Predicate offence closure can justify quashing an ECIR and related money-laundering proceedings.

Closure of the predicate offence by acceptance of the final report by the Magistrate was treated as removing the foundation for continuation of money-laundering proceedings based on alleged proceeds of crime. On that reasoning, an ECIR cannot be sustained where the scheduled offence no longer survives, and the inherent power under Section 482 of the Code of Criminal Procedure may be invoked to prevent abuse of process and give effect to the closure order. The text states that, in such circumstances, the aggrieved party may seek quashing of the ECIR and consequential proceedings, and that the ECIR and all proceedings pursuant to it were liable to be quashed.

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Issues: Whether the ECIR and all proceedings under the Prevention of Money Laundering Act could be quashed after the predicate offence ended in a final report accepted by the Magistrate.

Analysis: The closure of the predicate offence removed the foundation for any continuation of proceedings based on alleged proceeds of crime. The existence of an ECIR cannot be sustained when the scheduled offence itself no longer survives. The inherent power under Section 482 of the Code of Criminal Procedure may be invoked to prevent abuse of process and to give effect to the order accepting the final report. In such circumstances, the aggrieved party is entitled to seek quashing of the ECIR and consequential proceedings.

Conclusion: The ECIR and all proceedings pursuant to it were liable to be quashed, in favour of the petitioner.

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