Karnataka High Court
Smt Vinutha M B vs Assistant Director on 10 November, 2021
Author: M.Nagaprasanna
Bench: M. Nagaprasanna
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF NOVEMBER, 2021
BEFORE
THE HON'BLE MR. JUSTICE M. NAGAPRASANNA
CRIMINAL PETITION No.1973 OF 2018
BETWEEN
SMT. VINUTHA M.B.,
W/O SHRI CHETHAN KUMAR
AGED ABOUT 28 YEARS,
NO:21, CEIS (ENGINEERING) LAYOUT
2ND STAGE, 4TH CROSS,
BOGADI, MYSURU - 570 026.
... PETITIONER
(BY SRI ANIYAN JOSEPH, ADVOCATE (PHYSICAL
HEARING))
AND
ASSISTANT DIRECTOR
DIRECTORATE OF ENFORCEMENT
GOVERNMENT OF INDIA
3RD FLOOR, "B" BLOCK, B.M.T.C BUILDING
K.H.ROAD, SHANTHINAGAR
BENGALURU - 560 027.
... RESPONDENT
(BY SRI UNNIKRISHNAN M., ADVOCATE (PHYSICAL
HEARING))
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF CR.P.C., PRAYING TO a. QUASH THE ENTIRE
PROCEEDINGS AS AGAINST THE PETITIONER PENDING
BEFORE THE PRINCIPAL CITY CIVIL AND SESSIONS
JUDGE AND SPECIAL JUDGE, BENGALURU IN
2
SPL.C.C.NO.158/2015 TAKING COGNIZANCE OF THE
COMPLAINT FILED BY THE RESPONDENT AS AGAINST
THE PETITIONER.
b. QUASH ANNEXURE-A COMPLAINT FILED BY THE
RESPONDENT AS ALSO AGAINST THE PETITIONER
BEFORE THE COURT OF PRINCIPAL CITY CIVIL AND
SESSIONS JUDGE AND SPECIAL JUDGE, BENGALURU IN
SPL.C.C.NO.158/2015.
THIS CRIMINAL PETITION HAVING BEEN HEARD
AND RESERVED FOR ORDERS ON 07.10.2021, COMING
ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE
THE FOLLOWING :-
ORDER
The petitioner is before this Court calling in question proceedings pending against her, who is accused No.3 in Special C.C.No.158 of 2015 on the file of the Principal City Civil Sessions Judge and Special Judge at Bangalore City.
2. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows:-
The Lokayukta Police, Mysore registers a FIR in Crime No.9 of 2009 on 25-05-2009 for offences punishable under Section 13(1) read with Section 13(2) 3 of the Prevention of Corruption Act, 1988 ('the PC Act' for short) against the father of the petitioner one Sri Basavaraj, a retired District Education Officer for holding assets disproportionate to the known source of his income. The FIR results in a search and proceedings instituted before the Special Judge and after investigation becomes Special C.C.No.158 of 2015, on the Police filing a charge sheet, in charge sheet bearing No.23 of 2013.
3. The case of the prosecution against the petitioner is that, the petitioner accepted a gift of immovable property in site No.1447 of Devanur III Stage, Mysore, at the time of her marriage notwithstanding the said site being allotted to her father by the Mysore Urban Development Authority ('MUDA' for short) on 26-02-2009. The gift of the said site was made on 10-07-2012, as stated hereinabove, at the time of marriage of the petitioner. On inclusion of the name of the petitioner for the aforesaid offence, the petitioner 4 is sought to be tried under the Prevention of Money Laundering Act, 2002 ('the Act' for short). Challenging this action of conduct and continuation of proceedings against the petitioner, the petitioner is before this Court in the subject criminal petition.
4. Heard Mr. Aniyan Joseph, learned Advocate for the petitioner and Mr. Unnikrishnan M., learned Advocate for the respondent.
