M/s Goyal Tea Agencies Private Limited Vs. M/s Shakti Bhog Snacks Limited - In view of the grave and substantiated allegations of money laundering, the admitted implication of the Corporate Debtor as an accused party in pending proceedings under the Prevention of Money Laundering Act, 2002 ("PMLA"), and the ongoing prosecution before the Hon’ble Special Court, this Adjudicating Authority is of the considered view that allowing dissolution of the Corporate Debtor at this juncture would be premature, impermissible, and contrary to the settled scheme of law.

 NCLT ND-II (2025.30.06) in M/s Goyal Tea Agencies Private Limited Vs. M/s Shakti Bhog Snacks Limited [IA-3695-2023 In IB-1713-2019] held that;

• In view of the grave and substantiated allegations of money laundering, the admitted implication of the Corporate Debtor as an accused party in pending proceedings under the Prevention of Money Laundering Act, 2002 ("PMLA"), and the ongoing prosecution before the Hon’ble Special Court, this Adjudicating Authority is of the considered view that allowing dissolution of the Corporate Debtor at this juncture would be premature, impermissible, and contrary to the settled scheme of law.

• NCLAT in Sterling Biotech, Manohar Lal Vij, and other matters, has clearly held that the National Company Law Tribunal ("NCLT") and the National Company Law Appellate Tribunal ("NCLAT") do not have jurisdiction to interfere with proceedings or orders passed under the PMLA, including attachment orders or criminal prosecution.

• This Adjudicating Authority cannot assume jurisdiction in a manner that would render the Corporate Debtor unavailable for criminal liability, particularly when it stands named as an accused, and assets, however meagre, are under attachment. It is not the quantum but the character of the proceedings that is determinative.

• The IBC cannot be used as a mechanism to frustrate or sidestep the legitimate process of law under the PMLA. Accordingly, this Adjudicating Authority finds no merit in the request for dissolution and declines to grant the relief sought under Section 54 of the Code.

Excerpts of the order;

# 1. This Application has been filed by Mr. Umesh Gupta, the Resolution Professional of M/s. Shakti Bhog Snacks Limited before this Adjudicating Authority under Section 54 of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the National Company Law Tribunal Rules, 2016. The Applicant / Liquidator seeks the following reliefs:

• “a. Pass an order of dissolution of the corporate debtor M/s Shakti Bhog Snacks Limited

• b. Pass an order that Resolution Professional stands discharged upon passing order of dissolution.

• c. Pass any other or further directions as this Hon’ble NCLT may deem fit”

# 2. BRIEF BACKGROUND OF THE CASE:

i. An Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) was filed by the Operational Creditor, M/s Goyal Tea Agencies Private Limited, against the Corporate Debtor, M/s Shakti Bhog Snacks Limited, which came to be admitted by this Hon’ble Adjudicating Authority vide order dated 03.01.2023, whereby a moratorium under Section 14 of the Code was declared and Mr. Umesh Gupta was appointed as the Interim Resolution Professional. Thereafter, his appointment was duly confirmed as the Resolution Professional by the Committee of Creditors in its 1st meeting held on 02.02.2023.

ii. In compliance with Section 13, Section 15, and other applicable provisions of the Insolvency and Bankruptcy Code, 2016, read with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”), the Interim Resolution Professional caused a public announcement to be made, intimating the commencement of the Corporate Insolvency Resolution Process against the Corporate Debtor, M/s Shakti Bhog Snacks Limited, and inviting claims from its creditors along with proof of such claims. The said announcement was published in the Hindi edition of Jansatta and the English edition of Financial Express on 06.01.2023, with the last date for submission of claims stipulated as 17.01.2023.

iii. Pursuant to the public announcement inviting claims from all classes of creditors, including Financial Creditors, Operational Creditors, employees and workmen, the Interim Resolution Professional received only one claim, from the Financial Creditor, i.e., State Bank

of India, up to the last date of submission, i.e., 17.01.2023. No claims were received from any operational creditors, employees, or workmen. Accordingly, in compliance with Section 21(1) of the Code, the Interim Resolution Professional constituted the Committee of Creditors on 25.01.2023, comprising State Bank of India as its sole member. Thereafter, the report for constitution of the Committee of Creditors was filed by the Interim Resolution Professional on 26.01.2023, confirming that the CoC consisted solely of State Bank of India with a claim of ₹14,62,18,009.83/- and 100% voting share.

iv. On commencement of CIRP, the Applicant attempted to take charge of the assets and books of account of the Corporate Debtor. An email was sent to the Suspended Directors on 06.01.2023 intimating them regarding the Commencement of the CIRP and further requesting necessary documents and information.

v. On 07.01.2023, the Resolution Professional contacted one of the Suspended Directors, Mr. Naresh Chander Varshney, telephonically. The RP informed him about the initiation of the CIRP and requested that he share contact details of the other directors and assist in providing documents and company information. However, Mr. Varshney conveyed his inability to meet or provide the requested information.

vi. Upon receipt of any reply from the Suspended Director to the E-mail dated 06.01.2023, the Applicant made follow-ups by way of various reminder emails dated 16.01.2023 and 17.01.2023 to furnish the requisite information, to no avail, which compelled the Applicant to file an application under Section 19(2) of the Code, bearing IA No. 1083 of 2023, which was listed before this Adjudicating Authority on 21.02.2023, and notices were issued to all Suspended Directors. Despite service of notice to the Suspended Director, they have failed to either file a reply or appear before this Adjudicating Authority. 

vii. As there was no meaningful cooperation from the Suspended Boardof Directors and no timely response to repeated emails and calls, the Applicant physically visited the registered office of the Corporate Debtor, situated at 1102-A, Pearls Business Park Netaji Subhash Place, Pitampura, North West Delhi, New Delhi – 110034, for the purpose of verifying whether the Corporate Debtor was carrying on business operations from the said address, and to take control of its physical assets and records.

viii. Upon such visit, it was found that the said office was sealed by the Enforcement Directorate and was not in operation. No person was available at the site, and no records or documents of the Corporate Debtor could be obtained.

ix. The Applicant submitted that currently, no physical assets of the Corporate Debtor are available. It was further submitted that the last available financial statements on record pertain to the financial year 2015–2016. The Applicant also submitted that the land and building situated at B-87, Sector-64, Noida, belonging to the Corporate Debtor, were sold by the State Bank of India under the SARFAESI Act around December 2019.

x. The first meeting of the Committee of Creditors was convened on 02.02.2023. Notice of the meeting was duly circulated to the sole Financial Creditor, State Bank of India, and to the Suspended Directors. In the said meeting, the sole member of the CoC, State Bank of India, was present; however, none of the Suspended Directors attended. The CoC noted the constitution of the Committee of Creditors and the non-cooperation by the Suspended Directors. It was further recorded by the CoC that no assets or operations existed in the Corporate Debtor and that it would be appropriate if the Corporate Debtor could be put into liquidation.

