One Surviving Predicate Accused Keeps PMLA Action Alive

C. Subramannapa Vs Deputy Director (Appellate Tribunal Under SAFEMA Delhi)

Katta Subramanya Naidu Land Scam Case: PMLA Attachments Survive If Even One Key Accused Faces Predicate Case :

Katta Subramanya Naidu Land Scam Case: PMLA Attachments Survive as Proceedings Continue Against Key Accused;

PMLA Attachments Survive If Even One Key Accused Faces Predicate Case: SAFEMA Appellate Tribunal Refuses to Lift PAO Despite Discharges

The Appellate Tribunal under SAFEMA at New Delhi, by common order dt. 26-12-2025, dismissed multiple appeals challenging confirmation of Provisional Attachment Order (PAO) No.07/2012 arising out of the Katta Subramanya Naidu land acquisition scam involving M/s ITASCA Software Development Pvt. Ltd.

The appellants, including family members and associates of Shri Katta Subramanya Naidu (former Karnataka Minister), argued that since FIRs/charge-sheets in the scheduled offences were quashed or they were discharged/acquitted by the Special PMLA Court, proceedings under the PMLA and the attached properties could not survive. Reliance was placed on Vijay Madanlal Choudhary vs. Union of India (SC).

The Tribunal examined the factual matrix in detail, including the status of each appellant, and noted that although Shri Katta Subramanya Naidu himself stood discharged, one of the principal accused, Shri K.S. Jagadish (son of Katta Subramanya Naidu), continued to face proceedings in the scheduled offence and had neither been discharged nor acquitted.

Applying the ratio of Vijay Madanlal Choudhary and subsequent High Court decisions, the Tribunal held that PMLA proceedings and attachments do not automatically lapse unless the scheduled offence is wiped out in its entirety qua all accused. Since the predicate offence against a key accused connected with Katta Subramanya Naidu was still pending, the issue of “proceeds of crime” remained alive. The Tribunal further clarified that attachment under PMLA can extend even to persons who are discharged or not arrayed as accused, so long as the scheduled offence subsists.

Accordingly, the Tribunal upheld the confirmation of the provisional attachment and dismissed all appeals.

FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

These appeals have been preferred against the order passed in Original Complaint (OC) No. 158/2012, by the Ld. Adjudicating Authority (AA), whereby Provisional Attachment Order (“PAO”) No. 07/2012, was confirmed.

Facts in brief

2. The brief facts of the case are that based on a complaint received by them, the Lokayukta Police, Bangalore registered an FIR and an investigation was carried out. Based on the findings from the investigations conducted, the Karnataka Lokayukta Police filed a charge-sheet bearing No. 04/2011, dt. 07-07-2011 u/s 173 of the Cr. PC before the Court of the XXIII Additional City Civil & Sessions Judge & Special Judge for Lokayukta Cases, Bangalore.

3. A perusal of the Charge Sheet revealed that during November, 2004, Sh. Katta Subramanya Naidu, his son Sh. K.S. Jagadish @ Jagadish Naidu, and Sh. S.V. Srinivas hatched a criminal conspiracy and floated a company by name M/s ITASCA Software Development Pvt Ltd. with Sh. S.V Srinivas, as the Managing Director. Even though Sh. Katta Jagadish was not a Director of M/s ITASCA, he purchased two Demand Drafts, i.e., a DD bearing No. 333163 dt. 02/12/2006 from the Karnataka Bank Ltd., Indira Nagar Branch, Bangalore for Rs. 3,00,000/- in favour of the Karnataka Industrial Area Development Board (KIADB), and another DD bearing No: 737185 dt. 23.08.2006 for Rs.3,00,000/- in favour of Karnataka Udyog Mitra (KUM) and submitted the same along with a sketchy proposal to the KIADB for approval and, thereby, proceeded further in a criminal conspiracy. They sought acquisition of 325 acres of land in Bandikodigenahalli, a village bordering Bangalore and adjacent to the international airport for setting up a Software Park with the intention to secure wrongful gain.

4. It is alleged that Sh. Katta Subramanya Naidu, who was then the Minister of Medium & Large scale Industries, Govt. of Karnataka, misused his official position to commit irregularities in the process of land acquisition by his son, Sh. K.S. Jagadish, and in furtherance of the said conspiracy, joined hands with S/Sh. Jagaiah and Venkaiah and floated a partnership firm by name M/s INDU Builders & Developers to obtain ‘Consent Letters’ from the land owners as per procedure.