5. The learned counsel Mr. Aniyan Joseph, would urge two contentions viz., the petitioner is innocent and there is no mens rea on her part for the proceedings to continue as she has received a gift from her father at the time of her marriage and cannot be included for the offences punishable under the Act. The other contention is, the Act underwent an amendment on 15-02-2013. At that point of time, gift of the nature that was made by the father of the petitioner was not a scheduled offence under the Act and no person can be 5 prosecuted for a post-facto law. He would lay emphasis under Article 20 of the Constitution of India to contend that the offence committed cannot be enforced upon the petitioner on the law presently in force. He would place reliance on paragraph Nos.34 and 45 of the judgment in the case of KALPNATH RAI v. STATE (THROUGH CBI) AND CONNECTED MATTERS1 wherein, the Hon'ble Supreme Court holds as follows:
"34. Sub-section 3(5) was inserted in TADA by Act 43 of 1993 which came into force on 23.5.1993. Under Article 20(1) of the Constitution "no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence". So it is not enough that one was member of a terrorists gang before 23.5.1993.
45. The result of the above discussion is that conviction of A-1 to A-6 for the offence under Section 3(5) of TADA cannot be sustained under law."1
(1997) 8 SCC 732 6 and paragraph Nos.9 and 10 in the case of SONI DEVRAJBHAI BABUBHAI v. STATE OF GUJARAT AND OTEHRS2 wherein, it is held as follows:
"9. It is clear from the above historical background that the offence of dowry death punishable under Section 304-B of the Indian Penal Code is a new offence inserted in the Penal Code, 1860 with effect from November 19, 1986 when Act 43 of 1986 came into force. The offence under Section 304-B is punishable with a minimum sentence of seven years which may extend to life imprisonment and is triable by Court of Session. The corresponding amendments made in the Code of Criminal Procedure and the Indian Evidence Act relate to the trial and proof of the offence. Section 498-A inserted in the Penal Code, 1860 by the Criminal Law (Second Amendment) Act, 1983 (Act 46 of 1983) is an offence triable by a Magistrate of the First Class and is punishable with imprisonment for a term which may extend to three years in addition to fine. It is for the offence punishable under Section 498-A 2 (1991) 4 SCC 298 7 which was in the statute book on the date of death of Chhaya that the respondents are being tried in the Court of Magistrate of the First Class. The offence punishable under Section 304-B, known as dowry death, was a new offence created with effect from November 19, 1986 by insertion of the provision in the Penal Code, 1860 providing for a more stringent offence than Section 498-A. Section 304-B is a substantive provision creating a new offence and not merely a provision effecting a change in procedure for trial of a pre-existing substantive offence. Acceptance of the appellant's contention would amount to holding that the respondents can be tried and punished for the offence of dowry death provided in Section 304-B of the Penal Code, 1860 with the minimum sentence of seven years' imprisonment for an act done by them prior to creation of the new offence of dowry death. In our opinion, this would clearly deny to them the protection afforded by clause (1) of Article 20 of the Constitution which reads as under:8
"20. Protection in respect of conviction for offences.-- (1) No person shall be convicted of any offence except for violation of the law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence."
10. In our opinion, the protection given by Article 20(1) is a complete answer to the appellant's contention. The contention of learned counsel for the appellant that Section 304-B inserted in the Penal Code, 1860 does not create a new offence and contains merely a rule of evidence is untenable. The rule of evidence to prove the offence of dowry death is contained in Section 113-B of the Indian Evidence Act providing for presumption as to dowry death which was a simultaneous amendment made in the Indian Evidence Act for proving the offence of dowry death. The fact that the Indian Evidence Act was so amended simultaneously with the insertion of Section 9 304-B in the Penal Code, 1860 by the same Amendment Act is another pointer in this direction. This contention is, therefore, rejected."
6. On the other hand, the learned counsel, Sri Unnikrishnan, would submit that the amendment to the Act is by way of substitution and as long as the petitioner holds the property either directly or indirectly, it is covered under the very definition of the Act. He would place reliance upon several judgments rendered by the Co-ordinate Benches of this Court and the Apex Court, they are as follows:
(i) DYANI ANTONY PAUL AND
OTHERS v. UNION OF INDIA,
DEPARTMENT OF DIRECTORATE OF
ENFORCEMENT AND ANOTHER3,
(ii) DYANI ANTONY PAUL v. UNION OF
INDIA, DEPARTMENT OF DIRECTORATE OF ENFORCEMENT AND ANOTHER4 3 Writ Petition No.38642 of 2016 decided on 11th December, 2020 4 2021 SCC Online Kar 12189 (Writ Appeal No.72 of 2021 decided on 4th May 2021) 10
(iii) KANCHANA L. RAO v.
