BAIL APPLN.3620/2025 Page 1 of 46

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Reserved on: 30

th

January, 2026

Pronounced on: 16

th

February, 2026

+ BAIL APPLN. 3620/2025

MOIDEEN KUTTY K @ M. K. FAIZY

AGED ABOUT 54 YEARS

S/O SAIDALI KALACHAN

R/O KALACHAN HOUSE, VILAYUR POST,

KOORACHIPADI, PALAKKAD DIST.

KERALA-679309

THROUGH PAIROKAR MOHAMMED REAZ

.....Petitioner

Through: Mr. Siddharth Agarwal, Senior

Advocate, Mr. Raj at Bhardwaj, Ms.

Ankita M Bhardwaj, Mr. Dushyant

Chaudhary, Mohd. Fiyaz, Mr.

Vishwajeet Singh and Mr. Siddharth

Singh, Advocates.

versus

DIRECTORATE OF ENFORCEMENT

B- BLOCK, PRAVARTAN BHAWAN,

DR. APJ ABDUL KALAM ROAD

NEW DELHI – 110011

.....Respondent

Through: Mr. Zoheb Hossain, Special Counsel

with Mr. Vivek Gurnani, Panel

Counsel, Mr. Pranjal Tripathi, Mr.

Kartik Sabharwal and Mr. Kanishk

Maurya, Advocates

CORAM:

HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA

J U D G M E N T

BAIL APPLN.3620/2025 Page 2 of 46

NEENA BANSAL KRISHNA, J.

1. Bail Application under Section 439 of the Code of Criminal

Procedure, 1973 (hereinafter referred to as “CrPC”) read with Section 45

and 65 of Prevention of Money Laundering Act, 2002 (hereinafter referred

to as “PMLA”) has been filed on behalf of the Applicant/Moideen Kutty K

@ M.K. Faizy seeking Regular Bail in ECIR No. ECIR/STF/17/2022

dated 21.09.2022 for commission of the Scheduled Offence under Section

120B of the Indian Penal Code, 1860 (hereinafter referred to as “IPC”) and

Section 17, 18, 18B, 20, 38, 39 of the Unlawful Activities (Prevention) Act,

1967 (hereinafter referred to as “UAPA”).

2. It is submitted that the second Bail Application of the Applicant was

dismissed by the Ld. Special Court on 28.08.2025.

3. The brief facts are that the Respondent/ED registered the ECIR No.

ECIR/02/HIU/2018 dated 02.05.2018 on the basis of basis of National

Investigation Agency (hereinafter referred to as “NIA”) and other law

enforcement Agencies invoking Scheduled offences under Sections 120-B,

121, 121A of IPC, Sections 3, 4 and 5 of the Explosive Substance Act,

Sections 25 and 27 of the Arms Act and Sections 13, 16, 17, 18 and 18(A) of

the UAPA.

4. The Respondent/ED filed a Main Prosecution Complaint dated

19.11.2022 before the Ld. Special Court, PMLA, Lucknow, U.P. against 5

Accused persons, in ECIR No. ECIR/02/HIU/2018 arraigning 17 witnesses

and relying upon 60 documents, running into approximately 2000 pages.

5. Subsequently, the Respondent/ED filed the 1

st

Supplementary

Prosecution Complaint dated 06.05.2022 against 4 Accused persons in

BAIL APPLN.3620/2025 Page 3 of 46

ECIR/02/HIU/2018 dated 02.05.2018. The 2

nd

Supplementary Prosecution

Complaint dated 18.11.2022 against 10 Accused persons in said ECIR,

arraigning 9 witnesses and relying upon 31 documents running into

approximately 1300 pages.

6. The NIA registered FIR bearing RC No. RC-14/2022/NIA/DLI

dated 13.04.2022 under Sections 120B IPC and Sections

17/18/18B/20/38/39 UAPA.

7. Provisional Attachment Orders (“POA”) bearing No. 14/2022 and

PAO No. 15/2022 dated 01.06.2022 were passed, attaching a total of 30

bank accounts totalling to Rs.72,07,782/-.

8. The NIA filed a Chargesheet dated 18.03.2023 before the Ld.

Special Court, NIA Cases, New Delhi in RC No. RC-14/2022/NIA/DLI

dated 13.04.2022 against 24 Accused persons, arraigning 243 witnesses and

relying upon 184 documents running into approximately 6000 pages.

9. Respondent/ED registered the present ECIR bearing ECIR No.

ECIR/STF/17/2022 dated 21.09.2022 based on NIA RC dated 13.04.2022.

It is submitted that neither the name of the Applicant was there in the FIR

RC nor any allegations were levelled against the Applicant.

10. It is submitted that the Ministry of Home Affairs, Government of

India through The Gazette of India: Extraordinary bearing Regd. No. D.L.-

33004/99 and Notification No. S.O. 4559 (E) dated 27.09.2022 declared the

Popular Front of India (“PFI”) and its associates or affiliates or fronts,

namely Rehab India Foundation (RIF), Campus Front of India (CFI), All

India Imams Council (AIIC), National Confederation of Human Rights

Organization (NCHRO), National Women‟s Front, Junior Front, Empower

BAIL APPLN.3620/2025 Page 4 of 46

India Foundation and Rehab Foundation, Kerala as “unlawful

association” on the ground that they have been involved in violent terrorist

activities with an intent to create a reign of terror in the country,

endangering security and public order of the State, anti-national activities

and disrespect and disregard for the constitutional Authority and sovereignty

of the State.

11. PAO No. 27/2022 dated 10.10.2022, was passed attaching 1 bank

account totalling Rs.22,57,856/-.

12. The Respondent/ED filed a Main Prosecution Complaint dated

19.11.2022 in ECIR No. ECIR/STF/17/2022 before the Ld. Special Court,

New Delhi against 4 accused persons, arraigning 39 witnesses and relying

upon 69 documents running into approximately 4000 pages.

13. PAO No. 1/2023 dated 07.01.2023, was passed attaching 16

immovable properties totalling Rs.2,53,22,402/-. It is asserted that neither

were any allegations of any manner whatsoever alleged against the

Applicant herein, nor were any movable/immovable properties of the

Applicant or Social Democratic Party of India (“SDPI”) attached by the

Respondent/ED.

14. The Respondent/ED filed an amended Main Prosecution Complaint

dated 19.11.2022 in ECIR No. ECIR/STF/17/2022 against 4 accused

persons arraigning 39 witnesses and relying upon 69 documents running into

approximately 4000 pages.

15. The Respondent/ED filed the 1

st

Supplementary Prosecution

Complaint dated 05.08.2023 in ECIR dated 21.09.2022 before the Ld.

Special Court, Patiala House District Court, New Delhi against 1 Accused

BAIL APPLN.3620/2025 Page 5 of 46

person, arraigning 12 witnesses and relying upon 50 documents and digital

evidence running into approximately 8000 pages.

16. The 2

nd

Supplementary Prosecution Complaint dated 20.10.2023

was filed against 3 Accused persons, arraigning 15 witnesses and relying

upon 42 documents and digital evidence running into approximately 10000

pages.

17. Provisional Attachment Order bearing PAO No. 25/2023 dated

02.11.2023, attaching 15 bank accounts totalling Rs.1,19,81,250/-. The

Respondent/ED passed Provisional Attachment Order bearing PAO No.

26/2022 dated 16.11.2023, attaching 3 bank accounts and 2 immovable

properties totalling Rs. 48,03,126/-.

18. The Respondent/ED filed 3

rd

Supplementary Prosecution

Complaint dated 22.11.2023 against 2 Accused persons, arraigning 40

witnesses and relying upon 75 documents running into approximately 13000

pages.

19. The Respondent/ED filed 4

th

Supplementary Prosecution

Complaint dated 03.02.2024 against 12 Accused persons, arraigning 40

witnesses and relying upon 144 documents and digital device running into

approximately 50000 pages.

