2024 (1) TMI 1249 - HC - Money Laundering

Money Laundering - Criminal conspiracy - petitioner was convicted for the predicate offences under Sections 120B, 409 r/w 109 of the IPC - whether the respondent can maintain the complaint if the predicate offence is the offence of criminal conspiracy? - HELD THAT - The Hon'ble Supreme Court answered this question in Pavana Dibbur's case 2023 (12) TMI 49 - SUPREME COURT holding that in the charge sheets filed in the alleged scheduled offences, there is no allegation of the commission of criminal conspiracy to commit any of the offences included in the Schedule. As pointed out earlier, except for Section 120-B of the IPC, no other offence in the schedule has been applied. Therefore, in this case, the scheduled offence does not exist at all. Hence, the appellant cannot be prosecuted for the offences punishable under Section 3 of the PMLA. The petitioner was convicted for the offence of 409 r/w 109 and 120B of the IPC. Therefore, the predicate offence alleged and proved is conspiracy to commit offence under Section 409 of the IPC which is not a scheduled offence. Therefore, even assuming that there are proceeds of crime, it cannot be said to be as a result of commission of a scheduled offence, which is a prerequisite to maintain a complaint under Section 3 of the PMLA. Since the respondent has no jurisdiction to invoke the provisions of PMLA, as there are no proceeds of crime relating to any scheduled offence, the proceedings impugned in the Writ Petition is also liable to be set aside. Consequentially, though the Provisional Attachment Order has not been challenged, it is held that the said attachment order is also without jurisdiction. The Criminal Original Petition and the Writ Petition are allowed.

Summary

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.