The Supreme Court has upheld its judgment, ruling that proceedings under the Prevention of Money Laundering Act (PMLA) cannot be initiated using Section 120B of the Indian Penal Code unless the alleged criminal conspiracy relates to a scheduled offence.
In a case involving Pavana Dibbur v. Directorate of Enforcement, the Supreme Court clarified that an offence under Section 120-B becomes a scheduled offence under PMLA only if the conspiracy is aimed at committing an offence specifically listed in the PMLA schedule.
The bench comprising Justices Abhay S Oka and Pankaj Mithal dismissed review petitions filed by the Directorate of Enforcement and Alliance University seeking review of the judgment delivered on November 29, 2023.
The case stemmed from a complaint by the Enforcement Directorate against the former Vice-Chancellor of Alliance University, citing offences under sections 44 and 45 of the PMLA. Allegations suggested involvement in executing a sham sale deed and concealing money siphoned from the university.
Despite the FIR in the predicate offence not being registered under “scheduled offences,” the Enforcement Directorate invoked PMLA under Section 120B IPC, leading to controversy.
The Supreme Court’s decision reaffirms the necessity for a direct nexus between the alleged criminal conspiracy and a scheduled offence for PMLA applicability, safeguarding against misuse of the Act.
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