Trivedi and Parashar (Advocates and Solicitors)
Supreme Court - PMLA: Receipt of bribe is an Act of Money Laundering.
In 𝘠. 𝘉𝘢𝘭𝘢𝘫𝘪 𝘷. 𝘒𝘢𝘳𝘵𝘩𝘪𝘬 𝘋𝘦𝘴𝘢𝘳𝘪 & 𝘈𝘯𝘳. [Special Leave Petition (Criminal) No. 12779-12781 of 2022], a complaint was filed in 2018, alleging that the Appellant with several others had taken bribes from individuals seeking employment in the Tamil Nadu Metro Transport Corporation (MTC). The Complainant alleged that someone approached him and said, “You could obtain the jobs through the Appellant's influence by paying him a sum of money.” The Appellant and others were booked by the Authority under various sections of the Indian Penal Code, 1860, for criminal breach of trust, cheating, and criminal intimidation. However, in 2021, the Madras High Court quashed the case for cheating after being informed that the Complainant and the other victims had mutually settled the matter with the accused. Subsequently, the Appellant received a summons from the Enforcement Directorate regarding the recruitment scam. However, the Madras High Court allowed the petitions filed by the Appellant challenging the summons under the Prevention of Money Laundering Act 2002 ("Act"), stating that there were no jurisdictional facts to initiate proceedings under the Act. Shortly thereafter, the Supreme Court set aside the order of the Madras High Court which dismissed the case against the former transport minister and consequently reinstated the criminal complaint against him and the other accused individuals.
In November 2022, the Madras High Court directed a new investigation into the cash-for-job scam. The High Court remarked about discrepancies in the agency's previous investigation, due to which certain essential aspects ought to be reinvestigated. The Appellant filed an appeal before the Supreme Court against the order of the High Court.
