YASH TUTEJA & ANR.versusUNION OF INDIA & ORS.

                 [2024] 4 S.C.R. 591 : 2024 INSC 301

                           Yash Tuteja & Anr.
                                    v.
                          Union of India & Ors.
                 (Writ Petition (Criminal) No. 153 of 2023)
                                 08 April 2024
                [Abhay S. Oka* and Ujjal Bhuyan, JJ]

                           Issue for Consideration
       The issue for consideration was a challenge to the Complaint
       filed by the Directorate of Enforcement under Section 44(1)(b)
       of the Prevention of Money Laundering Act, 2002, mainly on the
       ground that apart from s. 120B of the Indian Penal Code, no other
       offences were scheduled offences, within the meaning of clause
       (y) of sub-section (1) of s. 2 of PMLA.`

                                  Headnotes
       Prevention of Money Laundering Act, 2002 – Clause (y) of
       sub-Section (1) of s. 2 – Scheduled Offence – Penal Code,
       1860 – s. 120B – Complaint filed by the Directorate of
       Enforcement on the basis of the offences which were not
       scheduled offences, except s. 120-B of IPC – Challenge to:
       Held: Offence punishable under Section 120B of the IPC could
       become a scheduled offence only if the conspiracy alleged is of
       committing an offence which is specifically included in the Schedule
       to the PMLA – Admittedly, the offences alleged in the complaint
       except Section 120-B of IPC are not the scheduled offences –
       Conspiracy to commit any of the offences included in the Schedule
       has not been alleged in the complaint – ECIR/RPZO/11/2022, which
       is the subject matter of the complaint, is based on the offences
       relied upon in the complaint – As the conspiracy alleged is of the
       commission of offences which are not the scheduled offences, the
       offences mentioned in the complaint are not scheduled offences
       within the meaning of clause (y) of sub-Section (1) of Section 2
       of the PMLA – Complaint arising out of ECIR filed by Directorate
       of Enforecement accordingly quashed. [Paras 3, 9]
       Prevention of Money Laundering Act, 2002 – Special Court –
       Cognizance – Code of Criminal Procedure, 1973 – s. 200 to
       s. 204 – Procedure thereof:

* Author
592                                                              [2024] 4 S.C.R.

                        Digital Supreme Court Reports


       Held: The only mode by which the cognizance of the offence under
       Section 3, punishable under Section 4 of the PMLA, can be taken
       by the Special Court is upon a complaint filed by the Authority
       authorized on this behalf – Section 46 of PMLA provides that the
       provisions of the Cr.PC shall apply to proceedings before a Special
       Court and for the purposes of the Cr.PC provisions, the Special
       Court shall be deemed to be a Court of Sessions – However, sub-
       section (1) of Section 46 starts with the words “save as otherwise
       provided in this Act” – Considering the provisions of Section 46(1) of
       the PMLA, save as otherwise provided in the PMLA, the provisions
       of the Cr.PC shall apply to the proceedings before a Special Court
       – Therefore, once a complaint is filed before the Special Court, the
       provisions of Sections 200 to 204 of the Cr.PC will apply to the
       Complaint – There is no provision in the PMLA which overrides the
       provisions of Sections 200 to Sections 204 of Cr.PC – Hence, the
       Special Court will have to apply its mind to the question of whether
       a prima facie case of a commission of an offence under Section 3
       of the PMLA is made out in a complaint under Section 44(1)(b) of
       the PMLA – If the Special Court is of the view that no prima facie
       case of an offence under Section 3 of the PMLA is made out, it
       must exercise the power under Section 203 of the Cr.PC to dismiss
       the complaint – If a prima facie case is made out, the Special Court
       can take recourse to Section 204 of the Cr.PC. [Para 6]

                                Case Law Cited
              Pavana Dibbur v. Directorate of Enforcement [2023] 13
              SCR 1049 : 2023 INSC 1029 – relied on.
                                   List of Acts
       Prevention of Money Laundering Act, 2002; Code of Criminal
       Procedure, 1973; Penal Code, 1860.
                                List of Keywords
       Proceeds of Crime; Scheduled Offence.
                               Case Arising From
       CRIMINAL ORIGINAL JURISDICTION : Writ Petition (Criminal) No.
       153 of 2023
       (Under Article 32 of The Constitution of India)
       With
       Writ Petition (Criminal) Nos. 208, 216 and 217 of 2023
[2024] 4 S.C.R.                                                           593

