SC notice to ED on former Karnataka Minister Katta Subramanya Naidu's plea against PLMA proceedings

The petitioners claimed that the PMLA Amendment Act, 2009 cannot operate retrospectively in respect of offences alleged to have been committed before the amendment

Former Karnataka Minister Katta Subramanya Naidu has approached the Supreme Court against proceedings initiated to attach properties worth over Rs 27 crore and others under the Prevention of Money Laundering Act (PMLA).

A bench of Justices Ashok Bhushan and R Subhash Reddy issued notice to the Enforcement Directorate on a plea by him and others to stay the proceedings.

The Karnataka High Court, by a common judgement on December 14, 2020, had dismissed writ petitions by several persons against retrospective application of the PMLA, 2009 and held that nobody had an inviolable right to enjoy wealth acquired through illegitimate means.

The Deputy Director of the ED filed had a complaint under Section 45(1) of the PMLA on March 24, 2014, against Naidu and 23 other accused seeking their prosecution under Sections 3 and 4 of the Act and also for the confiscation of all the attached properties.

The ED claimed that Naidu had directly and indirectly indulged, knowingly assisted, and knowingly was a party and was involved in the process and activities connected with the proceeds of crime, including its concealment, possession, acquisition or use and claiming it as untainted property. The total amount involved in the offence of money laundering was Rs 27.05 crore.

The petitioners were represented by senior advocates Mukul Rohatgi, Sidharth Luthra, P S Narsimha and R Basant and advocate Nishanth Patil, among others.

They claimed that the PMLA Amendment Act, 2009 cannot operate retrospectively in respect of offences alleged to have been committed before the amendment.

As on the date of the alleged offence, there was no criminality attached to the ‘proceeds of crime’ arising out of the alleged offence. Therefore, there could not have been any criminal proceedings arising out of such proceeds of crime, their plea said.

"In the present case, when the offence of money laundering was not a crime in respect of the alleged offences, no charge of money-laundering can be framed against the petitioner herein. The proceedings under the PMLA Act therefore violate Article 20(1) of the Constitution. In other words, ex post facto criminal laws cannot be made applicable retrospectively," the plea added.