TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 724
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....ct, 1984 against M/s Vikas Constructions through its partner. In the instant case, the allegation is that the partners of M/s Vikas Construction had encroached on public property by falsification of records. (ii) The other FIR is bearing No.185 of 2021 registered under Sections 419, 420, 468, 471, 120-B, 467 IPC against the accused of the said FIR. In the said FIR, significantly, the present applicant has neither been named nor he has been chargesheeted. Nevertheless, the allegations in the said FIR is that one of the co-accused in the said FIR, namely Mukhtar Ansari had taken funds from the MLA fund to build a school though no school was built and the land is being used for agricultural purposes. (iii) The third FIR is bearing No.236 of 2020 registered under Sections 120-B, 420, 467, 468, 471 IPC read with Section 3 of Prevention of Damages to Public Property Act, 1984 against the applicant, his brother Umar Ansari and his father Mukhtar Ansari. In the said FIR, it has been stated that the accused alongwith the other two co-accused knowing that the property in question is owned and vested with the government but by using their influence usurped the said land, got a map prepare....
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....applicant is in no way connected to the firm M/s. Vikas Construction nor the present applicant had anything directly or indirectly to do with the daily affairs of the said firm M/s. Vikas Construction. The said firm operates its own business through its partner and the present applicant is neither a partner nor an authorized signatory nor he has any authority or control to deal with the funds belonging to the said partnership firm. There is no material to indicate that the applicant had any connection with the properties acquired by the said firm or in respect of the money/funds of the said firm. Merely because some partners in the firm M/s. Vikas Construction are related to the applicant, it does not mean that he too is a partner in crime. Hence, the applicant has been falsely implicated and even though in the investigation the trail of money has not been satisfactorily connected to the applicant yet he has been apprehended and is languishing in jail since 04.11.2022. 8. It is further submitted that the entire case of the prosecution revolves around the theory that the present applicant received money from his family members generated from the firm M/s. Vikas Construction and sin....
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....4. 'Unaccounted money' cannot be taken as a synonym for 'proceeds of crime' as both are distinct and separate concepts. Any amount which may be unaccounted but acquired from legitimate means cannot be treated as proceeds of crime unless it is established that it has been generated from a scheduled offence. On the aforesaid touch stone the investigating agency has not been able to make out a case against the applicant, hence the bail applications deserves to be allowed. 15. It has further been argued by Mr. Sibal that Section 45 of the PMLA provides for a twin condition to be satisfied while considering an application for bail (i) the public prosecutor is given an opportunity to oppose the application for bail; (ii) where the bail application is opposed, the court must be satisfied that there are reasonable grounds to believe that the applicant is not guilty of an offence and that he is not likely to commit any offence while on bail. 16. In the instant case, in so far as the first condition is concerned, the same stands complied with as prosecution is duly represented and they have filed their counter-affidavit opposing bail application. In so far as the second con....
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....el for the applicant, no case is made out against the applicant in the predicate offence, accordingly the proceedings against the applicant for the offence under the PMLA will also falter, is not quite correct. 19. It is urged that Section 3 of the PMLA operates in a different sphere. From the statement recorded by the investigating agency and looking into the Bank details, balance sheet and other documents, it clearly indicates the commissioning of the predicate offence. The proceeds generated from the predicate offence have clearly been traced to and for the benefit of the present applicant which is enough to establish complicity of the applicant to the offence of money laundering in terms of Section 3 of the Act 2002 and then it is the applicant who has to establish his innocence regarding non commissioning of an offence under the PMLA. 20. Mr. Tripathi has further argued that language used in Section 3 of the PMLA is very wide and inclusive. From the record it can clearly been seen that the proceeds of crime have been generated from the firm M/s Vikas Construction which is clearly connected to another firm M/s. Aaghaaz which is also a family firm which is controlled by the ma....
