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by Deepak Kumar
16 March 2026 5:08 AM
“At Discharge Stage Court Cannot Conduct A Mini Trial; Strong Suspicion Is Sufficient To Proceed With Trial”, In a significant ruling concerning the scope of prosecution under the Prevention of Money Laundering Act, 2002 (PMLA), the Jharkhand High Court at Ranchi held that persons who knowingly assist in concealment or use of proceeds of crime can be prosecuted for money laundering even if they are not named in the predicate FIR.
Justice Sujit Narayan Prasad dismissed multiple criminal revision petitions challenging the rejection of discharge applications in a money laundering case.
The Court upheld the order dated 21 August 2025 passed by the Special Judge (PMLA), Ranchi, which had refused to discharge the accused in ECIR Case No. 08 of 2023 involving allegations of land fraud, illegal sand mining and illicit liquor trade resulting in proceeds of crime amounting to ₹13.29 crore.
The High Court emphasised that money laundering is a continuing offence, observing that:
“A person who knowingly assists the concealment or use of proceeds of crime can be held guilty of money laundering even if he is not an accused in the scheduled offence.”
The case arose from an investigation conducted by the Enforcement Directorate (ED) after registration of ECIR/RNZO/09/2022 on 31 March 2022.
The investigation was based on four predicate FIRs registered in Jharkhand relating to:
Fraudulent land grabbing and forged land documents in Deoghar (Roy Bungalow land dispute)
Illegal sand mining and theft of natural resources
Illicit liquor trade and smuggling activities
The investigation revealed that Jogendra Tiwari, alleged to be the beneficial owner of several entities, was running a network of businesses through front companies and associates.
According to the prosecution complaint, the accused allegedly generated illegal proceeds of crime amounting to ₹13,29,92,620 through:
fraudulent land transactions
illegal sand extraction and sale
illicit liquor trade
The ED alleged that the accused layered and integrated these proceeds through bank accounts of various entities and used the funds to obtain wholesale liquor licences.
Search operations conducted in August 2023 resulted in the seizure of incriminating documents and digital records, which allegedly demonstrated a structured financial network designed to conceal the origin of illicit funds.
Based on the investigation, the ED filed a Prosecution Complaint on 16 December 2023, following which the Special Court took cognizance on 22 December 2023.
The accused subsequently filed discharge applications, which were rejected by the Special Judge on 21 August 2025, leading to the present criminal revision petitions before the High Court.
The principal legal questions before the Court were:
Whether PMLA proceedings can continue when some predicate offences have been quashed or closed.
Whether accused persons not named in the scheduled offences can still be prosecuted under Section 3 PMLA.
Whether the Special Court erred in rejecting the discharge applications.
Whether the High Court should interfere in revisional jurisdiction with the order refusing discharge.
The petitioners argued that the entire foundation of the PMLA case had collapsed because the predicate offences were either quashed, closed, or had not resulted in cognizance.
They relied on Vijay Madanlal Choudhary v. Union of India (2023) and other decisions to argue that PMLA proceedings cannot survive without a subsisting scheduled offence.
The Enforcement Directorate, however, contended that four predicate FIRs were still active and pending, and therefore the prosecution under PMLA was legally valid.
“Proceeds of Crime” under PMLA
The Court examined the statutory definition of “proceeds of crime” under Section 2(1)(u) of the PMLA, which includes:
“Any property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence.”
The Court noted that the 2019 amendment expanded the scope of the provision, clarifying that proceeds of crime also include property indirectly derived from criminal activity relatable to a scheduled offence.
After analysing the investigation records, the Court observed that the ED had traced financial transactions demonstrating generation, layering and integration of proceeds of crime through multiple entities controlled by the main accused.
The Bench noted that the prosecution complaint specifically mapped the three stages of money laundering:
Placement – depositing illicit cash into bank accounts
Layering – routing funds through multiple entities and transactions
Integration – using funds to obtain business licences and project them as legitimate income
The Court held that these allegations prima facie satisfied the ingredients of the offence under Section 3 PMLA.
Whether Predicate Offences Were Still Subsisting
The High Court rejected the petitioners’ claim that the predicate offences had ceased to exist.
Upon examining the records, the Court found that four FIRs forming the basis of the ECIR were still legally active.
The Court noted that in two land fraud cases:
Police had filed final reports, but
protest petitions filed by the complainants were pending before the Magistrate
The Court held that pending protest petitions constitute continuing judicial proceedings, meaning the predicate offences remain legally alive.
Similarly, the sand mining case had been remanded by the High Court for fresh consideration, and the liquor smuggling case had already reached the stage of trial.
Therefore, the Court concluded:
“The jurisdictional fact of a scheduled offence subsists and the prosecution under the PMLA cannot be said to be without foundation.”
Accused Need Not Be Named in Predicate FIR
A crucial legal issue addressed by the Court was whether persons not named in the scheduled offence could be prosecuted under PMLA.
Relying on the Supreme Court decision in Pavana Dibbur v. Directorate of Enforcement (2023), the Court clarified that:
“It is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence.”
The Court explained that money laundering is an independent and continuing offence, and anyone who knowingly assists in possession, concealment, acquisition or projection of proceeds of crime as untainted property can be prosecuted.
Scope of Discharge and Revisional Jurisdiction
The High Court reiterated settled principles governing discharge under Section 227 CrPC and Section 250 BNSS.
The Court emphasised that at the stage of discharge:
the court must assume prosecution materials to be prima facie true
the court cannot evaluate the probative value of evidence
the court cannot conduct a mini trial
Quoting Supreme Court precedents such as Amit Kapoor v. Ramesh Chander and Sajjan Kumar v. CBI, the Court observed:
“Strong suspicion founded on material on record is sufficient to proceed with trial.”
The Court further held that revisional jurisdiction is extremely limited and cannot be used to re-appreciate evidence like an appellate court.
Economic Offences Require Full Trial
Justice Prasad emphasised the seriousness of economic crimes, relying on the Supreme Court judgment in Pradeep Nirankarnath Sharma v. Directorate of Enforcement (2025).
The Court observed that money laundering has severe economic consequences and undermines financial systems and public revenue.
It noted that:
“Cases involving serious economic offences necessitate a thorough trial to unearth the complete chain of events, financial transactions and culpability of the accused.”
Accordingly, premature discharge at the threshold stage would defeat the legislative objective of the PMLA.
After examining the prosecution complaint, financial records and legal principles governing discharge, the High Court held that sufficient prima facie material existed against the accused to proceed with trial.
The Court concluded that the Special Judge (PMLA) had passed a detailed and reasoned order, and there was no legal ground for interference in revisional jurisdiction.
Consequently, all the criminal revision petitions were dismissed, and the trial under the Prevention of Money Laundering Act was directed to proceed in accordance with law.
Date of Decision: 27 February 2026
