Case Law Details
Kumar Pranav Vs State through Enforcement of Directorate (Jharkhand High Court)
Jharkhand High Court dismissed the appeal of Kumar Pranav against the rejection of his discharge petition in a money laundering case. The court held that the presumption under Section 24 of the Prevention of Money Laundering Act can only be rebutted during the trial stage and not at the stage of framing charges.
High Court further held that Nexus if any, between the properties acquired in the name of this petitioner and the proceeds of crime is a question of fact to be looked into at the stage of trial and not at the stage of discharge.
FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND HIGH COURT
1. The instant criminal revision petition has been filed for quashing the order dated 01.12.2018 passed in Misc. Criminal Application No. 1145 of 2018 (ECIR/09/Pat/2012) by Special Judge, PML Act, Ranchi whereby and whereunder, the petition for discharge has been rejected.
2. Learned counsel for the petitioner in his submission has submitted the following list of dates for better appreciation:
15.02.2006– The work agreement entered between M/s Classic Coal Construction Ltd. and RCD Engineers Ltd for widening and strengthening of Chakradharpur Kharsawan Road.
15.07.2008 – The construction in pursuance of the work order completed. 23.08.2008 – Final bill of Rs.59,70,615/- paid for the executed work.
2010 – The petitioner becomes one of the Directors of M/s Classic Coal Construction Ltd after he became major in 2009.
16.02.2010 – FIR for the predicate offence bearing RC Case No. 03(A)/2010 registered by the CBI, ACB, Ranchi for the offence under Sections 120B read with Section 420, 468, 471 of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act against M/s Classic Coal Construction Ltd.
13.03.2012 – ECIR No. 09/PAT/2012 registered under the PMLA.
11.06.2014 – Area 13 decimal, under District Ramgrah purchased in the name of the petitioner Kumar Pranav (Petitioner) for Rs 6,00,000/–
31.03.2017- Proceeds of crime to the tune of Rs2,08,20,296 attached by Provisional Attachment Order which was later confirmed by the Adjudicating Authority.
31.03.2018 – The prosecution complaint filed under Section 45 of PMLA.
3. It is submitted by learned counsel for the petitioner that he is not an accused in RC case for the offence under the P.C. Act and was a minor on the date of execution of work and the date on which final payment was made. The only material against the petitioner is that after final payment of executed work, the plot measuring an area of 13 decimal in Khata No. 7, Plot no. 901 in the district of Ramgrah was purchased in the name of the petitioner for a consideration amount of Rs. 6 Lakh and odd after six years of the execution of the work contract and final payment. The attachment of the property has been appealed and now the order of confirmation has been stayed by the appellate authority under Section 25 of PMLA.
4. It is submitted that the company had a healthy business in the year of the said purchase which will be apparent from the balance sheet of the company which is set out in para 59 of the petition wherein it has been stated that the turnover of that financial year was more than Rs. 42 Crore and the income after payment of tax was Rs. 1,05,21,900/-. This paper was filed by the Enforcement Directorate but no finding regarding it has come in the prosecution complaint. No investigation has been done about it in terms of Section 2(n)(a) of PMLA. The petitioner will not be liable in terms of Section 17 of PMLA.
5. Learned counsel for the Enforcement Directorate has opposed the petition and submitted that the crime proceeds involve total sum of Rs.8,96,85,595/- out of which the worth property of Rs.2.08 Crore has been attached which includes the plot of land in the name of the petitioner.
6. It is also submitted that the offence of money laundering under the PMLA is a standalone offence and it is not necessary for a person accused of the offence of the money laundering to be an accused for the predicate offence. Whether the property purchased in the name of the petitioner was part of proceeds of crime or not, is a question of fact which cannot be decided at this stage and that too, while hearing the revision petition.
7. The matter for consideration is if there is ground for putting the petitioner on trial for offence of money laundering?
8. Organized crime in general and economic offences in particular are not individual act, they are collaborative criminal enterprise of collective of persons, with defined role, who may join at its different stage of its execution. These are species of economic offence, where proceed of crime may run into crores with wide ramification undermining financial institutions and the economic health of the country. Actors involved are skilled and educated, the process of money laundering involves meticulous planning and deft execution in placement, layering and integration of the ill-gotten money in a complex layer of financial transactions to disguise it and project it as untainted. Different players may enter and exit in stages, to bring into fructification the larger design.