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....eign trips as well as for importing arms for his participation in the sport on rifle shooting in such circumstances it cannot be said that the applicant has not been a direct beneficiary nor it can be said that he was not aware from where the funds were sourced or their origin. 23. In the aforesaid circumstances where the applicant knowingly has been a user of the proceeds of crime, hence he is prima facie, liable for the offence coupled with the fact that the status of the applicant as a sitting member of the Legislative Assembly, the influence yielded by his family including his deceased father, who had more than fifty criminal cases to his credit is enough to create a bonafide assumption that the applicant can very well influence any witness and this can also be corroborated from the fact that while the applicant was incarcerated in Chitrakoot Jail in connection with other cases against the applicant yet he was using the jail premise as his personal fiefdom with active connivance of the police and the Jail Authority, hence for all the aforesaid reasons the bail application deserves to be rejected. 24. In support of his submissions Mr. Tripathi has relied upon the decision of t....
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....of offence of money laundering 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 its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever] 4. Punishment for money-laundering:- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a terms which shall not be less than three years but which may extend to seven years and shall also be liable to fine Provided that where the proceeds of crime involve in money-laundering relates to any offence specified under paragraph 2 of Part A of the Sch....
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....twithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (2 of 1974), and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfillment of conditions under Section 19 and subject to the conditions enshrined under this section.] 30. Having taken a glance at the aforesaid statutory provisions it now will be worthwhile to notice certain decisions of the Apex Court on the issue of the offence of money laundering and the approach of courts while dealing with an application for bail. 31. The Apex Court in Rohit Tandon v. Directorate of Enforcement, (2018) 11 SCC 46 has held as under:- "19. The sweep of Section 45 of the 2002 Act is no more res intergra. In a recent decision of this Court in Gautam Kundu v. Directorate of Enforcement (2015) 16 SCC 1, this Court has had an occasion to examine it in paras 28-30. It will be useful to advert to paras 28 to 30 of this decision which read thus : (SCC pp. 14-15) "28. Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of PMLA are binding on the High Court while considering the ap....
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....money laundering and the burden to prove that the proceeds of crime are not involved, lies on the appellant." (emphasis supplied) 20. In para 34, this Court reiterated as follows : (Gautam Kundu case, SCC p. 16) "34. ... We have noted that Section 45 of PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. As mentioned earlier, Section 45 of PMLA imposes two conditions for grant of bail, specified under the said Act. We have not missed the proviso to Section 45 of the said Act which indicates that the legislature has carved out an exception for grant of bail by a Special Court when any person is under the age of 16 years or is a woman or is sick or infirm. Therefore, there is no doubt that the conditions laid down under Section 45-A of PMLA, would bind the High Court as the provisions of special law having overriding effect on the provisions of Section 439 of the Code of Criminal Procedure for grant of bail to any person accused of committing offence punishable under Section 4 of PMLA, even when the application for bail is considered under Section 439 of the Code of Criminal Procedure." The decisions of....
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....ed upon by the prosecution and also noted the inexplicable silence or reluctance of the appellant in disclosing the source from where such huge value of demonetised currency and also new currency has been acquired by him. The prosecution is relying on statements of 26 witnesses/accused already recorded, out of which 7 were considered by the Delhi High Court. These statements are admissible in evidence, in view of Section 50 of the 2002 Act. The same makes out a formidable case about the involvement of the appellant in commission of a serious offence of money laundering. It is, therefore, not possible for us to record satisfaction that there are reasonable grounds for believing that the appellant is not guilty of such offence. Further, the courts below have justly adverted to the antecedents of the appellant for considering the prayer for bail and concluded that it is not possible to hold that the appellant is not likely to commit any offence ascribable to the 2002 Act while on bail. Since the threshold stipulation predicated in Section 45 has not been overcome, the question of considering the efficacy of other points urged by the appellant to persuade the Court to favour the appell....
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....ex Court has held as under:- "269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The process or activity can be in any form - be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any one of such process or activity connected with the proceeds of crime would constitute offence of money-laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence - except the proceeds of crime derived or obtained as a result of that crime. ---------******--------******------****** 295. As aforesaid, in this backdrop the amendment Act 2 of 2013 came into being. Considering the purport of the amended provisions and the experience of implementing/enforcement agencies, further changes became necessary to strengthen the mechanism regarding prevention of money-laun....
