PMLA| Properties Purchased Prior To Scheduled Offence Can Be Attached If Properties, In Result of Criminal Activity, Is Held Outside India: Madras HC

The Court said that, in such a situation, the properties attached within the country need not be the properties purchased from and out of the proceeds of crime or criminal activity.

The Court was hearing a batch of Criminal Original Petition and Crl. MP instituted to quash the complaint against the accused Nos. 25, 21 & 22 respectively.

The bench of Justice SM Subramaniam and Justice V. Sivagnanam while emphasising that the very object of the Section 2(1)(u) PMLA would be to protect the economic interest of the country the Court said, “…Even in respect of the properties purchased prior to the scheduled offence under PMLA , such properties can be attached if the criminal activity relating to scheduled offence is taken or held outside the country, then the property equivalent in value held within the country can be attached. The said properties attached within the country need not be the properties purchased from and out of the proceeds of crime or criminal activity.”

Advocate Nithyash Natarajan appeared for the Appellant and Additional Solicitor General of India ARL Sundaresan appeared for the Respondent.

Brief Facts-

In the present case, IDBI Bank's DIFC Branch in Dubai sanctioned two loans: the first, 52 million Euros, to Win Wind Oy (WWOy), a subsidiary of Siva Industries & Holding Ltd (Accused-7), owned primarily by Ms. S. Jayalakshmi (Accused-16). The second loan, 67 million US dollars, was granted to Axcel Sunshine Ltd (Accused-2), and was moved through several companies before being credited to Siva Industries, which used it to repay the first loan. The CBI registered an FIR under Sections 120B, 420 IPC & Section 13 of Prevention of Corruption Act, 2013 which is a scheduled offence under PMLA, hence, the Enforcement Directorate investigated the offence under the Prevention of Money Laundering Act (PMLA). The Respondent filed a complaint under PMLA, which is being challenged in the present criminal petitions.

The Court perused Section 2(1)(u) of PMLA and observed, “…property derived by a person, in result of criminal activity relating to a scheduled offence can be treated as proceeds of crime. The value of any such property or if such property is taken or held outside the country, then the property equivalent in value held within the country can be construed as proceeds of crime. Therefore, some properties, in result of criminal activity, is held outside the country, then the property equivalent in value held within the country can be attached by the Enforcement Directorate.”