Supreme Court refuses to review ruling that PMLA cannot be mechanically invoked by citing criminal conspiracy

The Supreme Court recently refused to review a 2023 judgment which held that the Prevention of Money Laundering Act (PMLA) cannot be mechanically invoked merely by citing a standalone criminal conspiracy charge under Section 120B of the Indian Penal Code (IPC) [Alliance University and anr vs Pavana Dibbur and anr]..The Court had explained that for a PMLA case to be initiated on allegations of a criminal conspiracy, the conspiracy must be linked with a money-laundering offence already included in Parts A, B or C of the Schedule to PMLA..A bench of Justices Abhay S Oka and Pankaj Mithal held that no ground for review was made out to reconsider this judgment. Therefore, it dismissed the review plea filed in the matter by the Enforcement Directorate (ED), which handles money laundering probes. "We have perused the Judgment and Order dated 29th November 2023 which has been sought to be reviewed. There is no error apparent on the record. Even otherwise, there is no ground for review. Review Petitions are dismissed," the Court held on March 19. .The judgment in focus was delivered in November 2023. By this judgment, the top court had held that allowing criminal conspiracy to be a scheduled offence by itself, without any link to any money laundering offence, would render the PMLA meaningless and redundant.The Court explained that if a standalone allegation under Section 120B of the IPC is allowed to be treated as sufficient to launch a PMLA probe, then any and every offence under the IPC could attract PMLA.The bench opined that it was not the intention of the legislature to allow any offence capable of generating proceeds to become a scheduled offence merely by applying Section 120B of the IPC.The Court also pointed out that many other IPC offences that could generate undue profits (or "proceeds of a crime") have not been included in the schedule to the PMLA.The Court further observed that the PMLA, being a criminal law, has to be interpreted strictly. If two views are possible while interpreting such a law, the more lenient view has to be adopted, the Court added.The Court added that the offence of criminal conspiracy itself does not always amount to an "aggravated offence" and is only meant to incorporate a principle of vicarious liability.While so, allowing every non-scheduled offence to be converted into a PMLA offence would make the statute manifestly arbitrary, the Court had concluded in the November verdict..On a related note, days before the above judgment was passed in 2023, the Court had orally opined that the ED could not invoke PMLA for tax evasion cases by merely citing a "criminal conspiracy" charge, since offences under the Income Tax Act are not scheduled offences under the PMLA.Notably, the Court recently also rejected a plea by the Central government to review a judgment which had held that the ED must furnish written grounds of arrest to persons arrested in money laundering cases under the PMLA. .Supreme Court refuses to review judgment directing ED to give written grounds of arrest to PMLA accused.[Read Order]