The High Court Laid Down the Guidelines to File a Case Under Prevention of Money Laundering Act

Case title:

V.P. Nandakumar V. The Assistant Director Directorate of Enforcement, Cochin Zonal Office

Date of Order:

12^th September, 2023

Bench:

Hon'ble Justice Devan Ramachandran

Parties:

Petitioner: V.P. Nandakumar

Respondent: The Assistant Director Directorate of Enforcement, Cochin Zonal Office

SUBJECT

This Court has made it quite clear, the court reasoned, that "in the event of the predicate offence getting revived, it would always be open for the ED to revive the proceedings under the Prevention of Money Laundering Act, 2002 as well."

IMPORTANT PROVISIONS

Section 17(1A) of the Prevention of Money Laundering Act

ISSUES RAISED

Whether order assailed in the writ petition, issued under Section 17(1A) of the Prevention of Money Laundering Act, 2002, is now sustainable?

ARGUMENTS ADVANCED BY THE APPELLANT

The petitioner's learned Senior counsel firmly stated that because the case's legal basis—the Enforcement Director's registration of it under the terms of the "PMLA"—has been revoked by this Court, it no longer has anything to stand on and cannot, therefore, be supported or justified to proceed.

ARGUMENTS ADVANCED BY THE RESPONDENT

• The 'ED''s learned Standing Counsel stated that the order was made at a time when the petitioner was being investigated for a crime under Section 420 of the Indian Penal Code (IPC), which had been reported by the local police authorities.
• He claimed that because Section 420 of the IPC is one of the scheduled offenses under Section 2(1)(y) of the "PMLA" and the "ECIR" was filed on September 6, 2022, it was essential that the properties covered be preserved from exploitation or destruction. Ext.P12 was, he said, issued on April 5, 2023, in accordance with the terms of Section 17(1A) of the "PMLA," and he fiercely argued that the responsible Authority was authorized to do so.

JUDGEMENT ANALYSIS

• This Court has made it quite clear, the court reasoned, that "in the event of the predicate offence getting revived, it would always be open for the ED to revive the proceedings under the Prevention of Money Laundering Act, 2002 as well."
• Undoubtedly, this is the best defense the "ED" has. Accordingly, as and when any such revival is to become law, they will be free to issue orders similar to Ext.P12 under Section 17 (1A) of the PMLA, 2002, and none of my comments in this judgment will restrict them from doing so.
• After the foregoing explanation, the court grants this writ petition.

CONCLUSION

An Indian law known as the Prevention of Money Laundering Act of 2002 (PMLA) was passed with the goals of preventing and controlling money laundering as well as providing for the confiscation of property linked to or used in the practice. The law makes money laundering a crime and permits the freezing, seizing, and confiscation of the proceeds of crime. Beginning on July 1, 2005, the PMLA and the Rules thereunder went into effect.