Trial Of Scheduled Offence Should Take Place In Special Court Which Has Taken Cognizance Of Offence Of Money-Laundering : Supreme Court

The Supreme Court held that the trial of the scheduled offence should take place in the Special Court which has taken cognizance of the offence of money-laundering.

The court also added that the provisions of the Cr.P.C. are applicable to all proceedings under the PMLA Act including proceedings before the Special Court, except to the extent they are specifically excluded.

The bench of Justices V. Ramasubramanian and J.B. Pardiwala observed thus while dismissing the writ petition filed by journalist Rana Ayyub challenging the jurisdiction of a special court in Ghaziabad under the Prevention of Money Laundering Act, 2002 to take cognisance of the complaint filed by the Enforcement Directorate against her for alleged violations in amounts collected through crowdfunding for COVID relief.

The contention raised on behalf of Rana Ayyub was that under Section 44(1) of the PMLA, an offence punishable under the Act, shall be triable only by the Special Court constituted for the area in which the offence has been committed and therefore the Special Court in Maharashtra alone could have taken cognizance of the complaint. So the issues considered was (i) whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa; and (ii) whether the Court of the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, can be said to have exercised extra-territorial jurisdiction, even though the offence alleged, was not committed within the jurisdiction of the said Court.

Taking note of the provisions of Section 43 and 44 of the PMLA, the bench noted that (i) that the offence punishable under the PMLA as well as a scheduled offence connected to the same shall be triable by the Special Court constituted for the area in which the offence of money-laundering has been committed; and (ii) that if cognizance has been taken by one Court, in respect of the scheduled offence and cognizance has been taken in respect of the offence of money-laundering by the Special Court, the Court trying the scheduled offence shall commit it to the Special Court trying the offence of moneylaundering.

"It is clear that the trial of the scheduled offence should take place in the Special Court which has taken cognizance of 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...In view of the specific mandate of clauses (a) and (c) of subsection (1) of 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.", the court observed.

Regarding the second issue, the bench observeed that the issue of territorial jurisdiction cannot be decided in a writ petition, especially when there is a serious factual dispute about the place/places of commission of the offence. This question should be raised by the petitioner before the Special Court, since an answer to the same would depend upon evidence as to the places where any one or more of the processes or activities mentioned in Section 3 were carried out, the court said.

Case

Rana Ayyub vs Directorate of Enforcement | 2023 LiveLaw (SC) 86 | WP(Crl) 12 OF 2023 | 7 February 2023 | Justices V. Ramasubramanian and J B Pardiwala

For Petitioner(s) Ms. Vrinda Grover, Adv. Mr. Soutik Banerjee, Adv. Mr. Aakarsh Kamra, AOR Ms. Devika Tulsiani, Adv. Ms. Mannat Tipnis, Adv.

For Respondent(s) Mr. Tushar Mehta, Solicitor General Mr. Mukesh Kumar Maroria, AOR Mr. Zoheb Hussain, Adv. Mr. Kanu Agarwal, Adv. Mr. K. Parmeshwar, Adv. Mr. Padmesh Mishra, Adv.

Headnotes

Territorial Jurisdiction of Special PMLA Court – Prevention of Money Laundering Act (Act 15 of 2003) – Sections 3 and 44 – 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

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)

Code of Criminal Procedure, 1973 - Prevention of Money-laundering Act, 2002 ; Section 46(1), 65,71 - The provisions of the Cr.P.C. are applicable to all proceedings under the Act including proceedings before the Special Court, except to the extent they are specifically excluded. Hence, Section 71 of the PMLA providing an overriding effect, has to be construed in tune with Section 46(1) and Section 65. (Para 28-29)

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 moneylaundering is committed. (Para 39-40)

Constitution of India, 1950 ; Article 32, 226 - Prevention of Money-laundering Act, 2002 ; Section 3 - The issue of territorial jurisdiction cannot be decided in a writ petition, especially when there is a serious factual dispute about the place/places of commission of the offence - This question should be raised by the petitioner before the Special Court, since an answer to the same would depend upon evidence as to the places where any one or more of the processes or activities mentioned in Section 3 were carried out. (Para 46)

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