Today(on 1st May),Delhi High Court rules no further action under PMLA after acquittal in main offense, despite pending appeal. Immovable properties released after accused cleared of scheduled offenses.
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DELHI: Today(on 1st May), The Delhi High Court has determined that proceedings under the Prevention of Money Laundering Act (PMLA), including the attachment of properties, cannot be sustained once the accused is acquitted of the predicate offence, even if an appeal against the acquittal is pending.
The court issued a ruling elucidating the legal framework of the Prevention of Money Laundering Act (PMLA), particularly in cases where the accused has been acquitted of the predicate offense but faces prosecution appeal. The Enforcement Directorate (ED) challenged a trial court’s decision acquitting the accused of PMLA charges subsequent to their exoneration from scheduled offenses under the Indian Penal Code. Additionally, the trial court mandated the release of all immovable properties and the unfreezing of the accused’s bank accounts.
Presiding over the case, Justice Vikas Mahajan firmly rejected the Enforcement Directorate’s argument that the attached properties could not be released due to the pending appeal against the acquittal, emphasizing the lack of finality. He asserted that the trial court’s decision to discharge the accused post-acquittal was appropriate, highlighting the centrality of the scheduled offense and its proceeds to any money laundering charge. Acquittal nullifies this foundational basis, leading to the collapse of subsequent money laundering allegations.
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The judge explicitly stated-
“Simultaneously, the properties seized under the PMLA cannot be considered legally as proceeds of crime or obtained from criminal activity… Section 8(6) of the PMLA explicitly states that if an accused under the PMLA is discharged or acquitted, the Special Judge must release the properties seized under the PMLA.”
The court elaborated on the impact of an acquittal, asserting-
“Unless the judgement of acquittal for the predicate offense is reversed on appeal, the consequences of the acquittal will remain in effect. Simply appealing the acquittal for the predicate offense does not subject the respondents to the hardships of criminal proceedings or attachment under the PMLA.”
Further undermining the ED’s position, the court highlighted that an appeal does not equate to a continuation of the trial court’s proceedings and stressed that the trial effectively concludes with an acquittal.
The court concluded that-
“After the acquittal of respondent numbers 1 and 2 in the predicate offense, no further proceedings under the PMLA could be sustained. Therefore, the Special Judge appropriately discharged the respondents from PMLA offenses in the order dated 09.10.2023.”
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