Money laundering proceedings depend on the scheduled offence, and final adjudication must track its outcome under PMLA.

Proceedings under the Prevention of Money Laundering Act, 2002 remain dependent on the existence of proceeds of crime arising from a scheduled offence, so the money-laundering charge cannot be finally sustained if the scheduled offence ends in discharge, acquittal, or quashing. Section 44, read with its Explanation, was treated as requiring the Special Court to deal with both matters to prevent inconsistent outcomes, but not as mandating a joint trial. The money-laundering case may continue procedurally, yet its final adjudication must await and conform to the result of the scheduled-offence proceedings.

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Issues: Whether the offence under the Prevention of Money Laundering Act, 2002 can be tried and taken to conclusion ahead of the scheduled offence, and how Section 44 of the Prevention of Money Laundering Act, 2002, as interpreted in the light of the Supreme Court decision in Vijay Madanlal Choudhary, governs the relationship between the two proceedings.

Analysis: The offence under Section 3 of the Prevention of Money Laundering Act, 2002 is not to be treated as wholly detached from the scheduled offence. Its foundation is the existence of proceeds of crime, which in turn arise only from criminal activity relating to a scheduled offence. The Supreme Court has authoritatively held that if the accused is finally discharged, acquitted, or the scheduled offence is quashed, there can be no offence of money laundering in relation to that property or person. Section 44 of the Prevention of Money Laundering Act, 2002, especially its Explanation, was read as ensuring that the same Special Court deals with both matters to avoid inconsistent or conflicting outcomes, while not converting the two proceedings into a joint trial. Accordingly, although the money-laundering case may proceed independently in a procedural sense, its ultimate determination cannot be insulated from the result of the scheduled offence.

Conclusion: The earlier order treating the money-laundering prosecution as one that must necessarily precede the scheduled offence was set aside. The Special Court was directed to proceed independently with the money-laundering matter but to await the final decision in the scheduled-offence case before pronouncing the ultimate result, so as to avoid a paradoxical outcome.

Final Conclusion: The revision succeeded in part, with the impugned procedural direction quashed and modified so that the money-laundering trial may continue, but the final outcome must remain aligned with the scheduled-offence proceedings.

Ratio Decidendi: Proceedings under the Prevention of Money Laundering Act, 2002 are legally dependent upon the existence of proceeds of crime arising from a scheduled offence, and the final adjudication of the money-laundering charge cannot be sustained independently of the final result of the scheduled offence.

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