Supreme Court Stays PMLA Trial In Case Where Chargesheet In Predicate Offence Not Filed For 7 Yrs
The Supreme Court recently stayed trial against 4 accused in a case under the Prevention of Money Laundering Act where chargesheet had not been filed in the predicate offense since 7 years.
A bench of Justices Vikram Nath and Sandeep Mehta passed the order after hearing Senior Advocate PB Suresh (on behalf of the petitioners), who argued that the petitioners were not named in the predicate offense and questioned how trial could proceed in the PMLA case when chargesheet had not been filed in the predicate offense.
Staying the trial qua the petitioners, the bench issued notice to the Enforcement Directorate and Indian Bank.
Briefly put, in 2018, an FIR under Sections 120B/406/420/468/471 IPC was registered by the CBI on the complaint of Indian Bank against M/s Cethar Limited and others. Subsequently, ED registered an ECIR based on the FIR, which brought the petitioners within the scope of prosecution. The petitioners approached the Trial Court seeking discharge in the case, but their plea was rejected. A criminal revision petition against the dismissal order was rejected by the Madras High Court. Aggrieved, the petitioners approached the Supreme Court.
The petitioners, all women, claim to be family members of the erstwhile Chairman and Managing Director of the accused Company. They aver that they neither had access to nor participated in the company's financial or operational decisions, and have been drawn into the criminal prosecution solely on the basis of familial ties with the accused former Chairman and MD.
The petitioners point out that they were not named in the CBI FIR and there is no evidence showing possession of proceeds of crime. They also highlight that their jewelry, etc. stand seized and the accused company is under liquidation.
In support of the prayers, reliance is placed on the decision in Bharathi Cement Corporation Pvt. Ltd. v. The Directorate of Enforcement, where the Telangana High Court directed trial relating to the offence of money laundering to be paused until the decision of the Special Court trying the scheduled offence against Bharathi Cement Corporation Ltd.
Notably, this case pertained to the allotment of mining leases to Bharathi Cement Corporation Ltd and allegations of bribery in the guise of investments as quid pro quo for undue favors granted to the Andhra Pradesh government. The ED had registered a money laundering case against Bharathi Cement and several others including Bharathi Reddy, wife of ex-Andhra Pradesh Chief Minister-Jagan Mohan Reddy.
This case reached the Supreme Court, but was eventually dismissed as withdrawn on ED's prayer.
Reliance is also placed on the top Court's order in S Martin v. Directorate of Enforcement, where PMLA trial was initially stayed in respect of Santiago Martin, a giant in India's lottery industry. Notably, the top Court admitted Martin's plea against the Special Court's order refusing to defer the PMLA trial till disposal of CBI's predicate case. However, subsequently, both the trials (in PMLA case and predicate case) were allowed to proceed, subject to the condition that Special Court may not pronounce judgment in the PMLA case.
Appearance: Senior Advocate PB Suresh, AoR Vipin Nair, Advocate Deeksha Gupta (for petitioners)
Case Title: S. SRIVIDHYA AND ORS. Versus ASSISTANT DIRECTOR AND ANR., SLP(Crl) No. 10113-10115/2025