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2023 (2) TMI 236 - SC - Money LaunderingMoney Laundering - scheduled/predicate offence - initiation of crowdfunding campaign through an online crowdfunding platform named Ketto and ran three campaigns from April 2020 to September 2021 - whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa? - HELD THAT - The trial of the scheduled offence should take place in the Special Court which has taken cognizance of the offence of money-laundering. In other words, the trial of the scheduled offence, insofar as the question of territorial jurisdiction is concerned, should follow the trial of the offence of money-laundering and not vice versa - Since the Act contemplates the trial of the scheduled offence and the trial of the offence of money-laundering to take place only before the Special Court constituted under Section 43(1), a doubt is prone to arise as to whether all the offences are to be tried together. This doubt is sought to be removed by Explanation (i) to Section 44(1). Explanation (i) clarifies that the trial of both sets of offences by the same Court shall not be construed as joint trial. It may be seen from the principles culled out from Sections 177 to 184 of the Cr.P.C that almost all contingencies that are likely to arise have been carefully thought out and laid down in these provisions. The only contingency that could not have been provided in the above provisions of the Cr.P.C, is perhaps where the offence of money-laundering is committed. This is why Section 44(1) begins with a non-obstante clause. The whole picture is thus complete with a combined reading of Section 44 of the PMLA and the provisions of Sections 177 to 184 of the Cr.P.C. - Once this combined scheme is understood, it will be clear that in view of the specific mandate of clauses (a) and (c) of subsection (1) of Section 44, it is the Special Court constituted under the PMLA that would have jurisdiction to try even the scheduled offence. Even if the scheduled offence is taken cognizance of by any other Court, that Court shall commit the same, on an application by the concerned authority, to the Special Court which has taken cognizance of the offence of money-laundering. Whether the Court of the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, can be said to have exercised extra-territorial jurisdiction, even though the offence alleged, was not committed within the jurisdiction of the said Court? - HELD THAT - A person may (i) acquire proceeds of crime in one place, (ii) keep the same in his possession in another place, (iii) conceal the same in a third place, and (iv) use the same in a fourth place. The area in which each one of these places is located, will be the area in which the offence of money laundering has been committed. To put it differently, the area in which the place of acquisition of the proceeds of crime is located or the place of keeping it in possession is located or the place in which it is concealed is located or the place in which it is used is located, will be the area in which the offence has been committed. Having seen the legal landscape on the question of jurisdiction, let us now come back to the facts of the case on hand. It is the case of the petitioner that what was attached by the Enforcement Directorate under Section 5 of the Act as proceeds of crime, was the bank account of the petitioner in Navi Mumbai, Maharashtra and that therefore the offence of moneylaundering, even according to the respondent has been committed in Maharashtra. The question of territorial jurisdiction in this case requires an enquiry into a question of fact as to the place where the alleged proceeds of crime were (i) concealed; or (ii) possessed; or (iii) acquired; or (iv) used. This question of fact will actually depend upon the evidence that unfolds before the Trial Court. The issue of territorial jurisdiction cannot be decided in a writ petition, especially when there is a serious factual dispute about the place/places of commission of the offence. Hence, this question should be raised by the petitioner before the Special Court, since an answer to the same would depend upon evidence as to the places where any one or more of the processes or activities mentioned in Section 3 were carried out. Therefore, giving liberty to the petitioner to raise the issue of territorial jurisdiction before the Trial Court, this writ petition is dismissed.
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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