PMLA | Money Laundering Offence Continues So Long As Proceeds Of Crime Are Concealed, Used Or Projected As Untainted : Supreme Court

Observing that the offence of money laundering is a continuing offence and not a one-time occurrence, the Supreme Court today refused to discharge Pradeep Sharma, a former Gujarat IAS officer in a case under the Prevention of Money Laundering Act. The argument that no offence of money laundering could be made out because the alleged predicate offence occurred before the enactment of the PMLA was rejected by the Supreme Court. Instead, relying on the judgment in Vijay Madanlal Chaudhary vs. Union of India 12 SCC 1, the Court stated that the offence of money laundering is independent of the predicate offence and continues as long as the proceeds of crime are concealed, used, or presented as untainted property. " In Vijay Madanlal Chaudhary's case, the Court made the following observations regarding the offence of money laundering and its nature as a continuing offence: “the criminal activity may have been committed before the same had been notified as scheduled offence for the purpose of the 2002 Act, but if a person has indulged in or continues to indulge directly or indirectly in dealing with proceeds of crime, derived or obtained from such criminal activity even after it has been notified as scheduled offence, may be liable to be prosecuted for offence of money laundering under the 2002 Act — for continuing to possess or conceal the proceeds of crime or retaining possession thereof or uses it in trenches until fully exhausted. The relevant date is the date on which the person indulges in the process or activity connected with such proceeds of crime.” The Court noted that because the offence alleged against the appellant was “a continuing offence under the PMLA, and the quantum of proceeds of crime involved far exceeds the statutory threshold and requires proper investigation and judicial scrutiny.” Money laundering has cascading effect; Courts must adopt a strict approach In the judgment, the Court also made observations regarding the grave ramifications of the offence of money laundering.