Mumbai Court Upholds PMLA Prosecution in Major Money Laundering Case
A special court in Mumbai has delivered a significant ruling, rejecting the discharge plea of builder Yash Machinder in a high-profile Rs 400 crore money laundering case linked to Ornate Spaces Pvt Ltd (OSPL). The court emphasized that the absence of an accused's name in a predicate offence chargesheet does not automatically shield them from prosecution under the Prevention of Money Laundering Act (PMLA).
Court's Firm Stance on Independent Nature of PMLA Offences
Special Judge R B Rote, in a detailed order, stated that the Enforcement Directorate (ED) had gathered sufficient evidence to proceed against Machinder under PMLA sections 3 and 4, which define the offence and punishment for money laundering. The judge categorically declared, "Merely because the applicant is not chargesheeted in the predicate offence, he is not entitled for discharge in the serious economic offence of money laundering, which is an independent and standalone offence."
The court underscored the gravity of money laundering, describing it as "one of the heinous crimes" that adversely impacts the nation's social and economic fabric and often facilitates other serious offences. Judge Rote asserted that considering the nature of the application and the prosecution complaint, it was essential to allow the prosecution an opportunity to present evidence regarding the charges leveled against the accused.
Defence Arguments and Prosecution's Counterclaims
Yash Machinder, a director of OSPL and son of the main accused Vijay Machinder, had sought discharge based on several grounds. His legal team argued that the Economic Offences Wing (EOW), investigating the primary cheating case, had found no evidence against him. They further contended that Yash was studying abroad during the alleged crime period and was not named in the predicate charge sheet, rendering the PMLA proceedings unsustainable.
The defence also cited legal precedents suggesting that if a person is "finally discharged or acquitted" of the scheduled offence, no money laundering offence can stand against them. However, the ED presented a compelling counter-narrative, alleging that Yash was a direct beneficiary of the "proceeds of crime."
According to the ED's submission, approximately Rs 1.4 crore was diverted from OSPL to Ornate Wellness Pvt Ltd (OWPL), another company where Yash serves as a director. These funds were purportedly used to establish two gyms under the brand 'Iron House,' covering expenses for equipment, interior work, and marketing. The agency argued that this demonstrated Yash's active involvement in the "concealment, enjoyment, and use" of laundered money.
Legal Precedents and Conditions for PMLA Prosecution
The court addressed the legal framework governing PMLA prosecutions, noting that the conditions precedent for invoking section 3 of the PMLA require the existence of a scheduled offence and proceeds of crime generated from it. Crucially, the judge referenced Supreme Court decisions to affirm that "it is not necessary for the person against whom an offence under section 3 of the PMLA is alleged to have been shown as an accused in the scheduled offence."
While the accused claimed that the funds in question were obtained as a loan, the court observed that the application remained silent on this contention and no documentary evidence was presented to substantiate the claim. This lack of supporting documentation further weakened the defence's position.
The ruling reinforces the judiciary's commitment to tackling economic crimes rigorously and highlights the standalone nature of money laundering offences under the PMLA, independent of the outcomes in predicate cases.
