Does payment of extortion money amount to terror funding under UAPA
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This article is written by Saurav Narayan, pursuing a Certificate Course in Advanced Criminal Litigation and Trial Advocacy from Lawsikho.

Table of Contents

Introduction 

In Bollywood films or television, you have perhaps seen it several times that a Gabbar (villain) is walking into a family general store and notifies the owners that he needs to pay hafta (extortion money) so that he can get protection for them from the community hooligans, or even from his actions. According to Oxford English Dictionary, ‘extortion’ means “the act of getting something, especially money, by force or threats.” The law related to extortion in India is like the English Law for blackmailing, where it is composed of unreasonable demand under terror. 

Throwing light upon the prescribed legislation

Section 383 of  IPC, 1860 defines ‘extortion.’ Ordinarily, extortion is punishable under Section 384 of IPC. Section 385 to 389 of IPC deals with its attempt and its extreme form. “Extortion” is described as intentionally putting any person in fear of harm to that person or others, and then dishonestly inducing that person to give to any property or valuable protection, or something signed or sealed that can be turned into a valuable security. 

Essential  elements of extortion

  • An act done by a person causes imminent threat and injury to the other person.
  • The intended and deceitful act must be done.
  • Such a person inclines to induce injury to another person in which he aspires interest.
  • Unreasonable force can be used if a person wants to take another person’s property or any valuable goods, or any document.

The intention of the accused plays an important role while committing the offence of extortion. Intention can be determined by the fact and circumstances of the case. So, it can be said that if any person commits an offence that includes oft-stated points then the offence committed is called extortion.

What is the punishment for extortion?

Punishment for extortion is prescribed in Section 384 of IPC, 1860. A person committing extortion is punishable by a sentence of three years in jail or a fine, or both.

Terrorist financing

The Financial Action Task Force (FATF) defines terrorist financing as the “financing of terrorist acts, and terrorists and terrorist organisations.” That may also include the use of other properties or stores of value to facilitate terrorist attacks. Indirect finance is possible by holding the value of non-financial tangible and intangible properties.

Analysing the stance of the UAPA

UAPA (Unlawful Activities (Prevention) Act 1967

Unlawful Activities (Prevention) Act 1967, is an Indian statute aimed at effectively preventing unlawful activities associations in India. Its main objective was to give the central government more leverage in coping with actions that threatened India’s integrity and sovereignty. To further answer the important question of whether payment of extortion money amounts to terror funding under UAPA? It is essential to analyse the recent judgment of the Apex Court in the case of Sudesh Kedia vs. Union of India.

Facts of the case

  • In the instant case, a businessman naming Sudesh Kedia has been accused of violating Sections 120B, 414, 384, 386 and 387 of the Indian Penal Code (IPC), along with Sections 17, 18,  and 21 of the Unlawful Activities (Prevention) Act, 1967, Sections 25 (1B) (a), 26 and 35 of the Arms Act, and Section 17 (1) (2) of the Criminal Law Amendment (CLA) Act. 
  • Sudesh Kedias was accused in the FIR of being operatives/functionaries of the terrorist gang TPC and extorting levy from coal merchants, transporters, and contractors. 
  • Because of the seriousness of the crimes, the Central Government ordered the NIA to begin an investigation. 
  • According to the charge-sheet, members/operatives of the Tritiya Prastuti Committee (TPC) have been extorting money from businessmen in the Amrapali and Magadh coal mining areas and have amassed movable and immovable assets with the money. They have even been obstructing the smooth flow of coal transport.
  • Sudesh Kedia statement was recorded under Section 164 Cr. PC.
  • Mr Kedia said that Subhan Miyan called him and demanded money for the smooth conduct of transportation service, M/s. Esskay Concast and Minerals Pvt. Ltd. He went on to say that he had a meeting with the other accused. There was a constant demand for payment of the levy, he admitted payment of a huge amount of money.
  • Judicial Commissioner-cum-Special Judge, NIA, Ranchi and High Court of Jharkhand, Ranchi denied bail to Mr Kedia. The matter reached the Apex Court. 

The issue raised

  • Whether payment of extortion money amounts to terror funding under UAPA?

