2026 Supreme(Online)(Jhk) 1072

HIGH COURT OF JHARKHAND
Sujit Narayan Prasad, J
Yash Jalan – Appellant
Versus
Directorate of Enforcement – Respondent
Cr.M.P. No.2686 of 2025

The offence of money laundering is independent of predicate offences. An accused need not be named in the scheduled offence to be liable under anti-money laundering laws, provided they knowingly assist in activities connected with proceeds of crime, and procedural changes in law do not retrospectively invalidate validly taken cognizance.

Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 2(1)(u), 2(1)(v), 3, 4, 17(1-A), 44(1)(ii), 50 and 70 - Bharatiya Nagarik Suraksha Sanhita, 2023 - Section 528 (corresponding to Section 482 Cr.P.C.) - Code of Criminal Procedure, 1973 - Sections 190, 200, 202, 204 - Quashing of criminal proceedings - Requirement of pre-cognizance hearing - Applicability of procedural safeguards under new legal regime - Offence of money laundering is independent of predicate offence - Liability of persons not named in predicate FIR - Role of controlling mind in vicarious liability under Section 70 PMLA. (Paras 19-23, 30-31, 37-38, 44-46, 57-59, 80-82, 112)

(B) Criminal Procedure - Quashing of proceedings - Inherent powers of High Court - To be exercised sparingly and in cases where material establishes that the defence is based on sound, reasonable, and indubitable facts that displace the prosecution's assertions - Not to be used to conduct a mini-trial or weigh evidence in detail - Power to quash is not unlimited and must secure the ends of justice while preventing abuse of process. (Paras 16-18, 20-22, 112-114)

(C) Prevention of Money Laundering Act - Offence of money laundering - Nature of - Independent offence - Accused need not be named in the scheduled offence - Sufficient if there exists a scheduled offence and proceeds of crime, and accused is involved in any process or activity connected with such proceeds - Definition of proceeds of crime is broad and includes property derived or obtained directly or indirectly from criminal activity relatable to scheduled offence - Continuing nature of activity until enjoyment or concealment. (Paras 56-59, 73-82)

Facts of the case:
The petitioner sought to quash criminal proceedings initiated for money laundering, alleging that the Magistrate failed to provide a pre-cognizance opportunity of hearing as mandated by the new code, and that the petitioner was neither named in the predicate offences nor directly involved. The prosecution contended that cognizance was validly taken under the former code, the petitioner provided essential logistical support via corporate infrastructure for illegal activities, and that proceeds of crime were traced directly to entities under his control.

Findings of Court:
The court held that the mandate for a pre-cognizance hearing does not retrospectively invalidate cognizance taken under the former code for ongoing investigations. Furthermore, the petitioner’s involvement as a controlling mind of a corporate entity, facilitating the movement of illicit goods and receiving payments derived from criminal activity, constitutes sufficient material to proceed under the anti-money laundering legislation, rendering the claim of innocence untenable at the quashing stage.

Issues: (I) Whether a pre-cognizance hearing is mandatory for a supplemental complaint in an investigation where cognizance was initially taken under the former code; (II) Whether non-inclusion in a predicate offence bars prosecution under anti-money laundering laws; (III) Whether sufficient material exists to establish a prima facie case against the petitioner.

Ratio Decidendi: The court concluded that procedural safeguards under the new code do not apply to validly initiated proceedings under the former code, and that supplementary complaints filed during ongoing investigations are continuations of the original complaint. It reaffirmed that money laundering is a standalone offence; liability attaches to any person knowingly assisting in the concealment or use of proceeds of crime, regardless of being named in the predicate offence, provided there is a nexus to criminal property.

Result: Petition dismissed.