Double Jeopardy in India’s Fight Against Organized and Financial Crime: Section 111 BNS and PMLA

Anshumaan Rakshit, Garvit Gard (Dharmashastra National Law University, Jabalpur)

Introduction

Organized crime control in India has been transformed to a large extent and this is because of the dynamic character of crime and reaction of the state. So far, organized crime was not recognized by the Indian Penal Code of 1860 (IPC). Crimes like conspiracy or dacoity were prosecuted and heard individually instead of taking account of the links that the contemporary syndicates have. This was effective in the traditional crimes but failed in curbing transnational, financial, and cyber-related crimes that cropped up after liberalization. At the end of the twentieth century, serious criminal associations that deal in extortion, money laundering, trafficking, and other high stakes crimes emerged in India. These groups established close connection with economic and political organizations, which required more effective legal intervention. In 1999, the Maharashtra Control of Organized Crime Act (MCOCA) was the first attempt to characterize and attack continuing criminal organizations and was a transition in terms of understanding organized crime as a systemic phenomenon. Nevertheless, there was no national framework that constrained uniform enforcement across states.

A significant change in the Indian criminal law is the introduction of the Bharatiya Nyaya Sanhita (BNS) which is going to substitute the IPC starting in 2024. Organized crime is formally defined in a comprehensive legal code for the first time under Section 111 that covers traditional crimes and has the cover of economic, financial, and cybercrimes. The BNS is joined with the Prevention of Money Laundering Act (PMLA) in an attempt to include multiple controls in order to address complex criminal organizations. This constitutes national interests and also international norms, such as that of the United Nations Convention against Transnational Organized Crime.

This change illustrates a greater movement in the Indian legal system: from unclear colonial rules to explicit, security-oriented legislation capable of responding to sophisticated criminal activity. Nonetheless, Section 111, as well as the way in which it was constituted, raise significant constitutional and procedural difficulties, particularly in terms of overlapping powers, retroactivity, and double jeopardy. This historical and legal backdrop is crucial for understanding the problems and opportunities in India's battle on organized crime.

Historical Evolution of Organized Crime Regulation in India

The development of the Indian system of addressing organized crime can be seen to represent an increasing awareness of structured criminal networks as a category of crime that is dissimilar to traditional ones. In the IPC, organized crime was not uniquely identified; the acts of conspiracy or dacoity were charged individually and considering their connection with each other. The strategy was not sufficient to deal with the influx of transnational and financial crimes that accompanied liberalisation.

During the later part of the twentieth century, there was an observable boom of syndicate-based criminal networks, both extortion rackets and money-laundering, which were more and more interconnected with the political and economic world. To this, Maharashtra came up with the MCOCA Act in 1999, the first of its kind to introduce the concept of a continuing illegal enterprise. Similar structures would later be witnessed in Karnataka and Gujarat, but with no national definition, a consistent enforcer was still not possible.

To harmonize the law of India with the international laws and documents like the United Nations Convention against Transnational Organized Crime (UNTOC), the Bharatiya Nyaya Sanhita (BNS) received the status of promulgation and came into effect on 1 July 2024, replacing IPC. The BNS, which was written in order to modernize the Indian colonial legal tradition and to harmonize the substantive legal with the new threats of computer-related financial offences, trafficking, and financing of terrorist activities, changes the criminal philosophy of India towards restorative justice, as observed by the drafting committee of the government. This is the first time that organized crime is not only categorized but also codified in Chapter VI.

This recodification is joined with the current Prevention of Money Laundering Act (PMLA) of 2002, which also considers the financial tools that support the occurrence of organised crime. Co-existence of these statutes marks a new phase of such statutes where the general and special provisions interact. Whereas the BNS is conceptually clear, the PMLA provides financial accountability. The interplay of these laws is provoking serious constitutional and procedural concerns, but the state is determined to address multidimensional criminality. Altogether, the historical process of the IPC being replaced by the BNS can be described as the transformation of the Indian legal system, which was too vague in the colonial period and became precise in the constitutional one. Introduction of Section 111 thus is not only a climax of this history but also a turning point in India, taking a united commitment to build a coherent, security-oriented justice system.

