Imp. Rulings - Bribery - Offence under Money Laundering & PCA

 Imp. Rulings -  Bribery - Offence under Money Laundering & PCA

Index;

1. HC Jharkhand (2025.02.14) in Sanjay Kumar Agarwal. Vs. Union of India [(2025) ibclaw.in 259 HC, Criminal Revision No. 728 of 2023]

2. SCI (2023.09.21) In P. Sarangapani (Dead) Through LR Paka Saroja Vs. State of Andhra Pradesh [Criminal Appeal No. .2173 of 2011, Neutral Citation 2023INSC844]

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1). HC Jharkhand (2025.02.14) in Sanjay Kumar Agarwal. Vs. Union of India [(2025) ibclaw.in 259 HC, Criminal Revision No. 728 of 2023], held that; 

• In the instant case, the petitioner has knowingly acquired, possessed but he had projected the proceeds of crime [illegal gratification] in such a manner as it if was untainted money and therefore, guilty of offence of money-laundering as per the provision of Section 3 of PML Act, 2002 and as such is liable to be punished under Section 4 of the PML Act, 2002.

• It is evident from the aforesaid provision that “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad.

• It is further evident that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.

• Domestic Courts are under an obligation to give due regard to the international conventions and norms for construing the domestic laws, more so, when there is no inconsistency between them and there is a void in domestic law. This view has been restated in Githa Hariharan, as also in People’s Union for Civil Liberties, and National Legal Services Authority v. Union of India.”

• The “proceeds of crime” include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence, meaning thereby, the words “any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence” will come under the fold of the proceeds of crime.

• Further it is the nature of a duty, not an individual‘s position, that discloses whether or not the person carrying it out is a public servant. Under the Prevention of Corruption Act the concept was to replace the notion of conventionally recognized public officials with those who carry out public duties.

• From the aforesaid discussion it is manifest that the appointment of resolution professional is made by the National Company Law Tribunal, which is the Adjudicating Authority for the insolvency resolution process of the companies under the I & B Code, 2016. Resolution Professional has a key role to play in the insolvency resolution process and to protect the assets of the corporate debtors. From his nature of assignment and duty to be performed his office entails performance of functions which are in the nature of public duty and therefore will come within the meaning of public servant both under sections 2 (c) (v) & (viii) of the PC Act.”

• This Court is of the view that since the duties performed by RP are public in nature, they are public servants and Sec 2(c) of Prevention of Corruption Act is pretty clear that an individual who performs public duties are public servants for the purpose of the Act and hence, the legislature would have felt that there are no explicit provisions are required.

• Although the RP might not possess adjudicatory powers but he undeniably possesses administrative powers, therefore, RP will come under the ambit of Public Servant to the extent of his powers as an administrator or the Corporate Insolvency Resolution Process.

• If a person takes a bribe, he acquires proceeds of crime. So, the activity of “acquisition” takes place. Even if he does not retain it but “uses” it, he will be guilty of the offence of money-laundering, since “use” is one of the six activities mentioned in Section 3”.

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2). SCI (2023.09.21) In P. Sarangapani (Dead) Through LR Paka Saroja Vs. State of Andhra Pradesh [Criminal Appeal No. .2173 of 2011, Neutral Citation 2023INSC844] held that;

• # 11. In view of the above, once the undue advantage i.e., any gratification whatever, other than the legal remuneration is proved to have been accepted by the accused, the Court is entitled to raise the presumption under Section 20 that he accepted the undue advantage as a motive or reward under Section 7 for performing or to cause performance of a public duty improperly or dishonestly. No doubt, such  presumption is rebuttable. The Constitution Bench in Neeraj Dutta (supra), also had dealt with the issue of presumption under Section 20 of the Act and held as under: -

 - “88.7. (g) Insofar as Section 7 of the Act is concerned, on the proof of the facts in issue, Section 20 mandates the court to raise a presumption that the illegal gratification was for the purpose of a motive or reward as mentioned in the said Section. The said presumption has to be raised by the court as a legal presumption or a presumption in law. Of course, the said presumption is also subject to rebuttal. Section 20 does not apply to Sections 13(1)(d)(i) and (ii) of the Act.”

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