xi. The second meeting of the Committee of Creditors was convened on 28.02.2023. Notice of the meeting was duly circulated to the State Bank of India, being the sole member of the CoC, as well as to the Suspended Directors. A representative of the State Bank of India attended the meeting; however, none of the Suspended Directors were present. In the said meeting, the CoC noted the filing of the application under Section 19(2) of the Code and the appointment of valuers.

xii. The third meeting of the Coc was held on 19.06.2023, attended solely by the representative of the State Bank of India (SBI), the only CoC member. Suspended Directors and operational creditors were absent. The CoC reviewed updates on claims, valuation, and a pending Section 19(2) application. The key agenda was the consideration of liquidation; however, due to the absence of assets, records, operations, and personnel, and the unfeasibility of liquidation in light of existing CIRP costs and lack of recoverable value, the CoC discussed and unanimously recommended Dissolution of the Corporate Debtor instead of liquidation. Accordingly, the Resolution Professional was authorised to file an application under Section 54 of the IBC for dissolution.

xiii. The Applicant placed reliance on the settled position that, in cases where there are no assets to liquidate and no prospects of revival, the  Adjudicating Authority is empowered to directly dissolve the Corporate Debtor under Section 54 of the Code, without undergoing the liquidation process. In support of this proposition, the Applicant cited the following decisions, where there were no assets, no operational business, and continuation of CIRP or liquidation was deemed economically impractical, the various co-ordinate benches of this Adjudicating Authority, were pleased to dissolve the Corporate Debtor and discharge the Resolution Professional:

• i. MA/238/2018 in CP/187/IB/2018 (NCLT Chennai)

• ii. MA/540/2019 in CP/490/IB/2018 (NCLT Chennai)

• iii. CA/562/2019 in CP/920/ND/2018 (NCLT New Delhi)

• iv. IA/2227/2020 in CP/1148/ND/2019 (NCLT New Delhi)

• v. IA/198/2020 in CP/180/BB/2018 (NCLT Bengaluru)

• vi. IA/949/KB/2022 in CP/835/KB/2018 (NCLT Kolkata)

• vii. IA/134/KOB/2021 in IBA/22/KOB/2020 (NCLT Kochi)

# 3. Pursuant to the order dated 20.08.2024, notice was issued to the Registrar of Companies and the Income Tax Department to file their responses. However, despite service and multiple opportunities, no appearance or reply was filed by either authority, this Adjudicating Authority, vide order dated 25.04.2025, recorded the continued nonappearance and directed that both the Registrar of Companies and the Income Tax Department be proceeded against ex parte.

# 4. Vide order dated 20.08.2024, this Adjudicating Authority, upon being informed by the Learned Counsel for the Resolution Professional that the registered office of the Corporate Debtor was sealed by the Directorate of Enforcement (“ED”) and was not in operation, directed issuance of notice to the Director, Directorate of Enforcement.

# 5. The ED filed their reply to the present Application and has opposed the dissolution of the Corporate Debtor, M/s Shakti Bhog Foods Limited, in view of the ongoing proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) against M/s Shakti Bhog Foods Ltd. (SBFL) and its group entities including M/s Shakti Bhog Snacks Ltd. (SBSL), pursuant to ECIR/DLZO-I/12/2021 dated 31.01.2021. The ED submitted that SBFL defaulted in repaying its loan obligations, and its account was classified as a Non-Performing Asset (NPA) as on 31.03.2015. The total outstanding dues to the consortium of banks stand at approximately ₹3,269.42 crores as on 31.03.2020 after accounting for realizable securities.

# 6. The Ed submitted that M/s Shakti Bhog Snacks Limited is a group company of M/s Shakti Bhog Foods Limited. Investigation revealed that the said company, along with M/s Shakti Bhog Foods Limited, was involved in the activities related to money laundering. M/s Shakti Bhog Snacks Limited was used by M/s Shakti Bhog Foods Limited to rotate its loan funds against bogus invoices. It was submitted that company layered and siphoned off the proceeds of crime received from SBFL and further transferred them to the directors/promoters of SBFL and their relatives.

# 7. It was submitted by the Ed that SBSL is a group company of SBFL wherein Mr. Kewal Krishan Kumar, Mr. Siddharth Kumar, Ms. Sunanda Kumar, and Mr. Bharat Lal Shukla (an employee of SBFL) were acting as directors. Ms. Sunanda Kumar and Mr. Bharat Lal Shukla were made Directors for namesake only. Operations of the firm were controlled and managed by Kewal Krishan Kumar and Siddharth Kumar, since minimum genuine business activities were conducted in this company. The company maintained several bank accounts, bearing A/c No. 911020027670465 with Axis Bank, A/c No. 042305000350 with ICICI Bank, A/c No. 2530 with Indraprastha Bank, A/c Nos. 62010758619, 64004292210, and 63003943976 with State Bank of India, which were used in routing loan funds of SBFL. 

# 8. The ED submitted that SBSL acquired and possessed proceeds of crime to the tune of ₹97.87 crores from six group entities of SBFL, namely M/s Bhawna Portfolio Pvt. Ltd., M/s Divyarth Leasing & Finance Pvt. Ltd., M/s Divyashakti Hospitality Pvt. Ltd., M/s Fruto Freesh Industries Pvt. Ltd., M/s Pearl Agro Food, and M/s Sunanda Polymer, and transferred funds to the tune of ₹127.81 crores to these group entities from FY 2007– 08 to 2014–15 in the guise of investment and sale-purchase. It was submitted that these transactions were reflected in the books of accounts as sale, purchase, and investments and were projected as

untainted revenue of SBFL and its group companies.

# 9. The ED further submitted that SBSL carried out these transactions without any actual movement of goods. The group companies of SBFL involved in these transactions were shell entities, and no genuine business activities were conducted therein. These transactions were carried out to inflate the financials of SBFL so that more credit facilities could be availed from banks. The ED submitted that, therefore, SBSL was involved in the acquisition, possession, and concealment of proceeds of crime. It was submitted that SBSL was knowingly involved in the process and activity connected with the proceeds of crime, including its acquisition, possession, concealment, and projecting the same as untainted. It also assisted SBFL in such activities, thereby committing the offence of money laundering under Section 3 of PMLA, 2002, punishable under Section 4.

# 10. The ED also submitted that the Corporate Debtor, M/s Shakti Bhog Snacks Ltd., has been arrayed as an accused in the 5th Supplementary Prosecution Complaint dated 20.09.2024 before the Hon’ble Special Court, PMLA. The Court has taken cognizance of the complaint and issued summons to all accused, including SBSL. The prosecution under the PMLA is pending before the Ld. Special Court.

# 11. The Ed submitted that during the investigation, the balance in bank account No. 042305000350 (ICICI Bank) in the name of Shakti Bhog Snacks Limited was attached vide Provisional Attachment Order No. 05/2021 dated 25.08.2021. This attachment was confirmed by the Ld. Adjudicating Authority, PMLA, vide its order dated 26.05.2022. The Hon’ble Delhi High Court in Kumar Food Industries Limited v. Union of India, 2022 SCC OnLine Del 729, held that a bank account in which proceeds of crime are received is itself "property" and "records" involved in money laundering under Sections 2(1)(v) and 2(1)(w) of the PMLA.