9. In order to curb this, Prevention of Money Laundering Act aims at the persons who may not be involved in the predicate offence, but in laundering the proceeds of crime. The offence of money laundering is a stand alone offence and it is not necessary that the person accused of offence under PMLA should also be charged of the Scheduled offence. It is sufficient that proceed of crime so generated by the commission of scheduled offence, is laundered by the accused for being charged under PMLA. Money laundering is an independent offence has been held in Vijay Madan Lal Choudhary Vs Union of India 2022 SCC OnLine SC 929 :
269. From the bare language of Section 3 of the 2002 Act, it is amply clear that the offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence.
The process or activity can be in any form — be it one of concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so. Thus, involvement in any 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.
10. The object of the Act is two folds :
Firstly, Section 3 read with Section 4, makes the person punishable for the offence who directly or indirectly indulges or attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property. The triggering factor to prosecute any person for offence of money laundering, is existence of ‘proceeds of crime’ within the meaning of Section 2(1)(u) of the 2002 Act and involvement in any process or activity. Section 3 criminalizes the activity connected with the proceed of the crime including its concealment, possession, acquisition or use and projecting or claiming the tainted proceeds of crime.
Secondly, it aims at proceeds of crime by making provisions for its attachment and confiscation under Section 5 and 8. It is intended to retrieve the property which is subject matter of the crime or is generated by it. Broadly speaking, there are three stages of attachment. They are (i) provisional order under section 5(1); (ii) confirmation of the provisional order under section 8(3); and finality to the order of attachment under clause (b) of sub-section (3) of Section 8 in confiscation of the property by the order of the special Court.
11. As per section 3 of the Act it is the process or activity connected with the proceeds of crime and projection of it as untainted property, his money-laundering. By the amendment made with effect from first of August 2019 it has been clarified as follows:
A person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processor activities connected with proceeds of crime, namely:-
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property in any manner whatsoever
12. In the present case, FIR No. RC 3 (A)/2010 was registered by the CBI, ACB, Ranchi on 16.02.2010 for the offence u/s 120 B, 420, 468 and 471 of the IPC and u/s 13(2) r/w 13(1)(d) of the PC Act, against the Classic Coal Company on the charges of defrauding the government by submission of false and bogus invoices showing procurement of bitumen. After investigation chargesheet has been submitted against the contracting company M/s Classic Coal Construction Pvt. Ltd through its directors Sri Pawan Kumar Singh (father of the petitioner, since dead) and others for causing wrongful loss to the Govt. of Jharkhand and wrongful gain to the Company.
13. Petitioner became a salaried director in the year 2010 and after the death of his father on 27.03.2013 he became the Managing Director and inherited the assets and liabilities of the Company.
14. The argument advanced on behalf of the petitioner that the real estate property purchased in the name of the petitioner were not from the proceeds of crime, but from financial resources of the company, being a question of fact, cannot be considered at the revisional stage. Further, it has been held in Gautam Kundu v. Directorate of Enforcement (Prevention of Money-Laundering Act), (2015) 16 SCC 1:
“In Union of India v. Hassan Ali Khan [Union of India v. Hassan Ali Khan, (2011) 10 SCC 235 : (2012) 1 SCC (Cri) 256] , this Court has laid down that what will be the burden of proof when attempt is made to project the proceeds of crime as untainted money. It is held in the said paragraph that allegations may not ultimately be established, but having been made, the burden of proof that the monies were not the proceeds of crime and were not, therefore, tainted shifted on the accused persons under Section 24 of the PML Act, 2002”.
The presumption under Section 24 of PML Act can be rebutted only at the stage of trial and not at the stage of framing of charge. Nexus if any, between the properties acquired in the name of this petitioner and the proceeds of crime is a question of fact to be looked into at the stage of trial and not at the stage of discharge.
Under the aforesaid facts and circumstance of the case and for the reasons discussed above, I do not find any infirmity in the impugned order. Criminal Revision Petition accordingly stands dismissed.
