Merely Being Not Named In Predicate Offence Doesn't Mean One Can't Be Prosecuted Under PMLA: SC

(MENAFN- Kashmir Observer) New Delhi- Merely because a person has not been named in a predicate offence does not mean that he cannot be prosecuted under the Prevention of Money Laundering Act (PMLA), the Supreme Court said on Friday while hearing a plea in a money-laundering case arising out of the alleged coal-block allocation scam.

The observation came from a vacation bench of Justices Bela M Trivedi and Pankaj Mithal, which was hearing a petition filed by one Sudhir Gupta seeking quashing of an Enforcement Case Information Report (ECIR) against him and the subsequent proceedings arising out of it.


The bench told advocate Vijay Aggarwal, who appeared in the court on behalf of Gupta, that the Enforcement Directorate (ED) ECIR could neither be quashed nor stayed.

Aggarwal told the bench that the petitioner was arrayed as a witness in a related case lodged by the Central Bureau of Investigation (CBI), but the ED has made him an accused in the money-laundering case.

“Merely because you are not named in the predicate offence does not mean that you cannot be prosecuted under the PMLA,” the bench observed.

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“My case is, I am a witness in the predicate offence,” Aggarwal said.

“We are not satisfied,” the bench said, adding,“We have examined the merits also. Neither the ECIR can be quashed nor can it be stayed.”

The petitioner's counsel told the bench that the matter is listed for arguments on charges before a special court in June.

He sought permission from the bench to withdraw the plea with the liberty to approach the top court later.

“Without expressing any opinion on the merits of the case, permission to withdraw is granted,” the bench said, adding that the petitioner shall be at liberty as may be permissible under the law.

Besides seeking quashing of the ECIR, the petitioner had also sought setting aside of the prosecution complaint filed by the ED.

The plea had said the petitioner's evidence has been recorded as a witness for the prosecution in the alleged predicate offence registered by the CBI.

“On the other hand, the respondent (ED) has sought to array the petitioner as an accused in its case of money laundering, which case is dependent upon and based upon the alleged predicate offence/scheduled offence and the existence of which predicate offence is an essential ingredient for the offence of money laundering to be made out,” the petitioner had said.

He had claimed that the ED has sought to array him as an accused merely for having signed the application form of a company seeking allocation of coal blocks, for which he has given evidence on behalf of the prosecution in the alleged predicate offence.

“Further, the actions of the respondent have led to a situation where the two state agencies have taken contrary stands qua the petitioner, one (CBI) making him a witness to the particular set of events while the other (ED) arraying him as an accused for the very same set of events (act of signing the application form),” the plea had said.

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