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2023 (1) TMI 809 - HC - Money LaunderingMoney Laundering - schedule offence - proceeds of crime - non-existent or non-functional or fake functional MSMEs - offences under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 besides Sections 420, 468, 471 and 120-B IPC - HELD THAT:- The PMLA is a law linked with the scheduled offence. The same is evident from a sincere reading of Sections 5 and 8 of PMLA as it stood prior to 2009 and 2013 Amendments. In Section 5 of the PMLA (as it was originally enacted), a condition prerequisite for an order of provisional attachment of property was that the accused has been charged of having committed a scheduled offence. The said requirement was diluted to the effect that notwithstanding the above, provisional attachment could be ensured under Section 5 of PMLA when the concerned officer expressed his view in writing that the failure to immediately attach property would likely frustrate or defeat the action against money laundering. Section 8 of the PMLA prior to its 2013 Amendment), any attachment or retention of property under the PMLA would cease to exist once the person charged with a scheduled offence stood acquitted for the said offence. However, the amendment of 2013 was done away with the unamended Section 8 of PMLA. Having discussed so far, it is clear and apparent that while the continuance of the proceeding under the PMLA was intricately linked to the scheduled offence proceeding, the Legislature attempted to erase the said distinction by introducing amendments which led to incongruent interpretations resorted to by the various High Courts. With the above ratio laid down by the Supreme Court [2022 (7) TMI 1316 - SUPREME COURT], it has to be held that proceedings of money laundering are liable to be terminated with the underlined scheduled offences ending in acquittal, dismissal or being quashed. All the aforesaid decisions relief upon by the ED have been neutralized by the decision of the Apex Court in Vijay Madanlal Choudhury [2022 (7) TMI 1316 - SUPREME COURT]. In the plain language, if the foundation does not exist, how the edifice can survive. In other words, when the predicate offence fails, the foundation having been demolished, the superstructure is to fall and crumbl Application allowed.
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