* Author
[2024] 4 S.C.R. 591 : 2024 INSC 301
Yash Tuteja & Anr.
v.
Union of India & Ors.
(Writ Petition (Criminal) No. 153 of 2023)
08 April 2024
[Abhay S. Oka* and Ujjal Bhuyan, JJ]
Issue for Consideration
The issue for consideration was a challenge to the Complaint
filed by the Directorate of Enforcement under Section 44(1)(b)
of the Prevention of Money Laundering Act, 2002, mainly on the
ground that apart from s. 120B of the Indian Penal Code, no other
offences were scheduled offences, within the meaning of clause
(y) of sub-section (1) of s. 2 of PMLA.`
Headnotes
Prevention of Money Laundering Act, 2002 – Clause (y) of
sub-Section (1) of s. 2 – Scheduled Offence – Penal Code,
1860 – s. 120B – Complaint filed by the Directorate of
Enforcement on the basis of the offences which were not
scheduled offences, except s. 120-B of IPC – Challenge to:
Held: Offence punishable under Section 120B of the IPC could
become a scheduled offence only if the conspiracy alleged is of
committing an offence which is specifically included in the Schedule
to the PMLA – Admittedly, the offences alleged in the complaint
except Section 120-B of IPC are not the scheduled offences –
Conspiracy to commit any of the offences included in the Schedule
has not been alleged in the complaint – ECIR/RPZO/11/2022, which
is the subject matter of the complaint, is based on the offences
relied upon in the complaint – As the conspiracy alleged is of the
commission of offences which are not the scheduled offences, the
offences mentioned in the complaint are not scheduled offences
within the meaning of clause (y) of sub-Section (1) of Section 2
of the PMLA – Complaint arising out of ECIR filed by Directorate
of Enforecement accordingly quashed. [Paras 3, 9]
Prevention of Money Laundering Act, 2002 – Special Court –
Cognizance – Code of Criminal Procedure, 1973 – s. 200 to
s. 204 – Procedure thereof:
592 [2024] 4 S.C.R.
Digital Supreme Court Reports
Held: The only mode by which the cognizance of the offence under
Section 3, punishable under Section 4 of the PMLA, can be taken
by the Special Court is upon a complaint filed by the Authority
authorized on this behalf – Section 46 of PMLA provides that the
provisions of the Cr.PC shall apply to proceedings before a Special
Court and for the purposes of the Cr.PC provisions, the Special
Court shall be deemed to be a Court of Sessions – However, subsection (1) of Section 46 starts with the words “save as otherwise
provided in this Act” – Considering the provisions of Section 46(1) of
the PMLA, save as otherwise provided in the PMLA, the provisions
of the Cr.PC shall apply to the proceedings before a Special Court
– Therefore, once a complaint is filed before the Special Court, the
provisions of Sections 200 to 204 of the Cr.PC will apply to the
Complaint – There is no provision in the PMLA which overrides the
provisions of Sections 200 to Sections 204 of Cr.PC – Hence, the
Special Court will have to apply its mind to the question of whether
a prima facie case of a commission of an offence under Section 3
of the PMLA is made out in a complaint under Section 44(1)(b) of
the PMLA – If the Special Court is of the view that no prima facie
case of an offence under Section 3 of the PMLA is made out, it
must exercise the power under Section 203 of the Cr.PC to dismiss
the complaint – If a prima facie case is made out, the Special Court
can take recourse to Section 204 of the Cr.PC. [Para 6]
Case Law Cited
Pavana Dibbur v. Directorate of Enforcement [2023] 13
SCR 1049 : 2023 INSC 1029 – relied on.
List of Acts
Prevention of Money Laundering Act, 2002; Code of Criminal
Procedure, 1973; Penal Code, 1860.
List of Keywords
Proceeds of Crime; Scheduled Offence.
Case Arising From
CRIMINAL ORIGINAL JURISDICTION : Writ Petition (Criminal) No.