Rule

Section 43D(5) in The Unlawful Activities (Prevention) Act, 1967: Regardless of what is stated in the Code, no person accused of an offence punishable under Chapters IV and VI of this Act shall be released on bail or under his bond while he is in detention until the Public Prosecutor has been granted an opportunity to be heard on the application for such release: Provided, however, that such accused person shall not be released on bail or his bond if the Court determines, after reviewing the case diary or the report prepared under Section 173 of the Code, that there are fair grounds to believe that the charge against such person is prima facie real.

 Analysing it further

 In National Investigation Agency v. Zahoor Ahmad Shah Watali, the Apex Court considered the parameters for exercise of the power under Section 43 (5) D, held that the judge is bound by the proviso to subsection (5) to be convinced that there are fair reasons for assuming that the claim against the accused is prima facie true or false. The court is expected to record its finding that there are fair reasons to believe that the accused is not guilty of the alleged offence. There is a degree of variation between the court’s satisfaction that there are fair grounds to believe that the accused is not guilty of such crime and the satisfaction that there are reasonable grounds to believe that the charge against such an individual is prima facie true for the Unlawful Activities (Prevention) 1967 Act. The phrase ‘prima facie true’ means that the materials/data compiled by the Investigating Agency concerning the allegation against the concerned accused in the first information report must prevail unless refuted, resolved or disproved by other evidence, which on the face of it, reveals such accused’s involvement in the conduct of the specified crime.

Unless rebutted or refuted, it must be good and adequate on its own to determine a given fact or the chain of facts constituting the claimed offence. In one way, the court’s level of satisfaction is lighter because it needs to rule that the charge is prima facie true, as opposed to the judgement of the accused being not guilty of the crime as required by the other special enactments. Under any case, the court’s level of satisfaction for concluding that there are fair reasons to believe that the claim against the accused is prima facie true is lighter than the level of satisfaction for considering a discharge application or framing of charges concerning crimes under the Unlawful Activities (Prevention) 1967 Act.

While considering the bail application under Section 43 (5) D, it is the court’s responsibility to use its judicial mind to analyse all the evidence on hand to determine if a prima facie case exists against the accused. Supreme Court has gone through the material on record and is satisfied that Mr Kedia is entitled to bail, and the Judicial Commissioner-cum-Special Judge, NIA, Ranchi and High Court Of Jharkhand erred by refusing to give him bail, for the following reasons:

  1. A close examination of the evidence presented to the Apex Court would clearly show that the main accusation against Mr Kedia is that he paid a levy/extortion amount to the terrorist organization. It is clear from the supplementary charge-sheet and the other material on record that other accused who are members of the terrorist organization have been systematically collecting extortion amounts from businessmen in Amrapali and Magadh areas. Mr Kedia is carrying on transport business in the area of operation of the organization. It is alleged in the second supplementary charge sheet that Mr Kedia paid money to the members of the Tritiya Prastuti Committee (TPC) for the smooth running of his business. Prima facie, it cannot be said that Mr Kedia conspired with the other members of the TPC and raised funds to promote the organization.
  2. Another factor taken into account by the Special Court and the High Court relates to the allegation of Mr Kedia meeting the members of the terror organization. It has been held by the High Court that Mr Kedia has been in constant touch with the other accused. Mr Kedia has revealed in his statement recorded under Section 164 Cr.PC that he was summoned to meet A-14 and the other members of the organization in connection with the payments made by him. Prima facie, we are not satisfied that a case of conspiracy has been made out at this stage only because Mr Kedia met the organisation’s members.
  3. An amount of Rs. 9,95,000/- (Rupees Nine Lakh and Ninety-Five Thousand only) was seized from the house of Mr Kedia which was accounted for by Mr Kedia who stated that the amount was withdrawn from the bank to pay salaries to his employees and other expenses. The court does not agree with the prosecution that the amount is a terror fund. The court further stated it cannot be said that the amount seized from Mr Kedia proceeds from terrorist activity. There is no allegation that Mr Kedia was receiving any money. On the other hand, Mr Kedia is accused of providing money to the members of TPC.

Conclusion

To conclude, as is evident in the landmark case of Mr. Kedia, payment of extortion money doesn’t amount to terror funding if the only accusation is the payment of the illegal levy to Terror organization for the smooth functioning of the business because in the instant case there was no way he could carry on smooth transportation of coal without meeting the demand of the terrorist organization. Mr  Kedia is not a member of the terror organization, rather he was the victim of the extortion of money.

References   

 

  • OECD (2019), Money Laundering and Terrorist Financing Awareness Handbook for Tax Examiners and Tax Auditors, OECD, Paris.

 

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