Money-laundering prosecution fails when the predicate offence ends in final acquittal and no scheduled offence survives.

Money-laundering proceedings under the Prevention of Money Laundering Act, 2002 depend on a subsisting scheduled offence and alleged proceeds of crime arising from it. Where the accused in the predicate offence is finally acquitted, discharged, or the scheduled offence is quashed by a competent court, the foundational basis for prosecution under section 3 no longer survives. On the stated facts, the co-accused in the predicate offence had been acquitted and that judgment had attained finality, so the PMLA prosecution was treated as unsustainable and the charge order and connected proceedings were set aside.

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Issues: Whether proceedings under the Prevention of Money Laundering Act, 2002 can continue when the accused in the predicate offence has been finally acquitted and the predicate offence has attained finality.

Analysis: The governing rule applied was that the offence of money-laundering under section 3 is dependent on the existence of a scheduled offence and the alleged proceeds of crime arising from it. Once the person concerned is finally discharged, acquitted, or the criminal case for the scheduled offence is quashed by a competent court, the foundational substratum for prosecuting money-laundering no longer survives. On the facts, the co-accused in the predicate offence had been acquitted by the trial court, and that judgment had not been challenged. The Court therefore treated the prosecution under the PMLA as unsustainable, and declined to defer the matter pending any future decision of the Supreme Court.

Conclusion: The prosecution under the PMLA could not be continued against the petitioner after the final acquittal in the predicate offence.

Final Conclusion: The impugned charge order and the connected PMLA proceedings were set aside, leaving the petitioner free from the pending money-laundering proceedings on the present record.

Ratio Decidendi: A money-laundering prosecution cannot survive in the absence of a subsisting scheduled offence, and final acquittal or quashing of the predicate offence extinguishes the legal basis for proceedings under section 3 of the Prevention of Money Laundering Act, 2002.

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