DIRECTORATE OF ENFORCEMENT5
(iv) SACHIN NARAYAN v.
DEPARTMENT OF INCOME-TAX6
(v) KATTA SUBRAMANIAM NAIDU v.
DEPUTY DIRECTOR, DIRECTORATE OF ENFORCEMENT7
(vi) VINOD RAMNAVI v. STATION HOUSE OFFICER8
(vii) N.LAKSHMANA RAO PESHVE v.
DIRECTORATE OF ENFORCEMENT9.
7. I have given my anxious consideration to the submissions made by the respective learned counsel and perused the material on record.
8. The afore-narrated facts with regard to the allegations against the petitioner are not in dispute.
The petitioner accepts the property aforesaid as a gift during her marriage on 10-07-2012, from her father.
The site was an allotment made from the hands of
5. Writ Appeal No.72 of 2021 decided on 04th May, 2021 6 Writ Petition No.5299 of 2019 decided on 29th August, 2019 7 Crl.Petition No.5698 of 2019 decided on 14th December 2020 8 W.p.No.244 of 2020 decided on 13th August 2020 9 W.P.No.24366 of 2016 decided on 18th December, 2020 11 MUDA in favour of the father of the petitioner, which the petitioner claims to be for an amount of Rs.1,60,000/-. The aforesaid contentions advanced by the learned counsel for the petitioner need not detain this Court any longer or delve deeper into the matter as these very contentions have been considered and answered by several Co-ordinate Benches of this Court.
Therefore, to reiterate what this Court has held in consideration of the submissions, it is germane to notice the very provision under which the petitioner is wanting to be prosecuted. The provision of the Act as it stands today insofar as it pertains to Section 3, reads as follows:-
"3. Offence of money laundering.- Whosoever directly or indirectly attempt 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 12 untainted property shall be guilty of offence of money laundering.
Explanation. - For the removal of doubts, it is hereby clarified that, -
(i) a person shall be guilty of offence of money laundering if such person is found to have directly or indirectly attempts to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceedings 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;
(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds 13 of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever."
Chapter-II of the Act deals with offence of money laundering. Section 3 defines what is the offence of money laundering. Section 3 as it stands today, defines money laundering to be directly or indirectly 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 would be guilty of offence of money laundering. The Act was not in the manner in which it stands today. The Act earlier to the amendment on 15-02-2013 was, whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in the process of activity was only to be held punishable under the Act. With the amendment, several other 14 facets of money laundering came to be included. It is on this ground, the petitioner wants to contend that the gift was made on 10-07-2012 and the amendment was brought about on 15-02-2013 and as such, she cannot be held to be guilty or even tried for a post-facto law.
Reliance is placed on Article 20 of the Constitution of India. Article 20 reads as follows:
"20. Protection in respect of conviction for offences.--(1) No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.
(2) No person shall be prosecuted and punished for the same offence more than once.15
(3) No person accused of any offence shall be compelled to be a witness against himself."
Article 20 mandates that no person shall be convicted of any offence except for violation of a law in force at the time of commission of the act charged as an offence and the contention is as aforesaid that the amendment having come about on 15-02-2013, the gift that was made on 10-07-2012, would not have been made as an offence under the Act. This issue is answered by several Co-ordinate Benches of this Court.
9. This Court in the case of DYANI ANTONY PAUL (1) (supra), considering the entire spectrum of law and the very judgments that the petitioner relies on, has considered what are the proceeds of crime as obtaining under the definition after the amendment and holds as follows:
"72. Section 2(p) defines "money laundering" and it has the same meaning as 16 assigned to it in Section 3. A plain reading of Section 3 of PML Act would indicate that whosoever directly or indirectly 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 would be guilty of the offence of money laundering. The punishment for money laundering is prescribed under Section 4, which shall not be less than three (3) years, but may extend upto 7 years and shall also be liable to fine. The proviso to Section 4 would also indicate that if the proceeds of crime involved in money laundering relates to any offence specified under paragraph 2 of Part A of the schedule, the punishment can extend upto 10 years.
