TEAM CODE- SPCO9

SAMVIDHAN PE CHARCHA, 2.0 NATIONAL MOOT COURT COMPETITION,

2024

BEFORE THE HON’BLE SUPREME COURT OF THE REPUBLIC OF

ARYAVARTA

IN THE MATTER OF

REBA ABIZ……….…………..…………………………………..(PETITIONER)

VS

1. DIRECTORATE OF ENFORCEMENT(ED) AND

2. REPUBLICAN OF ARYAVARTA……………………………..(RESPONDENTS)

W.P. NO. 300/24 AND W.P. NO. 320/24

FILED UNDER ARTICLE 32 OF THE CONSTITUTION OF ARYAVARTA

WRITTEN SUBMISSION ON BEHALF OF RESPONDENT

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TABLE OF CONTENTS

TABLE OF CONTENTS.....................................................................................................................i

INDEX OF AUTHORITIES..............................................................................................................iii

I. LEGISLATIONS................................................................................................................iii
II. CASES..............................................................................................................................iv
III. ONLINE DATABASES...................................................................................................v
IV. BOOKS.............................................................................................................................v
STATEMENT OF JURISDICTION.................................................................................................vi

STATEMENT OF FACTS................................................................................................................vii

STATEMENT OF ISSUES..............................................................................................................viii

SUMMARY OF ARGUMENTS........................................................................................................ix

ARGUMENTS ADVANCED..............................................................................................................1

1. WHETHER THE PETITIONS BEARING NO. 300/2024 FILED BY REBA ABIZ IS

MAINTAINABLE ON ALLEGED GROUNDS OF VIOLATION OF FUNDAMENTAL
RIGHTS AND IS AMENABLE TO THE WRIT JURISDICTION OF HONOURABLE
SUPREME COURT OF ARYAVARTA?......................................................................................1
1.1. THE FAILURE OF THE PETITIONER TO EXHAUST REMEDIES......................1
1.2. JURISDICTION OF THIS COURT CANNOT BE INVOKED AS THERE IS NO
VIOLATION OF FUNDAMENTAL RIGHTS.........................................................................2
1.3. Appropriateness of Writ Jurisdiction.............................................................................5
1.4. The Petitioner’s Claim of Selective Prosecution Is Unsubstantiated...........................5
2. WHETHER THE SPECIAL COURT, PMLA-1 GANGALPURAM, HAS RIGHTLY
TAKEN COGNIZANCE OF CRIMINAL CASE NO. 20/2024 UNDER THE PROVISIONS
OF PMLA, INTER ALIA UNDER SECTION 44 READ WITH SECTION 3 OF PMLA?......6
2.1. The Special Court in Gangalpuram Has Jurisdiction Under Section 44(1) of the
PMLA...........................................................................................................................................6
2.2. Section 44(1)(c) Allows Special Courts to Exercise Jurisdiction Over Interconnected
Cases 8
2.3. No Violation of Fundamental Rights: Legitimate Exercise of Jurisdiction in the
Interest of Justice.........................................................................................................................9
2.4. The Trial in Gangalpuram Is Lawful Due to the Broad Definition of "Proceeds of
Crime" Under Section 3 of the PMLA.....................................................................................11
2.5. The Doctrine of Forum Convenience Favors Gangalpuram......................................12

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3. Issue III: WHETHER THE PETITIONS BEARING NO. 320/2024 FILED BY REBA
ABIZ IS MAINTAINABLE ON ALLEGED GROUNDS OF VIOLATION OF
FUNDAMENTAL RIGHTS?.......................................................................................................13
3.1. The Petition Is Not Maintainable Due to Lack of Direct Violation of Fundamental
Rights 13
3.3. Regulatory Measures Do Not Automatically Trigger Writ Jurisdiction...................14
3.4. Doctrine of Legislative Supremacy: Executive Notification Is a Valid Regulatory
Measure......................................................................................................................................15
4. Whether the Notification No. 10/2023 dated 07.03.2024 issued by the Ministry of Finance
through the Department of Revenue, Republic of Aryavarta, is ultra vires the Constitution,
Prevention of Money Laundering Act (PMLA), and exceeds the authority of delgated
rulemaking power vested by the Prevention of Money Laundering Act upon the Ministry of
Finance?.........................................................................................................................................17
4.1. The Notification is a Legitimate Exercise of Delegated Legislative Power under
PMLA17
4.2. The Notification is in Line with the Objective of the PMLA......................................18
4.3. The Notification Does Not Violate Fundamental Rights.............................................19
4.4. The Notification is Proportionate and Necessary to Address the Threat of Money
Laundering.................................................................................................................................20
PRAYER............................................................................................................................................22

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INDEX OF AUTHORITIES

I. LEGISLATIONS

1. Prevention of Money Laundering Act,2002

2. Foreign Contribution(Regulation) Act,2010.

3. Indian Penal Code, 1860

4. The Information Technology (Amendment) Act, 2008

5. The Black Money Act,2005

6. Code of Criminal Procedure, 1973

7. The Constitution of India.

8. [Link]

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II. CASES

1. ADM Jabalpur v. Shivkant Shukla

2. Arun Kumar v. Union of India (2007) 1 SCC 732

3. Avinder Singh v. State of Punjab (1979) 1 SCC 137

4. Cooverjee B. Bharucha v. Excise Commissioner (AIR 1954 SC 220)

5. Directorate of Enforcement v. Gautam Navlakha 2021 SC 246

6. I.C. Golaknath v. State of Punjab (1967) 2 SCR 762

7. J.K. Industries Ltd. v. Union of India (2007) 13 SCC 673

8. K.S. Puttaswamy v. Union of India (2017) 10 SCC 1

9. Kusum Ingots & Alloys Ltd. v. Union of India (2004) AIR SCW 276

10. M/s. Laxmi Khandsari v. State of U.P. (1981) AIR 873

11. Madras City Wine Merchants’ Association v. State of T.N. 1994 AIR SCW 3915

12. Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh

Bhupeshkumar Sheth (1984) 4 SCC 27\

13. Maneka Gandhi v. Union of India 1978 AIR 597, 1978 SCR (2) 621

14. Om Kumar v. Union of India (2001) 2 SCC 386

15. Rana Ayyub v. Directorate of Enforcement,2023 SSC Online SC109

16. S.P. Gupta v. Union of India 1982 AIR 149

17. State of Bombay v. R.M.D. Chamarbaugwala

18. State of Bombay v. R.M.D. Chamarbaugwala 1957 AIR 699

19. State Of Maharashtra & Anr vs Lok Shikshan Sansatha & Ors

20. State of Maharashtra v. Nisar Mohamed Ahmed Shaikh, (2002) 2 SCC 11

21. State of Rajasthan v. Union of India (1977) 3 SCC 592

22. Union of India v. Azadi Bachao Andolan (2004) 10 SCC 1

23. Union of India v. Deoki Nandan Aggarwal (1992) 1992 AIR 96

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24. UNION of India v. International Trading Co., (2003) 5 SCC 437

