Anshad Badruddin vs Directorate Of Enforcement on 2 July, 2026

July 7, 2026

Delhi High Court – Orders

Anshad Badruddin vs Directorate Of Enforcement on 2 July, 2026

Author: Purushaindra Kumar Kaurav

Bench: Purushaindra Kumar Kaurav

                          $~2 & 3
                          *         IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +         BAIL APPLN. 1989/2025
                                    ANSHAD BADRUDDIN                                                                .....Petitioner
                                                                  Through:            Mr. Satyakam, Mr. Shaikh Saipan
                                                                                      Dastgir and Mr. Rehan Galib Khan,
                                                                                      Advocates.

                                                                  versus

                                    DIRECTORATE OF ENFORCEMENT                                                      .....Respondent

                                                                  Through:            Mr. Vivek Gurnani, Panel Counsel for
                                                                                      ED; Mr. Kanishk Maurya, Advocates.
                          3
                          +         BAIL APPLN. 2808/2025
                                    ABDUL KHADER PUTTUR                                                             .....Petitioner
                                                                  Through:            Mr. Talha Abdul Rehman, Mr. Shaikh
                                                                                      Saipan Dastgir and Mr. Sudhanshu
                                                                                      Tewari, Advocates.

                                                                  versus

                                    DIRECTORATE OF ENFORCEMENT
                                    THROUGH ASSISTANT DIRECTOR                                                      .....Respondent

                                                                  Through:            Mr. Vivek Gurnani, Panel Counsel for
                                                                                      ED; Mr. Kanishk Maurya, Advocates.

                          CORAM:
                          HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
                                            ORDER

% 02.07.2026

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1. The aforesaid are the first bail applications filed seeking regular bail
under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in
connection of ECIR/STF/17/2022 under Section 44 read with Section 45 for
the commission of offence under Section 3 and 4 read with Section 70 of the
Prevention of Money Laundering Act, 2002 (PMLA).

2. The present ECIR is premised on FIR No. RC-14/2022/NIA/DLI
dated 13.04.2022 registered by the National Investigation Agency (“NIA”)
under Section 120-B of the Indian Penal Code, 1860 and Sections 17, 18,
18B, 20, 22B, 38 and 39 of the Unlawful Activities (Prevention) Act, 1967,
alleging that office bearers, members and cadres of an unlawful association
(hereinafter “association”) conspired to raise and collect funds, domestically
and from abroad, for financing terrorist activities, promoting communal
disharmony and radicalising vulnerable youth.

3. Neither of the two applicants finds mention in the main prosecution
complaint dated 19.11.2022. Both applicants were arrayed as an accused for
the first time only in the V supplementary prosecution complaint dated
24.05.2024. The applicant Anshad Badruddin as Accused No. 24, and the
applicant Abdul Khader Puttur as Accused No. 26, on the allegation that
they had served as Physical Education (“PE”) trainers of the association and
had received monies from the association in that capacity.

4. The applicant Anshad Badruddin was arrested on 18.03.2024 from
District Jail, Lucknow, where he was already lodged in judicial custody in a
separate matter. The applicant Abdul Khader Puttur was arrested on
19.03.2024 from Central Prison, Bengaluru, where he too was already in
judicial custody in a separate matter. Both applicants thereafter preferred
regular bail applications before the Additional Sessions Judge, Special Court

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(PMLA), Patiala House Courts, New Delhi, which came to be dismissed
vide orders dated 21.02.2025. It is against the said orders that the present
applications have been preferred.

5. Mr. Satyakam, learned counsel for the applicant in BAIL APPLN.
1989/2025 has pointed out three judgments passed by this Court releasing
five other accused persons who were involved in the same ECIR. The
reference is made to a common judgment dated 04.12.2024 passed by this
Court in Bail Appln. 1859/2024 titled Parvez Ahmed v. Directorate of
Enforcement, Bail Appln. 2001/2024 titled Abdul Muqeet v. Directorate of
Enforcement and Bail Appln. 2012/2024 titled Mohd. Ilyas v. Directorate
of Enforcement. The Special Leave Petition (SLP) against the said
judgement has been dismissed by the Supreme Court while observing that
the findings be treated to be prima facie in nature.

6. The attention of the Court has also been drawn to the decision dated
16.02.2026 in Bail Appln. 3620/2025 title Moideen Kutty K @ M. K. Faizy
vs. Directorate of Enforcement and another decision dated 29.05.2026 in
Bail Appln. 3796/2025 titled Wahidur Rahman vs. Directorate of
Enforcement.

7. In sum and substance, the argument on behalf of the applicants is that
the role assigned to the present applicants is lesser than the role assigned to
the accused persons who have already been admitted to bail.

8. Mr. Satyakam draws parity with the accused persons who have
already been admitted to bail. It has further been urged, without elaboration,
that the amounts said to have been received by the applicant precede the
declaration of the association as an unlawful association; that the arrest of
the applicant from judicial custody suffers from the same infirmity as

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considered in Dhanraj Aswani v. Amar S. Mulchandani1 and that the
applicant satisfies the triple test of flight risk, evidence tampering and
witness influence.

9. The aforesaid submissions are also adopted by Mr. Talha Abdul
Rehman, learned counsel for the applicant in BAIL APPLN. 2808/2025,
who additionally points out that the impugned order dated 21.02.2025, while
recording the role of his client, appears to erroneously attribute to him
certain factual particulars, and, in one instance, appears to have proceeded
on a conflation of the individual antecedents of the two applicants inter se,
which, it is submitted, reflects a want of due care in appreciation of the
individual role of each accused separately.

