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The court has found that if a person has been acquitted, there is no scheduled offence under the PMLA which means there are no proceeds of crime either
The Telangana High Court in its judgment dated April 19, 2023, clarified that prosecution under the Prevention of Money Laundering Act (PMLA) cannot continue, once the accused is discharged of the criminal cases against him.
It is immaterial whether such discharge is on the basis of merits or compromise – the bench under Para 21 of the judgment further interpreted “proceeds of crime” to observe later under Para 30, that acquittal means there is no scheduled offence against the appellant and in the absence any scheduled offence, the question of proceeds of crime cannot arise.
A division bench of Chief Justice Ujjal Bhuyan and Justice N. Tukaramji, while allowing the appeal, observed, “We are, therefore, of the view that learned Single Judge had erred in refusing to grant relief to the appellants by taking the view that acquittal of the appellants was on compromise and not on merit and relegating the appellants to the forum of the designated court. When there is no crime because of closure of the criminal case involving the predicate offence, continuation of attachment of the properties of appellants would not be justified.”
Reliance in this regard was placed on the Supreme Court decision in Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929 and Telangana High Court judgment in Jagati Publications Ltd. v. Enforcement Directorate, MANU/TL/1492/2022.
The appellants approached the High Court against the order passed by a Single Judge which observed that if exoneration in criminal cases is on technical grounds and not on merit, the prosecution may continue.
As per the appellants, while CC No. 319 of 2010 was pending before the Additional Judicial Magistrate, the case was referred to Lok Adalat and on a compromise between the parties, an order dated 20.03.2018 was passed discharging appellant no. 1, besides, closure of CC No. 319 of 2010.
On the basis of the aforesaid order, the appellants informed respondent No. 2 about the closure of criminal cases and requested for the release of the properties from the attachment, however, no action was taken.
Case Title: Manturi Shashi Kumar and Anr. v. Director, ED | Writ Appeal No. 107 of 2023
Statute: Prevention of money laundering act
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