5. One Sh. Basavapurnaiah, Chairman UTL, with an intention to make illegal gain, joined hands with S/Sh. Katta Subramanya Naidu, K.S. Jagadish, S.V. Srinivas, Jagaiah and Venkaiah in the land acquisition process for M/s ITASCA. Sh. Basavapurnaiah also joined M/s ITASCA Software Park Pvt. Ltd as one of the Directors by pumping in an amount of Rs 280,19,66,525/- into its bank accounts with Axis Bank, Malleshwaram & Axis Bank, Basaveshwarnagar. He also transferred Rs. 37 cr. into the Karnataka Bank a/c of M/s INDU Builders & Developers from their account. Further, from M/s ITASCA company, an amount of Rs. 50 cr. was transferred to M/s INDU Builders & Developers’ bank account. Thus, Rs. 87 cr. came into the bank account of M/s INDU Builders & Developers. The alleged beneficiaries of this amount were the Minister, Sh. Katta Subramanya Naidu, and his son Sh. Katta Jagadish @ K. S. Jagadish. In addition, Sh. S.V. Srinivas directly issued cheques of M/s ITASCA to K.S. Jagadish as illegal gratification.

6. In view of the above findings, the Karnataka Lokayukta filed a charge-sheet alleging that the accused had committed offences under various sections of the Indian Penal Code, including Sections 120B, 420, and 471 of the IPC as well as provisions of the Prevention of Corruption Act, 1988, namely, Sections 7, 8, and 13(2) read with 13(1)(d). As these were scheduled offences under the Prevention of Money Laundering Act (PMLA), an ECIR/07/BZO/2011-AD-MNT dated 11.08.2011 was registered by the Directorate.

7. As part of the ED’s investigation, the statements of bank accounts of the companies and the individuals involved in this case were scrutinized and statements were recorded.

8. A Provisional Attachment Order (PAO) dt. 25.09.2012 was passed by the Ld. Joint Director attaching various properties mentioned therein. Details of the properties are not being reproduced in this order for the sake of brevity and also because the same are not pertinent to the issues on which the case has been argued from either side.

9. The said PAO was confirmed by the Ld. AA vide its order dt. 21.02.2013.

10. Aggrieved by the said order of the Ld. AA, the appellant have filed the appeal before this tribunal.

Arguments on behalf of the appellant

11. The appeal was argued from the appellant’s side on only one ground. It was submitted that in the present set of cases, the FIR and the charge-sheet filed in the scheduled offence were quashed by the Hon’ble High Court of Karnataka in Crl. Petition No. 5102/2015, and the appellants have since been discharged in PMLA cases by the jurisdictional Special Court under the PMLA. Consequently, it is submitted that the provisional attachment order and the impugned order of the Ld. AA confirming the said attachment cannot survive.

12. It is further submitted that the proceedings have attained finality as the main accused, Sh. Katta Subramanaya Naidu, has been discharged by the Hon’ble Karnataka High Court vide its order dated 03.11.2016. Hence, there is no statutory remedy left. Responding to the submission from the side of the respondent directorate that an SLP stands filed against the order of the Hon’ble High Court quashing the scheduled offence cases, it is submitted by the ld. counsel for the appellant that SLP is a discretionary remedy. The judgement of the Hon’ble Delhi High Court in the case of Harish Fabiani Vs. Enforcement Directorate W.P.(Crl.) 408/2022 is cited wherein a similar issue was raised by ED. Reliance is also placed on the following other judgments:

i. Directorate of Enforcement v Akhilesh Singh & Ors. (Crl.R.P.1199/2023)

ii. Chetan Gupta v Directorate of Enforcement

iii. Naresh Goel v Enforcement Directorate

iv. Amanpreet Singh Gandhi @jaggu v Deputy Director, ED (FPA-PMLA-1766/JL/2017)

v. Vijay Madanlal Choudhary v Union of India

vi. Avinash Aradhya v Directorate of Enforcement (W.P. C. No 21187/2023).

vii. B Lakshman Rao Peshve v Directorate of Enforcement (W.P No. 8926 of 2024)

viii. Saraswathi v Deputy Director, ED (FPA-PMLA-694/BNG/2014)

13. Further, it is submitted that the limitation for filing revision against the said order of discharge has already expired. Hence the orders have attained finality.

