PMLA proceedings cannot survive final acquittal in the predicate offence, so connected complaint and attachment fall away.

Karnataka HC applied the settled principle that money-laundering liability under Section 3 of the Prevention of Money Laundering Act, 2002 depends on a scheduled offence and the alleged illegal gain arising from it. Because the petitioners had been finally acquitted in the predicate corruption case, the foundation for the ECIR, complaint, connected proceedings and attachment consequences failed. The Court held that proceedings under the PMLA could not continue on a mere assumption that the scheduled offence survived, and continuation in such circumstances would amount to abuse of process and miscarriage of justice.

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Issues: Whether proceedings under the Prevention of Money Laundering Act, 2002 could continue after the petitioners were acquitted of the predicate offences, and whether the ECIR, complaint, connected proceedings, and attachment consequences were liable to be quashed.

Analysis: The petitioners were prosecuted under the money-laundering law solely on the basis of allegations arising from the predicate corruption case. The predicate offences ended in acquittal, and the acquittal had attained finality. The governing legal position, as applied, is that money-laundering liability under Section 3 of the Prevention of Money Laundering Act, 2002 is dependent upon illegal gain of property arising from a scheduled offence, and the authorities cannot proceed on a mere assumption that such scheduled offence survives. Once the person concerned is finally acquitted or discharged in the scheduled offence, the foundation for the money-laundering proceedings fails. Continuing the proceedings in such circumstances would amount to abuse of process and result in miscarriage of justice.

Conclusion: The proceedings under the Prevention of Money Laundering Act, 2002 could not be continued after the final acquittal in the predicate offence, and the complaint, connected case, and consequential orders were liable to be set aside.

Ratio Decidendi: An offence under Section 3 of the Prevention of Money Laundering Act, 2002 cannot survive once the person concerned has been finally acquitted or discharged in the scheduled offence on which the money-laundering case is founded.

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