10. The submissions made on behalf of the applicants are strongly
opposed by Mr. Vivek Gurnani, learned counsel for the respondent-
Enforcement Directorate (“ED”). He submits that the allegations against the
present applicants are serious in nature and that the roles assigned to the
applicants are graver than the accused persons who have already been
enlarged on bail. It is submitted that, unlike Parvez Ahmed, Mohd. Ilyas and
Abdul Muqeet, who merely collected donations and deposited the same in
association’s own accounts, the present applicants were themselves direct
and personal beneficiaries of monies credited to their individual bank
accounts, and accordingly stood in dominion and control of the alleged
proceeds of crime.

11. Learned counsel further submits that the applicants were engaged not
in innocuous fund-collection but in personally conducting physical
education training that was, in truth, a facade for imparting weapons

1
(2024) 10 SCC 336.

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training, in the use of sickles, swords, knives and other implements, to
association’s cadres, as evidenced by documents seized during investigation,
and that the applicant Abdul Khader Puttur additionally held the offices of
State Executive Council Member (2011-2022), General Secretary (2013-
2014) and Vice President (2015) of association’s Karnataka unit.

12. It is submitted that Abdul Khader Puttur has unexplained cash credits
of Rs. 23,35,724/- against a declared annual income of Rs. 3,00,000/-, and
that Anshad Badruddin has unexplained cash credits of Rs. 3,16,200/- and
Rs. 63,100/- in his accounts, in addition to Rs. 3,50,000/- received through
banking channels, none of which the applicants have been able to explain in
their statements recorded under Section 50 of the PMLA.

13. It is also submitted that the provisions of the PMLA have not been
properly construed in the decisions relied upon by the applicants and that the
mandatory twin conditions under Section 45 of the PMLA are not satisfied.
Reliance is placed on Vijay Madanlal Choudhary v. Union of India, (2022)
SCC OnLine SC 929, Tarun Kumar v. Enforcement Directorate, 2023
SCC OnLine SC 1486 and Gautam Kundu v. Directorate of Enforcement,
(2015) 16 SCC 1 for the proposition that the conditions under Section 45 are
mandatory and cannot be diluted merely because the application is one
under Section 439 Cr.P.C./Section 483 BNSS.

14. It is further submitted that money laundering is classified as an
economic offence of a class apart, relying upon Y.S. Jaganmohan Reddy v.
CBI2, and that the arrest of both applicants, though effected while they were
in judicial custody in unconnected matters, was in due compliance with
Section 19 of the PMLA, the objections in that regard having already been

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15. I have considered the submissions made by learned counsel for the
parties and have perused the record.

16. Section 3 of the PMLA, which defines the offence of money-
laundering, reads as under:

“3. Offence of money-laundering.- Whosoever directly or indirectly
attempts to indulge or knowingly assists or knowingly is a party or is
actually involved in any process or activity connected with the proceeds of
crime and projecting it as untainted property shall be guilty of offence of
money laundering.”

17. The expression “proceeds of crime”, which constitutes the very
gravamen of the offence, is defined under Section 2(1)(u) of the PMLA as
under:

“(u) “proceeds of crime” means any property derived or obtained,
directly or indirectly, by any person as a result of criminal activity relating
to a scheduled offence or the value of any such property.”

18. Section 45 of the PMLA, in turn, prescribes the following twin
conditions which must be satisfied before an accused can be released on
bail:

“45. Offences to be cognizable and non-bailable.– (1) Notwithstanding
anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),
no person accused of an offence punishable for a term of imprisonment of
more than three years under Part A of the Schedule shall be released on
bail or on his own bond unless– (i) the Public Prosecutor has been given
an opportunity to oppose the application for such release; and (ii) where
the Public Prosecutor opposes the application, the court is satisfied that
there are reasonable grounds for believing that he is not guilty of such
offence and that he is not likely to commit any offence while on bail.”

19. Equally settled is the proposition that, absent a scheduled offence,
there can be no “proceeds of crime”, and absent proceeds of crime, the

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2013 (7) SCC 439

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offence under Section 3 of the PMLA cannot be invoked at all. The Supreme
Court, in Vijay Madanlal Choudhary v. Union of India3, while explaining
the true scope of the expression “proceeds of crime”, has held in paragraph
106 and 109 as under:

“106..The ‘proceeds of crime’ being the core of the ingredients
constituting the offence of money laundering, that expression needs to be
construed strictly. In that, all properties recovered or attached by the
investigating agency in connection with the criminal activity relating to a
scheduled offence under the general law cannot be regarded as proceeds
of crime… For being regarded as proceeds of crime, the property
associated with the scheduled offence must have been derived or obtained
by a person ‘as a result of’ criminal activity relating to the scheduled
offence concerned. This distinction must be borne in mind while reckoning
any property referred to in the scheduled offence as proceeds of crime for
the purpose of the 2002 Act.

…

“109..Tersely put, it is only such property which is derived or obtained,
directly or indirectly, as a result of criminal activity relating to a
scheduled offence that can be regarded as proceeds of crime. The
authorities under the 2002 Act cannot resort to action against any person
for money laundering on an assumption that the property recovered by
them must be proceeds of crime and that a scheduled offence has been
committed, unless the same is registered with the jurisdictional police or
pending inquiry by way of complaint before the competent forum. For, the
expression ‘derived or obtained’ is indicative of criminal activity relating
to a scheduled offence already accomplished.”