14. No other issues were raised by the ld. counsel for the appellant except that the proceedings in the scheduled offence cases stand quashed and the appellant stand discharged in the Prosecution Complaints filed under the PMLA.

Arguments on behalf of the respondent

15. From the respondent directorate’s side, it is submitted that the discharge of several of the accused persons in the scheduled offence case was based on technical grounds such as multiplicity of FIRs and procedural issues, and the same does not warrant setting aside the attachment order confirmed by the Adjudicating Authority. The predicate offences related to the land acquisition scam involving the appellant and others, have not been finally decided and remain under challenge before the Supreme Court. The money laundering offence under the PMLA is an independent offence that can continue irrespective of the status of the predicate offence case. The discharge orders, therefore, overlook the substantial evidence of money laundering unearthed during the investigation, including bank transaction trails and improper possession and use of proceeds of crime.

16. It was further argued that the quashing of proceedings in the scheduled offence case is not “final” as the agency investigating the said scheduled offence case has filed a Special Leave Petition and ED has filed an application for impleadment in the said case. The relevant SLP is still pending.

17. On facts, it is submitted that the appellants received significant illicit payments, which were layered through various entities to conceal their criminal origin. Sh. Katta Subramanya Naidu abused his ministerial position to facilitate the scam and misuse official processes for wrongful financial gain. The Respondent also highlighted the involvement of multiple family members and associates in these transactions. It is argued that the Special Court’s discharge of the accused based solely on procedural grounds is premature and contrary to the interests of justice, particularly since the substantive allegations and evidence against the accused remain untested in trial.

Analysis & Findings

18. The rival contentions of the parties have been considered and the pleadings and supporting material placed on record have been perused. The sole contention put forward on behalf of the appellants is that the persons from among the appellants who were accused in the prosecution complaints filed by the respondent Directorate under the PMLA now stand discharged in the said cases by an order of the jurisdictional Special Court set up under the said PMLA and the proceedings in the scheduled offence case had been quashed by the Hon’ble High Court prior to that. Hence, neither the scheduled offence case nor the PMLA offence case survives. This being the only contention, in order to ascertain the exact factual position, the respondent directorate was directed to furnish in tabular form, the requisite information regarding the present status of each appellant, namely, whether the appellant concerned stands discharged/ acquitted in the PMLA case, if so, whether the order of discharge/ acquittal has been challenged by the Respondent, and, if so, details thereof and the current status of the said proceedings. A tabular format was also provided by the Bench in which the information was to be submitted for ease of reference. The tabular summary submitted by the Respondent Directorate in response to the above direction is as follows:

19. Separately, the ld. counsel for the appellant also has submitted a tabular summary of the above details which was placed before the bench during the hearing held on 18.11.2025.

20. Upon perusal of the orders of acquittal by the Special Court under the PMLA, it is seen that the same was based on the finding that the appellants stood absolved of charges in the scheduled offence case on the basis of which proceedings under the PMLA were initiated against them. The following identical conclusions have been recorded by the Ld. Special Court in the discharge orders:

“25…Accordingly, by looking in to the facts and circumstances of the case, it could be summed at this juncture, that the proceedings under PMLA is not squarely independent, but it is dependent on the predicate offence wherein the proceeds of crime is required to be established by the prosecution. In the absence of pendency of predicate offence or the discharge of the accused or quashment or otherwise, acquittal of the accused in the predicate offence, the proceedings under PMLA cannot be continued.”

21. Accordingly, based on the above conclusion, the Special Court has discharged all the appellants herein except K. Vanaja, K. Krishna Kishore, K.S. Jagadish and M. Soumya (the appellants in FPA-PMLA-475, 479, 451 & 453/BNG/2013 respectively). The Ld. Special Court while passing its order, also noted that an SLP had been filed before the Apex Court against the order of the Hon’ble Karnataka High Court quashing the scheduled offence cases against the appellants. He, therefore, gave liberty to ED to revive their case if there are any “legitimate grounds to proceed under PMLA Act, 2002 in accordance with law or on the basis of any impugned orders being passed by the Hon’ble Apex Court”.

