He wanted his money laundering trial moved to Kerala. The Supreme Court said no — and here's why.

He asked the Supreme Court to move his trial from Lucknow to Kerala. The judge said: 'a congenital defect of lack of jurisdiction, assuming it exists, inures to the benefit of the accused and need not be cured at the instance of the accused to his detriment.'

KA Rauf Sherif, General Secretary of the Campus Front of India, stood trial in Lucknow for money laundering. He wanted out. His argument was clean: the original crime happened in Kannur, Kerala. Most accused and witnesses were from Kerala. He himself was first remanded in Kerala. So why, he asked the Supreme Court, should he face trial 2,500 kilometres away in Uttar Pradesh?

The court had one question to answer: Can an accused person force a transfer of his money laundering trial simply because the underlying crime happened in a different state?

When the money moved through UP

The story begins in 2013, in Kannur, Kerala. Twenty-two persons were prosecuted under the Indian Penal Code, the Arms Act, and the Unlawful Activities (Prevention) Act (UAPA). Twenty-one were convicted by a Special Court in Ernakulam. The courtroom in Kerala, where the trial unfolded over months, must have been familiar with the faces of the accused — local men, known in their communities. The Kerala High Court partially confirmed the convictions. The Supreme Court dismissed the appeal.

Then the Enforcement Directorate (ED) stepped in. In 2018, it registered an ECIR (Enforcement Case Information Report — the ED's equivalent of an FIR for money laundering) for money laundering linked to that original crime — what the PMLA calls a "predicate offence" (the underlying criminal activity that generates the laundered money). The ED's office in Delhi, where the file was opened, would have been a different world from the Kerala courtroom — stacks of case files on counsel tables, the hum of officials processing paperwork.

But something changed the geography of the case. In 2020, a separate FIR was registered in Mathura, Uttar Pradesh, for offences under UAPA and the Information Technology Act. The ED found that proceeds of crime had been transferred to accounts in Uttar Pradesh. So when the ED filed its prosecution complaint — the formal charge sheet under the Prevention of Money-laundering Act, 2002 (PMLA) — it filed it before the Special Judge, PMLA, in Lucknow. The file, thick with bank statements and transaction records, now sat in a Lucknow courtroom instead of Kerala.

Sherif was arrested in December 2020. Charges were framed in December 2022. The trial began. The first prosecution witness had already been examined — their testimony recorded in the Lucknow court, the court stenographer's fingers moving across the keyboard, the judge listening from the bench. That's when Sherif filed a transfer petition under Section 406 of the Code of Criminal Procedure, 1973 (CrPC) — the provision that allows the Supreme Court to move a case from one court to another.

The argument that almost worked

Sherif's lawyers had a clean argument on paper. The predicate offence — the original crime that triggered the money laundering investigation — happened entirely in Kerala. The trial for that offence was in Kerala. Most accused and witnesses were in Kerala. Sherif was initially remanded by a magistrate in Kerala — a handwritten remand application, signed in a Kerala court, now forming part of the Lucknow case file. So the Lucknow court, they said, had no territorial jurisdiction to try the PMLA case.

The Enforcement Directorate pushed back. It pointed to the money trail. Fund transfers connected to the case had landed in Uttar Pradesh. The ED's investigation had uncovered transactions involving persons arrested in UP. Under the PMLA, the Directorate argued, jurisdiction attaches wherever any part of the money laundering activity took place — not just where the original crime happened.

The court had to decide which version of jurisdiction was correct.

Why the Supreme Court said no

The bench — Justice V. Ramasubramanian and Justice Pankaj Mithal — delivered a crisp answer. The courtroom in the Supreme Court fell silent as the judges prepared to read the order. They began with a principle that might surprise non-lawyers: lack of jurisdiction, even if it exists, is not a ground for the accused to demand a transfer.

Here's the logic. If a court truly lacks jurisdiction to try a case, that is a defect that works in favour of the accused. The accused can raise it at trial, or on appeal, to get the proceedings quashed. But the accused cannot say: "This court has no jurisdiction, so please move my case to a court that does." That would be asking the Supreme Court to cure a defect that benefits the accused — and to do so at the accused's own request.

The court called this a "congenital defect" — a flaw present from birth. If it exists, it stays. The accused doesn't get to choose which court fixes it. The bench's words hung in the air as the order was dictated: "a congenital defect of lack of jurisdiction, assuming it exists, inures to the benefit of the accused and need not be cured at the instance of the accused to his detriment."

Where money laundering jurisdiction actually lies

But the court didn't stop there. It went on to hold that Lucknow actually did have jurisdiction.

The key provision was Section 44(1)(a) of the PMLA, which determines which Special Court can hear a money laundering case. The court, applying its own recent judgment in Rana Ayyub v. Directorate of Enforcement (2023), held that territorial jurisdiction under the PMLA is not tied to where the predicate offence was committed. It is tied to where any activity that constitutes money laundering under Section 3 of the PMLA took place.

Section 3 defines money laundering broadly — it covers not just the final act of hiding or using dirty money, but every process or activity connected with the proceeds of crime. If money was transferred to accounts in Uttar Pradesh, that transfer itself is a constituent activity of money laundering. And that gives the Lucknow court jurisdiction. The ED counsel's table in the Supreme Court, stacked with documents showing the UP money trail, had made its point.

The court also rejected the argument that most accused and witnesses were from Kerala. That, it said, is not a valid ground for transferring a criminal case. The convenience of witnesses, while relevant in civil cases, does not override the statutory scheme of jurisdiction in criminal law. The bench's tone was firm — the location of witnesses, however inconvenient, could not dictate where the trial would be held.

And the fact that Sherif was initially remanded by a magistrate in Kerala? The court pointed to Section 167(2) of the CrPC, which explicitly says a magistrate can remand an accused "whether he has or has not jurisdiction to try the case." Remand does not determine where the trial happens. The handwritten remand application from Kerala, however significant it seemed, could not anchor the entire trial to that state.

What this means for every PMLA accused

For lawyers and accused persons facing PMLA prosecutions, this judgment draws a clear line. You cannot use the location of the predicate offence as a lever to move your trial. The ED can file its complaint wherever the money moved — even if that is hundreds of kilometres from where the original crime was committed.

The practical takeaway is sharp. If you are an accused in a PMLA case, and you believe the trial court lacks jurisdiction, your remedy is to challenge the proceedings themselves — not to ask for a transfer. A transfer petition under Section 406 CrPC is not a backdoor way to fix a jurisdictional defect.

The judgment also clarifies the relationship between the predicate offence and the PMLA trial. They are not tethered to the same location. The money laundering case follows the money, not the original crime. For the ED, this is a powerful tool — it can consolidate investigations across state lines, filing complaints wherever the proceeds of crime have travelled. For the accused, it means that geography cannot be used as a shield to escape trial in a distant court.

There is also a broader procedural lesson here. Section 406 CrPC is designed to prevent a failure of justice — not to give the accused a choice of forum. The Supreme Court will not use its transfer power to fix a jurisdictional issue that, if it exists, actually helps the defence. The accused who wants to fight jurisdiction must attack the complaint itself, not ask for a move to a different court.

THE PLAY: If you want to fight PMLA jurisdiction, attack the complaint — don't ask the Supreme Court to move the case to a friendlier court.

The trial in Lucknow continues. Sherif remains Accused No.1. And the money trail that started in Kerala and passed through UP now defines where justice will be sought. The Lucknow courtroom, with its familiar routine of witness examinations and arguments, will hear the case through to its end — the file that began in Kerala now resting permanently on a judge's desk in Uttar Pradesh.