2021 (2) TMI 1276 - HC - Money Laundering

Money Laundering - Proceeds of crime in the name of daughter - scheduled offences - Murder - attempt to murder - extortion - cases under the Arms Act - escape to Dubai and continued to remote control his criminal empire with his minions in India until his demise - it is submitted that petitioner cannot be prosecuted under the PML Act for the alleged sins of her father, inasmuch as, she had no knowledge that her father had acquired the assets that stand in her name with the proceeds of crime - HELD THAT - The fact remains that 22 cases of serious nature were registered by the police against Sridhar, which include murder, attempt to murder, extortion, criminal intimidation, use of fire arms and criminal conspiracy to commit such offences. It is not in dispute that most of the offences mentioned in the FIRs are schedule offences under the PML Act and therefore, the Enforcement Directorate was justified in registering a case under the PML Act and taking up the investigation. The Enforcement Directorate has conducted extensive investigation and has identified 5 immovable properties in the name of Sridhar, 68 immovable properties in the name of Kumari, his wife, 10 immovable properties in the name of the petitioner, apart from the immovable properties purchased in the name of the other accused. It is not the case of the accused that Sridhar was born with a silver spoon in his mouth and that by sheer dint of hard work expending his sweat and blood, he had acquired the properties. Investigation conducted by the Enforcement Directorate shows that Sridhar never had any legitimate income and that his daughter Dhanalakshmi had not even filed income tax returns, whereas, she owns properties worth around ₹ 19 crores - If this Court, without appreciating the object and spirit of the PML Act, interferes and quashes the prosecution under the PML Act on abstract sympathetic grounds that the offspring of an accused who had amassed wealth by indulging in criminal activities should not be unnecessarily penalised, it would amount to frustrating the very will of the Parliament. In fact, the Courts should bear in mind that under Section 24 of the PML Act, the onus is on the accused to prove that such proceeds of crime are not involved in money laundering. Finally, a complete reading of the complaint shows that there are prima facie materials for the trial to proceed against the petitioner and hence, in exercise of the powers under Section 482 Cr.P.C., the impugned proceedings cannot be quashed - this criminal original petition is dismissed.

Summary

Issues:
Prosecution under the Prevention of Money Laundering Act for alleged sins of the father's assets acquisition; Proceeds of crime in FIRs against the father; Legitimacy of properties owned by daughter; Interpretation of Section 3 of the PML Act; Application of Section 24 of the PML Act.

Analysis:
The case involved the prosecution under the Prevention of Money Laundering Act (PML Act) concerning the assets acquired by the principal accused, known as "Kanchipuram Don," through criminal activities like extortion and murder. The Enforcement Directorate registered a case under the PML Act based on the FIRs disclosing serious offences like murder, extortion, and criminal conspiracy. The accused's daughter, the petitioner, challenged the prosecution, claiming ignorance of her father's criminal activities and the absence of proceeds of crime in the FIRs against him.

The petitioner's counsel argued that without evidence of pecuniary gain by the accused in the FIRs, the prosecution under the PML Act was flawed. However, the court held that the FIRs were triggers for investigation under the PML Act and not exhaustive evidence of financial gains. The Enforcement Directorate's investigation revealed extensive properties acquired by the accused and his family, including the petitioner, valued significantly higher than the actual purchase price, indicating illicit acquisition through criminal means.

The court emphasized the wide scope of Section 3 of the PML Act, which encompasses direct or indirect involvement in money laundering, and highlighted the legislative intent to prevent criminals and their descendants from benefiting from ill-gotten wealth. Referring to a moral anecdote, the court underscored the Act's aim to deter criminal activities for wealth accumulation. Additionally, the court emphasized the burden on the accused, under Section 24 of the PML Act, to prove that proceeds of crime were not involved in money laundering.

Ultimately, the court dismissed the petition, stating that prima facie evidence existed for the trial to proceed against the petitioner, emphasizing that quashing the prosecution under the PML Act would contradict the legislative intent and frustrate the Act's purpose of preventing money laundering and illicit wealth enjoyment by criminals and their kin.