25. Vijay Madanlal Choudhary v. Union of India 2022 SC 929

26. Vishaka v. State of Rajasthan (1997) AIR 1997 SUPREME COURT 3011

III. ONLINE DATABASES

1. Manupatra

IV. BOOKS

1. D.D. Basu, Introduction to the Constitution 26th Edn

2. C.K. Takwani, Administrative Law

3. Dr. J. N. Pandey, Constitution of India, Sixtieth Edn.

4.

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STATEMENT OF JURISDICTION

THE JURISDICTION OF THIS HON’BLE SUPREME COURT HAS BEEN INVOKED

UNDER ARTICLE 32 OF THE CONSTITUTION OF ARYAVARTA, WHICH READS

HEREIN UNDER AS:

Article 32. Remedies for enforcement of rights conferred by this Part.

1) The right to move the Supreme Court by appropriate proceedings for the enforcement of

the rights conferred by this Part is guaranteed.

2) The Supreme Court shall have power to issue directions or orders or writs, including writs

in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari,

whichever may be appropriate, for the enforcement of any of the rights conferred by this Part.

3) Without prejudice to the powers conferred on the Supreme Court by clauses (1) and (2),

Parliament may by law empower any other court to exercise within the local limits of its

jurisdiction all or any of the powers exercisable by the Supreme Court under clause (2).

4) The right guaranteed by this article shall not be suspended except as otherwise provided

for by this Constitution.

(The Constitution of Aryavarta is in pari materia with the Constitution of India)

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STATEMENT OF FACTS

1. Republic of Aryavarta is a sovereign nation with laws similar to India and a growing economy,

where new business methods are constantly evolving.

2. Reba Abiz, editor of "Akhand Bharata Daily," initiated a crowdfunding campaign in January

2023 to aid people with severe heart ailments, homeless individuals, and orphans. The

campaign garnered widespread attention, both nationally and globally. Reba quickly collected

over 2 billion in funds, but scrutiny began when it was revealed that foreign donations were

received without proper registration under the Foreign Contribution (Regulation) Act, 2010.

3. A complaint was lodged by "Vocal Against Laundering," accusing Reba of cheating, bribery,

corruption, and violating several laws including the IPC, IT Act, and Black Money Act. An FIR

was filed in March 2024. The ED took over the investigation, raiding Reba’s properties and

issuing a lookout circular. Reba was arrested at the Mumbankar airport while attempting to

flee. ED provisionally attached Rs 1.77 billion, including assets from virtual currency NFTs

regulated under Notification No. 10/2023.

4. Reba approached the High Court of Delar, which granted interim relief by staying the

attachment of properties and allowing him to travel abroad. The ED challenged this decision in

the Supreme Court, which remanded the case to the High Court for fresh adjudication.

5. The ED completed its investigation and filed charges, accusing Reba of fraudulently acquiring

proceeds of crime. The Special Court in Gangalpuram took cognizance and summoned Reba

under the PMLA. Reba petitioned the Supreme Court, claiming violation of his rights under

Articles 14, 19, and 21. He argued the case should be tried in Greater State, not Gangalpuram,

where the offenses allegedly occurred.

6. Reba also challenged the validity of Notification No. 10/2023, asserting that it exceeded the

Ministry of Finance’s authority under the PMLA. Both petitions were clubbed and are pending

before the Supreme Court.

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STATEMENT OF ISSUES

ISSUE I

Whether the petitions bearing no. 300/2024 filed by Reba Abiz is maintainable on alleged

grounds of violation of fundamental rights and is amenable to the writ jurisdiction of

Honourable Supreme Court of Aryavarta?

ISSUE II

Whether the Special Court, PMLA-1 Gangalpuram has rightly taken cognizance of Criminal

Case no.20/2024 under provisions of PMLA inter alia under the provision of Section 44 read

with Section 3 of PMLA?

ISSUE III

Whether the petitions bearing no. 320/2024 filed by Reba Abiz is maintainable on alleged

grounds of violation of fundamental rights?

ISSUE IV

Whether the Notification no.10/2023 dated 07.03.2024 issued by Ministry of Finance through

Department of Revenue, Republican of Aryavarta is ultra vires the Constitution, Prevention

of Money Laundering Act and exceeding authority of delegated rulemaking power vested by

Prevention of Money Laundering Act upon Ministry of Finance?

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SUMMARY OF ARGUMENTS

ISSUE I: WHETHER THE PETITIONS BEARING NO. 300/2024 FILED BY REBA

ABIZ IS MAINTAINABLE ON ALLEGED GROUNDS OF VIOLATION OF

FUNDAMENTAL RIGHTS AND IS AMENABLE TO THE WRIT JURISDICTION

OF HONOURABLE SUPREME COURT OF ARYAVARTA?

It is humbly submitted before this Hon’ble Court that the present petitions filed by Reba Abiz

under article 32 of the Constitution of the Republic of Aryavarta are not maintainable, since,

for a petition to be maintainable under Article 32 there has to be a violation of fundamental

rights, which is absent in the present case.

ISSUE II: WHETHER THE SPECIAL COURT, PMLA-1 GANGALPURAM HAS

RIGHTLY TAKEN COGNIZANCE OF CRIMINAL CASE NO.20/2024 UNDER

PROVISIONS OF PMLA INTER ALIA UNDER THE PROVISION OF SECTION 44

READ WITH SECTION 3 OF PMLA?

