RANA AYYUB versus DIRECTORATE OF ENFORCEMENT THROUGH ITS ASSISTANT DIRECTOR on 7 February 2023

[2023] 3 S.C.R. 892

SUPREME COURT REPORTS

[2023] 3 S.C.R.

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RANA AYYUB

v.

DIRECTORATE OF ENFORCEMENTTHROUGH ITS ASSISTANT DIRECTOR

(Writ Petition (Criminal) No. 12 of 2023)

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FEBRUARY 07, 2023

[V. RAMASUBRAMANIAN AND J.B. PARDIWALA, JJ.]

Prevention of Money-Laundering Act, 2002 – s. 3, 4, 44 and45 – Penal Code, 1860 – ss. 4.3, 406, 418, 420 – InformationCTechnology (Amendment) Act, 2008 – s. 66D – Black Money Act –s. 4 – Foreign Exchange Management Act, 1999 – s. 37 – IncomeTax Act, 1961 – ss. 133(6) – Petitioner during the pandemic did thecrowdfunding campaign using an online crowdfunding platform“Ketto” – Mumbai Zonal Office of the Enforcement Directorate (ED)initiated inquiry under FEMA – Also, a complaint was lodged by aDperson (private complainant) in Ghaziabad for the offences u/ss.403, 406, 418, 420 of IPC, s. 66D of IT Act and s. 4 of the BlackMoney Act – In the meantime the Mumbai Zonal Office of the EDissued notice to the petitioner seeking response relating to certaindocuments and the petitioner in response to that complied with theEnotice – Thereafter, the Delhi Zonal Office of the ED lodged acomplaint before the Special Judge at Ghaziabad citing that thecomplaint filed by the private complainant – After that theprovisional order of attachment of the bank account of the petitionerlocated at Navi Mumbai was passed by the ED – Thereafter, theSpecial Judge, Ghaziabad took cognizance of the complaint lodgedFby the ED (the respondent) and summoned the petitioner forappearance – Aggrieved by the order of summoning the petitionerhas approached the Supreme Court pleading that the Special JudgeGhaziabad has no territorial jurisdiction over the alleged offence– Held: Acquisition of the proceeds of crime has taken place in theGvirtual world, the places from where online transfers of money tookplace, are known only to the petitioner or their Bankers – Thequestion of territorial jurisdiction in the instant case requires anenquiry into a question of fact as to the place where the allegedproceeds of crime were (i) concealed; or (ii) possessed; or (iii)acquired; or (iv) used – This question of fact will depend upon theH

evidence that unfolds before the Trial Court – The issue of territorialjurisdiction cannot be decided in a writ petition, especially whenthere is a serious factual dispute about the place/places ofcommission of the offence – Petitioner given liberty to raise theissue of territorial jurisdiction before the Trial Court.

Prevention of Money-Laundering Act, 2002 – s. 44 –Jurisdiction of Special Court to try scheduled offences – Held: Acombined reading of Section 44 of the PMLA and the provisions ofSections 177 to 184 of the Cr.P.C. will make it clear that in view ofthe specific mandate of clauses (a) and (c) of subsection (1) ofSection 44, it is the Special Court constituted under the PMLA thatwould have jurisdiction to try even the scheduled offence – Even ifthe scheduled offence is taken cognizance of by any other Court,that Court shall commit the same, on an application by the concernedauthority, to the Special Court which has taken cognizance of theoffence of money-laundering.

Dismissing the Writ Petition, the Court

Conclusion

Dismissing the Writ Petition, the Court

HELD: 1. What is dealt with by Section 44(1)(a) ofPrevention of Money-Laundering Act, 2002 is a situation wherethere is no complication. Section 44(1)(a) lays down the mostfundamental rule relating to territorial jurisdiction, by providingthat an offence punishable under Section 4 of the PMLA and anyscheduled offence connected to the same shall be triable by theSpecial Court constituted for the area in which the offence hasbeen committed. It is relevant to note that Section 44(1)(a) usesthe expression “offence” in three places in contradistinction tothe expression “scheduled offence” used only once. This usageis not without significance. In all three places where the word“offence” alone is used, it connotes the offence of money-laundering. The place where the expression “scheduled offence”is used, it connotes the predicate offence. By prescribing that anoffence punishable under Section 4 of the PMLA and anyscheduled offence connected to the same shall be triable by theSpecial Court constituted for the area in which “the offence” hasbeen committed, Section 44(1)(a) makes it crystal clear that it isthe Special Court constituted under Section 43(1), which will beempowered to try even the scheduled offence connected to thesame. [Para 23][903-A-D]

