Definition of "Proceeds of a Crime" Inclusive of Properties Purchased from Laundered Money: Delhi HC [Read Order]

The High Court at Delhi held that the definition of “proceeds of a crime” inclusive of properties purchased from laundered money.

The Central Bureau of Investigation (CBI)lodged a First Information Report (FIR) through the Deputy Director of the National Agricultural Marketing Cooperative Federation Ltd alleging offences under Sections 403, 409 and 420 read with 120B of the Indian Penal Code, 1860.

On behalf of the Directorate of Enforcement (ED), the counsel submitted that under Section 5(1) of the Prevention of Money Laundering Act, 2015 (PMLA) property purchased from money also constitute “proceeds of crime”, placing reliance on Vijay Madanlal Choudhary v. Union of India and Pradeep Nirankarnath Sharma v. Enforcement Directorate.

The opposing counsel defending the accused submitted that Sections 3, 5 and 8 constitute an integrated scheme and that the property was purchased prior to the coming into force of the PMLA.

The High Court observed that the definition of “proceeds of crime” in Section 2(1)(u) of PMLA includes property purchased, directly or indirectly, from the said proceeds. The bench also was of the opinion that the concealment of proceeds of crime, possession of proceeds of crime, acquisition of proceeds of crime and use of proceeds of crime all fall under Section 3(1).

Justices C. Hari Shankar and Om Prakash Shukla noted that as long as the person is in possession of or in use of proceeds of crime, the offence of money laundering continues. The previous judgment was accordingly quashed and set aside, and the Provisional Attachment order dated 24.01.2014 stood upheld. The appeal was allowed.

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