Jammu & Kashmir High Court - Srinagar Bench
Ahsan Ahmad Mirza And Others vs Enforcement Directorate & Another on 15 October, 2019
Author: Sanjeev Kumar
Bench: Sanjeev Kumar
HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
WP(C ) No.2780/2019
CM No. 5528/2019
Reserved on 24.09.2019.
Pronounced on 15 .10.2019
Ahsan Ahmad Mirza and others
...Petitioner(s)
Through:- Mr Shariq J. Reyaz, Advocate
Vs
Enforcement Directorate & another
...Respondents
Through:-Mr T.M.Shamsi ASGI
Coram:
Hon'ble Mr Justice Sanjeev Kumar, Judge.
JUDGMENT
1 The petitioners, three in number, who have been served with summons issued by the Directorate of Enforcement, Government of India in exercise of powers conferred under Sub-Sections (2) and (3) of Section 50 of Prevention of Money Laundering Act,2002 (hereinafter 'PMLA' for short) for their appearance and recording of statements, have invoked the extraordinary writ jurisdiction of this Court to declare the proceedings initiated by the respondents under PMLA without jurisdiction and non-est in the eye of law.
2 The writ petition is primarily based on the ground that the designated authority under PMLA has no jurisdiction, power or authority to initiate any proceedings under PMLA against the petitioners and issue summons under Sub-Sections (2) and (3) of Section 50 of PMLA. It is urged that the 2 commission of a scheduled offence is a sine qua non for attracting the applicability of PMLA and the offences, the petitioners are sought to be charged with, being the offences punishable under Sections 406 and 409 RPC are not the scheduled offences enumerated in Schedule A of PMLA. The offence of criminal conspiracy punishable under Section 120-B RPC without predicate offence being a scheduled offence is not amenable to the jurisdiction of Enforcement Directorate. Unless it is demonstrated that the conspiracy has been hatched for commission of a scheduled offence, the provisions of PMLA would not be attracted. It is, thus, submitted that any proceedings initiated by the respondents under the provisions of PMLA including the summons issued under Sub-Sections (2) and (3) of Section 50 of PMLA would be de hors the law and without jurisdiction. It is also argued on behalf of the petitioners that the alleged offences with which the petitioners have been charged i.e. offences under Sections 406,409 and 120- B RPC are not the scheduled offences under PMLA and, therefore, for that reason also, the applicability of PMLA is ruled out and the petitioners cannot be held amenable to jurisdiction of the respondents. The writ petition proceeds precisely on these two issues raised by learned counsel appearing for the petitioners.
3 Per contra, the respondents have contested the writ petition on the ground that Section 120-B of Ranbir Penal Code (RPC) is pari materia and corresponds to Section 120-B of the Indian Penal Code (IPC) and, therefore, when read with Sections 1(2) and 2(2) of PMLA would fall under Part A, Paragraph I of the schedule of offences under PMLA. It is submitted that the statements of co-accused recorded under Sections 52(2) and 52 (3) of PMLA during the course of investigation clearly revealed that the petitioners 3 were involved in the act of money-laundering and siphoning of funds of J&K Cricket Association in furtherance of conspiracy hatched between the petitioners and the co-accused. The respondents in their reply affidavit have given the account of evidences collected during the investigation of Enforcement Case Information Report No. ECIR/01/SRZO/2018 dated 28.12.2018 registered by the respondents in this regard. 4 Heard learned counsel for the parties and perused the record. Before proceeding further, it is necessary to firstly set out the relevant provisions of PMLA insofar as these are germane to the decision of the questions raised in this petition.
5 Sub-Sections 2 and 3 of Section 50 of PMLA confers upon the Director, Additional Director, Joint Director, Deputy Director or Assistant Director, powers to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceedings under PMLA and all such persons so summoned shall be bound to attend in person or through their authorized agents and state the truth upon any subject respecting which they are examined or make statements and produce such documents as may be required. It may be appropriate to reproduce Sub-Sections 2 and 3 of Section 50 of PMLA which read thus:
"(2)The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act.
(3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may 4 direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required".
6 From reading of two clauses reproduced above, it is abundantly clear that for exercising the jurisdiction, the initiation of investigation or proceedings under PMLA is a sine qua non. For registration of the crime under PMLA and initiation of investigation or proceedings under PMLA, there should be a prima facie material to demonstrate that an offence under Section 3 of PMLA has been committed. Section 3 defines offence of money-laundering and Section 4 provides for punishment for the offence of money-laundering. Aforesaid two sections of PMLA read thus:
"Section 3- Offence of money-laundering.--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 and projecting it as untainted property shall be guilty of offence of money-laundering.