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A2. If the Court which has taken cognizance of the scheduledoffence is different from the Special Court which has takencognizance of the offence of money-laundering, then the authorityauthorised to file a complaint under PMLA should make anapplication to the Court which has taken cognizance of thescheduled offence. On the application so filed, the Court whichBhas taken cognizance of the scheduled offence, should committhe case relating to the scheduled offence to the Special Courtwhich has taken cognizance of the complaint of money-laundering.Therefore, it is clear that the trial of the scheduled offence shouldtake place in the Special Court which has taken cognizance ofCthe offence of money-laundering. In other words, the trial of thescheduled offence, insofar as the question of territorial jurisdictionis concerned, should follow the trial of the offence of money-laundering and not vice versa. [Paras 24, 25][903-E-H]

3. Since the Act contemplates the trial of the scheduledDoffence and the trial of the offence of money-laundering to takeplace only before the Special Court constituted under Section43(1), a doubt is prone to arise as to whether all the offences areto be tried together. This doubt is sought to be removed byExplanation (i) to Section 44(1). Explanation (i) clarifies that thetrial of both sets of offences by the same Court shall not beEconstrued as joint trial. [Para 26][904-A-B]

4. A careful dissection of clauses (a) and (c) of sub-section(1) of Section 44 shows that they confer primacy upon the SpecialCourt constituted under Section 43(1) of the PMLA. These twoclauses contain two Rules, namely, (i) that the offence punishableFunder the PMLA as well as a scheduled offence connected to thesame shall be triable by the Special Court constituted for thearea in which the offence of money-laundering has beencommitted; and (ii) that if cognizance has been taken by one Court,in respect of the scheduled offence and cognizance has been takenGin respect of the offence of money-laundering by the Special Court,the Court trying the scheduled offence shall commit it to theSpecial Court trying the offence of money-laundering. [Para27][904-C-D]

5. The whole picture is thus complete with a combinedHreading of Section 44 of the PMLA and the provisions of Sections

177 to 184 of the Cr.P.C. Once this combined scheme isunderstood, it will be clear that in view of the specific mandate ofclauses (a) and (c) of subsection (1) of Section 44, it is the SpecialCourt constituted under the PMLA that would have jurisdictionto try even the scheduled offence. Even if the scheduled offenceis taken cognizance of by any other Court, that Court shall committhe same, on an application by the concerned authority, to theSpecial Court which has taken cognizance of the offence of money-laundering. [Paras 35 and 36][908-E-G]

6. The involvement of a person in any one or more of certainprocesses or activities connected with the proceeds of crime,constitutes the offence of money-laundering. These processesor activities include, (i) concealment; (ii) possession; (iii)acquisition; (iv) use; (v) projecting as untainted property; or (vi)claiming as untainted property. In other words, a person may (i)acquire proceeds of crime in one place, (ii) keep the same in hispossession in another place, (iii) conceal the same in a third place,and (iv) use the same in a fourth place. The area in which eachone of these places is located, will be the area in which the offenceof money-laundering has been committed. To put it differently,the area in which the place of acquisition of the proceeds of crimeis located or the place of keeping it in possession is located orthe place in which it is concealed is located or the place in whichit is used is located, will be the area in which the offence hasbeen committed. [Paras 38, 39][909-A-C]

7. The question of territorial jurisdiction in this caserequires an enquiry into a question of fact as to the place wherethe alleged proceeds of crime were (i) concealed; or (ii)possessed; or (iii) acquired; or (iv) used. This question of factwill actually depend upon the evidence that unfolds before theTrial Court. [Para 45][910-D]

Kaushik Chatterjee v. State of Haryana & Ors. (2020)(10) SCC 92 – relied on.

Vijay Madanlal Choudhary & Ors. v. Union of India &Ors. 2022 SCC Online SC 929 – referred to.

CRIMINAL ORIGINAL JURISDICTION : Writ Petition(Criminal) No.12 of 2023.

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A(Under Article 32 of The Constitution Of India)

Ms. Vrinda Grover, Soutik Banerjee, Aakarsh Kamra, Ms. DevikaTulsiani, Ms. Mannat Tipnis, Advs. for the Petitioner.

Tushar Mehta, Solicitor General, Mukesh Kumar Maroria, ZohebHussain, Kanu Agarwal, K. Parmeshwar, Padmesh Mishra, Advs. forBthe Respondent.

The Judgment of the Court was delivered by

V. RAMASUBRAMANIAN, J.

1. Challenging a summoning order issued by the Court of theCSpecial Judge, Anti-Corruption, CBI Court No.1, Ghaziabad, on acomplaint lodged by the respondent under Section 45 read with Section44 of the Prevention of Money-laundering Act, 2002[1], the petitioner hascome up with the above writ petition under Article 32 of the Constitutionof India.D2. We have heard Ms. Vrinda Grover, learned Counsel for thepetitioner and Mr. Tushar Mehta, learned Solicitor General of India forthe respondent.