73. Section 2(u) defines the term "proceeds of crime" meaning any property derived or obtained, directly or indirectly by any person as a result of criminal activity relating to a scheduled offence or the value of any such 17 property or where such property is taken or held outside the country, then the property equivalent in value held within the country. By Finance Act, 28 of 2016 the words "or where such property is taken or held outside the country, then the property equivalent in value held within the country" came to be inserted. By Act 13 of 2018, after the words "within the country" the words "or abroad" came to be added. Thus, the definition of "proceeds of crime" as amended give a wider ambit to include value of specific property equivalent in value held outside the country as well. For instance, if a person in India is being labeled for having proceeds of crime in a country outside India, then, in such a scenario, his property situated in India shall be attached even though it may not have a relation to the proceeds of crime. The 2018 amendment has extended the ambit, wherein, the authorities can now proceed against such property equivalent to proceeds of crime held outside the country.
74. Thus, the expression "proceeds of crime" means any property derived or obtained 18 directly or indirectly by any person, as a result of criminal activity, related to a scheduled offence or the value of such property. The expression 'property' is elucidated in Clause (v) of Section 2, as any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located. Section 2 (u), therefore, does not envisage either mens rea or knowledge that the property is a result of criminal activity. If any property, which includes value of the property, is "proceeds of crime" then any transfer in terms of Section 2(za) requires examination to verify as to whether it is by way of a money-laundering operation involving the process of placement, layering or integration. Such property could be subjected to attachment and confiscation. The Section, however, does not presuppose knowledge of the proceeds being of criminal activity. Properties apart from the "proceeds of crime" are not liable to attachment, neither is it included in the ambit of the Act. All that the Section is concerned with is the "proceeds of 19 crime" and does not extend to property not so involved.
75. A plain reading of the definition of "money laundering" as indicated in Section 2(p) would indicate, it has not undergone any change and it has the same meaning as assigned to it under Section 3. Section 2(y) which defines "schedule offence" has undergone amendment namely, sub-clause (ii) substituted by Act No.21 of 2009. For the words "thirty lakh rupees or more" was substituted by the words "one crore rupees or more".
The argument with regard to Article 20 of the Constitution of India, which prohibits conviction except for violation of law in force at the time of commission of the offence also bears consideration at the hands of this Court in the case of DYANI ANTONY PAUL (1) (supra) and this Court holds as follows:
"77. Article 20 of the Constitution prohibits conviction except for violation of a law in force at the time of commission of an offence. In other 20 words, there cannot be prosecution under the PML Act for laundering of money acquired by committing the schedule offences prior to the introduction of the PML Act. Therefore, the time of commission of scheduled offences would not be relevant in the context of the prosecution under the PML Act. What would be relevant in the context of prosecution is the time of commission of the act of money laundering. The question would be, whether a person involved in money laundering as provided under Section 3 of the PML Act has indulged in the said act or not has to be decided by the competent authority. What is the date of laundering of money will have to be decided on facts of each case and there cannot be any prescribed straight jacket formula. This is an important fact which the authority will have to examine and it is a mixed question of law and fact.
78. A person acquiring assets through illegal means who comes before the society and claims that said money was acquired by proper means, then he would be guilty of the offence of money laundering. A person might have 21 committed an offence long back and the proceeds of it is being placed, layered or sought to be integrated to the main stream of economy, then also, he is said to have committed the offence of money laundering. Incorporation of certain offences in the Schedule is to bring it within the net of PML Act namely, proceeds of that crime within the provisions of the Act. For constituting an offence under Section 3 of PML Act, it is the connection of transaction to proceeds of crime which is sufficient and not the crime.
79. 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.
80. What is targeted by Section 3 is 'laundering of money' and therefore, the date of 22 '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."
This Court has declined to interfere with the pending proceedings on both the grounds, which are identical to the grounds that are urged in the present petition. The said judgment is also affirmed by a Division Bench of this Court, reported in 2021 SCC Online Kar 12189.
Identical writ appeals filed against the aforesaid findings in identical cases are all rejected by the Division Bench.
Therefore, the petitioner cannot now contend that she is innocent and is only a recipient of a gift from the hands of her father as in terms of what is interpreted by this Court, the proceeds of crime would include concealment, possession, acquisition or use and 23 projecting or claiming it as an untainted property.
Element of mens rea is found in the Section itself and there cannot be any further interpretation of mens rea insofar as Section 3 of the Act is concerned.
