During the early days of the Covid-19 pandemic Ranna Ayyub an Indian journalist and a columnist for the Washington Post had started three crowdfunding campaigns for the purpose of helping the slum dwellers who had been impacted by the pandemic and the migrant workers who had been affected by the sudden lockdown, through the online crowdfunding platform called "Ketto" which ran from April 2020 to September 2021. Due to the origin of some of the donations received being foreign of nature, it caught the attention of the Mumbai Zonal Office of the Enforcement Directorate which subsequently issued an inquiry against Ayyub under the Foreign Exchange Management Act,1999 through an office order. Thereafter an FIR was lodged against the journalist under numerous sections of the Indian Penal Code, 1860 namely Sections 403, 406, 418, and 420 with an addition of Section 66-D of the Information Technology(Amendment) Act,2008 read with Black Money (Undisclosed Foreign Income and Assets) and the Imposition of Tax Act, 2015. To further the investigation Ayyub was served with an order under Section 37 of the Foreign Exchange Management Act,1999 and Section 136(6) of the Income Tax Act, 1961 from the Mumbai Zonal Office of the ED requesting information. Subsequently a detailed response was submitted by Ayyub following which Enforcement Directorates' Delhi office constituted a Special Court under Section 43(1) of the Prevention of Money Laundering Act, 2002 for the purpose of trying an offence punishable under Section 4 of the aforementioned Act.
Ayyub was of the opinion that the Special Court in Ghaziabad did not possess the jurisdiction to try her case under Section 44(1) of the Prevention of Money Laundering Act,2002 as the aforesaid offence was only triable only by a Special Court constituted in the state of Maharashtra as only that court could have taken cognizance of the complaint. To support her claim the counsel for Ayyub depended on the Supreme Court Judgement of Vijay Madanlal Choudhary and ors vs. Union of India and Ors. which upheld the constitutional validity of a number of provisions of the PMLA. Rana Ayyubs's counsel argued on the facts of her client's case that since that no part of the offence which she had been accused off was committed within the jurisdictional boundaries of the District of Ghaziabad and that Ayyubs' bank account was located in Navi Mumbai where the supposed proceeds of crime was deposited, the lodging of the complaint in the Special Court in Ghaziabad was a gross abuse of process.
In a response filed by the Enforcement Directorate they were of the opinion that it is due course of law where the ECIR has to be filed under the jurisdiction of the same court where the offence has been committed since only that court has the powers to conduct the trial. Additionally, it was stated by the ED that a number of "Victims" were of the same jurisdiction where the offence was being tried. Subsequently a summons was issued to Ayyub to be present before the Special Court in Ghaziabad on December 13, 2022.
Ayyub challenged the summons order before the Supreme Court contending that the order did not have territorial jurisdiction under section 44 of the Prevention of Money Laundering Act, 2002 and that a Special Court Constituted within the Jurisdictional boundaries of Navi Mumbai should be the one to take cognizance of the case.
The Supreme Court based on Ayyubs' contention framed two moot questions:
1. Whether the trial of the offence of money laundering should follow the scheduled/ predicate offence or vice versa?
2. Can the Special Court, Ghaziabad, be said to have exercised extraterritorial jurisdiction, even though the alleged offence was not committed within the jurisdiction of the said court?
Findings Of The Supreme Court
A bench comprising Justice V. Ramasubramanian and Justice Pankaj
Mithal dealt with the relevant provisions of the prevention of
money laundering Act, 2002 at length to tackle the first question.
They analyzed section 43 of the PMLA under which the courts that
can hear cases under the PMLA were constituted and also Section 44
which states the territorial jurisdiction of the courts which can
take cognizance of offences under PMLA. The apex court recorded two
distinctions that under section 44 of the PMLA the terms
"offence" and "scheduled offence" are used with
a clear intention so as to not mix both. The judges opined that
"offence" will have to followed by the "scheduled
offence" as far as territorial jurisdiction is concerned and
the court that takes cognizance of the offence under PMLA would
have to be the same court that takes cognizance of the scheduled
offence. Therefore, the provisions under Criminal Procedure
code,1973 would apply to the proceedings where section 44 of the
PMLA is concerned with except where they have been specifically
excluded out of, which would be the final act in determining the
territorial jurisdiction.
Regarding the second issue the Bench opined that just the existence
of a bank account in Navi Mumbai would not be detrimental in
choosing the jurisdiction of the court where the offence should be
tried. The crowdfunding program was being run on an online platform
and thus the issue regarding jurisdiction could not be decided at a
stage where the trial has not even started. Due to the
aforementioned opinions the bench decided to dispose of the case
and directed Ayyub to raise her contentions before the special
judge in Ghaziabad.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
