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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether prosecution under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 could be sustained when the alleged predicate transactions and the alleged offences occurred before the 2009 amendment brought the relevant corruption offences within the schedule, and whether such application would amount to retrospective criminal liability.
Analysis: The alleged bank transactions were said to have occurred in 2008, before the amendment of 1.6.2009. The prosecution under the Prevention of Money Laundering Act was founded on the same factual foundation as the earlier corruption case, and the alleged money-laundering conduct had to be traced to the time of the actual transaction. The scheduled corruption offences were included in the Act only by the 2009 amendment, and penal liability could not be fastened for conduct occurring before that inclusion. Article 20(1) of the Constitution of India also bars retrospective prosecution for an offence not punishable at the time of its commission.
Conclusion: The prosecution under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 was not maintainable for the alleged pre-amendment conduct, and the petitioners were entitled to be discharged.
Final Conclusion: The revisional court set aside the order refusing discharge and terminated the money-laundering proceedings against the petitioners.
Ratio Decidendi: Penal provisions creating criminal liability cannot be applied retrospectively to conduct occurring before the relevant offence is brought within the statutory schedule, and Article 20(1) prohibits such retrospective prosecution.
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