Section 44(1) of the PMLA grants Special Courts broad jurisdiction over money laundering

and related offenses, regardless of territorial limitations set by the CrPC. Whereas, Section

44(1)(c) allows the court to handle both the scheduled offense and money laundering offenses

together, promoting judicial efficiency and avoiding fragmented trials. The trial does not

violate the Petitioner’s fundamental rights, as the proceedings are in line with PMLA

provisions and due process. The Trial in Gangalpuram Is Lawful Due to the Broad Definition

of "Proceeds of Crime" Under Section 3 of the PMLA which includes activities related to

proceeds of crime in Gangalpuram, establishing a valid basis for the Special Court’s

jurisdiction.

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ISSUE III: WHETHER THE PETITIONS BEARING NO. 320/2024 FILED BY REBA

ABIZ IS MAINTAINABLE ON ALLEGED GROUNDS OF VIOLATION OF

FUNDAMENTAL RIGHTS?

The Enforcement Directorate's actions are consistent with the Prevention of Money

Laundering Act (PMLA), which targets financial crimes. The petitioner’s claims of selective

prosecution lack evidence and are unsubstantiated. The notification may exceed the PMLA’s

authority by regulating virtual currencies and NFTs which could be seen as unfair or

discriminatory and might infringe on privacy rights.

ISSUE IV:WHETHER THE NOTIFICATION NO.10/2023 DATED 07.03.2024

ISSUED BY MINISTRY OF FINANCE THROUGH DEPARTMENT OF REVENUE,

REPUBLICAN OF ARYAVARTA IS ULTRA VIRES THE CONSTITUTION,

PREVENTION OF MONEY LAUNDERING ACT AND EXCEEDING AUTHORITY

OF DELEGATED RULEMAKING POWER VESTED BY PREVENTION OF

MONEY LAUNDERING ACT UPON MINISTRY OF FINANCE?

It is humbly submitted before the Hon’ble court that the Ministry of Finance, under Section

73 of the PMLA, validly issued Notification No. 10/2023 to regulate Virtual Digital Assets

(VDAs) like cryptocurrencies and NFTs to prevent money laundering. This notification

adheres to constitutional principles, respects fundamental rights, and follows the doctrine of

proportionality by regulating rather than banning VDAs. It serves a legitimate state interest in

combating financial crimes and aligns with the PMLA’s intent, warranting dismissal of the

petition challenging its validity.

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ARGUMENTS ADVANCED

ISSUE I

1. WHETHER THE PETITIONS BEARING NO. 300/2024 FILED BY REBA ABIZ

IS MAINTAINABLE ON ALLEGED GROUNDS OF VIOLATION OF

FUNDAMENTAL RIGHTS AND IS AMENABLE TO THE WRIT

JURISDICTION OF HONOURABLE SUPREME COURT OF ARYAVARTA?

It is humbly submitted before this Hon’ble Court that the present writ petition filed under

Article 32 is not maintainable before this court on the grounds that the Petitioner has not

exhausted his

1.1. THE FAILURE OF THE PETITIONER TO EXHAUST REMEDIES

1.1.1. The Respondent humbly contends that the present Petition of the Petitioner is barred on

grounds that the petitioner has not exhausted the legal remedy available to the Petitioner,

1.1.2. The Respondent humbly submits that the Petitioner, Reba Abiz, has approached the

Hon’ble Supreme Court under Article 32, before exhausting his statutory remedies

available under PMLA.

1.1.3 Article 32 is an extraordinary remedy, and the petitioner must demonstrate that there is no

adequate alternative legal remedy. The Enforcement Directorate (ED) contends that the

petitioner has other legal recourses, including appeals to the Special Courts under the

PMLA or to the High Court under Article 226.

1.1.4 In State of Rajasthan v. Union of India1 this case, the Supreme Court held that Article 32

should not be invoked prematurely if alternative legal remedies are available. The ED

asserts that the petitioner should first exhaust remedies under the PMLA before

approaching the Supreme Court.

1
(1977) 3 SCC 592

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1.2. JURISDICTION OF THIS COURT CANNOT BE INVOKED AS THERE IS

NO VIOLATION OF FUNDAMENTAL RIGHTS.

Article 32 is the custodian of Fundamental Rights. It provides remedies to individuals on

the violation of their fundamental rights. The Respondent contends before this Hon’ble

Court.

1.2.1. No Violation of Fundamental Rights The respondents argue that the proceedings

against Reba Abiz do not violate his fundamental rights under Articles 14, 19, and 21 of

the Constitution. Article 14 ensures equality before the law, and there is no evidence of

arbitrary or discriminatory treatment. Article 21 guarantees the right to a fair trial, which

is being provided through the legal process in Gangalpuram. Article 19(1)(g) allows for

reasonable restrictions on the right to practice any profession in the public interest, and

any restrictions imposed are justified to combat serious financial crimes like money

laundering.

1.2.2. No Violation of Article 14: Equal Protection of the Law

The respondent contends that the actions taken under the PMLA are based on evidence

gathered through lawful investigation and apply equally to any individual suspected of

money laundering. There is no selective targeting or discrimination as alleged by the

petitioner.

1.2.3. In Vijay Madanlal Choudhary v. Union of India2, this case, the Supreme Court upheld

the constitutional validity of various provisions of the PMLA, including the powers of

the ED to attach properties and make arrests. The Court emphasized that these powers

are based on evidence and are not arbitrary or discriminatory.

1.2.4. The ED asserts that the actions against Reba Abiz were taken after the discovery of

significant financial irregularities and foreign contributions without necessary

2
2022 SC 929

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permissions. Therefore, the application of the PMLA to the petitioner is not arbitrary but

based on the law.

1.2.5. No Violation of Article 19(1) (g): Right to Trade and Profession

The petitioner claims that the freezing of his assets and restrictions imposed on his

financial transactions infringe his right to trade and business. However, Article 19(1) (g)

is subject to reasonable restrictions in the interest of public welfare, especially in cases

of serious economic offenses like money laundering.

1.2.6. The Supreme Court held that the right to trade under Article 19(1)(g) can be subjected to

reasonable restrictions in the interest of public safety, public health, and public order 3. In

cases involving serious economic crimes, the state has the authority to impose

restrictions to prevent further unlawful activity.