# 12. The ED submitted that this Adjudicating Authority does not have the jurisdiction to interfere with proceedings under the PMLA, including provisional attachment orders passed by a competent authority under PMLA. Section 41 of the PMLA clearly bars civil courts from entertaining any suit or proceeding in respect of any matter which the Director, an Adjudicating Authority, or the Appellate Tribunal is empowered to determine. No injunction can be granted by any court or authority in respect of any action taken under the PML Act.

# 13. The ED submitted that the consistent judicial position is that the NCLT and NCLAT lack jurisdiction to adjudicate upon or interfere with actions taken under the Prevention of Money Laundering Act (PMLA), including provisional attachment orders passed by the Enforcement Directorate. This has been unequivocally laid down by the Hon’ble Supreme Court in Embassy Property and Kalyani Transco, and reiterated by the NCLAT and various NCLT benches in decisions such as Kiran Shah, Ashok Kumar Sarawagi, Shimping Technology, Manohar Lal Vij, and Andhra Bank v. Sterling Biotech. The proper forum to challenge such actions lies within the statutory mechanisms under the PMLA, not before the NCLT under the Insolvency and Bankruptcy Code.

# 14. The ED further submitted that the PMLA is a special legislation enacted to combat and regulate the offence of money laundering, and as such, holds primacy over the Insolvency and Bankruptcy Code, 2016 in all proceedings that relate to or arise from acts of money laundering. It is emphasized that the mere initiation of resolution proceedings under the IBC cannot serve as a shield against enforcement actions under the PMLA, as such a proposition would defeat the very object of the statute and allow economic offenders to misuse the insolvency process. The Ed submitted that the Hon’ble Delhi High Court in Deputy Director, Directorate of Enforcement v. Axis Bank (2019 SCC OnLine Del 7854) has clearly held that the IBC and PMLA operate in distinct legal fields, and the former cannot override or nullify proceedings under the latter. The Hon’ble Supreme Court has further recognized economic offences as a distinct category requiring stringent measures and has upheld the special character and overriding nature of the PMLA in cases such as Y.S. Jagan Mohan Reddy v. CBI [(2013) 7 SCC 439], Gautam Kundu v. Directorate of Enforcement [(2015) 16 SCC 1], and P. Chidambaram v. Directorate of Enforcement [(2019) 9 SCC 24]. The Ed submitted that, accordingly, any conflict between the two statutes must be resolved in favour of the PMLA, which is a self-contained code with its own adjudicatory mechanisms and remedies.

# 15. The Applicant pursuant to the reply filed by the ED, submitted that it was granted liberty vide order dated 22.01.2025 to bring on record the 5th Supplementary Prosecution Complaint under Sections 44 and 45 of the Prevention of Money Laundering Act, 2002 (PMLA), as filed by the ED in prosecution proceedings against the parent/holding company, M/s Shakti Bhog Foods Limited and its promoters.

# 16. In compliance thereof, the Applicant has brought on record the said Supplementary Prosecution Complaint along with an Affidavit. The Applicant submitted that in the said complaint the Corporate Debtor has been impleaded as an accused only on 20.09.2024 i.e., after a period of 19 months and 18 days from the commencement of CIRP on 03.01.2023.

# 17. The Applicant submitted that the reference to the Corporate Debtor in the said complaint is confined only to pages 20–21. Further, from pages 91–92 of the complaint, the details of provisionally attached properties are enumerated, none of which pertain to the Corporate Debtor.

# 18. The Applicant submitted that at page 93 of the 5th Supplementary Prosecution Complaint, it is merely alleged that the Corporate Debtor routed Rs. 97.87 Crores to six entities from the loan funds of its parent company, Shakti Bhog Foods Limited, which along with its Directors (also Promoter Directors of the CD) is already facing PMLA proceedings. However, since no properties of the Corporate Debtor are involved in the  ED proceedings, and the liability, if any, lies with the said individuals, the pendency of such criminal proceedings cannot be a ground to stall the ongoing IBC process.

# 19. The Applicant further submitted that no substantive property of the Corporate Debtor is under attachment in the said proceedings. The only item attributed to the Corporate Debtor is an ICICI Bank account reflected at Serial No. 29 of the ED’s chart (at page 171 of the ED’s reply), having a meagre balance of Rs. 3701.81/-. It is submitted by the Applicant that the ED is well within its rights to recover such amount, but it is submitted that the pendency of proceedings for such an inconsequential figure cannot be a valid basis to delay the IBC proceedings.

# 20. The Applicant submitted that, before the Ld. Special Judge (PC Act), CBI- 12, Rouse Avenue Courts, New Delhi, in Complaint Case No. 20/2021 (ED vs. Kewal Krishan Kumar & Ors.), the ED itself stated that it had no bjection to the release of properties attached in respect of the parent  company which was duly recorded in order dated 23.04.2025.

# 21. The Applicant further submitted that, the Ld. Trial Court, vide order dated 04.06.2025, has allowed the application of the RP/Liquidator of M/s Shakti Bhog Foods Limited for restoration of attached properties and directed the ED to hand over the assets to the RP/Liquidator. The Applicant submitted that if the ED has not objected to release of properties of the parent company, there remains no rationale to keep the Corporate Debtor’s proceedings stalled for a meagre amount of Rs. 3701.81/- lying in a bank account, particularly when no other asset is involved.

FINDINGS AND ANALYSIS:

# 22. We have heard the Ld. Counsel appearing on behalf of the Resolution Professional and the Ld. Counsel appearing on behalf of the Enforcement Directorate.

# 23. The present Application has been filed under Section 54 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), seeking dissolution of the Corporate Debtor, M/s Shakti Bhog Snacks Limited (“SBSL”), on the ground that there are no assets, no ongoing business operations, and no scope for revival. The Resolution Professional submits that continuation of the Corporate Insolvency Resolution Process (CIRP) or initiation of liquidation would be futile and economically unviable. The Committee of Creditors (CoC), consisting solely of the State Bank of India, has unanimously recommended dissolution under Section 54 of the Code.

# 24. Notice was issued to the Registrar of Companies, the Income Tax Department, and the Directorate of Enforcement (“ED”) in light of the disclosure that the registered office of the Corporate Debtor was sealed by the ED. While the RoC and ITD failed to respond, the ED entered appearance and has filed a detailed reply opposing the dissolution. It is the consistent stand of the ED that the Corporate Debtor is directly implicated in a large-scale money laundering investigation initiated against its parent company, M/s Shakti Bhog Foods Limited, and other group entities. The ED has placed on record the 5th Supplementary Prosecution Complaint dated 20.09.2024 wherein the Corporate Debtor stands arraigned as an accused, and one of its bank accounts has been attached under the Prevention of Money Laundering Act, 2002 (“PMLA”), with confirmation by the Adjudicating Authority under PMLA.

