### PMLA Prosecution Sustains Despite Closure of Some Predicate Offences If Other Scheduled Offences Remain Legally Active

In brief

The question

1. Whether the discharge of the accused is warranted when some predicate offences are subject to final reports or quashing of cognizance orders, while others remain active or subject to protest petitions?

The court held

The High Court dismissed the criminal revision petitions, holding that there is no legal bar to the continuation of the PMLA proceedings as the foundational predicate offences are still active and sub-judice.

It also directed

The Court held that the Special Judge correctly identified a *prima facie* case and that the evaluation of the defense's evidence must be reserved for the trial.

The impugned order dated 21.08.2025 was upheld, and the prayer for discharge was refused.

01Facts

The Enforcement Directorate (ED) registered ECIR No. 08/2023 against Jogendra Tiwari and 11 associated entities (Petitioners) based on four predicate FIRs involving land fraud, illegal sand mining, and liquor smuggling.

pp. 5-8

The investigation revealed that Tiwari was the "Beneficial Owner" of these entities, using them to layer and integrate proceeds of crime (POC) amounting to ₹13,29,92,620.

p. 10, 24

The ED alleged that illicit cash was deposited into these entities' accounts in 2021 to secure wholesale liquor licenses.

p. 20, 25

The Petitioners filed for discharge, arguing that the predicate offences had either been quashed, resulted in final reports (closure), or lacked cognizance.

pp. 11-13

The Special Judge, PMLA, Ranchi, rejected these applications on 21.08.2025.

p. 11

The Petitioners challenged this rejection via criminal revision.

p. 4

02Issues

i.1. Whether the discharge of the accused is warranted when some predicate offences are subject to final reports or quashing of cognizance orders, while others remain active or subject to protest petitions?

p. 29, 71

ii.2. Whether the material on record at the stage of framing charges establishes a *prima facie* case or "grave suspicion" necessitating a trial?

p. 29, 56

03Law Applied

The Court applied the definition of "Proceeds of Crime" under Section 2(1)(u) of the PMLA, including the 2019 Explanation regarding property indirectly derived from criminal activity.

p. 30

It relied on *Vijay Madanlal Choudhary v. Union of India*, which establishes that PMLA proceedings can continue as long as a scheduled offence is pending enquiry or trial and only extinguish upon final acquittal or quashing.

p. 33, 72

The court utilized the "Reverse Burden of Proof" under Section 24 of the PMLA once foundational facts are established.

p. 69

Regarding discharge, it followed *Sajjan Kumar v. CBI* and *M.E. Shivalingamurthy v. CBI*, holding that at the stage of Sections 227/228 CrPC (now Sections 250/251 BNSS), the court must only sift evidence to determine "grave suspicion" and avoid a "mini-trial".

p. 45, 46

It further noted that under *Pavana Dibbur v. ED*, a person not named in the predicate offence can still be prosecuted under PMLA.

p. 68

Provisions in the judgment · 34 · Linked ones open on LawLens

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 438 Section 442 Section 230 Section 232 Section 250 Section 262 Section 268

Prevention of Money-Laundering Act, 2002 Section 2 Section 3 Section 4 Section 24 Section 45 Section 70

Indian Penal Code, 1860 12 provisions

Section 34 Section 166 Section 272 Section 273 Section 379 Section 419 Section 420 Section 427 Section 463 Section 467 Section 468 Section 471

Code of Criminal Procedure, 1973 Section 173 Section 200 Section 202 Section 227 Section 228 Section 239 Section 245 Section 313

Prevention of Corruption Act, 1988 Section 13

04Reasoning

The Court reasoned that for an accused to be discharged under PMLA, the predicate offence must be *finally* extinguished; however, in this case, four FIRs remain legally "active".

p. 71

Specifically, although police filed Final Forms in the land fraud cases, pending "Protest Petitions" constitute valid judicial proceedings.

p. 73

Regarding the sand mining case, the remand by the High Court signifies a pending proceeding.

p. 71

The Court found that the ED had mapped a synchronized 1145.87% increase in cash deposits across the 12 entities, linked to the beneficial ownership of Jogendra Tiwari, which established necessary "foundational facts" of money laundering.

p. 20, 25, 65

The Court rejected the Petitioners' defense regarding the legitimacy of loans and business turnover, classifying them as "triable issues" that cannot be adjudicated during a discharge hearing.

p. 51, 72

The Court emphasized that it cannot act as a "post office" for the prosecution but found the existence of "grave suspicion" based on the quantified money trail.

p. 41, 75

05Holding

p. 72, 82

The Court held that the Special Judge correctly identified a *prima facie* case and that the evaluation of the defense's evidence must be reserved for the trial.

p. 77, 81

The impugned order dated 21.08.2025 was upheld, and the prayer for discharge was refused.

p. 82

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