Section 4 - Punishment for Money-Laundering-Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.
Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted".5
7 From reading of Section 3 of PMLA, it clearly transpires that a person, who directly or indirectly attempts to indulge or knowingly assists or is a party or is actually involved in any process or activity connected with 'proceeds of crime' including its concealment, possession, acquisition or use and projecting or claiming it as untainted property, shall be guilty of offence of money-laundering. It is, thus, evident that the activity or process with which the person accused could be charged for the offence of money- laundering must be connected with 'proceeds of crime'. 'Proceeds of crime' is, therefore, the genesis of offence of money-laundering. The 'proceeds of crime' is defined under Section 2(1)(u) in the following manner:
"Section 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"
8 As is apparent from the definition aforesaid, 'proceeds of crime' means any property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence and the term 'scheduled offence' has been separately defined under Section 2(1)(y) which, for facility of reference, is also set out below:
"Section 2(1)(y)-"scheduled offence" means--
(i) the offences specified under Part A of the Schedule; or
(ii) the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or
(iii) the offences specified under Part C of the Schedule;6
9 Obviously the offences specified under Part A of the Schedule and the offences specified under Part B of the Schedule, if the total value involved in such offences is one crore rupee or more or the offences specified under Part C of the Schedule are termed as the 'scheduled offences' for the purpose of 'proceeds of crime' and the commission of offence of money-laundering. Apart from various offences enlisted in Schedule A, offence of criminal conspiracy punishable under Section 120-B of IPC figures on top of the Schedule, but the offences under Sections 406 and 409 of Indian Penal Code do not find place in any Part of the Schedule and, therefore, are not the scheduled offences in terms of Section 2(1)(y) of PMLA. Section 2(2) of PMLA which has been strongly relied upon by learned ASGI appearing for the respondents also deserves to be noticed which reads as under:
"Section 2(2)-Any reference, in this Act or the Schedule, to any enactment or any provision thereof shall, in relation to an area in which such enactment or such provision is not in force, be construed as a reference to the corresponding law or the relevant provisions of the corresponding law, if any, in force in that area".
10 There is another important definition in PMLA given in Section 2(1)(ia) which was introduced/inserted by Act 2 of 2013 w.e.f 15.02.2013. The inserted clause defines 'corresponding law' to mean any law of any foreign country corresponding to any of the provisions of this Act or dealing with offences in that country corresponding to any of the scheduled offences. The clause aforesaid reads thus:
7
"Section 2(1)(ia)-"corresponding law" means any law of any foreign country corresponding to any of the provisions of this Act or dealing with offences in that country corresponding to any of the scheduled offences".
11 It is in the backdrop of aforesaid salient provisions of PMLA, learned counsel, appearing for the petitioners, has built up the edifice of his arguments that the investigation, set in motion by the respondents under the provisions of PMLA, is without jurisdiction and the offences with which the petitioners have been charged do not constitute the offence of money- laundering as defined under Section 3 of PMLA.
12 Before me, learned counsel for the petitioners raised two questions which, as per him, touch upon the jurisdiction of the respondents to initiate any investigation or action against the petitioners. To put the arguments of learned counsel for the petitioners in proper perspective and concretize the issues raised, it would be appropriate to succinctly draw up and formulate the questions for determination:
1. Whether the offence of criminal conspiracy punishable under Section 120-B RPC shall be deemed to be an offence corresponding to the offence of 120-B IPC and, therefore, the scheduled offence, for the purpose of definition of 'proceeds of crime' and the commission of offence of money-laundering as defined under Section 3 of PMLA ?.
2. What shall be the effect of insertion of clause (ia) of Sub-section 1 of Section 2 of PMLA by Section 2 (iii) of Act of 2013 which came into force w.e.f 15.02.2013 on the provisions of Sub- section 2 of Section 2 of PMLA as it stood and continues to stand prior to and after Act No.2 of 2013 ?.8
3. Whether Section 120-B IPC/RPC is a stand alone offence and its commission does not depend upon the commission of predicate offence ?.