20. The Respondent/ED passed Provisional Attachment Order

bearing PAO No. 04/2024 dated 16.04.2024, attaching 16 immovable

properties totalling Rs. 21,13,06,000/-.

21. The Respondent/ED filed 5

th

Supplementary Prosecution

Complaint dated 24.05.2024 against 4 Accused persons, arraigning 39

BAIL APPLN.3620/2025 Page 6 of 46

witnesses and relying upon 76 documents running into approximately 4000

pages.

22. The Respondent/ED filed 6

th

Supplementary Prosecution

Complaint dated 07.04.2025.

23. The Respondent/ED filed the 7

th

Supplementary Prosecution

Complaint dated 15.06.2025 against the Applicant, arraigning 57

witnesses and relying upon 104 documents running into approximately 6000

pages. It was in this Chargesheet that the Applicant was named for the

first time.

24. It is submitted that SDPI was neither declared unlawful nor were

any allegations of violent terrorist activities. The allegations levelled by the

Respondent/ED are that SDPI and the Applicant herein, are the front of PFI

and were involved in the commission of the offence under Section 3 of

PMLA, which is completely baseless and without any merit whatsoever. The

allegations have been baselessly levelled by the Respondent/ED in 2025,

nearly 3 years after the declaration of ban on PFI and its associates or

affiliates or fronts by the Government of India, with the sole objective of

harassing the Applicant herein by levelling baseless allegations and illegally

arresting the Applicant, thereby curtailing his Fundamental Rights as

guaranteed by the Constitution of India.

25. This Court granted Bail to the Co-Accused persons namely Parvez

Ahmed, Abdul Muqeet and Mohd. Ilyas in Bail Application Nos.

1859/2024, 2001/2024 and 2012/2024, after considering the totality of facts

and submissions on the grounds of period of incarceration, the stage of the

Complaint case before the Ld. Special Court, and by observing that to

BAIL APPLN.3620/2025 Page 7 of 46

invoke the provisions of Section 3 of PMLA, there must be proceeds of

crime and these proceeds must result from a criminal activity. Furthermore,

the case set up by the Respondent/ED that the funds which the Petitioners

were generating, were used for committing a scheduled offence and hence

were proceeds of crime, is not the scheme of PMLA. Furthermore, 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.

26. The Ld. Special Court granted regular Bail to the Co-Accused namely

B Sahul Hameed on grounds of parity, period of incarceration and

considering that this Court has held that collection of funds in an illegal way

to commit a scheduled offence in future, is not an offence under money

laundering and that the conditions under Section 45 of PMLA have been met

in the case of the co-Accused persons.

27. The Ld. Special Court granted regular Bail to the Co-Accused namely

Firoz K on grounds of parity and the period of incarceration on 01.03.2025.

28. Thus, it is submitted that throughout all the aforesaid proceedings,

spanning from 2018 to May 2024, including multiple Prosecution

Complaints, Supplementary Complaints, NIA chargesheet, and provisional

attachment orders - neither was the Applicant‟s name mentioned nor were

any allegations levelled against the Applicant. Furthermore, none of the

Applicant‟s or SDPI‟s movable/immovable properties, were attached in any

of the aforementioned Provisional Attachment Orders.

29. The Investigating Officer illegally arrested the Applicant from

Terminal-3 of the Indira Gandhi International Airport, New Delhi and the

BAIL APPLN.3620/2025 Page 8 of 46

Applicant was shown to have been arrested at 9:30 PM in purported exercise

of powers under Section 19(1) of PMLA, without there being anything

incriminating material found against the Applicant.

30. It is submitted that the Ld. Sessions Court dismissed the 1

st

Regular

Bail Application of the Applicant. The Special Court took cognizance of

the 7

th

Supplementary Prosecution Complaint and accordingly, the

Applicant herein was summoned to face Trial.

31. The Sessions Court dismissed the 2

nd

Regular Bail Application of the

Applicant on 28.08.2025, without considering the submissions in their

entirety, as there is no evidence to demonstrate or establish a prima facie

case against the Applicant.

32. The grounds taken by the Applicant for seeking Regular Bail is

that he has been falsely implicated as there is no “material in possession”,

and this expression must be confined to legally admissible evidence of

sterling quality and unimpeachable character based on which “reasons to

believe” could be recorded in writing that the arrestee is “guilty” of the

offence under PMLA. The word “guilt” occurring therein qualifies a higher

yardstick than mere suspicion.

33. It is submitted that there is no evidence or incriminating information

to determine the Applicant‟s involvement in any activity of placement,

layering and/or integration of any proceeds of crime. There is no question of

any violation of the provisions of PMLA or that alleged proceeds of crime

came into possession of the Applicant or the Applicant had any control over

the same.

BAIL APPLN.3620/2025 Page 9 of 46

34. It is submitted that the present ECIR dated 21.09.2022 was registered

by the Respondent/ED based on FIR No. RC-14/2022/NIA/DLI dated

13.04.2022 registered by NIA. The Applicant was neither named in the FIR

dated 13.04.2022 or the ECIR dated 21.09.2022 nor have there been any

prima facie allegations against the Applicant.

35. It is submitted that the Applicant is a respected public figure, Islamic

scholar, political observer and social worker, having deep roots in society

and no criminal antecedents. The Applicant was illegally arrested by the

Respondent/ED on 03.03.2025 at IGI Airport, New Delhi, based on

purported and uncorroborated statements, without any material linking him

with the alleged offence.

36. It is further submitted that the Applicant‟s name surfaced for the first

time only in the 7

th

Supplementary Prosecution Complaint dated

15.06.2025, despite several earlier Prosecution Complaints and

Supplementary Complaints filed since 2018, wherein no allegations were

made against him. The Applicant has been falsely implicated on the

allegation that SDPI is a political front of the banned Popular Front of India

(PFI). However, SDPI has never been declared as an unlawful association

under UAPA.

37. It is submitted that the Government of India through The Gazette of

India: Extraordinary bearing Notification No. S.O. 4559 (E) dated

27.09.2022, after thorough investigation, banned PFI and all its

associates/affiliates, but SDPI was neither declared unlawful nor were any

allegations levelled against SDPI or its leaders.

BAIL APPLN.3620/2025 Page 10 of 46

38. It is submitted that the Ld. Special Court, while dismissing the Second

Regular Bail Application vide order dated 28.08.2025, primarily relied upon

the Applicant's past association with PFI, which was duly investigated by

the Government of India prior to 2022, when PFI was banned. The Special

Court failed to consider that the Applicant is being prosecuted based on his

present role as National President of SDPI. The findings are based on

conjectures and presumptions rather than cogent evidence, overlooking the

constitutional mandate that personal liberty cannot be curtailed on

assumptions.

39. It is submitted that as per the Respondent/ED‟s case, the gravamen of

allegations is that donations and funds collected by SDPI constitute

“proceeds of crime”. However, no money trail, no quantification of alleged

proceeds of crime, and no specific transaction linking the Applicant to any

scheduled offence has been established. No bank transactions or cash

recoveries substantiate such claims. Reliance upon vague diaries, stray

references, and untested statements recorded under Section 50 of PMLA,

cannot satisfy the jurisdictional threshold of “reason to believe,” as

mandated under Section 19(1) of PMLA.

40. It is submitted that the Applicant is neither an accused nor a suspect in

the scheduled/predicate NIA offence, wherein investigation is continuing

since 13.04.2022 and nothing has surfaced against the Applicant. Despite

multiple Prosecution Complaints and POA, the Applicant‟s name did not

surface, until the illegal arrest on 03.03.2025.

41. The allegations have been baselessly levelled by the Respondent/ED

in 2025, after nearly 3 years of declaration of ban on PFI and its associates

BAIL APPLN.3620/2025 Page 11 of 46

or affiliates or fronts by the Government of India, with the sole objective of

harassing the Applicant.

42. “Proceeds of Crime” is sine qua non for commission of offence of

money laundering. The Respondent has failed to produce any evidence to

determine the Applicant's involvement in any activity of placement, layering

and/or integration of any proceeds of crime. Therefore, it would be unjust if

the Applicant is denied his constitutional right to liberty.

