PMLA attachment cannot survive without a live scheduled offence; lender's flats were ordered released after discharge in predicate case.

Provisional attachment under the Prevention of Money Laundering Act, 2002 was found unsustainable where the petitioner was only a lender, was not arraigned as an accused in the scheduled offence, and the predicate proceedings had already been closed with the connected accused discharged. The note states that money-laundering proceedings depend on a subsisting scheduled offence and that, once the underlying criminal activity is finally closed, discharged, acquitted, or quashed, attached property cannot continue to be treated as proceeds of crime. The attached flats were therefore directed to be released.

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Issues: Whether the provisional attachment of the petitioner's flats under the Prevention of Money Laundering Act, 2002 could continue when the petitioner was only a lender, was not arrayed as an accused in the scheduled offence, and the scheduled offence as well as the connected PMLA proceedings had been closed or the accused persons discharged.

Analysis: The attachment was founded on a scheduled offence under the Indian Penal Code, 1860 and on the premise that the property constituted proceeds of crime under the Prevention of Money Laundering Act, 2002. The material on record showed that the petitioner had merely extended credit facilities to the project and was not itself charged in the predicate offence. The scheduled offence had already been closed, and the persons connected with the predicate offence had been discharged. In such circumstances, the continuing existence of a live scheduled offence was absent. The Court relied on the settled principle that the offence of money-laundering is dependent on criminal activity relating to a scheduled offence and that, where the scheduled offence is finally discharged, acquitted, or quashed, proceedings under the Prevention of Money Laundering Act, 2002 cannot survive against persons claiming through that connected property.

Conclusion: The provisional attachment could not be sustained and the petitioner's attached flats were directed to be released.

Ratio Decidendi: Proceedings under the Prevention of Money Laundering Act, 2002 cannot continue in the absence of a subsisting scheduled offence, and property of a person not arraigned as an accused cannot be treated as proceeds of crime once the predicate offence has been finally closed or the relevant accused have been discharged.

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