Continuing offence under money-laundering law keeps complaint alive despite quashing of the predicate offence

A money-laundering complaint under the PMLA may proceed where the accused is alleged to continue possessing property said to be proceeds of crime, even if the predicate offence has been quashed, because Section 3 is treated as a continuing offence. The court treated whether the property was in fact proceeds of crime, and whether the accused had the requisite knowledge or mens rea, as matters for trial rather than quashing jurisdiction. Earlier quashing of a separate criminal case did not by itself defeat the complaint, and statutory presumptions were left to operate at the appropriate stage.

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Issues: Whether the complaint under the Prevention of Money Laundering Act, 2002 could be quashed on the ground that the predicate offence had been quashed and that the petitioner's possession of the alleged proceeds of crime and requisite knowledge or mens rea could not be inferred at the pre-trial stage.

Analysis: The complaint was founded on allegations that the petitioner continued to possess property alleged to have been acquired out of bribe money, and the Court treated the question whether such property constituted proceeds of crime, and whether the petitioner had knowledge or mens rea, as matters for evidence at trial. Relying on the governing law on money-laundering, the Court held that an offence under Section 3 of the Prevention of Money Laundering Act, 2002 is a continuing offence, and that prosecution may lie where a person continues to possess or deal with proceeds of crime even after the underlying criminal activity has been notified as a scheduled offence. The Court also noted that the petitioner's earlier quashing of a different criminal case did not, by itself, establish that the present complaint lacked a basis, because the present prosecution was linked to continuing possession of alleged proceeds of crime and the statutory presumptions would operate at the appropriate stage.

Conclusion: The quashment plea was rejected, and the prosecution was held to be maintainable against the petitioner.

Ratio Decidendi: In a money-laundering prosecution, continued possession or dealing with property alleged to be proceeds of crime after the relevant criminal activity has become a scheduled offence can sustain proceedings, and questions of knowledge or mens rea ordinarily cannot be resolved in quashing jurisdiction at the pre-trial stage.

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