TaxTMI 
TaxTMI 
2026 (3) TMI 1078
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....ed under Section 5(1) thereof, if the offender continues to remain in possession of, and continues to use, the property even after the PMLA came into force?" 2. The learned Single Judge has, in the impugned judgment, answered the question in the negative and has, therefore, set aside the attachment of the property in question, located at E-14/3, Vasant Vihar, New Delhi ["the subject property"]. 3. The Directorate of Enforcement, aggrieved thereby, is in appeal. 4. We have heard, at length, Mr. Zoheb Hossain, learned Special Counsel for the appellant, and Mr. Parag P. Tripathi, learned Senior Counsel for the respondent. Learned Counsel have also filed written submissions. 5. We now advert to the facts. B. Facts 6. On the basis of a written complaint by Mr. S.K. Maggu, Deputy Director of the National Agricultural Marketing Cooperative Federation Ltd. ["NAFED"], the Central Bureau of Investigation ["CBI"] lodged a First Information Report ["FIR"] dated 8 May 2009 at New Delhi, alleging that (i) Homi Rajvansh, the Additional Managing Director of NAFED, had, in connivance with M.K. Agri International Ltd ["MKAIL"] executed, on behalf of NAFED, certain Memorand....
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.... Director of NAFED to M/s M.K. International Ltd. of Sh. M.K. Agarwal, without charging the cost of the commodity, was well designed to share the undue benefit. The conspiracy caused/wrongful loss to NAFED and corresponding wrongful gain to themselves jointly and severally. That against the said three consignments of raw sugar sold by Sh. Homi Rajvansh to M/s M.K. International, an amount of Rs. 42,79,81,751/- excluding interest and NAFED charges is outstanding as on date. Smt. Alka Rajvansh w/o Homi Rajvansh also joined the conspiracy hatched by her husband and M.K. Agarwal. In furtherance of this conspiracy, M/s Mahanivesh Oil & Foods Ltd., New Delhi was taken over by Smt. Alka Rajvansh, as Director, in January 2005. (ii) It is seen, from the HDFC bank account statement of M/s M.K. International Ltd. that they have issued cheque of Rs. 35,00,000/- and Rs. 75,00,000/- on 11.02.2005. It is also seen from the Vijay Back account of M/s M.K. International Ltd. that they have issued cheque of Rs. 40,00,000/- to M/s Duroyale on 11.02.2005. Thus, it is clear that Sh. M.K. Agarwal, Director of M/s M.K. International Ltd. issued cheques of Rs. 1.50 crores on 11.02.2005 from his co....
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....id Sh. B.K. Uppal, the seller and the executer of the sale deed in question, had, prior to this, availed credit of Rs. 45 crores, extended by NAFED, under an MOU signed by Sh. B.K. Uppal and Sh. Homi Rajvansh, then AMD of NAFED. 15. NOW THEREFORE, having reasons to believe that the immovable E-14/3, property (house) basement and Ground Floor of house at Vasant Vihar, New Delhi, purchased and acquired by Smt Alka Rajvansh W/o Shri Homi Rajvansh, in the name of her company M/s Mahanivesh Oil and Foods Pvt Ltd, against the consideration value of Rs. 1,35,00,000/- excluding stamp duty and Corpn. tax of Rs. 10,80,000/- is the Proceeds of Crime, which is likely to be concealed, transferred or dealt with in any manner which may result in frustrating in proceedings relating to confiscation of the said Proceeds of Crime, I, hereby order Provisional Attachment of the said immovable properties and further order that the same shall not be transferred, disposed, parted with or otherwise dealt with in any manner, whatsoever, until or unless specially permitted to do so by the undersigned. Relied upon documents are mentioned in Annexure "A"." 8. The respondent challenged the above Pro....