22. The contention on behalf of the appellants is that the orders of discharge of the appellants herein in the PMLA cases are of 03.06.2024, 18.06.2024 and 04.01.2025. The statutory period for filing of appeal is already over and nothing has been filed even till the date on which final arguments on the case were heard by this Appellate Tribunal, but only the intention to challenge the orders has been stated. As regards the SLP preferred before the Apex Court against the order of the Hon’ble Karnataka High Court quashing the scheduled offence case, the submission of the Ld. counsel for the appellant is that the legal position is well settled that ED has no jurisdiction to challenge the order passed in the scheduled offence case. He further stated that SLP is an extraordinary remedy and mere pendency of an SLP would not affect the finality of the order of discharge, not a statutory remedy. He relied on the judgment of the Hon’ble Delhi High Court dated 26.09.2022 in the case of Harish Fabiani & Ors v. Enforcement Directorate & Ors W.P.(CRL) 408/2022.

23. Arguments on merits in this case were heard on 08.10.2025. Subsequently, the factual summary in tabular form as mentioned in para-18 above was called for on 28.10.2025, which was submitted on 11.11.2025 wherein it has been stated that appeal before the Hon’ble Karnataka High Court challenging the order of the Special Court under PMLA was filed on 10.11.2025, i.e., one day prior to the date of submission of the details, but after the date of presenting arguments on merits before the Bench in these cases.

24. Be that as it may, the issue that arises for consideration is whether given the above factual position, the attachment of properties can survive. The underlying legal position in this regard is not in doubt. The Hon’ble Supreme Court in its landmark judgment in the case of Vijay Madanlal Choudhary v Union of India 2022 SCC OnLine 929, had held as below:

“33. …….. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence.”

25. The ratio laid down in the said case has since been followed in judgements of the various High Courts as well as by the Special Courts set up under the PMLA and also this Appellate Tribunal. A number of such orders were cited which are sought to be relied upon by the ld. counsel for the appellant, which have been mentioned in para 12 (supra). The ratio of all the cases cited is the same, namely, that in the absence of a scheduled offence for any reason, whether acceptance of closure report in the FIR, discharge, acquittal or quashing, action under the PMLA would have no legs to stand on.

26. In the present set of cases, the primary contention on behalf of the appellant, which has been reiterated in the common written submissions dated 16.10.2025 placed before the bench on 17.10.2025, is as follows:

“The appellants have been discharged in PMLA case by the THE LD. LXXXI, ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BANGALORE CITY (CCH.82). Special Court for Cases Dealing with MP’s & MLA’s SPECIAL C.C. NO. 124/2014 vide its order dated 03.06.2024/18.06.2024 etc.

2. It is further significant to mention that another co-accused in the present case namely S. V Srinivas had approached the Hon’ble High Court of Karnataka seeking quashing of the Criminal proceedings by filing Crl. Petition No 5102/2015 and the Hon’ble High Court after considering all the contentions including the contentions raised in the present petition have quashed the FIR and the charge-sheet.”

27. The operative part of the judgment of the Hon’ble Karnataka High Court in Criminal Petition No.5102 OF 2015 (order dated 10.03.2016) is as follows:

“26. Accordingly, petition is allowed. The FIR registered in Cr.No.57/2010 of Lokayukta police station, Bangalore City and the charge-sheet filed in pursuance of Cr.No.57/2010 for the offences punishable under Sections 7, 8, 13(1) (d) r/w 13(2) of P.C. Act and Sections 465, 468, 471, 420 r/w 120-B IPC in Spl.C.C.No.135/2011 on the file of XXIII Addl. City Civil and Sessions Judge and Special 41 Judge under Prevention of Corruption Act, 1988 in so far as it relates to the petitioner-Sri. S.V. Srinivas (accused No.3) are hereby quashed.”

28. Thus, it can be seen that the Hon’ble High Court has not quashed the FIR and the charge sheet per se but have quashed the same only in so far as it relates to the petitioner Sh. S.V. Srinivas.

29. Through yet another order passed on 03.11.2016 in Criminal Revision Petition No. 432 of 2013 and Criminal Petition No. 2313 of 2016, the Hon’ble Karnataka High Court has held as follows:

“Further, for the reason that the two corporate bodies namely, Itasca and UTL not having been named in the charge-sheet as the accused, the theory of conspiracy has no foundation and cannot be sustained against any of the accused.