20. The above position was reiterated in Pavana Dibbur v. Enforcement
Directorate4, wherein it was clarified that although a person need not
himself be an accused in the scheduled offence in order to be prosecuted
under Section 3 of the PMLA, “the condition precedent for the existence of
proceeds of crime is the existence of a scheduled offence”, and that the
“conditions precedent for attracting the offence under Section 3 of the
PMLA are that there must be a scheduled offence and that there must be

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(2023) 12 SCC 1.

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21. The necessity of this foundational link has also been emphasised in
R.K.M Powergen Private Limited v. Enforcement Directorate5, in the
following terms: “The PMLA demands the existence of a predicate offence.
When there is no predicate offence, initiation of proceedings under PMLA is
a non starter… The essential ingredient for the ED to seize jurisdiction is the
presence of a predicate offence. It is like a limpet mine attached to a ship. If
there is no ship, the limpet cannot work. The ship is the predicate offence
and ‘proceeds of crime’. The ED is not a loitering munition or drone to
attack at will on any criminal activity.”

22. Vide order dated 04.12.2024 in the case of Parvez Ahmed (Supra),
the role assigned to the applicants therein i.e. Parvez Ahmed, Mohd. Ilyas
and Abdul Muqeet, is extracted in paragraph no. 4, and the same is
reproduced as under:

“4. As per the Complaint filed by the ED, the specific role of the
petitioners are described as under:-

Role of Parvez Ahmed
 It is stated that he was the president of Delhi state unit of Popular
Front of India (“PFI”) for the term 2018-2020 and was actively involved
in anti CAA-NRC protests held in Delhi. The anti-CAA protests in Delhi
resulted in Delhi riots of February, 2020 in which he, along with other
PFI members, was arrested. Parvez Ahmed admitted that in his capacity
as the President of PFI Delhi, he followed up the collection of donations.
He also revealed that receipts were issued to individual contributors who
donated funds to PFI.

 His statement under section 50 of PMLA was recorded wherein he,
inter alia, stated that he was responsible for PFI‟s public relations in
Delhi and after collection of donations, the amount was deposited in
headquarters office and donation receipts were taken which were then

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2023 SCC OnLine SC 1586.

W.P.Nos.4297 & 4300/2025 (Madras HC), decided on 15.07.2025.

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sent to the donors and this process was done under the supervision of the
District President. The funds were collected by visiting houses of
individuals but at that time no donation receipts were issued to the donors.
The accounts department handed over only the filled donation slips to the
District Presidents and one copy of the said slips remained in the booklet.
He further stated that the local units wrote the name of the donor along
with address on a piece of paper and handed over the same to the District
President.

Role of Mohd Ilyas
 It is stated that he was the General Secretary of Delhi state unit of
PFI since November, 2018 and actively participated in the anti-CAA
protests in Delhi which resulted in Delhi Riots. In his statement recorded
under section 50 of PMLA, he stated that collection of funds was mainly
done in the form of donations by Delhi units of PFI. Further, the cash
which was collected was deposited by him in PFI‟s Shaheen Bagh office
with either the manager Kamal or accountant Jaseer.
 In another statement recorded under section 50 of PMLA on
22.09.2022, he, inter alia, stated that his main work was public relations,
whenever there was any protest or public gathering it was his duty to
contact Police and get their approval and was also responsible for
spreading awareness about PFI. He further stated that PFI did not receive
any donations from abroad and most of PFI‟s donations were through
bank transfers and whatever small cash donations were there would be
donated in PFI‟s national headquarters office and thereafter the account
section prepared the donation receipts which he handed over to the
donors.

Role of Abdul Muqeet
 It is stated that he was the office secretary of Delhi State Unit of
the organization since 2017. During the investigation, it was revealed that
bogus donation slips were issued in the name of residents of Mullah
Colony, Gharoli for PFI by Abdul Muqeet along with his associates. It
was also revealed that donations made for a sum of Rs. 50-100 were
incorrectly reflected as donations to the tune of Rs. 2000 – Rs. 4000.
Further, Abdul Muqeet was actively involved in the collection of donations
in his locality, i.e. Mullah Colony, Gharoli, Delhi-96.
 His statement under section 50 of PMLA was recorded wherein he
inter alia, stated that he joined PFI after meeting Parvez Ahmed and was
made office secretary of PFI Delhi. Further as office secretary, his
responsibility was to open and close PFI‟s office and to attend any PFI
related person who came to the office. He used to attend office every day
for 3-4 hours and it was his responsibility to collect Zakat in Mulla
Colony and nearby areas and after collecting Zakat if anybody used to ask
him for donation receipts, he would talk to Mohd Ilyas and arranged for
receipts.”

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23. The Court in the said decision in paragraph no. 40 to 42 has rendered
following findings.

“40. In order to invoke the provisions of section 3 of PMLA, there must be
proceeds of crime as discussed above 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 a proceeds of crime
to invoke section 3 of PMLA.

41. 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. Learned 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 has 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 so 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.

