PMLA prosecution cannot continue after merits-based exoneration in predicate proceedings and release of attached property.

Where the petitioners had been discharged in the predicate offences and the adjudicatory proceedings had ended with release of the attached property, continuation of the PMLA prosecution on the same facts was treated as an abuse of process. The Court applied the principle that exoneration on merits in the relevant adjudicatory or predicate proceedings weakens the basis for a criminal case, especially because criminal prosecution requires a higher standard of proof than adjudication. On that reasoning, the money-laundering proceedings were quashed.

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Issues: Whether the criminal proceedings under the Prevention of Money-Laundering Act, 2002 could continue when the petitioners had been discharged in the predicate offences and the adjudicatory proceedings had also culminated in release of the attached property.

Analysis: The petition was for quashing of the money-laundering prosecution under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973. The Court noted that the attachment proceedings had been carried through the statutory process and the appellate tribunal had accepted the petitioners' request for release of property in view of the discharge order. The Court relied on the principle that where exoneration in adjudication is on merits and the allegations are found unsustainable, continuation of criminal prosecution on the same facts would amount to abuse of process of law. It distinguished cases where the predicate offence is merely said to be independent in the abstract, and held that the finality of the discharge and the release order weighed against further prosecution. The Court also applied the principle that criminal prosecution requires a higher standard of proof than adjudicatory proceedings.

Conclusion: The continuation of the prosecution was held to be unsustainable and was quashed in favour of the petitioners.

Final Conclusion: The proceedings under the Prevention of Money-Laundering Act, 2002 were terminated because the underlying allegations had been negated on merits and the consequential action was treated as an abuse of process.

Ratio Decidendi: Where the person concerned is exonerated on merits in the relevant adjudicatory or predicate proceedings, continuation of a criminal prosecution on the same set of facts is impermissible as an abuse of process of law.

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