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....ntion that the Act is completely independent of the principal crime (scheduled offence) giving rise to proceeds of crime is unmerited. It is necessary to bear in mind that the substratal subject of the Act is to prevent money-laundering and confiscate the proceeds of crime. In that perspective, there is an inextricable link between the Act and the occurrence of a crime. It cannot be disputed that the offence of money-laundering is a separate offence under section 3 of the Act, which is punishable under Section 4 of the Act. However as stated earlier, the offence of money-laundering relates to the proceeds of crime, the genesis of which is a scheduled offence. In the aforesaid circumstances, before initiation of any proceeding under Section 5 of the Act, it would be necessary for the concerned authorities to identify the scheduled crime. The First Proviso to Section 5 also indicates that no order of attachment shall be made unless in relation to a schedule offence a report has been forwarded to a Magistrate under Section 173 of the Code of Criminal Procedure, 1973 or a complaint has been filed by a person authorised to investigate the scheduled offence before a Magistrate or Court f....
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.... with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime". With effect from 01.03.2013, clause (b) has been deleted and it is now no longer necessary that the person who is in possession of the property alleged to be proceeds of crime must also be charged with a scheduled offence. In the circumstances, the order of provisional attachment could be issued against any property in possession or any person even if the said person is not alleged to have committed the scheduled offence. 25. However, such powers are not unbridled and there are several conditions that must be met before any property can be attached or confiscated. First and foremost, it is necessary that the property sought to be attached is one, which the concerned officer has reason to believe is the proceeds of a scheduled crime. Secondly, a provisional attachment under Section 5 is only in aid of adjudication under Section 8(2) of the Act, which may result in the Adjudicating Authority recording a finding that the property concerned is involved in money-laundering; therefore, it is also necessary that an offence of money-laundering is believ....
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....ffence of using its proceeds is alleged to have been committed prior to the Act coming into force. 28. As stated hereinbefore, the scope of the offence of money-laundering was widened by virtue of the Prevention of Money-Laundering (Amendment) Act, 2012 and the rigor of Section 3 of the Act also extends to any person who assists or is a party or is involved in any process or activity connected with concealment, possession, acquisition or use of proceeds of crime. However, the subject of the offence continues to be the proceeds of crime and its involvement in money-laundering. This again draws one to the central controversy in this petition, that is, whether any property of any person could be attached as allegedly involved in money-laundering prior to the enactment of the Act or acquired as a result of a crime, committed prior to the Act coming into effect. 29. The Act is a penal statute and, therefore, can have no retrospective or retroactive operation. Article 20(1) of the Constitution of India expressly forbids that no person can be convicted of any offence except for the violation of a law in force at the time of the commission of the act charged as an offence....
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....suggested that these amounts were proceeds of crime received by the petitioner as a result of a criminal activity and bulk of these funds were utilized by the petitioner for paying the consideration for acquiring the property in question. It was argued that all actions of integrating the money by purchase of immovable property would fall within the definition of 'money-laundering'. In this respect it is relevant to note that the sale deed in respect of the property was executed on 18.03.2005. Thus, even if the allegations made by the respondent are assumed to be correct, the proceeds of crime had been used by the petitioner for acquisition of the property much prior to the Act coming into force. The process of activity of utilising the proceeds of crime, if any, thus, stood concluded prior to the Act coming into force. Even if it is assumed that the funds received from M/s. Duoroyale Enterprises Ltd. and M/s. Shri Radhey Trading Pvt. Ltd. were proceeds of crime and were properties involved in money-laundering, such funds had come into possession of the petitioner prior to the Act coming into force. Thus, funds were already projected as untainted funds unconnected with the crime for....
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....m a scheduled offence have undergone significant changes and have been integrated in legitimate economic activity. The properties could also be traced in the hands of persons unconnected with the scheduled offence. There is no indication from the express language of the Act, that the Legislature intended the Act to be retroactive or operative with retrospective effect. 33. The Act was enacted as the international community recognised the threat of money-laundering whereby money generated from illegal activities such as trafficking and drugs etc. was finding its way into the economic system of a country and funding further criminal activity. The expression money-laundering would ordinarily imply the conversion and infusion of tainted money into the main stream of economy as legitimate wealth. According to the respondent, there are three stages to a transaction of money-laundering : The first stage is Placement, where the criminals place the proceeds of the crime into normal financial system. The second stage is Layering, where money introduced into the normal financial system is layered or spread into various transactions within the financial system so that any link with th....
