In a setback to the former Minister Katta Subramanya Naidu, the High Court of Karnataka has upheld the proceedings initiated by the Enforcement Directorate (ED) against him, his wife, and eight other family members on the allegation of money laundering.
“There is absolutely no basis for the petitioners to seek quashing of the attachment and consequent confiscation proceedings initiated against them on the purported plea that the same is violative of Article 20(1) of the Constitution of India. No legal right having been accrued in favour of the petitioners to hold on or to enjoy the proceeds of crime, the source of which cannot be explained by them,” the court observed.
Justice John Michael Cunha passed the order while dismissing the petitions filed by Mr. Naidu, his wife K. Sowbhagya, and others questioning the proceedings pending against them under the Prevention of Money Laundering (PML) Act, 2002. The money-laundering case was initiated after Mr. Naidu, who was then a Minister, was prosecuted in the Karnataka Industrial Areas Development Board land scam under the Prevention of Corruption (PC) Act.
He was, however, discharged from the charge by the High Court in November 2016 and an appeal against his discharge is pending adjudication before the apex court.
Contentions rejected
The court rejected the contentions raised on behalf Mr. Naidu that he could not have been proceeded under the PML Act as the offence alleged against him under the PC Act was prior to 2009, when the scope of the PML Act was expanded to the offences committed under the PC Act.
“The prosecution of the offender for his involvement in the process or activity connected with the proceeds obtained through the commission of a predicate offence cannot be said to be a prosecution based on ex post facto legislation,” the court said while observing that offence of money laundering is “a continuing offence”.
It goes without saying, the court said, that the properties acquired by commission of any of the offences listed in the schedule of the PML Act at any point of time as long as they continue to be in the possession or enjoyment of the offenders render themselves liable not only for prosecution but also for adjudication and consequent confiscation unless they establish that they have legitimate source to enjoy the assets held by them.