42. 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.
Admitted case of the ED is that the petitioners collected the funds and
deposited the same with the accountant or PFI‟s account. The Hon‟ble
Supreme Court in Manish Sisodia (I) (supra) has dealt with the same and
observed as under:-

“13. Fourthly, the contention of the DoE that generation of
proceeds of crime is itself „possession‟ or „use‟ of the „proceeds
of crime‟, prima facie, appears to be unclear and not free from
doubt in view of the ratio in Vijay Madanlal Choudhary (supra).
Further, the DoE’s contention that „generation‟ amounts to
possession and the expression „possession‟ includes constructive
possession, for which reliance is placed upon Mohan Lal v. State
of Rajasthan, is not assured.

14. ……… It is submitted that Vijay Madanlal Choudhry (supra)
has held that PML Act is an independent and distinct Act which
deals with offences relating to only proceeds of crime, and not with
the crime itself which generates the proceeds of the crime. In
particular, paragraph 406 in Vijay Madanlal Choudhary (supra)
states:

“406…The fact that the proceeds of crime have been

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generated as a result of criminal activity relating to a
scheduled offence, which incidentally happens to be a non-
cognisable offence, would make no difference. The person
is not prosecuted for the scheduled offence by invoking
provisions of the 2002 Act, but only when he has derived or
obtained property as a result of criminal activity relating to
or in relation to a scheduled offence and the indulges in
process or activity connected with such proceeds of
crime…”

15. Paragraph 407 similarly states:

“407…the offence under this Act in terms of Section 3 is
specific to involvement in any process or activity connected
with the proceeds of crime which is generated as a result of
criminal activity related to the scheduled offence…”

16. In Mohan Lal (supra), the expression „possession‟, it is held,
consists of two elements. First, it refers to corpus of physical
control and second it refers to the animus or intent which has
reference to exercise of self-control. In the context of narcotics
laws, a person is said to possess control over the substance when
he knows the substance is immediately accessible and exercises
dominion or control over the substance. The power and dominion
over the substance is, therefore, fundamental. The stand of the
DoE as to the constructive possession, will be satisfied only if the
dominion and control criteria is satisfied. If the proceeds of crime
are in dominion and control of a third person, and not in the
dominion and control of the person charged under Section 3, the
accused is not in possession of the proceeds of the crime. It would
be a different matter, when an accused, though not in possession,
is charged for use, concealment or acquisition of the proceeds of
the crime, or projects or claims the proceeds of crime as untainted
property. The involvement of an accused may be direct or indirect.
Prima facie, there is lack of clarity, as specific allegation on the
involvement of the appellant – Manish Sisodia, direct or indirect, in
the transfer of Rs. 45,00,00,000 (rupees forty five crores only) to
AAP for the Goa elections is missing. (Emphasis added)”

24. In paragraph no. 43, it has been noted that the applicants therein had
allegedly collected funds and deposited the funds to the accountant or
association’s account and the said scenario, prima facie, was found to be not
within the dominion and control of the applicants for generation of alleged
proceeds of crime. The Court has also considered the delay in trial and long

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incarceration. It was noted that petitioners therein had undergone substantial
period of incarceration i.e. more than two years and two months and it was
found that there was no likelihood that the trial would be completed in near
future. The paragraph nos. 43 to 47 is the said decision is extracted as
under:

“43. In the present case, 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.

44. At this juncture, I am also conscious that for deciding bail in PMLA,
the accused person has to cross the hurdle of twin conditions laid down in
section 45 of PMLA which read as under:-

“45. Offences to be cognizable and non-bailable.– (1)
Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), no person accused of an offence
punishable for a term of imprisonment of more than three years
under Part A of the Schedule shall be released on bail or on his
own bond unless–

(i) the Public Prosecutor has been given an opportunity to oppose
the application for such release; and

(ii) where the Public Prosecutor opposes the application, the court
is satisfied that there are reasonable grounds for believing that he
is not guilty of such offence and that he is not likely to commit any
offence while on bail:”

45. For the reasons noted above, I am of the view that in the present case,
the twin conditions of section 45 have been met. The Special Counsel for
ED has been given an opportunity to oppose the bail applications. Prima
facie, I am of the view that the offence of money laundering is not made
out against the petitioners herein.

Delay in trial and long incarceration.

46. The petitioners have undergone substantial period of incarceration i.e.
more than 2 years 2 months and there is no likelihood that the trial will be
concluded in the near future.

47. Our Constitution under Article 21 guarantees that no person shall be
deprived of his life or personal liberty except according to procedure
established by law. Personal liberty of under trial prisoner is a
fundamental right which flows from the said article. Unless the accused is
convicted, the accused is entitled to the presumption of innocence and a
fair procedure and trial. Our Courts have adopted the principle i.e. Bail is
the rule and Jail is an exception. Liberty of an accused is paramount and
should be curtailed only by a procedure established by law which should

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be both fair and reasonable. 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.”

25. In the case of Moideen Kutty, while relying on the decisions in the
case of Parvez Ahmed and Ors., the Coordinate Bench of this Court in
paragraph no. 118 has considered the role assigned to Moideen Kutty, and
has found that the said applicant was also entitled to be enlarged on bail.
For the sake of clarity, paragraph no. 118 to 122 of the decision dated
16.02.2024 passed in Moideen Kutty are extracted as under:

“118. In the present case, the entire case of the ED is that the Applicant
has been a member of PFI since its formation in 2009, held important
posts until he separated from PFI in the year 2018. Essentially, the
allegation against the Petitioner is that he is the political face of PFI, the
banned organization, and is facilitating bogus donations and disbursal of
funds for unlawful activities and has personally received Rs.15,40,000/-
from SDPI. The Applicant is also the authorized signatory in SDPI‟s
national bank account maintained with Canara Bank.

