The Supreme Court, while setting aside an order of the Madras High Court (HC), allowed the directorate of enforcement (ED) to proceed against the accused as per the law in its enforcement case information report (ECIR).
In an order passed on 31 October 2022, the bench of chief justice UU Lalit and justice Bela M Trivedi says, "By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime. 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."
"On a bare perusal of the complaint made by the ED, it is quite clear that the respondent was prima facie involved in the activity connected with the proceeds of crime. The view taken by the HC that the respondent cannot be held liable for the offence under the Prevention of Money Laundering (PML) Act is thus completely incorrect," the bench says.
The case related to an alleged bribe of Rs50 crore given to Andasu Ravinder, an officer from the Indian Revenue Services (IRS), who was additional commissioner of income-tax (I-T)at Chennai in August 2011. The Central Bureau of Investigation (CBI) checked a car parked in front of Mr Ravinder's house and recovered Rs50 crore from that car. During the investigation, CBI found that the money was handed over to the additional commissioner by Padmanabhan Kishore, whose I-T file was pending before Mr Ravinder for clearance. CBI then registered a case against both, Mr Ravinder and Mr Kishore and four others. Since the case mentioned commission of a scheduled offence under the PML Act, the ED too registered a case against Mr Kishore, Everonn Education Ltd and two others.
During the hearing before the Madras HC, Mr Kishore contended that the amount in question, as long as it was in the hands of the respondent, could not be said to be tainted money. The money assumed such character only after it was received by the public servant and, as such, he could not be said to be connected with the proceeds of crime and could not be proceeded against under the provisions of the PML Act, he said.
On 1 March 2021, the HC accepted this submission and quashed the proceedings in the PML Act against Mr Kishore.
The ED then approached the apex court challenging the order passed by Madras HC.
The bench of chief justice Lalit and justice Trivedi observed that, as 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. Thus, the requisite intent would always be 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," the bench says.
The SC also clarified that its observations regarding involvement of Mr Kishore are prima facie in nature and for considering whether the allegations made by the ED, if accepted to be true at this stage, would make out an offence or not. "Needless to say that, on facts, the matter shall be considered purely on merits at the appropriate stage(s)," it added.
While allowing the appeal filed by the ED, the apex court dismissed the order passed by the HC.
(Criminal Appeal arising out of SLP (Crl) No.2668 of 2022 Date: 31 October 2022)