2023 (4) TMI 411 - HC - Money Laundering

Money Laundering - framing of charges - Scheduled Offence - proceeds of crime - impugned order rejecting the application preferred by the petitioner No.2 for discharge is legally sustainable or not - Whether the charges framed against the petitioner No.2 are liable to be quashed by exercising the revisional jurisdiction? - HELD THAT - Section 3 of PMLA states inter alia that whoever knowingly assists or knowingly is a party or is actually involved in any process or activity connected with proceeds of crime including its concealment, possession, acquisition or use shall be guilty of offence of money-laundering - PMLA deals only with the process or activity connected with the proceeds of a scheduled crime, including its concealment, possession, acquisition or use and it has nothing to do with the launch of prosecution for scheduled offence and continuation thereof. Scheduled offence is only a trigger point to initiate investigation under PMLA and once ECIR is recorded, case registered under PMLA is independent, distinct and stand alone. Even if the predicate/scheduled offences are compromised, compounded, quashed or even in case the accused is acquitted, it does not affect proceedings under PMLA. The offence under the 2002, Act deals only with laundering of money acquired by committing a scheduled offence. Except that it starts with an offence of possessing, concealing, using, converting or projecting proceeds of a scheduled crime as untainted money, it has nothing to do with the launch of prosecution for scheduled offence and continuation thereof and once a case is registered under PMLA, it is an independent offence. In the present case, the husband of petitioner no. 2 has been prosecuted for amassing disproportionate assets. He had been prosecuted for that offence under Section 13(2) r/w 13(1)(e) of the PC Act. It is alleged that she knowingly assisted in activities connected with the proceeds of scheduled crime committed by her husband. She assisted her husband by concealment, possession, use etc. of tainted money and also by claiming it as untainted property and thus, abetted the offence punishable under section 13(1)(e) r/w 13(2) of the PC Act. They have been prosecuted, convicted and sentenced for amassing disproportionate property as well as abetting the offence of amassing disproportionate property. There cannot be any dispute that amassing disproportionate property as punishable under section 13(1)(e) of the PC act is a scheduled offence under the PMLA. Thus, she had abetted a scheduled offence and has been convicted accordingly with the aid and assistance of section 109 of the Indian Penal Code. It is held that there is no infirmity in the impugned order dated 03.06.2022 of the learned trial Court holding that prima facie case exists against petitioner No.2 of the alleged commission of the offence under Section 3 of the PMLA, 2002 punishable under Section 4 of the said enactment, inasmuch as, she allegedly acted prima facie in the company of her husband i.e. petitioner No.1 in a careful deliberate manner and engaged in money laundering with the proceeds of crime and thus, obtained property as the result of the criminal activity relatable to the scheduled offence as the proceeds of crime to make her prima facie culpable under Section 3 of the PMLA, 2002. Petition dismissed.

Summary

Issues Involved:
1. Whether the impugned order rejecting the application preferred by the petitioner No.2 for discharge is legally sustainable.
2. Whether the charges framed against the petitioner No.2 are liable to be quashed by exercising the revisional jurisdiction.

Summary:

Issue 1: Legality of the Impugned Order
The petition against petitioner No.1 Harishankar was dismissed as not pressed, with liberty to raise all grounds available in law before the trial Court. The main challenge was against the order framing charge dated 03.06.2022, and the charge framed against petitioner No.2 Smt. Seema Gurjar for the alleged commission of the offence of money laundering under Section 3 of the Prevention of Money-Laundering Act, 2002 (PMLA), punishable under Section 4 thereof.

The petitioner argued that since Smt. Seema Gurjar was not named in the FIR for the offence under the Prevention of Corruption Act, 1988, and was only prosecuted under Section 109 of IPC, which is not a scheduled offence under PMLA, her prosecution is an abuse of the process of law. However, the trial Court opined that there is sufficient material on record to prima facie frame charges against her for money laundering.

The Court emphasized that at the stage of framing of charge, the trial Judge should consider the broad probabilities of the case and not weigh the evidence as if conducting a trial. The Court found sufficient prima facie evidence to show that petitioner No.2 knowingly assisted her husband in activities connected with the proceeds of the scheduled crime, thus making her liable under Section 3 of PMLA.

Issue 2: Quashing of Charges
The petitioner contended that since the offence under Section 109 of IPC is not a scheduled offence under PMLA, her prosecution under PMLA is not sustainable. However, the Court noted that PMLA deals with laundering of money acquired by committing a scheduled offence and is independent of the prosecution for the scheduled offence. The Court found that petitioner No.2 was actively involved in converting tainted money into legal money, thus justifying the charges framed against her.

The Court also addressed the plea of double jeopardy, clarifying that it is not applicable as the person is being tried under the scheme of PMLA and not under the Penal Code/PC Act. The Court further dismissed the argument regarding the retrospective application of the PMLA, citing the Supreme Court's verdict that the offence of money laundering is a continuing offence.

In conclusion, the Court held that there is no infirmity in the impugned order dated 03.06.2022, as there is sufficient prima facie evidence against petitioner No.2 for the alleged commission of the offence under Section 3 of PMLA, 2002, punishable under Section 4 of the said enactment. The petition qua petitioner No.2 was found to be without merit and was dismissed.