New Delhi: A ‘bribe giver’ can also be prosecuted under the Prevention of Money Laundering Act (PMLA), the Supreme Court held Tuesday.
With this order, a three-judge bench of the SC, led by Chief Justice UU Lalit, overturned a Madras High Court verdict that quashed PMLA proceedings against a person who allegedly handed over Rs 50 lakh to a government servant.
According to the SC order, handing over money with the intent of giving bribe to someone would be “assisting” or “knowingly” becoming a party to an activity connected with the “proceeds of crime”.
“Without such an active participation on part of the person concerned, the money would not assume the character of being proceeds of crime,” the bench said, elucidating on section 3 of the PMLA. This provision deals with the “process or activity connected with proceeds of crime”, which includes its concealment, possession, acquisition or use.
The SC order came on an appeal filed by the Enforcement Directorate challenging the March 2021 judgment of the Madras HC that set aside PMLA enquiry against one Padmanabhan Kishore, who allegedly bribed an Indian Revenue Service (IRS) officer before whom the former’s income-tax file was pending for clearance. Kishore, it was alleged, paid Rs 50 lakh as bribe to the public servant.
PMLA proceedings commenced soon after the CBI registered a case against the IRS officer and Kishore in 2011. The ED also formally lodged a case in 2016, which Kishore challenged before the HC.
‘Crucial part is intent to hand over money as bribe’
Terming the prosecution as misconceived, the Madras HC had held that as long as the money was in the hands of Kishore, it could not have been deemed tainted since it was never claimed that the accused mobilised the amount through criminal activity. Moreover, even before the IRS officer could have projected the money as “tainted”, the CBI seized it from him in a trap that was laid to nab the government official, noted the HC.
However, the SC in its judgment noted down the definition of “proceeds of crime” under the PMLA law. It observed that any property derived as a result of criminal activity relating to scheduled offences mentioned in the law would certainly “be proceeds of crime”.
Then the bench discussed the contours of section 3 of the PMLA and gave it a wider interpretation to make a ‘bribe giver’ an accused. It said that the relevant expressions from section 3 of the PMLA are wide enough to cover the role played by accused Kishore in the case.
The top court agreed with the HC’s observation that as long as the amount is in the hands of someone and not actually handed over as a bribe, it would definitely be termed untainted money.
If it is handed over without any intent of bribing, then it would be a mere “entrustment”. However, if it is appropriated by a public servant, the offence would be of misappropriate but certainly not of bribe.
Therefore, the crucial part, SC noted, is the requisite intent, to hand over the amount as bribe. And usually, such intent must necessarily be antecedent or prior to the moment the amount is handed over.
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