# 25. In view of the grave and substantiated allegations of money laundering, the admitted implication of the Corporate Debtor as an accused party in pending proceedings under the Prevention of Money Laundering Act, 2002 ("PMLA"), and the ongoing prosecution before the Hon’ble Special Court, this Adjudicating Authority is of the considered view that allowing dissolution of the Corporate Debtor at this juncture would be premature, impermissible, and contrary to the settled scheme of law. Dissolution under Section 54 of the IBC results in the Corporate Debtor ceasing to exist as a legal entity. Such a consequence would inevitably frustrate the ongoing criminal prosecution under the PMLA and defeat the authority and jurisdiction of the Ld. Special Court, which is statutorily vested with the power to try offences under the PMLA and adjudicate upon related attachments and confiscation proceedings.

# 26. It is well established that the PMLA is a special and self-contained legislation designed to prevent, detect, and punish acts of money laundering. It provides for its own adjudicatory framework and overrides any inconsistent provisions of other laws by virtue of Section 71 of the PMLA. The Hon’ble Supreme Court, in Embassy Property Developments Pvt. Ltd. v. State of Karnataka and Kiran Shah v. Enforcement Directorate, as well as the Hon’ble NCLAT in Sterling Biotech, Manohar Lal Vij, and other matters, has clearly held that the National Company Law Tribunal ("NCLT") and the National Company Law Appellate Tribunal ("NCLAT") do not have jurisdiction to interfere with proceedings or orders passed under the PMLA, including attachment orders or criminal prosecution.

# 27. In view of the foregoing, we are of the considered opinion that permitting dissolution despite the pendency of the Special Court’s cognizance over the Corporate Debtor would amount to judicial overreach and would impair the ED’s ability to complete its investigation, pursue trial, and recover proceeds of crime. This Adjudicating Authority cannot assume jurisdiction in a manner that would render the Corporate Debtor unavailable for criminal liability, particularly when it stands named as an accused, and assets, however meagre, are under attachment. It is not the quantum but the character of the proceedings that is determinative. The IBC cannot be used as a mechanism to frustrate or sidestep the legitimate process of law under the PMLA. Accordingly, this Adjudicating Authority finds no merit in the request for dissolution and declines to grant the relief sought under Section 54 of the Code.

ORDER:

# 28. In light of the above facts and circumstances, the prayer(s) sought in the present Application cannot be allowed and hence, IA-3695-2023 In IB-1713-2019, hereby stands dismissed.

# 29. A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities. No order as to costs.

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Parvathi Kollur & Anr. Vs. State by Directorate of Enforcement - If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money laundering against him or any one claiming such property being the property linked to stated scheduled offence through him.”

 Supreme Court (16.08.2022) in Parvathi Kollur & Anr. Vs. State by Directorate of Enforcement  [Criminal Appeal No.1254 of  2022] held that;

• The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. 

• It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. 

• The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. 

• If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money laundering against him or any one claiming such property being the property linked to stated scheduled offence through him.”

Excerpts of the order;

Leave granted.

The appellants herein have questioned the judgement and order dated 17.12.2020 as passed by the High Court of Karnataka at Bengaluru in Criminal Revision Petition No. 590 of 2019 whereby, the High Court allowed the revision petition filed by the respondent and set aside the discharge order passed by the IIIrd Additional District and Sessions Judge, D.K., Mangaluru (Karnataka) for the offence under Section 3 of the Prevention of Money-Laundering Act, 2002(hereinafter referred to as ‘the Act of 2002’). The appellants herein are wife and son of the accused No. 1 against whom the allegations had been that during his tenure as Deputy Revenue Officer, he amassed assets disproportionate to his known source of income to an extent of Rs.42,25,859/-. For this, the Lokayukta Police registered a case under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 (hereinafter referred to as ‘the Act of 1988’). During the  pendency of trial, the Directorate of Enforcement registered a case against the accused No. 1 and the appellants under the Act of 2002 and filed a complaint on 08.06.2016 before the Special Court for trial of the offence under Section 3 thereof.

In the meantime, the Special Judge (Lokayukta) acquitted the accused No. 1 of the offences aforesaid under the Act of 1988 while observing that the evidence produced by the prosecution was insufficient to hold him guilty. Then, the accused No. 1 as also the present appellants moved an application under Section 227 of the Code of Criminal Procedure, 1973 seeking discharge in the case pertaining to the Act of 2002. Before the said application was considered and decided, the accused No. 1 expired on 08.05.2018.

Thereafter, the Trial Court, by its judgement and order dated 04.01.2019, allowed the application and discharged the appellants from the offences pertaining to the Act of 2002 while observing that occurrence of a scheduled offences was the basic condition for giving rise to “proceeds of crime”; and commission of scheduled offence was a pre-condition for proceeding under the Act of 2002. Aggrieved by the said discharge order, the Directorate preferred a revision petition before the High Court. The High Court proceeded to set aside the discharge order while observing that the allegations made in the complaint and the material produced, prima facie, made out sufficient ground for proceeding against the appellants for offences under the Act of 2002.

 

Learned counsel for the appellants has contended that the issue as involved in this matter is no more res integra, particularly for the view taken by a 3-Judge Bench of this Court in the case of Vijay Madanlal Choudhary & Ors. vs. Union Of India & Ors. decided on 27.07.2022 where, the consequence of failure of prosecution for the scheduled offence has been clearly provided in the following terms: 

• “187. ……(v)(d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money laundering against him or any one claiming such property being the property linked to stated scheduled offence through him.”

Learned ASG appearing for the respondent, in all fairness, does not dispute the above position of law declared by this Court. 

The result of the discussion aforesaid is that the view as taken by the Trial Court in this matter had been a justified view of the matter and the High Court was not right in setting aside the discharge order despite the fact that the accused No. 1 had already been acquitted in relation to the scheduled offence and the present appellants were not accused of any scheduled offence.

In view of the above, this appeal succeeds and is allowed. The impugned judgement and order dated 17.12.2020 is set aside and the order dated 04.01.2019 as passed by the Trial Court, allowing discharge application of the appellants, is restored.

All pending applications stand disposed of.

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Rana Ayyub vs Directorate of Enforcement - Therefore, it is clear that the trial of the scheduled offence should take place in the Special Court which has taken cognizance of the offence of money-laundering. In other words, the trial of the scheduled offence, insofar as the question of territorial jurisdiction is concerned, should follow the trial of the offence of money-laundering and not vice versa.

 Supreme Court (07.02.2023) In Rana Ayyub vs Directorate of Enforcement [Writ Petition (Criminal) No. 12 of 2023 ] held that;

• Therefore, it is clear that the trial of the scheduled offence should take place in the Special Court which has taken cognizance of the offence of money-laundering. In other words, the trial of the scheduled offence, insofar as the question of territorial jurisdiction is concerned, should follow the trial of the offence of money-laundering and not vice versa.

• In view of the specific mandate of clauses (a) and (c) of subsection (1) of Section 44, it is the Special Court constituted under the PMLA that would have jurisdiction to try even the scheduled offence. Even if the scheduled offence is taken cognizance of by any other Court, that Court shall commit the same, on an application by the concerned authority, to the Special Court which has taken cognizance of the offence of money-laundering.