Organized Crime under Bhartiya Nyaya Sanhita (BNS)

Organized crime is a unique and comprehensive definition under Section 111 of the BNS, 2023. This establishes a logical legal framework to address offenses, which were previously scattered across several different pieces of legislation. Bureau of Police Research and Development (2024) draft defines Section 111 as any current lawless activity of a person or a group, which involves violence, coercion, corruption, or threat and intimidation, or any other illegal means, to obtain financial or material profit.

The various vital elements are: -

1. Constant illegal practices: a person should be charged in court on several occasions within a period of ten years and charged with serious cognizable crimes, hence depicting the formation of a continuous criminal trend. The crimes should be committed as a member of the syndicate, or in its place.

2. Illegal activities and object: The desire should be to gain direct or indirect financial or material advantage via the employed coercive or unscrupulous tactics.

3. Variety of offenses: This is in the form of kidnapping, robbery, stealing of vehicles, extortion, land grabbing, contract killing, trafficking (human, drugs, weapons), in addition to economic and cybercrimes.

   
   

The consequences of Section 111 are harsh. In case the organized crime results in the death penalty, it can be the death penalty or a life imprisonment penalty with a mandatory fine of at least ten lakh rupees. In the case of non-fatal offenses, a jail sentence with a minimum of five years (or a life-long sentence) will be provided, along with fines starting at a rate of five lakh rupees. Those who shelter, help, manage, or fund such operations are also covered in its provisions, which portray a holistic manner of discouraging both the primary and secondary offenders.

Section 111 is quite different compared to previous frameworks like the IPC and MCOCA because it extends definitions and adds economic and cyber offenses as fundamental elements of organized crime. The prioritization of financial or material interest connects domestic criminal legal practice with international tendencies that consider economic disruption as a threat to national security. Section 111 has been construed as a strong tool for breaking down syndicates by the courts in recent times; the Karnataka High Court has made numerous comments on the relevance of more than one charge-sheet and set links of syndicates.

The other major improvement is the provision that deals with the proceeds of organized crime and puts such practices not merely as an act but also in terms of its financial consequences. However, this raises the issue of this clashing with the PMLA, 2002, and the risk of double Jeopardy due to overlapping jurisdictions of both, especially in financial crime cases.

PMLA, 2002: Combating Financial Facilitation of Organized Crime

PMLA is the main statutory tool of the prosecution of economic and organized crime in India. Starting its activity on 1 July 2005, the Act has the dual mandate of preventing money laundering and forfeiture of assets obtained through or involved in such malpractice. This way, it fulfills the constitutional demand of economic justice in making criminal any financial activity that can be used as an enabler to organized crime.

In essence, the PMLA prohibits misappropriation of or attempt to legitimize assets that are laced with criminal gains. The statute provides a definition of proceeds of crime, which involves any property, whether directly or indirectly obtained, through illicit conduct related to a given offence; it, therefore, means that any action taken under the PMLA must be followed by a predicate offence so that it falls under the provisions of the Indian Penal Code (referring now to the Banking Regulation Act). The Enforcement Directorate and the Financial Intelligence Unit (FIU - IND) are the enforcement bodies, both are endowed with investigative, attachment, and prosecutorial authorities.

Chapter II outlines the temporary attachment regime on assets that are deemed to be involved in the laundering of money, which can be renewed by a specified statutory body. Section 5 provides the right of the authorities to hold on to property up to a maximum time of 180 days; Section 8 gives the Adjudging Authority the power to establish the attachment and hence paves the way to confiscation with an additional conviction. Additionally, Section 45 classifies the offense in question as non-bailable and presents two conditions that override the presumption of innocence, which is a pedagogical standpoint, but has, nonetheless, been challenged in the seminal case of Vijay Madanlal Choudhary v. Union of India (2022 SC).

