# Neeharika Singh v. Directorate of Enforcement Lko. Opp. Party

- **Citation:** (2025) 5 ILRA 1008
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-05-14
- **Case number:** Application U/S 482 No. 3979 of 2025
- **Bench:** Subhash Vidyarthi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/neeharika-singh-v-directorate-of-enforcement-lko-opp-party-53283
- **Pages:** 10

## Headnote

The Prevention of Money Laundering Act
(PMLA), 2002-Section 3 -Offence of money
laundering u/s 3 of PMLA is independent of
the scheduled offence through which the
proceeds
of
crime
were
generated-if
numerous persons are accused of commission
of the scheduled offence and one or some of
them, but not all of them are exonerated /
discharged or acquitted- it cannot be said that
the
scheduled
offence
has
not
been
committed- or that the proceeds of crime
have not been generated-if prosecution is
going then even if a person is not named as
an accused in the scheduled offence- or if he
/ she has been exonerated / discharged in
respect of the scheduled offence-it will not
create a bar against his / her prosecution
under the PMLA.

Application dismissed. (E-9)

List of Cases cited:

## Text

1008 INDIAN LAW REPORTS ALLAHABAD SERIES
BNSS lack merits and are, accordingly,
rejected.
----------
(2025) 5 ILRA 1008
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 14.05.2025

BEFORE

THE HON'BLE SUBHASH VIDYARTHI, J.

Application U/S 482 No. 3979 of 2025

Neeharika Singh ...Applicant
Versus
Directorate of Enforcement Lko.
 ...Opp. Party

Counsel for the Applicant:
Aishwarya Pratap Singh, Vivek Kumar
Shukla

Counsel for the Opp. Party:
Kuldeep Srivastava

The Prevention of Money Laundering Act
(PMLA), 2002-Section 3 -Offence of money
laundering u/s 3 of PMLA is independent of
the scheduled offence through which the
proceeds
of
crime
were
generated-if
numerous persons are accused of commission
of the scheduled offence and one or some of
them, but not all of them are exonerated /
discharged or acquitted- it cannot be said that
the
scheduled
offence
has
not
been
committed- or that the proceeds of crime
have not been generated-if prosecution is
going then even if a person is not named as
an accused in the scheduled offence- or if he
/ she has been exonerated / discharged in
respect of the scheduled offence-it will not
create a bar against his / her prosecution
under the PMLA.

Application dismissed. (E-9)

List of Cases cited:

1. Vijay Madanlal Choudhary & ors. Vs U.O.I. &
ors.: (2022) SCC OnLine SC 929
2. Enforecement Directorate Vs Gagandeep
Singh: 2022 SCC OnLine Del 514

3.
Jeevan Kumar Vs Dy. Directorate of
Enforcement: (2024) SCC OnLine Delhi 271

4. Directorate of Enforcement Vs Akhilesh Singh:
(2024) SCC OnLine Delhi 3051

5. Pavana Dibbur Vs Directorate of Enforcement,
(2023) 15 SCC 91

(Delivered by Hon'ble Subhash Vidyarthi, J.)

1. Heard Sri Tushar Agarwal and Sri
Aishwarya Pratap Singh, learned counsel
for the applicant and Shri Rohit Tripathi,
the learned counsel for the respondent-
Directorate of Enforcement.

2. By means of the instant application
filed under Section 482 Cr.P.C., the
applicant
has
challenged
validity
of
cognizance and summoning order dated
24.10.2024 passed by the learned Special
Judge,
Anti
Corruption/PMLA,
(CBIWest), Lucknow in Session Case No.
2578/2024, the prosecution complaint filed
in
ECIR/LKZO/12/2021
and
all
consequential proceedings in the aforesaid
case.

3. Briefly stated, facts of the case are
that police has registered many FIRs
against several persons for offences under
Sections 120-B, 323, 406, 409, 419, 420,
467, 468, 470, 471, 504, 506, 505(1)(B)
I.P.C. between 21.02.2020 and 26.10.2020
alleging that M/s. Anee Bullion Traders,
Anee Commodity Brokers Pvt. Ltd., Eye
Vision India Credit Co-operative Society
Ltd., Anee Bullion Industries Pvt. Ltd. etc
had propelled many ponzi schemes in
various places of Uttar Pradesh and lured
the investors to invest money in the
Companies under allurement of lucrative
returns. Post dated cheques were issued to
5 All. Neeharika Singh Vs. Directorate of Enforcement Lko.
1009
the investors but they were returned by the
banks unpaid. The company showed forged
title deeds of lands whereas the Company
owned no land. The Directors of the
Company have diverted the investors
money to other related Companies and used
the same for acquiring of movable /
immovable assets in the name of close
relatives of the Directors.

