2023 (11) TMI 62 - HC - Money Laundering

Money Laundering - fraud in sale and purchase of land belonging to two Housing Co-operative Societies - presumption that proceeds of crime used in money transaction - shame and bogus sale deed - HELD THAT - From the provision of law of Section 3 of the PML Act, it is clear that whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party, connected with proceeds of crime including its concealment, possession, acquisition or use shall be guilty of the offence of money laundering. As per the explanation, a person shall be guilty of money laundering if such persons is found to have indirectly or directly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in any of its concealment, possession, acquisition, use etc. in any manner whatsoever. Prima facie, involvement of the applicant comes within the purview of Section 3 of the PML Act. Under Section 22 of the PML Act, there is a presumption as to the record or property in certain cases, according to which where any record or property is found in the possession or control of any person in the course of a survey or a search, such record or property shall be presumed to be belonging to such person. There is a presumption in inter-connected transaction also Section 24 castes a burden on a person charges with the offence of money laundering under Section 3, unless the contrary is proved, the presumption that such proceeds of crime are involved in the money transaction. Under Section 22 of the PML Act, there is a presumption as to the record or property in certain cases, according to which where any record or property is found in the possession or control of any person in the course of a survey or a search, such record or property shall be presumed to be belonging to such person. There is a presumption in inter-connected transaction also Section 24 castes a burden on a person charges with the offence of money laundering under Section 3, unless the contrary is proved, the presumption that such proceeds of crime are involved in the money transaction. Therefore, as on today, no clean chit can be given to the applicant under Section 482 of the Cr.P.C. The burden is on the present applicant to prove his innocence in the trial. Application dismissed.

Summary

Issues Involved:
The judgment involves the quashment of a prosecution complaint under the Prevention of Money Laundering Act, 2002, concerning allegations of fraud in the sale and purchase of land by several individuals. The main issue revolves around the applicant's alleged involvement in the money laundering activities connected to the proceeds of crime.

Details of the Judgment:
Issue 1: Allegations of Fraud in Sale and Purchase of Land
The case involves multiple FIRs registered against individuals for fraudulent activities related to the sale and purchase of land belonging to Housing Co-operative Societies. The accused, including the applicant, are alleged to have committed fraud by selling plots to unauthorized parties, transferring funds, and opening unauthorized accounts, thus defrauding the societies and rightful owners of the land.

Issue 2: Prosecution under the Prevention of Money Laundering Act
The investigation under the Prevention of Money Laundering Act revealed instances of money laundering connected to the fraudulent land transactions. The applicant, among others, was accused of knowingly assisting in the disposal, concealment, possession, and acquisition of proceeds of crime, which are punishable under Sections 3 and 4 of the PML Act. The prosecution complaint was filed against the applicant and others before the Special Court constituted under the PML Act.

Summary of Judgment:
The applicant sought quashment of the prosecution complaint under Section 482 of the Code of Criminal Procedure, arguing the lack of essential ingredients to establish the offense of money laundering against him. However, the court found that the applicant's involvement in the fraudulent activities, including transferring funds and assisting in concealing the proceeds of crime, fell within the purview of Section 3 of the PML Act. The burden of proving innocence lies with the applicant during trial, and the presumption of involvement in money laundering transactions applies unless proven otherwise. Therefore, the court dismissed the present M.Cr.C., indicating that no clean chit could be given to the applicant at this stage, emphasizing the need to establish innocence during the trial proceedings.