Scheduled offence

Polity & Governance glossary

Also called: Predicate offence · Topic: Statutory, Regulatory and Quasi-judicial Bodies · NCERT: Beyond NCERT

Meaning

A scheduled offence (also called a predicate offence) is a crime listed in the Schedule of the Prevention of Money-Laundering Act (PMLA) 2002, such as cheating or criminal breach of trust, that produces "proceeds of crime". It is the base of every money-laundering case. If there is no scheduled offence, there are no proceeds of crime, and so there can be no offence of money laundering under Section 3.

Explanation

How it works: the chain from crime to PMLA

  • Step 1: a scheduled offence takes place.
  • This is an ordinary crime that also appears in the PMLA Schedule. Examples are cheating or misusing money that was trusted to someone.

  • The police, usually the State police, investigate it under ordinary criminal law.

  • Step 2: the crime produces "proceeds of crime".

  • Proceeds of crime means any property that a person gets, directly or indirectly, from criminal activity linked to a scheduled offence.

  • Step 3: someone deals with those proceeds.

  • They may hide the money, move it, use it, or show it as clean money. This is money laundering, a separate offence under Section 3 of PMLA.

  • Step 4: the Enforcement Directorate (ED) steps in.

  • ED opens a case by recording an Enforcement Case Information Report (ECIR). An ECIR is ED's internal record of a case. It is not an FIR.
  • ED can then attach property (freeze it so it cannot be sold or moved).

Types: Part A and Part B of the Schedule

  • The PMLA Schedule has two parts, Part A and Part B.
  • Part A offences bring in PMLA whatever the amount involved.
  • Part B offences bring in PMLA only if the value involved is ₹1 crore or more.
  • Below that amount, the crime stays an ordinary crime, and ED gets no PMLA power over it.

Conditions and limits set by the Supreme Court

  • No predicate, no PMLA. If the scheduled offence case fails (for example, the accused is cleared or the case is closed), the PMLA case falls with it. Without a scheduled offence there are no proceeds of crime.
  • The laundering accused need not be the predicate accused. A person can be charged under Section 3 even if they are not named as an accused in the scheduled offence. This lets ED reach people who only handled the money, such as middlemen and fund handlers.
  • Laundering can be a continuing offence. Money laundering can carry on for as long as the proceeds are still being hidden or used.
  • A non-cognizable predicate still triggers strict bail rules. A non-cognizable offence is one where the police cannot arrest without a court's warrant. Even when the scheduled offence is of this kind, the Section 45 bail limits still apply.

Time limits once property is attached

Step Time limit
Director or authorised officer provisionally attaches property, on recorded reason to believe it may be hidden or moved —
Officer files a complaint before the Adjudicating Authority Within 30 days of attachment
Attachment lapses unless the Adjudicating Authority confirms it After 180 days (check the current amended text)

In the Constitution and practice

  • Law: the scheduled offence is a creation of the PMLA, not of the Constitution. PMLA was enacted in 2002 and came into force in 2005. Its official number is Act 15 of 2003. PMLA was amended through the Finance Act 2018.
  • Who uses it:
  • The ED enforces PMLA. ED sits under the Finance Ministry's Department of Revenue.

  • The State police usually investigate the scheduled offence itself, because "police" is a State subject under the Constitution.

  • Key judgments:

  • Vijay Madanlal Choudhary (2022, 3 judges): upheld PMLA's main provisions, including the twin bail conditions of Section 45 and the use of Section 50 statements. It held that ED officers are not "police". A review is pending.
  • 2024 INSC 301 (8 April 2024): no scheduled offence means no proceeds of crime, and so no Section 3 offence. The Section 3 accused need not be an accused in the scheduled offence.
  • 2025 INSC 210 (13 February 2025): laundering can be a continuing offence. Section 45 bail limits apply even when the scheduled offence is non-cognizable.
  • Pankaj Bansal (2023): the accused must be given the grounds of arrest in writing.

  • Manish Sisodia (2024): "bail is the rule" even under Section 45.

  • In practice:

  • In November 2026, ED registered a PMLA case over alleged misuse of money linked to the failed 2025 plan to bring the Argentina football team to Kochi, Keralam.
  • The case shows the test in action. A failed event on its own is a contract dispute. It becomes a PMLA matter only if a scheduled offence, such as cheating or criminal breach of trust, produced proceeds of crime.

Don't confuse with

  • Money laundering (Section 3 of PMLA): a scheduled offence is the first crime that creates the dirty money. Money laundering is the separate crime of hiding or using that money. A person can be tried for the second without being an accused in the first.
  • Proceeds of crime: this is the property that comes out of a scheduled offence, not the offence itself.
  • NIA Act scheduled offences: the NIA Act 2008 has its own Schedule (terror offences, and since 2019 trafficking, fake currency, arms and cyber-terrorism). The NIA can investigate these anywhere in India. These are not the same list as the PMLA Schedule.
  • Civil contract dispute: money paid under a contract that is later broken is usually settled by suing for a refund. It brings in PMLA only if a scheduled offence is shown.

Prelims Hooks

  • The PMLA Schedule has Part A and Part B. Part B offences count only at a value of ₹1 crore or more.
  • "A person charged under Section 3 of PMLA must also be an accused in the scheduled offence": FALSE (2024 INSC 301).
  • "A non-cognizable scheduled offence relaxes the Section 45 twin bail conditions": FALSE (2025 INSC 210).
  • PMLA is the 2002 Act, but its number is Act 15 of 2003. Section 3 defines money laundering.
  • The Adjudicating Authority confirms a provisional attachment, not a court and not the ED Director. Otherwise the attachment lapses after 180 days. The complaint must be filed within 30 days.
  • "An ECIR is an FIR": FALSE. It is ED's internal case record.

Mains Points

  • The predicate offence is both the base and the limit of PMLA.
  • It ties ED's very wide powers to a real, listed crime. Section 5 attachment, the Section 24 reverse burden (the accused must prove innocence) and the Section 45 twin bail conditions all rest on it.

  • If the scheduled offence fails, the PMLA case must fall. This is a key safeguard against using PMLA for what are really contract or commercial disputes.

  • Federal friction.

  • The scheduled offence is usually investigated by the State police, but PMLA is investigated by the central ED.
  • When the two agencies work without coordination, they can reach opposite conclusions on the same facts.

  • A reform idea is for both agencies to keep one shared record of the predicate case.

  • Liberty vs enforcement.

  • Because laundering can be a continuing offence and Section 45 applies even to non-cognizable predicates, the accused can spend long periods in custody before any trial ends.
  • This has to be weighed against India's FATF commitments.
  • The due-process rulings after Vijay Madanlal Choudhary (Pankaj Bansal 2023, Manish Sisodia 2024) try to restore that balance.

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