PMLA liability requires proceeds of crime and projection as untainted property; mere purchase from a titleless seller is insufficient.

Liability under Section 3 of the PMLA arises only where a person is knowingly involved in dealing with proceeds of crime and conceals, possesses, acquires, uses, or projects them as untainted property. On the complaint materials, the petitioner had only paid consideration for the property and was, at most, a purchaser from a person lacking title; the record did not show that he generated proceeds of crime or projected such property as untainted. The Madras HC therefore found the essential ingredients of the offence absent against him and quashed the prosecution, while permitting the case to continue against the remaining accused.

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Issues: Whether the complaint under the Prevention of Money-Laundering Act, 2002 disclosed the ingredients of the offence so as to sustain prosecution against the petitioner, and whether the complaint was liable to be quashed as against him.

Analysis: The complaint itself showed that the petitioner paid the sale consideration for purchasing the subject property and did not generate any proceeds of crime from a criminal activity. For an offence under Section 3 of the Prevention of Money-Laundering Act, 2002, there must be a criminal activity giving rise to proceeds of crime and a further act of concealing, possessing, acquiring, using, or projecting such proceeds as untainted property. On the materials placed, the petitioner was at best a purchaser from a person lacking title, and the alleged proceeds of crime were not shown to have been generated by him or projected by him as untainted.

Conclusion: The essential ingredients of the offence were absent against the petitioner, and the prosecution against him in the complaint was quashed.

Final Conclusion: The criminal original petition succeeded, and the prosecution against the petitioner in the PMLA case was set aside, while the trial was left to continue against the remaining accused.

Ratio Decidendi: Liability under Section 3 of the Prevention of Money-Laundering Act, 2002 arises only where a person is knowingly involved in a process connected with proceeds of crime and projects or claims such property as untainted; mere purchase of property from a person without title does not satisfy that test.

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