In a recent ruling, the Delhi High Court declared that assets seized under the Prevention of Money Laundering Act of 2002 (PMLA) should not be considered as proceeds of crime or linked to criminal activities if the original offense is nullified by a competent court.

A scheduled or predicate offence refers to a crime that forms part of a broader criminal activity. For instance, in the context of money laundering, the process typically initiates with an offence under the Indian Penal Code, which serves as the predicate offence.

Justice Vikas Mahajan emphasized that a scheduled offence and the proceeds of crime arising from it constitute the fundamental basis of the offense of money laundering. Therefore, if an individual is discharged or acquitted concerning the scheduled offence, the very basis of the money laundering charge collapses.

The court clarified that simply lodging an appeal against an acquittal in a previous offense does not automatically subject the accused to ongoing criminal proceedings or asset seizure under the PMLA.

The court's remarks came in the context of affirming a trial court's decision to dismiss charges against certain individuals in a case initiated by the Enforcement Directorate (ED). Subsequently, the ED contested this decision in the High Court.

After reviewing the case, the Court upheld both the trial court's decision to dismiss the charges against the accused and the directive to release the attached movable and immovable properties of the accused.

Special Counsel Anurag Jain appeared for the ED.

Advocates MA Niyazi, Anamika Ghai Niyazi, Kirti Bhardwaj, Nehmat Sethi and Arquam Ali appeared for the accused.