4. On 08.03.2021, the Directorate of
Enforcement
registered
ECIR/LKZO/12/2021 against five persons,
including the applicant and her husband
Ajit Kumar Gupta, stating that it appeared
to be expedient to make inquiries against
the accused persons regarding illegal
earnings, which may be proceeds of crime
i.e. tainted money earned out of the
criminal activities under Sections 120-B,
323, 406, 409, 419, 420, 467, 468, 470,
471, 504, 506, 505(1)(B) I.P.C. out of
which 120-B, 419, 420, 467 and 471 I.P.C.
are scheduled offences under para-1 of part
A of the Scheduled appended to the PMLA.
The proceeds of crime generated thus
appear to have been utilized by the accused
persons for acquisition of various movable
/ immovable assets to project the same as
untainted property, which is an offence
under Section 3 of the PMLA, 2002.

5. After investigation, the Directorate
of Enforcement filed a complaint in the
Court of Special Judge, Anti Corruption,
C.B.I. (W), Lucknow against five persons,
including the applicant and her husband
Ajit Kumar Gupta and three Companies -(i)
M/s Anee Bullion & Industries Pvt. Ltd.,
(ii) M/s Anee Commodity Brokers Pvt. Ltd.
& (iii) M/s Investors Anee Securities Pvt.
Ltd.

6. The allegations against the applicant
are that she is an Indian Foreign Service
Officer of 2006 Batch working with the
Ministry of External Affairs, Government of
India. She knowingly colluded and assisted
her husband through her influential position in
establishing the credibility of the ponzi
schemes. She being a highly educated senior
Officer of Government of India, used her
position actively and knowingly in assisting
her husband Ajit Kumar Gupta in establishing
the credibility of Anee Group Of Companies
to lure the investors by participating in various
functions organized by Ajit Kumar Gupta and
his Companies. Due to her active involvement
in raising funds by canvassing in the various
functions organized by Ajit Kumar Gupta and
his Companies, she was referred as the first
lady of the Anee Group of Companies. In this
way, she knowingly aided and abetted her
husband in commission of the scheduled
offences and generation of proceeds of crime
to the tune of Rs.44.44 crores.

7. Further, the applicant was found to be
involved in assisting her husband in layering
and concealment of proceeds of crime by
being the recipient of proceeds of crime
generated out of commission of the scheduled
offence from the Companies of her husband
Ajit Kumar Gupta, which was subsequently
utilized
for
acquisition
of
immovable
properties in her own name. The applicant
purchased a house in Virat Khand, Gomti
Nagar, Lucknow from Mrs. Sikha Tiwari
Rs.35 Lakhs out of the sale consideration have
been paid by M/s Anee Bullion Traders Pvt.
Ltd. The aforesaid property purchased for
Rs.4.45 crores has been sold by the applicant
for Rs.1.56 crores and she is in possession of
Rs.11 lakhs earned as profit which has been
derived directly from the proceeds of crime.

8. The investigation has revealed that
the applicant has assisted her husband Ajit
Kumar Gupta in concealment of proceeds
of crime to the tune Rs.76 lakhs which she
1010 INDIAN LAW REPORTS ALLAHABAD SERIES
received in her account from Anee Group
of Companies and she used this money of
the investors for making payments to
Lucknow
Development
Authority
for
changing the land use of a property situated
at Gomti Nagar, Lucknow. However, this
could not be accomplished and Lucknow
Development Authority refunded Rs.76
Lakhs to the bank account of the applicant
on 24.11.2020.

9. The complaint states that thus, it is
clear that the applicant actively and
knowingly assisted her husband Ajit Kumar
Gupta in acquisition, possession, layering,
concealment and utilization of proceeds of
crime to the tune of Rs.2.03 crores and,
therefore, she has committed the offence of
money laundering as defined under Section
3 and punishable under Section 4 of
PMLA, 2002.

10. The applicant was made an
accused in 12 cases relating to the
scheduled offences but after investigation,
her name has not been included in the
charge-sheet submitted in respect of any of
those 12 cases.

11. Submission of the learned counsel
for the applicant is that the Investigating
Officer has concluded the investigation in
respect of the scheduled offence and a
charge-sheet has been submitted which
does not include the applicant's name. The
applicant stands absolved of all the charges
under the case relating to the scheduled
offence. Therefore, the applicant cannot be
prosecuted for the offence of money
laundering under Prevention of Money
Laundering Act, 2002 (hereinafter referred
to as 'the PMLA').

