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2021 (1) TMI 1186 - HC - Money LaunderingMoney Laundering - predicate offence - proceeds of crime - Section 43(1) of the Prevention of Money Laundering Act, 2002 - HELD THAT - Under Section 24 of the PML Act, the burden is on the accused to prove that the proceeds of crime was not involved in money laundering. In this case, M/s. Maze Group of Technology was into finance business which cannot be said to be per se a criminal activity. Even assuming for a moment that they were into a criminal activity and the sum of ₹ 15 lakhs that was given as advance by Manoharan to Kumar Ganesa Perumal was proceeds of crime, the mere fact that Kumar Ganesa Perumal agreed to sell his property to Manoharan, cannot, by itself, bring him into the net of Section 3 of the PML Act without anything more. Petition allowed.
Issues:
1. Quashing of proceedings in C.C.No.13 of 2015 under the Prevention of Money Laundering Act, 2002. Analysis: The judgment by the Madras High Court involved the quashing of proceedings in a case related to money laundering. The case originated from the activities of a Financial Establishment called Maze Group of Technology, where deposits were collected from the public with the promise of returns. The Enforcement Directorate registered a case on the premise of money laundering involving the accused individuals. The investigation revealed transactions and agreements made by the accused, including the purchase of land using funds from the deposits. The court examined the involvement of one individual, Kumar Ganesa Perumal, in the alleged offense under the Prevention of Money Laundering Act, 2002. The court scrutinized the complaint and statements related to Kumar Ganesa Perumal's role in the transactions. It was noted that while Kumar Ganesa Perumal was not an accused in the primary offense, the Enforcement Directorate contended that his actions amounted to abetting or involvement in money laundering under Section 3 of the PML Act. The court deliberated on the wide scope of Section 3, emphasizing the need for direct or indirect involvement in money laundering activities. The judgment highlighted the specific transactions involving Kumar Ganesa Perumal, where he received funds for property deals linked to the alleged money laundering activities. The court analyzed the legal provisions and the burden of proof under the PML Act, emphasizing the necessity to establish a direct connection between the proceeds of crime and money laundering. The court used a hypothetical scenario to illustrate the importance of clear culpability in such cases to prevent arbitrary criminalization of individuals. Ultimately, the court allowed the petition, quashing the proceedings against Kumar Ganesa Perumal in the money laundering case. The judgment directed Kumar Ganesa Perumal to deposit the remaining amount from the transactions, absolving him of further prosecution and removing any encumbrances on his property. The detailed analysis of the transactions and legal provisions underlined the importance of establishing a direct link between the accused's actions and money laundering offenses to ensure fair and just legal proceedings.
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