Delhi High Court Rules Share Market Gains on Bribe Money Constitute Money Laundering

The Delhi High Court determined that profits from bribe money invested in the stock market are proceeds of crime under money laundering laws. The judgment emphasizes that any enhanced value remains tainted by its illicit origins, impacting cases like Prakash Industries Limited's coal block allocation.

The Delhi High Court has ruled that profits from bribe money invested in the stock market are considered proceeds of crime, thereby classifying as money laundering. This comes from a judgment by Justices Anil Kshetarpal and Harish Vaidyanathan Shankar, clarifying the crime's continuing nature.

The court emphasized that any appreciation in value, derived in part from the original illicit source, does not purify its tainted origins. Examples cited include investments in various sectors like the narcotics trade or real estate, where the taint persists.

This decision surfaced during the Enforcement Directorate's appeal involving Prakash Industries Limited's allocation of the Fatehpur Coal Block. The court reversed a single judge's earlier decision due to ongoing adjudication, highlighting the necessity to understand such actions as proceeds of crime under PMLA.

(With inputs from agencies.)