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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 ..... d not mean that this Court could permit such an action to be taken against the petitioner, without him being involved in any manner. If that would be permitted, every purchaser who has purchased the property from a person who gets indicted in the crime at a later stage would have to face the proceedings for no fault of him. In somewhat identical circumstances, the Apex Court in the case of Pavana Dibbur v. Directorate of Enforcement [ 2023 (12) TMI 49 - SUPREME COURT ] upturning the order passed by this Court holds that unless conspiracy is alleged, all and sundry cannot be drawn into the web of proceedings under the Act. Though in the case at hand, in one of the crimes so registered there is offence punishable under Section 120B of the IPC, but that cannot drag the petitioner into the web of those proceedings, as all the transactions that the petitioner is projecting have happened long before initiation of predicate offence even. Therefore, there are no hesitation to hold that the impugned proceedings are unsustainable, in the peculiar facts of this case. Conclusion - A bona fide purchaser who acquires property before any predicate offence is registered cannot be subjected to proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner by K.G. Krishna are ordered. It is this action that has driven the petitioner to this Court in the subject petition. 4. The learned senior counsel Sri S. Basavaraj appearing for the petitioner would vehemently contend that the petitioner is a bona fide purchaser. He purchases lands from one Sri K.G. Krishna beginning from the year 2021 by 12 sale deeds. The sale transactions end in the year 2022. The petitioner enters into a Joint Development Agreement ( JDA for short) with M/s. Brigade Enterprises Limited on 15-03-2023 and 17-03-2022. Long thereafter, a crime comes to be registered against Sri K.G. Krishna. Based upon the said crime, holding it to be a predicate offence, Enforcement Directorate initiates proceedings against K.G. Krishna and others. The petitioner is not an accused in any proceedings, but summons were issued to the petitioner, his residence was searched and found the sale deeds executed long before initiation of crime and attached the property holding it to be proceeds of crime of Sri K.G. Krishna. He would contend that all events that have happened long before registration of crime even cannot be taken note of against a bona fide purchaser. He wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the said ECIR is the aforesaid four crimes registered before different Police Stations. Alleging that there has been money laundering, the proceedings are instituted. Pursuant to registration of ECIR, the Enforcement Directorate gets hold of certain sale deeds during investigation, issues summons to the petitioner on 25-06-2024 under Section 50 of the Act and later the Enforcement Directorate files an application under Section 17 of the Act to retain the seized materials and sought permission from the 2nd respondent to hold it to be proceeds of crime. The 2nd respondent is the Adjudicating Authority under the Act. It is this that is called in question in the subject petition. 9. The link in the chain of events and undisputed dates are taken note of, what could be unmistakably gathered is, that the petitioner is a bona fide purchaser. Having purchased the property long before the crime even being initiated against the vendors of the petitioner would not mean that the axe should fall on the petitioner, that too for attachment of properties which have changed hands after they are purchased by the petitioner. The proceedings instituted by the Enforcement Directorate, though civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Another allegation is that she is shown to have purchased the second property from accused no. 1, though she did not have the resources to pay the consideration. The allegation is that she allowed the accused no. 1 to use her bank accounts to facilitate siphoning the proceeds of the crime. Another allegation is that both the first and second properties have been acquired out of the proceeds of crime. The first property, ex-facie, cannot be said to have any connection with the proceeds of crime as the acts constituting the scheduled offence took place after its acquisition. The case of the appellant is that she possessed a substantial amount, as can be seen from the declaration made by her under the Income Declaration Scheme, 2016 in September 2016 and therefore, at the time of the acquisition of the second property, more than sufficient money was available with her to acquire the second property. The issue of whether the appellant used tainted money to acquire the second property can be decided only after the evidence is adduced. This is not a case where any material is placed on record to show that the sale consideration was paid from a particular Bank Account of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Parliament in its wisdom having perceived the cumulative effect of the process or activity concerning the proceeds of crime generated from such criminal activities as being likely to pose threat to the economic stability, sovereignty and integrity of the country and thus, grouped them together for reckoning it as an offence of money-laundering, is a matter of legislative policy. It is not open to the Court to have a second guess at such a policy. 455. Needless to underscore that the 2002 Act is intended to initiate action in respect of money-laundering activity which necessarily is associated with the property derived or obtained by any person, directly or indirectly, as a result of specified criminal activity. The prosecution under this Act is not in relation to the criminal activity per se but limited to property derived or obtained from specified criminal activity. Resultantly, the inclusion of criminal activity which has been regarded as non-cognizable, compoundable or minor offence under the concerned legislation, should have no bearing to answer the matter in issue. In that, the offence of money-laundering is an independent offence and the persons involved in the commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Schedule; b. Though offences punishable under Sections 392 to 402 regarding robbery and dacoity have been included in part A of the Schedule, the offence punishable under Section 379 of committing theft and the offence punishable under Section 380 of theft in a dwelling house are not made a part of parts A and B of the Schedule. The theft of both categories can be of a very large amount running into crores. The said two offences become scheduled offences by virtue of clause (3) of part C of the Schedule only if the offences have cross-border implications; c. The offence punishable under Section 403 of dishonest misappropriation of property does not form part of the Schedule. The said offence becomes a scheduled offence by virtue of clause (3) of part C of the Schedule only if the offence has cross-border implications; d. The offence under Section 405 of criminal breach of trust, which is punishable under Section 406, is not a part of the Schedule The said offence becomes a scheduled offence by virtue of clause (3) of part C of the Schedule only if the offence has cross-border implications; e. Though the offence under Section 417 of cheating has been made a scheduled offence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f conspiracy to commit offences under Sections 403 and 405 will become a scheduled offence. Thus, if any offence is not included in Parts A, B and C of the Schedule but if the conspiracy to commit the offence is alleged, the same will become a scheduled offence. A crime punishable under Section 132 of the Customs Act is made a scheduled offence under Part B, provided the value involved in the offence is Rupees One Crore or more. But if Section 120-B of IPC is applied, one who commits such an offence having a value of even Rs. 1 lac can be brought within the purview of the PMLA. By that logic, a conspiracy to commit any offence under any penal law which is capable of generating proceeds, can be converted into a scheduled offence by applying Section 120-B of the IPC, though the offence is not a part of the Schedule. This cannot be the intention of the legislature. 27. The penal statutes are required to be strictly construed. It is true that the penal laws must be construed according to the legislative intent as expressed in the enactment. In Chapter 1 of GP Singh's Principles of Statutory Interpretation (15th Edition), it is observed that: The intention of the Legislature, thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onspiracy to commit a crime, though they may not have committed any overt act that constitutes the offence. Conspiracy is an agreement between the accused to commit an offence. If we look at the punishments provided under Section 120-B, it becomes evident that it is not an aggravated offence. It only incorporates the principle of vicarious liability. If no specific punishment is provided in the Statute for conspiracy to commit a particular offence, Section 120-B treats a conspirator of the main accused as an abettor for the purposes of imposing the punishment. The interpretation suggested by the ED will defeat the legislative object of making only a few selected offences as scheduled offences. If we accept such an interpretation, the statute may attract the vice of unconstitutionality for being manifestly arbitrary. It cannot be the legislature's intention to make every offence not included in the Schedule a scheduled offence by applying Section 120-B. Therefore, in our view, the offence under Section 120-B of IPC included in Part A of the Schedule will become a scheduled offence only if the criminal conspiracy is to commit any offence already included in Parts A, B or C of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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