1.2.7. The ED’s actions are aimed at preventing the petitioner from further using assets

acquired through allegedly illegal means. The freezing of assets under the PMLA is a

necessary measure to preserve the proceeds of crime, pending trial.

1.2.8. No Violation of Article 21: Right to Life and Personal Liberty

The respondent asserts that the petitioner’s Article 21 rights have not been violated. The

actions taken by the ED, including the issuance of a lookout notice and arrest, were

conducted in accordance with the legal process under the PMLA.

1.2.9. In the case of ADM Jabalpur v. Shivkant Shukla4 it was recognized that the state has

broad powers to take preventive measures in cases where public order and national

security are at risk. The ED argues that its actions are preventive in nature, aimed at

ensuring that the petitioner does not escape the jurisdiction of the law.

3
Dr. Subramanian Swamy v. CBI, (2014) 8 SCC 682
4
1976 AIR 1207

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1.2.10. The Supreme Court has upheld the constitutional validity of the arrest and search and

seizure provisions under the PMLA, emphasizing that these provisions are necessary to

combat the serious menace of money laundering5.

1.2.11. In the cases of Directorate of Enforcement v. Gautam Navlakha 6 and State of Bombay

v. R.M.D. Chamarbaugwala7, the respondents argue that writ petitions challenging

procedural aspects or jurisdictional matters are generally not entertained unless they

involve significant constitutional issues. The petition should be evaluated based on

whether it meets the criteria for invoking the Supreme Court's writ jurisdiction.

1.2.12. If the petitions lack substantive evidence or clear demonstration of fundamental rights

violations, they may be deemed non-maintainable. The Court requires substantial proof

of rights violations. Without adequate evidence, petitions may be dismissed as held in

the case of S.P. Gupta v. Union of India8.

1.2.13. The issue of territorial jurisdiction in the peculiar facts therefore cannot be decided in

a writ petition under Article 32, especially when there are serious factual disputes about

the places of commission of the offence of money laundering. Accordingly, the

petitioner was given liberty to raise the issue of territorial jurisdiction before the trial

court and the petition was disposed of.

1.2.14. The respondent respectfully submits that “Writ Petition No. 300/2024”is not

maintainable under Article 32. The petitioner has adequate legal remedies under the

PMLA, and there has been no violation of his fundamental rights. The actions of the

Enforcement Directorate, including the freezing of assets and the petitioner’s arrest, are

based on credible evidence and are consistent with the provisions of the Prevention of

Money Laundering Act. Therefore, the writ petition should be dismissed, and the

5
(supra)
6
2021 SC 246
7
1957 AIR 699
8
1982 AIR 149

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petitioner should be directed to pursue available remedies in the Special Court or the

High Court.

1.3. Appropriateness of Writ Jurisdiction

1.3.1. Writ Jurisdiction Limitations: The respondents argue that writ jurisdiction is not

typically invoked for matters related to the exercise of statutory powers or where alternative

remedies are available. Since Reba Abiz has access to statutory remedies under the PMLA

and the legal framework for challenging jurisdictional issues and provisional attachments,

invoking writ jurisdiction might be premature.

1.3.2. Alternative Remedies: Reba Abiz has alternative legal remedies, including appealing

to the appropriate High Court or Special Court. The Supreme Court's writ jurisdiction is

generally reserved for cases where fundamental constitutional issues are at stake, and the

petition must demonstrate that no other remedy is adequate.

1.3.3. Merits of the Case: The respondents argue that the writ petition lacks merit as it does

not substantively challenge the legality or constitutionality of the legal framework applied.

The jurisdiction of the Special Court and the validity of the regulatory notifications are

matters of statutory interpretation and are best addressed through appropriate legal channels

rather than direct writ petitions.

The respondent asserts that the petition does not adequately substantiate claims of

fundamental rights violations. The challenges presented pertain more to procedural and

jurisdictional matters, which are not compelling grounds for writ jurisdiction.

1.4. The Petitioner’s Claim of Selective Prosecution Is Unsubstantiated

1.4.1. The petitioner has alleged that he is being selectively targeted because of his critical stance

towards the government. However, the Enforcement Directorate (ED) has acted based on

objective evidence linking the petitioner to money laundering activities, not based on his

status as a journalist. The ED’s actions are in accordance with the Prevention of Money

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Laundering Act (PMLA), which mandates an investigation into individual suspected of

laundering proceeds of crime.

1.4.2. In State of Maharashtra v. Nisar Mohamed Ahmed Shaikh 9, the Supreme Court ruled that

a person can only claim selective prosecution if there is clear evidence of malafide intent or

discriminatory practices by law enforcement agencies. In the present case, the petitioner has

failed to provide any evidence to substantiate his claim that he is being targeted for his

journalistic activities. Instead, the actions of the ED are based on a thorough investigation of

financial transactions, including foreign contributions and dealings in Virtual Digital Assets

(VDAs).

ISSUE II

2. WHETHER THE SPECIAL COURT, PMLA-1 GANGALPURAM, HAS

RIGHTLY TAKEN COGNIZANCE OF CRIMINAL CASE NO. 20/2024 UNDER

THE PROVISIONS OF PMLA, INTER ALIA UNDER SECTION 44 READ WITH

SECTION 3 OF PMLA?

2.1. The Special Court in Gangalpuram Has Jurisdiction Under Section 44(1) of the

PMLA.

2.1.1. Comprehensive Interpretation of Section 44(1)(a): Section 44(1)(a) of the Prevention

of Money Laundering Act (PMLA) confers broad jurisdiction to the Special Court to try

both the offense of money laundering and the scheduled offense connected to it. The

non-obstante clause embedded in Section 44 ensures that the PMLA overrides any other

conflicting provisions in the Code of Criminal Procedure (CrPC). The law grants Special

Courts expansive jurisdiction to handle offenses related to money laundering, which

often span multiple jurisdictions due to the complex and transnational nature of such

crimes.

9
(2002) 2 SCC 11

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2.1.2. In the present case, the significant investigative actions—such as the complaint lodged

by the NGO “Vocal Against Laundering” and the initiation of the investigation by local

authorities—took place in Gangalpuram. Moreover, the Directorate of Enforcement

(DoE) uncovered links between the proceeds of crime and financial entities in

Gangalpuram. Thus, the Special Court’s jurisdiction is rooted in a legitimate territorial

nexus, and it is appropriate for the Special Court in Gangalpuram to take cognizance of

the case.