3. It is the case of the petitioner that during the pandemic, sheinitiated crowdfunding campaign through an online crowdfunding platformEnamed “Ketto” and ran three campaigns from April 2020 to September2021. In connection with the same, the Mumbai Zonal Office of theEnforcement Directorate initiated an enquiry against the petitioner underthe Foreign Exchange Management Act, 1999[2]through an Office Orderdated 3.8.2021.

F4. It appears that thereafter a complaint was lodged on 7.9.2021by one Vikas Sankritayan, claiming to be the founder of Hindu IT Cell, inFIR No. 2049/2021 with Indirapuram Police Station, Ghaziabad foralleged offences under Sections 403, 406, 418 and 420 IPC read withSection 66D of the Information Technology (Amendment) Act, 2008and Section 4 of the Black Money Act.G

5. In the meantime, the petitioner received an order under Section37 of the FEMA read with Section 133(6) of the Income- tax Act, 1961from the Mumbai Zonal Office of the Enforcement Directorate seeking H

1 For short, “PMLA” or the “Act”, as the case may be.

2 For short, “FEMA”

certain documents, in addition to the documents submitted by the petitionerin response to the previous Office Order dated 3.8.2021 issued by thevery same Mumbai Zonal Office.

6. After the petitioner submitted a detailed response to the MumbaiZonal Office of the Enforcement Directorate, the Delhi Zone-II Officeof the Directorate of Enforcement registered a complaint in ECIR No.DLZO-II/58/2021 on 11.11.2021, in the Court of the Special Judge atGhaziabad. It was stated in the said complaint that the FIR registered on7.9.2021 on the file of the Indirapuram Police Station, Ghaziabad formedthe basis for the complaint of the Enforcement Directorate.

7. After the registration of the aforesaid complaint by theEnforcement Directorate, the petitioner was summoned to the DelhiZone-II Office and her statement under Section 50 of the PMLA wasrecorded on 15.12.2021.

8. Thereafter, a provisional order of attachment of the bank accountof the petitioner in HDFC Bank, Koperkhairane Branch, Navi Mumbai,Maharashtra, was passed by the Directorate of Enforcement on 4.2.2022.Pursuant to the order of provisional attachment, the Adjudicating Authorityissued a show cause notice dated 8.3.2022.

9. While things stood thus, a Look out Circular was issued againstthe petitioner, but the same was set aside by the High Court of Delhi ina writ petition filed by the petitioner. In a second writ petition filed by thepetitioner, the High Court of Delhi restrained the Directorate ofEnforcement from taking further steps under Section 8 of the PMLA onthe short ground that the validity period of 180 days, of the order ofprovisional attachment, came to an end statutorily on 4.8.2022.

10. Thereafter, the Court of the Special Judge, Anti-Corruption,CBI Court No.1, Ghaziabad, passed an order on 29.11.2022 takingcognizance of the complaint lodged by the respondent and summoningthe petitioner for appearance on 13.12.2022. Upon coming to know ofthe said Summoning Order, the petitioner has come up with the abovewrit petition. It is claimed by the petitioner in paragraph 5(v) of the writpetition that “No summons have yet been received…” by her and thatshe had annexed a screenshot of the e-court website reflecting the casedetails. However, a print out of the copy of the Summoning Order isfiled along with the writ petition.

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A11. At the outset, it is made clear by Ms. Vrinda Grover, learnedCounsel for the petitioner that the challenge to the impugned SummoningOrder is limited to the question of territorial jurisdiction alone and thatthe impugned Summoning Order is not being challenged on any groundother than the lack of territorial jurisdiction.B12. In brief, the contention of the learned Counsel for the petitioneris that under Section 44(1) of the PMLA, an offence punishable underthe Act, shall be triable only by the Special Court constituted for the areain which the offence has been committed. This is notwithstanding anythingcontained in the Code of Criminal Procedure, 1973[3]. Apart from thenon-obstante clause with which Section 44(1) begins, Section 71 of theCAct also gives overriding effect to PMLA. Therefore, it is contended bythe learned Counsel for the petitioner that the Special Court inMaharashtra alone could have taken cognizance of the complaint.

13. Heavy reliance is placed by the learned Counsel for thepetitioner on the opinion of this Court in paragraphs 353 to 358 of theDdecision in Vijay Madanlal Choudhary & Ors. vs. Union of India &Ors.[4]. It was held in the said decision that the trial of the offence ofmoney-laundering should proceed before the Special Court constitutedfor the area in which the offence of money-laundering has beencommitted and that in case the scheduled offence is triable by the SpecialCourt under a special enactment elsewhere, both the trials need to proceedEindependently, but in the area where the offence of money- launderinghas been committed. Paragraphs 356 and 357 of the decision in VijayMadanlal Choudhary (supra) read as follows:

“356. The amendment of 2013 in fact clarifies the dispensationto be followed in regard to trials concerning offence of money-Flaundering under this Act and the trial in relation to scheduledoffence including before the Special Court trying such (scheduled)offence. By virtue of this clause, the trials regarding the offenceof money-laundering need to proceed before the Special Courtconstituted for the area in which the offence of money-launderinghas been committed. In case the scheduled offence is triable byGSpecial Court under the special enactment elsewhere, the provision,as amended, makes it amply clear that both the trials after cominginto effect of this Act need to proceed independently, but in thearea where the offence of money-laundering has been committed.

