Conspiracy to be scheduled offence under PMLA only if offence specifically mentioned: SC

New Delhi [India], November 29 : The Supreme Court on Wednesday clarified that an offence punishable under Section 120B (criminal conspiracy) of the IPC will become a scheduled offence only if the conspiracy alleged of committing an offence specifically included in Prevention of Money Laundering Act (PMLA).
A bench of justices Abhay S Oka and Pankaj Mithal observation came while setting aside a Karnataka High Court order dated September 27, 2022.
The court said that it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged, must have been shown as the accused in the scheduled offence.
"Even if an accused shown in the complaint under the PMLA is not an accused in the scheduled offence, he will benefit from the acquittal of all the accused in the scheduled offence or discharge of all the accused in the scheduled offence. Similarly, he will get the benefit of the order of quashing the proceedings of the scheduled offence," the court said.
"The first property cannot be said to have any connection with the proceeds of the crime as the
acts constituting scheduled offence were committed after the property was acquired," the court said.
"The issue of whether the appellant has used tainted money forming part of the proceeds of
crime for acquiring the second property can be decided only at the time of trial," the court said.
"The offence punishable under Section 120Bof the IPC will become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the Schedule," the court said.
"An offence punishable under Section 120B of IPC will become a scheduled offence only if the conspiracy alleged is of committing an offence which is otherwise a scheduled offence," the court said.
With these observations, the court further added, "Accordingly, the impugned order dated September 27, 2022, is hereby quashed and set aside, and the complaint being Special CC no 781 of 2022 pending before the Special Court for PMLA cases, Bengaluru, is hereby quashed only insofar as the present appellant is concerned," the court said.
If we look at Section 120B, only because there is a conspiracy to commit an offence, the same does not become an aggravated offence, the court said.
"The object is to punish those involved in conspiracy to commit a crime, though they may not have committed any overt act that constitutes the offence," the court said.
"Conspiracy is an agreement between the accused to commit an offence. If we look at the punishments provided under Section 120B, it becomes evident that it is not an aggravated offence," the court said.
"It only incorporates the principle of vicarious liability. If no specific punishment is provided in the statute for conspiracy to commit a particular offence, Section 120B treats a conspirator of the main accused as an abettor for the purposes of imposing the punishment," the court said.
"The interpretation suggested by the ED will defeat the legislative object of making only a few selected offences as scheduled offences," the court said.
"If we accept such an interpretation, the statute may attract the vice of unconstitutionality for being manifestly arbitrary," the court said.
"It cannot be the legislature's intention to make every offence not included in the Schedule a scheduled offence by applying Section 120B. Therefore, in our view, the offence under
Section 120B of the IPC included in Part A of the Schedule will become a scheduled offence only if the criminal conspiracy is to commit any offence already included in Parts A, B or C of the Schedule," the court said.
With this observation, the top court upheld the Pavana Dibbur's plea and quashed the complaint registered against him.
Dibbur was accused of money laundering by the Enforcement Directorate.
ED has filed a complaint against Dibbur under the provisions of the Prevention of Money Laundering Act before a Karanataka court, who took cognizance on March 17, 2022.
Dibbur moved the Karanataka High Court, challenging the trial court order. But the Karnataka High Court dismissed his plea seeking the relief of quashing of the complaint.
In the chargesheets filed in the alleged scheduled offences, there is no allegation of the commission of criminal conspiracy to commit any of the offences included in the schedule, the top court said.
"As pointed out earlier, except for Section 120B of the IPC, no other offence in the schedule has been applied," the court said.
"Therefore, in this case, the scheduled offence does not exist at all," the court said.
"Hence, the appellant cannot be prosecuted for the offences punishable under Section 3 of the PMLA," the court said.
The case related to the sale deed of properties and syphoning funds from an educational institution.