In the result, the petition in Cri. R.P. No. 432 of 2013 is allowed and the order dated 29-4-2013 passed by the Court below in Spl. CC No. 135 of 2011, rejecting the application filed by the petitioner under Section 227 of Cr.P.C., is set aside and the petitioner-accused 1 therein is discharged.

Further, the petition in Criminal Petition No. 2313 of 2016 is allowed and the proceedings pending against the petitioner-accused 9, before the Court below in Spl. CC No. 135 of 2011, insofar as the petitioner is concerned, stands quashed.”

30. Thus, vide the aforesaid order the Accused 1, i.e., Sh. Katta Subramanya Naidu and Accused 9, Sh. M. Gopi only were discharged.

31. The net result from the discussions and details above is that the FIR in the scheduled offence case has not been quashed insofar as it relates to Sh. K.S. Jagadish, s/o Sh. Katta Subramanya Naidu. He has also not been discharged in the PMLA case filed by the respondent against him. The role of Sh. K.S. Jagadish as emerging from the impugned order is as follows:

• Even though Katta Jagadish was not a Director of M/s ITASCA, he purchased demand draft from his bank account and enclosed the same with the land acquisition application to KIADB.
• Katta Jagadish joined hands with Jagaiah and Venkaiah and floated a bogus partnership firm by the name INDU Builders & Developers. As per the requirement, land owners’ consent was mandatory. Hence, in guise of obtaining consent letters from land owners, Katta Subramanya Naidu, Katta Jagadish, S.V Srinivas & Basavapoornaiah, Chairman of UTL got transferred illegal gratification amount of 87 Crores to the account of INDU Builders from the company ITASCA and UTL. In addition, S.V Srinivas directly issued cheques of ITASCA company to Katta Jagadish as illegal gratification.
• M/s UTL Company had transferred an amount of Rs. 280,19,66,525/-to M/s ITASCA company’s bank account (Axis Bank, Malleshwaram & Axis Bank Basaveshwarnagar) and Rs. 37 crores to M/s INDU Builders’s Karnataka bank account from their account. Further from M/s ITASCA company an amount of Rs. 50 crores were transferred to M/s INDU builders bank account. Thus, Basavapoornaiah and S.V. Srinivas had totally transferred an illegal gratification amount of Rs. 87 crores to the bank account of INDU Builders. Out of the said amount of Rs. 87 crores received in the account of M/s INDU Builders, Mr Katta Subramanya Naidu received payment of Rs. 5,09,27,700/-. In addition to above, Mr Katta Subramanya Naidu through his son Mr K.S. Jagadish had received illegal gratification amount of Rs. 21,95,80,000/-, In this way Mr. Katta Subramanya Naidu & Mr. K.S. Jagadish, directly in his name and through companies and through other names had received totally a sum of Rs. 27,05,07,700/- as illegal gratification as mentioned in the charge sheet.
• In order to obtain the consent letters from the land lords by cheating them, Mr K.S. Jagadish, Mr S.V. Srinivas, Mr Jagaiah, Mr Venkaiah, Mr B.K. Manju, Mr M. Gopi all together had made a criminal conspiracy. Accordingly, in order to fulfil the purpose of getting the land for the SEZ for ITASCA Company, the lands, which were identified for the SEZ purpose of the said company, the above persons had given false promises and assurances of giving more money to the land owners. Land owners were also threatened that if they fail to give the land, a false case will be filed against them and they will neither get money nor compensation. Without explaining the contents of the documents, the signature of the land owners of such land (identified for the SEZ purpose of ITASCA) were obtained and thumb impressions from the illiterate landlords on the documents/title, which were prepared to their convenience were obtained. Mr B.K. Manju & Mr M. Gopi were bringing the land lords to the office of Mr. S.V. Srinivas and there in the office, the Mr K.S. Jagadish, Mr. S.V. Srinivas, Mr. Jagaiah & Mr. Venkaiah were getting the signatures on various documents and also a notary by name Mr. Jayanna was called to the office of Mr. S.V. Srinivas and were getting the documents so prepared by them notarised. Such illegal things carried out by the above accused persons were brought to light by the statements given by various land lords and other witnesses, i.e., Mr. Sandeep and Notary Mr. Jayanna.
• In the names of landlords who had given consent for acquisition and also in the name of landlords who had not given consent, the accused persons (as named in the charge sheet filed by Lokayukta) in the guise of disbursing more amount to landlords, had issued bearer cheques from the bank account of INDU Builders held at Karnataka Bank, Indiranagar branch, in the name of land lords and had forged the signatures of the land lords at the back of the said bearer cheques. Mr K.S. Jagadish, Mr. Jagaiah & Mr Venkaiah had drawn Rs. 37,23,29,000/- for themselves from the said bank account and thereby had received the illegal gratification. In view of this, the real landlords who were supposed to get the compensation were cheated.
• Similarly, money was also withdrawn from the two bank accounts of ITASCA in the guise of disbursing money to the land lords, who had given consent and also in the name of landlords who had not given consent. K.S. Jagadish, Mr. S.V. Srinivas, Mr B.K. Manju & Mr M. Gopi had totally drawn Rs. 47,07,68,000/- for themselves and thereby had received illegal gratification. In view of these acts of the accused persons, the real landlords were cheated.
• During the period of verification, the landlords, who were not available and whose legal heirs were also not traceable, by issuing cheques in favour of such non traceable legal heirs an amount of Rs. 83,60,60,178/- were withdrawn by the said accused persons as stated in the charge sheet.
• In his statement dated 01.06.2012, Katta Jagadish admitted that he directly received a sum of Rs. 18,29,08,032/- from two accounts- M/s ITASCA (Axis Bank) and M/s INDU Builders & Developers (Karnataka Bank) and utilized this money towards construction of the residential bungalow at Rajmahal Vilas Extension, Bangalore, owned by his mother and father jointly.
• He has given elaborate narration of the utilization of funds on his behalf, in his statement (Para 49 of the impugned order)
• Further, in his second statement dated 13.06.2012 recorded under section 50, he admitted that the first statement given on 01.06.2012 was true and correct.