2.1.3. The Hon’ble Supreme Court in the Vijay Madanlal Choudhary10 case clarified that the

PMLA allows Special Courts to exercise jurisdiction in any location where aspects of the

money laundering offense took place, emphasizing the non-territorial application of

Section 44. This precedent confirms the validity of the Special Court’s jurisdiction in the

present case.

2.1.4. Expansive Jurisdiction under the PMLA’s Non-Obstante Clause: The non-obstante

clause in Section 44(1) of the PMLA grants overriding authority to the Special Court,

ensuring that any territorial limitations imposed by the CrPC do not restrict the Court’s

ability to try cases involving money laundering. The Supreme Court in *P. Chidambaram

v. Directorate of Enforcement* (2019) recognized that the PMLA allows for a broader

interpretation of jurisdiction, specifically due to the cross-jurisdictional nature of

financial crimes like money laundering.

2.1.5. In the current matter, the financial concealment and possession of proceeds of crime

were traced to Gangalpuram. The expansive jurisdiction of the Special Court, therefore,

enables it to take cognizance, as elements of the offense were carried out in this

jurisdiction. This wide jurisdiction is crucial for prosecuting money laundering offenses

that span multiple locations, ensuring effective enforcement of the law.

10
(supra)

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2.1.6. The Doctrine of Territorial Nexus: The Doctrine of Territorial Nexus, as established

in State of Bombay v. R.M.D. Chamarbaugwala 11, supports the exercise of jurisdiction

by the Special Court in Gangalpuram. The Court held that territorial jurisdiction could

extend beyond traditional boundaries if there is a sufficient connection between the

subject matter of the offense and the jurisdiction exercising authority.

2.1.7. Here, the DoE’s investigation revealed that substantial funds involved in the money

laundering activities passed through financial institutions linked to Gangalpuram. This

territorial connection provides a valid basis for the Special Court’s cognizance of the

case, ensuring that the crime’s far-reaching impact is adequately addressed.

2.2. Section 44(1)(c) Allows Special Courts to Exercise Jurisdiction Over

Interconnected Cases

2.2.1. Coordination Between Scheduled Offenses and Money Laundering Trials Section

44(1)(c) of the PMLA allows the Special Court to take cognizance of both the scheduled

offense and the offense of money laundering, even when the offenses span different

geographical areas. This section ensures that the trials are conducted efficiently in a

coordinated manner, avoiding fragmented or parallel trials that may cause delays or

inconsistencies.

2.2.2. In the present case, the DoE conducted investigations in both Mumbankar and

Gangalpuram, linking the proceeds of crime to individuals and entities across Aryavarta.

Since the scheduled offense was investigated in Gangalpuram, it is within the Special

Court’s jurisdiction to handle the entire case. This aligns with the legislative intent

behind Section 44(1)(c), which aims to streamline prosecution by allowing

interconnected offenses to be tried together.

11
1957 AIR 699

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2.2.3. Avoidance of Fragmented Trials One of the key objectives of Section 44(1)(c) is to

prevent fragmented trials in multiple courts, which could lead to unnecessary delays and

conflicting judgments. By granting the Special Court in Gangalpuram jurisdiction over

both the scheduled offense and the money laundering case, the law promotes judicial

efficiency and consistency in the trial process.

2.2.4. In Vijay Madanlal Choudhary12 case, the Supreme Court emphasized the importance of

ensuring judicial efficiency in cases involving interconnected financial crimes. Allowing

the Gangalpuram court to handle both offenses prevents the risk of contradictory findings

or judgments that may arise from parallel proceedings in different courts.

2.3. No Violation of Fundamental Rights: Legitimate Exercise of Jurisdiction in the

Interest of Justice

2.3.1. Article 14: Equality Before the Law: The Respondent submits that the exercise of

jurisdiction by the Special Court in Gangalpuram does not violate the Petitioner’s right to

equality under Article 14 of the Constitution. The Petitioner is being treated in

accordance with the provisions of the PMLA, which grants broad jurisdictional powers

to Special Courts in order to combat complex financial crimes. The decision to prosecute

in Gangalpuram is based on the territorial connection established by the DoE, linking the

proceeds of crime to entities in the region.

2.3.2. In Directorate of Enforcement v. Gautam Navlakha13, the Supreme Court held that in

cases involving cross-jurisdictional offenses, the State’s interest in prosecuting the

offense can override minor procedural objections regarding venue, provided the accused

is given a fair trial. Here, the evidence linking the Petitioner’s activities to Gangalpuram

provides a legitimate basis for jurisdiction. The petitioner is being treated in a manner

12
(supra)
13
(supra)

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consistent with the law, and there is no arbitrary or discriminatory application of legal

principles.

2.3.3. Article 21: No Violation of the Right to a Fair Trial: The Petitioner’s claim that his

right to a fair trial under Article 21 has been violated is without merit. The Respondent

asserts that the trial in Gangalpuram is being conducted in accordance with the law, with

the Petitioner’s right to defend himself fully preserved. The jurisdiction of the Special

Court is legally rooted in the territorial connections of the offense, and the Petitioner’s

rights to legal representation and due process are being upheld throughout the

proceedings.

2.3.4. The reliance on Maneka Gandhi v. Union of India14 is misplaced, as the inconvenience

of being tried in a different jurisdiction does not constitute a violation of Article 21. In

Union of India v. International Trading Co.15, the Supreme Court held that as long as

the legal procedure is followed and the accused is provided with a fair opportunity to

defend themselves, there is no violation of Article 21. The Petitioner’s ability to defend

himself has not been compromised, and the trial is proceeding fairly under the law’

2.3.5. Reasonable Restrictions on Article 19(1)(g): Legitimate State Interest: The right to

practice any profession under Article 19(1)(g) is subject to reasonable restrictions in the

public interest. The restriction imposed by requiring the petitioner to stand trial in

Gangalpuram is not arbitrary but necessary to serve the larger goal of combating money

laundering, a crime that has significant national and economic implications.