                   Yash Tuteja & Anr. v. Union of India & Ors


                               Appearances for Parties
      Mukul Rohatgi, Siddharth Aggarwal, Sr. Advs., Arshdeep Singh
      Khurana, Malak Manish Bhatt, Ms. Neeha Nagpal, Harsh Srivastava,
      Mandeep Singh, Sidak Anand, Gharote Anurag A, Mrs. Kalyani Bhide,
      Aljo K. Joseph, Advs. for the Petitioners.
      Suryaprakash V Raju, K.M. Nataraj, A.S.Gs., Avdhesh Kumar Singh,
      A.A.G., Mukesh Kumar Maroria, Zoheb Hussain, Annam Venkatesh,
      Mrs. Sairica Raju, Kanu Agarwal, Arkaj Kumar, Apoorv Kurup, Ravi
      Sharma, Ms. Prerna Dhall, Piyush Yadav, Prashant Singh, Nikhilesh
      Kumar, Srinivasan M Bogisam,M/S. VMZ CHAMBERS, Advs. for
      the Respondents.
                    Judgment / Order of the Supreme Court

                                        Judgment
      Abhay S. Oka, J.
1.    Taken up for final hearing as notice has already been issued on the
      petitions. In substance, in these Writ Petitions, the only challenge that
      survives is to the complaint filed by the Directorate of Enforcement
      under Section 44(1)(b) of the Prevention of Money-Laundering Act,
      2002 (for short, “the PMLA”) concerning ECIR/RPZO/11/2022.
2.    It is not in dispute that the alleged scheduled offences on which the
      complaint is based are under various sections of the Income-tax
      Act, 1961, read with Sections 120B, 191, 199, 200 and 204 of the
      Indian Penal Code, 1860 (for short, “the IPC”). It is also not in dispute
      that except for Section 120B of the IPC, none of the offences are
      scheduled offences within the meaning of clause (y) of sub-Section
      (1) of Section 2 of the PMLA. This Court, in the decision in the case
      of Pavana Dibbur v. Directorate of Enforcement1, recorded its
      conclusions in paragraph 31, which reads thus:
             “CONCLUSIONS
             31. While we reject the first and second submissions
             canvassed by the learned senior counsel appearing for
             the appellant, the third submission must be upheld. Our
             conclusions are:


1    [2023] 13 SCR 1049 : 2023 SCC OnLine SC 1586
594                                                          [2024] 4 S.C.R.

                      Digital Supreme Court Reports


            a.   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;
            b.   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;
            c.   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;
            d.   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; and
            e.   The offence punishable under Section 120-B of the
                 IPC will become a scheduled offence only if the
                 conspiracy alleged is of committing an offence which
                 is specifically included in the Schedule.”
                                                   (underline supplied)
3.     Hence, the offence punishable under Section 120B of the IPC
       could become a scheduled offence only if the conspiracy alleged
       is of committing an offence which is specifically included in the
       Schedule to the PMLA. In this case, admittedly, the offences
       alleged in the complaint except Section 120-B of IPC are not the
       scheduled offences. Conspiracy to commit any of the offences
       included in the Schedule has not been alleged in the complaint.
       ECIR/RPZO/11/2022, which is the subject matter of the complaint,
       is based on the offences relied upon in the complaint. As the
       conspiracy alleged is of the commission of offences which are not
       the scheduled offences, the offences mentioned in the complaint
       are not scheduled offences within the meaning of clause (y) of sub-
       Section (1) of Section 2 of the PMLA.
[2024] 4 S.C.R.                                                       595

