PMLA proceedings cannot continue after acquittal in predicate offence, attached properties must be released

Delhi HC held that PMLA proceedings cannot continue after acquittal in predicate offence. Following SC precedent in Vijay Madanlal Choudhry, the court ruled that money laundering charges require actual scheduled offence, not notional basis. When accused were acquitted in predicate offence, the foundation for PMLA proceedings was knocked out, making attached properties no longer proceeds of crime. Special Judge correctly discharged respondents from PMLA offences and ordered release of attached properties. Mere filing of appeal against acquittal does not sustain PMLA proceedings. Petition dismissed.

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Issues Involved:
1. Legality of the discharge of respondents from the offence of money laundering u/s 3 of the PMLA.
2. Release of attached properties and bank accounts following the acquittal in the predicate offence.
3. Impact of the pending appeal against the acquittal in the predicate offence on the PMLA proceedings.

Summary:

1. Discharge from Money Laundering Offence u/s 3 of PMLA:
The petition challenged the order dated 09.10.2023 by the Special Judge discharging respondents from offences u/s 3 of the PMLA. The Special Judge observed that since the respondents were acquitted in the scheduled offence, the PMLA proceedings could not continue. The Supreme Court in Vijay Madanlal Choudhry vs. UOI emphasized that the offence under Section 3 of the PMLA depends on illegal gain from a scheduled offence. If acquitted in the scheduled offence, there can be no money laundering offence.

2. Release of Attached Properties and Bank Accounts:
Following the discharge, the Special Judge ordered the release of attached properties and bank accounts on 07.11.2023. The court noted that the properties could not be considered proceeds of crime after the acquittal. Section 8(6) of the PMLA mandates the release of attached properties if the accused is acquitted, as reiterated in Parvathi Kollur vs. Enforcement of Directorate and other cases.

3. Impact of Pending Appeal Against Acquittal:
The petitioner argued that the acquittal had not attained finality due to a pending appeal by the State of Jharkhand. However, the court held that mere filing of an appeal does not negate the effects of acquittal. The PMLA proceedings cannot be sustained post-acquittal unless the acquittal is reversed. The Supreme Court in M/s Nik Nish Retail Ltd. clarified that if the acquittal is reversed, PMLA proceedings can be revived.

Conclusion:
The court dismissed the petition, affirming that no proceedings under the PMLA could be sustained after the acquittal in the predicate offence. The discharge of respondents and the release of attached properties were upheld as legally sound.

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