Money laundering requires participation in projecting proceeds of crime as untainted property; mere loan sanctioning violation was insufficient.

Prosecution under the Prevention of Money Laundering Act requires a scheduled offence, proceeds of crime, and projection of those proceeds as untainted property. The complaint against the petitioner alleged only that he sanctioned loans in breach of banking norms, but it contained no material showing that he directly or indirectly participated in, assisted, or abetted concealment, possession, acquisition, use, or projection of proceeds of crime. Mere abuse of official position in loan sanctioning was held insufficient to attract Sections 3 and 4, and the proceedings were quashed.

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Issues: Whether the prosecution under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 could be sustained against the petitioner in the absence of material showing that he directly or indirectly assisted in projecting the proceeds of crime as untainted property.

Analysis: The ingredients of the offence of money laundering require the existence of a scheduled offence, generation of proceeds of crime, and projection of such proceeds as untainted property. The complaint attributed to the petitioner only the sanction of loans to the principal accused in violation of banking norms. It did not contain material to show that the petitioner participated in, assisted, or abetted any activity connected with the projection, concealment, possession, acquisition, or use of proceeds of crime as untainted property. Mere abuse of official position in sanctioning loans was held insufficient to constitute the offence under the Act in the petitioner's case.

Conclusion: The prosecution against the petitioner under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 was not sustainable, and the proceedings against him were quashed.

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