The Popular Front of India (PFI)-linked alleged money laundering case has seen the Delhi High Court grant bail to two alleged Physical Education (PE) trainers of the organization, Anshad Badruddin and Abdul Khader Puttur. In its significant ruling, the court observed that the Enforcement Directorate (ED) had failed to establish, prima facie, that the remuneration received by the accused constituted “proceeds of crime” as defined under the Prevention of Money Laundering Act (PMLA).
A single-judge bench of Justice Purushaindra Kumar Kaurav held that merely because the accused provided physical training for PFI and received payment in return, such remuneration could not be treated as proceeds of crime. The court clarified that unless it is established, prima facie, that the payments originated from a proven scheduled offence, they cannot be termed “proceeds of crime.”
The two accused, who were arrested in March 2024, were taken into custody by the ED in connection with an ECIR registered on the basis of an investigation conducted by the National Investigation Agency (NIA). Notably, their names did not appear in the ED’s original prosecution complaint; they were arraigned as accused for the first time in the fifth supplementary prosecution complaint.
The ED alleged that both accused were Physical Education trainers for PFI and, under the guise of physical training, imparted training to the organization’s members in the use of swords, sickles, and other weapons. According to the agency, these activities were intended to promote the organization’s alleged unlawful and violent activities.
However, the High Court observed that these allegations would ultimately be tested during trial. At the present stage, the material available on record does not establish that the remuneration received by the accused was derived from any proven scheduled offence. The court further held that the mere fact that the payments were directly credited to the accused’s bank accounts does not automatically render them “proceeds of crime.”
The bench noted that neither accused is an accused in the underlying scheduled (predicate) offence. Therefore, it was incumbent upon the ED to demonstrate that the money in question was derived from an established scheduled offence, which, prima facie, it had failed to do.
Referring to its earlier ruling in the Parvez Ahmed case, the High Court observed that money allegedly intended to be used in a future offence cannot, without an adequate legal basis, be regarded as “proceeds of crime.” Doing so, the court said, would amount to “putting the cart before the horse.”
The court also took into account that both accused have remained in judicial custody for more than two years and three months, that charges have not yet been framed, and that there appears to be no likelihood of the trial concluding in the near future. In view of these circumstances, the High Court granted bail to both accused.
