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Issues: (i) Whether prosecution and attachment proceedings under the Prevention of Money Laundering Act, 2002 could be treated as ex post facto and hit by Article 20(1) of the Constitution of India when the predicate offences were inserted in the Schedule only with effect from 01.06.2009. (ii) Whether the offence of money laundering under section 3 of the Prevention of Money Laundering Act, 2002 is independent of the predicate offence and can be sustained even where the predicate proceedings are discharged, quashed or result in acquittal. (iii) Whether confiscation under section 8(5) of the Prevention of Money Laundering Act, 2002 is punitive so as to attract Article 20(1) of the Constitution of India.
Issue (i): Whether prosecution and attachment proceedings under the Prevention of Money Laundering Act, 2002 could be treated as ex post facto and hit by Article 20(1) of the Constitution of India when the predicate offences were inserted in the Schedule only with effect from 01.06.2009.
Analysis: The petitions were founded on the argument that the alleged acquisition of assets and the predicate offences occurred before the amendment of the Schedule, and therefore the proceedings were said to rest on retrospective penalisation. The statutory scheme was examined by reference to sections 2(1)(u), 3, 5 and 8 of the Prevention of Money Laundering Act, 2002 and the amended Schedule. The Court held that the relevant prosecution and attachment action had been initiated after the amendment had come into force, and that the offence under section 3 was not the same as the predicate offences added to the Schedule. The reference to scheduled offences operated only as a source indicator for proceeds of crime and did not mean that the petitioners were being punished for those offences with retrospective effect.
Conclusion: The proceedings were not held to be ex post facto and Article 20(1) was not attracted.
Issue (ii): Whether the offence of money laundering under section 3 of the Prevention of Money Laundering Act, 2002 is independent of the predicate offence and can be sustained even where the predicate proceedings are discharged, quashed or result in acquittal.
Analysis: The Court treated money laundering as a stand-alone offence. It held that the existence of a scheduled offence is relevant as the source of proceeds of crime, but prosecution under section 3 is not contingent on conviction in the predicate case. The offence lies in being directly or indirectly involved in any process or activity connected with proceeds of crime, including concealment, possession, acquisition, use or projecting the property as untainted. On that basis, the discharge, acquittal or quashment of the predicate case did not destroy the independent foundation of proceedings under the Prevention of Money Laundering Act, 2002.
Conclusion: The offence under section 3 was held to be independent and capable of prosecution notwithstanding the status of the predicate proceedings.
Issue (iii): Whether confiscation under section 8(5) of the Prevention of Money Laundering Act, 2002 is punitive so as to attract Article 20(1) of the Constitution of India.
Analysis: The Court distinguished confiscation from criminal punishment. It held that the PMLA scheme provides parallel streams: criminal prosecution for money laundering on the one hand, and attachment and confiscation of proceeds of crime on the other. Confiscation was treated as a civil or confiscatory consequence aimed at depriving a person of ill-gotten wealth, not as a penal sentence. The Court therefore rejected the argument that application of section 8(5) to property acquired before the amendment amounted to retrospective punishment.
Conclusion: Confiscation under section 8(5) was held not to be punishment and Article 20(1) was not violated.
Final Conclusion: The petitions failed on all substantive challenges, and the money laundering prosecutions together with the attachment and confiscation proceedings were upheld as legally maintainable.
Ratio Decidendi: Money laundering under the Prevention of Money Laundering Act, 2002 is an independent and continuing offence directed at proceeds of crime, and attachment or confiscation of such proceeds is not penal punishment for Article 20(1) purposes.
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