In a groundbreaking verdict delivered today, the Supreme Court has definitively ruled that an offense of criminal conspiracy, as outlined in Section 120-B of the Indian Penal Code, will only be considered a scheduled offense under the Prevention of Money Laundering Act (PMLA) if the alleged conspiracy is aimed at committing an offense explicitly listed in the PMLA schedule.
“The offense under Section 120-B becomes a scheduled offense only when the alleged conspiracy pertains to committing an offense explicitly mentioned in the schedule. On this basis, we have quashed the proceedings,” declared the Court.
This verdict emerged from an appeal against a Karnataka High Court judgment that refused to quash proceedings in a case pending before a Special Judge in Bangalore. The case involved money laundering charges under the PMLA against an individual, where the predicate offenses were registered under various sections of the IPC.
In this particular instance, the Enforcement Directorate applied the PMLA, invoking Section 120B IPC, even though the offenses in question were not “scheduled offenses.” The Supreme Court, echoing a recent observation, emphasized that the ED cannot invoke Section 120B IPC if the criminal conspiracy is not linked to a scheduled offense.
The controversy stemmed from a complaint filed by the Enforcement Directorate on March 7, 2022, against the former Vice-Chancellor of Alliance University, accusing her under sections 44 and 45 of the PMLA. The charges revolved around offenses defined under section 3, read with sections 8(5) and 70, punishable under section 4 of the PMLA.
Allegations suggested that during her tenure, the appellant conspired to execute a sham sale deed involving university properties, facilitating the concealment of embezzled funds. The Special Judge proceeded with the case, leading the appellant to approach the Karnataka High Court to quash the proceedings.
The High Court, citing a precedent, emphasized that the phrase used by the Apex Court is “any person” and not “any accused,” asserting that one need not be accused in the principal offense to face proceedings under the Act.
Appealing this decision, the appellant approached the Supreme Court. During the hearing, arguments centered on whether the PMLA could be applied independently to someone not named in the FIR. Another point of contention was whether Section 120-B of the IPC could be used independently by PMLA authorities or must be read in conjunction with other scheduled offenses.
The Supreme Court’s decision clarifies the nuanced relationship between criminal conspiracy, scheduled offenses, and the application of the PMLA.
