Delhi High Court: A bail application was filed by applicants under Section 439 read with Section 482 of Criminal Procedure Code seeking regular bail dated 21-09-2022 for the commission of offence under sections 3 and 4 read with section 70 of the Prevention of Money Laundering Act, 2002 (‘PMLA’). Jasmeet Singh, J., granted bail to the applicants subject to certain conditions.
The case revolves around the Enforcement Case Information Report which stems from an FIR filed by the National Investigation Agency (NIA) under various provisions of Penal Code, 1860 (IPC) and the Unlawful Activities (Prevention) Act, 1967 (UAPA). The case pertains to allegations against the petitioners for their involvement in raising and utilizing funds for unlawful activities carried out by the Popular Front of India (PFI). According to the Enforcement Directorate (ED), the petitioners were key office bearers of PFI in Delhi and played active roles in its operations, including the anti-CAA protests that allegedly culminated in the Delhi riots of February 2020. The ED’s complaint highlights their alleged participation in collecting and managing funds, with accusations that significant amounts of cash were deposited into PFI’s accounts, often under suspicious circumstances.
The investigation revealed that approximately ₹60 crore was deposited in PFI accounts since 2009, with ₹32.03 crore in cash. The petitioners allegedly created a façade of legitimate donations to disguise the proceeds of crime, which were purportedly used to incite violence and disrupt communal harmony. The specific roles were attributed to each petitioner, one being the Delhi State Unit President, oversaw fundraising and public relations; another was the general secretary, managed trans-Yamuna donations and public outreach; and one was the office secretary, collected donations locally and was involved in preparing fraudulent receipts. The ED asserted that the petitioners were integral to a criminal conspiracy aimed at laundering proceeds of crime, projecting them as untainted funds, and using them to facilitate PFI’s unlawful activities, thereby committing offences under the Prevention of Money Laundering Act, 2002 (PMLA).
The Court noted that in the present case, ED has alleged that all the petitioners are members/office bearers of the banned organisation i.e. PFI. The role of the petitioners is that they have collected funds for and on behalf of the organization from unknown sources, thereafter they provided fake receipts/showed the collections as legitimate donations to utilize those funds to commit terrorist activities (scheduled offences). Hence, the funds collected by the petitioners are the proceeds of crime.
The Court further noted that to invoke the provisions of Section 3 of PMLA, there must be proceeds of crime and these proceeds must be a result of a criminal activity. The case set up by the ED that the funds which the petitioners were generating were used for committing a scheduled offence, hence proceeds of crime, is not the scheme of PMLA. The offence committed by the collection of funds may be an offence under any law including a scheduled offence but cannot be termed as proceeds of crime to invoke section 3 of PMLA. On perusing the complaint, there is no evidence to show that any scheduled offence has been committed, it is stated that the petitioners participated in the anti-CAA protests in Delhi which culminated in Delhi Riots.
The Court also remarked that counsels for the petitioners have rightly pointed out that in the present case i.e. collection of funds precedes the crime i.e. Delhi Riots. The proceeds of crime have to be generated as a result of criminal activity (scheduled offence). The collection of funds in an illegal way to commit a scheduled offence in future is not an offence of money laundering under PMLA. The funds collected are not proceeds of crime and can be proceeds of crime only when they were generated as a result of scheduled offence. The case set up by the ED is putting the cart before the horse. Even assuming for the sake of argument that the petitioners have generated proceeds of crime, even then, prima facie, the petitioners do not have dominion and control over the said alleged proceeds of crime.
The Court concluded that the role of the petitioners is that they collected funds and deposited the same to the accountant or PFI’s account. Hence, in this scenario, prima facie, the dominion and control over the generation of alleged proceeds of crime is not of the petitioners herein. The twin conditions of section 45 have been met. The Special Counsel for ED has been given an opportunity to oppose the bail applications. Thus, prima facie, the offence of money laundering is not made out against the petitioners herein. The offences in the special statutes like Narcotic Drugs and Psychotropic Substances Act, 1985, UAPA and PMLA imposes additional stringent conditions for grant of bail which are to be tested on the facts and circumstances of each case, but these stringent conditions do not take away the fundamental rights guaranteed under Article 21.
Thus, the Court granted bail to the bail applicants subject to following conditions:
a) The petitioners shall furnish a personal bond in the sum of Rs 50,000 (Rupees fifty thousand only) each with 1 surety in the like amount, to the satisfaction of the concerned trial court;
b) The petitioners shall not leave the country without the permission of the concerned court and if the petitioners have a passport, they shall surrender the same to the concerned trial court;
c) The petitioners shall furnish to the IO concerned their cell phone numbers on which the petitioners may be contacted at any time and shall ensure that the number is kept active and switched on at all times;
d) The petitioners will furnish their permanent address to the concerned IO and in case they change their address, they will inform the IO concerned;
e) The petitioners shall not indulge in any act or omission that is unlawful, illegal or that would prejudice the proceedings in pending cases, if any;
f) The petitioners shall join investigation as and when directed by the concerned IO and will appear in Court as and when required;
g) The petitioners shall not communicate with or come into contact with any of the prosecution witnesses, or tamper with the evidence of the case.
[Parvez Ahmed v. Directorate of Enforcement, 2024 SCC OnLine Del 8528, decided on 04-12-2024]
Judgment by: Justice Jasmeet Singh
Advocates who appeared in this case :
Mr. Adit S. Pujari, Mr. A. Nowfal, Mr. Shaurya Mittal, Ms. Mantika Vohra, Mr. Arif Hussain, Advocates for petitioner;
Mr. Zoheb Hossain, Special Counsel for ED with Mr. Vivek Gurnani, Panel Counsel for ED, Mr. Kartik Sabhdarwal, Mr. Pranjal Tripathi, Mr. Kanishk Maurya, Mr. Azeeq Mushtaque, Advocates for respondent.
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