3 For short, “Cr.P.C”H4 2022 SCC OnLine SC 929

357. In that, the offence of money-laundering ought to proceedfor trial only before the Special Court designated to try money-laundering offences where the offence of money-laundering hasbeen committed. This is a special enactment and being a laterlaw, would prevail over any other law for the time being in forcein terms of Section 71 of the 2002 Act.”

14. On facts, it is the contention of the learned Counsel for thepetitioner that no part of the alleged offence of money-laundering wascommitted within the jurisdiction of the Special Court, Ghaziabad andthat the petitioner’s bank account where the alleged proceeds of crimewere deposited, is located in Navi Mumbai, Maharashtra. Even theproceedings for the provisional attachment of the bank account wereinitiated in New Delhi. Therefore, it is contended that the lodging of thecomplaint at Ghaziabad was an abuse of the process of the court andthat the same having been done at the instance of the founder of theHindu IT Cell, is completely vitiated. It is also contended that the Courtof the Special Judge, ought to have returned the complaint to therespondent, in terms of Section 201 of the Code of Criminal Procedureand that the Order taking cognizance is vitiated also by non-applicationof mind.

15. In response, it is contended by Mr. Tushar Mehta, learnedSolicitor General that under the scheme of the Act, the complaint ofmoney-laundering should follow the complaint in respect of the scheduledoffence. Since the complaint in respect of the scheduled offence wasregistered on 7.9.2021 in Indirapuram Police Station, Ghaziabad, therespondent necessarily had to lodge the Enforcement Case InformationReport (ECIR) on 11.11.2021, on the file of the same court, within whosejurisdiction the scheduled offence became triable. In addition, it iscontended by the learned Solicitor General that the petitioner was allegedto have received money through an online crowdfunding platform andthat there were several victims within the territorial jurisdiction of theCourt of the Special Judge who had contributed money. In other words,it is the contention of the learned Solicitor General that a part of thecause of action had actually arisen within the jurisdiction of the Court ofthe Special Judge, Ghaziabad.

16. From the rival contentions, it appears that two questions arisefor consideration before us. They are (i) whether the trial of the offenceof money-laundering should follow the trial of the scheduled/predicate A

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Aoffence or vice versa; and (ii) whether the Court of the Special Judge,Anti-Corruption, CBI Court No.1, Ghaziabad, can be said to haveexercised extra-territorial jurisdiction, even though the offence alleged,was not committed within the jurisdiction of the said Court.

17. In order to find an answer to question No.1, it is necessary forBus to take note of a few provisions of the PMLA.

18. The word “money-laundering” is defined in Section 2(1)(p)of the Act to have the same meaning as assigned to it in Section 3.Section 3 of the Act makes a person guilty of the offence of money-laundering, if he (i) directly or indirectly attempts to indulge; or (ii)knowingly assists or; (iii) knowingly is a party; or (iv) is actually involvedCin any process or activity. Such process or activity should be connected to ‘proceeds of crime’ including its concealment or possession oracquisition or use. In addition, a person involved in such process or activityconnected to proceeds of crime, should be projecting or claiming it asuntainted property. The Explanation under Section 3 makes it clear thatDeven if the involvement is in one or more of the following activities orprocesses, namely, (i) concealment; (ii) possession; (iii) acquisition; (iv)use; (v) projecting it as untainted property; or (vi) claiming it as untaintedproperty, the offence of money- laundering will be made out.

19. Thus, Section 3 comprises of two essential limbs, namely, (i)involvement in any process or activity; and (ii) connection of such processEor activity to the proceeds of crime. The expression “proceeds of crime”is defined in Section 2(1)(u) to mean any property derived or obtained,directly or indirectly, by any person as a result of criminal activity relatingto a scheduled offence or the value of such property or where suchproperty is taken or held outside the country, then the property equivalentFin value held within the country or abroad.

20. PMLA provides for a two-pronged approach, one for dealingwith the proceeds of crime and the other for dealing with the personguilty of the offence of money-laundering. While Chapter III and ChapterVI prescribe the procedure for dealing with the proceeds of crime, throughGa process of attachment, confirmation through adjudication and anappellate remedy to the Special Tribunal, Chapter VII deals with theprosecution of the money launderers by Special Courts.