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.... of a scheduled offence was a substratal condition for there to exist proceeds of crime, which could be attached under Section 5(1). (ii) "Money laundering" was a separate and distinct offence under the PMLA, defined in Section 3^7 thereof. The offence of money laundering, as per Section 3, related to proceeds of crime, the genesis of which was the commission of a scheduled offence. Identification of the scheduled offence was, therefore, essential before Section 5 could be invoked. (iii) After deletion of clause (b) in Section 5^8 by the Prevention of Money Laundering (Amendment) Act, 2015 ["the 2015 Amendment Act"], it was no longer necessary that the property should be in possession of the person accused of the scheduled offence. The correctness of this finding is not in dispute. (iv) Section 5 was required to be read with Section 3. Absent any reason to believe that the offence of money laundering had been committed, there was no question of attachment of property under Section 5. (v) The view of the Gujarat High Court in Alive Hospitality & Foods Pvt Ltd v. Union of India 2013 SCC OnLine Guj 3909, which holds that Article 20(1)^9 of the Const....
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....at any time would amount to money laundering, irrespective of when the property was acquired. If a person committed a scheduled offence, acquired proceeds therefrom and projected it as untainted, prior to the PMLA coming into force, he would ipso facto become liable of having committed an offence under the PMLA immediately on the PMLA coming into force as he would be in possession of some property. This would result in the PMLA applying retrospectively, which would violate Article 20(1) of the Constitution of India. Moreover, irrespective of how far back in time the scheduled offence might have been committed, the person would become liable to be tried for the offence of money laundering and to confiscation of his property, even if the property might have undergone substantial changes, or even reached the hands of persons unconnected with the scheduled offence. There was nothing to indicate that the legislature intended the Act to be thus retroactive or retrospective in operation. (xvii) Money laundering involves three stages; placement of the proceeds of crime into the normal financial system, layering of the money into transactions so as to lose the link with the origin ....
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....reasoning contained in the Provisional Attachment Order to emphasise that there could be no dispute about the commission of the scheduled offence. He has also referred us to the definitions of "attachment" and "proceeds of crime" as contained in Section 2(1)(d)^11 and 2(1)(u) of the PMLA. He has also invited us to the following passages from the CBI chargesheet dated 30 July 2010: "In all the above three HSS agreements terms of payment mentioned is that M/s MKIL, New Delhi was to make payment by demand draft in favour of NAFED within a period of 180 days from the date of Bill of Lading. The due dates of payment were 22.05.2005, 04.07.2005 and 26.09.2005 respectively. This fact shows that the above agreements have been executed by accused Homi Rajvansh and M/s. MKIL, New Delhi with mala fide intention and in violation of the laid down norms of NAFED Business Circular No.93 dated 17.10.2003 and also in violation of the terms of MOU/agreement signed by them earlier which stipulates delivery of commodity only after payment of 100% cost and other NAFED charges. Further to safe guard the interest of NAFED no Tri-Partile agreement was signed and no Hypothecation of material was r....
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.... 2(1)(u) and "property" in Section 2(1)(v)^12 of the PMLA. On a conjoint reading of the various provisions of the PMLA, Mr. Hossain submits that there is no justification for the finding, of the learned Single Judge that the offence of money-laundering comes to an end once proceeds of crime are "integrated" into the economy. 15. To sustain the submissions, Mr. Hossain places reliance on para 269 of Vijay Madanlal Choudhary v. Union of India 2022 SCC OnLine SC 929, various paras from Pradeep Nirankarnath Sharma v. Enforcement Directorate 2025 SCC OnLine SC 560, paras 15 and 23 from Tarun Kumar v. Enforcement Directorate (2024) 13 SCC 788 and the judgment of a learned Single Judge of this Court in Anand Kumar Kapur v. Union of India 2025 Cri LJ 26. 16. Mr. Hossain further submits that the learned Single Judge is in error in holding that the ingredients of clause (b) of Section 5(1) are not satisfied in the present case, as there is a specific finding, in para 15 of the Provisional Attachment Order, that there was reason to believe that the subject property was "likely to be concealed, transferred or dealt with in any manner which may result in frustrating proceedings relating t....