• Section 44 leaves no semblance of any doubt that the offence of money-laundering is triable only by the Special Court constituted for the area in which the offence of money-laundering has been committed.

• The area in which the place of acquisition of the proceeds of crime is located or the place of keeping it in possession is located or the place in which it is concealed is located or the place in which it is used is located, will be the area in which the offence has been committed.

• In addition, the definition of the words “proceeds of crime” focuses on “deriving or obtaining a property” as a result of criminal activity relating to a scheduled offence. Therefore, the area in which the property is derived or obtained or even held or concealed, will be the area in which the offence of money laundering is committed.

• The issue of territorial jurisdiction cannot be decided in a writ petition, especially when there is a serious factual dispute about the place/places of commission of the offence. Hence, this question should be raised by the petitioner before the Special Court, since an answer to the same would depend upon evidence as to the places where any one or more of the processes or activities mentioned in Section 3 were carried out.

Excerpts of the order;

# 1. Challenging a summoning order issued by the Court of the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, on a complaint lodged by the respondent under Section 45 read with Section 44 of the Prevention of Money-laundering Act, 20021 , the petitioner has come up with the above writ petition under Article 32 of the Constitution of India. 

# 2. We have heard Ms. Vrinda Grover, learned Counsel for the petitioner and Mr. Tushar Mehta, learned Solicitor General of India for the respondent. 1 For short, “PMLA” or the “Act”, as the case may be.  

# 3. It is the case of the petitioner that during the pandemic, she initiated crowdfunding campaign through an online crowdfunding platform named “Ketto” and ran three campaigns from April 2020 to September 2021. In connection with the same, the Mumbai Zonal Office of the Enforcement Directorate initiated an enquiry against the petitioner under the Foreign Exchange Management Act, 19992 through an Office Order dated 3.8.2021. 

# 4. It appears that thereafter a complaint was lodged on 7.9.2021 by one Vikas Sankritayan, claiming to be the founder of Hindu IT Cell, in FIR No.2049/2021 with Indirapuram Police Station, Ghaziabad for alleged offences under Sections 403, 406, 418 and 420 IPC read with Section 66D of the Information Technology (Amendment) Act, 2008 and Section 4 of the Black Money Act. 

# 5. In the meantime, the petitioner received an order under Section 37 of the FEMA read with Section 133(6) of the Income Tax Act, 1961 from the Mumbai Zonal Office of the Enforcement Directorate seeking certain documents, in addition to the documents submitted by the petitioner in response to the previous Office Order dated 3.8.2021 issued by the very same Mumbai Zonal Office. 

# 6. After the petitioner submitted a detailed response to the Mumbai Zonal Office of the Enforcement Directorate, the Delhi Zone-II Office of the Directorate of Enforcement registered a complaint in ECIR No.DLZO-II/58/2021 on 11.11.2021, in the Court of the Special Judge at Ghaziabad. It was stated in the said complaint that the FIR registered on 7.9.2021 on the file of the Indirapuram Police Station, Ghaziabad formed the basis for the complaint of the Enforcement Directorate. 

# 7. After the registration of the aforesaid complaint by the Enforcement Directorate, the petitioner was summoned to the Delhi Zone-II Office and her statement under Section 50 of the PMLA was recorded on 15.12.2021. 

# 8. Thereafter, a provisional order of attachment of the bank account of the petitioner in HDFC Bank, Koperkhairane Branch, Navi Mumbai, Maharashtra, was passed by the Directorate of Enforcement on 4.2.2022. Pursuant to the order of provisional attachment, the Adjudicating Authority issued a show cause notice dated 8.3.2022. 

# 9. While things stood thus, a Look out Circular was issued against the petitioner, but the same was set aside by the High Court of Delhi in a writ petition filed by the petitioner. In a second writ petition filed by the petitioner, the High Court of Delhi restrained the Directorate of Enforcement from taking further steps under Section 8 of the PMLA on the short ground that the validity period of 180 days, of the order of provisional attachment, came to an end statutorily on 4.8.2022. 

# 10. Thereafter, the Court of the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, passed an order on 29.11.2022 taking cognizance of the complaint lodged by the respondent and summoning the petitioner for appearance on 13.12.2022. Upon coming to know of the said Summoning Order, the petitioner has come up with the above writ petition. It is claimed by the petitioner in paragraph 5(v) of the writ petition that “No summons have yet been received…” by her and that she had annexed a screenshot of the e-court website reflecting the case details. However, a print out of the copy of the Summoning Order is filed along with the writ petition.  

# 11. At the outset, it is made clear by Ms. Vrinda Grover, learned Counsel for the petitioner that the challenge to the impugned Summoning Order is limited to the question of territorial jurisdiction alone and that the impugned Summoning Order is not being challenged on any ground other than the lack of territorial jurisdiction. 

# 12. In brief, the contention of the learned Counsel for the petitioner is that under Section 44(1) of the PMLA, an offence punishable under the Act, shall be triable only by the Special Court constituted for the area in which the offence has been committed. This is notwithstanding anything contained in the Code of Criminal Procedure, 1973 . Apart from the non-obstante clause with which Section 44(1) begins, Section 71 of the Act also gives overriding effect to PMLA. Therefore, it is contended by the learned Counsel for the petitioner that the Special Court in Maharashtra alone could have taken cognizance of the complaint. 

# 13. Heavy reliance is placed by the learned Counsel for the petitioner on the opinion of this Court in paragraphs 353 to 358 of the decision in Vijay Madanlal Choudhary & Ors. vs. Union of India & Ors.{2022 SCC OnLine SC 929} . It was held in the said decision that the trial of the offence of money-laundering should proceed before the Special Court constituted for the area in which the offence of money-laundering has been committed and that in case the scheduled offence is triable by the Special Court under a special enactment elsewhere, both the trials need to proceed independently, but in the area where the offence of money laundering has been committed. Paragraphs 356 and 357 of the decision in Vijay Madanlal Choudhary (supra) read as follows: 

• “356. The amendment of 2013 in fact clarifies the dispensation to be followed in regard to trials concerning offence of money-laundering under this Act and the trial in relation to scheduled offence including before the Special Court trying such (scheduled) offence. By virtue of this clause, the trials regarding the offence of money-laundering need to proceed before the Special Court constituted for the area in which the offence of money-laundering has been committed. In case the scheduled offence is triable by Special Court under the special enactment elsewhere, the provision, as amended, makes it amply clear that both the trials after coming into effect of this Act need to proceed independently, but in the area where the offence of money-laundering has been committed. 

• 357. In that, the offence of money-laundering ought to proceed for trial only before the Special Court designated to try money-laundering offences where the offence of money-laundering has been committed. This is a special enactment and being a later law, would prevail over any other law for the time being in force in terms of Section 71 of the 2002 Act.” 