21. Section 43(1) of the Act provides for the constitution of SpecialCourts, by the Central Government, in consultation with the Chief Justiceof the High Court. Sub-section (2) of Section 43 empowers a SpecialH

Court constituted under Section 43(1), also to try an offence other thanthe offence punishable under Section 4 of the PMLA, with which theaccused may be charged at the same trial under the Cr.P.C. In otherwords, a Special Court is constituted under Section 43(1) primarily forthe purpose of trying an offence punishable under Section 4. But sub-section (2) of Section 43 confers an additional jurisdiction upon such aSpecial Court to try any other offence with which the accused may becharged at the same trial. Section 43 reads as follows:- “43. Special Courts.—(1) The Central Government, in consultationwith the Chief Justice of the High Court, shall, for trial of offencepunishable under section 4, by notification, designate one or moreCourts of Session as Special Court or Special Courts for sucharea or areas or for such case or class or group of cases as maybe specified in the notification.

Explanation.—In this sub-section, “High Court” means theHigh Court of the State in which a Sessions Court designated asSpecial Court was functioning immediately before such designation.

(2) While trying an offence under this Act, a Special Courtshall also try an offence, other than an offence referred to in sub-section (1), with which the accused may, under the Code ofCriminal Procedure, 1973 (2 of 1974), be charged at the sametrial.”

22. Section 44 deals with the question of territorial jurisdiction ofthe Special Court, constituted under Section 43(1). At the outset, Section44(1) takes note of two different contingencies, namely, (i) cases wherethe scheduled offence as well as the offence of money-laundering arecommitted within the territorial jurisdiction of the same Special Courtconstituted under Section 43(1); and (ii) cases where the Court whichhas taken cognizance of the scheduled offence, is other than the SpecialCourt which has taken cognizance of the complaint of the offence ofmoney- laundering. Section 44(1) reads as follows:

“44. Offences triable by Special Courts.—

(1) Notwithstanding anything contained in the Code of CriminalProcedure, 1973 (2 of 1974),—

(a) an offence punishable under section 4 and any scheduledoffence connected to the offence under that section shall be triableby the Special Court constituted for the area in which the offencehas been committed:

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Provided that the Special Court, trying a scheduled offence beforethe commencement of this Act, shall continue to try such scheduledoffence; or; (b) a Special Court may, upon a complaint made by an authorityauthorised in this behalf under this Act take cognizance of offenceunder section 3, without the accused being committed to it fortrial; Provided that after conclusion of investigation, if no offence ofmoney-laundering is made out requiring filing of such complaint,the said authority shall submit a closure report before the SpecialCourt; or

(c) if the court which has taken cognizance of the scheduledoffence is other than the Special Court which has taken cognizanceof the complaint of the offence of money-laundering under sub-clause (b), it shall, on an application by the authority authorised tofile a complaint under this Act, commit the case relating to thescheduled offence to the Special Court and the Special Courtshall, on receipt of such case proceed to deal with it from thestage at which it is committed.

(d) a Special Court while trying the scheduled offence or theoffence of money-laundering shall hold trial in accordance withthe provisions of the Code of Criminal Procedure, 1973 (2 of 1974),as it applies to a trial before a Court of Session.

Explanation.—For the removal of doubts, it is clarified that,—

(i) the jurisdiction of the Special Court while dealing with theoffence under this Act, during investigation, enquiry or trial underthis Act, shall not be dependent upon any orders passed in respectof the scheduled offence, and the trial of both sets of offences bythe same court shall not be construed as joint trial;

(ii) the complaint shall be deemed to include any subsequentcomplaint in respect of further investigation that may be conductedto bring any further evidence, oral or documentary, against anyaccused person involved in respect of the offence, for whichcomplaint has already been filed, whether named in the originalcomplaint or not.”

23. What is dealt with by Section 44(1)(a) is a situation wherethere is no complication. Section 44(1)(a) lays down the most fundamentalrule relating to territorial jurisdiction, by providing that an offencepunishable under Section 4 of the PMLA and any scheduled offenceconnected to the same shall be triable by the Special Court constitutedfor the area in which the offence has been committed. It is relevant tonote that Section 44(1)(a) uses the expression “offence” in three placesin contradistinction to the expression “scheduled offence” used onlyonce. This usage is not without significance. In all three places wherethe word “offence” alone is used, it connotes the offence of money-laundering. The place where the expression “scheduled offence” isused, it connotes the predicate offence. By prescribing that an offencepunishable under Section 4 of the PMLA and any scheduled offenceconnected to the same shall be triable by the Special Court constitutedfor the area in which “the offence” has been committed, Section 44(1)(a)makes it crystal clear that it is the Special Court constituted under Section43(1), which will be empowered to try even the scheduled offenceconnected to the same.

