Money-laundering liability can extend beyond the predicate offence, while factual disputes over property source usually go to trial.

Liability for money-laundering under the Prevention of Money-Laundering Act, 2002 is not limited to persons named in the scheduled offence; involvement in possession, acquisition, use or projection of proceeds of crime can sustain prosecution even without being arrayed as an accused in the predicate case. The note also explains that disputes over when and how property was acquired, including claims that assets pre-dated the alleged loans or were not proceeds of crime, are factual matters ordinarily reserved for trial and not for discharge or quashment when prima facie material exists.

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Issues: (i) whether persons not arrayed as accused in the predicate offence can nevertheless be prosecuted for money-laundering under the Prevention of Money-Laundering Act, 2002; (ii) whether the plea that the properties were acquired before the alleged loans and therefore were not proceeds of crime could justify discharge or quashment.

Issue (i): whether persons not arrayed as accused in the predicate offence can nevertheless be prosecuted for money-laundering under the Prevention of Money-Laundering Act, 2002.

Analysis: Liability under Section 3 of the Prevention of Money-Laundering Act, 2002 is not confined to the persons named in the scheduled offence. The relevant inquiry is whether a person is involved in any process or activity connected with the proceeds of crime. A person may be proceeded against if the material shows possession, acquisition, use or projection of such proceeds as untainted property, even if that person was not an accused in the predicate case.

Conclusion: The contention that absence from the predicate case bars prosecution under the money-laundering law was rejected.

Issue (ii): whether the plea that the properties were acquired before the alleged loans and therefore were not proceeds of crime could justify discharge or quashment.

Analysis: The timing and source of acquisition of the properties, including whether they were purchased from proceeds of crime or were merely settled properties, involved disputed questions of fact. Such issues were held to be matters for trial and not for determination in revision or writ jurisdiction. The complaint also disclosed prima facie material regarding high-end vehicles standing in the names of the accused and their use of those assets.

Conclusion: The requests for discharge and quashment failed, as the matter required trial on the existing prima facie materials.

Final Conclusion: The challenge to the prosecution and to the dismissal of the discharge petitions was rejected, while limited dispensing-of-presence relief was granted for the conduct of trial.

Ratio Decidendi: A person need not be an accused in the scheduled offence to face prosecution under Section 3 of the Prevention of Money-Laundering Act, 2002 if material shows involvement with the proceeds of crime; factual disputes on source and timing of acquisition must ordinarily be left to trial.

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