10. Again this Court in its latest judgment in the case of KATTA SUBRAMANIAM NAIDU (supra) answered this very question. The grievance of the petitioner in the said case was that they were sought to be prosecuted and the properties belonging to them were sought to be attached or confiscated on the basis of the amended law, which came into effect from 01-06- 2009. Answering this question, the Court holds as follows:
"43. In the backdrop of the analysis made by the various High Courts in the country and the interpretation placed on the crucial terms and expressions found in the PML Act, let me now proceed to deal with the issues raised by the learned counsel appearing for petitioners. The first and 24 foremost question that need to be answered is, whether in the context of the provisions of the PML Act, prosecution initiated against the petitioners under section 3 of the PML Act and the confiscation proceedings resorted by the respondent under sections 5 and 8 of the PML Act are based on expost facto law and hit by the prohibition contained under Article 20(1) of the Constitution of India?
44. Petitioners appear to have put forward the plea of post facto law on the premise that the acts constituting the offences alleged against them were perpetrated prior to the amendment of the schedule to the PML Act and therefore, the action initiated against them falls within the mischief of Article 20(1) of the Constitution of India. This contention, in my view, in the factual setting of the case, is totally misplaced and misconceived and appears to have been canvassed by misconstruing the provisions of sections 3, 2(1)(u) and the Schedule appended to the PML Act. No-doubt, it is true that the Schedule to the PML Act was amended by Act 21 of 2009 25 and the various offences specified therein came to be included therein with effect from 1.06.2009. Nonetheless, in the instant cases, as on the date of initiation of action against petitioners, be it under section 3 or under section 5 of the PML Act, these provisions were very much there in the statute book. As already stated above, in all the cases, the prosecution under section 3 of the PML Act and adjudication proceedings under section 5 of the PML Act have been initiated against the petitioners subsequent to 1.06.2009. Therefore, the contention urged by learned counsel appearing for the petitioners that the petitioners are sought to be prosecuted on the basis of ex post facto laws is factually incorrect.
45. In order to answer the contentions urged by the petitioners, it may be necessary to refer to section 3 of the PML Act as it existed on 01.06.2009. The section as on that date read as under:-
3. Offence of money-Laundering.-
Whosoever directly or indirectly 26 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 and projecting it as untainted property shall be guilty of offence of money-laundering.
46. The unamended section 2(1) (u) of the PML Act, as on 1.06.2009, read as under:-
2(1)(u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property."
47. The Schedule to the PML Act of 2002 was amended by Act 21 of 2009 and section 13 of the Prevention of Corruption Act namely 'criminal misconduct by a public servant' and sections 419, 420, 465, 468, 471, 120B of IPC came to be inserted in the schedule with effect from 01.06.2009. As a result, as on the date of initiation of the proceedings against 27 the petitioners, the above offences were already included in the Schedule. But the thrust of the arguments of the learned Counsel for the petitioners is that the 'proceeds of crime' as defined under section 2(1)(u) of the PML Act is referable to the offences specified in the Schedule and since section 13 of the PC Act and the offences under IPC (predicate offences) came to be inserted in the Schedule by way of amendment only on 01.06.2009, the petitioners cannot be prosecuted for the acts and events that had taken place earlier to the insertion of those offences as it would take away the protection granted to the petitioners under Article 20(1) of the Constitution of India. This argument, in my view, proceeds on the misconception of the substantive provisions of the PML Act and on the supposition that without the existence of a predicate offence, there cannot be an offence of money laundering. This argument in my view is fallacious and cannot be accepted for the reason Article 20(1) of the Constitution of India gets attracted only when penal law 28 penalises with retrospective effect. When no penal action is initiated against the petitioners based on the newly inserted offences under the Schedule i.e., section 13 of the PC Act or IPC sections, question of Article 20(1) of the Constitution of India getting attracted does not arise at all.