153 of 2023
(Under Article 32 of The Constitution of India)
With
Writ Petition (Criminal) Nos. 208, 216 and 217 of 2023
[2024] 4 S.C.R. 593
Yash Tuteja & Anr. v. Union of India & Ors
Appearances for Parties
Mukul Rohatgi, Siddharth Aggarwal, Sr. Advs., Arshdeep Singh
Khurana, Malak Manish Bhatt, Ms. Neeha Nagpal, Harsh Srivastava,
Mandeep Singh, Sidak Anand, Gharote Anurag A, Mrs. Kalyani Bhide,
Aljo K. Joseph, Advs. for the Petitioners.
Suryaprakash V Raju, K.M. Nataraj, A.S.Gs., Avdhesh Kumar Singh,
A.A.G., Mukesh Kumar Maroria, Zoheb Hussain, Annam Venkatesh,
Mrs. Sairica Raju, Kanu Agarwal, Arkaj Kumar, Apoorv Kurup, Ravi
Sharma, Ms. Prerna Dhall, Piyush Yadav, Prashant Singh, Nikhilesh
Kumar, Srinivasan M Bogisam,M/S. VMZ CHAMBERS, Advs. for
the Respondents.
Judgment / Order of the Supreme Court
Judgment
Abhay S. Oka, J.
1. Taken up for final hearing as notice has already been issued on the
petitions. In substance, in these Writ Petitions, the only challenge that
survives is to the complaint filed by the Directorate of Enforcement
under Section 44(1)(b) of the Prevention of Money-Laundering Act,
2002 (for short, “the PMLA”) concerning ECIR/RPZO/11/2022.
2. It is not in dispute that the alleged scheduled offences on which the
complaint is based are under various sections of the Income-tax
Act, 1961, read with Sections 120B, 191, 199, 200 and 204 of the
Indian Penal Code, 1860 (for short, “the IPC”). It is also not in dispute
that except for Section 120B of the IPC, none of the offences are
scheduled offences within the meaning of clause (y) of sub-Section
(1) of Section 2 of the PMLA. This Court, in the decision in the case
of Pavana Dibbur v. Directorate of Enforcement1
, recorded its
conclusions in paragraph 31, which reads thus:
“CONCLUSIONS
31. 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:
1 [2023] 13 SCR 1049 : 2023 SCC OnLine SC 1586
594 [2024] 4 S.C.R.
Digital Supreme Court Reports
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.”
(underline supplied)
3. Hence, the offence punishable under Section 120B of the IPC
could become a scheduled offence only if the conspiracy alleged
is of committing an offence which is specifically included in the
Schedule to the PMLA. In this case, admittedly, the offences
alleged in the complaint except Section 120-B of IPC are not the
scheduled offences. Conspiracy to commit any of the offences
included in the Schedule has not been alleged in the complaint.
ECIR/RPZO/11/2022, which is the subject matter of the complaint,
is based on the offences relied upon in the complaint. As the
conspiracy alleged is of the commission of offences which are not
the scheduled offences, the offences mentioned in the complaint
are not scheduled offences within the meaning of clause (y) of subSection (1) of Section 2 of the PMLA.
[2024] 4 S.C.R. 595
Yash Tuteja & Anr. v. Union of India & Ors
4. In paragraph 15 of the decision in the case of Pavana Dibbur1
, this
Court held that:
“The condition precedent for the existence of proceeds of
crime is the existence of a scheduled offence.”
Therefore, in the absence of the scheduled offence, as held in
the decision mentioned above of this Court, there cannot be any
proceeds of crime within the meaning of clause (u) of sub-Section
(1) of Section 2 of the PMLA. If there are no proceeds of crime, the
offence under Section 3 of the PMLA is not made out. The reason
is that existence of the proceeds of crime is a condition precedent
for the applicability of Section 3 of the PMLA.
5. There is some controversy about whether the Special Court has
taken cognizance on the basis of the complaint. The learned ASG, on
instructions, states that cognizance has not been taken. The learned
ASG submits that as the cognizance is not taken, this Court should
not entertain the prayer for quashing the complaint.