43. Further, reliance is placed on the Delhi High Court‟s Order dated

04.12.2024, granting Bail to co-accused, which held that mere act of raising

or collecting funds, even if it constitutes an offence under another law, it

does not ipso facto amount to generation of proceeds of crime under Section

3 of PMLA, unless the funds are shown to have arisen from a scheduled

offence.

44. It is also contended that Bail is the rule and Jail the exception, and

arrest under Section 19(1) of PMLA must be founded on cogent, admissible

evidence of guilt rather than suspicion. Reliance is also placed on K. Kavitha

vs. Directorate of Enforcement, 2024 INSC 632, Arvind Kejriwal vs.

Directorate of Enforcement, 2024 INSC 512, and Manish Sisodia vs.

Directorate of Enforcement, 2024 SCC OnLine SC 1920 which reaffirmed

that prolonged incarceration amounts to pre-trial punishment.

45. It is submitted that the Applicant has been in custody since

03.03.2025. The Prosecution has filed voluminous Complaints running into

approximately 90,000 pages, arraigning over 240 witnesses and the case is

still at the compliance stage under Section 207 CrPC. Early conclusion of

trial is non-existent and continued detention amounts to denial of

BAIL APPLN.3620/2025 Page 12 of 46

fundamental right to liberty under Article 21 of the Constitution. All

documentary evidence has been seized, custodial interrogation is over and

there exists no possibility of tampering with evidence or influencing

witnesses.

46. It is submitted that the allegations in the 7

th

Supplementary

Prosecution Complaint, do not form part of the investigation or Chargesheet

in the predicate offence and have been introduced for the first time without

any basis in the primary investigation. The Applicant is being subjected to

unwarranted prosecution in disregard of established facts and settled legal

position.

47. Furthermore, the co-accused persons namely Parvez Ahmed, Abdul

Muqeet, Mohd. Ilyas, B Sahul Hameed, and Firoz K have been granted

Bail on grounds of parity and period of incarceration. The Applicant is

similarly entitled to Bail, on parity.

48. It is submitted that the exact quantum of alleged proceeds of crime,

was neither identified nor available and remains speculative. There is no

money trail identified against the Applicant and no prima facie evidence that

the Applicant was facilitating generation of funds allegedly used for

committing a scheduled offence.

49. The Prosecution has failed to cross the threshold of establishing

foundational facts, to satisfy reasonable Grounds for Arrest. The twin

conditions under Section 45 of PMLA must be read reasonably and not

literally. No evidence or documentary information has been recovered

incriminating the Applicant, and there is no basis to prima facie determine

that the Applicant is guilty of the said offences.

BAIL APPLN.3620/2025 Page 13 of 46

50. It is submitted that the Applicant is neither inclined to flee from

justice nor in a position to influence the course of investigation, as allegedly

incriminating material has already been seized and the Respondent/ED is no

longer seeking custody remand.

51. Hence, a prayer is made for grant of Bail to the Applicant.

52. A Counter-Affidavit has been filed on behalf of the

Respondent/Directorate of Enforcement (“ED”) wherein the contentions of

the Applicant have been vehemently opposed.

53. The ED states that it initiated investigations against the office bearers,

members and caterers of Popular Front of India, PFI and its related

entities/organisations under PMLA vide ECIR/02/HIU/2018 dated

02.05.2018 and ECIR/STF/17/2022 dated 21.09.2022 on the basis of

multiple FIRs registered by NIA and State Police.

a. FIR No. RC-05/2013/NIA/KOC (07.08.2013) and

Chargesheet No. 1 (19.10.2013) were filed by the NIA, Kochi,

alleging that certain PFI/SDPI activists conspired to train cadres

in the use of explosives and arms and organised a camp at

Narath, Kannur District, with the alleged objective of

promoting religious enmity and preparing individuals for

terrorist activities. The case was registered under Section 120B

IPC, Sections 4 & 5 of the Explosive Substances Act, Sections

25 & 27 of the Arms Act, and Sections 18 & 18A of the UAPA,

1967, which were treated as scheduled offences under the

PMLA.

BAIL APPLN.3620/2025 Page 14 of 46

b. FIR No. 0199/2020 (07.10.2020) was registered by the U.P.

Police under Sections 153A, 295A and 124A IPC; Sections 14

and 17 of the UAPA; and Sections 65, 72 and 76 of the

Information Technology Act against four members of PFI/CFI.

It was alleged that they were travelling to Hathras to disturb

communal harmony and incite violence. The PMLA

investigation alleged that K.A. Rauf Sherif, a PFI member and

National General Secretary of CFI, fraudulently transferred

approximately Rs. 1.36 crore through bogus international trade

transactions to fund unlawful activities, including anti-CAA

protests and other alleged terrorist activities.

c. FIR No. 04/2021 (16.02.2021) was registered by the U.P.

Police ATS under Sections 120B and 121A IPC; Sections 13,

16, 18 and 20 of the UAPA; Sections 3, 4 and 5 of the

Explosives Act; and Sections 3 and 25 of the Arms Act against

two PFI members. It was alleged that they were part of a

conspiracy to form a terrorist gang, stockpile arms and

explosives, and carry out attacks at multiple locations in U.P. to

undermine national security and communal harmony.

d. FIR No. RC-14/2022/NIA/DLI (13.04.2022) was registered by

the NIA, Delhi, under Section 120B IPC and Sections 17, 18,

18B, 20, 22B, 38 and 39 of the UAPA. The FIR alleged that

office bearers and members of PFI conspired to raise funds

through domestic and foreign sources, including hawala and

donations, to finance terrorist activities, promote communal

BAIL APPLN.3620/2025 Page 15 of 46

disharmony, radicalise and recruit youth, and support banned

organisations such as Students Islamic Movement of India

(SIMI) and ISIS.

54. The Respondent/ED has elaborated upon the modus operandi of

PFI and SDPI, which is stated as follows:

a. The PMLA investigation alleges that more than Rs. 62 crores

were deposited into 29 bank accounts of PFI between May

2009 and May 2022, of which over Rs. 32.07 crores were cash

deposits. PFI raised funds from unidentified and suspicious

domestic and foreign sources as part of a criminal conspiracy.

Searches conducted at PFI offices and residences of its office

bearers resulted in the seizure of documents and digital devices,

showing that PFI had a structured presence in Gulf countries

and systematically collected funds from abroad, which were

layered and integrated into the financial system and used for

unlawful activities.

b. Furthermore, the scrutiny of cash donations furnished by PFI

for the year 2018-19 allegedly revealed that several purported

donors were fictitious.

c. Analysis of various PFI bank accounts showed that funds were

routed through accounts of individuals into which identical

amounts of cash were first deposited, indicating the use of such

accounts as conduits to channel funds received through

clandestine or hawala channels and project them as legitimate

donations.

BAIL APPLN.3620/2025 Page 16 of 46

d. Although PFI claimed not to accept foreign funds, documents

seized during operations at the offices of PFI and residences of

office bearers on 03.12.2020 revealed that PFI and its frontal

organisations had an organised presence in Gulf countries and

raised funds abroad, which were transferred to India through

circuitous banking routes and illegal hawala channels, without

statutory compliance.

e. PFI did not deposit its entire fund collections into bank

accounts and retained substantial amounts in cash, which were

spent without reflection in bank statements, thereby leaving no

identifiable money trail.

f. In his statement dated 05.02.2020, Jaseer K.P., an accountant

of PFI, allegedly stated that a significant portion of cash

collected by PFI was retained at its offices and not deposited in

bank accounts, resulting in misrepresentation before

government authorities.

g. Hence, the overlapping membership of cadres of PFI-SDPI,

involvement of PFI office bearers in the founding of SDPI,

utilization of each other's assets and their statements under

Section 50 of PMLA evidences the deep rooted nexus between

these two organizations and that SDPI is a front organization of

PFI through which PFI has been carrying out its political

activities even while overtly taking a stand that PFI is a non-

political organization.