48. From the plain reading of section 3 read with section 2(1)(u) of the PML Act, it is clear that what is made punishable under section 3 is the activity connected with the proceeds of crime either by getting oneself involved in the process or activity connected thereto or directly or indirectly attempting to indulge or knowingly assist or knowingly be a party to the alleged activities and projecting it as untainted property, whereas the components of the offences under section 13 of the PC Act and Sections 120B, 419, 420 and other IPC offences are entirely different. The prosecution under section 3 of the PML Act, by no stretch of imagination, could be equated with the prosecution under section 13 of the PC Act or other offences specified in 29 the Schedule namely IPC or other laws. They are distinct and separate offences. Prosecution under section 3 of PML Act is not based on the outcome of the trial of the offenders under section 13 of the PC Act. A reading of section 3 of PML Act in unamended form would clearly indicate that even without there being any conviction of the accused in a predicate offence and even if the offender under section 3 of the PML Act is not a party to the predicate offence, still the prosecution could be launched against him if the offender is found involved in any process or activity connected with the 'proceeds of crime'. What is necessary to constitute the offence of money laundering is the existence of proceeds of crime and not the pendency of predicate offence as vehemently contended by the learned counsel appearing for the petitioners. This Court as well as various other Courts have analysed this provision and have consistently held that the offences under section 3 of the PML Act is an independent and stand alone offence. Therefore, the argument of learned counsel for petitioners 30 that without the existence of predicate offence and without there being any conviction of the petitioners for the predicate offence, their prosecution for the offence of money- laundering cannot be sustained being contrary to the language of section 3 of the PML Act and the intendment of the Legislature in enacting section 3 of the PML Act and the allied provisions is liable to be rejected and is accordingly rejected.
49. This Court in K. SOWBAGHYA VS.
UNION OF INDIA, MINISTRY OF FINANCE, NORTH BLOCK, DEPARTMENT OF REVENUE AND OTHERS, 2016 SCC OnLine KAR 282, had an opportunity to examine the various provisions of PML Act while deciding the constitutionality or validity of the sections 2(1)(u), 3, 5, 8, 9 ,17, 18, 19, 23, 24 and 44 of the PML Act 2002(as amended from time to time) and held that:-
"Money laundering is a stand alone offence. A person who has not committed a scheduled offence could be prosecuted for an offence of money 31 laundering. In such a situation, the prosecution need not wait for the scheduled offence to be established. It can independently prosecute and lay material to show that he had knowingly assisted or was responsible for laundering of the illicit wealth. In such a situation, the property would then stand attached and the person who is being prosecuted for money laundering has to show the Court that he is not guilty of money laundering.
The same would work to his advantage as to whether a scheduled offence has been committed or not. He could show that the property in question has not come in his possession and that he has not knowingly appropriated the same. In such a situation, if the offence is not established, the property would revert back to him.
The changes that were brought about to Sections 5 and 8 synchronize with other provisions contained in the 32 Act. Section 44, which now stands amended contemplates trial of both, the scheduled offence and the offence of money laundering by the same Special Court. In these circumstances, there is no likelihood of conflict of orders relating to the said offences."
50. This judgment is not under challenge from any quarters. The view taken in this judgment is consistently followed by various other High courts and the position of law is now well established that the offence under section 3 is independent of the predicate offence listed in the Schedule appended to the PML Act. Therefore, the prosecution of the offender for his involvement in the process or activity connected with the proceeds obtained through the commission of a predicate offence cannot be said to be a prosecution based on ex post facto legislation. The allegations made against the petitioners prima facie indicate that the properties and assets found in their possession as on 1.6.2009 were acquired by commission of the 33 predicate offence. As a result, I hold that the prosecution of the petitioners does not offend Article 20(1) of the Constitution of India.
51. The correlation between possession and acquisition of the subject matter of a crime which is made an offence post facto has been considered by the Hon'ble Apex Court in MOHAN LAL v. STATE OF RAJASTHAN, (2015) 6 SCC 222, in the context of possession of contraband substance under NDPS Act. In the said case, the appellant/accused therein was convicted and punished under section 18 of the NDPS Act when admittedly the theft of contraband substance was committed prior to coming into force of NDPS Act. The FIR was registered against the appellant/accused therein prior to coming into force of NDPS Act and therefore a contention was taken before the Court that the possession of contraband substance having commenced prior to coming into force of the NDPS Act i.e., when the theft was committed on the intervening night of 12/13- 11-1985 whereas the NDPS Act came into 34 force on 14.11.1985, the accused cannot be subjected to an offence under a new Act which was not in force on the date of theft and possession of the contraband articles. Analyzing the concept of possession in the context of section 18 of the NDPS Act, the Hon'ble Supreme Court considered the aspect of conscious possession as well as mens rea and animus to possess contraband substance and came to the conclusion that the animus and mental intent which is the primary and significant element to show and establish possession could be established from the personal knowledge as to the existence of the 'chattel', that is the illegal substance at a particular location of site, at a relevant time and the intention based upon the knowledge, would constitute the unique relationship and manifest possession. The Hon'ble Supreme Court further went on to hold that "in such a situation, presence and existence of possession could be justified for the intention is to exercise right over the substance of chattel and to act as the owner to the exclusion of others."