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.... force of the PMLA, the ED could not invoke the PMLA against the respondent. 21. Apropos the aspect of whether the offence under the PMLA is a continuing offence, Mr. Tripathi has placed reliance on Explanation (ii) in Section 3. He submits that, even if one were to proceed as per the said Explanation, all activities envisaged under the said explanation had taken place prior to the coming into force of the PMLA. 22. Mr. Tripathi submits that if the mere possession and use of the subject property by the respondent were to be construed as an offence, it would amount to a second offence coming into being on the date when the PMLA came into force, as the earlier offence of obtaining of the proceeds of crime and usage of the proceeds of crime in purchasing the subject property, as well as representing the property as untainted had all taken place prior to coming into force of the PMLA. He places reliance on the judgment of the Supreme Court in Rao Shiv Bahadur Singh v. State of Vindhya Pradesh AIR 1953 SC 394. 23. He has taken us through paras 27 to 36 of the impugned judgment and submits that they correctly lay down the legal position. III. Rejoinder submissions 24. As M....
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....n 3(1). The acts to which the clause alludes thereafter are, thereby, included within the definition of money laundering by legislative fiat. These include mere possession, and mere use, and militate against the finding, in para 33 of the impugned judgment, that the offence of money laundering is complete once the proceeds are crime are "integrated" into the financial system. III. Facts stated in Provisional Attachment Order not disputed in arguments - even otherwise, not within limits of certiorari 32. The submissions of Mr. Tripathi were centered largely around Section 3 of the PMLA, in an attempt to convince us that no offence of money laundering, as defined in the said provision, could be said to have been taken place. His submission, which basically reiterates the view expressed in the impugned judgment, is that the offence of money laundering took place, in its entirety, prior to the coming into force of the PMLA. Of course, Mr. Tripathi was careful in clarifying that he was making his submissions without prejudice. 33. However, Mr. Tripathi did not seek to dispute the facts alleged in the provisional attachment order. His submissions were entirely based on law and t....
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....rroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ Court. It is within these limits that the jurisdiction conferred on the High Courts under Article 226 to issue a writ of certiorari can be legitimately exercised (vide Hari Vishnu Kamath v Syed Ahmad Ishaque AIR 1955 SC 233, Nagandra Nath Bora v Commissioner of Hills Division and Appeals Assam AIR 1958 SC 398 and Kaushalya Devi v Bachittar Singh AIR 1960 SC 1168. 8. It is, of course, not easy to defin....
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.... purely legal, i.e., whether the property purchased from proceeds of crime prior to the coming into force of the PMLA, which continues to remain in possession of the purchaser, can be confiscated under Section 5 of the PMLA. 36. We, therefore, do not proceed to return any observations or findings on the facts alleged in the provisional attachment order, which are being treated as correct. 37. Ergo, it would also follow that the money received by Alka, using which she, as a Director of the respondent-Company, purchased the subject property, constituted "proceeds of crime". Indeed, the learned Single Judge has also proceeded, in the impugned judgment, on the premise that the said money constituted "proceeds of crime". The correctness of the said observation has not been disputed before us by the respondent, nor has any cross appeal been filed, challenging the said observation. IV. Section 3 of PMLA and para 32 of the impugned judgment 38. Adverting, now, to Section 3 of the PMLA, we are of the considered opinion that the impugned judgment errs on two counts. 39. Firstly, it fails to notice that the definition of money laundering, as contained in Section 3, is inclusive....
