SC dismisses Rana Ayyub’s plea challenging U.P. special court summons in money laundering case

A Bench refrained from arriving at any conclusions on the territorial jurisdiction of the Ghaziabad court and said Ayyub was free to raise the question before the special court

Updated - February 07, 2023 07:37 pm IST

Published - February 07, 2023 11:10 am IST - New Delhi

In her writ petition, Rana Ayyub has sought quashing of the proceedings initiated by the ED in Ghaziabad citing lack of jurisdiction as the alleged offence of money laundering occurred in Mumbai.

In her writ petition, Rana Ayyub has sought quashing of the proceedings initiated by the ED in Ghaziabad citing lack of jurisdiction as the alleged offence of money laundering occurred in Mumbai. | Photo Credit: Arunangsu Roy Chowdhury

The Supreme Court on Tuesday dismissed a writ petition filed by journalist Rana Ayyub challenging a summons order issued to her by a Special Court in Uttar Pradesh on a complaint filed by the Enforcement Directorate under the Prevention of Money Laundering Act.

A Bench of Justices V. Ramasubramanian and J.B. Pardiwala refrained from arriving at any conclusions on the territorial jurisdiction of the Ghaziabad court, saying the money was allegedly collected by her through virtual crowd-funding and there was a “serious factual dispute about the place/places of commission of the offence”.

The court said Ms. Ayyub was free to raise the question of territorial jurisdiction before the Special Court.

“The question of territorial jurisdiction in this case requires an enquiry into a question of fact as to the place where the alleged proceeds of crime were concealed or possessed or acquired or used. This question of fact will actually depend upon the evidence that unfolds before the trial court,” Justice Ramasubramanian noted.

Crowdfunding campaign

The money laundering case is linked to three campaigns Ms. Ayyub allegedly ran from April 2020 to September 2021 on an online crowdfunding platform named ‘Ketto’.

Ms. Ayyub had argued that the Ghaziabad court had no jurisdiction as the Enforcement Directorate (ED) had attached her bank account at Navi Mumbai in Maharashtra.

The ED had countered that the scheduled offence was registered in Ghaziabad and so it had to necessarily lodge the money laundering case also in the same place. Besides, the agency had said that many people from Uttar Pradesh had donated money to Ms. Ayyub’s campaign, and so, part of the cause of action lay within the jurisdiction of the Ghaziabad court.

‘Virtual mode’

The court noted that though the money from the funding campaign was ultimately taken “possession” of in a bank account at Navi Mumbai, the “other activity, namely acquisition, of the proceeds of crime (if they really are) has taken place in the virtual mode with people from different parts of the country/world transferring money online”.

“If acquisition has taken place in the real physical world, the difficulty with respect to the question of jurisdiction would have been lesser. Since acquisition has taken place in the virtual world, the places from where online transfers of money took place are known only to the petitioner or perhaps their bankers… Hence, this question should be raised by the petitioner before the Special Court, since an answer to the same would depend upon evidence as to the places where any one or more of the processes or activities were carried out,” the court observed.

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