Money-laundering prosecution fails without a surviving scheduled offence and proceeds of crime, supporting bail on the stated facts

Money-laundering liability under the Prevention of Money Laundering Act depends on the existence of a scheduled offence and corresponding proceeds of crime. Where the predicate FIR offences were dropped in the chargesheet, the Court treated the foundational scheduled offence as absent and held that prosecution under Section 3 could not be sustained on that basis. On the facts stated, bail was granted because no surviving scheduled offence or proceeds of crime remained against the accused.

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Issues: Whether bail could be granted in a money-laundering case when the scheduled offences in the predicate FIR stood dropped in the chargesheet, thereby leaving no subsisting scheduled offence or proceeds of crime.

Analysis: The application of the offence of money-laundering under the Prevention of Money Laundering Act, 2002 was examined with reference to the definitions of "proceeds of crime" and "scheduled offence" and the charging provision in Section 3. The Court held that the existence of a scheduled offence is foundational to the existence of proceeds of crime, and that without proceeds of crime the offence under Section 3 cannot be sustained. Reliance was placed on the Supreme Court's exposition that the offence under the Act is dependent on criminal activity relatable to a scheduled offence, and that once the predicate offence is no longer in existence, the foundation for money-laundering prosecution falls away.

Conclusion: Bail was granted because, on the facts as they stood, no scheduled offence survived against the accused and the prosecution under the money-laundering law could not continue on that basis.

Ratio Decidendi: The offence of money-laundering under Section 3 of the Prevention of Money Laundering Act, 2002 cannot be pursued unless there exists a scheduled offence giving rise to proceeds of crime.

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