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Money Laundering An Act Of Financial Terrorism, Poses Threat To Sovereignty, Integrity Of Nation: Orissa HC [Read Order]

Mehal Jain
15 July 2020 2:38 PM GMT
Money Laundering An Act Of Financial Terrorism, Poses Threat To Sovereignty, Integrity Of Nation: Orissa HC [Read Order]
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"The offence of Money Laundering is nothing but an act of financial terrorism that poses a serious threat not only to the financial system of the country but also to the integrity and sovereignty of a nation", observed the Orissa High Court on Monday.

Justice S. K. Panigrahi was hearing a bail plea of a director of a company, accused of involvement in laundering of sums of money accumulated under "a bodacious Ponzi scheme (floated by another company, namely, M/s. Fine Indisales Pvt. Ltd), inducing susceptible depositors by way of misrepresentation, promising immediate refund in case of any default and timely payment of return", with a "terminal ulterior motive to siphon off the funds collected from public".

Naming it an "economic demonology", the Single bench lamented that the "windfall gain of about Rs.703 crores" so made is "stained with the sweat, tears and blood of multitudes of innocent people".

"The modus operandi adopted while transferring such prodigious sum of ill-gotten wealth with the singular intention of concealing the original source of funds and to project the tainted money as untainted ex facie constitute the offence of money laundering", commented the Single Judge.

"The aforesaid amount of money has since been moved around and subjected to Machiavellian layering through a myriad of shell companies and bogus transactions. The money collected from such scheme immediately got transferred to different bank accounts of individuals as well as firms (including the petitioner's company) under the management and control of the Promotors/Directors/Shareholders of the said M/s. FIPL which is nothing but an act of sheltering the said 'proceeds of crime' as envisaged under Section 2 (u) of the PML Act", concluded the bench.

Denying the bail application, Justice Panigrahi cited that the International Monetary Fund estimates that laundered money generates about $590 billion to $1.5 trillion per year, which constitutes approximately two to five percent of the world's gross domestic product.

"The Supreme Court of India has consistently held that economic offences are sui generis in nature as they stifle the delicate economic fabric of a society. These offences permeate to human consciousness posing numerous questions on the very integrity of the business world", the bench reflected.

Venting its ire, the Single Judge proceeded to state that the offences, such as this, are "committed with a deliberate design with an eye on personal profit" and often shown to be giving "scant regard for a sordid residuum left behind to be borne by the unfortunate starry eyed petty investors".

The Court commented that "the perpetrators of such deviant schemes", including the petitioner herein, who "promise utopia to their unsuspecting investors" seem to have entered in "a proverbial Faustian bargain" and are "grossly unmindful of untold miseries of the faceless multitudes" who are left high and dry and "consigned to the flames of suffering".

Justice Panigrahi wrote that the abuse of financial system, like in the instant case, has great potential to negatively impact a country's macro economic performance and may also adversely impact its cross-border externalities. Further, such actions by the petitioner can inflict reputational damage of the country in the world of business and commerce both inside the country and abroad.

"The act of money laundering is done in an exotic fashion encompassing a series of actions by the proverbial renting of credibility from the innocent investors. The offenders often target the unsuspecting, rural and economically distressed populations of our state who while hoping for a dreamy return, part with their hard-earned monies", the bench said.

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