Proceeds of crime: India
This is a collection of articles archived for the excellence of their content. |
Court rulings
HC, 2021: Assets acquired before offence
Sagar, March 30, 2021: The Times of India
In a significant ruling, Justice R Raghunandan Rao of the Andhra Pradesh high court has held that the Enforcement Directorate (ED) cannot call assets acquired by an accused as proceeds of crime if they were bought before the commission of such an offence.
The judge gave this ruling and ordered the release of the attached assets of an accused, which were bought before the commission of the alleged offence, on March 20. The judge pronounced this order after hearing Kumar Pappu Singh, a resident of Erramanzil Colony in Hyderabad, and some of his companies that challenged the attachment of their assets by ED.
In March 2018, the CBI had registered an FIR against Pappu Singh and his companies for allegedly defrauding IDBI Bank’s Palangi branch in West Godavari district to an extent of 75 crore.
CBI alleged that he availed kisan credit card (KCC) loans in the names of various borrowers and re-routed all the money into his savings account before siphoning of the same.
According to the ED, all money made through a crime is crime money or proceeds of crime. Coming to the issue of attachment, ED contended it had attached the old assets of the accused because he exhausted all the fraud money in pisciculture and suffered huge losses there. The judge did not agree with this interpretation and said that even the legislature did not intend this way while amending the Act in 2019 and said that ED might have a case for attaching equal worth of assets if the accused diverted the money to foreign shores. In the instant case, however, the accused had lost the money. Hence, the attachment of his pre-2010 assets cannot be justified, Justice Raghunandan said in his order.
The judge said that ED might have a case for attaching assets worth an equal amount if the accused diverted the money to foreign shores.
Fund collection for future offence is not proceeds of crime: HC, 2024
Dec 5, 2024: The Times of India
New Delhi : Collection of funds, even if done illegally for a future offence, can’t be termed proceeds of crime, Delhi high court held Wednesday while granting bail to three members of the banned organisation Popular Front of India’s Delhi unit. The Enforcement Directorate accused them of raising funds for the 2020 anti-CAA protests and the subsequent northeast riots, reports Abhinav Garg.
“Proceeds of crime have to be generated as a result of criminal activity (scheduled offence). The collection of funds in an illegal way to commit a scheduled offence in the future is not an offence of money laundering under PMLA...,” Justice Jasmeet Singh observed while granting relief to Parvez Ahmed, Mohd Ilyas & Abdul Muqeet.
ED’s PFI case is like putting cart before horse: HC
The funds so collected are not proceeds of crime and can be proceeds of crime only when they were generated because of a scheduled offence. The case set up by ED is putting the cart before the horse,” Justice Jasmeet Singh observed. Ordering their release on bail, the court added “Prima facie, I am of the view the offence of money laundering is not made out against the petitioners” as it noted that “in the present case, collection of funds precedes the crime, i.e., Delhi riots.”
ED registered the case in Sept 2022 following an FIR by NIA under provisions of IPC and Unlawful Activities (Prevention) Act against PFI and its members. While accused Ahmed was President of Delhi state unit of PFI from 2018 to 2020, Ilyas was general secretary since Nov 2018, and Muqeet was office secretary since 2017. All the petitioners were arrested on Sept 22, 2022 in the case.
ED alleged the petitioners were actively involved and instrumental in raising funds for PFI as part of a “larger criminal conspiracy” and to use it for nefarious activities in India. It was claimed PFI conducted anti-CAA protests across India and there was a flow of cash from suspicious sources in the form of proceeds of crime to disturb communal harmony and incite violence through riots.
