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TMI Blog2025 (3) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... ey laundering does not conclude with a single instance but extends so long as the proceeds of crime are concealed, used, or projected as untainted property. The legislative intent behind the PMLA is to combat the menace of money laundering, which by its very nature involves transactions spanning over time. The concept of a continuing offence under PMLA has been well-settled by judicial precedents. An offence is deemed continuing when the illicit act or its consequences persist over time, thereby extending the liability of the offender. Section 3 of the PMLA defines the offence of money laundering to include direct or indirect attempts to indulge in, knowingly assist, or knowingly be a party to, or actually be involved in any process or activity connected with the proceeds of crime. Such involvement, if prolonged, constitutes a continuing offence. The law recognizes that money laundering is not a static event but an ongoing activity, as long as illicit gains are possessed, projected as legitimate, or reintroduced into the economy - The material on record indicates the continued and repeated misuse of power and position by the appellant, resulting in the generation and utilization ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are neither legally untenable nor in the best interest of justice. The offence alleged against the appellant is clearly a continuing offence under the PMLA, and the quantum of proceeds of crime involved far exceeds the statutory threshold and requires proper investigation and judicial scrutiny. The findings of the Courts below are wellreasoned and do not call for interference.
Appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 03.02.2012. In the second scheduled offence, the appellant has been on regular bail in furtherance of this Court's order dated 13.12.2011. 7. Appellant approached the Special Judge under Section 227 of CrPC seeking discharge in the PMLA case on the grounds that he has been falsely implicated in the case and also no offence under the PMLA is made out. Further, the appellant was arrested on 06.01.2010 and thereafter suspended on 08.01.2010, during which period he had attained the age of superannuation and therefore now there is no question of him being in service. He further contended that the offences are alleged to have been committed when the PMLA was not in force and thus these provisions cannot be invoked retrospectively. It was his case the transaction alleged against him were of the company in which his wife is a partner and thus these cannot be attributed to him. Further, the transactions made to the accounts held by him the bank in United States of America cannot be deemed to be in furtherance of any offence, as he had opened those accounts during his studies there and they were used for transactions in that period. 8. The Special Judge (PMLA) in its judgment dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acement of funds through multiple transactions to project them as untainted. 12. It was also contended that the investigation had revealed substantial material to suggest that the appellant had knowingly assisted in the money laundering activities and had derived financial benefits from the proceeds of crime. 13. It was further submitted that the appellant's argument regarding the retrospective application of the PMLA was misplaced since the offence of money laundering is a continuing offence, and as long as the tainted money remains in circulation, PMLA is applicable. The Special Court had examined the materials on record and found sufficient grounds to proceed against the appellant, thereby justifying the rejection of his discharge application. They also argued that the High Court, in the exercise of its revisional jurisdiction, ought not to interfere with well-reasoned orders passed by the Trial Court unless there was a manifest error or miscarriage of justice, which was not the case here. 14. The High Court vide the impugned order dated 14.03.2024 dismissed the Criminal Revision Application, thereby upholding the Special Judge's order rejecting the appellant's discharge appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Part B), but only if the total value involved in such offences was thirty lakh rupees or more. Later, Section 420 IPC was added to Part B of the PMLA schedule on 1st June 2009, with a similar monetary threshold. Similarly, Section 13 of the Prevention of Corruption Act was included in Part B of the PMLA schedule from 1st June 2009, again applicable only when the offence involved more than thirty lakh rupees. Subsequently, with the PMLA (Amendment) Act, 2012, effective from 4th January 2013, Sections 420 IPC, 467 IPC, and 13 of the Prevention of Corruption Act were moved to Part A of the PMLA schedule, removing any monetary threshold. 