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of <h1>Charges under PMLA after acquittal in IPC offences not sustainable. Acquittal of scheduled offence bars money laundering charge.</h1> <h3>C. Mahadesh @ Avva Mahadesh, C. Manju Smt. C. Bhagya, Smt. C. Nalina, Shri C. Koppanaiah Versus Directorate Of Enforcement</h3> C. Mahadesh @ Avva Mahadesh, C. Manju Smt. C. Bhagya, Smt. C. Nalina, Shri C. Koppanaiah Versus Directorate Of Enforcement - TMI Issues Involved:1. Legality of framing charges under the Prevention of Money Laundering Act, 2002 (PMLA) against the petitioners after their acquittal in predicate offences under the Indian Penal Code (IPC).2. Interpretation and application of Section 3 of the PMLA in light of recent Supreme Court judgments.Issue-wise Detailed Analysis:1. Legality of Framing Charges under PMLA Post Acquittal in Predicate Offences:The petitioners challenged the order dated 20.11.2021 by the XLVII Additional City Civil and Sessions Judge and Special Judge for CBI cases, Bangalore, which framed charges against them under Sections 3, 4, and 8(5) of the PMLA. The petitioners argued that since they were acquitted of the predicate offences under the IPC, the proceedings under the PMLA should be quashed. The predicate offences included Sections 307, 449, 201, 427, 143, 144, 147, and 302 of the IPC, for which accused 1 and 2 were initially convicted but later acquitted by the High Court due to lack of evidence.2. Interpretation and Application of Section 3 of the PMLA:The respondent, represented by the Enforcement Directorate, argued that proceedings under the PMLA could continue independently of the outcome of the predicate offences, citing a previous judgment in DYANI ANTONY PAUL AND OTHERS v. UNION OF INDIA. However, the Supreme Court's recent judgment in VIJAY MADANLAL CHOUDHARY AND OTHERS v. UNION OF INDIA clarified that if the accused are acquitted or the proceedings against them are quashed by a competent court, the proceedings for scheduled offences under the PMLA linked to those predicate offences cannot continue.The High Court noted that the Supreme Court's judgment in VIJAY MADANLAL CHOUDHARY held that the offence under Section 3 of the PMLA is dependent on the illegal gain of property as a result of criminal activity relating to a scheduled offence. The Supreme Court concluded that if a person is acquitted of the scheduled offence, there can be no offence of money laundering against them or anyone claiming such property linked to the scheduled offence.Further, the High Court referenced the Supreme Court's order in PARVATHI KOLLUR AND ANOTHER V. STATE BY DIRECTORATE OF ENFORCEMENT, which reiterated the position that the proceedings under the PMLA should be quashed if the accused are acquitted of the predicate offences.Conclusion:The High Court concluded that the framing of charges against the petitioners under the PMLA was not sustainable in light of their acquittal in the predicate offences. The court emphasized that continuing the proceedings under the PMLA would result in an abuse of the process of law and miscarriage of justice. Consequently, the criminal petitions were allowed, and the impugned proceedings in Special C.C.No.303 of 2018 were quashed.
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