TaxTMI 
TaxTMI 
2026 (6) TMI 1235
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.... in the subject ECIR inter-alia under sections 44/45 of the Prevention of Money-laundering Act 2002 ('PMLA') for the commission of offences under sections 3/4/70 of the PMLA. 2. Notice on the present petition was issued vidé order dated 14.10.2025. 3. Pursuant thereto counter-affidavit under cover of Index dated 24.11.2025 has been filed on behalf of respondent, Enforcement Directorate ('ED'). 4. Nominal Roll dated 18.02.2026 has been received from the concerned Jail Superintendent. 5. In support of their submissions, the petitioner and respondent have filed Written Submission dated 18.02.2026 and Note dated 19.03.2026, respectively. 6. The court has heard Mr. Adit S. Pujari, learned counsel appearing on behalf of the petitioner; and Mr. Zoheb Hossain, learned Special Counsel and Mr. Vivek Gurnani, learned Panel Counsel appearing on behalf of the ED. BRIEF BACKGROUND 7. The subject ECIR was registered on the basis of FIR bearing No. RC-14/2022/NIA/DLI dated 13.04.2022 registered under sections 120-B/153-A IPC and sections 17/18/18-B/20/22-B/38/39 UAPA by the National Investigation Agency, Delhi, which narrated that the Central Government had received cre....
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....mmission of any scheduled offence. It is submitted that it is important to note that the alleged transactions by the petitioner, the last of which is alleged to have been made on 14.08.2022, are prior in time to PFI (and its affiliate organisations) being declared an 'unlawful association' and being banned; 12.3. That even if the prosecution case against the petitioner is taken at its face value, the aggregate of financial transactions against him pertain to a total sum of Rs. 3.15 lacs, which sum falls way below the monetary threshold of Rs. 1 crore contained in the proviso to section 45 PMLA; 12.4. That in support of his argument, learned counsel has drawn attention to para 122 of judgment dated 16.02.2026 passed by a Co-ordinate Bench of this court in BAIL APPLN. 3620/2025, whereby co-accused Moideen Kutty K @ MK Faizy was admitted to regular bail : "122. The only allegations are that the funds have been collected in the accounts of PFI/SDPI from unknown sources, which are being shown as legitimate donations to be used for commission of illegal and unauthorized activities which are the scheduled offences. There is prima facie no evidence that the funds being recei....
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.... close linkage with that banned organization; 14.2. That forensic extraction of the petitioner's phone records has revealed contacts that are labelled as "PFI", "SDPI" and "PFI SDPI", which therefore link him to both the said entities; 14.3. That in fact, the petitioner was even part of the protests against PFI's ban in 2022 and was arrested for having thrown a petrol bomb during such protests. This shows that the petitioner was closely associated with PFI up until the organisation was banned in 2022 for being involved in terrorist activities and promoting communal disharmony; 14.4. That between October 2010 and March 2025, SDPI's bank accounts received total proceeds of crime of Rs. 32,94,43,117/-, of which amount Rs. 22,40,10,105/- was deposited in cash, which indicates a deliberate strategy to obscure the source of funds; 14.5. That PFI has used SDPI as a conduit to launder illicit funds and the petitioner has played a pivotal role in that activity by depositing cash in his and other people's bank accounts, before transferring the same to the bank accounts of SDPI, projecting the proceeds as legitimate donations; 14.6. That the petitioner has engaged in layering o....
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....I; and also stated that someone had given him cash, whose name he does not remember, and it was at that person's instance that he transferred the sum of Rs. 1 lac to SDPI's bank account; and 14.6.6. On 14.08.2022, the petitioner transferred Rs. 15,000/-into SDPI's bank account from his bank account maintained at Karur Vysya Bank. 14.7. That in the context of the above transactions, ED has pointed-out that though the petitioner has undertaken high-value transactions, it is important to highlight that it is the petitioner's own position that his annual income was Rs. 1 lac only. 14.8. That insofar as co-accused Moideen Kutty K @ MK Faizy having been admitted to regular bail is concerned, ED has argued that the petitioner cannot seek parity with the co-accused, since the petitioner's role is distinct from that co-accused, especially given that MK Faizy remained a member of PFI only till 2018 whereas the petitioner's association with the organization continued at least till the organization was banned in 2022. 15. Premised on the above submissions, ED has argued that the petitioner falls foul of the additional twin conditions of bail as engrafted in section 45 of the ....
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....t, equally significant is the relative magnitude of the financial link sought to be established between the petitioner and the alleged proceeds of crime. According to ED's own showing, SDPI's bank accounts received an aggregate amount of Rs. 32.94 crores between October 2010 and March 2025, out of which Rs. 22.40 crores was deposited in cash; yet only a sum of Rs. 3.15 lacs has been traced to transactions routed through the petitioner's accounts or at his instance. Even if, for the present purposes, these transactions are assumed to be proved in the manner alleged by ED, the proportion of Rs. 3.15 lacs vis-à-vis Rs. 32.94 crores is so minuscule that this court is of the view that the petitioner cannot, on that basis alone, be characterised as a significant or serious agent of the alleged money-laundering operations of PFI/SDPI. 20. Further, this court is of the opinion that the scheme of section 45 of the PMLA, as modified by the proviso inserted therein, cannot be ignored while assessing the rigour of the "twin conditions" in the present case. The proviso inter-alia contemplates a monetary threshold of Rs. 1,00,00,000/- and if the involvement of an accused in the offence....
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....alleged to have been undertaken by the petitioner. 23. The allegation that the petitioner engaged in obliterating the money trail by arranging cash deposits of less than Rs. 2,000/- from allegedly fake or non-existent donors, so as to obfuscate the true source of funds, is undoubtedly a serious one. However, this court is of the view, that such an allegation, resting as it presently does on investigative analysis and inferences, must ultimately be established through admissible evidence during trial. At the pre-trial stage, it would not be appropriate to pre-judge the evidentiary worth of such material so as to foreclose the petitioner's liberty, particularly when other factors point towards a more tempered approach. 24. The dimension of protracted incarceration also weighs with this court. The petitioner has been in judicial custody since 20.03.2025, i.e., for more than 01 year and 02 months as of now, while the case is admittedly still pending at the stage of arguments on charge, and the prosecution itself has cited about 250 witnesses and in excess of 600 documents to be produced in evidence in all 07 complaints. It is therefore evident, that the trial is likely to extend ....