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TMI Blog2024 (7) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... may be liable to be prosecuted for offence of money laundering under PMLA. In response to the aforesaid ratio laid down by the Hon ble Apex Court, the argument of the petitioner is that a review petition titled Karti P. Chidambaram v. Directorate of Enforcement [ 2022 (8) TMI 1373 - SUPREME COURT] has been filed before the Hon ble Apex Court for review of the judgment in Vijay Madanlal Choudhary. However, this argument can be of no help to the petitioner as far as instant applications seeking stay of proceedings are concerned since as on date, the question of law stands answered by the three-judge Bench of the Hon ble Apex Court and even though review of the said judgment is pending, no direction has been passed by the Hon ble Apex Court, nor has the judgment been stayed. Thus, the proposition of law laid down by the Hon ble Apex Court shall be binding upon this Court. Considering the aforesaid observations of the Hon ble Apex Court, and the fact that Section 13 of PC Act is a scheduled offence under PMLA, which has not been declared as unconstitutional or violative of any fundamental right by any court of law, this Court is of the opinion that the contention raised on behalf of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged under Section 13 (2) read with Section 13 (1) (e) of the PC Act, and his wife was charged under Section 109 of IPC read with Sections 13 (2) and 13 (1) (e) of the PC Act. After conclusion of trial, the learned Trial Court had convicted the petitioner on 27.09.2016, finding that he could not satisfactorily account for pecuniary resources and property worth Rs. 2,22,04,290/-, which were disproportionate to his income. However, his wife was acquitted, given the benefit of the doubt. Thereafter, on 29.09.2016, the learned Trial Court had ordered the confiscation of properties worth Rs. 2,12,36,205/-. 4. Further investigations in the present case revealed that the petitioner herein had amassed disproportionate assets amounting to Rs. 3,37,02,592/-, which were then provisionally attached by the Directorate of Enforcement on 04.11.2016. This attachment was confirmed by the Adjudicating Authority on 17.03.2017 after hearing both parties. The petitioner had appealed against this order, which is pending before the Appellate Tribunal, PMLA. The Appellate Tribunal had ordered the release of properties belonging to Smt. Mridula Kapur on 13.04.2018. The Directorate of Enforcement has appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. It is further submitted that the 'property' in question must be derived from criminal activity related to a scheduled offence. In this case, the judgment dated 27.09.2016 did not attribute any property to the purported disproportionate income, and only mentioned an amount. Therefore, there is no finding that any properties were derived from criminal activity related to the scheduled offence. 9. It is also argued that the provisions of PMLA, being punitive in nature, cannot be applied retrospectively. In this regard, it is submitted that Section 13 of PC Act was included in the list of predicate offences under the PMLA by an amendment on 01.06.2009. However, the check period for the predicate offence in this case is from 14.11.1971 to 10.10.2007. Thus, it is contended that the retrospective application of the PMLA is not permissible in this case. It is also pointed out that this issue of retrospective applicability is pending adjudication before both the Hon ble Supreme Court and the Hon ble Division Bench of this Court, and it is stated that the outcome of these cases will have a direct bearing on the present petitions. 10. It is then argued that Section 13 (1) (e) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified as a scheduled offence, but if a person continues to deal with the proceeds of crime derived from that activity after its notification, he can be prosecuted under the PMLA. It is further argued that the Hon ble Supreme Court in case of Tarun Kumar v. Directorate of Enforcement 2023 SCC OnLine SC 1486 has reiterated that money laundering under Section 3 of PMLA is an independent offence related to the handling of proceeds of crime, irrespective of the date of the predicate offence, and the involvement of an individual in activities such as concealment, possession, or use of proceeds of crime, or projecting it as untainted property, constitutes the offence of money laundering. Thus, it is submitted that the argument of the petitioner that PMLA proceedings are invalid due to the predicate offence occurring before certain provisions were included in the schedule is untenable. 