PMLA proceedings survive compounding of the predicate offence, and continued custody may remain justified during laundering investigation.

A scheduled offence is necessary to trigger proceedings under the Prevention of Money-Laundering Act, 2002, but once money-laundering is registered, the investigation proceeds independently. The closure, compromise, compounding or quashing of the predicate offence does not by itself extinguish the PMLA case or stop inquiry into the proceeds of crime and laundering activity. Continued custody was supported by the need for further investigation into the alleged laundering trail. The challenge to continued detention failed, and the applications were dismissed.

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Issues: Whether the compounding or closure of the predicate offence extinguishes the investigation under the Prevention of Money-Laundering Act, 2002 and entitles the applicants to release from custody.

Analysis: The predicate or scheduled offence is required for initiation of proceedings under the Prevention of Money-Laundering Act, 2002, but once the offence of money-laundering is registered, the investigation proceeds independently. The statutory scheme of Sections 2, 3, 4, 5 and 44, read with the object of the Act, shows that the inquiry is directed to the proceeds of crime and the laundering activity itself. The closure, compromise, compounding or quashing of the scheduled offence does not, by itself, wipe out the money-laundering case or arrest the investigation. The custody orders were also supported by the need for continued investigation into the alleged laundering trail.

Conclusion: The plea that the PMLA proceedings ceased because the predicate offence was compounded was rejected, and the challenge to further custody failed.

Final Conclusion: The applications were dismissed, and the applicants were not entitled to release on the ground that the scheduled offence had been compounded or closed.

Ratio Decidendi: A money-laundering prosecution, once validly initiated on the basis of a scheduled offence, survives independently of the later compromise, closure, or compounding of that scheduled offence.

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