18.2 It has been further submitted that the Enforcement Directorate (ED) has relied on the judgment in Vijay Madanlal Chaudhary and others v. Union of India and others (2023) 12 SCC 1, to argue that the issue of PMLA's retrospective application is settled. However, it has been contended, the only paragraphs dealing with retrospectivity in this judgment are Paragraphs 270 and 296, despite extensive submissions made on this issue. The judgment merely holds that "in a given fact situation," the offence of money laundering under Section 3 of the PMLA may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equests and engaged in corruption. ii. As per Gujarat Govt Order 03.02.2002 for allotment of land to those affected by the earthquake at Bhuj, a certificate was required from the Collector to verify that the victim was in fact impacted by the earthquake. The accused provided a fake certificate to a trust to facilitate their fraudulent application for compensatory land. iii. As per Gujarat Govt's Revenue Dept Resolution No. Jaman/392003/454/A dated 06.06.2003, the Collector was authorized to allot land upto 2 hectares only for industrial use. iv. When the accused Pradip Sharma was Collector, Bhuj, he allowed allotment of fallow land to M/s Saw Pipes Ltd. for setting up an industrial unit. These applications were submitted on 23.01.2004 and sanctioned on 05.03.2004, after which accused Pradip issued an order on 05.03.2004 for allotment above the cap of 2 hectares. v. Accused Pradip received a mobile SIM card no. 9925133799 from Asim Niranjan Chakravorty, Director of M/s Wellspun Company for which a bill of Rs. 2.24 lakhs were paid by the company for the period from 2004-2009 which was allegedly a bribe punishable under Section 7/11/13 of the Prevention of Corruption Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Corruption Act, 1988, as this was in exchange for allotments of land to M/s Wellspun in the year 2004 at an allegedly undervalued rate. v. Accused Pradip received mobile sim card no. 9824001729 from Ranjit Singh Bhaktarsingh Bhat, owner of M/S Ratan Enterprises Company and used it and the bill of Rs. 46,554/- was paid by Mr. Bhat for the period from 2004-2009 which was allegedly a bribe punishable under Section 7/11/13 of the Prevention of Corruption Act, 1988. vi. On retirement from the partnership in April 2009, his wife received Rs 22 lakhs in her NRO Bank account maintained with Bank of India from M/s Value Packaging. Subtracting her original investment of Rs. 1,50,000/-, this amounted to profits of Rs. 20.5 lakhs which was allegedly a bribe punishable under Section 7/11/13 of the Prevention of Corruption Act,1988. vii. Pradip Sharma's wife received Rs. 7.5 lakhs as goodwill payment from M/s Value Packaging which was allegedly a bribe punishable under Section 7/11/13 of the Prevention of Corruption Act, 1988. PMLA in force. S. 420 IPC and PC Act not scheduled offences. Between 01.06.2009 and 04.01.2013 i. Accused Pradip received a mobile SIM card no. 9925133799 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land to M/s Saw Pipes Ltd. and M/s Wellspun Company at significantly undervalued rates, causing a financial loss of ₹1,20,30,824/- to the government. Additionally, his wife was a partner in M/s Value Packaging, which applied for land-use conversion in 2005, and he allegedly facilitated the approval within 40 days, constituting offences under multiple IPC sections, including 217, 409, 465, 467, 471, 476, and 120-B. B. Between 1st July 2005 and 1st June 2009, while the PMLA was in force, Sections 420 IPC and the Prevention of Corruption Act were not scheduled offences, though Section 467 IPC was included in Part B of the schedule, applicable only if the offence involved a value exceeding thirty lakh rupees. During this period, similar allegations continued against the accused, including improper land allotments in Bhuj and Rajkot, approval of ineligible applications for agricultural land, and further instances of alleged bribery. Notably, during this period, his wife received ₹22 lakhs in her NRO bank account from M/s Value Packaging upon her retirement from the partnership in April 2009. After deducting her original investment of ₹1.5 lakhs, the remaining ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial if a prima facie offence is made out. 19.3 The respondent submits that the predicate offences forming the basis of the money laundering case were scheduled offences under the PMLA at the relevant time. Specifically, the predicate offences under the IPC and the Prevention of Corruption Act, 1988 (PC Act), were already included in the Schedule to PMLA when they were committed. Section 7 of the Prevention of Corruption Act, 1988, was part of Part B, Para 5 of the PMLA Schedule as originally enacted in 2005. Section 467 of the IPC was part of Part B, Para 1 of the PMLA Schedule as enacted in 2005. The total value of the alleged offence exceeded Rs. 30 lakhs, satisfying the monetary threshold under Section 2(1)(y) of PMLA for a Part B offence. The amendments to PMLA in 2009 and 2013 only expanded the scope