The Hon’ble Supreme Court recently adjudicated on the issuance of a summoning order of the Court of the Special Judge, Anti-Corruption, Ghaziabad on a complaint registered by the Enforcement Directorate, wherein the Petitioner, Rana Ayyub¹, under Article 32 of the Constitution of India, 1950 was challenging the territorial jurisdiction of the summoning Court.

Facts

During the pandemic, the Petitioner had initiated crowdfunding campaigns through an online crowdfunding platform named “Ketto” and ran three campaigns from April, 2020 to September, 2021.

1. In connection with the same, the Mumbai Zonal Office of the Enforcement Directorate initiated an enquiry against the Petitioner under the Foreign Exchange Management Act, 1999 (“FEMA”).
2. Thereafter FIR No. 2049 of 2021 was registered on 7.9.2021 by one Vikas Sankritayan, claiming to be the founder of Hindu IT Cell, with Indirapuram Police Station, Ghaziabad for alleged offences under Sections 403, 406, 418 and 420 of the Indian Penal Code, 1860 read with Section 66D of the Information Technology (Amendment) Act, 2008 and Section 4 of the Black Money Act, 2015.
3. The Petitioner further received an order under Section 37 of the FEMA read with Section 133(6) of the Income Tax Act, 1961 from the Mumbai Zonal Office of the Enforcement Directorate seeking certain documents, in addition to the documents submitted by the Petitioner.
4. Subsequent to submitting a detailed response to the Mumbai Zonal Office of the Enforcement Directorate, the Delhi Zone-II Office of the Directorate of Enforcement registered a complaint on 11.11.2021 in the Court of the Special Judge at Ghaziabad. It was stated in the said complaint that the FIR registered on 07.09.2021 on the file of the Indirapuram Police Station, Ghaziabad formed the basis for the complaint of the Enforcement Directorate.
5. The Petitioner was summoned to the Delhi Zone-II Office and her statement under Section 50 of the PMLA was recorded on 15.12.2021.
6. A provisional order of attachment of the bank account of the Petitioner in HDFC Bank, Koperkhairane Branch, Navi Mumbai, Maharashtra, was passed by the Directorate of Enforcement on 04.02.2022. Pursuant to the order of provisional attachment, the Adjudicating Authority issued a show cause notice dated 08.03.2022

Thereafter, the Court of the Special Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, passed an Order on 29.11.2022 taking cognizance of the complaint lodged by the Enforcement Directorate and summoning the Petitioner for appearance on 13.12.2022.

Contention of the Petitioner

• Under Section 44(1) of the PMLA, an offence punishable under the Act, shall be triable only by the Special Court constituted for the area in which the offence has been committed. Therefore, the Special Court in Maharashtra alone could have taken cognizance of the complaint.
• Reliance was placed on the Hon’ble Supreme Court’s judgement in Vijay Madanlal Choudhary & Ors. vs. Union of India & Ors.² wherein it was held that the trial of the offence of money-laundering should proceed before the Special Court constituted for the area in which the offence of money-laundering has been committed and that in case the scheduled offence is triable by the Special Court under a special enactment elsewhere, both the trials need to proceed independently, but in the area where the offence of money-laundering has been committed.
• No part of the alleged offence of money-laundering was committed within the jurisdiction of the Special Court, Ghaziabad.
• The Petitioner’s bank account where the alleged proceeds of crime were deposited is located in Navi Mumbai, Maharashtra.
• The proceedings for the provisional attachment of the bank account were initiated in New Delhi.
• Therefore, the Court of the Special Judge, ought to have returned the complaint to the Enforcement Directorate, in terms of Section 201 of the Code of Criminal Procedure, 1973.

Contention of the Respondent

• The Solicitor General on behalf of the Enforcement Directorate contended that under the scheme of the Act, the complaint of money-laundering should follow the complaint in respect of the scheduled offence and since the complaint in respect of the scheduled offence was registered on 07.09.2021 in Indirapuram Police Station, Ghaziabad, the Respondent necessarily had to register the complaint on the file of the same Court, within whose jurisdiction the scheduled offence became triable.
• The Petitioner was alleged to have received money through an online crowdfunding platform and that there were several victims within the territorial jurisdiction of the Court of the Special Judge who had contributed money and therefore a part of the cause of action had actually arisen within the jurisdiction of the Court of the Special Judge, Ghaziabad.

Held
As far as which Court has jurisdiction, the same has been answered with Section 44(1)(c) of the PMLA which states that if the Court which has taken cognizance of the scheduled offence is different from the Special Court which has taken cognizance of the offence of money-laundering, then the authority authorised to file a complaint under the PMLA should make an application to the Court which has taken cognizance of the scheduled offence. On the application so filed, the Court which has taken cognizance of the scheduled offence, should commit the case relating to the scheduled offence to the Special Court which has taken cognizance of the complaint of money-laundering. Thus, the trial of the scheduled offence with respect to the territorial jurisdiction, should follow the trial of the offence of money-laundering and not vice versa. However, the trial of both sets of offences by the same Court shall not be construed as joint trial.

With respect to which area the offence has been committed, it can be derived from Section 3 of the PMLA which states that office of money-laundering can be the area in which the place of acquisition of the proceeds of crime is located or the place of keeping it in possession is located or the place in which it is concealed is located or the place in which it is used is located, will be the area in which the offence has been committed. Moreover, the definition of the words “proceeds of crime” focuses on “deriving or obtaining a property” as a result of a criminal activity relating to a scheduled offence. Therefore, the area in which the property is derived or obtained or even held or concealed, will be the area in which the offence of money-laundering is committed.

Conclusion
The Hon’ble Supreme Court while decoding the PMLA with respect to the jurisdiction of the offences observed that although the bank account of the Petitioner in Navi Mumbai, Maharashtra was attached as proceeds of crime, in accordance with Section 5 of the PMLA, it was only the final destination to which all funds reached. It is a place where only one of the six different processes or activities listed in Section 3 of the PMLA has been carried out. What the Hon’ble Supreme Court had to look at while going through the facts of this case was where the alleged proceeds of crime were (i) concealed; or (ii) possessed; or (iii) acquired; or (iv) used. However, it observed that the activity of the alleged acquisition of the proceeds of crime has taken place in a virtual mode with people from different parts of the country/world transferring money online. If acquisition has taken place in the real physical world, the difficulty with respect to the question of jurisdiction would have been lesser.

The Division Bench went ahead and relied on Kaushik Chatterjee vs. State of Haryana & Ors.³ which had held that the issue of jurisdiction of a court to try an “offence” or “offender” as well as the issue of territorial jurisdiction, depend upon facts established through evidence and that these questions may have to be raised before the court trying the offence and thereafter, such court is bound to consider the same. Thus, the Hon’ble Supreme Court simply discussed the law on jurisdiction and slightly touched upon the issue with respect to the jurisdiction not necessarily being in Maharashtra. Thereafter, it refrained from answering the question as to which foot would have jurisdiction and sent the Petitioner back to square one by giving her liberty to raise this issue before the Special Court who would consider the evidence as to the places where any one or more of the processes or activities mentioned in Section 3 of the PMLA were carried out.

By - Lakshmi Raman