Scheduled Offence under PMLA: SC Ruling Provides Clarity

In a judgment dated November 29, 2023, the Supreme Court held that the appellant could not be prosecuted for offences punishable under Section 3 of the Prevention of Money Laundering Act, 2002, since no scheduled offence other than that of criminal conspiracy had been included in the chargesheets.[1]

In the complaint dated October 13, 2021, which was filed before the Special Court for PMLA Cases at Bengaluru, it was alleged that the appellant colluded with another person in siphoning off the funds of Alliance University using the appellant’s bank account. It was also alleged that the two properties purchased by the appellant in 2013 and 2019 respectively, were acquired through proceeds of crime.

After the Karnataka High Court rejected her petition, the appellant approached the Supreme Court, challenging the said complaint.

The Court accepted the appellant’s contention that the first property did not have any connection with the proceeds of the crime since the acts constituting the scheduled offence were committed after the purchase of the property. Without going into the aspects of valuation and legality of sale deeds, the Court observed that the matter as to whether or not tainted money was used to acquire the second property could be decided only through evidence.

It was made clear that an offence of criminal conspiracy punishable under Section 120B of the Indian Penal Code, 1860, would “become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule”.

With this, the Court set aside the complaint filed against the appellant considering that, in the present case, there was no allegation of criminal conspiracy to commit any offence listed in the Schedule to the 2002 Act.

[1] Pavana Dibbur vs. The Directorate of Enforcement (Criminal Appeal No.2779 of 2023)