24. After mapping out/laying down such a general but fundamentalrule, the Act then proceeds to deal with a more complicated situation inSection 44(1)(c). The question as to what happens if the Court whichhas taken cognizance of the scheduled offence is other than the SpecialCourt which has taken cognizance of the offence of money-laundering,is what is sought to be answered by clause (c) of sub-section (1) ofSection 44. If the Court which has taken cognizance of the scheduledoffence is different from the Special Court which has taken cognizanceof the offence of money-laundering, then the authority authorised to filea complaint under PMLA should make an application to the Court whichhas taken cognizance of the scheduled offence. On the application sofiled, the Court which has taken cognizance of the scheduled offence,should commit the case relating to the scheduled offence to the SpecialCourt which has taken cognizance of the complaint of money- laundering.

25. Therefore, it is clear that the trial of the scheduled offenceshould take place in the Special Court which has taken cognizance ofthe offence of money-laundering. In other words, the trial of the scheduledoffence, insofar as the question of territorial jurisdiction is concerned,should follow the trial of the offence of money-laundering and not viceversa.

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A26. Since the Act contemplates the trial of the scheduled offenceand the trial of the offence of money-laundering to take place only beforethe Special Court constituted under Section 43(1), a doubt is prone toarise as to whether all the offences are to be tried together. This doubt issought to be removed by Explanation (i) to Section 44(1). Explanation (i)clarifies that the trial of both sets of offences by the same Court shallBnot be construed as joint trial.

27. A careful dissection of clauses (a) and (c) of sub-section (1)of Section 44 shows that they confer primacy upon the Special Courtconstituted under Section 43(1) of the PMLA. These two clauses containtwo Rules, namely, (i) that the offence punishable under the PMLA asCwell as a scheduled offence connected to the same shall be triable bythe Special Court constituted for the area in which the offence of money-laundering has been committed; and (ii) that if cognizance has beentaken by one Court, in respect of the scheduled offence and cognizancehas been taken in respect of the offence of money-laundering by theDSpecial Court, the Court trying the scheduled offence shall commit it tothe Special Court trying the offence of money- laundering.

28. It is only because of the Special Court constituted under Section43(1) being conferred primacy that Section 44(1) begins with the words“notwithstanding anything contained in the Code of CriminalEProcedure”. Though the PMLA contains a non-obstante clause inrelation to the Cr.P.C, both in Section 44(1) and in Section 45(1), thereare two other provisions where the Code of Criminal Procedure isspecifically declared to apply to the proceedings before a Special Court.Section 46(1) specifically makes the provisions of the Cr.P.C applicableto proceedings before a Special Court. Similarly, Section 65 of the PMLAFmakes the provisions of Cr.P.C apply to arrest, search and seizure,attachment, confiscation, investigation, prosecution and all otherproceedings under the Act.

29. Therefore, it is clear that the provisions of the Cr.P.C. areapplicable to all proceedings under the Act including proceedings beforeGthe Special Court, except to the extent they are specifically excluded.Hence, Section 71 of the PMLA providing an overriding effect, has tobe construed in tune with Section 46(1) and Section 65.

30. Having taken note of the relevant provisions of the PMLA,which have a bearing upon the jurisdiction of the Special Court, let us H

now turn our attention to some of the provisions of the Cr.P.C, whichdeal with the question of territorial jurisdiction.

31. As pointed out by this Court in Kaushik Chatterjee vs. Stateof Haryana & Ors.[5], the question of territorial jurisdiction in criminalcases revolves around, (i) place of commission of the offence; or (ii)place where the consequence of an act, both of which constitute anoffence, ensues; or (iii) place where the accused was found; or (iv)place where the victim was found; or (v) place where the property inrespect of which the offence was committed, was found; or (vi) placewhere the property forming the subject-matter of an offence was requiredto be returned or accounted for, etc., according as the case may be.

32. As articulated in Kaushik Chatterjee (supra), the jurisdictionof a civil court is limited by territorial as well as pecuniary limits, but thejurisdiction of a criminal court is determined by (i) the offence; and/or(ii) the offender.

33. The discussion on the question of territorial jurisdiction in termsof the provisions of the Cr.P.C can be cut short by extracting the principlesculled out in paragraphs 19 to 21 of the decision in Kaushik Chatterjee.They read as follows:

“19. Chapter XIII of the Code of Criminal Procedure, 1973 containsprovisions relating to jurisdiction of criminal courts in inquiries andtrials. The Code maintains a distinction between (i) inquiry; (ii)investigation; and (iii) trial. The words “inquiry” and “investigation”are defined respectively, in clauses (g) and (h) of Section 2 of theCode.

20. The principles laid down in Sections 177 to 184 of the Code(contained in Chapter XIII) regarding the jurisdiction of criminalcourts in inquiries and trials can be summarised in simple terms asfollows:

20.1. Every offence should ordinarily be inquired into and triedby a court within whose local jurisdiction it was committed. Thisrule is found in Section 177. The expression “local jurisdiction”found in Section 177 is defined in Section 2(j) to mean “in relationto a court or Magistrate, means the local area within which the A

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court or Magistrate may exercise all or any of its or his powersunder the Code”.