BAIL APPLN.3620/2025 Page 17 of 46

55. It is further submitted that documents and digital evidence seized

during search operations conducted on 03.12.2020, reflects that PFI

exercised control over, funded, and supervised the activities of SDPI. It is

claimed that SDPI was substantially dependent on PFI for its day-to-day

functioning, policy decisions, selection of election candidates, campaign

planning, public programs, and cadre mobilization. SDPI also used booklets

for bogus cash donations that deliberately omitted donor addresses and

phone numbers, with amounts kept below Rs. 2,000 to avoid scrutiny. PFI

used SDPI as a conduit to launder illicit funds by depositing cash into

sympathizers‟ or unrelated individuals‟ bank accounts, which were then

transferred to SDPI‟s accounts to project them as legitimate donations and

cadre fees.

56. Furthermore, a document titled “Conceptual Clarity about

Organization and Party” was recovered from a pen drive seized at Unity

House, Kozhikode (PFI‟s Kerala State Headquarters), which allegedly

indicates an inter-relationship between PFI and SDPI. The document

purportedly outlines PFI‟s objectives as advancing an Islamic movement in

India while presenting itself externally as a social movement. It further

suggests that SDPI and other organizations, were created as fronts to achieve

these objectives.

57. It is submitted that SDPI‟s founding leaders demonstrate an

organisational and ideological overlap between PFI and SDPA. Every SDP

National President has also been a National Executive Council (“NEC”)

member of PFI, confirming that SDPI was never an independent

organisation; rather, just a political front.

BAIL APPLN.3620/2025 Page 18 of 46

58. The Applicant is shown to be a member of SDPI, since its formation

in 2009. He has held various important posts including National General

Secretary and General Secretary, till he was appointed as National President

in the year 2018. The Applicant was one of the founding members of PFI

and served as part of its National Executive Council. He was a member of

both the National Working Committee (“NWC”) of SDPI and the NEC of

PFI.

59. The Applicant was summoned approximately 12 times but he did not

join the investigation. Further, investigations have revealed that between

October, 2010 and March 2025, SDPI‟s bank accounts across 07 states and

UTs received Rs.32,94,43,117/-, with 68% of the amount deposited in cash.

Therefore, the PFI-SDPI nexus is firmly established and forms the

foundation for the charges of money laundering against the Applicant under

Section 3 of PMLA.

60. During his statement under Section 50 of PMLA dated 05.01.2024,

M.K. Faizy is stated to have identified the “organization” mentioned in the

document as PFI and the “party” as SDPI.

61. A Letter addressed to “Faizy Sahab,” recovered from an external

hard drive, pertains to organizational matters including the selection of

candidates for state elections. This Letter outlines a detailed and structured

framework for candidate selection, involving multiple levels of the

organization. Notably, the name “Jinnasahab” mentioned in the document

refers to M. Mohd. Ali Jinnah, who served as PFI‟s National General

Secretary from 2018 to 2020 and was a member of PFI‟s National Executive

Council at the time when PFI was declared an unlawful association by the

BAIL APPLN.3620/2025 Page 19 of 46

Government of India, through a Notification dated 27.09.2022, effective for

five years from its publication in the Official Gazette on 28.09.2022.

62. Investigation revealed that PFI and SDPI also maintained similar

party- organization relationship in Gulf Countries by the name of „IFF –

ISF‟. „IFF‟ stands for „Indian Fraternity Forum‟ and „ISF‟ stands for „Indian

Social Forum‟. IFF works under PFI and ISF works under SDPI.

63. The specific role of the Applicant, is explained as under:

a. It is submitted by the ED that M.K. Faizy was a founding

member of PFI and held senior positions in the organization at

the national level. At the time PFI was declared unlawful by the

Government of India on 28.09.2022, he remained an active

member. PFI exercised control over and provided funding to

SDPI, with the Applicant serving as a crucial connection point

in his dual role as SDPI National President while being a PFI

member. Evidence seized during raids, including

correspondence and meeting records, allegedly demonstrates

that PFI allocated Rs 3.75 crore to SDPI for electoral purposes

in 2019.

b. Documents recovered from PFI‟s Kerala headquarters

reportedly outlined the organization‟s aim of promoting an

“Islamic movement” through “all principles of jihad”,

identifying SDPI as one of its affiliated organizations under the

Applicant‟s leadership.

c. During his tenure as a PFI NEC member (2015-16 to 2018) and

as SDPI National President, M.K. Faizy allegedly participated

BAIL APPLN.3620/2025 Page 20 of 46

in obtaining, hiding, and presenting proceeds of crime as

legitimate funds.

d. Through his positions in PFI, he held decision-making authority

over the organization's operations and financial matters,

including fundraising as part of a broader conspiracy and the

deployment of funds for various illegal and terrorist activities,

welfare programs serving as cover, and integration into bank

accounts or acquisition of assets. The Applicant played a

significant role in overseeing PFI activities and managing

financial resources.

e. M.K. Faizy was engaged in “cross-border fundraising” for both

organizations. His travel to the UAE (10.02.2016-29.02.2016)

for fundraising purposes, supported by PFI documents and his

statement dated 05.01.2024, highlights SDPI‟s involvement in

PFI‟s international funding operations.

f. As SDPI National President and authorized signatory for

SDPI‟s Canara Bank account, the Applicant supervised

activities including fraudulent cash donations, routing funds

through intermediary accounts, collection through extortion,

financing unlawful activities, and controlling SDPI's financial

resources. He also received Rs.15,40,000/- from SDPI into his

personal bank account.

g. His failure to comply with 12 ED summons and the subsequent

issuance of warrants (17.12.2024, 17.01.2025) suggests

intentional interference with the investigation.

BAIL APPLN.3620/2025 Page 21 of 46

h. M.K. Faizy knowingly enabled the acquisition, possession, and

portrayal of proceeds of crime as legitimate funds, supporting

PFI's plan to finance riots, terrorist training, and anti-national

demonstrations. He actively participated in processes involving

proceeds of crime totalling Rs.32,94,43,117/-, including

concealment, possession, acquisition, use, and subsequent

projection as legitimate funds. Therefore, the Applicant

knowingly committed the offence of money laundering under

Section 3 of PMLA and is liable for punishment under Section

4 of PMLA. As a PFI National Executive Council member and

SDPI National President, the Applicant bears vicarious liability

for the activities of both organizations under Section 70 of

PMLA.

i. Further, investigations have revealed that between October,

2010 and March 2025, SDPI‟s bank accounts across 07 states

and UTs received Rs.32,94,43,117/-, with 68% of the amount

deposited in cash, indicating a deliberate strategy to obscure

source of funds.

64. It is submitted that the Applicant has been arrested in accordance with

the powers vested under Section 19 of PMLA. The acts of the Applicant

squarely fall within the definition and ambit of the offence of money-

laundering, as contemplated under Section 3 of said Act.

BAIL APPLN.3620/2025 Page 22 of 46

65. It is submitted that in terms of the mandatory twin conditions under

Section 45 of PMLA, an accused may be released on bail only if he fulfils

the following mandatory twin condition:

a. There are reasonable grounds for believing that he is not guilty

of the offence of money laundering; and

b. That he is not likely to commit any offence while on bail.

66. It is submitted that while considering the present Bail application on

the anvil of Section 45 of PMLA, the Court is not required to render a

finding of guilt at this stage, nor is it required to conduct a mini trial or

meticulously examine the evidence, rather examine whether the petitioner

has made out reasonable grounds for believing that he‟s not guilty.

67. Reliance is placed on Vijay Madanlal Choudhary & Ors. vs. Union of

India, (2022) SCC OnLine SC 929, wherein it has upheld the constitutional

validity of these conditions. In Tarun Kumar vs. Enforcement Directorate,

2023 SCC OnLine SC 1486, this Court has emphasized on compliance of

conditions enumerated in Section 45 of PMLA, even in respect of an

Application for bail made under Section 439 CrPC.

