Dyani Antony Paul Vs Union Of India (Karnataka High Court)
The main object of PML Act is to ascertain the proceeds of crime which involved in money laundering and attachment, confirmation and confiscation of the proceeds of crime in the form of properties and also to punish the offenders of money laundering. The date of acquisition of properties is immaterial but the date of projecting the proceeds of crime as untainted properties would only have to be ascertained by conducting investigation.
What is targeted by Section 3 is ‘laundering of money’ and therefore, the date of ‘laundering’ would be relevant. The expression ‘laundering’ as found in Section 3 comprises of involvement in any process or activity by which the illicit money is being projected as untainted. Thus, the relevant date is not the date of acquisition of illicit money but the dates on which such money is being processed by projecting it as untainted.
The offence of money laundering is not covered under any other provisions of law. This Court in W.P.No.5299/2019 & connected matters disposed of on 29.08.2019 has held that a reference to criminal activity relating to a scheduled offence has wider connotation and it may extend to a person who may not be the offender but may be connected with criminal activity. It has been further held:
“25. The PML Act being a special enactment contemplates a distinct procedure at the initial stage and thereafter provide for initiation of prosecution in order to achieve the special purpose envisaged under the Act and as such, it cannot be construed that proceedings under the PML Act is to be equated with prosecution initiated under the criminal proceedings for the offence punishable under the Indian Penal Code. Thus, initiation of action under the PML Act cannot have any implication or impact in respect of registration of other cases either under the Indian Penal Code or any other penal laws.
26. The offence of money laundering under Section 3 of the Act is an independent offence. A reference to criminal activity relating to a schedule offence has wider connotation and it may extend to a person, who is connected with criminal activity relating to schedule offence, but may not be the offender of schedule offence. It is in this background, it has to be necessarily held that money laundering is a stand alone offence under the PML Act. In this background, when Section 44 of the PML Act is perused, it would clearly indicate that special court may take cognizance of the offence upon a complaint by authorized signatory, which means cognizance will be taken of an offence which is separate and independent. The object of issuance of summons is to trace or ascertain the proceeds of crime if any and to take steps in that regard like attaching the proceeds of crime if proved in a given case.
27. Even in case of a person who is not booked for a scheduled offence but is later booked and subsequently acquitted for the offences punishable under different enactments, prescribed under Part ‘A’ to Part ‘C’ of the Schedule, still such person can be proceeded under PML Act. In other words, proceedings can be against persons who are accused of a scheduled offence or against persons who are accused of having committed an offence of money laundering and also persons who are found to be in possession of the “proceeds of crime”. It is not necessary that a person has to be prosecuted under the PML Act only in the event of such person having committed schedule offence. The prosecution can be independently initiated only for the offence of money laundering as defined under Section 3 read with section 2(p) which provides that “money laundering” having the meaning assigned to it under Section 3 of the Act.”
“23. In other words, the proceedings under PML Act are independent, separate, distinct and different from the proceedings initiated for scheduled offences by other law enforcement agencies. PML Act is a stand alone enactment which differentiates the Schedule offence and the money laundering offence separately. To put it differently, if the investigation for the predicate offence is conducted by the authorities so empowered under the enactments and if for various reasons such proceedings were to be closed or dropped, then, proceedings under PML Act would not automatically disappear or is not required to be dropped.
24. Even in case of proceeds of crime not being in possession of the alleged offenders, but if it is sought to be projected as an untainted money and sought to be ploughed into the economy, which ultimately derails the economy of the country, then, authorities under the PML Act would be empowered to proceed under the provisions of PML Act. As to whether it is proceeds of crime or its use or concealment or acquisition is to be decided only by the adjudicating authority after verifying the facts and circumstances that would be unraveled by verifying the relevant records and documents during the course of investigation. The mere suspicion of the authorities that proceeds of crime is being ploughed into main stream of the economy as untainted money is sufficient enough for the authorities to investigate and examine and this can be done only by collecting the information, recording the statements who might not be the offender also.”
In the light of aforestated analysis, this Court is of the considered view that existence of a predicate offence for initiation of proceedings under the PML Act is not a condition precedent or in other words, the offence under Section 3 of the PML Act is a stand alone offence. Hence, the presence of a schedule offence as prescribed under the PML Act would not be condition precedent for proceeding against such person under the PML Act.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
These batch of writ petitions have been filed questioning the provisional order of attachment, summons issued, order passed by the adjudicating authority, proceedings initiated, complaint filed before the adjudicating authority, consequential possession notice issued under the Prevention of Money Laundering Act, 2002 (for short ‘PML Act’). Hence, for the purposes of convenience, the aforesaid writ petitions are broadly categorized on the basis of prayer sought for in the respective writ petitions:
I. Provisional Attachment Order:
| Sl.No. | Case No. |
|---|---|
| 1 | W.P.Nos.38642-44/2017 |
| 2 | W.P.No.36309/2017 |
| 3 | W.P.No.36310/2017 |
| 4 | W.P.Nos.23176-77/2017 |
| 5 | W.P.No.33740/2016 |
| 6 | W.P.No.14158/2017 |
| 7 | W.P.No.57756/2016 |
| 8 | W.P.Nos.46318-323/2017 |
| 9 | W.P.No.5269/2017 |
| 10 | W.P.No.19313/2016 |
| 11 | W.P.No.17894/2015 |
| 12 | W.P.No.28027/2018 |
| 13 | W.P.No.48031 & 48531/2017 |
II. Information sought from Institutions/Bank is under challenge:
| Sl.No. | Case No. |
|---|---|
| 1 | W.P.No.6159/2017 |
| 2 | W.P.No.6173/2017 |
| 3 | W.P.No.8261/2017 |
| 4 | W.P.No.4215/2017 |
| 5 | W.P.No.24480/2018 |
III. Confirmation Order passed by the Adjudicating Authority:
| Sl.No. | Case No. |
|---|---|
| 1 | W.P.No.62102/2016 |
| 2 | W.P.No.27705/2018 |
IV. Writ Petition filed by Axis Bank Limited challenging the provisional order of attachment dated 27.02.2017 and confirmation of provisional attachment dated 16.08.2017 and consequential notice issued to the petitioner to transfer the amount of Rs.58,37,34,000/- to the account of Joint Director, Directorate of Enforcement, Bangalore Zone.
