Jurisdiction of PMLA Court To Try Money Laundering Offence Not Limited to Place Where Proceeds Of Crime Come Into Possession Of Accused : Supreme Court

The Supreme Court stated that the offence of money laundering is constituted by various activities, namely, concealment, possession, acquisition, use, projecting as untainted property, or claiming as untainted property. So, the the offence can be tried at the places where any of these acts have taken place have. The Court held so while rejecting the argument of journalist Rana Ayyub that the offence of money laundering can be tried only at the place where the alleged proceeds of crime are deposited (Navi Mumbai)A Bench of Justices V. Ramasubramanian and J.B. Pardiwala was deciding the petition field by Ayyub challenging the jurisdiction of the Special PMLA Court at Ghaziabad to take cognisance of the prosecution complaint lodged by the Directorate of Enforcement for allegedly misappropriating funds collected for relief work. Before the apex court, on the limited question of territorial jurisdiction, Advocate Vrinda Grover, appearing for the embattled journalist, argued that an offence punishable under the Prevention of Money Laundering Act would be triable only by the special court constituted for the area in which the offence has allegedly been committed, notwithstanding anything contained in the Code of Criminal Procedure, 1973. Not only did Sub-section (1) of Section 44 of PMLA begin with a non-obstante clause, Section 71 explicitly gave an overriding effect to the Act. Thus, it was contended by the senior counsel that only a special court in Maharashtra could have taken cognizance of the federal agency’s complaint since the bank accounts of the petitioner-accused was in Navi Mumbai. Grover placed heavy reliance on Vijay Madanlal Choudhary v. Union of India, 2022 LiveLaw (SC) 693, in which the top court had held that the trial of the offence of money-laundering would proceed before the regional special court and, in the event that the scheduled offence is triable by a special court under a special enactment elsewhere, both the trials need to proceed independently, but in the area where the offence of money-laundering has allegedly been committed. In response, Solicitor-General for India, Tushar Mehta, argued that a complaint of money-laundering should follow the complaint in respect of the scheduled offence. Therefore, since in the present case, the complaint in respect of the scheduled offence was registered at the Indirapuram Police Station, Ghaziabad, the Enforcement Case Information Report had to be lodged in a court, within whose jurisdiction the scheduled offence had become triable. In addition, Mehta argued, Ayyub received donations through an online crowdfunding platform from Ghaziabad and Uttar Pradesh as well, which meant that a part of the cause of action arose there. Disputing the contention that the territorial jurisdiction would be determined by the location where the proceeds of crime have been deposited, the court held that the places where the accused concealed, came into possession, acquired, or used the proceeds of crime, and where they projected or claimed the proceeds as untainted property, would all be areas in which the offence of money-laundering has taken place. Thus, the apex court held: “In other words, a person may first, acquire proceeds of crime in one place, second, keep the same in his possession in another place, third, conceal the same in a third place, and fourth, use the same in a fourth place. The area in which each one of these places is located, will be the area in which the offence of money laundering has been committed. To put it differently, the area in which the place of acquisition of the proceeds of crime is located or the place of keeping it in possession is located or the place in which it is concealed is located or the place in which it is used is located, will be the area in which the offence has been committed. In addition, the definition of the words ‘proceeds of crime’ focuses on ‘deriving or obtaining a property’ as a result of criminal activity relating to a scheduled offence. Therefore, the area in which the property is derived or obtained or even held or concealed will be the area in which the offence of money laundering is committed.” Further, Clauses (a) and (c) of Sub-section (1) of Section 44 conferred a special PMLA court with the power to try even the scheduled offence. Even if another court has taken cognizance of the scheduled offence, on an application by the concerned authority, the court would ‘commit’ the same to the special court trying the offence of money-laundering. “In other words, the trial of the scheduled offence, insofar as the question of territorial jurisdiction is concerned, should follow the trial of the offence of money-laundering and not vice versa,” Justice Ramasubramanian clarified. Therefore, applying the legal principles to the facts of the present case, the court held that Navi Mumbai was the place where only one of the six activities and...

Jurisdiction of PMLA Court To Try Money Laundering Offence Not Limited to Place Where Proceeds Of Crime Come Into Possession Of Accused : Supreme Court

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Awstika Das

Jurisdiction of PMLA Court To Try Money Laundering Offence Not Limited to Place Where Proceeds Of Crime Come Into Possession Of Accused : Supreme Court

Awstika Das

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Awstika Das

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