Properties can't be attached under PMLA after acquittal in scheduled offence: Delhi HC
- In Reports
- 02:31 PM, May 02, 2024
- Myind Staff
The Delhi High Court recently ruled that if a person is acquitted or discharged of the 'scheduled offence' in a money laundering case, the properties attached in the case cannot be considered "proceeds of crime" under the Prevention of Money Laundering Act (PMLA).
The Delhi High Court made these observations while dismissing an appeal filed by the Enforcement Directorate (ED). The appeal challenged a trial court's decision to discharge the accused individuals from charges under the PMLA.
This decision followed their acquittal of scheduled or predicate offences under the Indian Penal Code. Additionally, the trial court released all immovable properties and ordered the unfreezing of all bank accounts belonging to the accused.
In an order dated April 30, a single judge bench of Justice Vikas Mahajan referred to various decisions of the Supreme Court on the matter. The judge stated, "The position emerging from the aforementioned decisions is that the scheduled offence and the proceeds of crime generated therefrom form the very foundation for the offence of money laundering."
Justice Mahajan emphasised that once a person is acquitted of the scheduled offence, the charge of Money Laundering cannot stand as there are no proceeds of crime. Consequently, properties attached under the PMLA cannot be considered proceeds of crime or derived from criminal activity.
Justice Mahajan clarified that the effects of acquittal persist until reversed, and filing an appeal doesn't subject the accused to further proceedings or PMLA attachment. Scheduled offences are specified in the PMLA schedules. The trial court rightly discharged the accused in October 2023, and the subsequent order releasing attached properties was also deemed appropriate.
Justice Mahajan emphasized that Section 8(6) of the Prevention of Money Laundering Act clearly stipulates that upon the discharge or acquittal of an accused under the Act, the trial court is obliged to release the properties attached under the PMLA.
He dismissed the Enforcement Directorate's contention that an appeal constituted a continuation of the trial court proceedings. Additionally, he clarified that in criminal proceedings, a trial concludes either with an acquittal or a conviction and sentencing against the accused.
Image source: The Economic Times
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