Does Section 44(1)(c) of the PMLA Create Jurisdictional Supremacy in ED–CBI Conflicts?

Introduction

On March 5, 2026, a Division Bench of the Madras High Court, in The Deputy Director v. The Deputy Superintendent of Police and Others¹, was confronted with a question at the intersection of corruption law and anti-money laundering enforcement: when a CBI court under PC Act is adjudicating a corruption case, does the subsequent filing of money-laundering charges by the ED operate as a “legal magnet,” compelling the transfer of the original proceedings to a PMLA Special Court under Section 44(1)(c)²?

The dispute arose from a corruption case registered by the CBI against Dr. P. Vijayan and V. Anitha for alleged offences under Sections 13(2) (Punishment clause of Disproportionate Assets) and 13(1)(e)³ of the Prevention of Corruption Act, 1988. The case proceeded as C.C.No.19 of 2014 before the XIII Additional CBI Court in Chennai. Meanwhile, the ED initiated a parallel investigation, concluding on December 31, 2014, that the alleged corruption offences constituted “scheduled offences” under the PMLA. The agency subsequently issued a provisional attachment order on March 12, 2015, for properties believed to be “proceeds of crime” and filed a money-laundering complaint, before the Principal Sessions Judge in Chennai, designated as the PMLA Special Court. Noting that the corruption trial involved evidence central to the money-laundering allegations and that the proceedings were progressing slowly, the ED filed an application seeking transfer of the corruption case to the PMLA Special Court. However, the CBI Court dismissed the application on March 18, 2025, prompting the ED to challenge the order before the Madras High Court.

The petitioner (ED) argues that the statute states once a money-laundering complaint is lodged, any other court handling the related “predicate” offence is stripped of its independent discretion and must commit the case to the PMLA Special Court. This mechanism is not merely a rule of procedural movement; it is a legislative cornerstone designed to fuse fragmented proceedings into a single, cohesive search for the truth. By ensuring that both the underlying crime and its financial spoils are judged from the same bench, the law seeks to prevent inconsistent findings and ensure judicial economy.

The Statutory Mandate: Section 44 and the Judicial Primacy of PMLA Special Courts

The ED’s argument relies heavily on the overriding clause contained in Section 44 of the PMLA (Offenses Triable by Special Courts), which operates “notwithstanding anything contained in the Code of Criminal Procedure.” This clause gives primacy to the procedural framework of the PMLA when dealing with offences involving the laundering of proceeds derived from scheduled crimes. The High Court’s analysis centered on the interaction between Section 43 (Power to Designate Special Courts) and Section 44 of the PMLA. Section 43 of PMLA empowers the Central Government to designate Special Courts for the trial of PMLA offences, while Section 44 delineates the jurisdiction of these courts, allowing them to try both the money-laundering offence and the scheduled offence in the same trial. Under Section 43(2), a PMLA Special Court may try any other offence with which the accused may be charged during the same proceedings. Building upon this framework, Section 44(1)(c) imposes a mandatory obligation: once the authorized authority files an application, the court trying the scheduled offence shall commit the case to the PMLA Special Court.

To reinforce its position, the ED relied on a robust line of judicial precedents. In Vijay Madanlal Choudhary v. Union of India (2022)⁴, the Supreme Court affirmed the constitutional validity of the PMLA and underscored the primacy of its special procedural framework, noting that the PMLA is a unique legislation that creates its own universe of rules. Further, in Rana Ayyub v. Directorate of Enforcement (2023)⁵, the Apex Court clarified that trials for the scheduled offence and the money-laundering offence should ideally proceed before the same court to prevent inconsistent findings and procedural inefficiency. The court emphasized that the PMLA Special Court has exclusive jurisdiction once a complaint is filed.

Beyond these well-known cases, the court considered the principles laid down in P. Rajendran v. The Deputy Director, ED (2022)⁶, where the Madras High Court previously held that the word “shall” in Section 44(1)(c) denotes a mandatory command to ensure that the legislative intent of a “joint trial” is not defeated. Similarly, the precedent of K.A. Mansoor Ali Khan v. ED (2023)⁷ reinforced that once a PMLA complaint is taken cognizance of, the “committal” of the predicate offence is an automatic legal consequence to avoid the fragmentation of evidence. Furthermore, in Directorate of Enforcement v. Gagandeep Singh (2023)⁸, it was observed that the PMLA Special Court acts as a “hub” for all related proceedings, ensuring that the person who committed the predicate crime and the person who laundered the money are held accountable in a singular, cohesive judicial environment. The court also looked toward the spirit of Kaushik Chatterjee v. State of Haryana (2020)⁹, which, while dealing with territorial jurisdiction, emphasized that the interest of justice is best served when related trials are consolidated to avoid the “spectacle of conflicting verdicts.”

