Money laundering prosecution failed without surviving scheduled offences or independent material, and retrospective criminal liability was barred.

Money laundering prosecution under the PMLA cannot proceed on allegations that merely replicate an earlier CBI charge sheet when no surviving scheduled offence and no independent ED material establish the statutory ingredients, including nexus with proceeds of crime; the prosecution was therefore unsustainable. The Court also held that the 2009 amendment bringing the relevant predicate offences into the schedule could not apply retrospectively to conduct allegedly committed before that inclusion, as criminal liability cannot be imposed ex post facto under Article 20 of the Constitution. On both grounds, the proceedings were quashed.

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Issues: (i) Whether the complaint disclosed material to proceed against the petitioner for the offence of money laundering under the Prevention of Money Laundering Act, 2002 in the absence of surviving scheduled offences. (ii) Whether the 2009 amendment treating the relevant predicate offences as scheduled offences could be applied to acts allegedly committed before the amendment.

Issue (i): Whether the complaint disclosed material to proceed against the petitioner for the offence of money laundering under the Prevention of Money Laundering Act, 2002 in the absence of surviving scheduled offences.

Analysis: The complaint under the Prevention of Money Laundering Act, 2002 substantially mirrored the allegations already made in the CBI charge sheet. The earlier proceedings against the petitioner had been quashed, and the Court found that the material did not establish the necessary ingredients of the offence, including the requisite connection with proceeds of crime and the factual basis to proceed under Sections 3 and 4 of the Act. In the absence of separate and independent material collected by the Enforcement Directorate, the prosecution could not be sustained merely on the basis of the earlier allegations.

Conclusion: The issue was answered in favour of the petitioner.

Issue (ii): Whether the 2009 amendment treating the relevant predicate offences as scheduled offences could be applied to acts allegedly committed before the amendment.

Analysis: The Court relied on the constitutional bar against ex post facto criminal liability under Article 20 of the Constitution of India and accepted the view that criminal liability cannot be fastened retrospectively for conduct which was not covered by the statute at the relevant time. Since the alleged remittances occurred before the relevant offences were brought within the schedule, the amendment could not be used to sustain the prosecution for the earlier period.

Conclusion: The issue was answered in favour of the petitioner.

Final Conclusion: The prosecution under the Prevention of Money Laundering Act, 2002 was held unsustainable on the facts presented, and the proceedings were quashed.

Ratio Decidendi: A prosecution for money laundering cannot be sustained without a legally supportable predicate offence and independent material showing the statutory ingredients of the offence, and criminal liability cannot be imposed retrospectively for conduct predating the inclusion of the relevant offences in the schedule.

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