Money laundering offences are cognizable and non-bailable; prima facie involvement in proceeds of crime can defeat quashing

Offences under the Prevention of Money Laundering Act, 2002 were treated as cognizable and non-bailable, and the authorised officer was competent to file the prosecution complaint. The objection that the complaint lacked authority was rejected. Section 3 was read to cover direct or indirect involvement in concealment, possession, acquisition, use, or projection of proceeds of crime as untainted property; prior knowledge was not the sole requirement where prima facie laundering activity was alleged. The complaint disclosed sufficient material to resist quashing, and the inherent jurisdiction was not to be used except in exceptional cases.

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Issues: (i) Whether offences under the Prevention of Money Laundering Act, 2002 are cognizable and non-bailable and the complaint was without authority; (ii) Whether the prosecution complaint and connected proceedings were liable to be quashed for want of the petitioners' knowledge of the proceeds of crime and for alleged abuse of process.

Issue (i): Whether offences under the Prevention of Money Laundering Act, 2002 are cognizable and non-bailable and the complaint was without authority.

Analysis: The statutory scheme of Section 45, as substituted and clarified by the explanatory amendment, was read with Section 19 to hold that offences under the Act are cognizable and non-bailable. The authorized officer was competent to lodge the prosecution complaint, and the objection that the complaint lacked authority was found unsustainable.

Conclusion: The objection to cognizability, non-bailability, and authority to file the complaint was rejected.

Issue (ii): Whether the prosecution complaint and connected proceedings were liable to be quashed for want of the petitioners' knowledge of the proceeds of crime and for alleged abuse of process.

Analysis: Section 3 was construed to cover direct or indirect attempts, assistance, participation, or involvement in any process or activity connected with proceeds of crime. The Court held that knowledge is not the sole sine qua non where direct involvement in concealment, possession, acquisition, use, or projection as untainted property is alleged. Since the complaint contained material showing prima facie involvement in scheduled-offence-linked laundering activity, the case did not fall within the limited categories warranting quashing under the inherent jurisdiction.

Conclusion: The proceedings were held not to be liable to quashing.

Final Conclusion: The petitions failed on merits, and the impugned proceedings were permitted to continue in accordance with law.

Ratio Decidendi: For an offence under Section 3 of the Prevention of Money Laundering Act, 2002, the prosecution is not confined to proving prior knowledge alone; prima facie direct or indirect involvement in any process or activity connected with proceeds of crime is sufficient to resist quashing, and the inherent power to quash must be exercised sparingly only in exceptional cases.

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