2024 (11) TMI 996 - HC - Money Laundering

Money Laundering - scheduled offence - proceeds of crime - whether the properties purchased prior to the alleged commission of offence would not fall under the definition of proceeds of crime ? - HELD THAT - In view of the fact that 'proceeds of crime' has been set out in the complaint impugned in the present petition and the identification of proceeds of crime also has been set out, the grounds raised by the petitioner deserves no merit consideration and all other grounds raised on merits or regarding appreciation of materials would be considered only by the Trial Court. However, the Trial Court while proceeding with the trial, has to consider the materials available on record independently and uninfluenced by the findings recorded by this Court in this petition relating to facts. This Criminal Original Petition stands dismissed.

Summary

Issues:
Complaint filed under PMLA based on scheduled offence, Definition of "proceeds of crime" under PMLA, Properties purchased prior to alleged offence, Involvement of accused in alleged cheating, Arguments regarding collection of money, Investigation against other implicated persons.

Detailed Analysis:
The judgment concerns a complaint filed by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) based on a scheduled offence. The complaint alleged offences under Sections 420 and 406 of the Indian Penal Code (IPC). The petitioner argued that properties considered 'proceeds of crime' were purchased before the scheduled offence and some were acquired through bank loans, thus not falling under the PMLA definition. The petitioner also claimed innocence in collecting money based on instructions from the Chairman of SRM University without knowledge of the purpose, challenging the basis for the complaint.

The respondent, represented by the Special Public Prosecutor, contended that the petitioner's statements revealed 'proceeds of crime' under the PMLA. The ED, during investigation, traced such proceeds leading to provisional attachment under the Act. The respondent argued that a prima facie case existed, and the petition to quash the complaint should be rejected. The petitioner maintained innocence in the alleged cheating of parents, asserting collection of money as per instructions without involvement in any offence under IPC or PMLA.

The court analyzed the definition of "proceeds of crime" under PMLA, emphasizing the wide scope to include property obtained directly or indirectly from criminal activity. Referring to a Supreme Court judgment, the court concluded that properties purchased before the offence could still be considered 'proceeds of crime' under PMLA. The complaint detailed the petitioner's involvement in money laundering activities related to admissions in educational institutions, leading to the identification of specific properties as proceeds of crime.

The judgment highlighted the complaint's description of the proceeds of crime and the properties involved in money laundering. The court dismissed the petitioner's arguments, emphasizing that the trial court should independently assess the evidence during trial proceedings. The petition was ultimately dismissed, and the connected miscellaneous petition was closed, indicating that further considerations would be made by the trial court based on the available evidence.