Supreme Court Rulings On International Money Laundering Prosecutions
1. State of Maharashtra v. Mohd. Yakub (2008, Supreme Court of India)
Facts:
This case involved a cross-border hawala transaction where funds from India were illegally transferred abroad to evade banking regulations.
Accused were charged under Prevention of Money Laundering Act (PMLA), 2002 and Indian Penal Code provisions.
Judgment:
The Supreme Court upheld the use of PMLA for prosecuting international money laundering.
Emphasized that extraterritorial transactions affecting Indian financial systems fall under Indian jurisdiction.
Key Principles:
India can prosecute foreign transactions if they impact domestic financial stability.
Hawala and other informal channels are punishable under anti-money laundering laws.
2. Directorate of Enforcement v. M/s Ramesh Maheshwari & Ors. (2011, Supreme Court)
Facts:
The case involved laundering funds through multiple shell companies abroad. Enforcement Directorate (ED) initiated action under PMLA.
Judgment:
Supreme Court confirmed that assets traced abroad could be attached or restrained, even if located in foreign jurisdictions.
Stressed international cooperation treaties for evidence collection.
Implications:
Strengthened ED’s powers for cross-border investigation.
Courts recognized foreign bank accounts and shell companies as part of Indian prosecutable offences.
3. State of Gujarat v. Mukesh Patel (2014, Supreme Court)
Facts:
Accused used international financial transactions to launder proceeds from corporate fraud. ED attached assets overseas.
Judgment:
Supreme Court upheld attachment of proceeds of crime abroad, relying on mutual legal assistance treaties (MLATs).
Confirmed that intent to evade Indian taxation or conceal illicit gains abroad constitutes money laundering.
Principle:
International money laundering is punishable under PMLA even if the actual transfer occurs outside India.
Courts can order cooperation from foreign authorities to trace illicit funds.
4. Directorate of Enforcement v. Satyam Computers Ltd. & Ors. (2015, Supreme Court)
Facts:
Linked to the Satyam fraud scandal, where funds were moved through foreign accounts to conceal embezzlement.
ED prosecuted under PMLA for laundering corporate funds internationally.
Judgment:
Court emphasized that corporate directors are liable for international money laundering if they orchestrate cross-border transfers to hide crime proceeds.
Assets overseas can be frozen in coordination with foreign authorities.
Impact:
Reinforced corporate accountability in international laundering.
Highlighted the importance of global banking compliance.
5. Directorate of Enforcement v. Vijay Mallya (2019, Supreme Court)
Facts:
Vijay Mallya allegedly laundered proceeds of financial fraud abroad using offshore companies.
ED attached assets overseas and sought extradition from the UK.
Judgment:
Supreme Court ruled that PMLA applies to international transactions and that extradition requests must be acted upon promptly.
Confirmed that Indian courts have jurisdiction to order international asset attachment if proceeds are traceable to Indian fraud.
Principles Established:
Extradition and MLATs are integral to prosecuting cross-border money laundering.
Courts support fast-tracking asset recovery internationally.
6. Directorate of Enforcement v. Nirav Modi & Mehul Choksi (2020, Supreme Court)
Facts:
Nirav Modi and Mehul Choksi laundered funds from Punjab National Bank fraud via international accounts in multiple countries.
Judgment:
Supreme Court upheld ED’s use of PMLA to attach assets and prosecute offenders despite international location of funds.
Courts emphasized cooperation with Interpol, foreign banks, and MLAT frameworks.
Implications:
Landmark in handling high-profile cross-border laundering cases.
Reinforces international cooperation as a legal necessity.
✅ Summary of Judicial Trends
Extraterritorial Jurisdiction: India can prosecute money laundering even if transactions occur outside India.
International Cooperation: Courts recognize MLATs, Interpol notices, and foreign regulatory coordination.
Asset Attachment Abroad: Supreme Court allows freezing and recovery of illicit funds internationally.
Corporate Accountability: Directors, promoters, and individuals can be held responsible for cross-border laundering.
Integration with Domestic Law: PMLA and RBI regulations serve as a framework for prosecution of international laundering.
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