68. It is further submitted that it is well settled that investigation into the

offence of money laundering, is independent of the investigation conducted

by the predicate Agency and it is also very well settled that a person accused

of the offence of money laundering, need not necessarily be accused of a

scheduled offence. In Vijay Madanlal, (supra) this Court has also held at

Para 269 that offence of money laundering is an independent offence and in

BAIL APPLN.3620/2025 Page 23 of 46

Para 295 it was held that a person even if not an accused in the scheduled

offence, he can be guilty of the offence of money laundering.

69. The nature of the offences and the trite law mandates the fulfilment of

triple test as well, for securing Bail. As there is strong likelihood that if the

Accused if released, he may dispose of their properties/assets involved in the

commission of the offence of money laundering or tamper with evidences or

influence the witness in order to destroy the money trail, thereby leading to

frustration of proceedings under PMLA.

70. Furthermore, the filing of the 7

th

Supplementary Prosecution

Complaint dated 01.05.2025 and the issuance of process against the

Applicant/Accused by the Special Court on 20.05.2025, establishes that a

prima facie case exists against the Applicant, indicating guilt for the offence

of money laundering under the PMLA.

71. In support of this contention, reference is made to the Supreme

Court's decision in Manharibhai Muljibhai Kakadia & Anr vs. Shaileshbhai

Mohanbhai Patel & Ors, (2012) 10 SCC 517, which held that cognizance

involves the application of judicial mind to determine whether an offence

has been committed, based on a Complaint, First Information Report, or

other information.

72. It is submitted that the Applicant‟s reliance on delay of trial is

misplaced, given that the complexity of the offence, involving multiple

institutions, extensive records, and ongoing investigation, inherently

requires substantial time. The Applicant cannot benefit from their own

actions or seek comparison with cases having different factual

circumstances.

BAIL APPLN.3620/2025 Page 24 of 46

73. Furthermore, the Applicant‟s claim of suffering over one year of

incarceration, is without merit. This Court has neither established any fixed

rule mandating Bail after a year in custody nor do the mandatory twin

conditions under Section 45 of PMLA, cease to apply after such period.

74. To support this argument, the Applicant had cited Manish Sisodia vs.

CBI, 2023 SCC OnLine SC 1393 (Manish Sisodia I) and V. Senthil Balaji,

(supra). It is contended that in these decisions, the Court has not established

any universal mathematical formula for granting Bail. In fact, the ratio of the

above-mentioned decision can be summarized to say that a Court may grant

Bail, de hors the satisfaction of Section 45 of PMLA if:

a. Trial is delayed and protracted for reasons not attributable to

the accused; and

b. Long period of incarceration undergone by the accused and the

Court comes to a conclusion that the trial will not be concluded

within a reasonable time and is likely to take years; and

c. The above may be done „depending on the nature of

allegations‟.

75. Further, this Court while interpreting similar rigors of Bail under

Section 437 read with Section 439 CrPC, held that mere incarceration for a

long period, cannot be the sole ground for bail ignoring the gravity of the

offence.

76. Reliance in this regard is placed upon A. Kalyan Chandra Sarkar vs.

Rajesh Ranjan, (2004) 7 SCC 528; Rajesh Ranjan Yadav vs. CBI, (2007) 1

SCC 70. Further, the Apex Court, in State of Bihar & Anr. vs. Amit Kumar,

BAIL APPLN.3620/2025 Page 25 of 46

(2017) 13 SCC 751 has also held with respect to economic offences that

when the seriousness of the offence is such the mere fact that he was in jail

for howsoever long time, should not be the concern of the Courts. The

reasoning in these decisions, has also been endorsed by the Supreme Court

in Vijay Madanlal (supra).

77. Furthermore, before and after the recent rulings in Manish Sisodia vs.

Directorate of Enforcement, 2024 SCC OnLine SC 1920 (Manish Sisodia

II), and V. Senthil Balaji, (supra), the Supreme Court has rejected Bail

Applications of accused persons, despite their having spent over a year in

custody, considering various factors in each case. Such instances are listed

below:

a. Order dated 10.01.2025 in Shahnawaz Ahmed Jeelani vs.

Enforcement Directorate, SLP (Crl.) No. 14173/2024, the

Supreme Court denied bail after 1 year 6 months and 14 days.

b. Order dated 21.10.2024 in Vipin Kumar Sharma vs. Directorate

of Enforcement, SLP (Crl.) No. 9540/2024, the Supreme Court

denied bail after 1 year 3 months and 22 days.

c. Order dated 27.02.2023 in Bimal Kumar Jain vs. Directorate of

Enforcement, SLP (Crl.) No. 9656/2022, the Supreme Court

denied bail after 2 years 5 months and 26 days.

d. Order dated 03.02.2025 in Banmeet Singh vs. Directorate of

Enforcement, SLP (Crl.) No. 1685/2025, the Supreme Court

denied bail after 8 months and 5 days.

BAIL APPLN.3620/2025 Page 26 of 46

e. Order dated 25.03.2025 in Hitesh Gandhi vs. Enforcement

Directorate, SLP (Crl.) No. 16555/2024, the Supreme Court

denied bail after 1 year 6 months and 26 days.

f. Order dated 25.03.2025 in Arvind Rajta vs. Enforcement

Directorate, SLP (Crl.) No. 16263/2024 (co-accused in the

present ECIR), the Supreme Court denied bail after 1 year 6

months and 26 days.

g. Order dated 25.03.2025 in Krishan Kumar vs. Enforcement

Directorate, SLP (Crl.) No. 17355/2024 (co-accused in the

present ECIR), the Supreme Court denied bail after 1 year 6

months and 26 days.

h. Order dated 25.03.2025 in Rajdeep Singh vs. Enforcement

Directorate, SLP (Crl.) No. 16807/2024 (co-accused in the

present ECIR), the Supreme Court denied bail after 1 year 6

months and 26 days.

78. Additionally, this Court and the Supreme Court, have consistently

held that in cases involving serious economic offences affecting the nation's

financial health, the duration of incarceration alone cannot be the

determining factor for bail. The gravity of the offence, the nature of

evidence, and the influential position of the accused must take precedence.

79. The Respondent/ED has opposed the grounds taken by the Applicant

and thus, a prayer is made for dismissal of the present Bail Application.

80. Ld. Counsel for the Applicant, Senior Advocate Mr. Siddharth

Agarwal made a three-fold submission seeking Bail for the accused. At the

BAIL APPLN.3620/2025 Page 27 of 46

outset, Ld. counsel referred to the detailed Written Submissions filed by the

ED and submitted that despite the voluminous nature of these submissions,

there is no material evidence to substantiate the allegations against the

Applicant.

81. It was submitted that the Applicant has been in custody since

03.03.2025, i.e. approximately 11 months, which constitutes prolonged

incarceration without trial. Furthermore, the Applicant‟s name neither

appeared in the initial investigations nor in the predicate offence

proceedings.

82. It was vehemently argued that when PFI along with its associated

organizations and affiliates was declared unlawful in 2022, anyone

connected with PFI was made part of that order, but significantly, SDPI (the

political party) was neither declared unlawful nor included in the list of

banned organizations.

83. Ld. Counsel further submitted that the reliance placed by the ED on

Section 66 of PMLA is misplaced in the present circumstances.

84. Ld. counsel made reference to a letter dated June 2025 addressed to

the NIA regarding SDPI, pointing out that despite the ED providing all

materials in its possession to the NIA, no action has been taken against SDPI

or its leadership, which demonstrates that even the investigating agency in

the predicate offence does not consider there to be sufficient evidence to

proceed against SDPI or the Applicant.

85. Furthermore, on the ground of parity, Ld. Counsel submitted that

several Co-accused persons have been granted Bail by this Court and by the

Special Court, and all of them were similarly associated with SDPI just like

BAIL APPLN.3620/2025 Page 28 of 46

the Applicant. While the ED challenged the Bail Orders granted by this

Court before the Apex Court, contending that there was no parity, but, the

Order of this Court granting Bail to the co-accused was not cancelled.

