DIRECTORATE OF ENFORCEMENT versus PADMANABHAN KISHORE

Citation: [2022] 13 S.C.R. 1064 · Decided: 31-10-2022 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Appeal(s) allowed

Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 13 S.C.R.
[2022] 13 S.C.R. 1064
1064
DIRECTORATE OF ENFORCEMENT
v.
PADMANABHAN KISHORE
(Criminal Appeal No. 1864 of 2022)
October 31, 2022
[UDAY UMESH LALIT, CJI AND BELA M. TRIVEDI, J.]
Prevention of Money Laundering Act, 2002 – ss. 2(1)(u), 3,
and 4 – Prosecution case was that A-1 was Additional Commissioner
of Income Tax – On intelligence, the CBI checked a car that was
parked in front of the house of A1 and recovered a sum of
Rs.50,00,000/- in cash – It is alleged that A1 and A3 were in that
car at that time – During investigation, it came to light that the sum
of Rs.50,00,000/- was handed over to A-1 by A-2 whose income tax
file was pending with A1 for clearance – Since A-2 wanted certain
benefits, he had allegedly paid the sum of Rs.50,00,000/- as bribe
to A1 – In connection with this seizure, case was registered under
s.120- B IPC and ss.7, 12, 13(1)(d) r/w s.13(2) of the Prevention of
Corruption Act, 1988, s.3 of the Prevention of Money Laundering
Act, 2002 against A-1, A-2, A-3, A-4, A-5 and A6 – A-2 filed writ
petition before High Court for quashing the proceedings on the
ground that the amount in question as long as it was in the hands of
respondent could not be said to be tainted money; that it assumed
such character only after it was received by the public servant and
as such respondent could not be proceeded against under the
provisions of PML Act – High Court allowed writ petition and
quashed the proceedings in PML Act against the respondent – On
State’s appeal, held: The definition of “proceeds of crime” in PML
Act, inter alia, means any property derived or obtained by any person
as a result of criminal activity relating to a scheduled offence – The
offences punishable under ss.7, 12 and 13 are scheduled offences
– Any property thus derived as a result of criminal activity relating
to offence mentioned in paragraph 8 of Part-A of the Schedule
would certainly be “proceeds of crime” – It is true 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
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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 – 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 s.3 of the PML
Act are thus wide enough to cover the role played by such person –
A bare perusal of complaint made by the Enforcement Directorate
showed that the respondent was prima facie involved in the activity
connected with the proceeds of crime.
Allowing the appeal, the Court
HELD: 1. The definition of “proceeds of crime” in PML
Act, inter alia, means any property derived or obtained by any
person as a result of criminal activity relating to a scheduled
offence. The offences punishable under Sections 7, 12 and 13 are
scheduled offences, as is evident from paragraph 8 of Part-A of
the Schedule to the PML Act. Any property thus derived as a
result of criminal activity relating to offence mentioned in said
paragraph 8 of Part-A of the Schedule would certainly be “proceeds
of crime”. [Para 13][1071-B-C]
2. It is true 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, th

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