Predicate-offence finality limits money-laundering adjudication, requiring ultimate determination to await the scheduled-offence trial outcome.

Money-laundering liability under the Prevention of Money Laundering Act depends on property qualifying as proceeds of crime derived from criminal activity relating to a scheduled offence. Although money-laundering and scheduled-offence proceedings are distinct and need not be jointly tried, a money-laundering prosecution cannot survive a final discharge, acquittal, or quashing of the predicate offence. The analysis states that both matters should be handled by the same Special Court where applicable to prevent inconsistent outcomes. A direction requiring the money-laundering trial to precede the scheduled-offence trial was set aside; the money-laundering trial may continue, but final determination should await the scheduled-offence decision.

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Issues: Whether the trial for money laundering may be directed to precede the trial for the scheduled offence, notwithstanding the dependence of money laundering upon proceeds of crime arising from the scheduled offence.

Analysis: An offence of money laundering under Section 3 requires property derived or obtained from criminal activity relating to a scheduled offence to qualify as proceeds of crime under Section 2(1)(u). The Supreme Court's binding interpretation establishes that, although proceedings under the Prevention of Money Laundering Act, 2002 are distinct and the trials are not a joint trial, prosecution for money laundering cannot survive where the accused is finally discharged or acquitted of the scheduled offence or that case is quashed. Section 44 requires both matters to be dealt with by the same Special Court where applicable, to avoid conflicting outcomes; its Explanation does not permit a final money-laundering conviction founded on proceeds of crime where the predicate criminality is subsequently negated. The earlier contrary view was superseded by the Supreme Court's ruling.

Conclusion: The direction that the money-laundering trial must precede the scheduled-offence trial was set aside. The money-laundering trial may proceed independently, but the Special Court should await the final decision in the scheduled-offence trial before reaching its ultimate determination, in favour of the petitioner.

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