6. The only mode by which the cognizance of the offence under
Section 3, punishable under Section 4 of the PMLA, can be taken
by the Special Court is upon a complaint filed by the Authority
authorized on this behalf. Section 46 of PMLA provides that the
provisions of the Cr.PC (including the provisions as to bails or
bonds) shall apply to proceedings before a Special Court and
for the purposes of the Cr.PC provisions, the Special Court shall
be deemed to be a Court of Sessions. However, sub-section (1)
of Section 46 starts with the words “save as otherwise provided
in this Act.” Considering the provisions of Section 46(1) of the
PMLA, save as otherwise provided in the PMLA, the provisions
of the Code of Criminal Procedure, 1973 (for short, Cr. PC) shall
apply to the proceedings before a Special Court. Therefore, once
a complaint is filed before the Special Court, the provisions of
Sections 200 to 204 of the Cr.PC will apply to the Complaint.
There is no provision in the PMLA which overrides the provisions
of Sections 200 to Sections 204 of Cr.PC. Hence, the Special
Court will have to apply its mind to the question of whether a prima
facie case of a commission of an offence under Section 3 of the
PMLA is made out in a complaint under Section 44(1)(b) of the
PMLA. If the Special Court is of the view that no prima facie case
of an offence under Section 3 of the PMLA is made out, it must
596 [2024] 4 S.C.R.
Digital Supreme Court Reports
exercise the power under Section 203 of the Cr.PC to dismiss the
complaint. If a prima facie case is made out, the Special Court
can take recourse to Section 204 of the Cr. PC.
7. In this case, no scheduled offence is made out the basis of the
complaint as the offences relied upon therein are not scheduled
offences. Therefore, there cannot be any proceeds of crime. Hence,
there cannot be an offence under Section 3 of the PMLA. Therefore,
no purpose will be served by directing the Special Court to apply its
mind in accordance with Section 203 read with Section 204 of the
Cr.PC. That will only be an empty formality.
8. We may note that the petitioners in Writ Petition (Crl.) No.153/2023
and the petitioner in Writ Petition (Crl.) No.217/2023 have not been
shown as accused in the complaint. Only the second petitioner in
Writ Petition (Crl.) No.208/2023 and the petitioner in Writ Petition
No.216/2023 have been shown as accused in the complaint. In
the case of those petitioners who are not shown as accused in the
complaint, it is unnecessary to entertain the Writ Petitions since the
complaint itself is being quashed.
9. Hence, we pass the following order:
(i) Writ Petition (Crl.) Nos.153/2023 and 217/2023 are disposed of;
(ii) The complaint based on ECIR/RPZO/11/2022, as far as
the second petitioner (Anwar Dhebar) in Writ Petition (Crl.)
No.208/2023 is concerned, is hereby quashed. The Writ Petition
is, accordingly, partly allowed;
(iii) The complaint based on ECIR/RPZO/11/2022, as far as the
petitioner (Arun Pati Tripathi) in Writ Petition (Crl.) No.216/2023 is
concerned, is hereby quashed. The Writ Petition is, accordingly,
allowed;
(iv) There will be no order as to costs; and
(v) Pending applications, including those seeking impleadment,
are disposed of accordingly.
10. At this stage, the learned ASG stated that, based on another First
Information Report, which, according to him, involves a scheduled
offence, criminal proceedings under the PMLA are likely to be initiated
against the petitioners. It is not necessary for us to go into the issue
of the legality and validity of the proceedings that are likely to be
[2024] 4 S.C.R. 597
Yash Tuteja & Anr. v. Union of India & Ors
initiated at this stage. Therefore, all the contentions in that regard
are left open to be decided in appropriate proceedings.
11. The learned senior counsel appearing for the petitioners in Writ
Petition (Crl.) Nos.153/2023 and 208/2023 seeks continuation of
the interim order dated 7th August 2023 passed by this Court in
these two Writ Petitions to enable the petitioners to take recourse
to appropriate proceedings before the appropriate Court.
12. By keeping the rights and contention of the parties open, we direct
that the interim order dated 7th August 2023 passed in Writ Petition
(Crl.) Nos.153/2023 and 208/2023 shall continue to operate for three
weeks from today.
Headnotes prepared by: Result of the case:
Prastut Mahesh Dalvi, WP(Crl) Nos. 153/2023 and
Hony. Associate Editor 217/2023 disposed of
(Verified by: Kanu Agrawal, Adv.) WP(Crl) No. 208/2023 partly allowed
WP(Crl) No. 216/2023 allowed