12. The learned counsel for the
applicant has relied upon a decision of the
Hon'ble Supreme Court in the case of
Vijay Madanlal Choudhary and Ors. v.
Union of India and Ors.: (2022) SCC
OnLine SC 929, wherein the Hon'ble
Supreme Court held that: -

"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.
Similarly, in the event the person named in
the criminal activity relating to a scheduled
offence is finally absolved by a court of
competent jurisdiction owing to an order of
discharge, acquittal or because of quashing
of the criminal case (scheduled offence)
against him/her, there can be no action for
money laundering against such a person or
person claiming through him in relation to
the property linked to the stated scheduled
offence. This interpretation alone can be
countenanced on the basis of the provisions
of the 2002 Act, in particular Section
2(1)(u) read with Section 3. Taking any
other view would be rewriting of these
provisions and disregarding the express
language of the definition clause "proceeds
of crime", as it obtains as of now."

13. Learned counsel for the applicant
has also relied upon a decision rendered by
a Single Judge Bench of Delhi High Court
5 All. Neeharika Singh Vs. Directorate of Enforcement Lko.
1011
in
Enforecement
Directorate
v.
Gagandeep Singh: 2022 SCC OnLine Del
514, wherein a Single Judge Bench of
Delhi High Court held that: -

"30. The
offence
of
money
laundering,
however,
is
not
to
be
appreciated in isolation but is to be read
with the complementary provisions, that is,
the offences enlisted in the Schedule of the
Act.
The
bare
perusal
of
the
abovementioned provisions of the PMLA
establishes
the
prerequisite
relation
between the commission of scheduled
offences
under
the
PMLA
and
the
subsequent offence of money laundering.
The language of Section 3 clearly implies
that the money involved in the offence of
money
laundering
is
necessarily
the
proceeds of crime, arising out of a criminal
activity in relation to the scheduled
offences enlisted in the Schedule of the Act.
Hence, the essential ingredients for the
offence of Section 3 of the PMLA become,
first, the proceeds of crime, second,
proceeds of crime arising out of the
offences specified in the Schedule of the Act
and third, the factum of knowledge while
commission of the offence of money
laundering. In the present matter, at the
initial
stage
of
proceedings,
the
respondents were charged for offences
under Sections 21/25/29 of the NDPS Act
and
Sections
420/468/471/120-BIPC,
however, the learned Additional Sessions
Judge, Amritsar, observed that material
produced before the court as well as the
allegations made against the respondents
were largely made upon suspicion. Though
certain material, properties and cash, were
recovered and attached/seized but the fact
that such properties were obtained through
proceeds of crime of drug trafficking could
not be established.

31. In view of the observation
that the no scheduled offence was made out
against the respondents, this Court finds
that an investigation and proceedings into
the PMLA could not have been established
against them at the first instance."

14. This judgment has been challenged
by the Directorate of Enforcement by filing
SLP (Crl.) Diary No.42315 of 2022. The
Hon'ble Supreme Court was pleased to
issue notice of the petition on 10.02.2023
and the SLP is still pending.

15. The learned Counsel for the
applicant has relied upon two more
decisions rendered by a Single Judge
Benches of Hon'ble Delhi High Court in
Jeevan Kumar v. Dy. Directorate of
Enforcement: (2024) SCC OnLine Delhi
271 and Directorate of Enforcement v.
Akhilesh Singh: (2024) SCC OnLine Delhi
3051 wherein the proceedings under the
PMLA were quashed on the ground that the
petitioner had been acquitted by the trial
Court in the trial relating to the Scheduled
offence. In Akhilesh Singh (Supra), it was
held that: -

"28. The position thus, emerging
from the aforesaid decisions is that the
scheduled offence and the proceeds of
crime generated therefrom is the very
foundation for the offence of Money
Laundering Once a person Is discharged or
acquitted from the scheduled offence, the
very foundation gets knocked out and the
charge of Money Laundering will not
survive as there will be no proceeds of
crime.
Concomitantly,
the
properties
attached under the PMLA cannot legally be
treated as proceeds of crime or be viewed
as property derived or obtained from
criminal activity."

16. The learned Counsel for the
applicant has also placed reliance upon the
1012 INDIAN LAW REPORTS ALLAHABAD SERIES
following
passages
from
an
dated
13.04.2023 passed by a Division Bench of
Madras High Court in Hemal Mehta
versus the Directorate of Enforcement:
Writ Petition No.10901 of 2023: -

"8. It appears that the writ
petitioner's
name
was
subsequently
included as accused No.10 on the basis of
another report in April 2019 in Crime
No.39 of 2019. It was thereafter, the writ
petitioner filed Crl.O.P.No. 15869 of 2019
before this Court, to quash the FIR on
various grounds. This Court was pleased to
order stay of investigation in Crime No.39
of 2019 insofar as the writ petitioner is
concerned.

