Award of Industrial Plots to Panchkula: SC Order Must Affect Money Laundering Lawsuit

The Supreme Court (SC) reserved judgment in a slew of motions regarding the interpretation of the Prevention of Money Laundering Act (PMLA), including whether trial under the law can proceed without the CBI files a charge sheet in the case.

A three-judge bench headed by Judge AM Khanwilkar and comprising Judge Dinesh Maheshwari and Judge CT Ravikumar reserved judgment on March 15 after the conclusion of arguments in the case. “Disputes concluded. Judgment reserved. Distinguished attorneys for both parties are permitted to file additional written submissions, notes, if any, within two weeks of today,” the order reads.

The outcome of the Supreme Court orders will affect the Panchkula industrial plots allotment case involving former Haryana Chief Minister Bhupinder Singh Hooda. On August 19, 2021, the SC had granted a stay of the PMLA tribunal’s lawsuit against Hooda and 21 others in the Panchkula industrial plot award case. The stay was granted based on a December 2019 Supreme Court order.

In its order, the SC had stayed the trial in a similar PMLA case pending before the Special Court, Main Sessions Judge, Chennai City Civil Court. The SC order of December 2019 came after a bench of the Madras High Court dismissed a motion seeking the annulment of the PMLA proceedings, with the underlying or intended offense being investigated by the CBI having been dismissed by court order.

In accordance with the August 2021 order of the Supreme Court, Vikram Chaudhari, counsel for the claimant and defendant in the Panchkula Industrial Plot Allocation Case, Lt. Col. OP Dahiya (Retired) had drawn the Supreme Court’s attention to the December 2019 order. passed in a petition for special leave and requested similar interim protection for the petitioner, as the facts and circumstances are similar to this petition.

“No trial has started for a main offence”

On the grounds given by Lt. Col. Dahiya in his petition to the Supreme Court, his attorney Vikram Chaudhari said that since the CBI did not file an indictment in the Panchkula case and no trial has commenced for the predicate or intended offence, the trial under the PMLA cannot continue.

“We also challenged a 2019 amendment to section 44 of the PMLA in which an explanation was inserted,” Chaudhari said. The explanation inserted stated that the jurisdiction of the Special Court while dealing with the offense under the PMLA, during investigation, inquest or trial under that Act, shall not depend on any order made to the regard to the intended offence, and the trial of both sets of offenses by the same court shall not be construed as a joint trial.

Chaudhari said the SC had, in the Nikesh Tarachand Shah case in 2017, found that the trial of the predicate offenses and the PMLA went hand in hand. However, the 2019 amendment to the PMLA changed that, he said, adding that the amendment is also contested.

ED filed a charge sheet in 2021

The Directorate of Law Enforcement (ED) had in February 2021 filed a complaint for prosecution (an indictment) under the PMLA in a trial court against Hooda and others in the case. Panchkula despite the fact that CBI, which was investigating the case, had yet to submit a charge sheet for the predicate offenses recorded under the IPC and the Prevention of Corruption Act.

The ED indicates that each intended offense is a predicate offense and that the occurrence of the offense is a precondition for the initiation of an investigation into the money laundering offence. The underlying offenses are investigated by agencies such as Police, Customs, SEBI, NCB and CBI under their respective laws.

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