3552. After dealing with the concept of 'possession', the Hon'ble Supreme Court considered the issue as to whether the appellant could be convicted and sentenced under the Opium Act, as that was the law in force at the time of commission of an offence and if he is convicted under section 18 of the NDPS Act, whether it would tantamount to retrospective operation of law imposing penalty which is prohibited under Article 20 (1) of the Constitution of India. The Hon'ble Supreme Court held as under:-
Article 20(1) gets attracted only when any penal law penalises with retrospective effect i.e. when an act was not an offence when it was committed and additionally the persons cannot be subjected to penalty greater than that which might have been inflicted under the law in force at the time of commission of the offence. The Article prohibits application of ex post facto law. In Rao Shiv Bahadur Singh and Anr. v. State 36 of Vindhya Pradesh[23], while dealing with the import under Article 20(1) of the Constitution of India, the Court stated what has been prohibited under the said Article is the conviction and sentence in a criminal proceeding under ex post facto law and not the trial thereof. The Constitution Bench has held that:-
"9.... what is prohibited under Article 20 is only conviction or sentence under an 'ex post facto' law and not the trial thereof. Such trial under a procedure different from what obtained at the time of the commission of the offence or by a Court different from that which had competence at the time cannot 'ipso facto' be held to be unconstitutional. A person accused of the commission of a particular Court or by a particular procedure, except in so far as any constitutional objection by way of discrimination or the violation of any other fundamental right may be involved."
In the instant case, Article 20(1) would have no application. The actus of possession is not punishable with retrospective affect. No offence is 37 created under Section 18 of the NDPS Act with retrospective effect. What is punishable is possession of the prohibited article on or after a particular date when the statute was enacted, creating the offence or enhancing the punishment. Therefore, if a person is in possession of the banned substance on the date when the NDPS Act was enforced, he would commit the offence, for on the said date he would have both the 'corpus' and 'animus' necessary in law."
(underlining supplied)
53. The above principle, in my view, applies with full force to the facts of this case. As already held above, petitioners are not prosecuted for the offence which is added in the schedule subsequent to the petitioners coming in possession of the tainted property, rather the prosecution is initiated under section 3 of the PML Act which deals with an independent offence of laundering of money or property held by the petitioners with the knowledge that it was tainted property, acquired through commission of an offence which is punishable under law. The reference to "scheduled offence" under section 38 2(1)(y) of the PML Act is only an indicator or a pointer that the properties laundered by the offenders had their origin or source in any of the offence or crime specified in the schedule and therefore the offenders are liable to answer the charge under section 3 punishable under section 4 of the PML Act. In the light of this legal and factual position, I am unable to accept the submission of learned counsel for petitioners that they are the victims of ex post facto laws offending the constitutional protection granted to them under Article 20(1) of the Constitution of India."
54. In this context, it needs to be reiterated that, section 3 of the PML Act would come into play only when a person is found indulging, or knowingly assisting or involved in any process or activities connected with the proceeds of crime. It is now well settled that "If a subject acquires property by means which are not legally approved, sovereign would be perfectly justified to deprive such persons of the enjoyment of such ill-gotten 39 wealth. There is a public interest in ensuring that persons who cannot establish that they have legitimate sources to acquire the assets held by them do not enjoy such wealth. (AIR 2014 SC 1003, BISWANATH BHATTACHARYA VS UNION OF INDIA & ORS).
