for the appellant on the ground that the appellant was not shown as an accused in the chargesheets filed in the scheduled offences deserves to be rejected. ACQUISITION OF THE FIRST AND SECOND PROPERTY 17. The allegation against the appellant in the complaint is that she purchased the property worth crores, though she did not have the source of income which would generate enough money to buy the subject properties. The allegation against the appellant is that she allowed and facilitated accused no.1- Madhukar Angur, to conceal the siphoned/misappropriated amounts by using her bank account. Another allegation is that she is shown to have purchased the second property from accused no.1, though she did not have the resources to pay the consideration. The allegation is that she allowed the accused no.1 to use her bank accounts to facilitate siphoning the proceeds of the crime. Another allegation is that both the first and second properties have bee....
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....edule and the amendments thereto from time to time. However, it had been urged before us that there is no consistency in the approach as it includes even minor offences as scheduled offence for the purposes of offence of moneylaundering, more so even offences which have no transborder implications and are compoundable between the parties. The classification or grouping of offences for treating the same as relevant for constituting offence of moneylaundering is a matter of legislative policy. The Parliament in its wisdom has regarded the property derived or obtained as a result of specified criminal activity, being an offence under the concerned legislation mentioned in the Schedule. The fact that some of the offences may be noncognizable offences under the concerned legislation or regarded as minor and compoundable offences, yet, the Parliament in its wisdom having perceived the cumulative effect of the process or activity concerning the proceeds of crime generated from such criminal activities as being likely to pose threat to the economic stability, sovereignty and integrity of the country and thus, grouped them together for reckoning it as an offence of moneylaundering, is a mat....
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....arty to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence. (2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both." 20. Now, we turn to the Schedule to the PMLA. We find that many offences, which may generate proceeds of crime, have not been included in the Schedule. We are referring to only a few of such offences only by way of illustration: a. Section 263A of IPC, which deals with the offence of making or possessing fictitious stamps is not a part of the Schedule; b. Though offences punishable under Sections 392 to 402 regarding robbery and dacoity have been included in part A of the Schedule, the offence punishable under Section 379 of committing theft and the offence punishable under Section 380 of theft ....
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....n be said that many offences capable of generating proceeds of crime do not form a part of the schedule. 22. The learned Additional Solicitor General argued that as Section 120B of IPC is included in Part A to the Schedule, even if the allegation is of making a criminal conspiracy to commit an offence which is not a part of the Schedule, the offence becomes a scheduled offence. As stated earlier, many offences under Chapter XVII of IPC are not included in Parts A and B. They become scheduled offences only if the same have crossborder implications. Thus, the offences of dishonest misappropriation of property or criminal breach of trust or theft can become a scheduled offence, provided they have crossborder implications. If the argument of the learned Additional Solicitor General is accepted, if there is a conspiracy to commit offences under Section 403 or Section 405, though the same have no crossborder implications, the offence under Section 120B of conspiracy to commit offences under Sections 403 and 405 will become a scheduled offence. Thus, if any offence is not included in Parts A, B and C of the Schedule but if the conspiracy to commit the offence is alleged, the same will ....
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....urt should generally adopt the interpretation that avoids the imposition of penal consequences. In other words, a more lenient interpretation of the two needs to be adopted. 25. The legislative intent which can be gathered from the definition of the scheduled offence under clause (y) of sub - Section (1) of Section 2 of the PMLA is that every crime which may generate proceeds of crime need not be a scheduled offence. Therefore, only certain specific offences have been included in the Schedule. Thus, if the submissions of the learned Additional Solicitor General are accepted, the Schedule will become meaningless or redundant. The reason is that even if an offence registered is not a scheduled offence, the provisions of the PMLA and, in particular, Section 3 will be invoked by simply applying Section 120B. If we look at Section 120B, only because there is a conspiracy to commit an offence, the same does not become an aggravated offence. The object is to punish those involved in conspiracy to commit a crime, though they may not have committed any overt act that constitutes the offence. Conspiracy is an agreement between the accused to commit an offence. If we look at the punishment....