20.2. In case of uncertainty about the place in which, among theseveral local areas, an offence was committed, the Court havingjurisdiction over any of such local areas may inquire into or trysuch an offence.

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20.3. Where an offence is committed partly in one area and partlyin another, it may be inquired into or tried by a court havingjurisdiction over any of such local areas.

20.4. In the case of a continuing offence which is committed inmore local areas than one, it may be inquired into or tried by acourt having jurisdiction over any of such local areas.

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20.5. Where an offence consists of several acts done in differentlocal areas it may be inquired into or tried by a court havingjurisdiction over any of such local areas. (Numbers 2 to 5 areDtraceable to Section 178)

20.6. Where something is an offence by reason of the act done,as well as the consequence that ensued, then the offence may beinquired into or tried by a court within whose local jurisdictioneither the act was done or the consequence ensued. (Section 179)

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20.7. In cases where an act is an offence, by reason of its relationto any other act which is also an offence, then the first mentionedoffence may be inquired into or tried by a court within whoselocal jurisdiction either of the acts was done. (Section 180)

20.8. In certain cases such as dacoity, dacoity with murder,escaping from custody, etc., the offence may be inquired into andtried by a court within whose local jurisdiction either the offencewas committed or the accused person was found.

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20.9. In the case of an offence of kidnapping or abduction, it maybe inquired into or tried by a court within whose local jurisdictionthe person was kidnapped or conveyed or concealed or detained.

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20.10. The offences of theft, extortion or robbery may be inquiredinto or tried by a court within whose local jurisdiction, the offencewas committed or the stolen property was possessed, received orretained.

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20.11. An offence of criminal misappropriation or criminal breachof trust may be inquired into or tried by a court within whose localjurisdiction the offence was committed or any part of the propertywas received or retained or was required to be returned oraccounted for by the accused person.

20.12. An offence which includes the possession of stolenproperty, may be inquired into or tried by a court within whoselocal jurisdiction the offence was committed or the stolen propertywas possessed by any person, having knowledge that it is stolenproperty. (Nos. 8 to 12 are found in Section 181)

20.13. An offence which includes cheating, if committed by meansof letters or telecommunication messages, may be inquired into ortried by any court within whose local jurisdiction such letters ormessages were sent or received.

20.14. An offence of cheating and dishonestly inducing deliveryof the property may be inquired into or tried by a court withinwhose local jurisdiction the property was delivered by the persondeceived or was received by the accused person.

20.15. Some offences relating to marriage such as Section 494IPC (marrying again during the lifetime of husband or wife) andSection 495 IPC (committing the offence under Section 494 withconcealment of former marriage) may be inquired into or tried bya court within whose local jurisdiction the offence was committedor the offender last resided with the spouse by the first marriage.(Nos. 13 to 15 are found in Section 182)

20.16. An offence committed in the course of a journey or voyagemay be inquired into or tried by a court through or into whoselocal jurisdiction that person or thing passed in the course of thatjourney or voyage. (Section 183).

20.17. Cases falling under Section 219 (three offences of thesame kind committed within a space of twelve months whetherin respect of the same person or not), cases falling under Section220 (commission of more offences than one, in one series of actscommitted together as to form the same transaction) and casesfalling under Section 221, (where it is doubtful what offences havebeen committed), may be inquired into or tried by any courtcompetent to inquire into or try any of the offences. (Section 184).

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A21. Apart from Sections 177 to 184, which lay down in elaboratedetail, the rules relating to jurisdiction, Chapter XIII of the Codealso contains a few other sections. Section 185 empowers theState Government to order any case or class of cases committedfor trial in any district, to be tried in any Sessions Division. Section186 empowers the High Court, in case where two or more courtsBhave taken cognizance of the same offence and a question as towhich of them should inquire into or try the offence has arisen, todecide the district where the inquiry or trial shall take place. Section187 speaks of the powers of the Magistrate, in case where aperson within his local jurisdiction, has committed an offenceCoutside his jurisdiction, but the same cannot be inquired into ortried within such jurisdiction. Sections 188 and 189 deal withoffences committed outside India.”

34. It may be seen from the principles culled out from Sections177 to 184 of the Cr.P.C that almost all contingencies that are likely toDarise have been carefully thought out and laid down in these provisions.

35. The only contingency that could not have been provided in theabove provisions of the Cr.P.C, is perhaps where the offence of money-laundering is committed. This is why Section 44(1) begins with a non-obstante clause. The whole picture is thus complete with a combinedEreading of Section 44 of the PMLA and the provisions of Sections 177 to184 of the Cr.P.C.