The Supreme Court rejected the Appellant's submissions, emphasizing that it is evident that a public servant receiving illegal gratification possesses the proceeds of a crime. The Court found it preposterous to argue that the mere generation of proceeds of crime is insufficient to constitute the offense of money laundering. Further, the Court highlighted the provisions of the law, particularly Section 3 of the Act, which addresses the offense of money laundering, and Section 2(1)(u) of the Act, which defines "proceeds of crime."
The Supreme Court observed, "𝘐𝘵 𝘪𝘴 𝘵𝘳𝘶𝘦 𝘵𝘩𝘢𝘵 𝘵𝘩𝘦𝘳𝘦 𝘢𝘳𝘦 𝘴𝘰𝘮𝘦 𝘰𝘧𝘧𝘦𝘯𝘴𝘦𝘴, 𝘸𝘩𝘪𝘤𝘩, 𝘵𝘩𝘰𝘶𝘨𝘩 𝘴𝘤𝘩𝘦𝘥𝘶𝘭𝘦𝘥 𝘰𝘧𝘧𝘦𝘯𝘴𝘦𝘴, 𝘮𝘢𝘺 𝘰𝘳 𝘮𝘢𝘺 𝘯𝘰𝘵 𝘨𝘦𝘯𝘦𝘳𝘢𝘵𝘦 𝘱𝘳𝘰𝘤𝘦𝘦𝘥𝘴 𝘰𝘧 𝘤𝘳𝘪𝘮𝘦. 𝘍𝘰𝘳 𝘪𝘯𝘴𝘵𝘢𝘯𝘤𝘦, 𝘵𝘩𝘦 𝘰𝘧𝘧𝘦𝘯𝘴𝘦 𝘰𝘧 𝘮𝘶𝘳𝘥𝘦𝘳 𝘱𝘶𝘯𝘪𝘴𝘩𝘢𝘣𝘭𝘦 𝘶𝘯𝘥𝘦𝘳 𝘚𝘦𝘤𝘵𝘪𝘰𝘯 302 𝘪𝘴 𝘢 𝘴𝘤𝘩𝘦𝘥𝘶𝘭𝘦𝘥 𝘰𝘧𝘧𝘦𝘯𝘴𝘦. 𝘜𝘯𝘭𝘦𝘴𝘴 𝘪𝘵 𝘪𝘴 𝘮𝘶𝘳𝘥𝘦𝘳 𝘧𝘰𝘳 𝘨𝘢𝘪𝘯 𝘰𝘳 𝘮𝘶𝘳𝘥𝘦𝘳 𝘣𝘺 𝘢 𝘩𝘪𝘳𝘦𝘥 𝘢𝘴𝘴𝘢𝘴𝘴𝘪𝘯, 𝘵𝘩𝘦 𝘴𝘢𝘮𝘦 𝘮𝘢𝘺 𝘰𝘳 𝘮𝘢𝘺 𝘯𝘰𝘵 𝘨𝘦𝘯𝘦𝘳𝘢𝘵𝘦 𝘱𝘳𝘰𝘤𝘦𝘦𝘥𝘴 𝘰𝘧 𝘤𝘳𝘪𝘮𝘦. 𝘐𝘵 𝘪𝘴 𝘪𝘯 𝘳𝘦𝘴𝘱𝘦𝘤𝘵 𝘰𝘧 𝘴𝘶𝘤𝘩 𝘵𝘺𝘱𝘦𝘴 𝘰𝘧 𝘰𝘧𝘧𝘦𝘯𝘴𝘦𝘴 𝘵𝘩𝘢𝘵 𝘰𝘯𝘦 𝘮𝘢𝘺 𝘱𝘰𝘴𝘴𝘪𝘣𝘭𝘺 𝘢𝘳𝘨𝘶𝘦 𝘵𝘩𝘢𝘵 𝘵𝘩𝘦 𝘮𝘦𝘳𝘦 𝘤𝘰𝘮𝘮𝘪𝘴𝘴𝘪𝘰𝘯 𝘰𝘧 𝘵𝘩𝘦 𝘤𝘳𝘪𝘮𝘦 𝘪𝘴 𝘯𝘰𝘵 𝘴𝘶𝘧𝘧𝘪𝘤𝘪𝘦𝘯𝘵, 𝘣𝘶𝘵 𝘵𝘩𝘦 𝘨𝘦𝘯𝘦𝘳𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘱𝘳𝘰𝘤𝘦𝘦𝘥𝘴 𝘰𝘧 𝘤𝘳𝘪𝘮𝘦 𝘪𝘴 𝘯𝘦𝘤𝘦𝘴𝘴𝘢𝘳𝘺. 𝘐𝘯 𝘵𝘩𝘦 𝘤𝘢𝘴𝘦 𝘰𝘧 𝘢𝘯 𝘰𝘧𝘧𝘦𝘯𝘴𝘦 𝘰𝘧 𝘤𝘰𝘳𝘳𝘶𝘱𝘵𝘪𝘰𝘯, 𝘵𝘩𝘦 𝘤𝘳𝘪𝘮𝘪𝘯𝘢𝘭 𝘢𝘤𝘵𝘪𝘷𝘪𝘵𝘺 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘨𝘦𝘯𝘦𝘳𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘵𝘩𝘦 𝘱𝘳𝘰𝘤𝘦𝘦𝘥𝘴 𝘰𝘧 𝘤𝘳𝘪𝘮𝘦 𝘢𝘳𝘦 𝘭𝘪𝘬𝘦 𝘚𝘪𝘢𝘮𝘦𝘴𝘦 𝘵𝘸𝘪𝘯𝘴. 𝘛𝘩𝘦𝘳𝘦𝘧𝘰𝘳𝘦, 𝘦𝘷𝘦𝘯 𝘪𝘧 𝘢𝘯 𝘪𝘯𝘵𝘢𝘯𝘨𝘪𝘣𝘭𝘦 𝘱𝘳𝘰𝘱𝘦𝘳𝘵𝘺 𝘪𝘴 𝘥𝘦𝘳𝘪𝘷𝘦𝘥 𝘢𝘴 𝘢 𝘳𝘦𝘴𝘶𝘭𝘵 𝘰𝘧 𝘤𝘳𝘪𝘮𝘪𝘯𝘢𝘭 𝘢𝘤𝘵𝘪𝘷𝘪𝘵𝘺 𝘳𝘦𝘭𝘢𝘵𝘪𝘯𝘨 𝘵𝘰 𝘢 𝘴𝘤𝘩𝘦𝘥𝘶𝘭𝘦𝘥 𝘰𝘧𝘧𝘦𝘯𝘴𝘦, 𝘪𝘵 𝘣𝘦𝘤𝘰𝘮𝘦𝘴 𝘱𝘳𝘰𝘤𝘦𝘦𝘥𝘴 𝘰𝘧 𝘤𝘳𝘪𝘮𝘦 𝘶𝘯𝘥𝘦𝘳 𝘚𝘦𝘤𝘵𝘪𝘰𝘯 2(1)(𝘶)…𝘞𝘩𝘦𝘳𝘦𝘷𝘦𝘳 𝘵𝘩𝘦𝘳𝘦 𝘢𝘳𝘦 𝘢𝘭𝘭𝘦𝘨𝘢𝘵𝘪𝘰𝘯𝘴 𝘰𝘧 𝘤𝘰𝘳𝘳𝘶𝘱𝘵𝘪𝘰𝘯, 𝘵𝘩𝘦 𝘢𝘤𝘲𝘶𝘪𝘴𝘪𝘵𝘪𝘰𝘯 𝘰𝘧 𝘱𝘳𝘰𝘤𝘦𝘦𝘥𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘤𝘳𝘪𝘮𝘦 𝘪𝘵𝘴𝘦𝘭𝘧 𝘪𝘴 𝘵𝘢𝘯𝘵𝘢𝘮𝘰𝘶𝘯𝘵 𝘵𝘰 𝘮𝘰𝘯𝘦𝘺 𝘭𝘢𝘶𝘯𝘥𝘦𝘳𝘪𝘯𝘨."