New judicial law, such as RP Infosystems Ltd. v. Enforcement Directorate, has clarified that the automatic repudiation of a predicate offense causes the annihilation of the corresponding PMLA process and, as a result, stated that PMLA indictments could not proceed further without an underlying criminal act. The latter demarcation is necessary when locating the PMLA in opposition to the BNS: the latter genocide organized crime as the main offense, and the PMLA is engaged only in cases where such behavior brings financial gain. As a result, despite being complementary to each other, these statutes vary significantly in the procedures they contain.

The PMLA is an example of how India complies with the requirements of the Financial Action Task Force (FATF) and other related United Nations conventions, as a result, immunizing home enforcement with international anti-money laundering requirements. Its financial malfeasance, allowing it to recover its assets and prevent it, likely is subject to legal malfeasance; its legal powers with respect to this objective have been subject to substantive reservations by legal scholars and practitioners with respect to regulatory transparency and possible regulatory overreach. It has been criticized because of lengthy litigation, low conviction rates, and discretionary abuse given in attachment regimes, which can lead to abuse.

Double Jeopardy and the Risk of Parallel Prosecution

Article 20(2) of the Indian Constitution is known as the concept of double jeopardy according to which, no person may be put on trial or convicted twice for the same crime. This, under common law, is expressed in the formula “Nemo debet bis vexari,” that is, no man should be subjected twice to harassment on the same account. Section 300 of the Code of Criminal Procedure also forbids the prosecution of the same offense where a person has either been convicted or acquitted. Section 111 of the Bharatiya Nyaya Sanhita (BNS), 2023, however, has a retroactive effect, which is more precise to the financial and economic crime. Section 111 allows prosecutors to rejuvenate a prosecution of prior conduct by extending the term organised crime to cover other offences that, in any case, would have been prosecuted under other statutes that may violate the principle of double jeopardy.

This scheme is supported by judicial principles, Such as Maqbool Hussain v. State of Bombay (1953), where the court applied Article 20(2) to issues only in cases in which a penalty is imposed in a judicial trial. Also, in S.A. Venkataraman v. Union of India (1954) apex court stated that the issue of departmental punishments did not exclude future criminal prosecutions. Furthermore, in State of Bombay v. S.L. Apte (1961) explained the meaning of the same offence was explained. The Court noted that crimes comprising of varying legal elements though may be caused by the same facts, did not amount to a case of double jeopardy. Recently, in Vijay Madanlal Choudhary v. Union of India, the Court concluded that money laundering is not the same offence as its underlying scheduled crime, and that prosecution under PMLA doesn’t violate Article 20(2).

Regardless of this legal guarantee, Section 111 BNS increases the risk of parallel prosecutions. Any financial crime that has previously been criminalized according to the Securities Exchange Board of India (SEBI) Act, 1992, or Companies Act, 2013, can now instigate new criminalization according to Section 111, should it be perceived to be a part of an organised crime syndicate. As an example, a SEBI investigation, which ends in jail term or fines, would now be succeeded by new criminal charges under BNS, which penalizes the defendant twice due to the same offense. Similarly, SFIO inquiries in accordance with Section 212 of the Companies Act may be reused in accordance with Section 111 with more criminal cases.

This risk is aggravated by the PMLA regime. Section 3 imposes an obligation normally on the accused, whereby scheduled offence under scheduled law is predicate offence (SEBI rules). Hence, the same crime of fraud, e.g., securities or corporate fraud, can make the accused be liable under SEBI, PMLA, and Section 111 BNS, which leads to the functionality of the so-called double jeopardy. Although the two laws may differ technically, the accused may face the problems of concurrent investigations, repeated threats as well as double potential punishments.

The problem is aggravated by State legislations especially the Maharashtra Control of Organised Crime Act (MCOCA, 1999) and other State Organised Crime Acts (SOCOAs). These laws are very strong in their areas of jurisdiction and impose strict terms of bail leaving people more susceptible. MCOCA or SOCOA with section 111 BNS may bring about procedural abuse, which is frivolous filing and extended pre-trial detention.