# 14. On facts, it is the contention of the learned Counsel for the petitioner that no part of the alleged offence of money-laundering was committed within the jurisdiction of the Special Court, Ghaziabad and that the petitioner’s bank account where the alleged proceeds of crime were deposited, is located in Navi Mumbai, Maharashtra. Even the proceedings for the provisional attachment of the bank account were initiated in New Delhi. Therefore, it is contended that the lodging of the complaint at Ghaziabad was an abuse of the process of the court and that the same having been done at the instance of the founder of the Hindu IT Cell, is completely vitiated. It is also contended that the Court of the Special Judge, ought to have returned the complaint to the respondent, in terms of Section 201 of the Code of Criminal Procedure and that the Order taking cognizance is vitiated also by non-application of mind. 

# 15. In response, it is contended by Mr. Tushar Mehta, learned Solicitor General that under the scheme of the Act, the complaint of money-laundering should follow the complaint in respect of the scheduled offence. Since the complaint in respect of the scheduled offence was registered on 7.9.2021 in Indirapuram Police Station, Ghaziabad, the respondent necessarily had to lodge the Enforcement Case Information Report (ECIR) on 11.11.2021, on the file of the same court, within whose jurisdiction the scheduled offence became triable. In addition, it is contended by the learned Solicitor General that the petitioner was alleged to have received money through an online crowdfunding platform and that there were several victims within the territorial jurisdiction of the Court of the Special Judge who had contributed money. In other words, it is the contention of the learned Solicitor General that a part of the cause of action had actually arisen within the jurisdiction of the Court of the Special Judge, Ghaziabad. 

# 16. From the rival contentions, it appears that two questions arise for consideration before us. They are 

• (i) whether the trial of the offence of money-laundering should follow the trial of the scheduled/predicate offence or vice versa; and 

• (ii) whether the Court of the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, can be said to have exercised extra-territorial jurisdiction, even though the offence alleged, was not committed within the jurisdiction of the said Court.  

# 17. In order to find an answer to question No.1, it is necessary for us to take note of a few provisions of the PMLA. 

# 18. The word “money-laundering” is defined in Section 2(1)(p) of the Act to have the same meaning as assigned to it in Section 3. Section 3 of the Act makes a person guilty of the offence of money-laundering, if he 

• (i) directly or indirectly attempts to indulge; or 

• (ii) knowingly assists or; 

• (iii) knowingly is a party; or 

• (iv) is actually involved in any process or activity. Such process or activity should be connected to ‘proceeds of crime’ including its concealment or possession or acquisition or use. 

In addition, a person involved in such process or activity connected to proceeds of crime, should be projecting or claiming it as untainted property. The Explanation under Section 3 makes it clear that even if the involvement is in one or more of the following activities or processes, namely, (i) concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting it as untainted property; or (vi) claiming it as untainted property, the offence of money laundering will be made out. 

# 19. Thus, Section 3 comprises of two essential limbs, namely, (i) involvement in any process or activity; and (ii) connection of such  process or activity to the proceeds of crime. The expression “proceeds of crime” is defined in Section 2(1)(u) to mean any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad. 

# 20. PMLA provides for a two-pronged approach, one for dealing with the proceeds of crime and the other for dealing with the person guilty of the offence of money-laundering. While Chapter III and Chapter VI prescribe the procedure for dealing with the proceeds of crime, through a process of attachment, confirmation through adjudication and an appellate remedy to the Special Tribunal, Chapter VII deals with the prosecution of the money launderers by Special Courts. 

# 21. Section 43(1) of the Act provides for the constitution of Special Courts, by the Central Government, in consultation with the Chief Justice of the High Court. Sub-section (2) of Section 43 empowers a Special Court constituted under Section 43(1), also  to try an offence other than the offence punishable under Section 4 of the PMLA, with which the accused may be charged at the same trial under the Cr.P.C. In other words, a Special Court is constituted under Section 43(1) primarily for the purpose of trying an offence punishable under Section 4. But sub-section (2) of Section 43 confers an additional jurisdiction upon such a Special Court to try any other offence with which the accused may be charged at the same trial. Section 43 reads as follows:- 

• “43. Special Courts.—

• (1) The Central Government, in consultation with the Chief Justice of the High Court, shall, for trial of offence punishable under section 4, by notification, designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification. Explanation.—In this sub-section, “High Court” means the High Court of the State in which a Sessions Court designated as Special Court was functioning immediately before such designation. 

• (2) While trying an offence under this Act, a Special Court shall also try an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial.” 

# 22. Section 44 deals with the question of territorial jurisdiction of the Special Court, constituted under Section 43(1). At the outset, Section 44(1) takes note of two different contingencies, namely, 

(i) cases where the scheduled offence as well as the offence of money-laundering are committed within the territorial jurisdiction of the same Special Court constituted under Section 43(1); and 

(ii) cases where the Court which has taken cognizance of the scheduled offence, is other than the Special Court which has taken cognizance of the complaint of the offence of money laundering. Section 44(1) reads as follows: 

• “44. Offences triable by Special Courts.— 

• (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) an offence punishable under section 4 and any scheduled offence connected to the offence under that section shall be triable by the Special Court constituted for the area in which the offence has been committed: 

• Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall continue to try such scheduled offence; or; 

• (b) a Special Court may, upon a complaint made by an authority authorised in this behalf under this Act take cognizance of offence under section 3, without the accused being committed to it for trial; 

• Provided that after conclusion of investigation, if no offence of money-laundering is made out requiring filing of such complaint, the said authority shall submit a closure report before the Special Court; or 

• (c) if the court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the complaint of the offence of money-laundering under sub-clause (b), it shall, on an application by the authority authorised to file a complaint under this Act, commit the case relating to the scheduled offence to the Special Court and the Special Court shall,  on receipt of such case proceed to deal with it from the stage at which it is committed. 

• (d) a Special Court while trying the scheduled offence or the offence of money-laundering shall hold trial in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), as it applies to a trial before a Court of Session. 

• Explanation.—For the removal of doubts, it is clarified that,— (i) the jurisdiction of the Special Court while dealing with the offence under this Act, during investigation, enquiry or trial under this Act, shall not be dependent upon any orders passed in respect of the scheduled offence, and the trial of both sets of offences by the same court shall not be construed as joint trial; (ii) the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not.” 

# 23. What is dealt with by Section 44(1)(a) is a situation where there is no complication. Section 44(1)(a) lays down the most fundamental rule relating to territorial jurisdiction, by providing that an offence punishable under Section 4 of the PMLA and any scheduled offence connected to the same shall be triable by the Special Court constituted for the area in which the offence has been committed. It is relevant to note that Section 44(1)(a) uses the expression “offence” in three places in contradistinction to the expression “scheduled offence” used only once. This usage is not without significance. In all three places where the word “offence”  alone is used, it connotes the offence of money-laundering. The place where the expression “scheduled offence” is used, it connotes the predicate offence. By prescribing that an offence punishable under Section 4 of the PMLA and any scheduled offence connected to the same shall be triable by the Special Court constituted for the area in which “the offence” has been committed, Section 44(1)(a) makes it crystal clear that it is the Special Court constituted under Section 43(1), which will be empowered to try even the scheduled offence connected to the same.

