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TMI Blog2024 (12) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... ich would run through 26-08-2022. Conversion orders would correspond to the lands that are concerned in the sale deeds executed. Therefore, all the transactions between one K.G. Krishna and his wife K.N. Jayalakshmi, a partnership ends in 2022 with the petitioner through his firm. Long after purchase of lands by the petitioner from the hands of K.G. Krishna, a crime comes to be registered by a complainant by name one Amaresh against K.G. Krishna in Crime No.218 of 2023 registered on 20-08-2023 for offences punishable under Sections 406, 420, 504 and 506 of the IPC. This was one of several crimes registered against Sri K.G. Krishna by several complainants before respective jurisdictional police stations. The investigation in all those crimes have been stayed by this Court by orders passed by the coordinate Bench in different criminal petitions. After the interim order of stay, the Enforcement Directorate registers Enforcement Case Information Report in No. ECIR/BGZO/28/2023 on 11-09-2023. Pursuant to registration of ECIR, the impugned proceedings are initiated against the petitioner invoking Section 17 of the Act, for attachment of properties of the petitioner, on the ground that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective learned counsel and have perused the material on record. 7. The afore-narrated facts are not in dispute. The petitioner is a real estate developer. The petitioner intended to purchase 72 acres of land and the records of those lands would depict that a partnership firm by name Sai Sristi had entered into an agreement to purchase the land from Sri K.G. Krishna and his wife. The petitioner after due diligence proceeds to purchase 12 packets of lands by 12 different sale deeds from the partnership firm owned by Sri K.G. Krishna and his wife. Those sale deeds are executed between 25-10-2021 and 26-08-2022. This is a matter of record. The petitioner after purchase of lands enters into a JDA with Brigade Enterprises on 15-03-2023. All was well up to this point. 8. Several crimes come to be registered not against the petitioner but against his vendor Sri K.G. Krishna and his wife in Crime Nos. 112 of 2023, 113 of 2023, 218 of 2023 and 237 of 2023 all for offences punishable under Sections 406, 420, 504 and 506 of the IPC inter alia. These crimes have become subject matter of different criminal petitions before this Court and a coordinate Bench of this Court granted an interim or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entirety, the scheduled offence will not exist, and therefore, no one can be prosecuted for the offence punishable under Section 3 of the PMLA as there will not be any proceeds of crime. Thus, in such a case, the accused against whom the complaint under Section 3 of the PMLA is filed will benefit from the scheduled offence ending by acquittal or discharge of all the accused. Similarly, he will get the benefit of quashing the proceedings of the scheduled offence. However, an accused in the PMLA case who comes into the picture after the scheduled offence is committed by assisting in the concealment or use of proceeds of crime need not be an accused in the scheduled offence. Such an accused can still be prosecuted under PMLA so long as the scheduled offence exists. Thus, the second contention raised by the learned senior counsel appearing for the appellant on the ground that the appellant was not shown as an accused in the charge-sheets filed in the scheduled offences deserves to be rejected. ACQUISITION OF THE FIRST AND SECOND PROPERTY 19. The allegation against the appellant in the complaint is that she purchased the property worth crores, though she did not have the source of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore this Court was that even minor offences have been included in the Schedule, and even compoundable offences form part of the Schedule. It was submitted that the offences which do not have cross-border implications have been included in the Schedule. In paragraphs 454 and 455 of the said decision, this Court held thus: "454. This Schedule has been amended by Act 21 of 2009, Act 2 of 2013, Act 22 of 2015, Act 13 of 2018 and Act 16 of 2018, thereby inserting new offences to be regarded as scheduled offence. The challenge is not on the basis of legislative competence in respect of enactment of Schedule and the amendments thereto from time to time. However, it had been urged before us that there is no consistency in the approach as it includes even minor offences as scheduled offence for the purposes of offence of money-laundering, more so even offences which have no trans-border implications and are compoundable between the parties. The classification or grouping of offences for treating the same as relevant for constituting offence of money-laundering is a matter of legislative policy. The Parliament in its wisdom has regarded the property derived or obtained as a result of spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans, such an agreement is designated a criminal conspiracy: Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof. Explanation.-It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object." 23. Section 120-B of IPC provides for punishment for a criminal conspiracy which reads thus: "120B. Punishment of criminal conspiracy.- (1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence. (2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both." 24. Now, we turn to the Schedule to the PMLA. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of Part C. More importantly, all the offences against the property under Chapter XVII of IPC having cross-border implications become scheduled offences. As pointed out earlier, the offences punishable under Sections 379 (theft), 380 (theft in dwelling house), 403 (dishonest misappropriation of property) and 405 (criminal breach of trust) are part of Chapter XVII. Though the said offences are not included in Part A, they become scheduled offences by virtue of Part C only if they have cross-border implications. Thus, it can be said that many offences capable of generating proceeds of crime do not form a part of the schedule. 26. The learned Additional Solicitor General argued that as Section 120-B of IPC is included in Part A to the Schedule, even if the allegation is of making a criminal conspiracy to commit an offence which is not a part of the Schedule, the offence becomes a scheduled offence. As stated earlier, many offences under Chapter XVII of IPC are not included in Parts A and B. They become scheduled offences only if the same have cross-border implications. Thus, the offences of dishonest misappropriation of property or criminal breach of trust or theft can become a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation later received the approval of the Supreme Court and was called the "cardinal principle of construction"." In both Constitutional and statutory interpretation, the court is supposed to exercise discretion in determining the proper relationship between the subjective and objective purposes of the law and help the law achieve its purpose." (Emphasis added) 28. While giving effect to the legislature's intention, if two reasonable interpretations can be given to a particular provision of a penal statute, the Court should generally adopt the interpretation that avoids the imposition of penal consequences. In other words, a more lenient interpretation of the two needs to be adopted. 29. The legislative intent which can be gathered from the definition of the scheduled offence under clause (y) of sub-Section (1) of Section 2 of the PMLA is that every crime which may generate proceeds of crime need not be a scheduled offence. Therefore, only certain specific offences have been included in the Schedule. Thus, if the submissions of the learned Additional Solicitor General are accepted, the Schedule will become meaningless or redundant. The reason is that even if an offence re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld. Our conclusions are: a. It is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged, must have been shown as the accused in the scheduled offence; b. Even if an accused shown in the complaint under the PMLA is not an accused in the scheduled offence, he will benefit from the acquittal of all the accused in the scheduled offence or discharge of all the accused in the scheduled offence. Similarly, he will get the benefit of the order of quashing the proceedings of the scheduled offence; c. The first property cannot be said to have any connection with the proceeds of the crime as the acts constituting scheduled offence were committed after the property was acquired; d. The issue of whether the appellant has used tainted money forming part of the proceeds of crime for acquiring the second property can be decided only at the time of trial; and e. The offence punishable under Section 120-B of the IPC will become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule." The appellant PAVANA DIBBUR, before the Apex Court, was not an accused in the predicate offence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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