Money-laundering proceedings cannot survive after the predicate offence is quashed, as the legal foundation disappears.

Proceedings under the Prevention of Money-laundering Act, 2002 cannot survive once the underlying scheduled offence has been quashed by a competent court. The continuation of a money-laundering case depends on the existence of a valid predicate offence; without that foundation, the allegation of laundering loses its legal basis. The authorities cannot sustain prosecution on a mere notional assumption that a scheduled offence exists. On that reasoning, the PMLA proceedings were held unsustainable and quashed.

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Issues: Whether proceedings under the Prevention of Money-laundering Act, 2002 could continue after the predicate offence proceedings had been quashed.

Analysis: The continuation of proceedings under the Prevention of Money-laundering Act, 2002 depends on the existence of an underlying scheduled offence. Once the predicate proceedings were quashed, the basis for alleging money-laundering ceased to survive. The legal position relied upon was that the authorities under the Act cannot prosecute on a notional assumption of a scheduled offence, and if the criminal case relating to the scheduled offence is quashed, no offence of money-laundering survives on that foundation.

Conclusion: The proceedings under the Prevention of Money-laundering Act, 2002 were held to be unsustainable and were quashed in favour of the petitioner.

Ratio Decidendi: Proceedings for money-laundering cannot survive once the predicate scheduled offence proceedings forming their basis are quashed by a competent court.

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