Money Laundering - Once discharged from predicate offence by trial court, prosecution under PMLA cannot be continued
Bombay High Court Quashes Money Laundering Charges Against Krishna Shantaram Chamankar After Discharge from Predicate Offence
News Report:
Bombay High Court underscores the significance of Supreme Court precedent in PMLA cases, reinforcing the principle that prosecution cannot continue without a basis in scheduled offences.
In a significant ruling, the Bombay High Court has quashed the money laundering charges against Krishna Shantaram Chamankar and others, following their discharge from the predicate offence by the trial court. The judgment, delivered by Justices A. S. Gadkari and Rajesh S. Patil, emphasizes the dependence of proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) on the existence of a scheduled offence.
The petitioners, represented by advocate Mr. Shreeyash Lalit, sought to annul the charge-sheet filed in PMLA Special Case No. 2 of 2016, arguing that their discharge from the predicate offence had attained finality, as it was not contested by the prosecuting agency. The trial court had absolved them in ACB Special Case No. 10 of 2016, finding no material evidence to support the charges against them.
The core of the judgment hinges on the Supreme Court's decision in Vijay Madanlal Choudhary v. Union of India, which dictates that prosecution under PMLA cannot proceed if the predicate offence has been conclusively dismissed. The Bombay High Court applied this precedent, underscoring its binding nature and the necessity for careful consideration of specific factual contexts in legal proceedings.
Respondent No. 2, represented by advocate Ms. Manisha Jagtap, had contended that prosecution under PMLA could continue despite the discharge from the predicate offence, citing a view from the Jammu and Kashmir High Court. However, the Bombay High Court clarified that such a view holds no binding authority and reaffirmed the supremacy of the Supreme Court's ruling.
The court highlighted the importance of the decision in Pavana Dibbur v. Directorate of Enforcement, where the Supreme Court extended protection to individuals not directly accused in the scheduled offence but implicated in PMLA cases, provided all accused in the scheduled offence are acquitted or discharged.
The judgment reiterates that the offence of money laundering under Section 3 of the PMLA is contingent upon illegal property gain from a scheduled offence. Without a registered and ongoing scheduled offence, prosecution on a notional basis is impermissible.
This ruling marks a pivotal moment in the interpretation and application of the PMLA, safeguarding individuals from unwarranted prosecution when foundational charges fail to hold in court. It reinforces the necessity for actual criminal activity relating to a scheduled offence before invoking money laundering charges.
The decision is a testament to the judiciary's commitment to uphold legal precedents and protect citizens from undue legal harassment, ensuring that the legal process remains just and equitable.
The Bombay High Court's judgment sets a precedent in PMLA cases, reflecting the judiciary's adherence to Supreme Court rulings and reinforcing the principle that legal actions must be rooted in substantiated offences.
Krishna Shantaram Chamankar v. Union of India, (Bombay)(DB) : Law Finder Doc Id # 2779645