119. According to the ED, the Investigation have revealed that the
Applicant knowingly facilitated the acquisition, possession and projection
of proceeds of crime as untainted and supported PFI‟s conspiracy to fund
riots, terrorist camps and anti-national protests.

120. Thus, what emerges is that, the ED‟s entire case against the
Applicant is founded on guilt by association. Mere occupancy of
leadership positions in PFI, which was a lawful organization during the
Applicant‟s association from 2009 to 2018. The Petitioner as Member of
SDPI thus, separated much prior to PFI been declared as a banned
Organization on 28.09.2022. SDPI which continues to be a lawful
political party not declared unlawful by the Government, does not, without
more, constitute the offence of money laundering.

121. The Applicant may have at one point of time be a founding Member
of PFI since 2015 and remained a member till 2018, but that or that he
may be a National President of SDPI, but these allegations in itself are not
enough to prima facie make out a case of laundering the proceeds of
crime. Mere association of the Applicant with an organization or holding
a position in an organization, without specific and concrete evidence of
personal involvement in money laundering activities, cannot constitute

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an offence under Section 3 of PMLA.

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 received are generated from commission of
any scheduled offence. The money being received from unknown sources
may be getting utilized for various activities, but that per se does not make
the donations, money etc. as the proceeds of crime under the scheme of
PMLA. The offence committed by the collection of funds, may be an
offence under any law including the scheduled offence, but cannot be
termed as proceeds of crime under Section 3 of PMLA.”

26. In another case i.e. Wahidur Rahman6, this Court vide its judgement
dated 29.05.2026 has admitted that said applicant on bail and considered the
facts and circumstances including the aspect of aggregate amount involved
in the case as well as the amount which was linked to the said applicant. For
the sake of clarity, paragraph no. 19 to 21 of the said decision is extracted as
under:

“19. In the opinion of this court, 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 of money
laundering is below that threshold, the rigours of the additional twin

6
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conditions get watered-down. In the present case, the amount attributed to
the petitioner, even on ED’s own reckoning, is only Rs. 3.15 lacs, which
falls far below that threshold. Without undertaking an elaborate exegesis
of that provision at thisstage, this court is of the view, that when the
alleged involvement of an accused is confined to a quantum substantially
below the statutory threshold, it would be incongruous to subject him to
the same degree of rigour as may apply to persons alleged to have
laundered, or to be in possession of, amounts equal to or exceeding that
threshold; and that this factor militates in favour of a more liberal
approach in the matter of bail.

21. The court is also conscious of the observations made by a Co‑ordinate
Bench while granting regular bail to co‑accused Moideen Kutty K @ MK
Faizy, particularly the observation that there was no material to show that
the said co‑accused had dealt with “proceeds of crime” within the
meaning of section 3 of the PMLA. If the inflows into SDPI’s accounts
have, at least at this stage, not been demonstrated to constitute proceeds
of crime, then ex-facie the sums allegedly transferred by the petitioner to
SDPI cannot readily be labelled as proceeds of crime either. As correctly
argued on behalf of the petitioner, since ED has not primafacie
demonstrated how the funds in questions are derived from anyidentified
scheduled offence, which is a sine-qua-non for invoking the offence of
money laundering under sections 3 and 4 of the PMLA, that aspect cannot
be divorced from consideration while dealing with the petitioner’s bail
plea.

22. As regards the allegation that the petitioner participated in protests
organised by PFI against the ban imposed on that organisation, and that
he was allegedly involved in an incident of throwing a petrol bomb, this
court is of the opinion that those allegations, even if taken at their face
value, pertain to a period prior to PFI being declared an “unlawful
association”. Participation in protest activities in that temporal context,
however unseemly the form of protest may be alleged to have been, cannot
at this stage, be treated as a determinative factor for denying bail in a
PMLA prosecution, particularly when the primary focus of the allegation
is on the financial transactions alleged to have been undertaken by the
petitioner.”

27. Even the aforesaid applicant was found to be entitled for grant of bail
and, accordingly, the directions were issued.

28. As per the ED, the following role is assigned to applicant i.e. Anshad
Badruddin:

a. He was appointed as a Physical Trainer by the association and used

15
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this role to instigate violent tendencies among vulnerable Muslims,
disguising weapons and combat training as yoga and fitness sessions
to encourage participation in unlawful activities.
b. He received ₹3,50,000 through association’s bank accounts
between January 2018 and January 2021 in his Canara and ICICI
accounts for imparting PE training, along with unexplained cash
deposits of ₹3,16,200.

c. When questioned under Section 50 of PMLA, 2002 about these
deposits, he failed to explain their source and instead questioned the
authenticity of his own bank statements, indicating an attempt to
mislead the investigation.

d. He travelled across the country to train the association cadres and
failed to account for funds used for travel, showing that his expenses
were sponsored by the association.

e. Through his position, he provided training aimed at disturbing
communal harmony and received substantial funds from the
association, making him complicit in activities linked to the proceeds
of crime.

f. He knowingly concealed, possessed, and used illicit funds,
projecting them as legitimate, thereby committing the offence of
money laundering under Section 3 read with Section 70 of PMLA,
2002, punishable under Section 4.