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...., the definition is extensive". In Pancharatham Pillai v. Emperor AIR 1929 Mad 487, Bapu Vithal v. Secy of State AIR 1932 Bom 370 and Province of Bengal v. Hingul Kumari AIR 1946 Cal 217, it has been held that when the expression "includes" is used in a definition, the intention is that the scope of the definition be widened by specific enumeration of certain matters which in their ordinary meaning may or may not comprise, so as to make the definition enumerative and not exhaustive. The High Court of Andhra Pradesh, in A. Poorna Chandra Rao v. Government of Andhra Pradesh (1982) 1 APLJ 106, has held that when the expression "includes" is used, the definition has to be construed as comprehending not only such things as it signifies according to its actual import but also those things which the interpretation clause declares that they shall include. The Supreme Court, too, in Mukesh K. Tripathi v. Senior Divisional Manager, LIC (2004) 8 SCC 387 and Indian Handicrafts Emporium v. Union of India (2003) 7 SCC 589, held that an interpretation clause which uses the word "includes" has to be given a broader meaning, keeping in mind, however, the scheme, object and purport of the statute. ....
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....the word "includes" in Rule 2(g) indicated that the definition was to be construed expansively and that, therefore, welding electrodes would also qualify as "inputs". Apropos the use of the word "includes" in the definition, the Supreme Court observed as under: "The word 'include' should be given a wide interpretation as by employing the said word, the legislature intends to bring in, by legal fiction, something within the accepted connotation of the substantive part. It is also well settled that in order to determine whether the word "includes" has that enlarging effect, regard must be had to the context in which the said word appears." 45. Similarly, in Oswal Oils and Fats Limited v. Additional Commissioner (2010) 4 SCC 728, the Supreme Court was concerned with Section 154(1) of the UP Zamindari Abolition and Land Reforms Act, 1950, which referred to "person" but did not define the expression. The Supreme Court, therefore, referred to Section 4(33) of the UP General Clauses Act, 1904, which read: "4. Definitions. - In all Uttar Pradesh Acts, unless there is anything repugnant in the subject or context, - ***** (33) 'persons' shall include an....
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....etation upon terms of wider denotation." 38. In CIT v. Taj Mahal Hotel (1971) 3 SCC 550 this Court interpreted the word "plant" used in Section 10(2)(vi-b) of the Income Tax Act, 1922. Speaking for the Court, Grover, J. observed: "6. ... The very fact that even books have been included shows that the meaning intended to be given to 'plant' is wide. The word 'includes' is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, those words and phrases must be construed as comprehending not only such things as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include." 39. Moreover, if the word "person" used in Section 154(1) is interpreted keeping in view the object of legislation and by applying the rule of contextual interpretation, the applicability of which has been recognised in Poppatlal Shah v. State of Madras AIR 1953 SC 274, S.K. Gupta v. K.P. Jain (1979) 3 SCC 54, RBI v. Peerless General Finance and Investment Co. Ltd. (1987) 1 SCC 424 and Central Bank of India v. State of Ker....
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....nt order specifically alleges that the subject property had been acquired out of the funds which came into the possession of Alka Rajvansh, following a trail starting from the scheduled offence of cheating committed by her husband Homi Rajvansh. The subject property, therefore, constitutes "proceeds of crime" within the meaning of Section 2(1)(u) of the PMLA. 52. Though Mr. Tripathi, very fairly, did not seek to argue that the subject property does not constitute "proceeds of crime" within the meaning of Section 2(1)(u), 3 or 5 of the PMLA, the impugned judgment indicates that the learned Single Judge has proceeded, at more than one point, on the premise that the "proceeds of crime", in the present case, were the amounts received by Alka Rajvansh as director of the respondent-company, and that the subject property was been acquired using the proceeds of crime. Proceeding from this premise, the impugned judgment holds that, with the acquisition of the subject property, the proceeds stood entirely used prior to the enactment of the PMLA. This finding appears to us to be incorrect as the subject property also partakes of the character of "proceeds of crime" and continued to remain ....
