The requisite intent is the core for the transformation of money into bribe and proceeds of crime under the money laundering law, the Supreme Court said on Monday overturning a Madras High Court order.
By handing over money with the intent of giving bribe, such a person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime, the apex court has held while interpreting Section 3 of Prevention of Money Laundering Act, 2002 (PMLA).
“Without such active participation on part of the person concerned, the money would not assume the character of being proceeds of crime. The relevant expressions from Section 3 of the PML Act are thus wide enough to cover the role played by such person…”, the Chief Justice of India (CJI) UU Lalit-led bench has held.
These observations were made by the Supreme Court while reinstating the proceedings initiated against one Padmanabhan Kishore under the provisions of PMLA.
Kishore had allegedly handed over a sum of Rs 50,00,000 to a public servant, which transaction and the surrounding circumstances were projected in an FIR, leading to the registration of a crime under Section 120B, Indian Penal Code, 1860 and Sections 7, 12, 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988. Later, a case was registered by the Enforcement Directorate against Kishore and another person under Sections 3 and 4 of the PMLA.
It was Kishore’s case that the amount in question, as long as it was in his hands, could not be said to be tainted money; and it assumed such character only after it was received by the public servant; and as such he could not be said to be connected with proceeds of crime and could not be proceeded against under the provisions of the PMLA.
The bench also comprising Justice Bela M Trivedi questioned whether the role played by Kishore could come within the purview of Section 3 of PMLA.
The court noted that so long as the amount is in the hands of a bribe-giver, and till it does not get impressed with the requisite intent and is actually handed over as a bribe, it would definitely be untainted money.
“If the money is handed over without such intent, it would be a mere entrustment. If it is thereafter appropriated by the public servant, the offence would be of misappropriation or species thereof but certainly not of bribe. The crucial part therefore is the requisite intent to hand over the amount as bribe and normally such intent must necessarily be antecedent or prior to the moment the amount is handed over…” the top court said.
Thus, the Supreme Court held, requisite intent is always at the core before the amount is handed over.
“Such intent having been entertained well before the amount is actually handed over, the person concerned would certainly be involved in the process or activity connected with “proceeds of crime” including inter alia, the aspects of possession or acquisition thereof…” said the division bench while ordering that Kishore continued to be arrayed and proceeded against in accordance with law in ECIR No. 13 of 2016 registered by the Enforcement Directorate.
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