36. Once this combined scheme is understood, it will be clear thatin view of the specific mandate of clauses (a) and (c) of sub- section (1)of Section 44, it is the Special Court constituted under the PMLA thatFwould have jurisdiction to try even the scheduled offence. Even if thescheduled offence is taken cognizance of by any other Court, that Courtshall commit the same, on an application by the concerned authority, tothe Special Court which has taken cognizance of the offence of money-laundering. This answers the first question posed before us.

G37. Coming to the second question arising for our consideration,clause (a) of sub-section (1) of Section 44 leaves no semblance of anydoubt that the offence of money-laundering is triable only by the SpecialCourt constituted for the area in which the offence of money-launderinghas been committed. To find out the area in which the offence of money-laundering has been committed, we may have to go back to the definitionHin Section 3 of the PMLA.

38. As we have pointed out earlier, the involvement of a person inany one or more of certain processes or activities connected with theproceeds of crime, constitutes the offence of money- laundering. Theseprocesses or activities include, (i) concealment; (ii) possession; (iii)acquisition; (iv) use; (v) projecting as untainted property; or (vi) claimingas untainted property.

39. In other words, a person may (i) acquire proceeds of crime inone place, (ii) keep the same in his possession in another place, (iii)conceal the same in a third place, and (iv) use the same in a fourthplace. The area in which each one of these places is located, will be thearea in which the offence of money- laundering has been committed. Toput it differently, the area in which the place of acquisition of the proceedsof crime is located or the place of keeping it in possession is located orthe place in which it is concealed is located or the place in which it isused is located, will be the area in which the offence has been committed.

40. In addition, the definition of the words “proceeds of crime”focuses on “deriving or obtaining a property” as a result of criminalactivity relating to a scheduled offence. Therefore, the area in which theproperty is derived or obtained or even held or concealed, will be thearea in which the offence of money- laundering is committed.

41. Having seen the legal landscape on the question of jurisdiction,let us now come back to the facts of the case on hand. It is the case ofthe petitioner that what was attached by the Enforcement Directorateunder Section 5 of the Act as proceeds of crime, was the bank accountof the petitioner in Navi Mumbai, Maharashtra and that therefore theoffence of money- laundering, even according to the respondent hasbeen committed in Maharashtra.

42. But the said contention overlooks the six different types ofprocesses or activities mentioned in Explanation (i) under Section 3 ofthe Act, as connected with proceeds of crime, namely, concealment,possession, acquisition, or use, etc.

43. Even according to the petitioner, she ran three campaignsfrom April 2020 to September 2021 in an online crowdfunding platformnamed “Ketto”. From the pleadings on record, we are not able to makeout (i) the number of persons who provided funds; and (ii) the placeswhere the donors were located.

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A44. The bank account of the petitioner in HDFC Bank,Koperkhairane Branch, Navi Mumbai, Maharashtra, is the ultimatedestination, to which all funds reached. Therefore, Navi Mumbai,Maharashtra is the place where the proceeds of crime were takenpossession of (if they were actually proceeds of crime). Therefore,Navi Mumbai, Maharashtra is a place where only one of the six differentBprocesses or activities listed in Section 3 has been carried out. The otheractivity namely acquisition of the proceeds of crime (if they really are)has taken place in the virtual mode with people from different parts ofthe country/world transferring money online. If acquisition has takenplace in the real physical world, the difficulty with respect to the questionCof jurisdiction would have been lesser. Since acquisition has taken placein the virtual world, the places from where online transfers of moneytook place, are known only to the petitioner or perhaps their Bankers.

45. Therefore, the question of territorial jurisdiction in this caserequires an enquiry into a question of fact as to the place where theDalleged proceeds of crime were (i) concealed; or (ii) possessed; or (iii)acquired; or (iv) used. This question of fact will actually depend uponthe evidence that unfolds before the Trial Court. It will be useful in thisregard to extract Paragraph 38 of the decision in Kaushik Chatterjeewhich reads as follows: - E“38. But be that as it may, the upshot of the above discussion is:38.1. That the issue of jurisdiction of a court to try an “offence”or “offender” as well as the issue of territorial jurisdiction, dependupon facts established through evidence.

38.2. That if the issue is one of territorial jurisdiction, the sameFhas to be decided with respect to the various rules enunciated inSections 177 to 184 of the Code.

38.3. That these questions may have to be raised before the courttrying the offence and such court is bound to consider the same.”

46. Therefore, we are of the view that the issue of territorialGjurisdiction cannot be decided in a writ petition, especially when there isa serious factual dispute about the place/places of commission of theoffence. Hence, this question should be raised by the petitioner beforethe Special Court, since an answer to the same would depend uponevidence as to the places where any one or more of the processes orHactivities mentioned in Section 3 were carried out. Therefore, giving liberty to the petitioner to raise the issue of territorial jurisdiction beforethe Trial Court, this writ petition is dismissed. There will be no order asto costs.

Ankit Gyan(Assisted by : Harshed Sunder and Mahendra Yadav, LCRAs)

Writ petition dismissed.

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