The High Court of Telangana passed a judgment on 3 April, 2023 stating that every commercial activity where an outstanding arises would not fall within the ambit of section 3 of the prevention of corruption act . It was stated in the case of Sukesh Gupta vs Directorate Of Enforcement (Criminal Petition No.431 OF 2023)which was passed by the single judge bench comprising of K.Surender
FACTS OF THE CASE:
A criminal complaint was registered by the CBI under Section 13 of the Prevention of Corruption Act against this petitioner and others on 03.01.2013. Thereafter, the company of the petitioner filed arbitration application and also MMTC filed civil suits. On 25.02.2014, a petitionwas registered under Section 3 of Prevention of Money- Laundering Act, 2002 on the basis of FIR that was registered by CBI.The crux of the allegation is that the petitioner being Director of MBS group of companies, received gold from MMTC on buyers Credit loan basis by keeping the forex position open. On account of the rupee fluctuation, lowering the value of the rupee, the petitioner was liable to pay additional 5% margin money in accordance with the MOU. According to MMTC, the company suffered a loss to the tune of Rs.220 Crores. CBI in its charge sheet alleged that this petitioner entered into criminal conspiracy with public servants of MMTC and received gold.
JUDGEMENT OF THE CASE
Every commercial activity where an outstanding arises would not fall within the ambit of Section 3 of the Act. It is not merely criminal activity relating to commission of a predicate offence but property has to be derived directly or indirectly as a result of such criminal activity to be tried and prosecuted under Section 3 of the Act. In the present case, no such property is derived or obtained either directly or indirectly by the petitioner herein either involving in criminal activity or handling any such property derived as a result of criminal activity. The question of concealing or being in possession or acquiring such property does not arise. The amount accrued as discussed earlier is on account of dollar- rupee fluctuation and it cannot in any manner be held that the petitioner had derived or obtained any property. Though, it was agreed that differential amount of rupee dollar fluctuation would be paid, at most it can be termed as an outstanding which can be recovered in a civil suit and by no stretch of imagination can it be called as ‘Proceeds of Crime” or the outstanding amount can be called as ‘property’ as defined under Section 2(1)(v) of the Act. Viewed from any angle, when there is no criminal activity nor any property which is derived as a consequence of criminal activity,the court was of the firm opinion that the proceedings cannot be permitted to continue. Accordingly, the proceedings in were hereby quashed.
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JUDGEMENT REVIEWED BY ROSHNI SABU, KERALA LAW ACADEMY LAW COLLEGE.