14. It is also contended that prosecution under the PMLA does not violate Article 20(1) of the Constitution, even if the petitioner has been convicted of the predicate offence. The proceeds of crime, once held to be disproportionate assets under Section 13 (1) (e) of PC Act, can fall within the ambit of mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing out of the ECIR which had been recorded in the year 2009. Cognizance of offence was taken by the learned Special Court vide order dated 25.01.2019, and charges were framed against the petitioner vide orders dated 21.01.2020 and 01.02.2020. 19. The above-captioned petitions were filed by the petitioner challenging the orders of cognizance and orders framing charge, in the year 2019 and 2020 respectively, in which notice were issued by this Court, however, the trial court proceedings in the present case have not been stayed till date. 20. The first argument raised on behalf petitioner is that since the appeal filed by him against his conviction in predicate offence is pending before this Court, the trial in respect of offences under PMLA must not proceed since establishment of the predicate offence is a mandatory prerequisite for proceedings under PMLA. In this Court s opinion, there is no merit in this argument since the petitioner, as on date, stands convicted by the learned Trial Court for the predicate offence vide judgment of conviction dated 27.09.2016. Though his appeal against conviction is pending before this Court, his conviction has not been stayed and thus, the commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied retrospectively and the issue of retrospective applicability is pending adjudication before the Hon ble Apex Court and Hon ble Division Bench of this Court. It has been argued so since the grievance of petitioner is that check period for the predicate offence under Section 13 (1) (e) read with Section 13 (2) of PC Act is from 14.11.1971 to 10.10.2007 in the present case, whereas the said provision was included in Schedule A of PMLA as predicate offence only in the year 2009. In this regard, this Court has gone through the findings of the learned Special Court in the order dated 21.01.2020 wherein the Court has examined various judgments of different High Courts as well as the Hon ble Apex Court. The relevant portion of the findings of learned Special Court are as under: 22. Therefore, from a reading of various cases relied on by Ld. Counsel for the parties it appears that there are judgments holding that the provisions of PML Act would be applicable even in cases where the scheduled offence was committed prior to amendment in the schedule of PML Act to include offences under Prevention of Corruption Act. There are judgments holding otherwise but in appeal either their operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceeds of crime (fully or in part) or retaining possession thereof or uses it in trenches until fully exhausted. The offence of money laundering is not dependent on or linked to the date on which the scheduled offence or if we may say so the predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime. These ingredients are intrinsic in the original provision (Section 3, as amended until 2013 and were in force till 31.7.2019); and the same has been merely explained and clarified by way of Explanation vide Finance (No. 2) Act, 2019. Thus understood, inclusion of Clause (ii) in Explanation inserted in 2019 is of no consequence as it does not alter or enlarge the scope of Section 3 at all. (emphasis supplied) 24. In response to the aforesaid ratio laid down by the Hon ble Apex Court, the argument of the petitioner is that a review petition titled Karti P. Chidambaram v. Directorate of Enforcement has been filed before the Hon ble Apex Court for review of the judgment in Vijay Madanlal Choudhary (supra). However, this argument can be of no help to the petitioner as far as instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Apex Court in case of Y. Balaji (supra) wherein following observations were made in respect of essentials of Section 3 of PMLA, Section 13 of PC Act being a scheduled offence, and bribe money being proceeds of crime under Section 2 (1) (u) of PMLA: 97. If the main part of Section 3 is dissected with forensic precision, it will be clear that Section 3 addresses itself to three things (we may call them 3 P's) namely, (i) person; (ii) process or activity; and (iii) product. Insofar as persons covered by Section 3 are concerned, they are, (i) those who directly or indirectly attempt to indulge; or (ii) those who knowingly assists; or (iii) those who are knowingly a party; or (iv) those who are actually involved. Insofar as process is concerned, the Section identifies six different activities, namely (i) concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting; or (vi) claiming as untainted property, any one of which is sufficient to constitute the offence. Insofar as product is concerned, Section 3 identifies proceeds of crime or the property representing the proceeds of crime as the product of the process or activity. *** 99. Keeping in mind these essential ele ..... X X X X Extracts X X X X X X X X Extracts X X X X
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