13 These are precisely the issues which call for determination in this petition.
14 Before I proceed to discuss the issues formulated above, I deem it appropriate to briefly advert to the statement of objects and reasons for enacting PMLA. As the preamble of the Act goes, it is to prevent money- laundering and to provide for confiscation of property derived from or involved in money-laundering and for matters connected therewith. The statement of objects and reasons recognizes that money- laundering poses a serious threat not only to the financial system of the country, but also to its integrity and sovereignty.
15 PMLA was enacted to implement Political Declaration and Global Programme of Action adopted by the General Assembly of the United Nations at its 17th Special Session on 23rd of February 1990 and the Political Declaration adopted by Special Session of United Nations General Assembly, held on 8th to 10th June, 1998 calling upon the Member States to adopt national money- laundering legislation and programme. The nation got the enactment aimed at preventing the money-laundering on 17.01.2003. PMLA applies and extends to the whole of India. Since its enforcement w.e.f 17.01.2003, PMLA has undergone various amendments, latest being the amendment made by Act 2 of 2013.
16 As is apparent from the statement of objects and reasons of Amendment Act 2 of 2013, the amendment was necessitated, inter alia, to seek introduction of concept of 'corresponding law' to link the provisions of Indian law with the laws of foreign countries and provide for transfer of 9 proceeds of the foreign predicate offence in any manner in India. It was also aimed to introduce the concept of 'reporting entity' to include therein a banking company, financial institution, intermediary or a person carrying on a designated business or profession. To understand and appreciate the objects of the Amendment Act of 2013 in a better way, it would be necessary to refer to clauses 2 and 3 of the statement of objects and reasons given in the Amendment Act which are reproduced ad infra:
"2.The problem of money-laundering is no longer restricted to the geo-political boundaries of any country. It is a global menace that cannot be contained by any nation alone. In view of this, India has become a member of the Financial Action Task Force and Asia Pacific Group on money-laundering, which are committed to the effective implementation and enforcement of internationally accepted standards against money-laundering and the financing of terrorism. Consequent to the submission of an action plan to the Financial Action Task Force to bring anti money-laundering legislation of India at par with the international standards and to obviate some of the deficiencies in the Act that have been experienced by the implementing agencies, the need to amend the Prevention of Money-Laundering Act, 2002 has become necessary.
3. The Prevention of Money Laundering (Amendment) Bill ,2011, inter alia, seeks to-
(a) introduce the concept of 'corresponding law' to link the provisions of Indian law with the laws of foreign countries and provide for transfer of the proceeds of the foreign predicate offence in any manner in India;
(b) introduce the concept of "reporting entity" to include therein a banking company, financial institution, 10 intermediary or a person carrying on a designated business or profession;
© enlarge the definition of offence of money-laundering to include therein the activities like concealment, acquisition, possession and use of proceeds of crime as criminal activities and remove existing limit of five lakh rupees of fine under the Act;
(d) make provision for attachment and confiscation of the proceeds of crime even if there is no conviction so long as it is proved that the offence of money-laundering has taken place and property in question is involved in money laundering;
(e) confer power upon the Director to call for records of transactions or any additional information that may be required for the purposes of the Prevention of money- laundering and also to make enquiries for non compliance of reporting obligations cast upon them;
(f) make the reporting entity, its designated directors on the Board and employees responsible for omissions or commissions in relation to the reporting obligations under Chapter IV of the Act;
(g) provide that in any proceedings relating to proceeds of crime under the aforesaid Act, unless the contrary is proved, it shall be presumed that such proceeds of crime is involved in money-laundering;
(h) provide for appeal against the orders of the Appellate Tribunal directly to the Supreme Court;
(i) provide for the process of transfer of the cases of scheduled offence pending in a court which had taken cognizance of the offence to the Special Court for trial of offence of money-laundering and also provide that the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed;
11
(j) putting all the offences listed in Part A and Part B of the Schedule to the aforesaid Act into Part A of that Schedule instead of keeping them in two Parts so that the provision of monetary threshold does not apply to the offences"
17. From the perusal of different provisions of PMLA including those introduced by the amendment Act 2 of 2013 , it is abundantly clear that the reference to the corresponding law as used in Sub-section 2 of Section 2 of PMLA has nothing to do with the definition of 'corresponding law' given in clause (ia) of Sub- section 1 of Section 2 which came to be inserted by Act of 2 of 2013 w.e.f 15.02.2013. This distinction is required to be borne in mind while interpreting the provisions of Sub-section 2 of Section 2 of PMLA which has been relied upon by the respondents strongly to make a point that Section 120-B RPC corresponds to Section 120-B IPC as the same is a corresponding law in operation in the State of J&K to which the Indian Penal Code does not extend.
