The Supreme Court has reaffirmed that money laundering is a continuing offence, holding that the act does not conclude with a single instance but persists as long as the proceeds of crime are concealed, utilized, or projected as legitimate property. Emphasizing the legislative intent behind the Prevention of Money Laundering Act (PMLA), 2002, the Court stated that the law aims to combat financial crimes that inherently involve transactions spanning over time.

The Bench of Justice Vikram Nath and Justice Prasanna B. Varale observed, "It is well established that offences under the PMLA are of a continuing nature, and the act of money laundering does not conclude with a single instance but extends so long as the proceeds of crime are concealed, used, or projected as untainted property. The legislative intent behind the PMLA is to combat the menace of money laundering, which by its very nature involves transactions spanning over time."

The Court made the observations in an appeal challenging the Gujarat High Court’s refusal to discharge a former government official from prosecution under PMLA. The Enforcement Directorate (ED) initiated action against him under the Prevention of Money Laundering Act (PMLA) following allegations that he played a pivotal role in a money laundering scheme.

The prosecution argued that Sharma had facilitated the layering and placement of illicit funds through multiple transactions designed to disguise their unlawful origin. They contended that substantial evidence indicated his involvement in the money laundering activities while deriving financial benefits from the proceeds of crime.

The Court, dismissing the appeal, held that as long as proceeds of crime remain concealed, transferred, or in circulation, the offence of money laundering continues and remains prosecutable under PMLA.

It also observed, "It is settled law that the determination of the threshold value must be based on the entirety of the transaction and not an isolated instance or a narrow interpretation of specific amounts at any given time."

Precedents Cited and Legal Reasoning

The Court relied on its landmark ruling in Vijay Madanlal Chaudhary & Ors. v. Union of India & Ors. (2023), which established that PMLA applies even when the predicate offence predates its inclusion as a scheduled offence, provided that laundering activities continued thereafter.

The Court reiterated that money laundering is distinct from the commission of the underlying crime, as it involves a series of transactions aimed at legitimizing illicit wealth. The Court underscored that technical objections regarding the timing of predicate offences will not shield offenders from PMLA scrutiny.

Conclusively, the Court ordered, "The offence alleged against the appellant is clearly a continuing offence under the PMLA, and the quantum of proceeds of crime involved far exceeds the statutory threshold and requires proper investigation and judicial scrutiny. The findings of the Courts below are wellreasoned and do not call for interference. Consequently, the appeal is dismissed."

Cause Title: Pradeep Nirankarnath Sharma v. Directorate of Enforcement & Anr. [Neutral Citation No. 2025 INSC 349]

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Justice Vikram NathJustice Prasanna B. VaralePrevention of Money Laundering Act (PMLA)

Sukriti Mishra

    Sukriti Mishra was a Legal Correspondent at Verdictum. She covered the Supreme Court. She completed her graduation with BA. LL.B (Hons.) from The ICFAI University, Dehradun. Sukriti started covering courts in March 2022. She had previously worked with another legal news portal, where she covered the Delhi High Court and Trial Courts.