TaxTMI 
TaxTMI 
2025 (6) TMI 1182
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....Penal Code (for short, IPC). It was registered pursuant to a complaint filed by M/s United Bank Ltd., Qatar, through its power of attorney holder, Mr. Jolly Malayil, CEO of M/s Neil Debt Collections. The Crime was subsequently transferred to the Crime Branch, Economic Offences Wing (EOW), Kannur and Kasaragod Units, Kerala, which re-registered it as Crime No.976/2023 on 11/4/2023. The allegation in the FIR is that the petitioner obtained a loan from United Bank Ltd., Qatar of QAR 30,643,204 (equivalent to INR 61,28,64,080/-) on 14/3/2017 ostensibly for the expansion of his business operation in Qatar, wilfully defaulted on its repayment, misused and diverted the funds to India through illicit channels and thus cheated the bank. The alleged diversion of funds and the failure to fulfil the obligations of repayment were stated to constitute a deliberate and wilful act of deception and fraudulent intent on the part of the petitioner. The conduct of the petitioner was alleged to have resulted in a wrongful loss to the Bank and an unlawful gain to him. The petitioner was granted pre-arrest bail in the said crime by this Court. The investigation into the said crime is still going on, and ....
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....ioner in the crime. The learned counsel further submitted that the magnitude of the offence is so high and in the case of an economic offence, the court must account for several factors while granting bail, especially the gravity of the offence involved. The standing counsel also submitted that going by Section 45(1) of the PMLA, bail can only be granted in a case where there are reasonable grounds for believing that the accused is not guilty of such an offence and that he is not likely to commit any offence while on bail and the petitioner failed to satisfy the said mandatory conditions. 8. The jurisdiction of this court to grant bail to a person accused of an offence under the PMLA is circumscribed by the provisions of Section 45 as amended in 2018. Going by the said provision, if the Public Prosecutor opposes the application, bail can be granted only in a case where there are reasonable grounds for believing that the accused is not guilty of an offence under the Act and that he is not likely to commit any offence while on bail. However, the first proviso to the Section says that a person, who is under the age of 16 years, or is a woman or is sick or infirm or is accused either ....
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....components: (1) the predicate offence and (2) the surface offence. The predicate offence is the underlying criminal activity that generates proceeds, which, when laundered, results in the offence of money laundering. The predicate offence in this case is the crime (Crime No.976/2023) registered by the Crime Branch, and money laundering involved in the above crime is the surface or the larger offence. The allegation against the accused/petitioner in Crime No.976/2023 is that after availing a loan from United Bank Ltd., Qatar amounting to INR 61,28,64,080/- on 14/3/2017 ostensibly for the expansion of his business operation in Qatar, the petitioner willfully failed to repay the loan amount, instead diverted the funds to India through illicit channels and thus cheated the bank. The definite case of the prosecution herein is that these funds identified as proceeds of crime were utilised by the petitioner for acquiring immovable assets in his name and in the name of benami individuals. This is the surface offence allegedly committed by him under Section 3 of the PMLA. 11. Chapter II of the PMLA contains provisions relating to the offence of money laundering. Section 2(1)(p) defines "mo....
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.... reaching up to the property derived or obtained directly or indirectly as a result of criminal activity relating to a scheduled offence. A person may have indulged, attempted to indulge, or knowingly assisted another person in any process or activity connected with the "proceeds of crime". That involvement may be direct or indirect, by way of concealing, possessing, or using the tainted money or assets. The involvement, further, may be acquiring, projecting or claiming the tainted money or property as untainted. Any of the above multitude of activities constitutes a crime under Section 3 of the PMLA. Thus, involvement in any one of such processes or activities connected with the proceeds of crime would constitute an 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. 13. As stated already, property derived or obtained, directly or indirectly, by a person as a result of criminal activity relating to a scheduled offence constitutes proceeds of crime. The loan amount of Rs. 61,28,64,080/- obtained by the petitioner from M/s United ....
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....aning of Section 2(1)(u) of the PMLA - so long as the whole or some portion of the property has been derived or obtained by any person "as a result of" criminal activity relating to the stated scheduled offence. To be proceeds of crime, therefore, the property must be derived or obtained, directly or indirectly, "as a result of" criminal activity relating to a scheduled offence. For being regarded as proceeds of crime, the property associated with the scheduled offence must have been derived or obtained by a person "as a result of" criminal activity relating to the scheduled offence concerned. This distinction must be borne in mind while reckoning any property referred to in the scheduled offence as proceeds of crime for the purpose of the PMLA [Vijay Madanlal Choudhary, (supra)]. Needless to say, such a process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). 16. A bare look at Table No.15 of the complaint would show that all the remittances made to the Axis Bank account of the petitioner, except the last six transactions, were made prior to 14/3/2017. Similarly, Table No.16 would show that all t....
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....tion with the petitioner or his business other than his involvement in the wholesale vegetable business at Grand Mart Hyper Market and his engagement was strictly limited to that venture and he did not have any business dealings or partnership with him outside of that context. Thus, the statement given by the 2nd accused under Section 50 of the PMLA and relied on by the prosecution are not sufficient to conclude that the properties in the name of the 2nd accused shown in Table No.7 were purchased utilising the proceeds of crime. That apart, it is settled that the statement of a co-accused against another co-accused will not have a character of substantive evidence, and the prosecution cannot start with such a statement to establish its case. 18. In the complaint, it is also averred that the petitioner utilizing the proceeds of crime acquired properties in benami names such as Ronnie Cherian, Joby Antony, Ashraf Chakkarath, Shoukathali and Muhammedisha. It is specifically alleged that the petitioner, through his associates, concealed proceeds of crime amounting to Rs. 2.02 crores with Ronnie Cherian under the guise of acquiring benami properties in Wayanad. But the funds allegedly ....