2024 (3) TMI 861 - HC - Money Laundering

Money Laundering - Validity of framing of charges - dealing in skin and organs of prohibited animals - proceeds of crime - scheduled offence - It is submitted that the trial court has failed to consider that in fact no proceeds of crime has been generated from the goods allegedly seized from the premises of the applicants - HELD THAT - The allegations against the applicants are to tune that they were indulged in dealing with the skin and organs of prohibited animals from before the year 2007 and the same is punishable under various provisions of the Wildlife Act and the Indian Forest Act. It is also alleged that applicants have parked proceeds of crime earned by them in the bank-account of their mother, which has been used by her in purchasing two properties. Sudden inflation in income tax returns of Smt. Zaibunnisha is also highlighted in order to substantiate the allegations of money laundering. It is also the case of the Enforcement Directorate that these properties were earned after enactment of PMLA. The whole case of the applicants rests on presumption that the valuation of the certain articles seized from the houses of applicants has not been properly done and as per the definition of property contained in section 2(y) of the PMLA, the offence, if is committed, pertaining to the value of more than 30 Lakh, the applicants only in that condition may be prosecuted under PMLA, and at the relevant time, the offence under Wildlife Act was falling under Chapter B of Schedule appended with PMLA. Much emphasis has been given on the fact that the valuation of the seized articles is based on a website run by an NGO. However, allegations are also to tune that apart from seized articles the proceeds of crime has also been used for purchase of some properties by mother of the applicants. Thus, it is not the seized articles alone whose valuation is to be seen. Moreover, when there is no known mode of assessing the value of seized articles as they could not be sold in open market legally, the value of these articles may be what these articles may fetch anywhere may be taken as the market value of the same and it is why the emphasis has been given in section 2(zb) on market value - The applicants have not declared in their application as to on what basis they are claiming the value of proceeds of crime less than 30 Lakh. Thus, what is the market value of the articles seized from the premises of the applicants is a disputed question of fact which could only be adjudicated by the trial court, during the course of trial. Similarly, if the income tax returns filed by the mother of the applicants has not been disputed, the same may not be the sole ground of the discharge of applicants. Law leans in favour of trial and an accused could only be discharged if there is no prima facie case available against him. At the stage of discharge or framing of charge the trial court was only required to sift the material sent with the complaint in order to assess whether there is a p rima facie case against the applicants and meticulous exercise of appreciating evidence or material, in order to assess the probative value of the evidence collected by the prosecution, was not required. This application moved by the applicants under section 482 CrPC is dismissed.

Summary

Issues Involved:
1. Rejection of discharge application and framing of charges under \u/s 3/4 of the Prevention of Money Laundering Act, 2002 (PMLA).
2. Valuation of seized goods and their classification under PMLA.
3. Alleged proceeds of crime parked in the bank account of co-accused.
4. Prima facie case assessment at the stage of framing charges.

Summary of Judgment:

1. Rejection of Discharge Application and Framing of Charges under \u/s 3/4 PMLA:
The applicants argued that the trial court committed material illegality by rejecting their discharge application and framing charges under \u/s 3/4 of the PMLA. They contended that no proceeds of crime were generated from the seized goods and that the Enforcement Directorate relied on an unauthenticated report for valuation.

2. Valuation of Seized Goods and Classification under PMLA:
The applicants claimed that the seized articles were not properly valued by the Enforcement Directorate and that the valuation report was not authenticated. They argued that the prosecution under PMLA could not be launched as the value of the seized goods was less than Rs. 30 Lakh, as per Section 2(y) of the PMLA.

3. Alleged Proceeds of Crime Parked in Bank Account of Co-Accused:
The applicants contended that the Enforcement Directorate's theory that the proceeds of crime were deposited in the bank account of co-accused Smt. Zaibunnisha was unfounded. They argued that there was no material evidence warranting the framing of charges against them.

4. Prima Facie Case Assessment at the Stage of Framing Charges:
The court emphasized that at the stage of framing charges, only a prima facie case and sufficient grounds need to be established. It is not the stage for meticulous evaluation of evidence. The court referred to several Supreme Court judgments to underline that the sufficiency of material for framing charges should not meet the standard required for conviction.

Conclusion:
The court concluded that the trial court did not commit any illegality in rejecting the discharge application and framing charges against the applicants. The valuation of seized goods and the alleged proceeds of crime were deemed disputed questions of fact to be adjudicated during the trial. The application under \u/s 482 CrPC was dismissed.