2.3.6. This Hon'ble Court has held previously that restrictions on fundamental rights must be

reasonable and proportionate16. The restriction in this case is minimal and necessary for

ensuring the proper prosecution of the offense, especially considering the complexity of

14
1978 AIR 597, 1978 SCR (2) 621
15
(2003) 5 SCC 437
16
Chintaman Rao v. State of Madhya Pradesh ,1951 AIR 118, 1950 SCR 759.

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financial crimes like money laundering. The public interest in preventing and prosecuting

money laundering outweighs any inconvenience caused to the petitioner.

2.4. The Trial in Gangalpuram Is Lawful Due to the Broad Definition of "Proceeds

of Crime" Under Section 3 of the PMLA

2.4.1. Wide Interpretation of the Offense of Money Laundering: Section 3 of the PMLA

criminalizes money laundering activities, including the acquisition, concealment, and use

of proceeds of crime. The DoE’s investigation uncovered that proceeds of crime related

to this case were funneled through financial accounts linked to entities in Gangalpuram.

This triggers the jurisdiction of the Special Court to try the offense under Section 3 of the

PMLA, as the concealment of proceeds is sufficient to establish jurisdiction in the area

where the proceeds were hidden.

2.4.2. In Rana Ayyub v. Directorate of Enforcement17, the Hon’ble Supreme Court held that

any act of possession, concealment, or use of proceeds of crime could be tried in any

jurisdiction where a part of the offense has occurred. In this case, the financial trails

connecting Gangalpuram to the proceeds of crime provide a sufficient basis for the

Special Court to exercise jurisdiction under Section 3.

2.4.3. Actions in Gangalpuram Related to the Offense: The DoE’s investigation revealed

that donations and contributions, some from foreign sources, were funneled through

financial institutions with connections to Gangalpuram. This provides a direct territorial

nexus for the Special Court to take cognizance of the money laundering offense.

Additionally, entities involved in the transfer of funds had operational links in

Gangalpuram, further justifying the Court’s jurisdiction.

17
2023 SSC Online SC109

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2.5. The Doctrine of Forum Convenience Favors Gangalpuram

2.5.1. The Doctrine of Forum Convenience supports the trial proceeding in Gangalpuram. This

doctrine, applied in criminal law, suggests that the court with the closest connection to

the facts of the case should assume jurisdiction. In the present case, the investigation

uncovered significant links to Gangalpuram, making it the most appropriate forum for

trial.

2.5.2. Jurisprudence establishes that jurisdiction should be determined based on the location

where the cause of action arises, and that the forum with the closest connection to the

offense should preside over the matter18. Since several aspects of the investigation,

including the lodging of the complaint and financial transactions, took place in

Gangalpuram, it is the most suitable venue for the trial.

2.5.3. The Special Court, PMLA-1 Gangalpuram, has rightly taken cognizance of Criminal

Case No. 20/2024 under Section 44(1) of the PMLA. The PMLA provides broad

jurisdictional authority to Special Courts, and the territorial links between the offense

and Gangalpuram are sufficient to justify the exercise of jurisdiction. The Petitioner’s

claims of violations of Articles 14 and 21 are unfounded, as the trial is being conducted

in accordance with the law and the Petitioner’s rights are being fully respected.

18
Kusum Ingots & Alloys Ltd. v. Union of India (2004) AIR SCW 2766

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ISSUE III

3. Issue III: WHETHER THE PETITIONS BEARING NO. 320/2024 FILED BY

REBA ABIZ IS MAINTAINABLE ON ALLEGED GROUNDS OF VIOLATION

OF FUNDAMENTAL RIGHTS?

3.1. The Petition Is Not Maintainable Due to Lack of Direct Violation of

Fundamental Rights

3.1.1. The Notification Does Not Directly Violate the Petitioner’s Fundamental Rights

It is submitted that the petition is not maintainable, as there is no direct or substantial

infringement of the petitioner’s fundamental rights under Articles 14, 19, or 21 of the

Constitution of Aryavarta. The challenge brought forward by the petitioner hinges on an

indirect interpretation of how the inclusion of virtual digital assets (VDAs) under the

Prevention of Money Laundering Act (PMLA) purportedly affects their rights. However,

mere apprehensions or indirect consequences do not form a valid basis for invoking the

writ jurisdiction of this Hon’ble Court under Article 32.

3.1.2. In R.K. Dalmia v. Justice Tendolkar19, the Hon’ble Supreme Court held that for a

petition under Article 32 to be maintainable, the violation of fundamental rights must be

clear, specific, and directly traceable to the impugned law or executive action. In the

present case, the petitioner has failed to establish any direct violation of their rights due to

the Ministry of Finance’s Notification No. 10/2023, which is a general regulatory

measure and not aimed at infringing the petitioner’s individual rights.

3.2. The Petition Is Premature and Speculative

3.2.1. The petitioner’s claims are largely speculative, as the notification in question does not

impose any immediate or direct harm on the petitioner. The notification simply brings

VDAs under the scope of PMLA to prevent their misuse for money laundering activities.

19
1958 AIR 538

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It is a regulatory measure, and unless the petitioner is directly impacted by specific legal

actions under the PMLA, there is no basis for a challenge at this stage.

3.2.2. In one case, the Supreme Court observed that petitions challenging laws or executive

actions on speculative grounds or based on hypothetical situations are not maintainable 20.

A petition must demonstrate that the impugned action has caused or is likely to cause

actual and immediate harm to the petitioner. In this case, the petitioner has not shown any

immediate consequence arising from the notification that infringes on their rights.

3.3. Regulatory Measures Do Not Automatically Trigger Writ Jurisdiction

3.3.1. Regulation of VDAs is a Reasonable Legislative Action

The respondent submits that regulatory measures like the notification do not

automatically give rise to a violation of fundamental rights unless there is clear evidence

of arbitrariness or discriminatory treatment. The notification in question is a legitimate

exercise of the government’s regulatory authority under PMLA and does not amount to

an arbitrary action that violates the petitioner’s rights under Article 14.

3.3.2. In Madras City Wine Merchants’ Association v. State of T.N. 21, the Supreme Court

emphasized that regulatory measures aimed at curbing illegal activities must be

presumed to be in the public interest, and challenges to such regulations must

demonstrate clear constitutional violations. The notification here is in line with the state's

duty to curb financial crimes and cannot be seen as infringing on any fundamental rights.

