Trial Court Has Discretion To Proceed With PMLA Trial Or Keep It In Abeyance Pending Predicate Offence Trial: Kerala High Court

The Kerala High Court has held that the Bharatiya Nagarik Suraksha Sanhita (BNSS) and the Bharatiya Sakshiya Adhiniyam (BSA) provide discretion to the Trial Court in summoning and examining witnesses, allowing it to decide whether to proceed with the trial under the Prevention of Money Laundering Act (PMLA) or keep it in abeyance until the trial of the predicate offence is concluded.

The Division Bench of Justice A. Muhamed Mustaque and Justice P. Krishna Kumar observed that delaying the PMLA trial until the conclusion of the trial in the predicate offence could lead to the Enforcement Directorate (ED) losing key witnesses.

However, the Court also acknowledged that if the accused is acquitted of the predicate offence, the PMLA trial would be rendered futile.

“In this circumstance, we deem it appropriate to leave the matter for the just decision of the trial court. Depending upon the nature of each case, it can take a balanced course. The court may, in its discretion, permit the Enforcement Directorate to examine those witnesses who are required to prove the most important elements of the crime (such as the act of using the proceeds of crime or projecting or claiming it as untainted) while the trial of the predicate offence is pending. In such cases, the court may keep the examination of the rest of the witnesses in abeyance until the conclusion of the trial,” the Court stated.

Facts of the Case

The Court was considering the constitutional validity of criminal proceedings initiated under the PMLA in cases where the alleged act of money laundering was committed before the enactment of the PMLA or before the amendment to its schedule in 2009. The appellants contended that they could not be prosecuted under the PMLA unless they were first convicted of the predicate offence. It was thus argued that the PMLA trial should be kept in abeyance until the conclusion of the trial of the predicate offence.

On the other hand, the ED maintained that the trials under the predicate offence and PMLA should proceed simultaneously, with the judgment in the PMLA case being withheld until a conviction in the predicate offence was secured.

Court's Observation

The Court examined the relevant provisions under the BNSS and BSA to determine whether Trial Courts have discretion in summoning and examining witnesses. It noted that Section 253 of the BNSS allows courts to issue process for compelling the attendance of any witnesses, conferring discretion on the trial court regarding which witnesses are to be summoned first.

“The expression ‘may … issue any process for compelling the attendance of any witness’ confers ample discretion to the trial court for taking a decision as to which of the witnesses are to be summoned before the court,” the Court observed.

Furthermore, the Court highlighted that Section 254 of the BNSS requires courts to take all evidence produced by the prosecution on the fixed date for evidence. It stated that if the court decides not to summon certain witnesses under Section 253, it is not bound to examine them on the prosecution evidence date. Similarly, under Section 140 of the BSA, the Trial Court has the discretion to determine the order in which witnesses are produced and examined.

Ultimately, the Court held that it is within the discretion of the Trial Court to decide whether to proceed with the PMLA trial or await the outcome of the trial for the predicate offence. “If the court finds that the above course prejudices either side, it should proceed with the trial in a full-fledged manner and postpone the pronouncement of judgment until the trial of the predicate offence is concluded,” the Court added.

In the present case, the Court found that the ED had relied on sufficient material to take action under the PMLA. “The materials available before us prima facie indicate that the Directorate initiated actions against the appellant/petitioners under the PMLA on the basis of some materials. The sufficiency of the materials for attracting the penal offences is a matter to be looked into by the trial court,” the Division Bench stated.

The Court noted that, pursuant to its interim directions, the ED had not submitted a final report in the cases in question. It clarified that parties remain at liberty to raise disputes as situations arise and may challenge criminal proceedings if there is no material to suggest any act was committed subsequent to the enactment of the PMLA or its amendments.

Accordingly, the appeals were dismissed.

Cause Title: A.K Samsuddin & Connected Cases [Neutral Citation No. 2025:KER:24506]

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