Prosecution under the Prevention of Money Laundering Act cannot proceed for acts committed before the Act's enforcement, upholding Article 20's protection against ex post facto laws.

ORAL ORDER

The petitioners are before this Court, seeking the following prayers:

"a. Issue a writ of certiorari and quash the entire proceedings in Special C.C No.711/2023, on the file of the Principal City Civil and Sessions Judge, Bengaluru for the offences punishable under section 3 read with section 70 punishable under section 4 of PMLA Act, 2002;- vide Annexure-A.

b. Grant such other relief/s that this Hon'ble Court deems fit in the facts and circumstances of the above case."

2. Heard Sri. Anoop Haranahalli, learned counsel appearing for the petitioners, Sri. Unnikrishnan M., learned counsel appearing for the respondent and have perused the material on record.

3. This Court, on 10.03.2025, had observed as follows:

"Heard the learned counsel appearing for the petitioners.

Learned counsel for the petitioners taking this Court through the order dated 13^th December 2024 seeks to demonstrate that the predicate offence against these petitioners is stand quashed.

In the light of the predicate offence being quashed against the petitioners, the offences under PMLA is naturally be tumbled down.

Learned counsel Sri P.Prasanna Kumar is directed to accept notice for the respondent.

Learned counsel appearing for the petitioners is directed to serve a copy of the petition papers upon the aforesaid learned counsel.

List the matter on 19.03.2025, in the `fresh matters list'."

4. It is clarified that the predicate offence was not quashed, but the offences qua co-accused was quashed in W.P.No.18217/2024 and connected cases dated 13.12.2024. This Court in the aforesaid writ petitions has held as follows:

"10. The afore-narrated facts are a matter of record. The only issue that falls for my consideration is:

“Whether the proceedings in Special C.C.No.711 of 2023 as against the petitioners should be permitted to be continued?”

11. It is not in dispute that predicate offence relates to the period between 1985 and 12-12-2002. The Act comes into force on 17.01.2003. But, the acts of the petitioners are projected to be between the dates on which the Act was not in force. Therefore, as on the date of commission of offence, it was not an offence under the Act, as it was not in force. Later on, when the Act comes into force, the Directorate of Enforcement cannot exhume and make all predicate offences which have taken place prior to the Act coming into force to become an offence under the Act. The issue need not detain this Court for long or delve deep into the matter.

12. This Court while answering an identical circumstance under the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act, 2015 has in the case of Dhanashree Ravindra Pandit v. Income Tax Department , 2024 SCC OnLine Kar 58 , held as follows:

“…. …. ….

12. It becomes germane, at this juncture, to consider where a legal fiction or a deeming fiction is created under section 72(c) of the Act or criminal liability under sections 50 and 52 could be imposed. The apex court in the case of Kumaran v. State of Kerala [ (2017) 7 SCC 471 ; (2017) 3 SCC (Cri) 431; 2017 SCC OnLine SC 545.] considers what is deeming section or a legal fiction that is created and holds as follows:

“27. These two judgments make it clear that the deeming fiction of section 431 of the Criminal Procedure Code extends not only to section 421, but also to section 64 of the Penal Code, 1860. This being the case, section 70 of the Penal Code, 1860, which is the last in the group of sections dealing with sentence of imprisonment for nonpayment of fine must also be included as applying directly to compensation under section 357(3) as well. The position in law now becomes clear. The deeming provision in section 431 will apply to section 421(1) as well, despite the fact that the last part of the proviso to section 421(1) makes a reference only to an order for payment of expenses or compensation out of a fine, which would necessarily refer only to section 357(1) and not section 357(3). Despite this being so, so long as compensa