PMLA Investigation Cannot Survive Final Closure of Predicate Case: Karnataka HC

Karnataka HC Quashes PMLA Probe Post Closure of Predicate Offence

The Karnataka High Court has held that a money laundering investigation under the Prevention of Money Laundering Act (PMLA), 2002, cannot persist if the underlying predicate offence has been finally closed by the investigating agency without prosecution.

The Court ruled that PMLA proceedings are adjunct to the scheduled offence. Without a live criminal proceeding, the ED lacks a basis to proceed. A final closure report (under Section 173 CrPC) accepted by the court extinguishes the foundation for PMLA action.

A PMLA investigation is not an independent criminal inquiry; it is tethered to the existence of a prosecutable scheduled offence.

This decision may prompt challenges to ED investigations where FIRs are closed. Practitioners should monitor predicate case status and seek early quashing of PMLA proceedings where the root offence is abated.