Money laundering prosecution can proceed without predicate-accused status where the complaint shows prima facie involvement in proceeds of crime.

Prosecution under the Prevention of Money Laundering Act, 2002 can lie even where a person was not arraigned as an accused in the predicate offence, if the complaint prima facie shows knowing involvement in concealment, possession, acquisition, use, or projection of proceeds of crime. An omission in the ECIR regarding a scheduled offence was treated as curable where the complaint disclosed the predicate offences, and money laundering was treated as a continuing offence. A stay of the predicate proceedings did not erase the scheduled offence or justify quashing under Section 482 CrPC, and the summons was upheld because the allegations and material disclosed a prima facie case.

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Issues: (i) Whether prosecution under the Prevention of Money Laundering Act, 2002 could be maintained against a person not shown as an accused in the predicate offence and shown only as a witness there; (ii) Whether the absence of Section 12 of the Prevention of Corruption Act, 1988 in the ECIR and the fact that the alleged predicate offence had occurred before that provision was notified as a scheduled offence defeated the PMLA proceedings; (iii) Whether the pending stay of the predicate proceedings and the material relied upon were sufficient to quash the complaint and summons under Section 482 of the Criminal Procedure Code.

Issue (i): Whether prosecution under the Prevention of Money Laundering Act, 2002 could be maintained against a person not shown as an accused in the predicate offence and shown only as a witness there.

Analysis: Liability for money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 turns on knowingly assisting or being involved in a process connected with proceeds of crime, and not on formal arraignment as an accused in the predicate case. The offence is distinct from the scheduled offence and may extend to a person who assists in concealment, possession, acquisition, use, or projection of proceeds of crime. A witness or approver in the predicate case is not immunised from PMLA prosecution if the complaint otherwise discloses involvement in laundering activity.

Conclusion: The objection was rejected and PMLA proceedings against the petitioner were held maintainable.

Issue (ii): Whether the absence of Section 12 of the Prevention of Corruption Act, 1988 in the ECIR and the fact that the alleged predicate offence had occurred before that provision was notified as a scheduled offence defeated the PMLA proceedings.

Analysis: The record showed that the FIR and charge sheets in the predicate matter invoked Section 12 of the Prevention of Corruption Act, 1988 as well as Section 120B of the Indian Penal Code, and the omission in the ECIR was treated as a curable omission because the prosecution complaint itself set out the scheduled offences. The Court also treated money laundering as a continuing offence, so the relevant inquiry was whether a scheduled offence existed when the ECIR was registered and whether proceeds of crime were being dealt with at that stage. On that footing, the existence of the scheduled offence and the continuing character of the laundering allegation were affirmed.

Conclusion: The challenge based on absence or timing of the scheduled offence failed.

Issue (iii): Whether the pending stay of the predicate proceedings and the material relied upon were sufficient to quash the complaint and summons under Section 482 of the Criminal Procedure Code.

Analysis: A stay of the predicate trial does not amount to discharge, acquittal, or quashing of the scheduled offence, and therefore does not extinguish the foundation for PMLA proceedings. At the stage of Section 482 scrutiny, the Court only examined whether the allegations prima facie disclosed the offence. The alleged handing over of bribe money and the surrounding material were considered sufficient at that threshold, and the summons was not shown to be vitiated by non-application of mind on the face of the record.

Conclusion: The request to quash the complaint and summons was rejected.

Final Conclusion: The criminal petition was found meritless because the complaint disclosed a prima facie case of money laundering, the petitioner need not have been an accused in the predicate case, and the subsisting scheduled offence and continuing nature of the alleged laundering supported the prosecution.

Ratio Decidendi: A person need not be an accused in the predicate offence to be prosecuted under the Prevention of Money Laundering Act, 2002 if the complaint prima facie shows knowing involvement in dealing with proceeds of crime, and a mere stay of the predicate proceedings does not nullify such prosecution.

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