of money laundering offences but did not introduce retrospective liability in this case. 19.4 The respondent provided a detailed factual timeline to establish that the offence was committed after PMLA came into force. FIR No. 3/2010 was registered on 31.03.2010 under Section 7 of the PC Act, a scheduled offence under PMLA since 01.07.2005. Similarly, FIR No. 9/2010 was regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of crime well after 2005, making the offence of money laundering applicable under PMLA. The sanction orders for land allotments were passed in 2006, after PMLA came into force, and were based on forged documents, constituting an independent offence. The reverse burden of proof under Section 24 of PMLA places the onus on the appellant to prove that the attached properties were not proceeds of crime, which he has failed to do. 19.8 The respondent submitted that the Special Court and High Court correctly applied the law in framing charges against the appellant. The scheduled offences were part of the PMLA Schedule at the time they were committed, and the offence of money laundering continued well beyond the enactment of PMLA. Additionally, the total amount involved far exceeds the Rs. 30 lakhs threshold required under Part B of the Schedule before its amendment. Therefore, the appellant's argument regarding retrospective application is misconceived and without merit. 20. Having considered the rival submissions, the material on record, and the statutory framework under the PMLA, this Court finds no merit in the appeal. 21. A significant ground raised by the appellant pertains to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y one of such process or activity connected with the proceeds of crime would constitute offence of money laundering. This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence - except the proceeds of crime derived or obtained as a result of that crime. 135. Needless to mention that such process or activity can be indulged in only after the property is derived or obtained as a result of criminal activity (a scheduled offence). It would be an offence of money laundering to indulge in or to assist or being party to the process or activity connected with the proceeds of crime; and such process or activity in a given fact situation may be a continuing offence, irrespective of the date and time of commission of the scheduled offence. In other words, the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted prima facie that the appellant remained involved in financial transactions linked to proceeds of crime beyond the initial point of commission. The utilization of such proceeds, the alleged layering and integration, and the efforts to project such funds as untainted all constitute elements of a continuing offence under the PMLA. Thus, the proceedings initiated against the appellant are well within the legal framework and cannot be assailed on this ground. 26. Another ground urged by the appellant is that the amount involved does not meet the statutory threshold for initiating proceedings under the PMLA as it stood prior to the amendment. The appellant has relied upon the monetary threshold of Rs. 30 lakhs to argue that at the relevant time, the offence did not attract the provisions of the PMLA. This argument is equally devoid of merit. 27. The respondent has placed substantial material on record to demonstrate that the quantum of proceeds of crime significantly exceeds the statutory threshold. The financial trail indicates that the aggregated value of assets derived from the alleged criminal activity is well beyond the prescribed limit. It is settled law that the determinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and lead to systemic vulnerabilities within financial institutions. 31. The illegal diversion and layering of funds have a cascading effect, leading to revenue losses for the state and depriving legitimate sectors of investment and financial resources. It is settled law that in cases involving serious economic offences, judicial intervention at a preliminary stage must be exercised with caution, and proceedings should not be quashed in the absence of compelling legal grounds. The respondent has rightly argued that in cases involving allegations of such magnitude, a trial is imperative to establish the full extent of wrongdoing and to ensure accountability. 32. The PMLA was enacted to combat the menace of money laundering and to curb the use of proceeds of crime in the formal economy. Given the evolving complexity of financial crimes, courts must adopt a strict approach in matters concerning economic offences to ensure that perpetrators do not exploit procedural loopholes to evade justice. 33. The present case involves grave and serious allegations of financial misconduct, misuse of position, and involvement in transactions constituting money laundering. The appellant seeks an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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