Money-laundering prosecution cannot survive after final acquittal or quashing of the scheduled offence.

Prosecution for money-laundering under Section 3 of the Prevention of Money-Laundering Act, 2002 depends on the existence of criminal activity relating to a scheduled offence, or at least a pending investigation or trial in that offence. Once the person concerned has been finally discharged, acquitted, or the scheduled criminal case has been quashed, the foundation for alleging proceeds of crime and continuing money-laundering proceedings against that person disappears. On the stated facts, the accused had already been acquitted in the scheduled offence and the appellants were not themselves accused of any scheduled offence, so proceedings under the Act could not be sustained and the discharge order was upheld.

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Issues: Whether prosecution for the offence of money-laundering can survive after the accused has been finally discharged or acquitted in the scheduled offence.

Analysis: The offence under Section 3 of the Prevention of Money-Laundering Act, 2002 is linked to property generated from criminal activity relating to a scheduled offence. The existence of a scheduled offence, or at least a pending investigation or trial in relation to it, is essential to sustain proceedings under the money-laundering . Once the person concerned is finally discharged, acquitted, or the criminal case is quashed, the foundation for alleging proceeds of crime and pursuing money-laundering action against that person is removed. On the facts, the accused had already been acquitted in the scheduled offence and the appellants were not accused of any scheduled offence.

Conclusion: Proceedings under the Prevention of Money-Laundering Act, 2002 could not be sustained against the appellants, and the discharge order was correctly granted.

Ratio Decidendi: Prosecution under Section 3 of the Prevention of Money-Laundering Act, 2002 cannot continue against a person once the scheduled offence has ended in final discharge, acquittal, or quashing, because the offence of money-laundering is dependent on the existence of criminal activity relating to a scheduled offence.

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