2021 (1) TMI 1145 - DSC - Money Laundering

Court upholds stand-alone nature of money laundering offenses under PMLA & denies modification of prayer request

M/s. Jagati Publications Ltd., Mr. V. Vijay Sai Reddy Versus The Directorate of Enforcement Through its Assistant Director, Hyderabad

M/s. Jagati Publications Ltd., Mr. V. Vijay Sai Reddy Versus The Directorate of Enforcement Through its Assistant Director, Hyderabad - TMI Issues Involved:1. Whether the hearing on charges in the scheduled offences should be taken up before the money laundering offences.2. Whether the petitioners are entitled to modify the prayer to take up the hearing on charges in the scheduled offences and the money laundering offences simultaneously.3. To what relief the petitioners are entitled.Issue-Wise Detailed Analysis:Issue 1: Hearing on Charges in Scheduled Offences Before Money Laundering OffencesThe petitioners filed multiple applications under Section 362 of Cr.P.C., requesting to take up the hearing on charges in the scheduled offences (C.C. Nos. 9/2012, 10/2012, 24/2013, 26/2013, and 27/2013) before the money laundering offences (S.C. Nos. 1/2016, 2/2016, 2/2017, 1/2018, and 2/2018). The petitioners contended that the trial of the predicate offence must precede the money laundering offence, arguing that without a conviction in the scheduled offences, the proceeds of crime cannot be established, thus nullifying the basis for the money laundering charges.The respondent/complainant (Enforcement Directorate) opposed, arguing that under the Prevention of Money Laundering Act (PMLA), 2002, the offence of money laundering is a stand-alone offence. The amendments to Section 44 of PMLA in 2013 and further clarifications in 2019 emphasize that the trial for money laundering is independent and not contingent upon the trial of the scheduled offence. The court noted that the PMLA allows for simultaneous trials but does not mandate that the scheduled offence must be tried first.The court concluded that the money laundering offence is a stand-alone offence and can be tried independently of the scheduled offences. The court referenced several judgments, including Binod Kumar Sinha vs. State of Jharkhand and Arun Kumar Mishra vs. Directorate of Enforcement, supporting the view that simultaneous trials are permissible but not mandatory.Issue 2: Modification of Prayer for Simultaneous HearingThe petitioners sought to modify their original prayer to request simultaneous hearings of both the scheduled offences and the money laundering offences. The court noted that such a modification would change the nature of the original petition, which is not permissible under law. The court emphasized that the offence of money laundering under PMLA is distinct and independent of the scheduled offences.The court highlighted that the amendments to PMLA through the Finance (No.2) Act, 2019, clarified that the jurisdiction of the Special Court for money laundering is not dependent on the outcome of the scheduled offence. The court cited the Lok Sabha debates and the Supreme Court's interpretation of statutory explanations to support this view.Issue 3: ReliefThe court dismissed all the applications filed by the petitioners, emphasizing that the money laundering offence under PMLA is a stand-alone offence and can be tried independently of the scheduled offences. The court reiterated that the procedural basis for the conduct of cases, as established in previous orders, remains valid, and no abrupt departure from the settled procedure is warranted.Conclusion:The court dismissed the petitions, affirming that the money laundering offences under PMLA are stand-alone offences that can be tried independently and are not contingent upon the trial or outcome of the scheduled offences. The request to modify the prayer for simultaneous hearings was also denied as it would alter the nature of the original petition. The court upheld the procedural integrity of previous orders, ensuring that both sets of offences can proceed as per the established legal framework.