Supreme Court Annual Digest 2023- Prevention of Money Laundering Act (PMLA), 2002

Prevention of Money Laundering Act (Act 15 of 2003) – Section 3 – Registration of ECIR – Effect of delay – Information about all complaints, the nature of the complaints, and the amount of money allegedly collected towards illegal gratification had all come into the public domain – Once a piece of information relating to the acquisition of a huge amount of illegal gratification in the matter of public employment has come into the public domain, it is the duty of the ED to register an Information Report – Held, registration of ECIR does not amount to fishing expedition – Further held, argument that there is no explanation for the delay in registering the ECIR self-serving – Writ petition challenging ED investigation dismissed. 2023 LiveLaw (SC) 440

Prevention of Money Laundering Act (Act 15 of 2003); Sections 3 and 44 – Territorial Jurisdiction of Special PMLA Court – Place of commission of the offence of money-laundering – The involvement of a person in any one or more of certain processes or activities connected with the proceeds of crime, namely, concealment, possession, acquisition, use, projecting as untainted property, or claiming as untainted property, constitutes the offence of money-laundering – All the places where any one or more of these processes or activities take place are the places where the offence of money-laundering has been committed – Triable by the special court(s) constituted for the area(s) in which the offence of money-laundering has been committed – Held, the petition could not be entertained since the issue of territorial jurisdiction could not be decided in a writ petition, especially in the presence of a serious factual dispute about the place or places of commission of the offence – Petition dismissed. (Paras 38 to 40) 2023 LiveLaw (SC) 86

Prevention of Money Laundering Act, 2002 - Directorate of Enforcement (ED) - Being a premier investigating agency, charged with the onerous responsibility of curbing the debilitating economic offence of money laundering in our country, every action of the ED in the course of such exercise is expected to be transparent, above board and conforming to pristine standards of fair play in action. The ED, mantled with far-reaching powers under the stringent Act of 2002, is not expected to be vindictive in its conduct and must be seen to be acting with utmost probity and with the highest degree of dispassion and fairness. (Para 20) 2023 LiveLaw (SC) 844

Prevention of Money Laundering Act, 2002 - Mere fact that chargesheet has been filed for the predicate offences is not a ground to release the accused on bail in connection with the offences under the PML Act. 2023 LiveLaw (SC) 433

Prevention of Money Laundering Act, 2002; Section 19 - Any non-compliance of the mandate of Section 19 of the PMLA, 2002 would enure to the benefit of the person arrested. For such noncompliance, the Competent Court shall have the power to initiate action under Section 62 of the PMLA, 2002. (Para 39) 2023 LiveLaw (SC) 611

Prevention of Money Laundering Act, 2002; Section 19 - In any event, it is not open to the ED to expect an admission of guilt from the person summoned for interrogation and assert that anything short of such admission would be an 'evasive reply'. (Para 25) 2023 LiveLaw (SC) 844

Prevention of Money Laundering Act, 2002; Section 19 (3) - When an arrestee is forwarded to the jurisdictional Magistrate under Section 19(3) of the PMLA, 2002 no writ of Habeus Corpus would lie. Any plea of illegal arrest is to be made before such Magistrate since custody becomes judicial. (Para 82) 2023 LiveLaw (SC) 611

Prevention of Money Laundering Act, 2002; Section 19 and 50 - Mere noncooperation of a witness in response to the summons would not be enough to render him/her liable to be arrested. (Para 25) 2023 LiveLaw (SC) 844

Prevention of Money Laundering Act, 2002; Section 45 - Rigours under Section 45 are applicable to anticipatory bail applications. (Para 5) 2023 LiveLaw (SC) 138

Prevention of Money Laundering Act, 2002; Section 45 - The respondent has undergone over 620 days of custody. Since in the exercise of its discretion, the High Court has come to the conclusion that the respondent should be released on bail, we are not interfering with the order under Article 136 of the Constitution. (Para 3) 2023 LiveLaw (SC) 603

Prevention of Money Laundering Act, 2003 - It is only in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case 24(scheduled offence) against him/ her, there can be no action for money laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. In the instant case, there is neither discharge nor acquittal nor quashing of the criminal case by the court of competent jurisdiction against the accused in the predicate/ scheduled offence. (Para 29) 2023 LiveLaw (SC) 1057

Prevention of Money Laundering Act, 2003 – Sections 3 and 2(1)(u) – Offence of Money Laundering – Definition of proceeds of crime – In offences of corruption, criminal activity and generation of proceeds of crime go hand-in-hand – Wherever there are allegations of corruption, the acquisition of proceeds of crime itself tantamount to money laundering – Even if an intangible property is derived as a result of criminal activity relating to a scheduled offence, it becomes proceeds of crime under Section 2(1)(u) – Held, arguments that there are no foundational facts or jurisdictional facts unsustainable and as such, proceedings before Enforcement Directorate not illegal – Writ petition challenging ED investigation dismissed. 2023 LiveLaw (SC) 440

Prevention of Money Laundering Act, 2003 - The offence punishable under Section 120­B of the IPC will become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule. (Para 25) 2023 LiveLaw (SC) 1021

