In a recent landmark decision, the Supreme Court has clarified a crucial aspect of cases involving offenses under the Prevention of Money Laundering Act (PMLA). The court asserted that an individual accused of a PMLA offense, particularly under Section 3, need not be explicitly accused in the scheduled offense related to the case. This clarification expands the scope of liability to those knowingly involved in concealing the proceeds of crime, even if unconnected to the scheduled offense.
The judgment, delivered by the bench of Justice Abhay S. Oka and Justice Pankaj Mithal, stemmed from an appeal against the Karnataka High Court’s decision. The petitioner, a former Vice-Chancellor of Alliance University, faced charges filed by the Enforcement Directorate (ED) under sections 44 and 45 of the PMLA. The ED accused her of conspiring with Madhukar Angur to execute a sham sale deed, concealing money siphoned from the university.
The High Court, drawing on the precedent set in Vijay Madanlal Choudhary v. Union of India & Ors., emphasized that the PMLA applies to “any person” rather than specifically to the accused in the principal offense. It affirmed that even those aiding or abetting the criminal activity could be subject to money laundering charges.
The Supreme Court, in its ruling, underscored the necessity of a scheduled offense and the presence of proceeds of crime related to that offense for Section 3 of the PMLA to apply. It illustrated this with an example involving extortion offenses, making it clear that an accused need not be implicated in the scheduled offense to face PMLA charges.
Crucially, the court stated that if the prosecution for the scheduled offense concludes with the acquittal or discharge of all accused, or if the proceedings are quashed, the scheduled offense ceases to exist. However, individuals involved in a PMLA case after the commission of the scheduled offense can still be prosecuted under the PMLA.
In essence, the Supreme Court’s decision establishes that accusations under the PMLA are not contingent upon being accused in the scheduled offense. This precedent sets a significant benchmark in the legal landscape, shaping the interpretation and application of the PMLA in cases where individuals knowingly aid in the concealment of proceeds of crime.
