2024 (8) TMI 1494 - HC - Money Laundering

Money Laundering - disproportionate wealth in the predicate offence - seeking relief to discharge the accused from the offence of Money Laundering as defined under Section 3 and punishable under Section 4 of Prevention of Money Laundering Act - Applicability of principles of double jeopardy - HELD THAT - The scope of PMLA is independent and cannot be compared with the dealing of offences under other enactments including Prevention of Corruption Act. The very purpose and object of PMLA is to deal with economic offences. Therefore, the provisions are stand alone and the Enforcement Directorate is conferred with the powers to prosecute the persons under Section 3 of the PMLA. The principles of double jeopardy has no application. The other grounds raised by the petitioner are connected with the merits of the case. Section 24 of the Act provides burden of proof and it lies on the affected persons. Therefore, the petitioner has to establish their innocence during the course of trial through documents and evidences available on record. Grounds touching upon the merits cannot be adjudicated in a discharge petition. The probate value of the evidences cannot be considered while dealing with the discharge petition by the Courts. Any such adjudication would cause prejudice to the interest of either of the parties and result in miscarriage of justice. All such grounds are to be considered during the course of trial elaborately. Prima facie, there are no reason to interfere with the order impugned, since the respondent could able to establish that there is a prima facie case to invoke the provisions of PMLA and rightly they have done it. It is for the parties to establish their respective case before the trial court in the manner known to law. The order impugned dated 16.11.2022 in Crl.M.P.No.7727 of 2022 in Spl.C.C.No.3 of 2022 stands confirmed - Consequently, this Criminal Revision Petition stands dismissed.

Summary

Issues:
Petition under Section 227 of Cr.P.C. seeking relief to discharge accused from the offence of Money Laundering.
Validity of initiation of action under PMLA for possessing disproportionate wealth.
Retrospective effect of amendment in Act 2 of 2013 on invoking PMLA.
Double jeopardy and constitutionality of invoking PMLA after conviction under Prevention of Corruption Act.
Interpretation of "proceeds of crime" under Section 2(1) (u) of PMLA.
Scope and applicability of Section 3 of PMLA in cases of possession of proceeds of crime.
Independence of PMLA from other enactments like Prevention of Corruption Act.
Burden of proof under Section 24 of PMLA and consideration of merits in discharge petition.

Analysis:

The judgment concerns a criminal revision petition challenging the order of a Special Court rejecting a petition seeking discharge from the offence of Money Laundering under the Prevention of Money Laundering Act (PMLA). The petitioner argued that the initiation of action under PMLA for possessing disproportionate wealth was invalid due to various reasons. The respondent, a Special Public Prosecutor, contended that the petitioner continued to possess the proceeds of crime, justifying the invocation of PMLA.

The petitioner raised concerns about the ceiling of Rs.30,00,000 under PMLA, arguing that the amount of disproportionate wealth possessed was below this limit, rendering the initiation of action invalid. Additionally, the petitioner challenged the retrospective effect of an amendment in Act 2 of 2013, which expanded the scope of PMLA, and raised the issue of double jeopardy, claiming that invoking PMLA after a conviction under the Prevention of Corruption Act was unconstitutional.

The respondent countered these arguments by asserting that the petitioner's possession of the proceeds of crime justified the action under PMLA. The respondent explained that the amendment in 2013 erased the ceiling limit, making the initiation of action valid. Furthermore, the respondent argued that PMLA, being a Central Act, could override other laws, and the possession of proceeds of crime justified the invocation of PMLA.

The judgment delved into the definition of "proceeds of crime" under PMLA and the scope of Section 3, which outlines the offence of money laundering. The court emphasized that mere possession of proceeds of crime was sufficient to invoke PMLA, highlighting the Act's broad scope to combat economic offences. The court rejected the petitioner's arguments regarding the narrow interpretation of PMLA, emphasizing the Act's importance in curbing money laundering threats.

Ultimately, the court upheld the order of the Special Court, confirming the validity of invoking PMLA against the petitioner. The judgment emphasized that the grounds touching upon the merits of the case should be addressed during trial, not in a discharge petition. The burden of proof under PMLA was highlighted, indicating that the parties must establish their case during the trial. The court dismissed the Criminal Revision Petition, allowing the trial court to proceed without influence from the observations made in the judgment.