Offsprings of criminals cannot be allowed to enjoy fruits of their material sins under PMLA: Madras HC

Case details: Dhanalakshmi Sridhar v. Deputy Director, Directorate of Enforcement, Chennai - [2021] 128 taxmann.com 69 (Madras)

Judiciary and Counsel Details

• • P.N. Prakash and V.Sivagnanam , JJ.
  • R. Rajarathinam for the Petitioner.
  • Ms. G. Hema , Central Government Standing Counsel for the Respondent.

Facts of the Case

People indulge in criminal activities for various reasons, one of which, is to amass wealth for themselves and their descendants, and the Prevention of Money Laundering Act (PML Act) seeks to send a stern warning to criminals that it would neither allow them nor their offspring to enjoy fruits of their material sins and that State would not only appropriate ill-gotten wealth but would also punish those who are found in possession and enjoyment of such tainted

In the instant case, Police forwarded a letter to Enforcement Directorate stating that ‘S’ who was a criminal had been evading judicial proceedings in India for a period of three years and had purchased several properties in India in his name, in name of his wife and his daughter ‘D’ (petitioner) out of criminal activities, in support of which, cases pending against him were furnished.

As a result, the Enforcement Directorate registered a case and took up an investigation of the case under the PML Act. The Enforcement Directorate filed a complaint against ‘S’ and 6 others, including his daughter ‘D’, seeking quashing of which, ‘D’ had preferred instant criminal petition invoking section 482 Criminal Procedure Code (Cr.P.C.)

High Court Held

However, the investigation conducted by Enforcement Directorate showed that ‘S’ never had any legitimate income and that his daughter ‘D’ had not even filed income tax returns, whereas, she owned properties worth around Rs. 19 crores. Since there were prima facie materials for trial to proceed against the petitioner, impugned proceedings could not be quashed in exercise of powers under section 482 Cr.P.C.

Cases Referred To

• State of Maharashtra v. Dnyaneshwar Lakshman Rao Wankhede [2010] 2 SCC (Crl.) 385 (para 6)
• Dr. Partap Singh v Director of Enforcement, Foreign Exchange Regulation Act [1985] 22 Taxman 30/155 ITR 166 (SC) (para 6).