Charges under PMLA not attracted if Investigation into Predicate Offence is Stalled: J&K and Ladakh HC [Read Order]
Charges under PMLA not attracted if investigation into predicate offence is stalled, rules J&K and Ladakh HC
PMLA – Prevention of Money Laundering Act – Jammu and Kashmir high court – TAXSCAN
PMLA – Prevention of Money Laundering Act – Jammu and Kashmir high court – TAXSCAN
The Jammu and Kashmir and Ladakh High Court observed that the charges under the Prevention of Money Laundering Act, 2002 ( PMLA ) is not attracted if the investigation into predicate offence is stalled.
It was alleged in the FIR that the accused persons have perpetrated bank loan fraud for an amount running into approximately Rs. 200 crores with the Consortium of Banks with lead bank as State Bank of India, the other banks being J&K Bank, Punjab National Bank and Karur Vyasya Bank.
On 31.03.2023, an ECIR was registered by the respondent and investigation in respect of offences under PMLA was set into motion. It is pertinent to mention here that the registration of ECIR regarding offences under PMLA is based upon the scheduled offences that are subject matter of aforesaid FIR registered with ACB Jammu.
The Senior Counsel has contended that once investigation in the predicate offence is stayed, the proceedings in the said case are eclipsed, therefore, proceedings in respect to offences under PMLA, which essentially owe their origin to the predicate offence, cannot be taken forward till the stay of investigation of the predicate offence is subsisting. Another contention that has been raised by the Senior Counsel is that action of the respondent leading to arrest of the petitioner is contrary to the guidelines laid down by the Supreme Court in the case of Pankaj Bansal v Union of India and others.
The DSGI has argued that the petitioner has raised similar contentions before the High Court of Punjab and Haryana, while challenging the proceedings initiated by the respondent pursuant to which, he has been arrested. It has been contended that the petitioner cannot invoke jurisdiction of more than one court for similar relief.
It was also contended that merely because FIR in the predicate offence has been stayed, does not preclude the respondent-ED to register case relating to offences under PMLA and to undertake investigation in respect of the said offences. It has been contended that unless an accused is discharged, acquitted or the FIR lodged against him in respect of predicate offence is quashed, the proceedings under PMLA would continue to operate.
A Single Bench of Justice Sanjay Dhar observed that “Once investigation in FIR relating to predicate scheduled offences is stayed, the proceedings in the said FIR would get eclipsed. The same will definitely have a bearing upon the offences of money laundering as the said offences owe their origin to the predicate offences. Therefore, the said offences would also stand eclipsed till such time the stay of investigation is in operation”.
“Offences under PMLA are stand-alone offences, yet their origin is the Scheduled offences. Once the Scheduled offence ceases to exist or is extinguished, an accused cannot be proceeded against in respect of offences under PMLA” the Court noted.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
