The Madras High Court has clarified a critical procedural conflict in multi-statutory prosecutions, affirming that when a Special Court under the Prevention of Money-Laundering Act (PMLA) and a Special Court under the Prevention of Corruption Act (PC Act) are co-extensive, the predicate offence must be transferred to the court already seized of the money laundering case. This ensures procedural coherence and avoids duplication in evidence and judicial scrutiny.
Background & Facts
The Dispute
The Enforcement Directorate (ED), as the petitioner, sought to transfer a pending corruption case under the Prevention of Corruption Act, 1988, to the Special Court designated under the PMLA for trial alongside the money laundering offence. The accused, Dr. P. Vijayan and his wife, were facing trial before the XIII Additional Special Court for CBI Cases, Chennai, for offences under Section 13(2) read with Section 13(1)(e) of the PC Act. Simultaneously, the ED had filed a separate complaint under Section 44(1)(b) of the PMLA before the Principal Sessions Judge, Chennai, for money laundering under Section 3 of the PMLA, which was numbered as C.C. No. 37 of 2015.
Procedural History
- 2014: CBI filed charge sheet in C.C. No. 19 of 2014 before the XIII Additional Special Court for CBI Cases, Chennai, for corruption offences.
- 2014: ED registered an enforcement case and provisionally attached properties under Section 5(1) of the PMLA.
- 2015: ED filed a complaint under Section 44(1)(b) of the PMLA before the Principal Sessions Judge, Chennai, for money laundering (C.C. No. 37 of 2015).
- 2025: ED filed an application under Section 44(1)(c) of the PMLA seeking transfer of the PC Act case to the PMLA Special Court.
- 18.03.2025: The XIII Additional Special Court for CBI Cases dismissed the application, citing advanced stage of trial and potential delay.
Relief Sought
The ED sought to set aside the dismissal order and direct transfer of the scheduled offence (PC Act case) to the Special Court trying the money laundering offence under Section 44(1)(c) of the PMLA, in the interest of justice and procedural efficiency.
The Legal Issue
The central question was whether Section 44(1)(c) of the PMLA mandates transfer of a scheduled offence being tried in a Special Court constituted under a special enactment (like the PC Act) to the Special Court already trying the money laundering offence, even when the former court is also designated under the PMLA.
Arguments Presented
For the Appellant/Petitioner
The ED relied on Rana Ayyub v. Directorate of Enforcement to argue that Section 44(1)(c) imposes a mandatory duty on any court trying a scheduled offence to transfer it to the Special Court that has taken cognizance of the money laundering offence. It emphasized that the overriding nature of the PMLA and the Supreme Court’s holding that the trial of scheduled offences must follow the money laundering case rendered the CBI Court’s refusal legally untenable.
For the Respondent/State
The CBI and accused contended that Section 44(1)(c) applies only when the court trying the scheduled offence is not a Special Court under the PMLA. They argued that since the XIII Additional Special Court for CBI Cases is also a designated Special Court under the PMLA, it is competent to try both offences and no transfer is required. They further cited Assistant Director, ED v. Inspector of Police to suggest that transfer to the court already trying the predicate offence is permissible.
The Court's Analysis
The Court undertook a detailed textual and contextual analysis of Section 44 of the PMLA, particularly Section 44(1)(c) and its Explanation (i). It noted that the Supreme Court in Rana Ayyub had unequivocally held that the Special Court trying the money laundering offence is the designated forum for the trial of all connected scheduled offences, regardless of which court took cognizance first. The Court observed:
"Section 44(1)(a) makes it crystal clear that it is the Special Court constituted under Section 44(1), which will be empowered to try even the scheduled offence connected to the same."
The Court further clarified that Explanation (i) to Section 44(1) removes any ambiguity by stating that trial of both offences by the same court does not constitute a joint trial, thereby affirming the legislative intent for unified adjudication.
The Court then addressed the unique factual matrix: the CBI Court was already designated as a Special Court under the PMLA. In such a scenario, the Court distinguished Assistant Director, ED v. Inspector of Police, noting that the Supreme Court had not ruled on the legal principle but merely accepted a practical arrangement. The Madras High Court held that where the court trying the scheduled offence is already competent under the PMLA, Section 44(1)(c) does not compel transfer to another PMLA court. Instead, the logical and efficient course is to transfer the money laundering case to the court already seized of the predicate offence.
The Court emphasized that procedural economy, evidence consolidation, and avoidance of contradictory findings are central to the PMLA’s design. To force transfer of a nearly concluded corruption trial to a court that has not yet begun its money laundering trial would defeat the very purpose of unified adjudication.
The Verdict
The petition was allowed. The Madras High Court held that Section 44(1)(c) of the PMLA does not mandate transfer of a scheduled offence to a different Special Court when the court already trying the scheduled offence is also designated under the PMLA. The Court directed that the money laundering case (C.C. No. 37 of 2015) be transferred to the XIII Additional Special Court for CBI Cases, Chennai, which is already trying the predicate offence under the PC Act.
What This Means For Similar Cases
Transfer Is Not Automatic When Courts Are Co-Extensive
- Practitioners must first determine whether the court trying the scheduled offence is also a designated Special Court under the PMLA.
- If yes, Section 44(1)(c) does not require transfer of the scheduled offence; instead, the money laundering case should be transferred to the existing court.
- Applications under Section 44(1)(c) must be strategically framed to reflect this hierarchy.
Evidence Consolidation Overrides Procedural Formalities
- Documents, witness statements, and forensic reports from the predicate offence are admissible in the money laundering trial.
- Courts must prioritize efficiency and evidentiary coherence over rigid jurisdictional formalities.
- Delay in trial is not a valid ground to refuse transfer if the court is already competent.
Special Courts Under Multiple Enactments Are Not Mutually Exclusive
- A court designated under the PC Act can simultaneously function as a Special Court under the PMLA.
- This dual designation creates a concurrent jurisdictional zone where the court already seized of the predicate offence becomes the natural forum for the money laundering case.
- Advocates must verify the designation status of the court before filing transfer applications.
