2024 (2) TMI 1088 - HC - Money Laundering

Money Laundering - predicate/scheduled offence - proceeds of crime - purchase of papers of Rajasthan Eligibility Examination for Teachers, 2021 (REET, 2021) and its further distribution - Section 45(1) of the PMLA - HELD THAT - It is settled law that to establish offence under the PMLA the Enforcement Directorate must demonstrate that procurement of the property as the proceeds of crime are derived from criminal activity from the predicate offences prescribed under Part-A and Part-B of the scheduled offence. It is also an established preposition that though the offence of money laundering is separate standalone offence, the proceeds of crime ought to have preceded the commission of predicate offences and thereafter laundered over. Section 45 of the PMLA, which deals with the conditions for bail pending trial provides that the Court may grant bail to an accused if Court is satisfied that (i) There are reasonable grounds for believing that the accused is not guilty of such offence and (ii) That the accused is not likely to commit any offence while on bail. Admittedly, Rajasthan Public Examination (Prevention of Unfair Means) Act, 1992 is not scheduled offence as prescribed under Section 2 (Y) of the PMLA but the offences under Sections 420 and 120-B of I.P.C. fall within the ambit of the scheduled offence as specified under Part-A of the schedule - there is ample evidence available against the accused implying that he obtained an amount of Rs. 1.06 Crores by selling the REET, 2021 papers. The recovery of aforesaid amount from above eight persons further shows that the accused siphoned the proceeds of the crime to various persons. The recovery of Rs. 1.06 Crores from the above persons exemplifies the use/concealment of the proceeds of crime by the present petitioner. Whether, the predicate offence under Sections 420 and 120-B of I.P.C. is made out or not and whether the amount recovered from various persons is their legitimate amount or not, are the questions to be ascertained by the trial court, this Court cannot proceed into the intricacies of the case with regard to above issues, at the stage of bail. This Court has only to see whether there is prima facie evidence available against the accused-petitioner that he has committed the offence under Section 3 of Money Laundering Act. As far as applicability of proviso appended to Section 45 (1) of the PMLA is concerned, the above facts clearly show that the amount recovered from the above persons as proceeds of crime is more than Rs. 1 Crore, therefore, the case of the present petitioner does not fall within the ambit of proviso appended to Section 45 (1) of PMLA. The petitioner cannot be enlarged on bail - the instant bail application under Section 439 Cr.P.C. is dismissed.

Summary

Issues Involved:
1. Prima facie case under Section 3/4 of the Prevention of Money Laundering Act, 2002 (PMLA).
2. Applicability of Section 420 & 120-B of IPC and Sections 4 & 6 of Rajasthan Public Examination (Prevention of Unfair Means) Act, 1992.
3. Recovery of proceeds of crime.
4. Applicability of proviso to Section 45(1) of PMLA.

Summary:

1. Prima facie case under Section 3/4 of PMLA:
The petitioner argued that no prima facie criminal case is made out under Section 3/4 of PMLA against him. He claimed that the offences under the Rajasthan Public Examination (Prevention of Unfair Means) Act, 1992 are not 'scheduled offences' under Part-A and Part-B of the Schedule of PMLA. The counsel for the petitioner also contended that the investigation did not indicate that the petitioner procured or used the amount in the predicate offence.

2. Applicability of Section 420 & 120-B of IPC and Sections 4 & 6 of Rajasthan Public Examination (Prevention of Unfair Means) Act, 1992:
The petitioner was charged under Sections 420 & 120-B of IPC along with Sections 4 & 6 of the Rajasthan Public Examination (Prevention of Unfair Means) Act, 1992. The petitioner argued that the main allegation of purchasing the stolen paper was against another accused, and no case under Section 420 of IPC was made out against him. The counsel for the respondent opposed the bail, stating that the petitioner, in connivance with another individual, stole the REET, 2021 question papers and sold them for Rs. 1.20 Crores.

3. Recovery of proceeds of crime:
The respondent's counsel stated that the investigation revealed that the petitioner had laundered Rs. 1.06 Crores, which was recovered from various individuals. The petitioner argued that the recovery of Rs. 65,00,000/- was wrongfully shown and should not be considered as proceeds of crime. The court noted that there was ample evidence against the petitioner, showing that he obtained Rs. 1.06 Crores by selling the REET, 2021 papers and siphoned the proceeds to various persons.

4. Applicability of proviso to Section 45(1) of PMLA:
The petitioner argued that under the proviso to Section 45(1) of PMLA, he was entitled to bail as the amount recovered was less than one crore rupees. The court found that the amount recovered from the individuals as proceeds of crime was more than Rs. 1 Crore, thus not falling within the ambit of the proviso. The court also noted that the conditions under Section 45 of PMLA reverse the burden on the accused to demonstrate that he is not guilty.

Conclusion:
The court concluded that there was prima facie evidence against the petitioner for committing the offence under Section 3 of PMLA. The court dismissed the bail application, stating that the petitioner was involved in stealing and selling the REET, 2021 papers and that the amount recovered from various individuals exemplified the use/concealment of the proceeds of crime. The court also found that the judgments cited by the petitioner's counsel were not applicable to the instant case due to differing facts.