18. It is not in dispute and is otherwise borne out from the provisions of PMLA and the Schedule appended thereto that offence of criminal conspiracy punishable under Section 120-B IPC is a scheduled offence and the offence of criminal conspiracy punishable under Section 120-B of the RPC does not specifically find mention in the Schedule of PMLA, but by operation of Sub-section 2 of Section 2 of PMLA, any reference in the Schedule to any enactment or any provision thereof (120-B IPC) shall in relation to area (State of J&K) in which such enactment or such provision is not in-force shall be construed as a reference to the corresponding law or relevant provisions of the corresponding law (120-B RPC),if any, inforce in that area. The expression or term 'area', however, has not been defined 12 anywhere in PMLA, but it needs to be noticed that expression 'corresponding law' or the relevant provisions of the corresponding law' existed in the enactment as it stood on the date of its promulgation i.e. 01.07.2005 when the expression 'corresponding law' had not been defined under Section 2 of PMLA.
19 As noted above, the term 'corresponding law' came to be defined first time in clause (ia) of Sub-section 1 of Section 2 of PMLA which was inserted for the first time by the amendment Act 2 of 2013 w.e.f 15.02.2013.That being the position, it would be totally illogical to borrow the definition given in clause (ia) of Sub-section 1 of Section 2 of PMLA to interpret the term 'area' as used in Sub-section 2 of Section 2 of PMLA. That apart, in the absence of specific definition of the term 'area' as used in Section 2(2) of PMLA, it is only logical to understand the term 'area' to mean the area to which PMLA extends i.e. whole of India which includes the State of J&K. The Indian Penal Code applies to the whole of India except State of J&K, but there is corresponding law known as RPC in operation in the State of J&K to which PMLA clearly extends.
20. It is well accepted that a statute must be construed according to the intention of the Legislature and the Courts should act upon the true intention of the legislation while applying law and while interpreting law, if a statutory provision is open to more than one meaning, the Court has to choose the interpretation which represents the intention of the Legislature. In this connection, the following observations made by the 13 Hon'ble Supreme Court in the case of District Mining Officer vs. Tata Iron and Steel Co., (2001) 7 SCC 358, may be noticed:
" ....A statute is an edit of the Legislature and in construing a statute, it is necessary, to seek the intention of its maker. A statue has to be construed according to the intent of them that make it and the duty of the Court is to act upon the true intention of the Legislature. If a statutory provision is open to more than one interpretation the Court has to choose that interpretation which represents the true intention of the Legislature. This task very often raises the difficulties because of various reasons, inasmuch as the words used may not be scientific symbols having any precise or definite meaning and the language may be an imperfect medium to convey one's thought or that the assembly of Legislatures consisting of persons of various shades of opinion purport to convey a meaning which may be obscure".
20. Viewed thus, it is beyond the cavil of any debate that the offence of criminal conspiracy punishable under section 120- B RPC shall be deemed to be a scheduled offence corresponding to Section 120-B of IPC which figures on top of Part A of the Schedule appended to the PMLA. The argument of learned counsel for the petitioner that Section 120- RPC cannot be taken to be a scheduled offence is an argument in despair and, therefore, cannot be accepted. I am in agreement with the argument of learned ASGI that the definition of corresponding law inserted by Act 2 of 2013 cannot be used in aid of interpreting the expression 'corresponding law' or 'the relevant provisions of the corresponding law' as used in Sub-section 2 of Section 2 of PMLA which is existing in the statute from the date of its inception. The definition of 'corresponding law' introduced in the Act for 14 the first time by Act 2 of 2013 was aimed at giving effect to the other amendments made in the Act dealing with the offences committed in a foreign country which correspond to any of the scheduled offences. For example, first proviso to Section 5(1) of PMLA refers to the expression 'corresponding law' of any other country. Similar provision is made in Section 8 (3)(a), section 58 (a) 58(b) & 60 of PMLA. This is apparent from the statement of objects and reasons which I have reproduced hereinabove. 21 The definition of 'corresponding law' as given in clause (ia) of Sub- section 1 of Section 2 of PMLA inserted by Act 2 of 2013 is, therefore, required to be restricted to the expression used in the Amendment Act 2 of 2013 which introduced various new provisions in the PMLA. 22 It is, thus, clearly demonstrable that the offence of criminal conspiracy defined under section 120-A RPC and punishable under section 120- B RPC is a deemed scheduled offence for the purpose of Section 3 read with clause (u) of Sub-section 1 of Section 2 of PMLA.
