Money Laundering Is A Continuing Offence; Prosecution Under PMLA Can Survive Even If One Scheduled Offence Is Quashed: Orissa High Court

“The process or activity connected with proceeds of crime is a continuing activity... and continues so long as a person is directly or indirectly enjoying the proceeds of crime” — In a significant pronouncement reaffirming the autonomous and enduring character of money laundering as an offence, the Orissa High Court on 21st November 2025 dismissed a set of criminal revision petitions filed by Trilochan Mishra and others, challenging the rejection of their discharge applications under Section 227 of the Code of Criminal Procedure in a prosecution under the Prevention of Money Laundering Act, 2002 (PMLA).

The case, Trilochan Mishra & Others v. Union of India & Another, was heard in the criminal revisional jurisdiction of the High Court by Justice Chittaranjan Dash, who upheld the Special Court's decision to proceed with trial under the PMLA notwithstanding the quashing of cognizance in one of the scheduled offences that originally triggered the investigation.

“PMLA Is A Standalone Code; Proceedings Under It Are Not Extinguished Merely Because One Predicate Offence Is Quashed”

The Court squarely addressed the central legal issue: whether proceedings under the PMLA can survive once cognizance in a scheduled offence has been quashed. The answer was unequivocal.

“The offence of money laundering is a standalone, substantive, and continuing offence,” observed the Court, stressing that even where one predicate case collapses, other pending FIRs can independently sustain proceedings under the PMLA. The judgment clarified that the statutory scheme does not envisage an automatic termination of money laundering prosecution upon quashing of a single scheduled offence.

Referring to the judgment of the Supreme Court in Pradeep Nirankarnath Sharma v. Directorate of Enforcement (2025 SCC OnLine SC 560), the Court noted that the laundering of criminal proceeds constitutes “an ongoing activity,” and persists as long as the accused continues to possess or project illicit property as legitimate.

No Need for Cash Involvement: “Proceeds of Crime” Can Include Non-Monetary Property

Another key legal contention rejected by the Court was the petitioners’ argument that in absence of a monetary transaction in the scheduled offence, the invocation of PMLA was unjustified.

Justice Dash clarified, “The definition of proceeds of crime under Section 2(1)(u) PMLA is not confined to monetary gains. Even a non-monetary transfer of property obtained as a result of criminal activity may fall within the statutory sweep.”

In the present case, the allegations revolved around the execution of a sale deed in lieu of a gift deed — a transaction with no direct cash component. However, the Court found that “even a property transaction that appears civil in nature may qualify as proceeds of crime if it represents an advantage obtained through criminal means.”

This observation is crucial, as it broadens the ambit of “proceeds of crime” to include non-cash benefits arising from scheduled offences, placing an emphasis on the nature and origin of the property rather than its form.

Reverse Burden Under Section 24 PMLA Applies Even At Discharge Stage

Perhaps most significantly from a procedural standpoint, the Court addressed the role of the statutory presumption under Section 24 of the PMLA in discharge proceedings. According to the petitioners, the ED failed to show any prima facie connection between their property and the alleged predicate offence.

Rejecting this, the Court held: “Once there exists prima facie material linking the property to a scheduled offence, the presumption under Section 24 arises. The burden then shifts to the accused to demonstrate lawful origin.”

The Court emphasized that at the Section 227 CrPC stage, it is not necessary to conclusively prove guilt; rather, it is sufficient if the materials raise a strong suspicion of the offence. “Discharge cannot be granted unless the accused is able to show that no ground exists to presume commission of an offence,” Justice Dash noted, relying on a consistent line of precedents including Onkar Nath Mishra v. State (NCT of Delhi) and Som Nath Thapa v. State of Maharashtra.

Supplementary Complaints Are Valid And Reflect The Continuing Nature Of Money Laundering

The Court further dealt with the validity of the supplementary complaint filed by the Enforcement Directorate under Section 45 of the PMLA. Drawing an analogy to supplementary charge sheets under the CrPC, the Court held that such a filing “reflects the ongoing character of money laundering” and is “neither illegal nor procedurally infirm,” provided it is based on fresh material.

“Supplementary complaints serve to bolster the foundational basis for cognizance by bringing in new facts or links in the laundering chain,” the judgment declared, underlining that the ED’s case is not frozen in time but evolves with ongoing investigation.

PMLA Investigation Can Survive Even If The Accused Is Not Arraigned In The Predicate Offence

The Court also underscored that the accused in a money laundering case need not be an accused in the scheduled offence itself. Citing the decision in Pavana Dibbur v. Directorate of Enforcement (2023 SCC OnLine SC 158), Justice Dash reiterated:

“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.”

What matters, the Court said, is the subsistence of a scheduled offence and a demonstrable link between the alleged proceeds and that offence. So long as these two foundational requirements are met, prosecution under PMLA can validly proceed.

No Interference Warranted In Revisional Jurisdiction

Dismissing the revision petition, the Court made it clear that a revisional court is not to reappreciate evidence or examine factual disputes at the pre-trial stage. “The revisional jurisdiction is limited to correcting errors of law or procedural illegality. It does not extend to entering into disputed questions of fact,” observed the Court, relying on the Supreme Court’s decision in Munna Devi v. State of Rajasthan.

Accordingly, Justice Dash held that no legal bar or procedural irregularity was found in the Special Court’s refusal to discharge the petitioners, and the case must proceed to trial.

The decision of the Orissa High Court sets down an authoritative and nuanced exposition of PMLA jurisprudence. By clarifying the independent, standalone, and continuing nature of money laundering offences, it fortifies the enforcement framework of the Act and resists technical challenges premised on the fate of predicate offences.

The judgment is a reminder that the real inquiry under the PMLA is not whether the scheduled offence survives in one case or another, but whether the property in question represents a criminal benefit — regardless of whether it was derived in cash, in kind, or even through illicit legal documentation.

Ultimately, the petitioners — despite quashing of cognizance in one of the FIRs — must now stand trial for the alleged laundering of criminal property over an extended period and across multiple transactions.

Date of Decision: 21st November 2025