Special Court Under PC Act Is Also Designated Court Under PMLA: Madras High Court Transfers Money Laundering Case To CBI Court

The Madras High Court directed the transfer of a money laundering case lodged under the PMLA to the Special Court of CBI cases which is hearing the predicate offence under Prevention of Corruption Act in the matter, after noting that the Special Court under PC Act is a designated court under the PMLA as well. The bench of Chief Justice Manindra Mohan Shrivastava (now retired) and Justice G Arul Murugan was considering a situation where the predicate offence is an offence under a special enactment being tried by a special court constituted under the special enactment, i.e., the Prevention of Corruption Act and the Special Court under the PMLA is not a designated Special Court under the PC Act. The court noted that in the present case, Special Court constituted under the PMLA is not a designated Special Court under the Prevention of Corruption Act, however the CBI Court which is trying the scheduled predicate offence under the Prevention of Corruption Act, "incidentally is also a designated Special Court under the PMLA".The bench referred to Supreme Court's decision in Assistant Director, Directorate of Enforcement v. Inspector of Police and another (2022) where a similar situation had arisen. The bench noted that the apex court had, based on the statement of the ASG therein that PMLA case may be transferred to the Special Court which is trying scheduled offence under PC Act as the latter is competent to try both cases (PMLA and PC Act cases), while keeping the legal issue open, directed the case from the Special Court under PMLA to be transferred to the Special Court trying predicate offence under PC Act. It said:"Taking note of the aforesaid decision of the Hon'ble Supreme Court, as in the instant case also, the Special Court trying the predicate scheduled offence under the PC Act, is also a designated Special Court under the PMLA, which is competent to try both cases, whereas the Special Court under the PMLA is not a designated Special Court under the PC Act, by keeping the larger issue open to be decided in an appropriate case, we deem it fit to follow the same proposition.Ergo, the impugned order is set aside and we direct the case in C.C.No.37 of 2015 on the file of the learned Principal Sessions Judge, Chennai, under PMLA, be transferred to the XIII Additional Special Court for CBI Cases, Chennai, which is trying the predicate scheduled offence in C.C.No.19 of 2014 under the Prevention of Corruption Act, 1988". The court was hearing an application filed by the Deputy Director of the Directorate of Enforcement against the order of the Special Court for CBI cases, refusing to transfer the case pending before it to the special court under the PMLA Act.The CBI had registered a case against private respondents under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act 1988. The case was taken on file and pending before the Additional CBI Court, Chennai, at the stage of trial.Since the offences under the PC Act are scheduled offences under the PMLA, the ED registered an enforcement case, and a complaint was filed before the Adjudicating Authority under PMLA, which confirmed the attachment of properties as proceeds of crime. The PMLA case was pending before the Principal Sessions Judge at Chennai, and the trial commenced. Since the trial of the predicate offence was behind the trial of the money laundering case, the ED filed an application before the CBI court to transfer the trial of the scheduled offence to the Special Court under PMLA. Since this application was rejected, ED moved the high court. The court noted that under Section 44(1)(a) PMLA states that Notwithstanding anything contained in CrPC, an offence punishable under section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed.Meanwhile Section 44(1)(c) states that if the court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of money laundering offence, then the former shall, on an application by the authority authorized to file a complaint under PMLA, commit the scheduled offence case to the Special Court. Further the Special Court shall, on receipt of such case proceed to deal with it from the stage at which it is committed.Referring to Supreme court judgment in Rana Ayyub v. Directorate of Enforcement, the court said:"The Supreme Court then dealt with a situation as to what happens if the Court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the offence of money-laundering. It was held that if the Court which has taken cognizance of the scheduled offence is different from the Special Court which has taken cognizance of the offence of money laundering, then the authority authorized to file a complaint under PMLA should make an application to the Court which has ...

Special Court Under PC Act Is Also Designated Court Under PMLA: Madras High Court Transfers Money Laundering Case To CBI Court

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Special Court Under PC Act Is Also Designated Court Under PMLA: Madras High Court Transfers Money Laundering Case To CBI Court

Upasana Sajeev

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