PMLA Section 3 as a Continuing Offence and Non‑Retrospective Operation

1. Introduction

A.K. Samsuddin and several other petitioners challenged criminal proceedings under Section 3 of the Prevention of Money‑Laundering Act, 2002 (“PMLA”) in WA 2076/2016 and connected writ petitions (Nos. 5562/2017, 5647/2017, 8373/2017 & 26120/2017) before the Kerala High Court. The appellants contended that either the PMLA was not in force when their alleged predicate offences took place, or the offences were not yet included in the PMLA schedule, and thus prosecution violated Article 20(1) of the Constitution (no retrospective penal laws).

The Court (Justices A. Muhamed Mustaque and P. Krishna Kumar) heard both petitioners and the Enforcement Directorate (ED) in March 2025 and delivered judgment on 26 March 2025.

2. Summary of the Judgment

• The Court held that the offence under Section 3 PMLA is by nature a continuing offence: it begins when proceeds of crime are first acquired and continues as long as those proceeds are concealed, used or integrated into the financial system.
• Reliance was placed on the Supreme Court’s decisions in Vijay Madanlal Chaudhary & Ors. v. Union of India (2023) and Pradeep Nirankarnath Sharma v. Directorate of Enforcement (SLP(Crl.) 6185/2023, decided 17 March 2025), which affirmed that Section 3 may extend to acts done after PMLA’s commencement—even if the underlying crime pre‑dated the Act or its schedule amendment.
• Article 20(1) (no retrospective punishment) is not infringed because PMLA penalises only the post‑enactment handling of illicit proceeds—there is no penalty for the prior crime itself.
• The Court left to trial courts the procedural discretion—under Section 253 of the Bharatiya Nagarik Suraksha Sanhita and Section 140 of the Bharatiya Sakshiya Adhiniyam—to determine which ED witnesses to summon first and whether to keep parts of the PMLA trial in abeyance pending predicate‑offence conviction.
• All petitions and the appeal were dismissed, subject to these observations and guidance.

3. Analysis

3.1. Precedents Cited

• Vijay Madanlal Chaudhary & Ors. v. Union of India [(2023) 12 SCC 1]: Held that money‑laundering is a continuing offence—punishable when any act under Section 3 occurs after PMLA’s commencement, irrespective of when the predicate offence was committed.
• Pradeep Nirankarnath Sharma v. Directorate of Enforcement (SLP(Crl.) 6185/2023, 17 March 2025): Clarified that Section 3 applies so long as illicit proceeds remain in circulation, “concealed, used, or projected as untainted property,” thereby affirming retrospective application to continuing conduct.

3.2. Legal Reasoning

• Article 20(1) prohibits punishing acts that were not offences when committed, but PMLA does not punish the underlying crime—it only penalises the post‑commencement handling of illicit gains.

• Section 3 PMLA defines money‑laundering acts (possession, concealment, acquisition, use, projection of proceeds) in a manner that naturally extends over time.

• The statutory scheme and judicial precedents confirm that once the Act is in force, any fresh act in the laundering chain is punishable—even if the predicate offence fall before PMLA or before schedule amendment.

3.3. Procedural Guidance and Trial Management

• Section 253 of the Bharatiya Nagarik Suraksha Sanhita (mirror of CrPC Section 230) grants the trial court discretion to decide which prosecution witnesses to summon first.
• Section 254 Sanhita and Section 140 of the Bharatiya Sakshiya Adhiniyam allow the court to sequence evidence and defer parts of the PMLA trial until a predicate‑offence conviction, if warranted by fairness and ED’s evidence‑preservation concerns.

3.4. Impact on Future Cases

• Confirms the ED’s broad power to pursue money‑laundering charges based on ongoing handling of illicit proceeds.
• Dispelled doubts about retrospective application—trial courts can proceed even if the underlying crime pre-dated the schedule.
• Provides a balanced mechanism for courts to manage concurrent trials of predicate and PMLA offences, protecting both State interests and accused‑persons’ rights.

4. Complex Concepts Simplified

• Predicate Offence: The original crime (e.g., fraud, corruption) whose proceeds are alleged to be laundered.
• Section 3 PMLA: Defines money‑laundering acts—possession, acquisition, concealment, use, projection of “proceeds of crime.”
• Continuing Offence: An offence that persists over time so long as illicit proceeds remain in circulation or use.
• Non‑Retrospectivity vs. Continuing Conduct: PMLA does not punish past crime itself but only the ongoing misuse of its proceeds after the law took effect.
• Article 20(1): Constitutional guarantee against retrospective criminal laws—satisfied here because liability attaches only to post‑enactment acts.

5. Conclusion

The Kerala High Court in A.K. Samsuddin v. Union of India has definitively endorsed the continuing nature of money‑laundering offences under Section 3 PMLA and clarified that Article 20(1) does not bar prosecution of post‑enactment laundering activities—even when the predicate offence predates the PMLA or its schedule amendment. The judgment also supplies practical procedural guidance, empowering trial courts to sequence evidence and manage concurrent trials fairly. This precedent strengthens India’s anti–money laundering framework and provides clarity for future litigation.