(i) The Placement Stage: the malfeasant, who’s
holding the cash generated from felony actions, locations the
crime cash into the traditional monetary system;

(ii) The Layering Stage: the cash launched
into the monetary system is layered-spread out into a number of
transactions inside the monetary system with a view to concealing
the origin of the unique identification of the cash and to make this
origin/identification nearly disappear; and

(iii) The Integration Stage: the cash is
thereafter built-in into the monetary system in such a means that
its unique affiliation with crime is completely obliterated and the
cash might be utilized by the malfeasant and/or the accomplices to get
it as untainted/clear cash.

“The Act was enacted because the worldwide neighborhood
recognised the specter of cash laundering whereby cash generated
from unlawful actions reminiscent of trafficking and medicines and so on. was
discovering its means into the financial system of a rustic and funding
additional felony exercise. The expression money-laundering would
ordinarily suggest the conversion and infusion of tainted cash into
the primary stream of financial system as official wealth. According to the
respondent, there are three phases to a transaction of
money-laundering: The first stage is Placement, the place the
criminals place the proceeds of the crime into regular monetary
system. The second stage is Layering, the place cash launched into
the traditional monetary system is layered or unfold into varied
transactions inside the monetary system in order that any hyperlink with the
origin of the wealth is misplaced. And, the third stage is Integration,
the place the profit or proceeds of crime can be found with the
criminals as untainted cash. There is far advantage on this
description of money-laundering and this additionally signifies that, by
its nature, the offence of money-laundering needs to be constituted
by determinate actions and the method or exercise of
money-laundering is over as soon as the third stage of integration is
full. Thus, except such acts have been dedicated after
the Act got here into drive, an offence of money-laundering punishable
beneath Section 4 wouldn’t be made out. The 2013 Amendment
to Section 3 of the Act by advantage of which the phrases “course of
or exercise linked with proceeds of crime and projecting it as
untainted property” were substituted by the words “any
course of or exercise linked with proceeds of crime together with
concealment, possession, acquisition or use and projecting or
claiming it as untainted property”. The phrases
“concealment, possession, acquisition or use” should be
learn within the context of the method or exercise of money-laundering
and that is over as soon as the cash is laundered and built-in into
the financial system. Thus, an individual concealing or coming into
possession or bringing proceeds of crime to make use of would have
dedicated the offence of money-laundering when he got here into
possession or hid or used the proceeds of
crime.

* The findings recorded by the realized Single Judge of the Delhi
High Court within the stated judgment has been stayed by the Division
Bench of the Delhi High Court within the interim order dated
30^th November 2016, handed in LPA 144/2016 filed by
Directorate Of Enforcement in opposition to the order of the Single
Judge.

“It is obvious that the essence of the offence of the
money-laundering is “projecting of the proceeds of crime as
untainted property. It is that this ‘projecting’ that draws
the applicability of the penal provisions of PML Act. Now,
the place such sale proceeds, or the property derived from a criminal offense,
which, at the moment, was not a scheduled offence, however was a
scheduled offence when such sale proceeds or such property was
projected as untainted, there can be no bar to the applicability
of the PML Act. If the provisions of Section 3 of the PML Act are
interpreted on this method, it could not quantity to giving
retrospective impact to the stated Legislation. If the proceeds of a
crime, which has been declared as a ‘scheduled offence’ on
the day on which the ‘projection of such proceeds’ as
‘untainted’ is tried or undertaken, the provisions of
the PML Act would apply. Such a course, can’t be stated to be
violative of Article 20 of the Constitution.

In different phrases, the essential date can be the date
on which the projection of the proceeds of crime as
‘untainted’ takes place, and, if this has taken place
earlier than the graduation of the PML Act, then it can’t be prompt
that an individual will be prosecuted for the offence punishable beneath
Section 4 thereof. In the moment case,
many of the transactions, that are the subject material of the case
in opposition to the Applicant, have taken place earlier than coming into drive of
the PML Act. They can’t be the subject material of prosecution for
the offence punishable beneath the PML Act. It was faintly
prompt, to beat this problem, that the offence of
money-laundering is a seamless offence. This Dixit competition,
-if it’s meant thereby to recommend that even the instances the place the
money-laundering had already been accomplished earlier than the graduation of
the PML Act, would give rise to the prosecution beneath the
provisions of the PML Act, -has to be rejected
forthwith.”