The Delhi High Court recently made a significant ruling regarding the treatment of offences committed abroad under the Prevention of Money Laundering Act (PMLA). According to the court, an offence committed in a foreign country can be considered a predicate offence under the PMLA if it has “cross border implications” and if the proceeds of the crime have made their way to India. This ruling was made by Justice Vikas Mahajan while examining various provisions under the PMLA and Part C of the Schedule.
In his statement, Justice Mahajan highlighted that if an offence is committed in a foreign country in accordance with the laws of that country, it can be deemed a predicate offence as long as it corresponds to any of the offences specified under Part C of the PMLA and has cross border implications, meaning that the proceeds of the crime have entered India. This interpretation of the law is crucial in cases where crimes committed abroad have repercussions in India, especially when it comes to money laundering activities.
The court emphasized the importance of the definition of “corresponding law,” which was introduced through a 2013 amendment to the PMLA. This definition clarifies that the corresponding law refers to any law of a foreign country that deals with offences specific to that country and aligns with the scheduled offences under the PMLA. Additionally, the term “area” in sub-section (2) of Section 2 of the PMLA was expanded to include any foreign country, broadening the scope of jurisdiction in cases involving international crimes.
Furthermore, Justice Mahajan pointed out that a predicate offence under the corresponding law of a foreign country must be adjudicated according to the procedural norms of that country. This means that Section 44(1)(c) of the PMLA, which pertains to the trial of offences under the Act, does not apply to offences committed in foreign jurisdictions. The court’s ruling provides clarity on how such cases should be handled, ensuring that legal procedures are followed appropriately.
The court’s decision came in a case involving three individuals – Adnan Nisar, Shivang Malkoti, and Vishal Moral – who were seeking bail in a money laundering investigation conducted by the Enforcement Directorate (ED). The ED had received a Mutual Legal Assistance (MLA) Request from the U.S. Department of Justice, alleging that Moral, an Indian national, was involved in money laundering activities under the US Code. The investigation revealed that cryptocurrencies worth approximately US$ 527,615.45 had been fraudulently transferred from a victim’s account to an account linked to Moral.
During the course of the investigation, it was discovered that Moral had committed the alleged offences with the assistance of several individuals, both Indian and foreign nationals, including Malkoti and Nisar. The ED conducted searches and found evidence linking the suspects to the money laundering activities. The court’s analysis of Section 60, which deals with the attachment and confiscation of property in foreign jurisdictions, shed light on the legal complexities involved in international crime investigations.
Justice Mahajan supported the ED’s argument that the MLA request from the U.S. Authorities aimed to gather evidence related to the case, empowering the probe agency to take necessary actions, including arrests, to secure evidence. The court recognized that while the predicate offence was committed in the U.S., the money laundering offence under the PMLA was being tried in India due to the proceeds of the crime entering the country. This distinction highlighted the need for cooperation between international law enforcement agencies in cases of transnational crimes.
However, Justice Mahajan also raised concerns about the lack of concrete evidence linking the seized amount from Moral’s account to the predicate offence committed in the U.S. According to the court, without sufficient proof that the seized funds were proceeds of crime corresponding to the scheduled offences under the PMLA, the case lacked a crucial element to establish guilt. This observation underscored the importance of thorough investigations and evidence collection in cases involving cross-border crimes.
In conclusion, the Delhi High Court’s ruling in the Adnan Nisar v. ED case sets a precedent for handling offences committed abroad with implications in India under the PMLA. The court’s interpretation of the law provides guidance on how such cases should be approached, emphasizing the importance of evidence and legal procedures in prosecuting individuals involved in international money laundering activities. This decision underscores the need for international cooperation and coordination in combating transnational crimes and upholding the rule of law.
