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2022 (9) TMI 1286 - HC - Money LaunderingMoney Laundering - Validity of look out circular - proceeds of crime - Constitutional Validity of Section 2(1)(u), Section 50 and Explanation to Section 44 of the Prevention of Money Laundering Act, 2002 - scheduled/predicate offences or not - HELD THAT:- The Hon’ble Supreme Court in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT] has been clear and categorical in its reasoning. The undeniable sequitur of the reasoning is that firstly, authorities under the PMLA cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed; secondly, the scheduled offence must be registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum; thirdly, in the event there is already a registered scheduled offence but the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or quashing of the criminal case of the scheduled offence, there can be no action for money laundering against not only such a person but also any person claiming through him in relation to the property linked to the stated scheduled offence. No action under PMLA can be resorted to unless there is a substratum of a scheduled offence for the same, which substratum should legally exist in the form of a subsisting (not quashed) criminal complaint/inquiry or if it did exist the accused has since been discharged or acquitted by a Court of competent jurisdiction. The relief sought regarding constitutionality or vires of various provisions of the Prevention of Money Laundering Act, 2002 is infructuous having been decided by the Hon’ble Supreme Court in Vijay Madanlal Choudhary & Ors. Vs. Union of India & Ors. - All proceedings set aside - application disposed off.
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