Commission of a scheduled offence is essential for establishing money laundering under the Prevention of Money Laundering Act, 2002.

JUDGEMENT

1. In this petition filed under section 482, of the Code of Criminal Procedure, 1973, the petitioner seeks quashing of a complaint filed by the respondent against him alleging commission of offence of money laundering under section 3, of the Prevention of Money Laundering Act, 2002 ["PMLA"] as also the impugned prosecution launched against the petitioner pursuant to the order of cognizance dated 2nd December, 2019. The petitioner also prays for quashing of order dated 18th March, 2020 passed by the Designated Special Court (the Court of Principal Sessions Judge, Srinagar), whereby the charges have been framed against the petitioner.

2. The short point that is raised by the learned counsel for the petitioner is that the complaint is eventually instituted by the respondents for prosecution of the petitioner under section 3 and 4 of PMLA and what is alleged against the petitioner is misappropriation of funds of JKCA with criminal conspiracy with other accused persons and that the funds so misappropriated have been laundered by layering them into other bank accounts thereby generating proceeds of crime within the meaning of Section 2(1)(u) of PMLA.

3. It is submitted that with regard to the aforesaid allegation of misappropriation of JKCA funds, the CBI has already registered an FIR for commission of offences under sections 120-B, 406 and 409 RPC. Both the aforesaid offences i.e. S.406 and S.409 RPC, it is contended, are not the scheduled offences as defined under section 2(y), of PMLA. It is, thus, argued that commission of scheduled offence is a sine qua non for offence of money laundering and, therefore, in the absence of commission of schedules offence, there could be no proceeds of crime and no offence under PMLA. It is argued that the very basis of launching prosecution against the petitioner for commission of offence of money laundering defined under section 3, and punishable under section 4, of PMLA was that Section 120-B RPC is a scheduled offence and, therefore, in view of the law laid down by this Court in its judgment dated 15th October, 2019, passed in WP(C) No. 2780/2019, titled [1]Ahsan Ahmad Mirza v. Enforcement Directorate and others, registration of case under PMLA was permissible. However, the legal position enunciated by a Single Bench of this Court is now no longer a good law in view of the issue having been decided by the Hon'ble Supreme Court in [2]Pavana Dibbur v. Directorate of Enforcement, AIR 2024 SC 117. In the said case, the Supreme Court has held as under:-

"27. While we reject the first and second submissions canvassed by the learned senior counsel appearing for the appellant, the third submission must be upheld. Our conclusions are:

a. It is not necessary that a person, against whom the offence under section 3, of the PMLA is alleged, must have been shown as the accused in the scheduled offence;

b. Even if an accused shown in the complaint under the PMLA is not an accused in the scheduled offence, he will benefit from the acquittal of all the accused in the scheduled offence or discharge of all the accused in the scheduled offence. Similarly, he will get the benefit of the order of quashing the proceedings of the scheduled offence;

c. The first property cannot be said to have any connection with the proceeds of the crime as the acts constituting scheduled offence were committed after the property was acquired;

d. The issue of whether the appellant has used tainted money forming part of the proceeds of crime for acquiring the second property can be decided only at the time of trial; and

e. The offence punishable under section 120-B, of the IPC will become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule."

It is, thus, argued that the facts, as alleged in the complaint filed by the respondent, ex facie do not disclose commission of offence of money laundering, in that, the money alleged to have been laundered by the petition