High Court Mandates Transfer of PMLA Cases to Courts Trying Predicate Offences Under Section 44(1)(c) of PMLA - 2026-03-05

Judicial Synergy: Madras High Court Streamlines PMLA and Predicate Offence Trials

In a significant ruling aimed at streamlining the prosecution of economic offences, the Madras High Court has clarified the mandatory nature of transferring money laundering cases to the same court presiding over the underlying predicate offence. The judgment, delivered by Chief Justice Manindra Mohan Shrivastava and Justice G. Arul Murugan, underscores the legislative intent behind the Prevention of Money-Laundering Act (PMLA) to ensure logical consistency in judicial proceedings.

The Conflict of Jurisdictions

The dispute arose when the Enforcement Directorate (ED), investigating a money laundering case (C.C. No. 37 of 2015), sought to transfer its proceedings to the XIII Additional Special Court for CBI cases . This specific CBI court was already in session regarding the predicate offence (C.C. No. 19 of 2014) filed under the Prevention of Corruption Act, 1988 .

The CBI court had previously dismissed the ED's application, citing that the trial of the predicate offence was already at an advanced stage and fearing that a transfer might cause unnecessary procedural delays. The ED challenged this order, arguing that Section 44(1)(c) of the PMLA leaves no room for judicial discretion once an application for transfer is made by the investigating authority.

Legislative Mandate and Judicial Precedents

Focusing on the interpretation of Section 44(1)(c) of the PMLA , the High Court relied heavily on the Supreme Court ’s observations in Rana Ayyub v. Directorate of Enforcement . The court noted that the PMLA requires the trial of the money laundering offence and the associated scheduled offence to be aligned.

The division bench emphasized that the "procedural convenience" of a trial court does not override the statutory design intended by Parliament. By enabling the transfer, the court ensures that the evidentiary links between the predicate crime (the source of the proceeds of crime) and the laundering offence are handled within a singular jurisdictional framework.

Key Observations

The judgment clarifies that the PMLA’s framework is designed to prevent fragmented judicial outcomes. As the Court noted:

• "The trial of the scheduled offence should take place in the Special Court which has taken cognizance of the offence of money laundering."
  
  
• "In view of the provisions contained in Section 44(1)(c) of the PMLA ... no discretion is left with the court which has taken cognizance and is trying the predicate office, but to commit the case to the Special Court under the PMLA."
  
  
• "The impugned order of the trial court... is in the teeth of the decision of the Hon’ble Supreme Court ... and as such, the impugned order is perverse and cannot be sustained."

A Pathway to Consistency

The Madras High Court set aside the trial court's order, directing that the PMLA case be moved to the XIII Additional Special Court for CBI cases . The Court highlighted that since the designated CBI court already functions as a Special Court under the PMLA, it is perfectly equipped to handle both matters.

This decision serves as a stern reminder to subordinate courts that when legal provisions explicitly mandate the consolidation of related offences for trial, there is little latitude to deny such applications based on the stage of the trial. For legal practitioners, the ruling reinforces the primacy of the PMLA’s procedural mandates, effectively curbing potential delays in the adjudication of money laundering cases.