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....ems including sovereignty and integrity of the countries. This is not an ordinary offence. To deal with such serious offence, stringent measures are provided in the 2002 Act for prevention of money-laundering and combating menace of money-laundering, including for attachment and confiscation of proceeds of crime and to prosecute persons involved in the process or activity connected with the proceeds of crime. In view of the gravity of the fallout of money-laundering activities having transnational impact, a special procedural law for prevention and regulation, including to prosecute the person involved, has been enacted, grouping the offenders involved in the process or activity connected with the proceeds of crime as a separate class from ordinary criminals. The offence of money-laundering has been regarded as an aggravated form of crime "world over". It is, therefore, a separate class of offence requiring effective and stringent measures to combat the menace of money-laundering. ---------******--------******------****** 400. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but....
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....ing that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby" (emphasis supplied) 401. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. ....
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....offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act." 35. Again, the Apex Court in Pavana Dibbur v. Enforcement Directorate, 2023 SCC OnLine SC 1586 has held as under:- 15. 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. 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 money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled of....
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....d time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but 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 money laundering 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 money laundering 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, incl....
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....offence. Similarly, he will get the benefit of the order of quashing the proceedings of the scheduled offence; c. The first property cannot be said to have any connection with the proceeds of the crime as the acts constituting scheduled offence were committed after the property was acquired; d. The issue of whether the appellant has used tainted money forming part of the proceeds of crime for acquiring the second property can be decided only at the time of trial; and e. The offence punishable under Section 120-B of the IPC will become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule. 36. Having examined the statutory provisions as well as the dictum of the Apex Court in the aforesaid mentioned decisions and applying the principles as laid therein to the facts of the instant case. The position as obtained, prima facie, is as under:- (i) A partnership firm mainly M/s. Vikas Construction is the prime vehicle which appears to have been used for commissioning of the scheduled offence and for generating the proceeds of crime. The firm M/s. Vikas Construction through its partners is alleged to have usurp....
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....ation revealed that the transactions made in and from the account of the applicant has been used by the applicant for not only getting his vehicle bullet proofed but also for his foreign visit and purchase/import of guns and fire arms but what is more important is that whenever these transactions have been done they have either been sourced through M/s Vikas Construction and prior thereto cash deposits have been made in M/s Vikas Construction and the same trail has been noticed through various bank transfers and into the hands of the applicant. (v) The record further indicates that a some of money was transferred from the account of M/s Vikas Construction into the account of M/s. Aaghaaz which thereafter was transferred to the account of the present applicant and out of the amount so transferred in the hands of the present applicant, part of the same was used to pay for importing of fire arms and a substantial amount was withdrawn in cash. (vi) The record further indicates that on a particular date a cash deposit is made in the account of one Mashaza Enterprizes which on the same date is transferred by Mashaza Enterprizes to the account of the present applicant and the same is ....
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....ow anything beyond that. This explanation does not reflect credibility especially from the applicant who is a sitting MLA and an elected representative of the people. 37. Section 2(1)(u) defines the phrase 'proceeds of crime' which clearly indicates that any person who derives any property or obtains, directly or indirectly as a result of a criminal activity would be treated as proceeds of crime. The word 'property' as defined in Section 2(1) (v) includes both movable and immovable property as also tangible or intangible, corporeal or incorporeal and includes deeds and instruments evidencing title or interest indicates that it is a wholesome inclusive definition. The offence of money laundering as per Section 3 not only relates to generation of such proceeds of crime but it also includes any activity directly or indirectly relating to concealment or possession or acquisition or use amongst others. The said definition is very wide and inclusive, thus, the fact that directly or indirectly if any person is in possession or use of such proceeds of crime whether directly or indirectly, knowingly assists or knowingly is a party or actually involved or in any activity con....