S. Srinivasan Vs Assistant Director (Madras High Court)
Summary: In S. Srinivasan Vs Assistant Director (Madras High Court), the court held that mere possession of proceeds of crime is sufficient to invoke the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The judgment clarified that Section 3 of the PMLA, which defines the offence of money laundering, covers a broad range of activities including concealment, possession, acquisition, use, projecting, or claiming proceeds of crime as untainted property. The court emphasized that these activities should not be read conjunctively, as doing so would allow offenders to escape liability by dividing acts among accomplices. The offence continues as long as a person is directly or indirectly involved in enjoying or handling the proceeds of crime. The court also elaborated on the concept of “attempt” under criminal law, stating that it begins when preparation ends and requires an intentional act towards committing the offence, not necessarily the final act. The case involved Srinivasan, General Secretary of the All India Overseas Bank Employee Union Trust, who was accused of colluding with the trust president to misuse money collected by the trust, thereby laundering criminal proceeds. Srinivasan claimed no involvement in possession, use, or administration of the trust’s funds and denied the required mens rea under PMLA. However, based on the FIR and investigation by the CBI and Enforcement Directorate, the court found sufficient prima facie evidence to reject his discharge plea. Upholding the trial court’s order, the Madras High Court dismissed Srinivasan’s petition, reinforcing that possession or involvement in proceeds of crime, even indirectly, attracts PMLA provisions, and the scope of Section 3 is deliberately broad to effectively combat economic offences.
