SC quashes PMLA case against ex-IAS officer in Chhattisgarh ‘liquor scam’
The court said the offences they were charged with don't fall in the schedule of the Prevention of Money Laundering Act (PMLA) and hence there cannot be any “proceeds of crime” as defined by the Act.
The ED had initiated proceedings under PMLA in the matter during the tenure of the earlier Congress government in Chhattisgarh led by then Chief Minister Bhupesh Baghel, who had alleged that the case was politically motivated. The Supreme Court on Monday quashed the money laundering case arising out of the alleged Rs 2,000-crore liquor scam in Chhattisgarh, in which former IAS officer Anil Tuteja and his son Yash Tuteja were among those probed by the Enforcement Directorate (ED).
The court said the offences they were charged with don’t fall in the schedule of the Prevention of Money Laundering Act (PMLA) and hence there cannot be any “proceeds of crime” as defined by the Act.
“As there is no scheduled offence… there cannot be any proceeds of crime within the meaning of clause (u) of section 2 of PMLA… If there are no proceeds of crime, obviously offence under section 3 of PMLA is not made out,” said a bench of Justices A S Oka and Ujjal Bhuyan.
“It is not in dispute that the scheduled offence within the meaning of clause (y) of section 2 of PMLA (in the Chattisgarh case) is under various sections of the Income Tax Act, 1961 read with section 120 B, 191, 199, 200 and 204 of IPC. It is not in dispute that except for section 120 B of IPC, none of the offences are scheduled offences,” the bench noted, adding that for section 120B (criminal conspiracy) to be treated as a scheduled offence, the conspiracy must have been to commit an offence falling in the PMLA schedule.
“In this case, conspiracy to commit offence in lieu of offences which is included in the schedule has been alleged. The ECIR (Enforcement Case Information Report) subject matter of the said complaint is based on the same offence,” the court said, adding that there was no “scheduled offence”.
Appearing for the Enforcement Directorate (ED), Additional Solicitor General S V Raju informed the bench that “on the basis of another FIR, which… involves scheduled offence, criminal proceedings under PMLA are likely to be initiated”.
The court, however, said: “It is not necessary for us to go into the issue of legality and validity of the proceedings which are likely to be initiated and therefore all contentions in that behalf are kept open”.
The ASG said the special court hearing the case had not taken cognizance of the complaint so far. He said the accused cannot approach the SC before the special court decides whether to take cognizance or not.
The SC responded: “In this case, ex facie, the scheduled offence is not in existence. Therefore, there cannot be proceeds of crime. Hence it follows that there cannot be any offence under section 3 of PMLA. Therefore, no purpose is served by directing the special court to apply its mind…”
The ED had initiated proceedings under PMLA in the matter during the tenure of the earlier Congress government in Chhattisgarh led by then Chief Minister Bhupesh Baghel, who had alleged that the case was politically motivated.
In its prosecution complaint filed before the PMLA special court, the ED had alleged that a criminal syndicate comprising senior government officials, politicians and private persons had pocketed Rs 2,161 crore by creating a parallel system that sold liquor illegally in 2019-2022. It had alleged that bribes were collected from distillers per case of liquor procured from the Chhattisgarh State Marketing Corporation Limited, and country liquor was sold off-the-books.
PTI adds: Baghel said the SC’s decision had exposed the Centre for using the ED to target Opposition parties. “Shameful political misuse of ED has been proved and the Modi government has been exposed. Today’s decision of the Supreme Court has proved that at the behest of BJP, the ED has been conspiring to defame the Opposition parties by making every case a case of money laundering,” he said in a post on X.
The ED registered the case just before the 2023 Assembly polls to defame the then Congress government and give a political weapon to the BJP, Baghel alleged. It has become clear from the SC ruling that BJP was only spreading lies, he added.
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