Y. BALAJI versus KARTHIK DESARI & ANR. ETC.

Citation: [2023] 8 S.C.R. 1026 · Decided: 16-05-2023 · Supreme Court of India · Bench: KRISHNA MURARI · Disposal: Disposed off

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2023] 8 S.C.R.
   [2023] 8 S.C.R. 1026
1026
Y. BALAJI
v.
KARTHIK DESARI & ANR. ETC.
(Criminal Appeal Nos. 1671-1673 of 2023)
MAY 16, 2023
[KRISHNA MURARI AND V. RAMASUBRAMANIAN, JJ.]
Prevention of Money Laundering Act, 2002 – ss.3, 2(1)(u) –
Offence of Money Laundering – Prevention of Corruption Act, 1988
– Jobs-for-cash scam in the State of Tamil Nadu – Whether without
identifying the proceeds of crime/a property representing the
proceeds of crime and any process or activity connected to proceeds
of crime as required by s.3, which constitute the foundational/
jurisdictional fact, can ED initiate an investigation and issue
summons – Held: All the three FIRs alleged that the accused had
committed offences included in the schedule by taking illegal
gratification for providing appointment to several persons in the
Public Transport Corporation – It is the bribe money that constitutes
the proceeds of crime u/s.2(1)(u) – A public servant receiving illegal
gratification is in possession of proceeds of crime – Mere generation
of proceeds of crime is sufficient to constitute the offence of money-
laundering – In s.3 there are 6 activities or process and one of them
is “acquisition” – If a person takes a bribe, he acquires proceeds
of crime, hence, activity of “acquisition” takes place – Even if he
does not retain it but “uses” it, he will be guilty of offence of money-
laundering, since “use” is one of the activities mentioned in s.3 –
The FIRs for the predicate offences identify all the three components
of s.3, persons; process; and product – Corruption money represents
the proceeds of crime – In the case of an offence of corruption, the
criminal activity and the generation of the proceeds of crime are
like Siamese twins – The contention that the investigation by ED
was triggered without any foundational/jurisdictional facts are aimed
at hoodwinking the Court – Wherever there are allegations of
corruption, there is acquisition of proceeds of crime which itself
tantamount to money-laundering – Once an information relating to
the acquisition of huge amount of illegal gratification in the matter
of public employment has come in the public domain, it is the duty
of the ED to register an Information Report – This is because
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“acquisition” is an activity amounting to money-laundering and
the illegal gratification acquired by a public servant represents
“proceeds of crime”, generated through a criminal activity in respect
of a scheduled offence – Receipt of bribe money is an act of money-
laundering – All the arguments on facts and all the legal contentions
emanating from some portions of the judgment in Vijay Madanlal
Choudhary, to challenge the validity of the proceedings initiated by
ED are completely unsustainable.
Criminal Law – Matters pertaining to Jobs-for-cash scam in
the State of Tamil Nadu – Impugned order allowed de novo
investigation on a ground not raised in the petition – Held: ‘D’,
whose original complaint led to the registration of FIR in Crime
No.441 of 2015 seems to have had a genuine grievance against the
culprits at the bottom of the layer, but he later turned out to be a
Trojan horse, willing to sabotage the investigation against influential
persons – Order directing de novo investigation in all the three cases,
actually inured to the benefit of the accused, but the High Court
put it on the ground that the credibility of the investigation should
not be eroded – In fact, the accused did not seek de novo investigation
on the ground of slackness on the part of the Investigating Officer,
but it was ‘D’ who sought it, with the able assistance of the
Investigating Officer – What is shocking is that the High Court
directed reinvestigation to be started ab initio, wiping out the earlier
investigation altogether – By issuing the said direction, the High
Court not only directed the wiping out of the investigation carried
out so far, but virtually wiped out even the judgment of Supreme
Court dtd.08.09.2022 passed in the previous round of litigation –
The problem with the impugned order is not merely one of improper
usage of language, as sought to be diluted by the accused and the
complainant, but something more – Prevention of Money Laundering
Act, 2002 –Prevention of Corruption Act, 1988.
Doctrines/Principles – Doctrine of stare decisis – Whether in
the light of the fact that notice has been ordered in the review petition
and a few interim orders have been 

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