55. The very same principle is enshrined in section 3 and Sections 5, 8 of the PML Act. As a result, it goes without saying that the properties acquired by commission of any of the offences listed in the schedule at any point of time as long as they continue to be in the possession or enjoyment of the offenders and that the offenders are found to have been involved in any of the process or activity connected with the proceeds derived by the scheduled offence, render themselves liable not only for prosecution but also for adjudication and consequent confiscation unless they establish that they have legitimate source to enjoy the assets held by them. Apparently for this reason, offence of 'money laundering' is made a continuing 40 offence. That being the purport of section 3, 5 and 8 of the Act, neither these provisions nor the offences included in the schedule could be construed as post facto legislation as contended by the petitioners. As a result, the contention urged by the petitioners that their prosecution is based on ex post facto law and is liable to be rejected and is accordingly rejected.
56. In view of the above conclusion, the contra view taken by the Division Bench of this court in M/s.OBULAPURAM MINING COMPANY W.P.No.5962/2016 Pvt. And Ltd., vs. connected JOINT matters, DIRECTOR has not been followed for the reason that while admitting the SLP filed against this order in Special Leave to Appeal (Crl.) No.4466/2017 vide order dated 24.07.2017, the Hon'ble Supreme Court has directed that the impugned judgment and order will not operate as a precedent. Likewise, the Division Bench of the High Court of Delhi, on consideration of the appeal preferred against the order of learned Single Judge in M/s Mahanivesh Oils and Foods Pvt Ltd. v/s.
41 Directorate of Enforcement,
(W.P.(C)1925/2014 & CM.No.4017/2014
dated 25.01.2016) has directed that the findings recorded by learned Single Judge shall not be construed as conclusive and binding precedent."
A little earlier to the afore-extracted judgment, another Co-ordinate Bench of this Court in the case of VINOD RAMNANI (supra), considering and answering this very question has held as follows:
"7(f). "Offence of money laundering" is expansively u/s. 3 and the Explanation inserted by amendment 2019 to this section & to section 44, being clarificatory of the legal position ab inceptio, applies to the case of the petitioner, contend Mr.Prasanna Kumar & Mr.Jayakar Shetty; they justified this submission through interpretative process by placing reliance on the observations of a Five Judge Bench of the Apex Court in CIT Vs. Vatika Township, (2015) 1 SCC 1, wherein para 32 quotes the rule of interpretation as 42 stated by G.P. Singh in "Principles of Statutory Interpretation, 13th Edition, Lexis Nexis Butterworths Wadhwa, which reads as under:
"... If a new Act is 'to explain' an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended. The language 'shall be deemed always to have meant' is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is declaratory, it would not be so construed when the pre- amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law which the Constitution came into force, the amending Act also will be part of the existing law." The above summing up is factually based on the judgments of this Court as well as English decisions."
Arguably, the counsel for the respondents are right; even otherwise, the expansive definition 43 of the "offence of Money-Laundering" as it existed prior to insertion of aforesaid Explanation also covers the case of petitioner;
now that, the challenge to the CBI investigation is held to be unsustainable, petitioner's case has been rendered worse; therefore, the submission that the impugned communication is without competence or justification, does not merit acceptance.
In the above circumstances, no other ground having been urged and both the writ petitions being devoid of merits, are liable to be dismissed and accordingly they are, costs, in the circumstances, having been made easy."
Therefore, the very submissions being answered by the Co-ordinate Benches of this Court and affirmed by the Division Benches in two of the cases, the petitioner cannot now urge both the grounds viz., that there is no mens rea insofar as it concerns the petitioner as she was only a recipient and she cannot be prosecuted on a 44 ex post facto law as holding of the property was not an offence. when the gift was made on 10-07-2012, since the amendment came about on 15-02-2013.
11. The judgments on which the petitioner has placed reliance upon are rendered on circumstances which were different and interpreting different provisions of law. In the case of KALPNATH RAI (supra), the Apex Court was interpreting the provisions of Terrorist and Disruptive Activities (Prevention) Act, 1987. It is in that context of a particular law, the Apex Court held that the accused cannot be punished for an offence when the particular provision of the aforesaid Act was not in force at the time when the offence was committed. The issue in the case at hand concerns the offence under the Act, which is entirely different from what is considered in the aforesaid judgments.
Therefore, the judgment relied on by the learned counsel for the petitioner does not merit any acceptance.
4512. For the aforesaid reasons, the criminal petition lacks merit and is dismissed.
Sd/-
JUDGE nvj CT:MJ