PMLA Can't Applied Using S.120B IPC If Criminal Conspiracy Wasn't Related To Scheduled Offence : Supreme Court Rejects ED's Review Petition
The Supreme Court has dismissed the review petitions filed against its judgment which held that proceedings under the Prevention of Money Laundering Act (PMLA) cannot be initiated by invoking Section 120B of the Indian Penal Code if the alleged criminal conspiracy was not related to a scheduled offence.A bench comprising Justices Abhay S Oka and Pankaj Mithal dismissed the review petitions...
The Supreme Court has dismissed the review petitions filed against its judgment which held that proceedings under the Prevention of Money Laundering Act (PMLA) cannot be initiated by invoking Section 120B of the Indian Penal Code if the alleged criminal conspiracy was not related to a scheduled offence.
A bench comprising Justices Abhay S Oka and Pankaj Mithal dismissed the review petitions filed by the Directorate of Enforcement and Alliance University seeking review of the judgment delivered on November 29, 2023 in Pavana Dibbur v. Directorate of Enforcement.
In the judgment, the Supreme Court clarified that an offence of criminal conspiracy punishable under Section 120-B of the Indian Penal Code will be deemed a scheduled offence under the Prevention of Money Laundering Act (PMLA) only if the alleged conspiracy is directed towards committing an offence specifically included in the schedule of the PMLA.
“An offence punishable under section 120-B will become a scheduled offence only if the conspiracy alleged is of committing an offence specifically included in the schedule. On that ground, we've quashed the proceedings," ruled the Court.
The bench comprising Justice Abhay S. Oka and Justice Pankaj Mithal pronounced the judgment in an appeal against a judgment of the Karnataka High Court which refused to quash the proceedings in a case pending before Special Judge, Bangalore for the offence of money laundering against her under PMLA.
Here, the FIR in the predicate offence was registered under Sections 143, 406, 407, 408, 409, 149 IPC. The Prevention of Money Laundering Act can be invoked only in relation to "proceeds of crime" arising out of offences which are mentioned in the schedule of the Act. Though the offences in the present case were not "scheduled offences", the Enforcement Directorate applied the PMLA by invoking Section 120B IPC(which is a scheduled offence).
In the present case, a complaint filed by the Enforcement Directorate (ED) on March 7, 2022, against the former Vice-Chancellor of Alliance University has stirred controversy. The ED has charged the petitioner under sections 44 and 45 of the Prevention of Money Laundering Act (PMLA), citing offences defined under section 3 read with sections 8(5) and 70, which are punishable under section 4 of PMLA.
The allegations suggested that during her tenure as VC of Alliance University from 2014 to 2016, the appellant acquainted with Madhukar Angur (Accused no.1), conspired to execute a sham and nominal sale deed without any consideration, involving properties belonging to Alliance University. It was further claimed that she facilitated Accused No. 1 in using her bank accounts to conceal money siphoned from the university.
Taking cognizance of the allegations, the Special Judge proceeded with the case. In response, the petitioner approached the Karnataka High Court, seeking to quash the proceedings under Section 482 of the Criminal Procedure Code (CrPC).
However, the High Court, relying on the judgment in Vijay Madanlal Choudhary v. Union of India & Ors., emphasized that the phrase used by the Apex Court is "any person" and not "any accused." Therefore, one need not be accused in the principal offense to be subject to proceedings under the Act. The court further held that even assisting in the process or activity constitutes a part of the crime of money laundering
Aggrieved by the same, the appellant approached the Supreme Court.