Court clarifies jurisdiction in money-laundering cases stressing trial sequence.

The Court dismissed the writ petition challenging the summoning order issued by the Special Judge in Ghaziabad, emphasizing that the Special Court in the area where the offence is committed has jurisdiction over both the money-laundering offence and any scheduled offence connected to it. It clarified that the trial of the scheduled offence should follow the trial of the money-laundering offence. The Court highlighted that the determination of territorial jurisdiction hinges on the evidence relating to where the money-laundering activities occurred, allowing the petitioner to address this issue before the Trial Court.

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Issues Involved:
1. Territorial jurisdiction of the Special Court in Ghaziabad.
2. Whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa.

Detailed Analysis:

Territorial Jurisdiction of the Special Court in Ghaziabad:

The petitioner challenged the summoning order issued by the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, on the grounds of lack of territorial jurisdiction. The petitioner argued that under Section 44(1) of the Prevention of Money-laundering Act, 2002 (PMLA), the offence should be triable only by the Special Court constituted for the area in which the offence has been committed. The petitioner contended that no part of the alleged offence of money-laundering was committed within the jurisdiction of the Special Court, Ghaziabad, as the bank account where the alleged proceeds of crime were deposited is located in Navi Mumbai, Maharashtra.

The Court examined Section 44 of the PMLA, which deals with the territorial jurisdiction of Special Courts. It noted that Section 44(1)(a) provides that an offence punishable under Section 4 of the PMLA and any scheduled offence connected to it shall be triable by the Special Court constituted for the area in which the offence has been committed. The Court emphasized that it is the Special Court constituted under Section 43(1) of the PMLA that would have jurisdiction to try even the scheduled offence.

The Court further analyzed the definition of "money-laundering" under Section 3 of the PMLA, which includes various processes or activities connected with the proceeds of crime, such as concealment, possession, acquisition, use, projecting as untainted property, or claiming as untainted property. It concluded that the area where any of these activities occur would be the area in which the offence of money-laundering is committed.

The Court observed that the petitioner's bank account in Navi Mumbai, Maharashtra, is the ultimate destination where the funds reached, making it a place where one of the processes (possession) occurred. However, the acquisition of the proceeds of crime took place in the virtual mode with people from different parts of the country/world transferring money online. Therefore, the question of territorial jurisdiction requires an inquiry into the facts as to where the alleged proceeds of crime were concealed, possessed, acquired, or used, which depends on evidence that unfolds before the Trial Court.

The Court concluded that the issue of territorial jurisdiction cannot be decided in a writ petition due to the serious factual dispute about the place/places of commission of the offence. The petitioner was given liberty to raise the issue of territorial jurisdiction before the Special Court.

Trial of the Offence of Money-laundering and the Scheduled/Predicate Offence:

The Court addressed whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa. It noted that Section 44(1)(c) of the PMLA requires that if the Court which has taken cognizance of the scheduled offence is different from the Special Court which has taken cognizance of the offence of money-laundering, the Court trying the scheduled offence should commit it to the Special Court trying the offence of money-laundering.

The Court emphasized that the trial of the scheduled offence should take place in the Special Court which has taken cognizance of the offence of money-laundering. This means the trial of the scheduled offence, in terms of territorial jurisdiction, should follow the trial of the offence of money-laundering and not vice versa.

The Court also referred to the non-obstante clause in Section 44(1) of the PMLA, indicating that the provisions of the Code of Criminal Procedure (Cr.P.C) apply to proceedings before a Special Court, except to the extent they are specifically excluded. It concluded that the provisions of the Cr.P.C are applicable to all proceedings under the PMLA, including proceedings before the Special Court.

In conclusion, the Court dismissed the writ petition, giving liberty to the petitioner to raise the issue of territorial jurisdiction before the Trial Court, as the determination of territorial jurisdiction depends on evidence regarding the places where the processes or activities related to money-laundering were carried out.

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