ED lacks jurisdiction to invoke PMLA when predicate offence is criminal conspiracy under Section 120B IPC

The Madras HC quashed PMLA proceedings against a petitioner convicted under Sections 120B, 409 r/w 109 IPC. Following SC precedent in Pavana Dibbur, the court held that criminal conspiracy (Section 120B) alone cannot constitute a scheduled offence under PMLA. Since the predicate offence was conspiracy to commit breach of trust (Section 409), which is not a scheduled offence, no proceeds of crime could arise from a scheduled offence. The court ruled that ED lacked jurisdiction to invoke PMLA provisions and set aside the proceedings and provisional attachment order.

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Issues involved:
The judgment involves issues related to the maintainability of a complaint under the Prevention of Money Laundering Act (PMLA) based on the conviction for specific offences, the attachment of properties, and the jurisdiction of the respondent to withhold compensation.

Summary of Judgment:

Issue 1: Conviction for predicate offences and maintainability of PMLA complaint
The petitioner was convicted for offences under Sections 409 r/w 109 and 120B of the IPC. The complaint by the respondent alleged conspiracy to commit an offence under Section 409 of the IPC, which is not a scheduled offence under the PMLA. The Hon'ble Supreme Court's ruling in a similar case clarified that an offence under Section 120-B of the IPC becomes a scheduled offence only if the conspiracy is to commit an offence already included in the PMLA schedule. As the predicate offence in this case is not a scheduled offence, the complaint under the PMLA is not maintainable. The complaint was quashed based on this ground.

Issue 2: Jurisdiction to withhold compensation
The respondent issued a communication to withhold compensation deposited by Chennai Metro Rail Limited (CMRL) in the petitioner's bank account. However, as the respondent lacked jurisdiction under the PMLA due to the absence of proceeds of crime related to a scheduled offence, the communication to withhold compensation was deemed unsustainable. The provisional attachment order issued by the respondent was also found to be without jurisdiction. Consequently, the proceedings impugned in the writ petition were set aside.

Conclusion:
The Criminal Original Petition and the Writ Petition were allowed, and the connected Miscellaneous Petitions were closed based on the lack of jurisdiction of the respondent under the PMLA and the absence of a scheduled offence in the predicate offence for which the petitioner was convicted.

This summary encapsulates the key issues addressed in the judgment, focusing on the maintainability of the PMLA complaint and the jurisdictional aspects concerning the withholding of compensation by the respondent.

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