Money laundering as a distinct continuing offence: PMLA prosecution upheld despite prior conviction for predicate offences.

Money laundering under the PMLA is treated as a distinct and continuing offence, separate from the scheduled offence. The Madras HC's reasoning, as described, rejects objections based on double jeopardy and retrospectivity because prosecution under the PMLA proceeds on an independent statutory basis, even where the predicate offences under the Prevention of Corruption Act and the IPC have already resulted in conviction. On the evidence, the Court found that property and construction proceeds were acquired and used far beyond known income and were projected as untainted, satisfying the ingredients of possession, acquisition, use and projection of proceeds of crime as clean property. The statutory presumption was not rebutted, and the conviction was upheld.

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Issues: (i) Whether prosecution and conviction under the Prevention of Money Laundering Act, 2002 were barred because the predicate offences had already resulted in conviction and the alleged predicate transactions pre-dated the PMLA amendment. (ii) Whether the materials on record established the offence of money laundering under Section 3 of the Prevention of Money Laundering Act, 2002.

Issue (i): Whether prosecution and conviction under the Prevention of Money Laundering Act, 2002 were barred because the predicate offences had already resulted in conviction and the alleged predicate transactions pre-dated the PMLA amendment.

Analysis: The offence of money laundering was treated as an independent offence distinct from the scheduled offence. The Court applied the settled principle that the process or activity connected with proceeds of crime is continuing in nature and may be prosecuted irrespective of the date of the predicate offence. It also held that prosecution for the scheduled offence under the Prevention of Corruption Act, 1988 and the Indian Penal Code, 1860 does not attract Article 20 of the Constitution of India, because the ingredients of the two offences are different and the PMLA proceeds on a separate statutory basis.

Conclusion: The objection based on double jeopardy and retrospectivity was rejected and the prosecution under the PMLA was held maintainable.

Issue (ii): Whether the materials on record established the offence of money laundering under Section 3 of the Prevention of Money Laundering Act, 2002.

Analysis: The Court found that the appellants had acquired and used property and construction proceeds far beyond their known sources of income, and that the funds were projected as untainted through the construction of the building. On the evidence of the property purchase, construction records, valuation material, cash transactions, and the appellants' own explanations, the Court held that the ingredients of possession, acquisition, use, and projection as untainted property were satisfied. The burden under the statutory presumption was not rebutted.

Conclusion: The offence under Section 3 of the Prevention of Money Laundering Act, 2002 was proved.

Final Conclusion: The conviction for money laundering was upheld and the appeal was dismissed, leaving the trial court's sentence undisturbed.

Ratio Decidendi: Money laundering is a distinct and continuing offence; once involvement in possession, acquisition, use, concealment, or projection of proceeds of crime as untainted property is proved, prosecution under the PMLA is maintainable notwithstanding conviction for the predicate offence.

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