Money laundering procedure: offences remain cognizable, criminal prosecution can continue despite pending attachment appeals.
The commentary explains that the Prevention of Money Laundering Act, 2002 operates as a self-contained code for investigation, arrest, attachment, confiscation and prosecution, with the Code of Criminal Procedure applying only where not inconsistent. It states that offences under the Act remain cognizable after the amendment, and that prior sanction under the Code is not required for investigation or arrest. It further notes that pending appellate proceedings on attachment do not bar prosecution for money laundering, and that writ interference is unwarranted where the complaint and investigation disclose a prima facie case involving proceeds of crime, layering and integration.
Issues: (i) whether offences under the Prevention of Money Laundering Act, 2002 are non-cognizable after the amendment to the Act and whether investigation or arrest required prior sanction under the Code of Criminal Procedure, 1973; (ii) whether criminal proceedings for money laundering could be stayed or quashed on the ground that parallel appellate proceedings were pending before the Appellate Tribunal under the Act; (iii) whether the complaint disclosed a prima facie case of money laundering so as to justify interference in writ jurisdiction.
Issue (i): whether offences under the Prevention of Money Laundering Act, 2002 are non-cognizable after the amendment to the Act and whether investigation or arrest required prior sanction under the Code of Criminal Procedure, 1973
Analysis: The Act was treated as a self-contained code governing investigation, search, seizure, arrest, attachment, confiscation and prosecution. The provisions enabling investigation, search and arrest were read with the overriding clause and with the application of the Code of Criminal Procedure only to the extent it is not inconsistent with the Act. The amendment to the cognizability clause was held not to convert the offence into a non-cognizable offence. The scheme of the Act, including the requirement that cognizance be taken on a complaint by the authorised authority, did not require prior court approval for investigation or arrest.
Conclusion: The offences under the Act were held to be cognizable, and the contention that the proceedings were vitiated for want of prior sanction under the Code of Criminal Procedure, 1973 was rejected.
Issue (ii): whether criminal proceedings for money laundering could be stayed or quashed on the ground that parallel appellate proceedings were pending before the Appellate Tribunal under the Act
Analysis: The appellate proceedings concerned attachment and related adjudicatory consequences, whereas the complaint before the Special Court concerned the distinct offence of money laundering. The Court held that pendency of an appeal before the Tribunal did not bar continuation of prosecution before the Special Court, and the cited income-tax decisions were held inapplicable to the statutory scheme of the Act.
Conclusion: The prayer to stay or halt the prosecution on account of pending appellate proceedings was rejected.
Issue (iii): whether the complaint disclosed a prima facie case of money laundering so as to justify interference in writ jurisdiction
Analysis: The investigation material was found to indicate that the petitioners received and routed substantial amounts linked to the scheduled offence, operated current accounts contrary to the financing terms, and facilitated placement, layering and integration of proceeds of crime. The Court held that the complaint and investigation disclosed involvement in the proceeds of crime and that the case did not fall within the rare category warranting quashing.
Conclusion: The complaint was held not liable to be quashed, and the writ petitions were dismissed.
Final Conclusion: The Court upheld the continuation of prosecution under the money-laundering statute, found the challenge to the maintainability of the proceedings meritless, and declined to interfere in writ jurisdiction.
Ratio Decidendi: Offences under the Prevention of Money Laundering Act, 2002 remain cognizable and prosecutable in accordance with the Act's special procedure, and pendency of appellate proceedings concerning attachment does not bar a prima facie sustainable prosecution for laundering of proceeds of crime.