Court affirms that offences under J&K Prevention of Corruption Act align with scheduled offences under PMLA post-2018 amendments, dismissing Reach Dredging Limited’s petition.
In a significant ruling, the Jammu & Kashmir and Ladakh High Court has upheld the jurisdiction of the Enforcement Directorate (ED) to investigate and issue summons in a case involving M/s Reach Dredging Limited under the Prevention of Money Laundering Act (PMLA), 2002. The case, adjudicated by Justice Sanjay Dhar, centered on whether offences under the J&K Prevention of Corruption Act could be considered scheduled offences under the PMLA following amendments to the Central Prevention of Corruption Act in 2018.
The petitioner, M/s Reach Dredging Limited, challenged the summons issued by the ED and the underlying proceedings, arguing that the offences under Section 5(1)(d) of the J&K PC Act and Section 120-B of the RPC were not scheduled offences under the PMLA. They contended that the ED lacked jurisdiction since the corresponding provision in the Central PC Act, Section 13(1)(d), had been omitted in 2018.
The court, however, observed that the 2018 amendments to the Central PC Act expanded the scope of Section 7 to encompass offences previously covered under Section 13(1)(d). Justice Dhar noted that the amended Section 7 is comprehensive enough to cover acts of public servants obtaining undue advantage through corrupt means, aligning with the provisions of Section 5(1)(d) of the J&K PC Act.
The judgment highlighted that by virtue of Section 2(2) of the PMLA, corresponding laws in force in Jammu and Kashmir prior to its reorganization are considered for determining scheduled offences. Consequently, offences under Section 5(1)(d) of the J&K PC Act align with scheduled offences under the amended Section 7 of the Central PC Act.
This decision confirms that the ED possesses jurisdiction to proceed with investigations under the PMLA for offences under the J&K PC Act that correspond to scheduled offences under the Central PC Act. The court's dismissal of the petition effectively validates the ED's actions against M/s Reach Dredging Limited, allowing the agency to continue its probe into alleged money laundering activities.
The ruling underscores the legislative intent behind the Prevention of Corruption (Amendment) Act, 2018, which aimed to broaden the scope of corruption-related offences, ensuring comprehensive coverage under anti-money laundering laws.
Bottom Line :
The Enforcement Directorate has jurisdiction under the Prevention of Money Laundering Act, 2002 (PMLA), to investigate and issue summons in cases where the alleged offence is a scheduled offence under the PMLA, even if the corresponding provision under the J&K Prevention of Corruption Act aligns with a provision of the Central Prevention of Corruption Act, 1988, that was later amended.
Statutory provision(s):
Prevention of Money Laundering Act, 2002; J&K Prevention of Corruption Act; Central Prevention of Corruption Act, 1988; Prevention of Corruption (Amendment) Act, 2018; Section 5(1)(d) of J&K PC Act; Section 7 of Central PC Act; Section 2(2) of PMLA; Section 50 of PMLA