23 It is next contended by learned counsel for the petitioner that even if it is assumed that 120- B RPC could be taken to be a scheduled offence, yet unless it is demonstrated that the offence of criminal conspiracy has been committed in relation to a predicate scheduled offence, no offence under Section 3 is made out. That being so, the respondents would not assume any jurisdiction to launch any investigation or action under PMLA. It is contended that since the offences allegedly committed by the petitioners are the offences under Sections 120-B, 406 and 409 RPC out which the predicate offences i.e. offences under sections 406 and 409 RPC are not the scheduled offence. It is, thus. contended that the offence of money laundering as defined under Section 3 shall not be made out, unless the 15 offence of criminal conspiracy punishable under section 120-B RPC has been committed in relation to one or more of scheduled offences. It is, thus, urged that the predicate offences i.e, offence under sections 406 and 409 RPC are not the scheduled offences and, therefore, Section 120-B RPC which is allegedly committed in connection with the aforesaid offences cannot give rise to the commission of offence of money-laundering as defined under Section 3. It is, therefore, on this premise learned counsel for the petitioners submits that no case for initiating proceedings or investigation under PMLA has been made out and that being the position, the launching of investigation by the respondents followed by issuance of impugned summons is without jurisdiction.
24 Having given my thoughtful consideration to the rival contentions on the point, I am of the view that having regard to the settled legal position that the offence of criminal conspiracy as defined under Section 120- A and punishable under section 120-B of IPC/ RPC is an independent and stand alone offence and, therefore, even if the predicate offence is not a scheduled offence, it would still be a scheduled offence for the purpose of Section 3 read with clause (u) of Sub-section 1 of Section of PMLA. 25 In the case of Baldev Singh vs. State of Punjab, 2009 (3) Crimes 8 (SC), the Supreme Court has clearly held that an offence of criminal conspiracy is an independent offence and is punishable separately; its ingredients being:-
(i) an agreement between two or more persons;
(ii) an agreement must relate to doing or causing to be done either ;
(a) an illegal act;
(b) an act which is not illegal in itself, but is done by an illegal 16 means.
26 In the case of State of Bihar vs. Srilal Kejriwal and others, AIR 1960 Pat 459, the Patna High Court, making reference to the judgment of Madras High Court in the case of Venkataramiah, AIR 1938 Mad 130, observed that when an offence is actually committed, the perpetrator, who commits the actual offence should be charged with the substantive offence and for him, the charge of conspiracy is irrelevant. This was because conspiracy is a form of an abetment and when an accused actually commits an offence, he is no longer an abettor.
27 A contrary view had been taken by the Bombay High Court in the case of Emperor vs. Karamalli Gulamalli, AIR 1938 Bom 481. Two distinct views aforesaid were later on noticed by the Supreme Court in the case of Pramatha Nath Taluqdar vs. Saroj Ranjan Sarkar, AIR 1962 SC 876 wherein the Hon'ble Supreme Court drew distinction between abetment as defined in second clause of Section 107 of IPC and that of criminal conspiracy under Section 120-A IPC by elucidating that in the former offence, a mere combination of persons or agreement between them is not enough. In other words, for abetment by conspiracy, actus reus must take place in pursuance of the conspiracy and in order to do a thing conspired for. In the latter offence i.e offence of criminal conspiracy under Section 120 A IPC, the very agreement or plot is an act in itself and is the gist of an offence, though for illegal means, some act besides the agreement is necessary.
