Money laundering prosecution needs a prima facie scheduled offence and proceeds of crime; discharge upheld for lack of foundation.

Money laundering under the Prevention of Money Laundering Act requires a prima facie scheduled offence generating proceeds of crime, and the material must disclose a sufficient foundation for proceeding at the charge stage. The revisional court will examine only the legality, correctness and propriety of a discharge order, not reappreciate evidence as an appellate court. As the predicate offences were not established and the Enforcement Directorate's material did not show a prima facie laundering case, the discharge order was upheld and no patent illegality, gross impropriety or jurisdictional error was found.

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Issues: (i) Whether the order discharging the respondents from offences under the Prevention of Money Laundering Act, 2002 suffered from illegality or impropriety in revisional jurisdiction on the ground that no scheduled offence and no proceeds of crime were made out.

Analysis: The revisional court confined itself to the legality, correctness and propriety of the discharge order, and did not reappreciate evidence as an appellate court. Offence of money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 is predicated on the existence of proceeds of crime arising from a scheduled offence. At the stage of framing of charge, only a prima facie assessment is required, but the material still must disclose a sufficient foundation for proceeding. On the record, the court below had found that the alleged predicate offences were not established against the respondents, and the material relied upon by the Enforcement Directorate did not disclose a prima facie case of laundering of proceeds of crime.

Conclusion: The discharge order was upheld and no patent illegality, gross impropriety or jurisdictional error was found.

Final Conclusion: The revision petition failed because the foundational requirement of a scheduled offence and linked proceeds of crime was not shown, and the respondents were rightly discharged.

Ratio Decidendi: A prosecution for money laundering cannot be sustained in the absence of a prima facie scheduled offence generating proceeds of crime, and revisional interference with a discharge order is unwarranted unless the order suffers from patent illegality or impropriety.

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