PMLA Trial Must Be Transferred To Court Where Scheduled Offence Is Pending To Fulfill Statutory Mandate Of Section 44(1): Supreme Court

"To give effect to the statutory mandate u/s 44(1) of the Act which provides both the offence under PMLA and the scheduled offence are to be tried by a Special Court having jurisdiction to try the PMLA offence, it would be expedient for the ends of justice to transfer the present proceeding." Supreme Court, in a significant ruling dated July 14, 2026, held that a Money Laundering prosecution should be transferred to the jurisdiction where the related scheduled offence is being tried to satisfy the statutory mandate of the PMLA.

A bench comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi observed that once a predicate offence is transferred to a different court, the PMLA trial must follow suit to ensure both cases are heard by the same Special Court as required under Section 44(1) of the Act.

The Petitioner, Amit Katyal, a promoter of M/s Krrish Realtech Pvt. Ltd., was accused of siphoning over Rs. 503 Crore from homebuyers in a Gurugram real estate project. Based on multiple FIRs alleging cheating and criminal conspiracy, the Enforcement Directorate (ED) registered an ECIR in 2023. Although the PMLA complaint was originally filed in Gurugram where the 'proceeds of crime' were situated, the primary scheduled offence (FIR No. 439/2024) had been previously clubbed with a Delhi-based FIR and transferred to Delhi by a coordinate bench of the Supreme Court.

The primary question before the Court was whether the PMLA prosecution pending before the Special Judge in Gurugram should be transferred to the Special Court in Delhi. The Court was also called upon to determine if the Gurugram court initially possessed valid jurisdiction given that the proceeds of crime were derived and attached within its territorial limits.

Jurisdiction Based On Territorial Location Of Proceeds Of Crime

The Court first addressed whether the institution of the PMLA complaint at Gurugram was legally sound. Referencing the precedent in Rana Ayyub v. Directorate of Enforcement, the bench noted that an offence under Section 3 of the PMLA involves various processes including concealment, possession, acquisition, or use of proceeds of crime. Since vast tracts of land constituting the 'proceeds of crime' were situated and attached in Gurugram, the Court held that the initial filing in Gurugram could not be faulted.

Section 43 and 44 PMLA Govern Trial Venue

The bench explained that Section 43 of the PMLA provides for the constitution of Special Courts, while Section 44 mandates that an offence punishable under Section 4 and any scheduled offence connected therewith shall be triable by the Special Court for the area where the offence was committed. The Court clarified that 'offence committed' in the context of PMLA includes any area where the proceeds are derived, obtained, concealed, or even projected as untainted property.

"The word ‘offence has been committed’ means the offence under the PMLA which comprises one or many of the processes or activities as delineated hereinabove."

Simultaneous Jurisdiction And The Impact Of Predicate Offence Transfer

The Court observed that in this specific case, part of the offence also occurred in Delhi where certain proceeds of crime, such as cash, jewellery, and fixed deposits, were seized. This created a situation of simultaneous jurisdiction between the courts in Delhi and Gurugram. However, the pivotal factor was that the scheduled offence (FIR No. 439/2024) had already been transferred to Delhi by another bench of the Supreme Court to be tried alongside an existing Delhi FIR.

Distinguishing The Precedent In KA Rauf Sherif

The Respondents had relied on KA Rauf Sherif v. Directorate of Enforcement to oppose the transfer. However, the bench distinguished the present case, noting that in KA Rauf Sherif, transfer was sought on grounds of convenience or lack of jurisdiction which were declined. Here, the transfer was necessitated by the fact that the scheduled offence had already moved to Delhi and part of the money laundering activities specifically occurred within the Delhi jurisdiction.

"The ratio in a judgment cannot be treated like an Euclidean axiom and must be read in the facts of each case."

Mandate Of Section 44(1) For Unified Trials

The Court emphasized that the statutory mandate under Section 44(1) of the PMLA requires both the money laundering offence and the scheduled offence to be tried by the same Special Court. Since the predicate offence was now pending in Delhi, keeping the PMLA trial in Gurugram would lead to a procedural conflict and violate the legislative intent of the Act. The bench concluded that for the ends of justice, the proceedings must be unified in one forum.

"To give effect to the statutory mandate u/s 44(1) of the Act... it would be expedient for the ends of justice to transfer the present proceeding to the Special Court under PMLA at Delhi."

The Supreme Court directed the PMLA proceedings pending before the Special Judge, Gurugram, to be transferred to the Special Judge, PMLA, Saket Court Complex, Delhi. The Court ordered that the prosecution proceed from the stage at which it was pending in the transferee court. Consequently, the writ petition was disposed of with these directions.

Date of Decision: July 14, 2026