Court grants relief to Anshad Badruddin and Abdul Khadir Puttur who have spent more than two years in judicial custody in money laundering case
NEW DELHI — The Delhi High Court has granted bail to two former members of the banned Popular Front of India (PFI), observing that merely receiving a salary from an organisation cannot automatically be treated as receiving the proceeds of crime under the Prevention of Money Laundering Act (PMLA).
The court extended relief to Anshad Badruddin and Abdul Khadir Puttur, who have spent more than two years in judicial custody in connection with a money laundering case investigated by the Enforcement Directorate (ED).
In a significant order, the High Court said that, at this stage, there was insufficient material to conclude that the salaries allegedly received by the two men from the PFI constituted proceeds of crime as defined under the PMLA.
The case stems from an Enforcement Case Information Report (ECIR) registered by the ED on the basis of a National Investigation Agency (NIA) investigation linked to the activities of the Popular Front of India, an organisation that was later banned by the Central Government.
The ED arrested both accused in March 2024. According to the agency, the two men were associated with the PFI and were engaged in providing physical training to members of the organisation. The agency alleged that they received payments from the organisation for these activities.
During the hearing, the ED argued that the accused were involved in activities connected with the organisation and that the payments received by them were linked to unlawful activities.
However, Justice Purushaindra Kumar Kaurav observed that receiving remuneration for providing physical training before the organisation was banned could not automatically be regarded as illegal.
The court emphasised that under the Prevention of Money Laundering Act, money can only be treated as proceeds of crime if it is first shown to be connected to a scheduled offence recognised under the law.
The court noted that, on a prima facie examination of the material presently available, there was no adequate basis to conclude that the salaries received by the accused fell within the category of criminal proceeds.
“Merely receiving salary from an organisation does not by itself establish that the money was derived from criminal activity,” the court observed while considering the bail applications.
The ED also alleged that the accused had participated in activities involving training related to weapons and other exercises. The agency argued that such activities demonstrated their involvement in the organisation’s wider operations.
The High Court, however, clarified that even if such allegations were assumed to be true at this stage, their accuracy and legal consequences would have to be determined during the trial after a full examination of evidence.
The court said that the existence of allegations alone was not sufficient to establish that the salaries paid to the accused constituted proceeds of crime under the money laundering law.
According to the court, these questions require a detailed assessment during trial proceedings and cannot be conclusively decided while considering bail.
A major factor in the court’s decision was the prolonged incarceration of the accused.
The High Court noted that both Anshad Badruddin and Abdul Khadir Puttur had remained in judicial custody for more than two years and three months. Despite their lengthy detention, charges had not yet been formally framed against them.
The court also observed that there was currently no indication that the trial would conclude in the near future.
Referring to the constitutional principles of personal liberty and fair trial, the court indicated that prolonged detention without substantial progress in the trial process could not be ignored while deciding the bail applications.
Legal experts say the ruling is significant because it reiterates that allegations alone are not enough to invoke the stringent provisions of the PMLA and that investigating agencies must establish a clear connection between the money in question and a scheduled criminal offence.
The order does not amount to an acquittal, and the criminal proceedings against the accused will continue before the trial court. The High Court’s decision only concerns their entitlement to bail while the case remains pending.
The ruling is also likely to be closely examined in other money laundering cases where courts are required to balance the seriousness of allegations against the constitutional rights of accused persons awaiting trial.
With the grant of bail, Anshad Badruddin and Abdul Khadir Puttur have secured temporary relief after spending more than two years in custody, while the allegations against them will continue to be examined through the judicial process.
