PMLA Attachment, Confiscation Are Preventive, Not Defeated by Pre-Amendment Offences: Calcutta High Court

The Calcutta High Court has held that proceedings under the Prevention of Money Laundering Act may continue even where the alleged predicate offence was committed before it was included as a scheduled offence, provided the accused is alleged to have continued to deal with the proceeds of crime after the relevant statutory amendment came into force. The bench of Justice Ajay Kumar Gupta has observed that attachment and confiscation proceedings under the PMLA are civil and preventive measures, intended to deprive the offender of the benefits of crime, and are not rendered invalid merely because the scheduled offence predates the enactment or amendment, so long as the proceeds of crime subsist and are traceable. The case originated from a police complaint alleging fraudulent encashment of mutual fund redemption proceeds by opening bank accounts using forged and fabricated documents. Based on the complaint, a police case was registered in 2009 under various provisions of the IPC, including criminal conspiracy, cheating, forgery, and use of forged documents. During the course of investigation, the Enforcement Directorate initiated a separate inquiry under the PMLA after receiving materials from the police authorities. Section 467 of the IPC, which deals with forgery of valuable security and related documents, was included as a scheduled offence under the PMLA through the 2009 amendment, which came into effect on 1 June 2009. The enforcement agency alleged that the accused had not only committed the predicate offence but had also continued to possess, use, and project the proceeds derived from the alleged criminal activity as legitimate by routing funds through bank accounts and acquiring assets. A complaint under Sections 3 and 4 of the PMLA was filed before the designated court in 2013. In December 2017, the Special PMLA Court discharged the accused, holding that the alleged criminal acts occurred prior to the inclusion of Section 467 IPC in the Schedule and that the PMLA could not be invoked retrospectively. The court also directed the return of seized and attached properties, concluding that continuation of proceedings would amount to an abuse of process. Reversing the discharge order, the High Court held that the Special Court had failed to appreciate the independent and continuing nature of the offence of money laundering. Relying heavily on the Supreme Court’s authoritative ruling in Vijay Madanlal Choudhary v. Union of India, the Court observed that the offence under Section 3 of the PMLA is not determined solely by the date of commission of the predicate offence. The Court clarified that money laundering is a continuing offence that persists so long as the proceeds of crime are concealed, possessed, used, or projected as untainted property. Therefore, even if the criminal activity generating the proceeds occurred prior to the amendment, continued handling of those proceeds after the offence is notified as a scheduled offence would attract liability under the PMLA. Addressing concerns under Article 20(1) of the Constitution, the High Court held that the prosecution was not retrospectively criminalising past conduct. Instead, the penal consequences were linked to post-amendment conduct involving laundering of proceeds of crime, which constitutes a distinct and separate offence under the PMLA. The Court further observed that while the existence of a scheduled offence is a prerequisite for invoking the PMLA, a conviction for the predicate offence is not required at the stage of framing charges. What is necessary is prima facie material indicating that the property in question was derived from criminal activity relating to a scheduled offence and that the accused was involved in laundering-related activities thereafter. The High Court also disagreed with the Special Court’s view on attachment of property, reiterating that attachment and confiscation under the PMLA are civil and preventive in nature, aimed at depriving offenders of the benefits of crime. Such proceedings, the Court held, do not become invalid merely because the predicate offence predates the amendment, so long as the proceeds of crime continue to exist and are traceable. Allowing the revision petition, the High Court set aside the discharge order and directed the trial court to proceed with the case in accordance with law. The Court held that, at the stage of discharge, the allegations disclosed sufficient material to warrant a trial and that a detailed evaluation of evidence must be left to the trial stage. Case Details Case Title: ED Versus Papia Rozario & Anr. Case No.: C.R.R. 914 of 2018 Date: 21.01.2026 Counsel For Petitioner: Debjani Roy, Adv. Counsel For Respondent: Manjit Singha, Adv. Click Here To Read Order Read More: Can Buyers Claim CENVAT Credit on Supplementary Invoices Issued After Duty Suppression? Chhattisgarh HC

PMLA Attachment, Confiscation Are Preventive, Not Defeated by Pre-Amendment Offences: Calcutta High Court

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