Business: The Delhi High Court has considered the income received from bribe money after investment in the stock market as income from crime. The court has said that action can be taken against this amount under laws related to money laundering. The High Court has said that merely increasing the price does not make income earned from wrong sources sacred. The court said in this regard that the increased value is obtained by using the original illegal source of bribe, hence it cannot be considered justified.

“The offense of money laundering is not limited to the initial act of criminal acquisition but extends to every process or activity involving income, including stratification through multiple transactions, integration into the legitimate economy and passing off the money earned as legitimate,” a bench of Justices Anil Kshetrapal and Harish Vaidyanathan Shankar said in the November 3 judgment.

Giving an example, the bench said that if a public servant takes bribe then it is an offense under the Prevention of Corruption Act. He then invests that amount in drug trade, real estate, preference shares or using any other means, but this does not make them legitimate. The stain of it being illegal still remains. The court said that the entire income so received can be confiscated, irrespective of the medium by which it is subsequently remitted or its form.

“Similarly, if the amount taken as bribe is invested in the stock market and earns profits on it, the entire increased amount will be deemed to be the proceeds of crime,” the court said. The court passed this decision while accepting an appeal by the Enforcement Directorate (ED). The appeal challenged the order of the single judge in the case relating to allocation of Fatehpur coal block in favor of M/s Prakash Industries Limited (PIL).

The ED said in its APA that a provisional attachment order (PAO) was issued. Under this, property worth Rs 122.74 crore was attached. This action was taken because the ill-gotten financial gain arising from the sale of preference shares is the proceeds of crime. The single judge had said that since the issue of preference shares was not part of the FIR, chargesheet or ECIR, the ED lacked the power and jurisdiction to issue the PAO.