New Delhi- The Delhi High Court has held that the profits earned on bribe money after investment in share market would constitute as proceeds of crime and amounts to offence of money laundering.

Appreciation in value does not cleanse or purify the tainted origin, since the augmented value is inextricably and indirectly derived from the original illicit source of bribe, the court said.

“The offence of money laundering being continuing in nature is not confined only to the initial act of criminal acquisition but also extends to every process or activity connected with the proceeds, including layering through multiple transactions, integration into the legitimate economy and projection of the acquired wealth as lawful,” a bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar said in a November 3 judgment.

Giving an example, the bench said if a public servant receives a bribe, which constitutes an offence under the Prevention of Corruption Act, and thereafter invests the sum in narcotics trade, real estate, preferential shares or any other avenue, the taint of illegality would still continue.

The entire corpus shall be liable to be attached irrespective of the subsequent channels through which it has been routed or the forms it assumes subsequently, it added.

“Similarly, if the sum received as bribe is invested in share market, which later increases or goes beyond and above the value of actual investment owing to market forces or corporate actions, the entire enhanced amount shall constitute as proceeds of crime,” it said.

The court passed the judgment while allowing the appeals of the Enforcement Directorate (ED) challenging a single judge order in relation to the case arising from the allocation of Fatehpur Coal Block in favour of M/s Prakash Industries Limited (PIL).

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