Karnataka HC Rejects Plea by 11 Accused in 2016 Note Exchange Case

The Karnataka High Court in Bengaluru has dismissed a petition filed by 11 accused individuals challenging the money laundering proceedings initiated against them by the Directorate of Enforcement (ED). Justice M Nagaprasanna rejected the plea, which contended that continuing proceedings under the Prevention of Money Laundering Act (PMLA) amounted to double jeopardy following their prior conviction under the Indian Penal Code (IPC) for exchanging demonetised currency notes in 2016.

The petitioners, hailing from Mysuru and Mandya districts, had previously been convicted under the IPC for exchanging old currency notes for new ones for a premium following the 2016 demonetisation. While their appeal against the IPC conviction remains pending before the concerned court, the ED had registered a separate case under Sections 3 and 4 of the PMLA based on the original predicate offence registered in 2016.

The 11 accused who filed the petition are Dilip A alias JCB Dilipa, Ananda DB alias CCTV Ananda, Rajesh DM alias Raji, Ananda alias Mysurammana Mommaga, Umesh RK alias Bonda, Channakeshava C alias Sanju, Cheluvaraju CS alias Onduvare, Mahadevaswamy DR alias Keera, Purushothma alias Purushi, Babu DG, and Ramalinga alias Buka. They argued through their petition that Section 300 of the Code of Criminal Procedure (CrPC) prohibits a second trial for the same offences, claiming the PMLA action constituted double jeopardy.

In response, the Enforcement Directorate contended that the prohibition against a second trial for the same offence applies to prosecution under the same penal code, the IPC. The agency maintained that trying a person under a different statute for a distinct offence under the PMLA is legally permissible.

Dismissing the petition, Justice Nagaprasanna observed that offences under the PMLA derive their existence from the laundering of proceeds of crime. The court held that while PMLA proceedings emanate from the commission of a predicate offence, a subsequent prosecution under the PMLA does not amount to a second trial for the same offence even if an accused has been convicted for the scheduled predicate offence.

The High Court ruled that PMLA proceedings represent an independent statutory prosecution. The bench stated that the prohibition under Section 300 of the CrPC extends solely to a second trial for the exact same offence, not to prosecution for a distinct offence under another enactment, adding that the petitioners must establish their innocence through full-blown proceedings before the special court.