                Yash Tuteja & Anr. v. Union of India & Ors


4.   In paragraph 15 of the decision in the case of Pavana Dibbur1, this
     Court held that:
           “The condition precedent for the existence of proceeds of
           crime is the existence of a scheduled offence.”
     Therefore, in the absence of the scheduled offence, as held in
     the decision mentioned above of this Court, there cannot be any
     proceeds of crime within the meaning of clause (u) of sub-Section
     (1) of Section 2 of the PMLA. If there are no proceeds of crime, the
     offence under Section 3 of the PMLA is not made out. The reason
     is that existence of the proceeds of crime is a condition precedent
     for the applicability of Section 3 of the PMLA.
5.   There is some controversy about whether the Special Court has
     taken cognizance on the basis of the complaint. The learned ASG, on
     instructions, states that cognizance has not been taken. The learned
     ASG submits that as the cognizance is not taken, this Court should
     not entertain the prayer for quashing the complaint.
6.   The only mode by which the cognizance of the offence under
     Section 3, punishable under Section 4 of the PMLA, can be taken
     by the Special Court is upon a complaint filed by the Authority
     authorized on this behalf. Section 46 of PMLA provides that the
     provisions of the Cr.PC (including the provisions as to bails or
     bonds) shall apply to proceedings before a Special Court and
     for the purposes of the Cr.PC provisions, the Special Court shall
     be deemed to be a Court of Sessions. However, sub-section (1)
     of Section 46 starts with the words “save as otherwise provided
     in this Act.” Considering the provisions of Section 46(1) of the
     PMLA, save as otherwise provided in the PMLA, the provisions
     of the Code of Criminal Procedure, 1973 (for short, Cr. PC) shall
     apply to the proceedings before a Special Court. Therefore, once
     a complaint is filed before the Special Court, the provisions of
     Sections 200 to 204 of the Cr.PC will apply to the Complaint.
     There is no provision in the PMLA which overrides the provisions
     of Sections 200 to Sections 204 of Cr.PC. Hence, the Special
     Court will have to apply its mind to the question of whether a prima
     facie case of a commission of an offence under Section 3 of the
     PMLA is made out in a complaint under Section 44(1)(b) of the
     PMLA. If the Special Court is of the view that no prima facie case
     of an offence under Section 3 of the PMLA is made out, it must
596                                                              [2024] 4 S.C.R.

                        Digital Supreme Court Reports


       exercise the power under Section 203 of the Cr.PC to dismiss the
       complaint. If a prima facie case is made out, the Special Court
       can take recourse to Section 204 of the Cr. PC.
7.     In this case, no scheduled offence is made out the basis of the
       complaint as the offences relied upon therein are not scheduled
       offences. Therefore, there cannot be any proceeds of crime. Hence,
       there cannot be an offence under Section 3 of the PMLA. Therefore,
       no purpose will be served by directing the Special Court to apply its
       mind in accordance with Section 203 read with Section 204 of the
       Cr.PC. That will only be an empty formality.
8.     We may note that the petitioners in Writ Petition (Crl.) No.153/2023
       and the petitioner in Writ Petition (Crl.) No.217/2023 have not been
       shown as accused in the complaint. Only the second petitioner in
       Writ Petition (Crl.) No.208/2023 and the petitioner in Writ Petition
       No.216/2023 have been shown as accused in the complaint. In
       the case of those petitioners who are not shown as accused in the
       complaint, it is unnecessary to entertain the Writ Petitions since the
       complaint itself is being quashed.
9.     Hence, we pass the following order:
       (i)    Writ Petition (Crl.) Nos.153/2023 and 217/2023 are disposed of;
       (ii)   The complaint based on ECIR/RPZO/11/2022, as far as
              the second petitioner (Anwar Dhebar) in Writ Petition (Crl.)
              No.208/2023 is concerned, is hereby quashed. The Writ Petition
              is, accordingly, partly allowed;
       (iii) The complaint based on ECIR/RPZO/11/2022, as far as the
             petitioner (Arun Pati Tripathi) in Writ Petition (Crl.) No.216/2023 is
             concerned, is hereby quashed. The Writ Petition is, accordingly,
             allowed;
       (iv) There will be no order as to costs; and
       (v)    Pending applications, including those seeking impleadment,
              are disposed of accordingly.
10. At this stage, the learned ASG stated that, based on another First
    Information Report, which, according to him, involves a scheduled
    offence, criminal proceedings under the PMLA are likely to be initiated
    against the petitioners. It is not necessary for us to go into the issue
    of the legality and validity of the proceedings that are likely to be
[2024] 4 S.C.R.                                                         597

                Yash Tuteja & Anr. v. Union of India & Ors


     initiated at this stage. Therefore, all the contentions in that regard
     are left open to be decided in appropriate proceedings.
11. The learned senior counsel appearing for the petitioners in Writ
    Petition (Crl.) Nos.153/2023 and 208/2023 seeks continuation of
    the interim order dated 7th August 2023 passed by this Court in
    these two Writ Petitions to enable the petitioners to take recourse
    to appropriate proceedings before the appropriate Court.
12. By keeping the rights and contention of the parties open, we direct
    that the interim order dated 7th August 2023 passed in Writ Petition
    (Crl.) Nos.153/2023 and 208/2023 shall continue to operate for three
    weeks from today.

     Headnotes prepared by:                               Result of the case:
     Prastut Mahesh Dalvi,                       WP(Crl) Nos. 153/2023 and
     Hony. Associate Editor                            217/2023 disposed of
     (Verified by: Kanu Agrawal, Adv.)   WP(Crl) No. 208/2023 partly allowed
                                              WP(Crl) No. 216/2023 allowed