29. Similarly, as per ED, the role assigned to Abdul Khader Puttur is as
under:

a. Investigation under PMLA, 2002 revealed that Abdul Khader
Puttur was a State Executive Council member of Karnataka wing of

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the association (2011-2022), General Secretary (2013-2014), and Vice
President (2015).

b. As a Physical Trainer of the association, he instigated violent
tendencies among vulnerable Muslims under the guise of yoga and
fitness classes, providing training in the use of weapons like sickles
and swords to promote unlawful activities.

c. He received ₹2,16,000 from the association’s Union Bank account
for conducting PE training and had unexplained cash deposits of
₹23,35,724 in his own account.

d. Despite declaring an annual income of ₹3 lakh, he failed to explain
these deposits and attempted to mislead the investigation, which
established that the funds were payments from the association for PE
training used in its unlawful activities.

e. Though he denied association’s foreign fundraising, evidence
showed that the association had a large network in Gulf countries and
raised funds abroad through hawala and remittances routed via its
members’ accounts for illegal activities.

f. By imparting PE training to association’s cadres for inciting
violence and receiving funds for the same, he knowingly participated
in processes linked to proceeds of crime.

g. He concealed, possessed, and used such illicit funds, projecting
them as legitimate, thereby committing the offence of money
laundering under Section 3 read with Section 70 of PMLA, 2002,
punishable under Section 4.

30. Learned counsel for the ED has sought to distinguish the case of the
present applicants from that of Parvez Ahmed, Mohd. Ilyas and Abdul

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Muqeet on the ground that, unlike the latter who merely collected donations
for deposit into association’s own accounts, the present applicants were
direct and personal recipients of the monies in question, and therefore stood
in dominion and control thereof. This distinction, though factually correct,
does not, in the opinion of this Court, alter the outcome. The question of
dominion and control over “proceeds of crime” arises only after it is first
shown that the property in question is, in fact, “proceeds of crime”, that is to
say, property “derived or obtained… as a result of” a scheduled offence
already accomplished.

31. It is only upon that foundational fact being established that the further
question of a person’s dominion or control over such proceeds assumes
relevance. Absent that foundation, the fact that the money travelled into the
applicants’ personal accounts, rather than into an intermediate organisational
account, does not by itself convert an otherwise unproved sum into proceeds
of crime.

32. This very distinction, between the anterior question of whether
property constitutes “proceeds of crime” at all, and the subsequent question
of an accused’s dominion, control, possession, concealment or use thereof,
was considered by the Supreme Court in Manish Sisodia v. Central
Bureau of Investigation7, wherein it was observed in paragraph 13 and 16
as follows:-

“13. Fourthly, the contention of the DoE that generation of proceeds of crime
is itself ‘possession’ or ‘use’ of the ‘proceeds of crime’, prima facie, appears
to be unclear and not free from doubt in view of the ratio in Vijay Madanlal
Choudhary (supra)…

16. In Mohan Lal (supra), the expression ‘possession’, it is held, consists of
two elements. First, it refers to corpus of physical control and second it refers

7
2023 SCC OnLine SC 1393.

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to the animus or intent which has reference to exercise of self-control… The
stand of the DoE as to the constructive possession, will be satisfied only if the
dominion and control criteria is satisfied. If the proceeds of crime are in
dominion and control of a third person, and not in the dominion and control
of the person charged under Section 3, the accused is not in possession of the
proceeds of the crime. It would be a different matter, when an accused,
though not in possession, is charged for use, concealment or acquisition of
the proceeds of the crime, or projects or claims the proceeds of crime as
untainted property. The involvement of an accused may be direct or indirect.”

33. The submission advanced by Mr. Gurnani, that the present applicants,
unlike Parvez Ahmed and others, were personal and direct recipients of
monies and hence in “dominion and control” thereof, proceeds on the
assumption that the question of dominion and control arises at the threshold.
As is evident from the extract above, that question becomes relevant only
once it is first shown that the property in question is, in fact, “proceeds of
crime” within the meaning of Section 2(1)(u).

34. Since, for the reasons discussed hereinabove and hereinafter, that
foundational fact remains wanting qua the present applicants, the
circumstance that the monies travelled into their personal accounts, rather
than into an intermediate organisational account as in the case of Parvez
Ahmed and others, does not advance the case of the ED any further at this
prima facie stage. If anything, the ED’s attempt to treat personal receipt of
funds as itself dispositive of “dominion and control” over proceeds of crime,
without first establishing the anterior fact of an accomplished scheduled
offence from which such proceeds are said to be derived, only reproduces, in
a more emphatic form, the very infirmity that this Court found fatal to the
ED’s case in Parvez Ahmed.

35. On this foundational aspect, the case set up by the ED qua the present
applicants suffers from the same infirmity that was found fatal in Parvez

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Ahmed. The amounts credited to the applicants are stated by the ED itself to
have been received “in lieu of” or “in exchange for” conducting Physical
Education training, that is to say, as remuneration for services said to have
been rendered by the applicants to the association.. The bulk of these credits,
on the ED’s own case, span the period 2015 to 2021, i.e., well before
association was declared an unlawful association on 27.09.2022, and before
the predicate FIR dated 13.04.2022 crystallised into any adjudicated finding
of criminal activity.

