Money laundering case: Madras HC turns down IOB ex-unionist’s plea seeking relief

CHENNAI: The Madras High Court on Friday refused to discharge a former trustee of the All Indian Overseas Bank Employees Union in a money laundering case pertaining to the collection of Rs 2 crore from employees which was siphoned into another bank account with a motive to swindle the staff.

"The definition of money laundering is not only limited to the final act of integrating tainted property into the formal economy but also captures every process and activity in dealing with the proceeds of crime, directly or indirectly," wrote a division bench of Justice SM Subramaniam and Justice AD Maria Clete.

The bench formed the opinion while dismissing the criminal revision petition moved by the former trustee of the All Indian Overseas Bank Employees Union (AIOBEU) seeking to quash the case booked by the Directorate of Enforcement (ED) for the charges of committing a money laundering offence.

In 2014, the Central Bureau of Investigation (CBI) had registered cases against L Balasubramaniam, founder of AIOBEU, and S Srinivasan, the petitioner, who was the first trustee of the union.

The CBI alleged that the accused persons collected subscriptions from several employees of the Indian Overseas Bank and siphoned Rs 2 crore to another bank account. It was also alleged that the accused persons accumulated assets unknown to their source of income.

Considering siphoned money as proceeds of crime, the ED registered the money laundering case against the accused. In 2015, the ED attached the bank accounts of the AIOBEU, besides two cars and an apartment belonging to the union.

While the case is pending before the principal sessions court in Chennai, one of the accused, S Srinivasan, moved the petition seeking to discharge him from the case.

The petitioner claimed that since he resigned from the union, he doesn’t have any role in the proceeds of crime.

However, the bench refused to discharge the petitioner and referred to section 24 of PMLA which places the burden of proof on the accused, and unless the contrary is proved, the authority or court may presume that such proceeds of crime are involved in money laundering, it wrote.