Furthermore, that there is no material distinction between the role attributed

to the Applicant and the roles attributed to the Co-accused who have been

granted bail, and therefore, the principle of parity mandates that the

Applicant must also be entitled to Bail.

86. On the issue of alleged non-cooperation with the investigation, Ld.

Counsel submitted that from March 2024 onwards, summons were issued to

the Applicant and the Applicant responded to all summons and appeared. It

was submitted that there were valid reasons for any delay in appearance,

including the Applicant‟s participation in election-related activities as the

National President of a political party and genuine health concerns that

prevented immediate compliance. Ld. Counsel emphasized that the

Applicant is a resident of Kerala and was arrested in Delhi on 03.03.2025. It

was further submitted that proceedings under Section 174 IPC were initiated

against the Applicant, which is an offence punishable with a maximum

sentence of only one month, and even that period has been undergone by the

Applicant. Therefore, the issue of non-cooperation raised by the ED is

incorrect.

87. On the central issue of the Applicant‟s alleged association with PFI,

Ld. Counsel submitted that the Applicant‟s association with PFI, if any,

ended in 2018, which was four years before PFI was declared a banned

organization in 2022. Ld. Counsel submitted that the allegation that PFI

funded SDPI is irrelevant because SDPI itself is not a banned organization

BAIL APPLN.3620/2025 Page 29 of 46

and continues to function as a legitimate political party. It was emphasized

that the Applicant is the National President of SDPI, which is a registered

political party participating in democratic elections, and his role and

activities are entirely in his capacity as the head of a political party.

88. Furthermore, it was argued that the actual amount involved is only Rs.

3 lakh and not the inflated figures suggested by the ED. It was argued that

social movements and political parties are often connected and have

overlapping membership, which is a normal feature of democratic political

activity. Thus, to say today that anyone who was associated with PFI at any

point in time is guilty of criminal offences is incorrect. SDPI was established

in 2009 and is still functioning as a legitimate political party, and the

allegation that it operated under the “guise” of a political party, is a bald

assertion without any evidence.

89. Ld. Counsel further submitted that the Applicant went to Dubai solely

for the purpose of legitimate work, and this travel occurred over a period

from 2010 to 2025 spanning 15 years, during which he went for only 18

days in total.

90. Ld. Counsel further submitted that the specific amounts allegedly

involved are mentioned as only Rs. 86,000 and Rs. 1.5 lakh respectively,

which are relatively small amounts and do not justify the serious allegations

of money laundering and terrorist financing being levelled against the

Applicant. It was submitted that a total of 8 Prosecution Complaints have

been filed in this case, and the Applicant’s name did not feature in any of

the earlier Complaints, appearing for the first time only in the 7

th

Supplementary Prosecution Complaint.

BAIL APPLN.3620/2025 Page 30 of 46

91. Ld. Counsel further submitted that the Applicant has satisfied both the

twin conditions under Section 45 of PMLA, that there are reasonable

grounds to believe that he is not guilty of the offence alleged, and that he is

not likely to commit any offence while on Bail. The grant of Bail to

similarly placed Co-accused persons, the lack of evidence against the

Applicant, and the fact that SDPI is not a banned organization, the Applicant

be granted Bail.

92. Ld. Counsel for the Respondent, ED, Mr. Zoheb Hossain along with

Mr. Vivek Gurnani has vehemently opposed the present Bail Application.

Detailed Written Submissions have also been filed by the Respondent/ED.

93. Ld. Counsel emphasized that the Applicant has been in custody since

03.03.2025, and this period of incarceration, while acknowledged, cannot be

the sole ground for grant of Bail in a case of this gravity and nature. Ld.

Counsel emphasized that Section 120B IPC (criminal conspiracy) read with

other offences constitutes a predicate offence under PMLA, and the present

case involves a deep-rooted conspiracy to raise, layer, and deploy proceeds

of crime for terrorist activities and anti-national purposes.

94. Moreover, the Applicant is not merely a member or office bearer of

PFI but is a founding member of PFI, which establishes his involvement

from the very inception of the criminal enterprise and demonstrates his

intimate knowledge of the organizational structure, objectives, and modus

operandi.

95. It was submitted that ED is investigating offences under Section 3 of

PMLA relating to funds raised both in India and abroad for terrorist

activities, communal violence, and anti-national purposes, and significantly,

BAIL APPLN.3620/2025 Page 31 of 46

these funds were not reflected in the books of accounts, demonstrating

deliberate concealment and layering of proceeds of crime. Ld. Counsel

emphasized on two critical aspects of the Applicant‟s role: firstly, the

Applicant was a founding member of PFI at the time when these unlawful

activities were being undertaken, establishing his knowledge and

participation in the criminal conspiracy from the beginning; and secondly,

the Applicant was the head of SDPI, which operated as the political front of

PFI, and the entire decision-making process of SDPI was controlled and

directed by PFI. Therefore, any money received or deployed by SDPI was

effectively money under the control of PFI, and given that these funds were

derived from criminal activities relating to scheduled offences, they

necessarily constitute proceeds of crime.

96. It was further pointed out that the language of Section 3 of PMLA,

defines the offence of money laundering. The word “including” followed by

“acquisition” makes it clear that acquisition is a distinct and independent

category of activity constituting money laundering.

97. Regarding the specific role of the Applicant, Ld. Counsel submitted

that the evidence on record establishes a clear and direct link between the

predicate offence and the money laundering offence. It was submitted that

the existence of a predicate offence is a condition precedent for invoking the

provisions of PMLA; in the present case, multiple predicate offences have

been registered by the NIA and State Police involving serious charges under

UAPA, IPC, Explosive Substances Act, and Arms Act. The ED has arrayed

the Applicant as an accused based on the material evidence gathered during

BAIL APPLN.3620/2025 Page 32 of 46

investigation establishing his involvement in the process and activity

connected with proceeds of crime.

98. Ld. Counsel drew attention to the provisions of Section 66(2) of

PMLA and submitted that this provision specifically deals with the situation

where proceeds of crime are claimed to be held by a person on behalf of

another person, and in such cases, the ED is duty-bound to proceed against

the actual beneficiary or controller of such proceeds.

99. Ld. Counsel submitted that in June 2025, the ED had shared all

material and evidence in its possession with the predicate agency (NIA), and

the fact that the Applicant has not been named as an accused in the predicate

offence by the NIA does not mean that he is exonerated or absolved of

liability under PMLA. Reliance was placed on the judgment in Anil Tuteja,

(supra) wherein it has been held that it is the statutory duty of the ED under

Section 66(2) of PMLA is to investigate and prosecute persons involved in

money laundering regardless of whether they are accused in the predicate

offence ECIR or not. It is submitted that money laundering is an independent

offence distinct from the predicate offence, and a person not accused in the

scheduled offence can nevertheless be guilty of money laundering if he is

involved in any process or activity connected with proceeds of crime.

100. Ld. Counsel emphasized that in the present case, the applicable

threshold for grant of Bail is Section 45 of PMLA. It was submitted that

both these conditions are mandatory and cumulative in nature, and the

failure to satisfy even one condition would disentitle the accused from Bail.

Completion of investigation is not a ground for automatic grant of bail, and

the applicable test is not whether investigation is complete but whether the

BAIL APPLN.3620/2025 Page 33 of 46

twin conditions under Section 45 PMLA are satisfied. Without satisfaction

of Section 45, bail cannot be granted regardless of the stage of investigation

or trial.

101. The Applicant's contention that there is no involvement of the

Applicant after 2018, was answered by the Ld. counsel who asserted that the

date of declaration of an entity as unlawful cannot be treated as the date of

cessation of involvement or liability. The Applicant continued to serve as

National President of SDPI, which was the political front of PFI, and

through this position, he continued to facilitate the laundering of proceeds of

crime even after his formal association with PFI may have ended.