# 24. After mapping out/laying down such a general but fundamental rule, the Act then proceeds to deal with a more complicated situation in Section 44(1)(c). The question as to what happens if the Court which has taken cognizance of the scheduled offence is other than the Special Court which has taken cognizance of the offence of money-laundering, is what is sought to be answered by clause (c) of sub-section (1) of Section 44. If the Court which has taken cognizance of the scheduled offence is different from the Special Court which has taken cognizance of the offence of money-laundering, then the authority authorised to file a complaint under PMLA should make an application to the Court which has taken cognizance of the scheduled offence. On the application so filed, the Court which has taken cognizance of the scheduled offence, should commit the case relating to the scheduled offence to the Special Court which has taken cognizance of the complaint of money laundering. 

# 25. Therefore, it is clear that the trial of the scheduled offence should take place in the Special Court which has taken cognizance of the offence of money-laundering. In other words, the trial of the scheduled offence, insofar as the question of territorial jurisdiction is concerned, should follow the trial of the offence of money-laundering and not vice versa. 

# 26. Since the Act contemplates the trial of the scheduled offence and the trial of the offence of money-laundering to take place only before the Special Court constituted under Section 43(1), a doubt is prone to arise as to whether all the offences are to be tried together. This doubt is sought to be removed by Explanation (i) to Section 44(1). Explanation (i) clarifies that the trial of both sets of offences by the same Court shall not be construed as joint trial. 

# 27. A careful dissection of clauses (a) and (c) of sub-section (1) of Section 44 shows that they confer primacy upon the Special Court constituted under Section 43(1) of the PMLA. These two clauses contain two Rules, namely, (i) that the offence punishable under the PMLA as well as a scheduled offence connected to the same shall be triable by the Special Court constituted for the area in which the offence of money-laundering has been committed; and (ii) that if cognizance has been taken by one Court, in respect of the scheduled offence and cognizance has been taken in respect of the offence of money-laundering by the Special Court, the Court trying the scheduled offence shall commit it to the Special Court trying the offence of money laundering. 

# 28. It is only because of the Special Court constituted under Section 43(1) being conferred primacy that Section 44(1) begins with the words “notwithstanding anything contained in the Code of Criminal Procedure”. Though the PMLA contains a non-obstante clause in relation to the Cr.P.C, both in Section 44(1) and in Section 45(1), there are two other provisions where the Code of Criminal Procedure is specifically declared to apply to the proceedings before a Special Court. Section 46(1) specifically  makes the provisions of the Cr.P.C applicable to proceedings before a Special Court. Similarly, Section 65 of the PMLA makes the provisions of Cr.P.C apply to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under the Act. 

# 29. Therefore, it is clear that the provisions of the Cr.P.C. are applicable to all proceedings under the Act including proceedings before the Special Court, except to the extent they are specifically excluded. Hence, Section 71 of the PMLA providing an overriding effect, has to be construed in tune with Section 46(1) and Section 65. 

# 30. Having taken note of the relevant provisions of the PMLA, which have a bearing upon the jurisdiction of the Special Court, let us now turn our attention to some of the provisions of the Cr.P.C, which deal with the question of territorial jurisdiction. 

# 31. As pointed out by this Court in Kaushik Chatterjee vs. State of Haryana & Ors.[2020 (10) SCC 92] , the question of territorial jurisdiction in criminal cases revolves around, 

• (i) place of commission of the offence; or 

• (ii) place where the consequence of an act, both of  which constitute an offence, ensues; or 

• (iii) place where the accused was found; or 

• (iv ) place where the victim was found; or 

• (v) place where the property in respect of which the offence was committed, was found; or

• (vi) place where the property forming the subject-matter of an offence was required to be returned or accounted for, etc., according as the case may be. 

# 32. As articulated in Kaushik Chatterjee (supra), the jurisdiction of a civil court is limited by territorial as well as pecuniary limits, but the jurisdiction of a criminal court is determined by (i) the offence; and/or (ii) the offender. 

# 33. The discussion on the question of territorial jurisdiction in terms of the provisions of the Cr.P.C can be cut short by extracting the principles culled out in paragraphs 19 to 21 of the decision in Kaushik Chatterjee. They read as follows: 

• “19. Chapter XIII of the Code of Criminal Procedure, 1973 contains provisions relating to jurisdiction of criminal courts in inquiries and trials. The Code maintains a distinction between (i) inquiry; (ii) investigation; and (iii) trial. The words “inquiry” and “investigation” are defined respectively, in clauses (g) and (h) of Section 2 of the Code. 

• 20. The principles laid down in Sections 177 to 184 of the Code (contained in Chapter XIII) regarding the jurisdiction of criminal courts in inquiries and trials can be summarised in simple terms as follows: 

• 20.1. Every offence should ordinarily be inquired into and tried by a court within whose local jurisdiction it was committed. This rule is found in Section 177. The expression “local jurisdiction” found in Section 177 is defined in Section 2(j) to mean “in relation to a court or Magistrate, means the local area within which the court or Magistrate may exercise all or any of its or his powers under the Code”. 

• 20.2. In case of uncertainty about the place in which, among the several local areas, an offence was committed, the Court having jurisdiction over any of such local areas may inquire into or try such an offence. 

• 20.3. Where an offence is committed partly in one area and partly in another, it may be inquired into or tried by a court having jurisdiction over any of such local areas.

• 20.4. In the case of a continuing offence which is committed in more local areas than one, it may be inquired into or tried by a court having jurisdiction over any of such local areas. 

• 20.5. Where an offence consists of several acts done in different local areas it may be inquired into or tried by a court having jurisdiction over any of such local areas. (Numbers 2 to 5 are traceable to Section 178) 

• 20.6. Where something is an offence by reason of the act done, as well as the consequence that ensued, then the offence may be inquired into or tried by a court within whose local jurisdiction either the act was done or the consequence ensued. (Section 179) 

• 20.7. In cases where an act is an offence, by reason of its relation to any other act which is also an offence, then the first mentioned offence may be inquired into or tried by a court within whose local jurisdiction either of the acts was done. (Section 180) 

• 20.8. In certain cases such as dacoity, dacoity with murder, escaping from custody, etc., the offence may be inquired into and tried by a court within whose local jurisdiction either the offence was committed or the accused person was found. 

• 20.9. In the case of an offence of kidnapping or abduction, it may be inquired into or tried by a court within whose  local jurisdiction the person was kidnapped or conveyed or concealed or detained. 

• 20.10. The offences of theft, extortion or robbery may be inquired into or tried by a court within whose local jurisdiction, the offence was committed or the stolen property was possessed, received or retained. 

• 20.11. An offence of criminal misappropriation or criminal breach of trust may be inquired into or tried by a court within whose local jurisdiction the offence was committed or any part of the property was received or retained or was required to be returned or accounted for by the accused person. 

• 20.12. An offence which includes the possession of stolen property, may be inquired into or tried by a court within whose local jurisdiction the offence was committed or the stolen property was possessed by any person, having knowledge that it is stolen property. (Nos. 8 to 12 are found in Section 181) 

• 20.13. An offence which includes cheating, if committed by means of letters or telecommunication messages, may be inquired into or tried by any court within whose local jurisdiction such letters or messages were sent or received. 