32. As is evident from the above, Sh. Katta Jagadish alias K.S. Jagadish allegedly played a key role in the scheduled offence. As per the tabular summary submitted from both the appellant’s and the respondent’s side, Sh. K.S Jagadish was one of the accused in the scheduled offence case. As already mentioned, the ratio of the judgement of the Hon’ble Supreme Court in the case of Vijay Madanlal Choudhary, which has been consistently followed by all the courts below is that in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. In the present case, Sh. K. S. Jagadish, one of the principal figures in the case, has not been absolved of charges in the predicate offence case. The case against him has neither been quashed nor he has been discharged or acquitted in the said case. Accordingly, property linked to the stated scheduled offence cannot be released on the said ground so long as proceedings against him remain pending.

33. It is also by now well-established that the sweep of attachment provisions under the PMLA are not limited to the accused named in the scheduled offence. It would apply to any person (not necessarily being accused in the scheduled offence), if he is involved in any process or activity connected with the proceeds of crime. Thus, if it applies to a person who was never accused in the scheduled offence case, it would apply equally to a person accused but discharged in the scheduled offence case. The Hon’ble Supreme Court in its judgment in the case of Vijay Madanlal Choudhary has also held that the objective of enacting the Act was the attachment and confiscation of proceeds of crime which is the quintessence, so as to combat the evil of money-laundering, by reaching the proceeds of crime in whosoever’s name they are kept or by whosoever they are held. Hence, even if the property is held by a person who was not accused or who was accused but has been discharged in the scheduled offence case, the property can remain attached so long as the allegations in the scheduled offence case against the persons accused therein remain pending. On this specific issue, the Hon’ble Telangana High Court in its order dated 21 April, 2025 in Byappanahalli Prabhakar Rddy Kumar v. Directorate of Enforcement (Criminal Petition No. 15518 of 2024) has held as below:

“23. Unless the predicate offence / scheduled offence is quashed in its entirety qua all the accused, the PMLA proceedings will not terminate. In other words, as long as there is a predicate offence / scheduled offence in which the issue of generation of proceeds of crime is pending adjudication, the proceedings under the PMLA shall continue qua all the accused.”

34. The ld. counsel for the appellant chose not to argue the appeal on merits in respect of individual appellants and the sources of acquisition of the individual properties which have been attached, but relied solely on the overarching plea of the appellants having been absolved of charges under in the scheduled offence cases and discharged in the PMLA prosecution case. However, as has been discussed above, all the appellants have not been absolved of charges in the scheduled offence case and one of the principal figures against whom serious allegations in the scheduled offence case have been levelled, remains accused.

35. Accordingly, the appeals fail on this count and are hereby, dismissed.