PMLA Prosecution Maintainable if Predicate Offence is Pending Judicial Adjudication Despite Police Closure Report

The Enforcement Directorate (ED) registered ECIR/RNZO/09/2022 against Jogendra Tiwari and several associated entities based on four predicate FIRs involving land fraud ("Roy Bangla" land), illegal sand mining, and liquor smuggling.

The ED alleged that Tiwari acted as the beneficial owner of 11 entities, using them to layer and integrate proceeds of crime (POC) totaling ₹13,29,92,620/- earned from these activities into the formal economy, specifically to pay for wholesale liquor licenses.

The petitioners filed discharge applications, arguing that most predicate FIRs were either quashed, culminated in final reports, or resulted in acquittals.

The Special Judge, PML Act, Ranchi, rejected these applications on 21.08.2025.

The petitioners challenged this rejection via criminal revision under Sections 438 & 442 of the BNSS, 2023.

1. Whether the order rejecting the discharge application suffers from legal error given the alleged absence of subsisting scheduled offences.

2. Whether the evidence collected during investigation establishes a prima facie case of money laundering against the petitioners.

The court primarily applied Section 3 of the PMLA, 2002, which defines money laundering as a standalone offence involving the concealment, possession, or use of proceeds of crime.

It relied on *Vijay Madanlal Choudhary v. Union of India*, which established that while PMLA proceedings require a scheduled offence, the process of attachment and prosecution is independent until the final acquittal in the predicate case.

The court also applied Section 24 of the PMLA, which mandates a reverse burden of proof on the accused once foundational facts are established.

Regarding discharge, the court followed *Sajjan Kumar v. CBI* and *M.E. Shivalingamurthy v. CBI*, holding that at the stage of framing charges, the court must only determine if "grave suspicion" exists and cannot conduct a mini-trial or appreciate evidence in detail.

The Court observed that while the petitioners claimed the predicate offences were extinguished, four foundational FIRs (Land, Sand, and Liquor related) remain legally active or pending judicial consideration.

Specifically, in the "Roy Bangla" land cases, although police filed final reports, protest petitions remain pending, which constitutes a continuation of the proceedings.

The Court found that the ED's quantification of POC (₹5.66 Crores) was derived from these active FIRs and was not dependent on the quashed liquor FIRs.

The investigation revealed a synchronized 1145.87% increase in cash deposits in the petitioners' accounts, suggesting a criminal syndicate controlled by Jogendra Tiwari as the beneficial owner.

The Court held that since the jurisdictional fact of a scheduled offence subsists and foundational money trails were documented, the reverse burden under Section 24 was triggered.

The Court affirmed that as long as predicate offences are pending—including cases where protest petitions are under adjudication—a PMLA prosecution cannot be quashed.

The Court concluded that "grave suspicion" and a prima facie case were established by the ED's prosecution complaint, and the petitioners must face trial to rebut the presumptions against them.

All pending interlocutory applications were disposed of.