BEYOND CONVENTIONAL PREDICATE OFFENCES: A CRITICAL ANALYSIS OF THE EXPANDING SCOPE OF ENFORCEMENT DIRECTORATE INVESTIGATIONS UNDER THE PMLA, 2002

Abstract

The Prevention of Money Laundering Act, 2002 was enacted to address the laundering of proceeds derived from serious criminal activity. In practice, however, the scope of investigations undertaken by the Enforcement Directorate has extended beyond conventional offences into a wider range of evolving financial and regulatory violations.

The Schedule to the PMLA incorporates a broad spectrum of predicate offences drawn from multiple statutes, including those relating to narcotics, customs, wildlife protection, human trafficking and illegal organ trade. Despite this expansive framework,  it is often perceived as confined to mainstream financial offences such as banking frauds and related economic crimes.

This paper argues that, contrary to such perception, the Enforcement Directorate operates across a far wider range of scheduled offences spanning diverse statutory domains. Crucially, it contends that mere inclusion of an offence within the Schedule does not, by itself, justify the initiation of proceedings under the Act. The statutory framework presupposes the existence of “proceeds of crime” and requires a demonstrable nexus between the predicate offence and the generation of such proceeds. In the absence of this foundational linkage, the invocation of the PMLA risks straying from its intended purpose, thereby raising concerns as to the permissible limits of its invocation.

These concerns are analysed in this paper with reference to recent probes undertaken by the Enforcement Directorate, read in conjunction with pertinent judicial pronouncements.