Overall, though Section 111 BNS is supposed to address the new-age organised crime, it still raises the genuine issue of overlapping and retroactive risk of prosecution. It allows the authorities to reopen or re-prosecute cases that have already been dealt with by SEBI, SFIO, PMLA or State crime law, thereby undermining the constitutional protection of Article 20(2). Although technically, parallel prosecution has been legalized by the courts under PMLA, different laws acting together with broader interpretation of Section 111 may lead to practical effect of double jeopardy, increased criminal responsibility and inefficiencies in the process. This is an expression of an urgent need to have uniformity in the law and judicial security to ensure that the fight against organised crime remains fruitful without making constitutional ideals a victim.

Judicial Trends in Financial and Organized Crime Prosecution in India

Organized crime and financial crime in India have evolved significantly in the last twenty years. This change is indicative of legal ideas as well as practical implementation questions. The Supreme Court and the High Courts have always aimed to have a balanced approach of effective measures to combat crimes with just procedures. This is especially significant when there are overlapping laws, e.g. the Bharatiya Nyaya Sanhita (BNS), 2023, as well as the Prevention of Money Laundering Act (PMLA), 2002.

One of them is the Vijay Madanlal Choudhary v. Union of India (2022) wherein the Supreme Court affirmed the tough enforcement rules of the PMLA, such as reverse burden measures, seizure measures and tough bail measure. The Court claimed that money laundering is a distinct crime as opposed to its underlying crimes, which explains the harsh procedural safeguards. Critics however, observe this interpretation has enhanced the power of state prosecutors and that it could lead to similar circumstances as the prohibition of prosecution under multiple laws, e.g. SEBI regulation or Companies Act.

Equally, under Nikesh Tarachand Shah v. The Delhi High Court, discussed the issue of the balance between the powers of the Enforcement Directorate (ED) and the constitutional rights in the context of Article 21. The Court stressed the necessity to secure pre-trial rights, proportionality and equal chances of investigation, particularly, high-value financial crimes involving corporate directors or complicated organizations. This decision demonstrates that the courts are becoming more conscious of the role the procedural fairness can play in criminology cases in economics.

The problems of multiplicity of charges and overlapping of practice play out in recent cases. The cases of the Delhi Excise Policy demonstrate that the severe cases of regulatory breaches may result in simultaneous prosecution under the PMLA, Section 111 of the BNS, and Companies Act. In the same spirit, recent frauds involving digital property and cryptocurrencies - usually through shell companies, hawala teachers, and foreign exchange - have also led to cases investigated by SEBI, ED, and local law enforcement through organized crime. These cases indicate that the courts have a continuous battle of striking a balance between various statutes in accordance with due process but not overemphasizing the suspects.

The other trend is the shift of judiciary towards enterprise-oriented prosecution. Some of the High Court decisions on the Maharashtra Control of Organized Crime Act (MCOCA) and the Gujarat Control of Organized Crime Act (SCOCA) acknowledged that organized crime is commonly conducted by networks, but not by individuals. Therefore, it must be approached with due precautions in terms of procedures. In the case of Tofun Singh v. State of Tamil Nadu (2020), affirmed that investigative powers in special laws will have to harmonize with constitutional guarantees, especially on bails and preventive detention.

These decisions bring out three trends. To begin with, the judiciary acknowledges the necessity of special powers in the implementation of financial and organized crime schemes which are the complex nature of the modern crime network. Second, the courts are emphasizing more on procedural safeguards and proportionality particularly when it comes to corporate and rich suspects. Third, there is an acute need for statutory guidelines due to the emergence of overlapping enforcement of the BNS, PMLA, SEBI, and state-level organized crime laws. This will assist in averting multiple investigations and adverse effects as well as practical duplicity.