36. Neither applicant is presently an accused in the predicate offence:

Abdul Khader Puttur, though named in FIR No. RC-14/2022/NIA/DLI, has
admittedly not been charge-sheeted therein; and Anshad Badruddin does not
figure even as a named accused in the said FIR. In these circumstances, the
character of the PE training imparted by the applicants, whatever its true
nature may ultimately be found to be at trial, cannot, at this prima facie
stage, be equated with an “accomplished” scheduled offence from which the
payments received by the applicants can be said to be “derived”, so as to
clothe such payments with the character of proceeds of crime under Section
2(1)(u) of the PMLA.

37. This Court is not oblivious to the material relied upon by the ED
regarding certain seized documents said to disclose that PE training
conducted by association’s trainers was, in substance, weapons training
conducted under the guise of physical education and yoga instruction.
However, even taking such material at its highest, it would, at best, go to
establish that the applicants participated in an activity that may itself require
to be tested as a scheduled offence at trial; it does not, without more,
establish that the remuneration received by the applicants was generated as a

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38. To hold otherwise would be to permit the ED to proceed on the same
premise that was expressly disapproved of in Parvez Ahmed , namely, that
funds said to have been utilised for, or connected with, the future or
continuing commission of a scheduled offence can, without further
foundation, be treated as proceeds of that offence. The case set up by the
ED, to that extent, once again puts the cart before the horse.

39. Insofar as reliance is placed on the statements of the applicants
recorded under Section 50 of the PMLA, it is well settled that a statement
recorded after a person has been formally arrested, by the very agency
effecting the arrest, is hit by the bar under Article 20(3) of the Constitution
and Section 25 of the Indian Evidence Act, being in the nature of a
confession made otherwise than with a free mind. Supreme Court in Prem
Prakash v. Union of India8 in paragraph 32 held as under:-

“32. We have no hesitation in holding that when an accused is in custody
under PMLA irrespective of the case for which he is under custody, any
statement under Section 50 PMLA to the same Investigating Agency is
inadmissible against the maker. The reason being that the person in
custody pursuant to the proceeding investigated by the same Investigating
Agency is not a person who can be considered as one operating with a free
mind. It will be extremely unsafe to render such statements admissible
against the maker, as such a course of action would be contrary to all
canons of fair play and justice.”

40. Two of the four statements relied upon by the ED were recorded after
arrest. Abdul Khader Puttur was arrested on 19.03.2024, and his statements
dated 28.03.2024 and 30.03.2024 were recorded thereafter. Anshad
Badruddin was arrested on 18.03.2024, and his statement dated 31.03.2024

8
(2024) 9 SCC 787.

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was recorded thereafter. A statement recorded after arrest, by the very
agency that effected the arrest, is prima facie hit by the bar under Article
20(3) of the Constitution and Section 25 of the Indian Evidence Act, since it
is not a statement made with a free mind.

41. This leaves only Abdul Khader Puttur’s two pre-arrest statements,
dated 16.01.2024 and 17.01.2024, in which he described the money he
received as “honorarium.” Even taking this admission at face value, it does
not help the ED’s case. Calling a payment an “honorarium” only confirms
that money changed hands, it says nothing about whether that money was
generated by a scheduled offence. Without independent proof of an
accomplished scheduled offence from which the money is said to derive, an
unexplained bank credit remains just that: unexplained. It does not, by itself,
become “proceeds of crime.”

42. It is also relevant that the quantum of funds attributed to each of the
present applicants, approximately Rs. 7,29,300/- in the case of Anshad
Badruddin (Rs. 3,50,000/- through banking channels and Rs. 3,79,300/- in
cash) and approximately Rs. 25,51,724/- in the case of Abdul Khader Puttur
(Rs. 2,16,000/- through banking channels and Rs. 23,35,724/- in cash) is, on
any view, well below the threshold of Rs. 1,00,00,000/- contemplated by the
proviso to Section 45 of the PMLA and considered by this Court in
Wahidur Rahman (Supra).

43. While this Court is not, at this stage, called upon to render a final
view on the applicability of the said proviso to the facts of the present case,
the relatively modest quantum involved is a factor that reinforces, rather
than detracts from, a liberal approach to the question of bail, consistently
with the approach adopted in the decisions discussed above.

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44. It further deserves notice that neither applicant presently stands
charge-sheeted in the predicate offence registered by the NIA. Abdul Khader
Puttur, though named in FIR No. RC-14/2022/NIA/DLI, has admittedly not
been charge-sheeted therein, and Anshad Badruddin does not figure even as
a named accused in the said FIR. Mere sharing of information by the ED
with the NIA under Section 66(2) of the PMLA does not, without more,
crystallise the existence of a scheduled offence qua the applicants; as
observed by this Court in Harish Fabiani and Ors. vs. ED and Ors.9, “an
ECIR or a proceeding under the PMLA cannot be triggered merely on that
assumption alone”, and Section 66(2) “itself enables disclosure and sharing
of information inter se authorities, however mere disclosure does not
crystallize a scheduled offence.” Absent the “ship” of an accomplished and
charge-sheeted predicate offence qua the applicants, the “limpet” of the
PMLA proceeding, has nothing to attach itself to.

