Money-laundering prosecution can proceed during the predicate trial, but it still requires a clear nexus to proceeds of crime.

Money-laundering prosecution may proceed independently of the predicate offence trial, because the existence of a scheduled offence is a necessary foundation but final conclusion of the predicate case is not required before action under the 2002 Act continues. Simultaneous investigation and prosecution are therefore permissible, although the money-laundering case would lose its footing if the predicate offence ends in acquittal, discharge, or quashing. Continuation of proceedings also depends on material linking the impugned property transaction to proceeds of crime; mere undervaluation of a conveyance is insufficient without a real nexus to the scheduled offence. On that basis, proceedings were quashed only where such linkage was absent.

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Issues: (i) Whether pendency of the predicate offence trial bars prosecution under the Prevention of Money Laundering Act, 2002; (ii) Whether the complaint disclosed sufficient material to continue proceedings against the petitioners in relation to the 35 cents property transaction.

Issue (i): Whether pendency of the predicate offence trial bars prosecution under the Prevention of Money Laundering Act, 2002.

Analysis: The offence of money laundering is treated as an independent offence under the statute. The existence of a scheduled or predicate offence is a necessary foundation, but it is not necessary that prosecution under the money laundering law await the final outcome of the predicate case. Simultaneous investigation and prosecution are permissible. Only if the predicate offence ultimately results in acquittal, discharge, or quashing would the money laundering proceeding lose its footing.

Conclusion: The objection based on pendency of the predicate offence trial was rejected.

Issue (ii): Whether the complaint disclosed sufficient material to continue proceedings against the petitioners in relation to the 35 cents property transaction.

Analysis: For prosecution under the money laundering law, the complaint must show material linking the property or the transaction to proceeds of crime derived from the scheduled offence. In the case of the two petitioners whose petitions were allowed, the record did not establish that the property was in the possession or enjoyment of the principal accused, that the sale consideration was paid from proceeds of crime, or that the purchasers were merely name-lenders for laundering such proceeds. Mere undervaluation of the conveyance, without the necessary nexus to the proceeds of crime arising from the predicate offence, was held insufficient. As regards the remaining petitioners, the complaint disclosed enough material to proceed.

Conclusion: The proceedings were quashed for Manimegalai and Siddique Raja, while the challenge raised by Yasar Arabath and Rahuman was rejected.

Final Conclusion: The common order upheld the maintainability of money-laundering prosecution despite the pending predicate case, but interfered only where the complaint lacked the required nexus between the transaction and the proceeds of crime.

Ratio Decidendi: Money-laundering prosecution can proceed independently of the predicate trial, but continuation of such prosecution requires material showing a real nexus between the impugned property transaction and proceeds of crime derived from the scheduled offence.

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