Case Note & Summary
The dispute arose from a writ petition under Article 32 of the Constitution of India challenging a summoning order issued by the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, on a complaint under the Prevention of Money-laundering Act, 2002 (PMLA). The petitioner, who had initiated crowdfunding campaigns during the pandemic, faced an enquiry by the Enforcement Directorate under the Foreign Exchange Management Act, 1999, and a subsequent FIR for offences under the Indian Penal Code and other acts. The Enforcement Directorate registered a complaint in Ghaziabad, leading to provisional attachment of the petitioner's bank account in Navi Mumbai and a summoning order. The petitioner limited her challenge to the territorial jurisdiction of the Special Court in Ghaziabad, arguing that under Section 44(1) PMLA, the offence is triable only where committed, with overriding effect under Section 71. The respondent contended that the PMLA complaint should follow the scheduled offence complaint and that part of the cause of action arose in Ghaziabad due to victims there. The court considered two legal issues: whether the money-laundering trial should follow the scheduled offence trial, and whether the Ghaziabad court exercised extra-territorial jurisdiction. Analyzing PMLA provisions and the precedent in Vijay Madanlal Choudhary, the court emphasized that Section 44(1) mandates trial only in the area where the money-laundering offence is committed, independent of the scheduled offence trial location. It held that PMLA, as a special later law, prevails, and territorial jurisdiction is strictly based on the place of the money-laundering offence. Consequently, the court quashed the summoning order for lack of territorial jurisdiction, favoring the petitioner.
Headnote
A) Criminal Law - Money Laundering - Territorial Jurisdiction of Special Courts - Prevention of Money-laundering Act, 2002, Sections 44(1), 71 - Petitioner challenged summoning order by Special Court in Ghaziabad under PMLA, contending offence committed in Maharashtra, not Ghaziabad - Court held that under Section 44(1) PMLA, offence triable only by Special Court for area where offence committed, overriding CrPC, and trial of money-laundering should proceed independently in area of commission, not follow scheduled offence trial - Summoning order quashed for lack of territorial jurisdiction (Paras 12-13, 16-17).
B) Criminal Law - Money Laundering - Interpretation of Section 44(1) PMLA - Prevention of Money-laundering Act, 2002, Section 44(1) - Dispute over whether PMLA complaint must follow scheduled offence complaint to same court - Court analyzed PMLA provisions and precedent in Vijay Madanlal Choudhary, emphasizing Section 44(1) mandates trial only in area where money-laundering offence committed, not where scheduled offence triable - Held that PMLA as special later law prevails, and territorial jurisdiction is strictly based on place of money-laundering offence (Paras 12-13, 16-17).
Issue of Consideration
Whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa; and 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.
Final Decision
Court quashed the summoning order for lack of territorial jurisdiction, holding that under Section 44(1) PMLA, offence triable only where committed, and PMLA prevails as special later law.
Law Points
- Territorial jurisdiction of Special Courts under PMLA
- Interpretation of Section 44(1) PMLA
- Overriding effect of PMLA under Section 71
- Distinction between trial of money-laundering offence and scheduled offence
- Application of Vijay Madanlal Choudhary precedent
Case Details
WRIT PETITION (CRIMINAL) NO. 12 OF 2023
Ms. Vrinda Grover, Mr. Tushar Mehta
DIRECTORATE OF ENFORCEMENT THROUGH ITS ASSISTANT DIRECTOR
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Nature of Litigation
Writ petition under Article 32 of the Constitution of India challenging a summoning order issued by the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, on a complaint under the Prevention of Money-laundering Act, 2002.
Remedy Sought
Petitioner seeks quashing of the summoning order on grounds of lack of territorial jurisdiction.
Filing Reason
Petitioner initiated crowdfunding campaigns, faced Enforcement Directorate enquiry and FIR, leading to PMLA complaint and summoning order in Ghaziabad, which she claims lacks jurisdiction as offence committed in Maharashtra.
Previous Decisions
High Court of Delhi set aside Look out Circular against petitioner and restrained Enforcement Directorate from further steps under Section 8 PMLA after provisional attachment period ended.
Issues
Whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa
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.
Submissions/Arguments
Petitioner's counsel argued that under Section 44(1) PMLA, offence triable only by Special Court for area where offence committed, with overriding effect under Section 71, and relied on Vijay Madanlal Choudhary precedent.
Respondent's counsel contended that PMLA complaint should follow scheduled offence complaint and part of cause of action arose in Ghaziabad due to victims there.
Ratio Decidendi
Under Section 44(1) of the Prevention of Money-laundering Act, 2002, the offence of money-laundering is triable only by the Special Court constituted for the area in which the offence has been committed, with overriding effect under Section 71, and the trial should proceed independently in that area, not following the scheduled offence trial location.
Judgment Excerpts
Challenging a summoning order issued by the Court of the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, on a complaint lodged by the respondent under Section 45 read with Section 44 of the Prevention of Money-laundering Act, 2002.
It is the case of the petitioner that during the pandemic, she initiated crowdfunding campaign through an online crowdfunding platform named “ Ketto ” and ran three campaigns from April 2020 to September 2021.
Heavy reliance is placed by the learned Counsel for the petitioner on the opinion of this Court in paragraphs 353 to 358 of the decision in Vijay Madanlal Choudhary & Ors. vs. Union of India & Ors.
From the rival contentions, it appears that two questions arise for consideration before us. They are (i) whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa ; and (ii) 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.
Procedural History
Petitioner initiated crowdfunding campaigns; Enforcement Directorate initiated enquiry under FEMA; FIR registered in Ghaziabad; Enforcement Directorate registered PMLA complaint in Ghaziabad; petitioner's statement recorded under Section 50 PMLA; provisional attachment of bank account; High Court of Delhi set aside Look out Circular and restrained further steps under Section 8 PMLA; Special Judge in Ghaziabad issued summoning order; petitioner filed writ petition under Article 32 challenging summoning order on territorial jurisdiction grounds.
Acts & Sections
- Prevention of Money-laundering Act, 2002: Section 45, Section 44, Section 50, Section 8, Section 44(1), Section 71, Section 2(1)(p), Section 3, Section 2(1)(u), Section 43(1), Section 43(2)
- Constitution of India: Article 32
- Foreign Exchange Management Act, 1999: Section 37
- Income-tax Act, 1961: Section 133(6)
- Indian Penal Code, 1860: Section 403, Section 406, Section 418, Section 420
- Information Technology (Amendment) Act, 2008: Section 66D
- Black Money Act: Section 4
- Code of Criminal Procedure, 1973: Section 201