Prevention of Money Laundering Act, 2003 - The property cannot be said to have any connection with the proceeds of the crime as the acts constituting scheduled offence were committed after the property was acquired. The issue of whether the accused has used tainted money forming part of the proceeds of crime for acquiring the second property can be decided only at the time of trial. (Para 27) 2023 LiveLaw (SC) 1021

Prevention of Money Laundering Act, 2003 - When the FIR is registered under particular offences which include the offences mentioned in the Schedule to the PMLA, it is the court of competent jurisdiction, which would decide whether the Charge is required to be framed against the accused for the scheduled offence or not. (Para 28) 2023 LiveLaw (SC) 1057

Prevention of Money Laundering Act, 2003; Even if an accused shown in the complaint under the PMLA is not an accused in the scheduled offence, he will benefit from the acquittal of all the accused in the scheduled offence or discharge of all the accused in the scheduled offence. Similarly, he will get the benefit of the order of quashing the proceedings of the scheduled offence. (Para 16) 2023 LiveLaw (SC) 1021

Prevention of Money Laundering Act, 2003; Section 19 – Enforcement Directorate need not give reasons in writing to the accused at the time of arrest. Grounds of arrest need to be supplied to the accused in writing only within 24 hours. The 'Pankaj Bansal judgment' does not apply retrospectively. 2023 LiveLaw (SC) 1059

Prevention of Money Laundering Act, 2003; Section 19 - the expression “as soon as may be” contained in Section 19 of PMLA is required to be construed as- “as early as possible without avoidable delay” or “within reasonably convenient” or “reasonably requisite” period of time. Since by way of safeguard a duty is cast upon the concerned officer to forward a copy of the order along with the material in his possession to the Adjudicating Authority immediately after the arrest of the person, and to take the person arrested to the concerned court within 24 hours of the arrest, held, the reasonably convenient or reasonably requisite time to inform the arrestee about the grounds of his arrest would be twenty-four hours of the arrest. (Para 21) 2023 LiveLaw (SC) 1059

Prevention of Money Laundering Act, 2003; Section 3 - It is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence. (Para 15) 2023 LiveLaw (SC) 1021

Prevention of Money Laundering Act, 2003; Section 3 - the offence of money laundering under Section 3 of the Act is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to or in relation to a scheduled offence. The offence of money laundering is not dependent or linked to the date on which the scheduled offence or predicate offence has been committed. The relevant date is the date on which the person indulges in the process or activity connected with the proceeds of crime. Thus, the involvement of the person in any of the criminal activities like concealment, possession, acquisition, use of proceeds of crime as much as projecting it as untainted property or claiming it to be so, would constitute the offence of money laundering under Section 3 of the Act. (Para 15) 2023 LiveLaw (SC) 995

Prevention of Money Laundering Act, 2003; Section 45 - Courts not obliged to grant bail just because accused is a woman. First proviso to Section 45 not mandatory. (Para 25) 2023 LiveLaw (SC) 1057

Prevention of Money Laundering Act, 2003; Section 45 - No doubt the courts need to be more sensitive and sympathetic towards the category of persons included in the first proviso to Section 45 and similar provisions in the other Acts, as the persons of tender age and women who are likely to be more vulnerable, may sometimes be misused by the unscrupulous elements and made scapegoats for committing such Crimes, nonetheless, the courts also should not be oblivious to the fact that nowadays the educated and well placed women in the society engage themselves in the commercial ventures and enterprises, and advertently or inadvertently engage themselves in the illegal activities. In essence, the courts should exercise the discretion judiciously using their prudence, while granting the benefit of the first proviso to Section 45 PMLA to the category of persons mentioned therein. The extent of involvement of the persons falling in such category in the alleged offences, the nature of evidence collected by the investigating agency etc., would be material considerations. (Para 24) 2023 LiveLaw (SC) 1057

Prevention of Money Laundering Act, 2003; With the advancement of technology and Artificial Intelligence, the economic offences like money laundering have become a real threat to the functioning of the financial system of the country and have become a great challenge for the investigating agencies to detect and comprehend the intricate nature of transactions, as also the role of the persons involved therein. Lot of minute exercise is expected to be undertaken by the Investigating Agency to see that no innocent person is wrongly booked and that no culprit escapes from the clutches of the law. When the detention of the accused is continued by the Court, the courts are also expected to conclude the trials within a reasonable time, further ensuring the right of speedy trial guaranteed by Article 21 of the Constitution. (Para 23) 2023 LiveLaw (SC) 995

Prevention of Money-laundering Act, 2002; Section 3 - 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. (Para 39-40) 2023 LiveLaw (SC) 86

Prevention of Money-laundering Act, 2002; Section 44 - It is the Special Court constituted under the PMLA that would have jurisdiction to try even the scheduled offence. Even if the scheduled offence is taken cognizance of by any other Court, that Court shall commit the same, on an application by the concerned authority, to the Special Court which has taken cognizance of the offence of money-laundering. (Para 36) 2023 LiveLaw (SC) 86