Gauhati High Court Allows PMLA Proceedings Against Unnamed Individuals
The Gauhati High Court recently ruled that individuals or companies not named in the predicate (scheduled) offense can still be prosecuted under the Prevention of Money Laundering Act, 2002 (PMLA), if there is prima facie evidence linking them to proceeds of crime.
A company involved in a cryptocurrency investment scam was trying to quash proceedings initiated by the Directorate of Enforcement (ED). The ED alleged that the company had used its AstroPay platform for activities connected with betting, gambling, and cryptocurrency transactions. It also claimed that the company misused PayU's payment gateway credentials by routing transaction traffic originating from betting and adult-content websites.
The Court held that money laundering is an independent offense and that a person need not be accused in the scheduled offense to be prosecuted under Section 3 of the PMLA. The ED can investigate individuals or companies involved in layering and transferring proceeds of crime, even if they are not named in the predicate offense.
The Court also relied on the Supreme Court's decision in Pavana Dibbur, which clarified that a person not arrayed as an accused in the scheduled offense can commit the offense of money laundering if they knowingly assist in handling or concealing proceeds of crime.