Supreme Court put brakes on trial in money laundering case against Santiago Martin

New Delhi: The Supreme Court on Wednesday stayed the proceedings before a special court in a money laundering case against 'lottery king' Santiago Martin, whose company donated the most to political parties through the controversial electoral bonds scheme.

A bench of Justices Abhay S Oka and Ujjal Bhuyan issued notice on a plea by Martin challenging the March 16 order of a special PMLA court in Kerala's Ernakulam dismissing his petition for keeping in abeyance the trial in the money laundering case registered by the Enforcement Directorate (ED).

Senior advocate Aditya Sondhi and advocate Rohini Musa, who appeared for Martin, said that the special court ought to have considered that the trial in the Prevention of Money Laundering Act (PMLA) case can commence only after the conclusion of the trial in the predicate (main) case.

The ED usually registers a money laundering case on the basis of an FIR or probe conducted in corruption or tax evasion cases by relevant central agencies like the CBI and the Income Tax department which constitute the predicate or scheduled offence.

On March 16, the special court had dismissed Martin's application for keeping in abeyance the trial in the ED case until the trial in the matter involving the predicate offence registered by the CBI in an alleged lottery scam case has concluded. He has moved the apex court against the PMLA court's order.

Referring to the 2022 verdict in the Vijay Madanlal Chaudhary case, he said proceedings under PMLA cannot continue once there has been an acquittal or discharge in the predicate case.

The appeal, filed through advocate Rohini Musa said, "The present petition raises a significant question of law that in the event of the trial of the predicate case being transferred to the jurisdictional Court in seisin of the trial of the PMLA case, then in the sequence of trial, which case should take precedence."

The plea said the CBI case is the alleged predicate case and it has been transferred/committed to the Special Court vide order dated September 28, 2023.

"The application for discharge in the predicate case was filed by the Petitioner and is pending consideration. That in the event of the petitioner being discharged in the predicate case, there will be no question of continuation of PMLA proceedings," it said.

Martin said, based on the 2022 judgement of the apex court in the case of Vijay Madanlal Choudhary, an acquittal in the predicate case would automatically result in noncontinuance of proceedings under the PMLA and therefore, in the sequence of trial, it ought to be the trial of the predicate case that needs to be given precedence.

He said the apex court, in judgments relevant to the case, has held that in the event of acquittal or discharge or quashing of the scheduled offence, the prosecution for the offence of money laundering will automatically be deemed to be non-est (cease to exist).

The trial of a predicated case can commence only after the conclusion of the trial in the predicate case, he said.

"No prejudice will cause to the complainant by keeping further proceedings in abeyance till the disposal of the predicate case. If further proceedings in this case are not kept in abeyance, it would cause serious prejudice, irreparable injury and harm to the Petitioner," Martin said in his plea.

In 2014, the CBI had registered the case in the alleged lottery scam and filed chargesheet against Martin and others. Based on the chargesheet, the Enforcement Directorate filed a complaint against seven people including Martin for money laundering on June 11, 2018 .

On September 30, 2019, Martin filed a discharge application in the CBI case which is pending consideration.

He had moved a petition before the PMLA court on November 16, 2023, urging it to keep in abeyance all further proceedings in the money laundering matter till the disposal of the CBI case. The application was dismissed on March 16.

Coimbatore-based Future Gaming and Hotel Services, owned by Santiago Martin was the biggest buyer of electoral bonds worth Rs 1,368 crore.

The Supreme Court had in February struck down as "unconstitutional and manifestly arbitrary" the electoral bonds scheme, which provided blanket anonymity to individuals and corporate entities making donations to political parties.