Case Note & Summary
The judgment pertains to a criminal petition filed under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) (read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023) by ten accused persons seeking quashing of a complaint filed by the Assistant Director, Directorate of Enforcement (ED), Bengaluru, under the Prevention of Money Laundering Act, 2002 (PMLA). The complaint alleged that the petitioners were involved in illegal sand mining and transportation, generating proceeds of crime which were then laundered. The petitioners argued that the predicate offence under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) was not a scheduled offence under the PMLA, and therefore the PMLA proceedings were not maintainable. The court examined the definitions under the PMLA, particularly the term 'scheduled offence' as defined in Section 2(1)(y) read with the Schedule, and noted that the MMDR Act is not included in the schedule. The court also considered the provisions of the MMDR Act, which provide for penalties for illegal mining under Section 21, and held that such offences do not automatically become scheduled offences under the PMLA. The court further observed that the alleged offences under the Indian Penal Code, 1860 (IPC) such as Sections 379 (theft) and 414 (assisting in concealment of stolen property) were not linked to any scheduled offence under the PMLA. The court concluded that without a valid predicate offence, the PMLA proceedings cannot be sustained, and quashed the ECIR and the complaint. The court also directed the release of the petitioners who were in judicial custody, subject to compliance with bail conditions.
Headnote
A) Criminal Procedure - Quashing of Complaint - Section 482 CrPC / Section 528 BNNS - Predicate Offence - The court examined whether a complaint under PMLA can be quashed when the predicate offence under MMDR Act is not established. Held that without a valid predicate offence, the PMLA proceedings cannot be sustained. (Paras 1-30) B) Prevention of Money Laundering Act, 2002 - Scheduled Offence - Section 2(1)(y) read with Section 3 and Section 4 - The court considered the definition of scheduled offence and proceeds of crime. Held that the alleged illegal mining and transportation of sand, even if proven, would not constitute a scheduled offence under PMLA as the MMDR Act is not included in the schedule. (Paras 15-25) C) Mines and Minerals (Development and Regulation) Act, 1957 - Illegal Mining - Section 21 - The court noted that the MMDR Act provides its own penal provisions and does not automatically make an offence under the IPC a scheduled offence under PMLA. Held that the predicate offence must be one that is specifically listed in the PMLA schedule. (Paras 20-28)
Issue of Consideration
Whether the complaint under the Prevention of Money Laundering Act, 2002 (PMLA) can be sustained when the predicate offence under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) has not been established, and whether the proceeds of crime can be linked to a scheduled offence.
Final Decision
The court allowed the petitions and quashed the complaint and ECIR filed by the Enforcement Directorate. The court directed the release of the petitioners who were in judicial custody, subject to compliance with bail conditions.
Law Points
- Predicate offence
- Scheduled offence
- Money laundering
- PMLA
- MMDR Act
- Quashing of complaint
- Section 482 CrPC
- Section 528 BNSS
- Section 3 PMLA
- Section 4 PMLA
- Section 2(1)(y) PMLA
- Section 2(1)(d) PMLA
- Section 2(1)(u) PMLA
- Section 21 MMDR Act
- Section 4 MMDR Act
- Section 379 IPC
- Section 414 IPC
