No PMLA case based solely on 'criminal conspiracy': ED chief to staff after dismissal of DKS', other key cases

'There is no point in facing setbacks in court after working hard on cases. The Supreme Court has made it clear that IPC section 120B cannot be construed as a standalone predicate offence under the PMLA. What the apex court says is the law. So, instructions to that effect have been passed on,' a senior official said.

Enforcement Directorate (ED) chief Rahul Navin has reportedly told his staff to not file cases under the PMLA solely based on 'criminal conspiracy' being the 'predicate offence''. After several of the high-profile cases filed by the agency failed in court, it has now decided that the charges should include offences under the Prevention of Money Laundering Act (PMLA) related to that conspiracy.

According to a report in the Indian Express (IE), this move comes after cases against Karnataka Deputy CM D K Shivakumar and a retired IAS officer who had served under Congress leader and Chhattisgarh ex-CM Bhupesh Baghel were dismissed by courts on the same grounds.

A senior ED official told IE, "There is no point in facing setbacks in court after working hard on cases. The Supreme Court has made it clear that IPC section 120B cannot be construed as a standalone predicate offence under the PMLA. What the apex court says is the law. So, instructions to that effect have been passed on.”

In this case, a 'predicate offence' refers to any crime mentioned in a primary FIR filed by another agency, e.g. Police, CBI, IT dept, etc.

A 'predicate offence' refers to the criminal activity which was mentioned in the primary FIR that has been registered by another investigating body, based on which the ED files its case.

“The offence punishable under Section 120 B of the IPC (criminal conspiracy) will become a scheduled offence only if the conspiracy alleged is of committing an offence which is specifically included in the schedule,” the Supreme Court, as per the report, had said in 2023 during the ruling of a 2020 land deal case against Pavana Dibbur, who was the acting head of a private university in Karnataka.

The apex court had then said, "…if the submissions of the learned Additional Solicitor General are accepted, the (PMLA) Schedule will become meaningless or redundant. The reason is that even if an offence registered is not a scheduled offence, the provisions of the PMLA and, in particular, Section 3 will be invoked by simply applying Section 120­B.”

The PMLA schedule covers close to 150 primary offences, ranging from corruption to tax evasion and even violations of the Wild Life Act.

Using criminal conspiracy as the predicate offence, ED had booked D K Shivakumar in 2018 in connection with a case of money laundering for alleged tax evasion, and arrested him in 2019. The case was dismissed by the apex court in March this year by citing the Pavana Dibbur case ruling.

It must be noted that IPC section 120B has been replaced by Bharatiya Nyaya Sanhita (BNS) Section 61.