3.3.3. Right to Trade (Article 19(1)(g)) Is Subject to Reasonable Restrictions

The petitioner’s claim under Article 19(1)(g) is premature, as no actual restriction has

been placed on their right to trade. The inclusion of VDAs under PMLA merely subjects

them to scrutiny for money laundering activities. The Constitution permits reasonable

20
State Of Maharashtra & Anr vs Lok Shikshan Sansatha & Ors 1973 AIR 588
21
1994 AIR SCW 3915

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restrictions on the freedom to trade under Article 19(6) in the interest of public safety,

order, and morality.

3.3.4. In M/s. Laxmi Khandsari v. State of U.P.22, the Supreme Court held that the right to

trade is not absolute and can be reasonably restricted to protect larger societal interests.

The notification regulating VDAs is a proportionate measure to prevent the misuse of

such assets for illegal activities, and thus does not unreasonably restrict the petitioner’s

fundamental rights.

3.4. Doctrine of Legislative Supremacy: Executive Notification Is a Valid Regulatory

Measure

3.4.1. Notification Issued Under Valid Delegated Authority

The respondent submits that the Ministry of Finance’s Notification No. 10/2023 is a

valid exercise of delegated legislation under the PMLA. Section 73 of the PMLA grants

the executive the power to issue notifications to carry out the objectives of the Act. The

notification does not go beyond the scope of delegated authority and is aimed at ensuring

that VDAs are not misused for laundering the proceeds of crime.

3.4.2. In Vishaka v. State of Rajasthan23, the Supreme Court held that executive action taken

within the framework of delegated powers should be presumed valid unless there is clear

evidence of overreach. The notification is issued within the legislative framework and

serves a legitimate state interest, making the petitioner’s challenge unsustainable.

3.4.3. Legislative Intent Supports Regulation of Financial Instruments

The legislative intent behind the PMLA is to prevent money laundering in all its forms.

The inclusion of VDAs within the regulatory scope of PMLA is consistent with the Act’s

purpose, as VDAs are increasingly being used for laundering proceeds of crime. The

22
1981 AIR 873
23
AIR 1997 SUPREME COURT 3011

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notification aligns with the legislative intent of expanding the scope of PMLA to address

emerging financial technologies.

3.4.4. In Union of India v. Deoki Nandan Aggarwal 24, the Court emphasized that delegated

legislation must be interpreted in a manner consistent with the legislative intent. Here,

the notification is an essential regulatory tool to fulfill the objectives of the PMLA and

does not infringe on the petitioner’s rights.

ISSUE IV

24
1992 AIR 96

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4. Whether the Notification No. 10/2023 dated 07.03.2024 issued by the Ministry of

Finance through the Department of Revenue, Republic of Aryavarta, is ultra vires

the Constitution, Prevention of Money Laundering Act (PMLA), and exceeds the

authority of delegated rulemaking power vested by the Prevention of Money

Laundering Act upon the Ministry of Finance?

4.1. The Notification is a Legitimate Exercise of Delegated Legislative Power under

PMLA

4.1.1. Delegated Legislation is Necessary and Permissible: The Prevention of Money

Laundering Act (PMLA), 2002, grants broad rulemaking powers to the Ministry of

Finance to implement effective anti-money laundering (AML) mechanisms. Under

Section 73 of the PMLA, the Ministry of Finance is empowered to issue notifications and

rules to prevent the misuse of financial systems for money laundering. As held in D. S.

Garewal v. State of Punjab (AIR 1959 SC 512), delegated legislation is permissible and

necessary for dealing with complex and technical matters which require flexibility and

expertise.

4.1.2. The inclusion of Virtual Digital Assets (VDAs) like Non-Fungible Tokens (NFTs) under

the ambit of the PMLA is a legitimate exercise of the Ministry’s authority to adapt to the

evolving nature of financial crimes. In a rapidly changing financial and technological

landscape, emerging digital assets must be brought within the regulatory framework to

prevent their misuse in illicit activities like money laundering.

4.1.3. Ultra Vires Doctrine Does Not Apply as Powers Were Properly Exercised: The

respondent submits that the notification is not ultra vires, as it falls within the broad

framework of the PMLA. The Ministry of Finance has not exceeded its authority; rather,

it has acted within the parameters laid out by the parent statute. The principle of ultra

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vires, as explained in Maharashtra State Board of Secondary and Higher Secondary

Education v. Paritosh Bhupeshkumar Sheth25, holds that delegated legislation is valid

as long as it conforms to the objectives of the parent statute. In this case, the object of the

PMLA is to combat money laundering, and the inclusion of VDAs serves this objective

by addressing potential financial crimes involving digital assets.

4.1.4. Furthermore, in Avinder Singh v. State of Punjab26, the Court clarified that unless the

delegated legislation contravenes express provisions of the parent Act, it cannot be held

ultra vires. The inclusion of VDAs is in furtherance of the PMLA’s goal to prevent

money laundering and does not conflict with any explicit provisions of the Act.

4.2. The Notification is in Line with the Objective of the PMLA

4.2.1. Prevention of Money Laundering Through Emerging Technologies: The respondent

submits that the notification’s inclusion of VDAs, including NFTs, under the PMLA is

consistent with the legislative intent of curbing money laundering in all its forms. The

PMLA is a comprehensive statute intended to tackle money laundering by regulating

financial transactions and systems. Digital assets, being susceptible to use in illicit

activities due to their pseudonymous and decentralized nature, require regulation to

prevent their misuse.

4.2.2. In J.K. Industries Ltd. v. Union of India 27, the Court held that delegated legislation

should be interpreted in a manner that furthers the purpose of the parent statute. The

notification brings VDAs within the ambit of the PMLA, ensuring that digital assets are

not exploited for illegal financial activities, such as laundering proceeds from crime. The

respondent argues that such regulatory measures are necessary to address the risks posed

by VDAs in a global economy increasingly dependent on digital financial systems.

25
(1984) 4 SCC 27
26
(1979) 1 SCC 137
27
(2007) 13 SCC 673

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4.2.3. Principle of Harmonious Construction: Notification is Consistent with the

Legislative Framework: The principle of harmonious construction, as established in

I.C. Golaknath v. State of Punjab 28, mandates that laws and regulations must be

interpreted in a way that advances the objectives of the legislative framework. The

PMLA aims to prevent money laundering and preserve the integrity of the financial

system. The respondent submits that the notification should be interpreted in light of this

objective, as it seeks to prevent emerging technologies like VDAs from being exploited

for laundering money.

