Money-laundering liability extends to participation in processes connected with proceeds of crime, including alleged loan sanction and disbursement.

The expression "proceeds of crime" is the foundation of money-laundering under the Prevention of Money-Laundering Act, 2002, and Section 3 covers not only projection as untainted property but also any direct or indirect involvement in a process or activity connected with such proceeds. Applying Vijay Madanlal Choudhary and Padmanabhan Kishore, the Court noted that allegations of active participation by a bank officer in sanctioning and disbursing loans, if accepted at face value, could amount to facilitation of the generation and movement of proceeds of crime. The prosecution therefore disclosed a prima facie case under Section 3, and the criminal proceedings were not liable to be quashed.

---

---

Issues: Whether the criminal proceedings and the charges framed under the Prevention of Money-Laundering Act, 2002 against the petitioner, a bank officer alleged to have sanctioned and disbursed loan facilities in relation to the scheduled offence, were liable to be quashed for want of proceeds of crime and lack of an offence under Section 3.

Analysis: The expression "proceeds of crime" under Section 2(1)(u) is the foundation of the offence of money-laundering. It extends to property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence. The scope of Section 3 is wide and covers any person who directly or indirectly attempts to indulge, knowingly assists, is knowingly a party, or is actually involved in any process or activity connected with such proceeds. In the light of the authoritative interpretation in Vijay Madanlal Choudhary, projection as untainted property is not the sole or indispensable mode of commission; involvement in the process or activity connected with proceeds of crime is sufficient. The allegations in the complaint, if accepted at face value, attributed active participation to the petitioner in sanctioning and disbursing the loan, thereby facilitating the alleged generation and movement of proceeds of crime. The earlier view taken in certain quash petitions involving bank officials could not be followed after the later binding law and the subsequent decision in Padmanabhan Kishore.

Conclusion: The prosecution disclosed a prima facie case under Section 3 of the Prevention of Money-Laundering Act, 2002, and the proceedings against the petitioner were not liable to be quashed.

---