PMLA proceedings depend on a scheduled offence and proceeds of crime; acquittal without illicit gains bars continuation.

Proceedings under the Prevention of Money-Laundering Act, 2002 cannot continue where the scheduled offence has ended in acquittal and the record does not show generation or possession of proceeds of crime. The Court applied the settled principle that liability under Section 3 depends on the existence of a scheduled offence and illicit gain arising from criminal activity. Relying on Vijay Madanlal Choudhary as binding under Article 141, it noted that the related proceedings against the person through whom the alleged benefit was derived had also been quashed for want of criminal proceeds. On those facts, continuation of PMLA proceedings was impermissible.

---

---

Issues: Whether proceedings under the Prevention of Money-Laundering Act, 2002 could continue against a person when the scheduled offence had ended in acquittal and no proceeds of crime were shown to have been generated.

Analysis: The petitioner's case was tested against the settled principle that the offence under Section 3 of the Prevention of Money-Laundering Act, 2002 is dependent on the existence of a scheduled offence and illegal gain of property resulting from such criminal activity. Once the scheduled offence ends in acquittal, and the connected proceedings do not disclose generation or possession of proceeds of crime, continuation of money-laundering proceedings is not permissible. The decision of the Supreme Court in Vijay Madanlal Choudhary was treated as binding under Article 141 of the Constitution of India, and the Court applied that rule to the facts, noting that the related proceedings against the person through whom the alleged benefit was derived had also been quashed on the ground that no criminal proceeds existed.

Conclusion: The proceedings under the Prevention of Money-Laundering Act, 2002 could not be continued against the petitioner.

---