28 In the recent case, the High Court of Karnataka was confronted with the similar issue. Justice Aravind Kumar, who heard the matter i.e Writ Petition No. 5299/2019 titled Sri Sachin Narayan vs The Income Tax 17 Department and another, has extensively deliberated on the issue in its judgment, pronounced on 29th August, 2019. Relying upon the judgment of Supreme Court in the case of Sudhir Shantilal Mehta vs Central Bureau of Investigation, (2009) 8 SCC 1 and R Venkatkrishanan vs Central Burea of Invesitgation, AIR 2010 SC 1812, what is held by the learned Judge in paragraph Nos. 34 and 35 deserves to be noticed and is reproduced below:
"34. The issue involved in W.P.No.32593/2018 relates to the order passed by the Principal Director of Income Tax (Investigation), who by the said impugned order dated 28.05.2019 had accorded sanction to initiate criminal prosecution against petitioner therein and the authority for granting such sanction being under challenge, has to be necessarily confined to the proceedings arising out of the Income Tax Act, 1961. Said order of interim stay of further proceedings arising out of IT Act cannot take within its sweep proceedings initiated or to be initiated under different enactments by different authorities. Though in the statement of objections filed by the Enforcement Authority at paragraph 4 it has been admitted that:
"The averments in the petition that this respondent had registered in ECIR for the offences under the provisions of the Prevention of Money Laundering Act, pursuant to private complaint filed by the first respondent on the basis of the scheduled offence under Section 120B of the Indian Penal Code is true and correct", The fact remains that Section 120B is a predicate offence by itself or in other words, it is a stand alone offence and as such said argument would not be of any avail to the petitioner to assail the summons issued under Section 50(2) and 50(3) of the 18 Act. That, I have already held, money laundering is an offence independent of the predicate offence and to launch prosecution under Section 3 of the Act, it would not be necessary that a predicate offence should also have been committed.
35. That apart, a plain reading of Section 3 of PML Act would disclose that whosoever directly or indirectly, attempts to indulge or knowingly assess 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 punishable for the offence of money laundering. The expression of "proceeds of crime" has been defined under Section 2(u) of the Act which means any property derived or obtained directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence xxxxx within the country and the expression "scheduled offence" has been defined under Section 2(y) to mean the offences specified under Part-A or the offences specified in Part-B (the total value in such offences is 1 Crore rupees or more); or the offences specified under Part-C of the schedule. The expression "Scheduled" is defined under Section 2(x) of PML Act to mean the offences specified in the Schedule to the Act. Under Part-A, Paragraph-1 offences under the Indian Penal Code, as morefully described thereunder has been described as offences constituting Schedule offence under the PML Act. Likewise, under Part 'A' at Paragraphs - 2 to 29 the offences under different enactments have been specified to be an offence attracting the provisions of PML Act. In other words, offences which are specified in Part 'A' or Part 'B' or Part 'C' would automatically attract the offence punishable under the PML Act. Under Part 'A' of the Schedule, Section 120B of IPC has been incorporated to be an offence for the provisions of PML Act.19
29 I am persuaded to take the view which has been taken by the Karnataka High Court in the judgment supra, for, the view taken by the Karnataka High Court is the only correct view having regard to the settled legal position enumerated extensively in the several judgments of the Apex Court. It is beyond the pale of any doubt that offence of criminal conspiracy punishable under Section 120- B IPC is a stand alone offence and figures on top of Part A of the Schedule of PMLA. That being the position, it is difficult to accept the plea that unless the offence of criminal conspiracy is committed in conjunction with a scheduled offence, it cannot be taken to be a scheduled offence for the purpose of Section 3 read with clause (u) of Sub- section 1 of Section 2 of PMLA. Undoubtedly, the offence of money- laundering relates to the process or activity connected with the proceeds of the crime including its concealment possession, acquisition etcetra and 'proceeds of crime' would mean any property derived or obtained directly or indirectly as a result of criminal activity relating to scheduled offence. Once Section 120- B is held to be a distinct, independent and stand alone offence and is one of the scheduled offences under PMLA, any property derived or obtained by any person directly or indirectly as a result of criminal activity relating to the offence of conspiracy would come within the definition of 'proceeds of crime'. A fortiori, any process or activity connected with 'proceeds of crime' including its concealment, possession, acquisition etcetra as untainted property, shall come within the purview of offence of money-laundering as defined under Section 3 of PMLA. That being the position of law, no fault could be found with the investigation or action initiated by the respondents including issuance of summons in exercise of powers conferred by Section 50(2) and (50(3) of PMLA. 20
30. In view of the foregoing discussion and analysis, this petition is found to be without any merit and is, accordingly dismissed.
(Sanjeev Kumar) Judge SRINAGAR 15 .10.2019 Anil Raina, JR/Secy Whether the order is speaking: Yes/No Whether the order is reportable: Yes/No ANIL RAINA 2019.10.16 13:31 I attest to the accuracy and integrity of this document