The CBI, however, argued that the existing trial was already being conducted before a Special Court constituted under the Prevention of Corruption Act, 1988, which is itself a special statute. Consequently, it contended that the mandatory committal mechanism under the PMLA should not automatically apply to another “Special Court.” Despite this contention, the statutory architecture of the PMLA suggests a legislative intent to ensure that the “predicate offence” and the “laundering of its proceeds” are adjudicated together. This integrated approach prevents fragmented trials and allows courts to evaluate the financial trail in conjunction with the underlying criminal conduct.

Upon a due consideration of the rival submissions and the statutory scheme,  a Division Bench of the Madras High Court, comprising Hon’ble Chief Justice Manindra Mohan Shrivastava and Hon’ble Mr. Justice G. Arul Murugan, set aside the CBI Court’s order, labeling it “perverse and unsustainable.” The Bench clarified that the word “shall” in Section 44(1)(c) denotes a mandatory command that cannot be bypassed even if a trial is at an advanced stage. However, the Court introduced a pragmatic procedural solution: since the XIII Additional Special Court (CBI) was already designated as a Special Court under the PMLA, the Court directed that the PMLA case be transferred to the CBI Court instead. This “dual-capacity” approach ensures that a single judge oversees both the predicate offence and the money-laundering charges, fulfilling the legislative intent of a unified trial without disrupting the specialized expertise required for CBI cases.

The journey of this legal principle has now reached the Supreme Court of India. While the Madras High Court’s decision serves as a powerful precedent, the broader question of whether the PMLA “legal magnet” absolutely overrides other special statutes like the Prevention of Corruption Act is currently under intense scrutiny by the Apex Court. In related matters such as The Deputy Director v. C. Sivasankaran¹⁰, the Supreme Court has issued notices to examine the limits of this jurisdictional supremacy. As it stands, the fusion of these trials reflects a deliberate statutory mandate aimed at providing a comprehensive view of the criminal enterprise, ensuring that the commission of an offence and the concealment of its fruits are judged as one.

Conclusion

The case highlights the legislative design behind the PMLA to centralize the adjudication of financial crimes. By requiring predicate offences to be transferred to the PMLA Special Court, the statute seeks to create a single judicial forum capable of examining both the underlying criminal activity and the laundering of its proceeds. This consolidation is not merely a matter of procedural convenience; rather, it reflects a deliberate statutory mandate aimed at ensuring coherent findings, preventing conflicting judgments, and preserving the primacy of the PMLA Special Court in complex financial crime prosecutions. Ultimately, the fusion of these trials serves the broader interest of justice by providing a comprehensive view of the criminal enterprise from the commission of the offence to the concealment of its fruits.

Citations

1. The Deputy Director v. The Deputy Superintendent of Police and Others 2026:MHC:922 ↩︎
2. Section 44(1)(c) of PMLA (Offences triable by Special Courts) ↩︎
3. 13(1)(e) of the Prevention of Corruption Act, 1988 (The Substantive Offense (Disproportionate Assets) ↩︎
4.  Vijay Madanlal Choudhary v. Union of India [(2022) SCC OnLine SC 929] ↩︎
5. Rana Ayyub v. Directorate of Enforcement [(2023) 4 SCC 357] ↩︎
6. P. Rajendran v. The Deputy Director, ED [2022 SCC OnLine Mad 4016] ↩︎
7. K.A. Mansoor Ali Khan v. ED [2023 SCC OnLine Mad 5384] ↩︎
8. Directorate of Enforcement v. Gagandeep Singh [2022 SCC OnLine Del 514] ↩︎
9. Kaushik Chatterjee v. State of Haryana [(2020) 10 SCC 92] ↩︎
10. The Deputy Director v. C. Sivasankaran SLP (Criminal) Diary No.: 3877/2026 ↩︎

Expositor(s): Adv. Archana Shukla