The offence of money laundering under the PMLA is a continuing offence, applicable irrespective of when the predicate offence occurred, and requires thorough judicial scrutiny.

JUDGMENT :

VIKRAM NATH, J.

1. Leave granted.

2. The present appeal has been filed against an order dated 14.03.2023 passed by the High Court of Gujarat dismissing the appellant’s criminal revision application and refusing to the quash the order of the Trial Court rejecting the appellant’s discharge application in a case for offences under the Prevention of Money Laundering Act, 2002.¹ [PMLA]

3. The appellant had approached the High Court through a Criminal Revision Application No. 66 of 2018, challenging the order dated 08.01.2018 passed by the Special Judge (PMLA), Ahmedabad, in PMLA Case No. 02 of 2016. The Special Judge had rejected the discharge application filed by the appellant under Section 227 of the Code of Criminal Procedure, 1973² [CrPC] seeking discharge from the case registered under the PMLA. The appellant had been implicated based on allegations of money laundering arising out of scheduled offences under the PMLA.

4. The case against the appellant arose from an alleged economic offence wherein the respondent no. 1 – Enforcement Directorate³ [ED] initiated proceedings against him under the PMLA. The primary allegation was that the appellant was involved in financial transactions related to proceeds of crime, generated through fraudulent activities causing significant financial losses to the State of Gujarat. The prosecution alleged that the appellant had actively facilitated the process of money laundering by utilizing banking channels and other financial instruments to conceal the illicit origins of funds.

5. Appellant was arrested on 31.07.2016 in connection with inquiry in furtherance of ECIR/01/AZO/2012 registered by respondent no. 1. This Enforcement Case Information Report⁴ [ECIR] dated 12.03.2012 came to be registered in furtherance of FIR No. 03/2010 dated 31.03.2010 and FIR No. 09/2010 dated 25.09.2010. Upon completion of the investigation, respondent no. 1 filed a complaint before the Special Judge on 27.09.2016 for offences under Section 3 and 4 of the PMLA. In the present case there were two scheduled offences as per the two FIRs:

(i) I-CR No. 03/2010 registered with Rajkot Zone, CID Crime for offences under Sections 7, 11, 13(1)(B), 13(2) of the Prevention of Corruption Act, 1988.⁵ [PC Act]

(ii) I-CR No. 09/2010 registered with Rajkot Zone, CID Crime for offences under Sections 217, 409, 465, 467, 468, 471, 476, 120-B, IPC.

6. In both these cases, the charge sheet has been filed before the concerned Court. Appellant is on anticipatory bail in the first scheduled offence, in furtherance of High Court’s order dated 03.02.2012. In the second scheduled offence, the appellant has been on regular bail in furtherance of this Court’s order dated 13.12.2011.

7. Appellant approached the Special Judge under Section 227 of CrPC seeking discharge in the PMLA case on the grounds that he has been falsely implicated in the case and also no offence under the PMLA is made out. Further, the appellant was arrested on 06.01.2010 and thereafter suspended on 08.01.2010, during which period he had attained the age of superannuation and therefore now there is no question of him being in service. He further contended that the offences are alleged to have been committed when the PMLA was not in force and thus these provisions cannot be invoked retrospectively. It was his case the transaction alleged against him were of the company in which his wife is a partner and thus these cannot be attributed to him. Further, the transactions made to the accounts held by him the bank in United States of America cannot be deemed to be in furtherance of any offence, as he had opened those accounts during his studies there and they were used for transactions in that period.

8. The Special Judge (PMLA) in its judgment dated 08.01.2018 observed that from the material on record and on the basis of the investigation by respondent no. 1, it prima facie appears that the appellant is involved in Hawala, that is, illegal transfer of money to foreign countries,