Intent is core for transformation of money into bribe & proceeds of crime under PMLA: SC

The requisite intent is the core for the transformation of money into bribe and proceeds of crime under the money laundering law, the Supreme Court said on Monday overturning a Madras High Court order.

A bench of Chief Justice Uday Umesh Lalit and Justice Bela M Trivedi dealt with the issue of bribes and the proceeds of crime under the Prevention of Money Laundering Act, 2002.

The HC had closed a money laundering case against IRS officer Andasu Ravinder, then working as Additional Commissioner of Income Tax, and others by accepting the submission that the amount, as long as it was in the hands of alleged bribe-giver, could not be said to be tainted money and it assumed such character only after it was received by the public servant.

As such the respondent could not be said to be connected with proceeds of crime and could not be proceeded against under the provisions of the PML Act, the high court had said.

The officer was accused of accepting Rs 50 lakh as bribe to grant some tax benefits to a co-accused.

The CBI, after receiving inputs, checked a car that was parked in front of the premises of the IRS officer on August 29, 2011 and recovered a sum of Rs 50 lakh cash and it is alleged that the officer and one Uttam Chand Bohra, a co-accused, were in the vehicle at that time.

During the investigation, it came to light that the sum was allegedly handed over to the officer by one Padmanabhan Kishore, the third accused, whose income tax file was pending with the officer, the probe agency had said.

The high court said it was not tainted money.

Reversing the HC judgement, the CJI, writing the verdict for the bench, said that 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.

"The crucial part, therefore, is the requisite intent to hand over the amount as a 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," it said.

By handing over the 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, the judgement said.

"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 a person," it said.

On a bare perusal of the complaint made by the Enforcement Directorate, it is quite clear that the accused was prima facie involved in the activity connected with the proceeds of crime, it said.

"The view taken by the High Court that the respondent cannot be held liable for the offence under the PML Act is thus completely incorrect," it said.