### Subsistence of Any Scheduled Offence Negates Discharge Under PMLA Irrespective of Quashing of Other Predicate FIRs

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

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

The ED alleged a synchronized infusion of cash into these entities' accounts in 2021 to settle liquor license fees

The petitioners filed for discharge, arguing that several predicate FIRs had been quashed or resulted in Final Reports (closure), meaning no "proceeds of crime" could legally exist

The Special Judge, PMLA, rejected these applications on 21.08.2025

The petitioners moved the High Court in revision.

1. Whether the discharge of the accused is warranted when some predicate offences have been closed or quashed, while others remain active or under protest

2. Whether the materials collected during investigation establish a *prima facie* case of money laundering sufficient to proceed to trial

The Court applied Section 3 of the PMLA, 2002, which defines money laundering as a standalone offence involving any process connected with the "proceeds of crime"

It relied on *Vijay Madanlal Choudhary v. Union of India*, which establishes that PMLA proceedings can only continue if a scheduled offence exists, but clarified that "proceeds of crime" includes properties derived indirectly from criminal activity

The Court further applied the "reverse burden of proof" under Section 24 of the PMLA

and the standard for discharge under Section 250 of the BNSS (corresponding to Section 227 CrPC), noting that at the discharge stage, the court must only look for "grave suspicion" rather than proof beyond reasonable doubt

Precedents like *Pavana Dibbur v. ED* were used to affirm that a person not named in a predicate offence can still be prosecuted under PMLA

The Court reasoned that while nine liquor-related FIRs were quashed, the ED’s quantification of POC (₹5,66,34,500) was derived exclusively from four active and pending predicate FIRs

Specifically, although police filed Final Reports in the land fraud cases, the filing of "Protest Petitions" by complainants kept these scheduled offences legally active

The Court observed that the remand of the sand mining case by the High Court rendered it a pending proceeding

Applying the principle that a "mini-trial" is impermissible at the discharge stage, the Court found that the synchronized cash deposits and layering through shell companies created a "grave suspicion" of money laundering

The Court rejected the petitioners' defense regarding legitimate loans, holding that the truthfulness of financial entries is a triable issue to be determined during evidence, not at the stage of framing charges

The Court answered both issues in the negative, finding sufficient *prima facie* material to proceed with the trial

Consequently, the High Court dismissed the criminal revision petitions and upheld the Special Judge’s order dated 21.08.2025, refusing to interfere with the rejection of the discharge applications