4.2.4. The inclusion of VDAs under the AML framework serves as a necessary step in

combating new forms of financial crimes that were not anticipated at the time of the

PMLA’s enactment. In this context, the respondent relies on Arun Kumar v. Union of

India29, where the Court emphasized that regulations issued under delegated powers

must be viewed through the lens of the statute's overall purpose.

4.3. The Notification Does Not Violate Fundamental Rights

4.3.1. Reasonable Restrictions Under Article 19(6): The petitioner’s contention that the

notification violates Article 19(1)(g) of the Constitution of Aryavarta is misplaced. The

State has the power to impose reasonable restrictions on the freedom to practice any

profession, trade, or business in the interest of public welfare, under Article 19(6) of the

Constitution. In Cooverjee B. Bharucha v. Excise Commissioner30, the Hon'ble Supreme

Court held that the right to carry on trade or business is not absolute and can be subject to

reasonable restrictions to protect public interest.

4.3.2. The inclusion of VDAs under the PMLA does not prohibit the business of digital assets;

rather, it regulates such business to prevent its misuse for illegal activities. The

28
(1967) 2 SCR 762
29
(2007) 1 SCC 732
30
AIR 1954 SC 220

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restrictions imposed are proportionate to the objective of preventing financial crimes, and

they do not amount to a blanket prohibition on digital asset transactions. As upheld in

Modern Dental College v. State of Madhya Pradesh (2016) 7 SCC 353, a restriction is

reasonable if it serves a legitimate objective and is proportionate to the harm sought to be

prevented. The regulation of VDAs under the PMLA serves the legitimate purpose of

preventing money laundering and safeguarding the integrity of the financial system.

4.3.3. No Violation of Article 21 – Procedural Safeguards Exist: The notification does not

infringe on the right to privacy under Article 21, as argued by the petitioner. The State

has a legitimate interest in regulating financial transactions that may be used for money

laundering. In K.S. Puttaswamy31 case, the Supreme Court recognized that the right to

privacy is not absolute and may be subject to reasonable restrictions in the interest of the

State, provided such restrictions adhere to the principles of legality, necessity, and

proportionality.

4.3.4. The PMLA contains procedural safeguards to prevent arbitrary enforcement. The

notification is aimed at regulating illicit transactions involving VDAs, and legitimate

businesses have nothing to fear from the regulatory framework. As held in Maneka

Gandhi32 case, any deprivation of rights must follow just, fair, and reasonable procedure.

The notification’s purpose is to protect public interest by addressing the evolving risks in

financial transactions involving VDAs.

4.4. The Notification is Proportionate and Necessary to Address the Threat of

Money Laundering

4.4.1. Doctrine of Proportionality: The respondent submits that the notification is a

proportionate response to the growing threat of money laundering through digital assets.

31
K.S. Puttaswamy v. Union of India (2017) 10 SCC 1
32
(supra)

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In Om Kumar v. Union of India 33, the Supreme Court held that the doctrine of

proportionality applies to determine whether a measure taken by the State is necessary

and appropriate for the objective it seeks to achieve. The respondent argues that the

notification is a proportionate measure given the risks associated with VDAs, which are

increasingly used to obscure the origins of illicit funds.

4.4.2. The Notification is in Line with International Best Practices: The Financial Action

Task Force (FATF), an international body that sets global standards for AML

regulations, has recommended the inclusion of digital assets within the ambit of anti-

money laundering laws. Aryavarta, as a signatory to the FATF, is bound to implement

these standards, as held in Union of India v. Azadi Bachao Andolan 34, where the Court

underscored the importance of international obligations in shaping domestic law.

4.4.3. The respondent contends that by bringing VDAs within the regulatory framework,

Aryavarta is fulfilling its international obligations and ensuring that its financial system

remains robust against new and emerging threats like money laundering through digital

assets.

4.4.4. The notification issued by the Ministry of Finance is a valid exercise of delegated

legislative power and does not violate the Constitution or the Prevention of Money

Laundering Act (PMLA). It serves a legitimate public interest in preventing the misuse

of digital assets like VDAs for money laundering. The notification is proportionate,

reasonable, and consistent with the legislative intent of the PMLA. It adheres to

international best practices and provides necessary regulatory oversight in a rapidly

evolving financial landscape. Therefore, the respondent respectfully submits that this

Hon’ble Court uphold the validity of the notification.

33
(2001) 2 SCC 386
34
(2004) 10 SCC 1

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PRAYER

Wherefore, in the light of the issues raised, arguments advanced, reasons given, and

authorities cited, it is most humbly prayed before this Hon’ble Court, that it may be pleased

to:

I. DISMISS THE PETITIONS CHALLENGING THE MAINTAINABILITY OF

COGNIZANCE TAKEN BY THE SPECIAL COURT, PMLA-1 GANGALPURAM

AND VALIDITY OF THE NOTIFICATION, FOR LACK OF MERIT;

II. UPHOLD THE VALIDITY OF THE COGNIZANCE TAKEN BY THE SPECIAL

COURT, PMLA-1 GANGALPURAM, UNDER SECTION 44(1) OF THE PMLA,

AS IT HAS PROPER TERRITORIAL JURISDICTION;

III. DECLARE THAT THE NOTIFICATION NO. 10/2023 DATED 07.03.2023

ISSUED BY THE MINISTRY OF FINANCE IS VALID, CONSTITUTIONAL,

AND WITHIN THE SCOPE OF DELEGATED AUTHORITY UNDER THE

PMLA;

AND/OR

Pass any other relief that this court may be pleased to grant in the interests of justice, equity

and good conscience.

For this act of kindness, the counsels on behalf of the respondent as in duty bound shall

forever pray.

All of which is respectfully submitted.

(S/d)

COUNSELS FOR THE RESPONDENT

DATE: --/09/2024

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PLACE: The Supreme Court of Aryavarta

Parul University National Moot Court Competition, 2024 ~MEMORIAL FOR THE RESPONDENTS