102. On the issue of parity, Ld. Counsel submitted that the Applicant‟s

reliance on the grant of Bail to Co-accused is not tenable. While these co-

accused were granted Bail by this Court, the period of custody undergone by

them was more than 2 years, which is significantly longer than the

approximately 10-11 months undergone by the present Applicant. The

Supreme Court clarified that its decision dismissing the ED‟s SLP was not

on merits. Therefore, the findings in the Bail Order granting Bail to

Parvez Ahmed and others cannot be treated as settled law or binding

precedent.

103. Ld. Counsel further submitted that there is a fundamental distinction

between the case of Parvez Ahmed and the present Applicant‟s case. In

Parvez Ahmed‟s case, the Court held that mere collection of funds for future

commission of offences does not constitute proceeds of crime. However, in

the present case, the allegation is not of collection of money for future

offences, but of conspiracy to commit scheduled offences under UAPA, and

BAIL APPLN.3620/2025 Page 34 of 46

the funds in question are proceeds derived from already committed criminal

activities including terrorist training camps, riots, communal violence, and

other completed offences.

104. Ld. counsel has placed strong reliance on the judgment of the Hon'ble

Supreme Court in Sagar vs. State of Uttar Pradesh, 2025 INSC 137 wherein

it has been held that the principle of parity in Bail matters must be applied

with great caution and cannot be mechanically applied, and that each case

must be decided on its own facts considering the specific role, position, and

degree of involvement of each accused. The Applicant was also a direct

recipient of Rs. 15,40,000/- in his personal account is materially different

from and far more culpable than the roles attributed to the Co-accused.

105. To sum up, Ld. Counsel for the ED submitted that the Applicant has

failed to satisfy either of the twin conditions under Section 45 of PMLA.

There exist overwhelming reasonable grounds to believe that the Applicant

is guilty of the serious offence of money laundering linked to terrorist

financing and activities threatening national security. Furthermore, given the

Applicant‟s influential position, evasion of 12 summons, his international

connections through cross-border fundraising, and the risk of tampering with

evidence and influencing witnesses, there are substantial grounds to believe

that the Applicant is likely to commit offences while on Bail.

Submissions heard and record perused.

106. The Applicant herein, seeks grant of regular Bail in ECIR dated

21.09.2022. The Applicant was arrested on 03.03.2025 and has been in

custody since then.

BAIL APPLN.3620/2025 Page 35 of 46

107. The investigation commenced with ECIR dated 02.05.2018 registered

on the basis of various FIRs by NIA and State Police, against office bearers

and members of Popular Front of India (PFI) and its related entities, under

scheduled offences including Sections 120-B, 121, 121A IPC, Explosive

Substances Act, Arms Act and UAPA.

108. Subsequently, present ECIR dated 21.09.2022 was registered based

on NIA FIR No. RC-14/2022/NIA/DLI dated 13.04.2022. The Applicant‟s

name was neither mentioned nor were any allegations levelled against him,

until the filing of the 7

th

Supplementary Prosecution Complaint dated

15.06.2025.

Role of the Applicant in the present matter:

109. The Respondent/ED in its Complaint has alleged that as a PFI NEC

Member and also the SDPI President, the Applicant was involved in

acquiring, concealing, and projecting proceeds of crime as legitimate. It is

also stated that he knowingly participated in laundering Rs.32.94 crore,

concealing and using illicit funds to finance riots, terrorist training, and anti-

national activities, thereby committing offences under Section 3 and 4 of

PMLA, and being vicariously liable under Section 70 as NEC member of

PFI and President of SDPI.

110. The Respondent/ED in its Complaint has further alleged that the

members of PFI, conspired to raise funds, domestically and abroad for

terrorist activities, promoted communal disharmony through media

and radicalised Muslim youth to join proscribed groups.

BAIL APPLN.3620/2025 Page 36 of 46

Parameters for grant of Bail:

111. The grant of Bail in offences under the Prevention of Money

Laundering Act, 2002 is governed by the stringent twin conditions

prescribed under Section 45, which are: (i) reasonable grounds to believe

accused is not guilty; (ii) accused unlikely to commit offence while on Bail.

The failure to satisfy even one of these conditions would disentitle the

accused from the grant of Bail.

112. In the case of Union of India vs. Kanhaiya Prasad, 2025 INSC 210 it

was held that it was well settled, these two conditions are mandatory in

nature and they need to be complied with before the accused person is

released on bail under Section 439 of Cr.P.C.

Proceeds of Crime:

113. The Petitioner has been charged for the offence of money laundering

under Section 3 of PMLA. It 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.”

114. The gravamen for commission of the offence of money laundering is

„proceeds of crime‟ which is defined under Section 2(1)(u) of PMLA as

under:

“(u) “proceeds of crime” means any property derived or

obtained, directly or indirectly, by any person as a result of

BAIL APPLN.3620/2025 Page 37 of 46

criminal activity relating to a scheduled offence or the value

of any such property;”

115. The term “proceeds of crime” was extensively explained in the case

of Vijay Madanlal Choudhary vs. Union of India, (2023) 12 SCC 1 as under:

“To be proceeds of crime, therefore, the property must be

derived or obtained, directly or indirectly, “as a result of”

criminal activity relating to a scheduled offence. To put it

differently, the vehicle used in commission of scheduled

offence may be attached as property in the case (crime)

concerned, it may still not be proceeds of crime within the

meaning of Section 2(1)(u) of the 2002 Act. Similarly,

possession of unaccounted property acquired by legal means

may be actionable for tax violation and yet, will not be

regarded as proceeds of crime unless the tax legislation

concerned prescribes such violation as an offence and such

offence is included in the Schedule to the 2002 Act. 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. Dealing with proceeds

of crime by way of any process or activity constitutes offence

of money laundering under Section 3 PMLA.

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

BAIL APPLN.3620/2025 Page 38 of 46

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.”

116. From the aforesaid paragraphs, it is evident that any property being

derived or obtained directly or indirectly as a result of criminal activity

which is a scheduled offence, would be termed as proceeds of crime, under

PMLA. In other words, for any property to be termed as proceeds of crime,

it must be obtained from the commission of a scheduled offence.

117. In Pavana Dibbur vs. Enforcement Directorate, 2023 SCC OnLine

SC 1586, it was explained that on plain reading of Section 3, an offence

under this Section can be committed after a scheduled offence is committed.

In case of a person who is unconnected with the scheduled offence,

knowingly assists the concealment of proceeds of crime or knowingly assists

the use of proceeds of crime, would be guilty under Section 3 of PMLA. It

was thus, concluded that it is not necessary that a person against whom the

offence under Section 3 of PMLA is alleged, must have been shown as an

accused in the scheduled offence. “The condition precedent for attracting

offence Section 3 PMLA are that there must be a scheduled offence and that

there must be proceeds of crime in relation to the scheduled offence as

defined in Clause (u) of sub-section (1) of Section 3 of the PMLA.”

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

BAIL APPLN.3620/2025 Page 39 of 46

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 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

BAIL APPLN.3620/2025 Page 40 of 46

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.

123. The ED, in order to establish that the Applicant was actively involved

in fund-raising, has made an allegation that in the year 2016, the Appellant

had gone to UAE from 10.02.2016-29.02.2016 i.e. merely 18 days. Such

visit was in 2016, much prior to registration of the case by NIA on

02.05.2018.

124. In the light of aforesaid discussion, it is concluded that the

parameters of Section 45 are satisfied, in the present case.

Section 66 of PMLA:

125. Another contention was raised by the Ld. Senior Counsel for the

Applicant is that Letter dated 13.06.2025 was written by the ED to the NIA

for sharing the information, despite which the name of the Applicant has not

been included in the Charge-Sheet in the predicate offence.