• 20.14. An offence of cheating and dishonestly inducing delivery of the property may be inquired into or tried by a court within whose local jurisdiction the property was delivered by the person deceived or was received by the accused person. 

• 20.15. Some offences relating to marriage such as Section 494 IPC (marrying again during the lifetime of husband or wife) and Section 495 IPC (committing the offence under Section 494 with concealment of former marriage) may be inquired into or tried by a court within whose local jurisdiction the offence was committed or the offender last resided with the spouse by the first marriage. (Nos. 13 to 15 are found in Section 182) 

• 20.16. An offence committed in the course of a journey or voyage may be inquired into or tried by a court through or into whose local jurisdiction that person or thing passed in the course of that journey or voyage. (Section 183). 

• 20.17  Cases falling under Section 219 (three offences of the same kind committed within a space of twelve months whether in respect of the same person or not), cases falling under Section 220 (commission of more offences than one, in one series of acts committed together as to form the same transaction) and cases falling under Section 221, (where it is doubtful what offences have been committed), may be inquired into or tried by any court competent to inquire into or try any of the offences. (Section 184).

• 21. Apart from Sections 177 to 184, which lay down in elaborate detail, the rules relating to jurisdiction, Chapter XIII of the Code also contains a few other sections. Section 185 empowers the State Government to order any case or class of cases committed for trial in any district, to be tried in any Sessions Division. Section 186 empowers the High Court, in case where two or more courts have taken cognizance of the same offence and a question as to which of them should inquire into or try the offence has arisen, to decide the district where the inquiry or trial shall take place. Section 187 speaks of the powers of the Magistrate, in case where a person within his local jurisdiction, has committed an offence outside his jurisdiction, but the same cannot be inquired into or tried within such jurisdiction. Sections 188 and 189 deal with offences committed outside India.” 

# 34. It may be seen from the principles culled out from Sections 177 to 184 of the Cr.P.C that almost all contingencies that are likely to arise have been carefully thought out and laid down in these provisions. 

# 35. The only contingency that could not have been provided in the above provisions of the Cr.P.C, is perhaps where the offence of money-laundering is committed. This is why Section 44(1) begins with a non-obstante clause. The whole picture is thus  complete with a combined reading of Section 44 of the PMLA and the provisions of Sections 177 to 184 of the Cr.P.C. 

# 36. Once this combined scheme is understood, it will be clear that in view of the specific mandate of clauses (a) and (c) of subsection (1) of Section 44, it is the Special Court constituted under the PMLA that would have jurisdiction to try even the scheduled offence. Even if the scheduled offence is taken cognizance of by any other Court, that Court shall commit the same, on an application by the concerned authority, to the Special Court which has taken cognizance of the offence of money-laundering. This answers the first question posed before us. 

# 37. Coming to the second question arising for our consideration, clause (a) of sub-section (1) of Section 44 leaves no semblance of any doubt that the offence of money-laundering is triable only by the Special Court constituted for the area in which the offence of money-laundering has been committed. To find out the area in which the offence of money-laundering has been committed, we may have to go back to the definition in Section 3 of the PMLA. 

# 38. As we have pointed out earlier, the involvement of a person in any one or more of certain processes or activities connected with the proceeds of crime, constitutes the offence of money laundering. These processes or activities include, (i) concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting as untainted property; or (vi) claiming as untainted property. 

# 39. In other words, a person may (i) acquire proceeds of crime in one place, (ii) keep the same in his possession in another place, (iii) conceal the same in a third place, and (iv) use the same in a fourth place. The area in which each one of these places is located, will be the area in which the offence of money laundering has been committed. To put it differently, the area in which the place of acquisition of the proceeds of crime is located or the place of keeping it in possession is located or the place in which it is concealed is located or the place in which it is used is located, will be the area in which the offence has been committed. 

# 40. In addition, the definition of the words “proceeds of crime” focuses on “deriving or obtaining a property” as a result of criminal activity relating to a scheduled offence. Therefore, the area in which the property is derived or obtained or even held or concealed, will be the area in which the offence of money laundering is committed. 

# 41. Having seen the legal landscape on the question of jurisdiction, let us now come back to the facts of the case on hand. It is the case of the petitioner that what was attached by the Enforcement Directorate under Section 5 of the Act as proceeds of crime, was the bank account of the petitioner in Navi Mumbai, Maharashtra and that therefore the offence of money laundering, even according to the respondent has been committed in Maharashtra. 

# 42. But the said contention overlooks the six different types of processes or activities mentioned in Explanation (i) under Section 3 of the Act, as connected with proceeds of crime, namely, concealment, possession, acquisition, or use, etc. 

# 43. Even according to the petitioner, she ran three campaigns from April 2020 to September 2021 in an online crowdfunding platform named “Ketto”. From the pleadings on record, we are not able to make out (i) the number of persons who provided funds; and (ii) the places where the donors were located.  

# 44. The bank account of the petitioner in HDFC Bank, Koperkhairane Branch, Navi Mumbai, Maharashtra, is the ultimate destination, to which all funds reached. Therefore, Navi Mumbai, Maharashtra is the place where the proceeds of crime were taken possession of (if they were actually proceeds of crime). Therefore, Navi Mumbai, Maharashtra is a place where only one of the six different processes or activities listed in Section 3 has been carried out. The other activity namely acquisition of the proceeds of crime (if they really are) has taken place in the virtual mode with people from different parts of the country/world transferring money online. If acquisition has taken place in the real physical world, the difficulty with respect to the question of jurisdiction would have been lesser. Since acquisition has taken place in the virtual world, the places from where online transfers of money took place, are known only to the petitioner or perhaps their Bankers. 

# 45. Therefore, the question of territorial jurisdiction in this case requires an enquiry into a question of fact as to the place where the alleged proceeds of crime were (i) concealed; or (ii) possessed; or (iii) acquired; or (iv) used. This question of fact will actually depend upon the evidence that unfolds before the Trial Court. It  will be useful in this regard to extract Paragraph 38 of the decision in Kaushik Chatterjee which reads as follows: - 

• “38. But be that as it may, the upshot of the above discussion is: 

• 38.1. That the issue of jurisdiction of a court to try an “offence” or “offender” as well as the issue of territorial jurisdiction, depend upon facts established through evidence. 

• 38.2. That if the issue is one of territorial jurisdiction, the same has to be decided with respect to the various rules enunciated in Sections 177 to 184 of the Code. 

• 38.3. That these questions may have to be raised before the court trying the offence and such court is bound to consider the same.” 

# 46. Therefore, we are of the view that the issue of territorial jurisdiction cannot be decided in a writ petition, especially when there is a serious factual dispute about the place/places of commission of the offence. Hence, this question should be raised by the petitioner before the Special Court, since an answer to the same would depend upon evidence as to the places where any one or more of the processes or activities mentioned in Section 3 were carried out. Therefore, giving liberty to the petitioner to raise the issue of territorial jurisdiction before the Trial Court, this writ petition is dismissed. There will be no order as to costs. 

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