The existence of a scheduled offence is essential for sustaining PMLA proceedings; quashing of such offences leads to dismissal of related money laundering charges, but a firm may be prosecuted independently if evidence supports its complicity.

JUDGMENT :

S.S. Mishra, J.

The present petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 ( BNSS ) has been filed seeking quashing of the order of cognizance dated 03.12.2020 passed by the learned CBI-I cum-Special Judge (PMLA), Bhubaneswar, now in the Court of the learned Sessions Judge, Khurda at Bhubaneswar, as well as the consequential proceedings pending in Criminal Misc. Case (PMLA) No.16 of 2020.

2. The case arises out of allegations of illegal mining operations by M/s. Serajuddin & Co. (Petitioner No.2), a partnership firm comprising seven partners, including Md. Mofazzalur Rehman (since deceased) and Md. Intekhab Alam (Petitioner No.1). The Vigilance Department had registered FIR Nos.54 and 55 of 2009 at Vigilance P.S., Balasore, Odisha, leading to Charge Sheet Nos.3 and 4 dated 30.03.2012 against the petitioners under the following provisions:

 Sections 201, 379, 420, 120-B of the INDIAN PENAL CODE , 1860 (IPC)

 Section 2 1(1) of the Mines and Minerals (Development and Regulation) Act, 1957  Section 2 of the Indian Forest Conservation Act, 1980  Section 13 (2) read with 13(1)(d) of the Prevention of Corruption Act, 1988

3. Based on the said Charge Sheets being the predicating/ scheduled offence, a complaint under Sections 3 and 45 of the PMLA, 2002 was filed before the learned Special Judge (PMLA), Bhubaneswar in Crl. Misc. (PMLA) Case No.16 of 2020, inter alia, on the allegation that the petitioners had received proceeds of crime to the tune of ₹625,13,87,640.00/- (Six Hundred Twenty- Five Crores Thirteen Lakh Eighty-Seven Thousand Six Forty only) and the same is still retained by the Petitioner No.2 and, has been laundered by the Petitioner firm, which is an offence under Section 3 and punishable under Section 4 of the PMLA.

4. That it is also a matter of record that this Court vide order dated 23.09.2022 passed in CRLMC No.2845 of 2021 and CRLMC No.2272 of 2024, quashed the order of taking cognizance passed by the trial court and the entire proceedings emanating thereof against Md. Mofazzalur Rahman (deceased) and Md. Intekhab Alam (Petitioner No.1). Pursuant to the order dated 23.09.2022 passed by this Court, the learned Special Judge (Vigilance) Keonjhar vide order dated 01.11.2022 closed the case against the aforesaid accused in so far as the scheduled offence is concerned.

5. The petitioners, relying upon the order dated 23.09.2022 passed by this Court in CRLMC No.2845 of 2021 and CRLMC No.2272 of 2024 and subsequent orders closing the case against the petitioners by the court below, are now seeking quashing of the proceedings under the PMLA, 2002, pending before the learned Special Judge, PMLA.

6. The primary grounds taken by the petitioners in support of their prayer for quashing is that with the scheduled offences having been quashed, there remains no basis for treating the alleged amount as 'proceeds of crime' under Section 2 (1)(u) of the PMLA, 2002 and once there is no ‘proceeds of crime’, the proceeding under PMLA does not survive.

7. Mr. Mishra, the learned Senior Counsel for the petitioners, has strongly contended that the foundation of an offence under Section 3 of PMLA, 2002, is the existence of ‘proceeds of crime’, which must originate from a scheduled offence. Since the scheduled offences have been quashed by this Court, there exists no legal basis to treat any amount in the hands of the Petitioners as pr