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....ndering. The offence of money laundering does not, therefore, end on the date when the person comes into possession of the proceeds of crime. It continues so long as the person remains in possession of the proceeds of crime. This is yet another error, in our respectful opinion, in the impugned judgment, which conflates the concept of "possession" with "coming into possession". Section 3 envisages the former, whereas the impugned judgment presumes the latter. 58. We now proceed to the Explanations in Section 3, which are also of significance. 59. Both the Explanations to Section 3 make it clear that claiming or projecting the proceeds of crime to be untainted is not a sine qua non for the offence of money laundering to be said to have been committed. Explanation (i), in fact, places this position beyond the pale of controversy, by providing that a person who is found to have directly or directly attempted to indulge, or knowingly assisted, or is knowingly involved, or is actually involved in one or more of the activities enumerated in (a) to (f) thereunder would be guilty of money laundering, and concealment, possession, acquisition, use, projection as untainted property and c....
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....s the money received by Alka Rajvansh as the proceeds of crime), prior to coming of the PMLA into force, would nonetheless be guilty of the offence of money laundering "only for the reason that he is in possession of some property". 64. With great respect, we are entirely unable to subscribe to this observation. The use of the words "some property" indicate that the impugned judgment ignores the significance of the fact that the subject property was not just "some property", but property purchased using the monies paid to Alka Rajvansh, which were directly relatable to the crime committed by Homi Rajvansh which, in turn, was a scheduled offence. At the very least, therefore, the subject property was, if not directly, certainly indirectly obtained as a result of the criminal activity relating to the scheduled offence committed by Homi Rajvansh. The reference to the property as "some property" is, therefore, incompatible with the words used in the PMLA as well as the very definition of "proceeds of crime" as contained in Section 2(1)(u) thereof. Referring to the property as "some property" purchased from the proceeds of crime fails to notice the fact that the property itself const....
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....69. Para 32 goes on to state that accepting the interpretation advanced by the Directorate of Enforcement to Section 3(1) would result in the provision being given a retrospective operation and would thereby offend Article 20(1) of the Constitution of India "as an offender of a scheduled crime would now be visited with a greater punitive measure than as could be inflicted at the time when the scheduled offence was committed." We are unable to accept this reasoning. The PMLA does not intend to punish for the commission of scheduled offence. It punishes for commission of the offence of money laundering. Infliction, for committing the offence of money laundering, of a punishment which may be greater than the punishment which attaches the commission of the scheduled offence does not, therefore, in any manner violate Article 20(1) of the Constitution of India. 70. It is clear that the scheduled offence and the offence of money laundering are distinct and different. There can be no comparison, therefore, of the punishments, which may visit the commission of these two offences. Nor can Article 20(1) be said to be infracted if the punishment visiting the commission of offence of money l....
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....d judgment holds that "even if the allegations made by the respondent are assumed to be correct, the proceeds of crime had been used for acquisition of the property much prior to the Act coming into force". This observation omits to note the fact that the subject property itself fell within the definition of "proceeds of crime" and that, therefore, it could not be said that the proceeds of crime had been used by the respondent for acquisition of the subject property prior to the coming into force of the PMLA. This observation of the learned Single Judge is contrary to the definition of "proceeds of crime" as contained in Section 2(1)(u) of the PMLA. (ii) The immediately succeeding finding that "the process of activity of utilizing the proceeds of crime, if any, thus stood concluded prior to the Act coming into force" is also resultantly unsustainable as the proceeds of crime also included the subject property and it, could not, therefore be said that the activity of utilizing the proceeds of crime stood concluded prior to the PMLA coming into force. (iii) The further observation in para 31 that, assuming the funds received by Alka Rajvansh from Duroroyale and SRTP....
