The Supreme Court in the case Indrani Patnaik vs Enforcement Directorate observed and has reiterated that the prosecution under the Prevention of Money-Laundering Act cannot continue if the accused is discharged from the scheduled offence.
In the present case, a writ petition was filled by one Indrani Patnaik and others, while allowing the appeal the court contended that their prosecution in relation to the scheduled offence had already come to an end as they were discharged from the criminal case. It was contended by them that consequentially, the proceedings of PMLA also could not continue.
On the other hand, it was submitted by Additional Solicitor General that he has not received further instructions as to whether the prosecuting agency has challenged the said order or not.
The bench comprising of Justice Dinesh Maheshwari and Justice Sudhanshu Dhulia observed and has stated that the petitioners are stand discharged of the scheduled offence and as per the declared law by this Court, no question could arise of they being prosecuted for illegal gain of property as a result of the criminal activity relating to the alleged scheduled offence. This being the position and this Court finds no reason for allowing the proceedings against the petitioners under PMLA to proceed further.
The bench also relied on the following observations made in the recent judgment in the case Vijay Madanlal Choudhary vs Union of India.
The bench stated that the offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, constituting the offence of money-laundering. It was contended that the Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and or for a pending enquiry or a trial including by way of criminal complaint before the competent forum. Therefore, if the person being finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the Court of competent jurisdiction, there can be no offence of money laundering against him or any one claiming such property as the property being linked to stated scheduled offence through him.
Accordingly, the court reserved liberty to Enforcement Directorate wherein seeking revival of these proceedings if the order discharging the petitioners is annulled or in any manner varied and if there being any legitimate ground to proceed under PMLA.