Discharge under Section 227 CrPC: assume prosecution case true; prima facie PMLA allegations can sustain trial, sanction not automatic.

At the discharge stage in proceedings under the Prevention of Money Laundering Act, the court must assume prosecution material to be true and decide whether those facts prima facie disclose the offence or grave suspicion warranting trial; the impugned refusal of discharge was upheld on that basis. Protection by sanction for public servants is not automatic and its relevance may be examined at appropriate stages rather than functioning as a jurisdictional bar to discharge. PMLA is a continuing offence and determination that assets are proceeds of crime is primarily evidentiary and ordinarily not resolved at the Section 227 stage absent clear absence of nexus.

---

---

Issues: Whether the order dated 02.09.2023 rejecting the petitioners' application for discharge under Section 227 Cr.P.C. in proceedings under the Prevention of Money Laundering Act, 2002 is legally sustainable.

Analysis: Applicable principles governing discharge applications require the court at the threshold to assume the prosecution material to be true and to determine whether the facts, taken at their face value, disclose the ingredients of the alleged offence so as to constitute a prima facie case or grave suspicion sufficient to proceed to trial. Protection under sanction provisions for public servants is not automatic and depends on the quality of the act and its reasonable nexus with official duty; the need for sanction may be examined at appropriate stages and does not necessarily constitute a jurisdictional bar at the discharge stage. The offence under the Prevention of Money Laundering Act, 2002 is treated as a continuing offence and liability is triggered when a person indulges in processes or activities connected with proceeds of crime, such as concealment, possession, acquisition, use, or projection as untainted property. Determination of whether assets constitute proceeds of crime is primarily evidentiary and cannot ordinarily be concluded at the Section 227 Cr.P.C. stage unless the record clearly shows absence of any nexus between the property and the scheduled offence.

Conclusion: The impugned order declining discharge was legally sustainable; the materials on record disclose a prima facie case under the Prevention of Money Laundering Act, 2002 and warrant trial. The petitioners' revision is dismissed and the rejection of the discharge application is upheld in favour of the respondent.

---