45. Independent of the foregoing, the applicants are also entitled to relief
on the ground of prolonged incarceration and the improbability of early
conclusion of the trial, grounds which weighed with this Court, and were
affirmed and further elaborated by the Supreme Court, in the decisions
considered above. The Supreme Court, in Union of India v. K.A. Najeeb10,
has held that statutory restrictions on bail do not oust the power of the
Constitutional Courts to grant bail where continued incarceration would
violate Part III of the Constitution, observing that “the rigours of such
provisions will melt down where there is no likelihood of trial being
completed within a reasonable time and the period of incarceration already

9
WP (Crl.) 408/2022, decided on 26.09.2022.

(2021) 3 SCC 713

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46. This principle has since been reiterated with added emphasis in V.
Senthil Balaji v. Enforcement Directorate11, wherein it was observed:

“25. … It is a well-settled principle of our criminal jurisprudence that ‘bail is
the rule, and jail is the exception.’ These stringent provisions regarding the
grant of bail, such as Section 45(1)(iii) of the PMLA, cannot become a tool
which can be used to incarcerate the accused without trial for an
unreasonably long time.

27. … When the trial of the complaint under PMLA is likely to prolong
beyond reasonable limits, the Constitutional Courts will have to consider
exercising their powers to grant bail… The Constitutional Courts cannot
allow provisions like Section 45(1)(ii) to become instruments in the hands of
the ED to continue incarceration for a long time when there is no possibility
of a trial of the scheduled offence and the PMLA offence concluding within a
reasonable time. If the Constitutional Courts do not exercise their jurisdiction
in such cases, the rights of the undertrials under Article 21 of the Constitution
of India will be defeated.”

47. The Supreme Court, in Prem Prakash v. Union of India12, has, in the
same vein, cautioned that “keeping persons behind the bars for unlimited
periods of time in the hope of speedy completion of trial would deprive the
fundamental right of persons under Article 21 of the Constitution of India
and that prolonged incarceration before being pronounced guilty ought not
to be permitted to become the punishment without trial.”

48. In the present case, the applicant Anshad Badruddin has, as on date,
remained in continuous custody for over two years and three months, and
the applicant Abdul Khader Puttur for a like period, longer, in either case,
than the two years and two months of incarceration that this Court found
sufficient, in Parvez Ahmed, to tilt the balance in favour of bail. The
Prosecution Complaint and Supplementary Complaints in the present ECIR,

11
2024 SCC OnLine SC 2626.

(2024) 9 SCC 787.

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as noted in the decisions discussed above, together run into several
thousands of pages and arraign several hundred witnesses, and charges are
yet to be framed even qua the applicants herein, who were arrayed as
accused only vide the V supplementary prosecution complaint dated
24.05.2024.

49. There is, accordingly, no reasonable likelihood of the trial concluding,
or indeed meaningfully commencing so far as the applicants are concerned,
in the near future. The rigours of Section 45 of the PMLA cannot,
consistently with the law declared above, be permitted to operate so as to
sanction the indefinite pre-trial detention of the applicants.

50. Insofar as the triple test is concerned, the applicants are not shown to
be a flight risk, having already remained in continuous custody for over two
years without default; the material relied upon by the ED is stated to be
documentary and digital in nature and already stands seized; and the
witnesses cited are overwhelmingly official witnesses, in respect of whom
no substantive apprehension of influence has been made out.

51. If the role assigned to both the applicants is considered in the context
of the role assigned to the accused persons who have already been granted
bail, the Court finds that, on the ground of parity, even the present applicants
are entitled to grant of bail. Prima facie, there does not seem to be any
graver role assigned to these applicants than those accused persons who
have already been admitted to bail.

52. Principle of parity coupled with the absence, at this stage, of a
foundational scheduled offence qua the applicants, and the prolonged period
of incarceration discussed above, the Court finds no reason to deny the
applicants the benefit of bail. More importantly, the Court finds that the

25
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applicant Anshad Badruddin is in jail since 18.03.2024 and the applicant
Abdul Khader Puttur is in jail since 19.03.2024. They have both already
remained under incarceration for more than two years and three months.

53. Accordingly, for all the aforesaid reasons, as have already been
assigned by the Court, in the aforesaid cited three decisions, the applicants
in the present bail applications be released on bail subject to the following
conditions:

a. Each of the applicants shall furnish a personal bond in the sum of
Rs.50,000/- (Rupees Fifty Thousand Only) with 01 surety in the like
amount, to the satisfaction of the learned trial Court;
b. Each of the applicants shall furnish to the Investigating Officer a
cellphone number on which the applicant may be contacted at any
time and shall ensure that the number is kept active and switched-on
at all times;

c. If the applicants have passport, they shall surrender the same to the
learned trial court and shall not travel out of the country without prior
permission of the learned trial court;

d. The applicants shall not contact, nor visit, nor offer any inducement,
threat or promise to any of the prosecution witnesses or other persons
acquainted with the facts of case. The applicants shall not tamper with
evidence nor otherwise indulge in any act or omission that is unlawful
or that would prejudice the proceedings in the pending trial; and
e. In case of any change in their residential address(s)/contact detail(s),
the applicants shall promptly inform the Investigating Officer, in
writing.

54. It be noted that the trial will have to take place independently without

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55. With the aforesaid directions, the bail applications stand disposed of.

56. A copy of this judgment be forwarded to the concerned Jail
Superintendent forthwith for information and necessary compliance.

PURUSHAINDRA KUMAR KAURAV, J
JULY 2, 2026
aks

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Delhi High Court – Orders