Money-laundering prosecution cannot survive once the predicate offence is quashed and the foundational basis disappears.

Prosecution under the Prevention of Money Laundering Act, 2002 depends on the existence of a subsisting scheduled offence. Once the predicate offence is quashed, the foundational basis for action under Section 3 punishable under Section 4 no longer survives, and the money-laundering prosecution cannot be sustained. The challenge to the criminal proceedings was therefore maintainable, and the prosecution was held unsustainable and quashed.

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Issues: Whether the prosecution for the offence under the Prevention of Money Laundering Act, 2002 could survive after the predicate offence was quashed.

Analysis: The proceedings under the Prevention of Money Laundering Act, 2002 were founded on the existence of a scheduled offence. Once the proceedings relating to the predicate offence were quashed, there remained no subsisting basis for continuing the prosecution under Section 3 punishable under Section 4 of the Prevention of Money Laundering Act, 2002. In the circumstances, the challenge to the criminal proceedings was maintainable and the prosecution could not be sustained.

Conclusion: The issue is answered in favour of the petitioners. The money-laundering prosecution was held to be unsustainable and was quashed.

Ratio Decidendi: Where the foundational predicate offence is quashed, prosecution for money laundering based on that scheduled offence cannot survive.

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