Predicate offence closure ends money-laundering action when the scheduled offence no longer survives as a live foundation.

Acceptance of the B report and closure of the predicate case after hearing the complainant brought the criminal proceedings to an end without trial, and was treated as substantively akin to discharge. On that footing, the foundation for continuing proceedings under the Prevention of Money-laundering Act did not survive because money-laundering action requires a live scheduled offence. Applying Vijay Madanlal Choudhary, the summons issued by the Enforcement Directorate could not be sustained and were liable to be quashed.

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Issues: Whether summons issued by the Enforcement Directorate could survive after the predicate proceedings ended upon acceptance of the B report and closure of the case, and whether such closure was legally equivalent to discharge or acquittal for the purpose of continuing money-laundering proceedings.

Analysis: The effect of the Supreme Court's ruling in Vijay Madanlal Choudhary was that money-laundering proceedings cannot continue where the scheduled offence ends in final discharge, acquittal after trial, or quashing of the criminal case. The Court held that acceptance of the B report and closure of the predicate case, after hearing the complainant, brought the criminal proceedings to an end and, in substance, was akin to discharge because no trial had taken place. In that situation, the foundation for continuing proceedings under the Prevention of Money-laundering Act did not survive.

Conclusion: The summons could not be sustained and were liable to be quashed in favour of the petitioner.

Final Conclusion: The proceedings initiated by the Enforcement Directorate were extinguished because the predicate offence had reached final closure, and the impugned summons could not continue.

Ratio Decidendi: Where the predicate criminal case has attained final closure without trial, the enforcement proceedings based on that offence cannot be continued, as the existence of a live scheduled offence is a necessary foundation for action under the Prevention of Money-laundering Act, 2002.

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