Unchecked Powers and Constitutional Tensions in India’s Fight Against Organized Crime

Section 111 of the Bharatiya Nyaya Sanhita (BNS) and the existing PMLA structure have got their exception due to a valid interest of the State. It seeks to combat intricate economic and organized crime networks that undermine markets, cripple public finances as well as facilitate cross-border illegal activities. But constitutional and institutional views reveal however that the law of the present day presents gaps that jeopardize civil liberties and prosecution efficacy.

To begin with, the system is confronted with problems under the proportionality test which now falls on Article 21 following Maneka Gandhi v. Union of India and Justice K.S. Puttaswamy V. Union of India (2017). The loose use of the term, as well as high bail conditions and reverse burdens, in special statutes, might fail to pass the test of the least restrictive means established in Modern Dental College v. State of Madhya Pradesh (2016). A criminal justice system cannot justify coercion on the basis of the gravity of the crime alone, it has to make sure that the procedures are not unfair and unreasonable.

Second, the federal tensions and overlapping institutions are problems with the policy framework. Police work is predominantly the state work, but due to the overlapping of jurisdictions between central agencies under PMLA and State police investigation under Section 111, there is fragmentation and duplication of work. This promotes the selection of desirable forums, which is detrimental to the constitutional balance held in State of West Bengal v. Committee of Protection of Democratic Rights (2010). Here, the Supreme Court highlighted the significance of the cooperative federalism in the process of criminality.

Third, international standards such as the FATF Recommendations and the UNTOC have made India committed to these rules and this necessitates stronger anti-organized crime legislation. Nevertheless, the international comparison shows that greater powers are normally accompanied with high level of accountability. As an illustration, the RICO model of the U.S. and the Serious Crime Act of the U.K. provide more explicit judicial protection and definite law specifics-which have not yet been introduced in India.

Therefore, the legislative objective is appealing, whereas the existing system of policies fails to deter overreach, numerous court cases, or legal counterattacks. The issues that require regular laws, robust procedural safeguards, and well-stated jurisdiction of the battle against organized crime are necessary to make sure that the struggle against organized crime does not infringe upon the fundamental constitutional rights.

Conclusion & Recommendations

The introduction of Section 111 in the Bharatiya Nyaya Sanhita (BNS), is a new approach to the serious financial and organized crime in India. This transformation indicates a true state interest in de-escalating criminal groups that pose a threat to economic stability, order, and national security. But according to the decisions of courts and the constitutional examinations, particularly under Article 21 and under Article 20(2), the present legal framework stands the risk of calling in due process and the balance of power unless it is changed. The jurisdiction of the two or more laws can cause the duplication of the prosecution, forum shopping and power abuse, i.e. BNS, PMLA, SEBI Act, Companies Act, SFIO investigations, and state law, such as MCOCA. There have been numerous instances such as Vijay Madanlal Choudhary and Nikesh Tarachand Shah wherein court ruled that special laws should indeed be used to apply drastic measures, but they should be reasonable, fair, and not extreme.

In order to make sure that Section 111 can achieve its objectives without infringing on the basic rights, certain institutional and legal modifications are required.

To begin with, legislature needs to make the definition accompanying Section 111, which is organized crime, more specific to address only those activities that are administrative or corporate in nature. This will prevent the process of criminalizing everyday matters of governance.

Second, safeguards regarding the issue of double jeopardy should be adopted to prevent the situation where a person is tried for the same offense under different laws, which is prohibited by Article 20(2).

Third, the enforcement rules must be established to restrict the retroactive implementation of Section 111 to eliminate active criminal activity and to prevent unnecessary and over-the-board prosecution.

Fourth, the judicial check must be made more powerful to have the courts strictly regulate the use of Section 111 to prevent its misuse, safeguard the rights of individuals and maintain procedural fairness.

The reforms would help to bring the anti-crime efforts in India in line with the values of fairness, proportionality, and interstate cooperation. They could also assist the government to effectively deal with emerging variations of organized crime. Finally, legislative review, institutional responsibility, and robust judicial control will also play an important role in ensuring that the BNS 2023 will continue to be an instrument of justice and not injustice and the war on organized crime will ensure that the rule of law is enforced in India.