Panchkula industrial plots allotment case| SC order to have bearing on ex-CM Bhupinder Hooda’s trial by PMLA court
Apex court held that money laundering is dependent on illegal gain of property as a result of criminal activity, thus there can be no prosecution against a person if he is acquitted of the scheduled offence or criminal case
The Supreme Court (SC) judgment of July 27, interpreting the provisions of Prevention of Money Laundering Act (PMLA), will have a bearing on the trial of Panchkula industrial plots allotment case, involving former Haryana chief minister Bhupinder Singh Hooda, allottees and officials. The trial is being conducted by special judge, PMLA court, Panchkula. The apex court, which on August 19, 2021, had granted a stay on the PMLA court’s trial against Hooda and 21 others in the plot allotment case, on Wednesday ordered the interim relief to continue for four weeks to enable private parties to take recourse to appropriate remedies before the forums concerned.
ED filed chargesheet even as CBI is yet to do so
The Enforcement Directorate (ED) had in February 2021 filed a prosecution complaint (a charge-sheet) under PMLA against Hooda and others in a trial court despite the fact that the CBI, which was probing the matter, was yet to submit a charge-sheet for the predicate offences registered under the Indian Penal Code and Prevention of Corruption (PC) Act.
What the SC order says
The SC’s Wednesday order becomes significant since the apex court held that the offence of money laundering under Section 3 of the PMLA is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence and there can be no offence of money laundering against a person if he is discharged or acquitted of the scheduled offence or the criminal case against him is quashed by the court. “It is concerning the process or activity connected with such property, which constitutes the offence of money laundering. The Authorities under PMLA cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police or pending inquiry/trial including by way of criminal complaint before the competent forum,” the SC bench headed by Justice AM Khanwilkar said.
‘PMLA offence is dependent on scheduled offence’
Senior lawyer Vikram Chaudhari, who is the counsel of Lt Col OP Dahiya (retd), one of the petitioners and accused in Panchkula plot allotment case, said that the apex court has categorically held that offence under the PMLA is dependent on the scheduled or predicate offence and in case the prosecution of the scheduled offence fails for any reason, the PMLA proceedings will not stand.
The senior counsel said though the SC has upheld the validity of various PMLA provisions, it also has emphasised the in-built safeguards as well as checks and balances which have to be scrupulously adhered to by the ED. “In the wake of this verdict, the PMLA case in the absence of prosecution in the scheduled offence may not be justified at all. We will take appropriate legal recourse,” said Chaudhari.
Chaudhari said they had also challenged a 2019 amendment in Section 44 of the PMLA wherein an explanation was inserted. The explanation inserted in 2019 for removal of doubts about Section 44 of PMLA said that the jurisdiction of special court while dealing with offence under PMLA, during investigation, inquiry or trial under this Act, shall not be dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial.
Arguing before the SC, Chaudhari said an umbilical cord connection exists between the scheduled offence and the money-laundering offence. The explanation of Section 44 is to disconnect the link between the two, since the findings recorded in the trial of the scheduled offence would not have a bearing on the case under the PMLA. He said that before the ED starts investigation, there must be some commencement under the scheduled or predicate offence. The trials for the specifically connected proceeds of crime and scheduled or predicate offence must be tried together.