The Supreme Court on Tuesday dismissed a plea of journalist Rana Ayyub challenging summons issued by a special court in Ghaziabad in a money laundering case.
She has challenged the summon order on the ground that the Ghaziabad court does not have territorial jurisdiction and the special court in Maharashtra alone could have taken cognisance of the Enforcement Directorate complaint as the alleged offence is said to have taken place in that state.
A bench of justices V Ramasubramanian and JB Pardiwala said, "We are of the view that the issue of territorial jurisdiction cannot be decided in a writ petition, especially when there is a serious factual dispute about the place/places of commission of the offence."
"Hence, this question should be raised by the petitioner before the special court (Ghaziabad), since an answer to the same would depend upon evidence as to the places where any one or more of the processes or activities mentioned in Section 3 (of the Prevention of Money Laundering Act) were carried out," it said.
The bench said therefore, "giving liberty to the petitioner to raise the issue of territorial jurisdiction before the trial court, this writ petition is dismissed".
The top court said the word "money-laundering" is defined in Section 2(1)(p) of the Prevention of Money Laundering Act.
"Section 3 of the Act makes a person guilty of the offence of money-laundering, if he (i) directly or indirectly attempts to indulge; or (ii) knowingly assists or; (iii) knowingly is a party; or (iv) is actually involved in any process or activity. Such process or activity should be connected to 'proceeds of crime' including its concealment or possession or acquisition or use," the bench said.
Elaborating on the matter, it said the explanation under Section 3 makes it clear that even if the involvement is in one or more of the activities or processes such as concealment, possession, acquisition, use, projecting it as untainted property or claiming it as untainted property, the offence of money laundering will be made out.
The bench said it is the case of Ayyub that during the Covid pandemic, she initiated a crowdfunding campaign through an online platform named "Ketto" and ran three campaigns from April 2020 to September 2021.
It noted that in connection with the campaigns, the Mumbai Zonal Office of the ED initiated an enquiry against Ayyub under the Foreign Exchange Management Act, 1992, through an Office Order dated August 3, 2021.
The bench said thereafter, a complaint was lodged on September 7, 2021, by Vikas Sankritayan, who claimed to be the founder of the Hindu IT Cell, and an FIR was registered with the Indirapuram police station in Ghaziabad.
The FIR was for alleged offences under Indian Penal Code sections 403, 406, 418 and 420 read with Section 66D of the Information Technology (Amendment) Act, 2008, and Section 4 of the Black Money Act, it said.
It noted that after Ayyub submitted a detailed response to the ED's Mumbai Zonal Office, the agency's Delhi Zone-II Office registered a complaint on November 11, 2021, in the court of the special judge at Ghaziabad.
"It was stated in the said complaint that the FIR registered on September 7, 2021, on the file of the Indirapuram police station, Ghaziabad, formed the basis for the complaint of the Enforcement Directorate," the bench noted.
It said a person may acquire proceeds of crime in one place, keep the same in possession in another place, conceal the same in a third place, and use the same in a fourth place.
"The area in which each one of these places is located, will be the area in which the offence of money laundering has been committed. To put it differently, the area in which the place of acquisition of the proceeds of crime is located or the place of keeping it in possession is located or the place in which it is concealed is located or the place in which it is used is located, will be the area in which the offence has been committed", the bench said.
It noted that even according to Ayyub, she ran the three campaigns from April 2020 to September 2021. But from the pleadings on record, the court is not able to make out the number of persons who provided funds and the places where the donors were located, the bench said.
"The bank account of the petitioner in HDFC Bank, Koparkhairane Branch, Navi Mumbai, Maharashtra, is the ultimate destination, to which all funds reached. Therefore, Navi Mumbai, Maharashtra is the place where the proceeds of crime were taken possession of (if they were actually proceeds of crime). Therefore, Navi Mumbai, Maharashtra, is a place where only one of the six different processes or activities listed in Section 3 has been carried out," the bench said.
It said the other activity namely acquisition of the proceeds of crime, if they really are, has taken place in the virtual mode with people from different parts of the country or world transferring money online.
"If acquisition had taken place in the real physical world, the difficulty with respect to the question of jurisdiction would have been lesser. Since acquisition has taken place in the virtual world, the places from where online transfers of money took place, are known only to the petitioner or perhaps their bankers", it said.
The bench said therefore, the question of territorial jurisdiction in this case requires an enquiry into a question of fact as to the place where the alleged proceeds of crime were concealed or possessed or acquired or used.
"This question of fact will actually depend upon the evidence that unfolds before the trial court", it said.
Dealing with various provisions of the PMLA, the bench said it is clear that the trial of the scheduled offence should take place in the special court which has taken cognizance of the offence of money-laundering.