Introduction:

In a significant development, the Supreme Court rendered a verdict quashing a money laundering case pertaining to the alleged Chhattisgarh liquor scam. The Court’s ruling centered on the absence of a scheduled offence under the Prevention of Money Laundering Act (PMLA), thereby precluding the existence of proceeds of crime essential for invoking money laundering charges.

Arguments:

The core contention revolved around the Enforcement Directorate’s (ED) complaint, premised on an alleged conspiracy to commit an Income Tax Act offence under Section 120B IPC. The petitioners, represented by Senior Advocate Mukul Rohatgi, argued that the ED’s invocation of PMLA based on Section 120B IPC was untenable in the absence of a scheduled offence.

Court’s Judgment:

In a meticulous analysis, the bench comprising Justice Abhay S Oka and Ujjal Bhuyan, relied on precedent set in Pavana Dibbur v. ED, emphasizing that the ED cannot invoke PMLA without a scheduled offence. Cognizant of procedural nuances, the Court elucidated the Special Court’s role in scrutinizing complaints and affirmed its authority to dismiss unsustainable complaints ex-facie.

The Court underscored that since no scheduled offence existed, no proceeds of crime were discernible, thereby negating the premise for a money laundering offence under PMLA. Consequently, the Court quashed the complaints against the petitioners, Anwar Dhebar and Arun Pati Tripathi, while refraining from opining on future complaints or their legality.