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.... proceeds of crime. We have already expressed our disagreement with that proposition. (vii) Interestingly, para 33 also observes as under: "... The 2013 Amendment to Section 3 of the Act by virtue of which the words "process or activity connected with proceeds of crime and projecting it as untainted property" were substituted by the words "any process or activity connected with proceeds of crime including concealment, possession, acquisition or use and projecting or claiming it as untainted property." The impugned judgment, therefore, notes that by the 2013 Amendment, the words "including concealment, possession, acquisition or use" were inserted in Section 3(1) of the PMLA. This, to our mind, is clearly demonstrative of the legislative intent not to restrict the offence of PMLA to the process or activity connected with the proceeds of crime, or projection of the proceeds of crime as untainted property, but also to include, within the ambit of the offence, possession, acquisition and use of the proceeds of crime. We are of the considered opinion that the interpretation placed on the provisions of the PMLA by the impugned judgment, if allowed to stand, wou....
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....5(1) of the PMLA were not satisfied as there was no material forthcoming on the record which could lead to a belief that the respondent was likely to transfer or conceal the subject property in any manner. We must note, in this context, that what Section 5 envisages is the reason for such belief being entertained by the Deputy Director or other officer who passes the order of provisional attachment. The arrival at such a reasoned belief is essentially a subjective decision of the concerned officer. If the decision is completely baseless or based on no material whatsoever, perhaps a court could interfere. However, given the manner in which, starting from the MOUs executed by Homi Rajvansh on behalf of NAFED with MKAIL till, followed by the incorporation of MIL and Alka becoming a Director therein, the tainted money was transferred to Duroroyale and SRTPL, from whom it was paid to Alka Rajvansh and used in the purchase of the subject property, we are of the opinion that, in exercise of certiorari jurisdiction under Article 226 of the Constitution of India, it would not be open to the learned Single Judge to sit in appeal over the subjective decision of the Deputy Director in the orde....
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....onnected 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. 135. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and 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 Ac....
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....ara 135, that continuing to possess proceeds of crime or retaining possession of proceeds of crime or using of proceeds of crime until they are fully exhausted, amounts to money laundering. It is also clarified, in the same paragraph that the relevant date for determining when the offence has been committed is the date when the person indulges in the process or activity connected with the proceeds of crime. Inasmuch as usage and possession of the proceeds of crime is also covered under the definition of "money laundering", the fact that the subject property was in the possession of and continued to be used by, the respondent on and after the date when the PMLA came into force, ipso facto makes the PMLA applicable. 82. The same position is reflected from paras 21, 22, 24 and 25 of Pradeep Nirankarnath Sharma, which may be reproduced thus: "21. A significant ground raised by the appellant pertains to the nature of the alleged offence under the PMLA. The appellant has contended that the alleged acts do not constitute an offence under the PMLA as the same was not in force during the relevant period, or the predicate offences as alleged were not included in the schedule to t....
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....#39;s contention does not hold water. The material on record indicates the continued and repeated misuse of power and position by the appellant, resulting in the generation and utilization of proceeds of crime over an extended period. The respondent has successfully demonstrated prima facie that the appellant remained involved in financial transactions linked to proceeds of crime beyond the initial point of commission. The utilization of such proceeds, the alleged layering and integration, and the efforts to project such funds as untainted all constitute elements of a continuing offence under the PMLA. Thus, the proceedings initiated against the appellant are well within the legal framework and cannot be assailed on this ground." 83. The impugned judgment was rendered prior to the decisions in Vijay Madanlal Choudhary and Pradeep Nirankarnath Sharma. Had the learned Single Judge had the advantage of these decisions, we are sanguine that the judgment would have ruled differently. F. Conclusion 84. In view of the aforesaid discussion, we find ourselves unable to sustain the impugned judgment of the learned Single Judge, which is, accordingly, quashed and set aside. The Provi....
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....a further period not exceeding thirty days from the date of order of vacation of such stay order shall be counted. 1 (u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad; Explanation.- For the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence; 2. 403. Dishonest misappropriation of property.- Whoever dishonestly misappropriates or converts to his own use any movable property, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both. 3. 409. Criminal breach of trust by public servant, or by banker, merchant or agent. - Whoever, being in any manner entrusted with property, or with any do....
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....s concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. Explanation. - For the removal of doubts, it is hereby clarified that,- (i) a person shall be guilty 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. 8. Section 5(1), before amendment, contained the following clause (b), which was later ....