What is a Predicate Offence?

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What is a Predicate Offence? Blog Image

Overview:

The Supreme Court recently quashed a money laundering case after noting that there was no predicate offence in the case and no proceeds of crime.

About Predicate Offence

  • A predicate offence is a crime that is a component of a more complex criminal activity, often associated with money laundering or organised crime.
  • It serves as the underlying criminal act that generates proceeds or funds for the subsequent illegal activity.
  • The term “predicate offence” is usually used to describe money laundering or terrorist financing activities.
  • Predicate Offence under the Prevention of Money Laundering Act (PMLA):
    • The legislative intent behind predicate offences under PMLA finds its roots in the pursuit of curbing not only illicitly gained wealth but also income legally acquired yet concealed from the watchful eyes of public authorities.
    • The PMLA designates certain offences as predicate offences through the Schedule, consisting of three parts: Part A, Part B, and Part C. 

Part A:

  • This section enumerates offences under the Indian Penal Code (IPC) that are deemed predicate offences.
  • Ranging from criminal conspiracy, waging war against the government, counterfeiting, to offences related to extortion, robbery, forgery, cheating, and more, Part A delves into the core fabric of criminal activities.

Part B:

  • Under this section, offences under the Customs Act become predicate offences if their value exceeds one crore rupees.
  • This section focuses on violations related to customs duties and regulations.

Part C:

  • This segment encompasses offences of cross-border implications, encompassing not only Part A's offences but also those against property under Chapter XVII of the Indian Penal Code.
  • Additionally, the wilful attempt to evade taxes, penalties, or interest under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 also finds a place here.
  • The Supreme Court held that ‘If there’s no predicate offence, there are no proceeds of crime. Therefore, there can’t be money laundering’.

Q1: What is the Indian Penal Code, 1860?

The Indian Penal Code is the official criminal code of India, which was drafted way back in 1860. Its objective is to provide a general penal code for the country. It has 511 sections across 23 chapters, providing the list of crimes along with their definitions and punishments. The IPC has been amended several times and is now supplemented by other Acts.

Source: No predicate offence, SC says, junks case against Chhattisgarh ex-IAS officer, son