Mumbai: Observing that the absence of an accused person’s name in the chargesheet in a predicate offence does not automatically exonerate them from prosecution under the Prevention of Money Laundering Act (PMLA), a special court rejected the discharge plea of builder Yash Machinder, an accused in a Rs 400 crore money laundering case involving Ornate Spaces Pvt Ltd (OSPL).The predicate or scheduled offence is the foundational criminal case on the basis of which the money laundering prosecution is launched.“Perusal of the record, it shows that Enforcement Directorate (ED) has collected sufficient evidence for proceeding against the applicant and to frame charges for offence under PMLA sections 3 and 4. 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. Therefore...accused is not entitled for discharge….application deserves to be rejected,” special judge R B Rote said. Sections 3 and 4 define the offence and punishment for money laundering.Pointing out that the offence under PMLA sections 3 and 4 is serious economic offence, the judge added: “It is well settled that money laundering is one of the heinous crimes, which not only affects the social and economic fabric of the nation, but also tends to promote other heinous offences. Considering the nature of application and the prosecution complaint, it is necessary to give an opportunity to the prosecution to adduce evidence in respect of the charges levelled against applicant.“Yash, a director of OSPL and son of main accused Vijay Machinder, had sought discharge on the grounds that the Economic Offences Wing (EOW), which was investigating the primary cheating case, had found no evidence against him. His lawyer argued that Yash was studying abroad during the period of the alleged crime and was not named in the predicate charge sheet, hence the PMLA proceedings were unsustainable.The defence relied on legal precedents suggesting that if a person is “finally discharged or acquitted” of the scheduled offence, there can be no offence of money laundering against them. However, ED alleged that Yash was a direct beneficiary of the “proceeds of crime”. It claimed that Rs 1.4 crore was diverted from OSPL to Ornate Wellness Pvt Ltd (OWPL), another company where Yash is a director, to establish two gyms called ‘Iron House’. ED submitted that these funds were utilised for equipment, interior work, and marketing, making Yash an active participant in the “concealment, enjoyment, and use” of laundered money. The judge observed that while the accused claimed that amount was obtained as a loan, the application was silent in respect of the contention and no documentary evidence had been placed on record.Addressing the legal requirements for prosecution, the judge said, “The conditions precedent for attracting the offence under PMLA section 3 are that there must be a scheduled offence and that there must be proceeds of crime generated in relation to the scheduled offence. From the decision of the…apex court, it is well settled 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.“
