Introduction
The
Brief facts
In 2013, Pavana Dibbur (Appellant) purchased a property (
In 2017, a First Information Report (FIR) was registered against
Subsequent to the registration of the FIR, in 2020, an Enforcement Case Information Report was registered by the
Issue involved
Whether an offence of criminal conspiracy can be treated as a scheduled offence under PMLA where the purported criminal conspiracy involves committing an offence which is not listed as a scheduled offence under PMLA?
Submissions on behalf of the Appellant
- The Appellant acquired the
First Property in 2013 much prior to the commission of the alleged offences in 2017 byMadhukar Angur . Further the Appellant had money to acquire the Second Property and therefore, the purchase of theFirst Property and Second Property by the Appellant had no connection with the alleged proceeds of crime. - The Appellant was not named as accused in the Chargesheets filed for the alleged predicate offences committed by Madhukur Angur and others and hence the Appellant could not be named as an accused for the alleged offence of money laundering.
- The offence of criminal conspiracy alone, without another scheduled offence, cannot sustain a charge under PMLA i.e. the offence of criminal conspiracy cannot be treated as a standalone offence in the absence of any other scheduled offence being committed.
Submissions on behalf of the Respondents
- The Appellant acquired the
First Property in 2013 much prior to the commission of the alleged offences in 2017 byMadhukar Angur . Further the Appellant had money to acquire the Second Property and therefore, the purchase of theFirst Property and Second Property by the Appellant had no connection with the alleged proceeds of crime. - The definition of the offence of money laundering under PMLA suggests that a person who is not accused of the predicate offence can be held guilty of the offence of the money laundering.
- The offence of criminal conspiracy is listed in Part A of the Schedule and therefore, even if the allegation is of conspiracy to commit an offence which is not listed in the Schedule, the offence of criminal conspiracy becomes a scheduled offence.
Findings of the Supreme Court
The
The Court observed that the offence of criminal conspiracy listed in Part-A of the Schedule becomes a scheduled offence only if the conspiracy is to commit an offence which also listed in Parts A or B or C of the Schedule.
The Court also observed that the offence of money laundering may be committed after a scheduled offence is committed. A person may not have committed an offence resulting in generation of proceeds of crime, but he may have assisted a person accused of committing a scheduled offence by concealing the proceeds of crime or transferring the proceeds of crime.
Thus, it is not necessary for a person accused of money laundering to be specifically named as an accused in the underlying scheduled offence. Such an accused can still be prosecuted under PMLA as long as there is a scheduled offence and there are proceeds of crime in relation to the scheduled offence. In such a case, if the prosecution for the scheduled offence ultimately ends in acquittal or discharge or the prosecution for scheduled offences are quashed, then no one can be prosecuted for the offence of money laundering as there will be no proceeds of crime.
In the present case, the Court observed that there was no allegation of conspiracy to commit a scheduled offence and as a scheduled offence does not exist at all, the Appellant cannot be prosecuted for the offence of money laundering under PMLA. Hence the Court set aside the
Significance
This is the first view expressed by the Supreme Court on the issue of interpretation of the offence of criminal conspiracy which is listed as a scheduled offence under PMLA. This a critical view in the emerging money laundering jurisprudence as a money laundering offence typically involves various persons, hence prima facie attracting the ingredients of the offence of criminal conspiracy which is listed as a scheduled offence under PMLA. The Court has laid down the circumstances in which the offence of criminal conspiracy can form the basis of a money laundering prosecution under PMLA.
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