126. Section 66 of PMLA provides for disclosure of information. Section

66 is reproduced as under:

BAIL APPLN.3620/2025 Page 41 of 46

“(1) The Director or any other authority specified by him by

a general or special order in this behalf may furnish or

cause to be furnished to--

(i) any officer, authority or body performing any functions

under any law relating to imposition of any tax, duty or cess

or to dealings in foreign exchange, or prevention of illicit

traffic in the narcotic drugs and psychotropic substances

under the Narcotic Drugs and Psychotropic Substances Act,

1985 (61 of 1985); or

(ii) such other officer, authority or body performing

functions under any other law as the Central Government

may, if in its opinion it is necessary so to do in the public

interest, specify, by notification in the Official Gazette, in

this behalf, any information received or obtained by such

Director or any other authority, specified by him in the

performance of their functions under this Act, as may, in the

opinion of the Director or the other authority, so specified

by him, be necessary for the purpose of the officer, authority

or body specified in clause (i) or clause (ii) to perform his

or its functions under that law.

(2) If the Director or other authority specified under

sub-section (1) is of the opinion, on the basis of

information or material in his possession, that the

provisions of any other law for the time being in force are

contravened, then the Director or such other authority

shall share the information with the concerned agency for

necessary action.”

127. This Court in the case of Harish Fabiani and Ors. vs. ED and Ors.,

WP (Crl.) 408/2022 (Delhi HC) decided on 26.09.2022, observed that an

ECIR or a proceeding under the PMLA cannot be triggered merely on that

assumption alone, as noticed in Vijay Madanlal Choudhary, (supra). Section

66(2) itself enables disclosure and sharing of information inter se authorities,

BAIL APPLN.3620/2025 Page 42 of 46

however mere disclosure does not crystallize a scheduled offence. It is

merely an “assumption” till it precipitates as being “registered with the

jurisdictional police or pending inquiry by way of Complaint before the

competent forum”.

128. Furthermore, in the case of R.K.M Powergen Private Limited vs. ED

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

it was held as under:

“60. It is too well settled that where an act has to be done in a

particular way, it must be done in that way and in no other way. The

PMLA demands the existence of a predicate offence. When there is

no predicate offence, initiation of proceedings under PMLA is a non

starter. If the arguments of the Additional Solicitor General is

accepted, then the ED on registration of an ECIR can conduct a

roving enquiry with respect to other aspects also. That is not the

position of law. To put it pithily, no predicate offence, no action by

ED.

61. A careful perusal of Section 66(2) of PMLA points out that if

during the course of investigation, the ED comes across violations of

other provisions of law, then it cannot assume the role of

investigating those offences also. It is to inform the appropriate

agency, which is empowered by law to investigate into that offence.

If that Agency, on the intimation from the ED, commences

investigation and registers a complaint, then certainly the ED can

investigate into those aspects also, provided there are “proceeds of

crime”. In case, the investigating agency does not find any case with

respect to the aspects pointed out by the ED, then the ED cannot suo

motu proceed with the investigation and assume powers. 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.”

129. Applying the ratio of the above judgments to the facts of the present

case, the Applicant was neither named in the original FIR No. RC-

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14/2022/NIA/DLI dated 13.04.2022 registered by the NIA nor in the ECIR

No. ECIR/STF/17/2022 dated 21.09.2022 registered by the ED based on the

NIA FIR. There have been no prima facie allegations against the Applicant

in the predicate offence. The NIA, after conducting extensive investigation

spanning over three years from April 2022 till date, has filed its Chargesheet

dated 18.03.2023 against 24 accused persons, arraigning 243 witnesses, but

the Applicant’s name does not figure anywhere in the said Chargesheet.

Despite the ED sharing all its material with the NIA vide the letter dated

13.06.2025, the NIA has not filed any supplementary Chargesheet against

him.

130. The Applicant‟s name surfaced for the first time, only in the 7

th

Supplementary Prosecution Complaint filed on 15.06.2025 by the ED,

despite several earlier Prosecution Complaints and Supplementary

Complaints having been filed since 2018, wherein no allegations were ever

made against him. This belated inclusion of the Applicant in the 7

th

Supplementary ED's Complaint and pertinently, not in the NIA‟s predicate

offence proceedings despite sharing of material, reflects no prima facie case

against the Applicant.

Delay, period of incarceration and lengthy trial:

131. Another ground raised by the Applicant, is of inordinate delay in the

trial. It is argued that he is in Judicial Custody since 03.03.2025 and the trial

is not likely to conclude soon. He may thus, be granted Bail.

132. It is well settled that the right to a speedy trial is a fundamental right

guaranteed under Article 21 of the Constitution of India. While gravity of

BAIL APPLN.3620/2025 Page 44 of 46

offence is undoubtedly a relevant consideration, it cannot eclipse the

constitutional mandate that personal liberty of an undertrial cannot be

curtailed for an indefinite period without conclusion of trial. Prolonged

incarceration, when coupled with no real likelihood of early completion of

trial, assumes constitutional significance.

133. The Apex Court in Union of India vs. K.A. Najeeb, (2021) 3 SCC 713,

has categorically held that statutory restrictions on bail do not oust the

powers of Constitutional Courts to grant bail where continued incarceration

would result in violation of Part III of the Constitution. The Court observed

that the rigours of stringent bail provisions “melt down” when there is no

likelihood of trial being completed within a reasonable time and the accused

has undergone substantial incarceration.

134. The principle has been reiterated in Manish Sisodia (II), (supra)

wherein the Apex Court emphasized that “Bail is the rule and Jail is the

exception” and cautioned courts against withholding bail as a form of pre-

trial punishment.

135. In the present case, the Prosecution itself admits that the matter

involves voluminous records running into approximately 90,000 pages,

more than 240 witnesses, multiple accused persons, digital and forensic

evidence, and complex financial transactions spanning several years. The

scale and nature of the evidence make it apparent that the trial is bound to

take a considerable period of time before conclusion.

136. Although the 7

th

Supplementary Prosecution Complaint was filed on

15.06.2025 and cognizance taken on 20.05.2025, the proceedings are still at

BAIL APPLN.3620/2025 Page 45 of 46

a nascent stage. Charges are also yet to be framed. In light of the sheer

volume of evidence and number of witnesses, the trial is likely to take long.

137. The Applicant is in Jail since 03.03.2025 i.e. for more than 11

months. Continued incarceration without commencement and foreseeable

completion of trial would amount to pre-trial punishment, which is

impermissible under Article 21.

138. The rigours of Section 45 of PMLA cannot be permitted to operate so

as to sanction indefinite detention of the Applicant.

Conclusion:

139. In light of the foregoing reasons, the Bail Application is allowed. The

Applicant be released on Regular Bail, subject to the following terms and

conditions:

a) The Applicant / Petitioner shall furnish a personal bond in the

sum of Rs 50,000/- (Rupees fifty thousand only) with 1 surety in the

like amount, to the satisfaction of the concerned trial court;

b) The Applicant / Petitioner shall not leave the country without

the permission of the concerned court and if the Applicant / Petitioner

has a passport, he shall surrender the same to the concerned trial

court;

c) The Applicant / Petitioner shall furnish to the I.O. concerned

his cell phone numbers on which the Applicant / Petitioner may be

contacted at any time and shall ensure that the number is kept active

and switched on at all times;

BAIL APPLN.3620/2025 Page 46 of 46

d) The Applicant / Petitioner will furnish their permanent address

to the concerned I.O. and in case he changes his address, he will

inform the I.O. concerned;

e) The Applicant / Petitioner 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 Applicant / Petitioner shall appear in Court as and when

required;

g) The Applicant / Petitioner shall not communicate with, or come

into contact with any of the prosecution witnesses, or tamper with the

evidence of the case.

140. It is made clear that any observations made hereinabove, are not an

expression on the merits of the case. It is further clarified that these

observations shall not, in any manner, influence the trial before the Ld. Trial

Court, as they have been made solely for the purpose of examining the Bail

Application of the Applicant.

141. Accordingly, in the facts and circumstances of the present case, and in

view of the foregoing discussion and analysis, the present Bail Application

is allowed.

142. The present Bail Application is accordingly disposed of.

(NEENA BANSAL KRISHNA)

JUDGE

FEBRUARY 16, 2026/VA