9. However, it is the grievance of
the writ petitioner that he has received
summons from the respondent herein under
the provisions of the Prevention of Money
Laundering Act, 2002, to appear before the
respondent on 09.01.2023 based on the
impugned proceedings.
* * *

14. The learned senior counsel
appearing for the writ petitioner relied
upon the Judgment of the Hon'ble Supreme
Court in Vijay Madanlal Choudhary and
others Vs Union of India and others
reported in (2022) SCC OnLine SC 929,
wherein, the Hon'ble Supreme Court in
Paragraph No.467 (v)(d), has held as
follows:-

"467. In light of the above
analysis, we now proceed to summarise
our conclusion on seminal points in issue
in the following terms: -

(v) (a) Section 3 of the 2002 Act
has a wider reach and captures every
process and activity, direct or indirect, in
dealing with the proceeds of crime and is
not limited to the happening of the final
act of integration of tainted property in the
formal
economy.
The
Explanation
inserted to Section 3 by way of amendment
of 2019 does not expand the purport of
Section 3 but is only clarificatory in
nature. It clarifies the word "and"
preceding the expression projecting or
claiming
as
"or";
and
being
a
clarificatory amendment, it would make
no difference even if it is introduced by
way of Finance Act or otherwise.

(b) Independent of the above, we
are clearly of the view that the expression
"and" occurring in Section 3 has to be
construed as "or", to give full play to the
said provision so as to include "every"
process or activity indulged into by
anyone.
Projecting
or
claiming
the
property as untainted property would
constitute an offence of money-laundering
on its own, being an independent process
or activity.

(c) The interpretation suggested
by
the
petitioners,
that
only
upon
projecting or claiming the property in
question as untainted property that the
offence of Section 3 would be complete,
stands rejected.

(d) The offence under Section 3
of the 2002 Act is dependent on illegal
gain of property as a result of criminal
activity relating to a scheduled offence. It
is concerning the process or activity
connected with such property, which
constitutes
the
offence
of
moneylaundering. The Authorities under the
2002 Act cannot prosecute any person on
notional basis or on the assumption that a
scheduled offence has been committed,
unless it is so registered with the
jurisdictional
police
and/or
pending
enquiry/trial including by way of criminal
complaint before the competent forum. If
the person is finally discharged/acquitted
of the scheduled offence or the criminal
case against him is quashed by the Court
of competent jurisdiction, there can be no
5 All. Neeharika Singh Vs. Directorate of Enforcement Lko.
1013
offence of money-laundering against him
or any one claiming such property being
the property linked to stated scheduled
offence through him."

15. The learned senior counsel
appearing for the writ petitioner referred to
the averments made in FIR No.39 of 2019
dated 02.02.2019 and pointed out that the
petitioner's name is neither referred as an
accused nor as one involved in the offences
namely Section 120-B read with Sections
420 and 471 of the Indian Penal Code,
1860. The learned senior counsel further
pointed out that even in the impugned
proceedings
dated
23.03.2020,
the
petitioner's name is not found anywhere."

17. He has submitted that the aforesaid
decision of Madras High Court was
challenged before the Hon'ble Supreme
Court in SLP (Crl.) Diary No.28128 of
2023 and it was dismissed as withdrawn by
means of the following order passed on
18.09.2023 :-

"Shri S. V Raju, learned ASG
submits that the FIR on predicate offence
has been quashed on 10.05.2023. In such
circumstances,
the
petition
becomes
infurctuous. The special leave petition is
dismissed as withdrawn as having become
infurctuous.

Learned ASG also wants this
Court to observe that in this event quashing
order is subsequently overturned by a
superior forum, his client would have the
right to revive the proceedings. We do not
make any comment in that regard except
Mr. Raju's client shall be entitled to take
such steps in such situation as may be
permissible under the law."

18.
However,
what
the
learned
Counsel for the applicant did not point out,
was that the order dated 13.04.2023 passed
by the Madras High Court is merely an
interim order staying the proceedings
against the petitioner for the reasons
recorded in paragraph 24 of the order: -

"since the writ petitioner is not
one of the accused in the case registered
for the offences punishable Sections 120-B,
420 and 471 under the Indian Penal Code,
1860, we are unable to justify prosecution
of the writ petitioner as a person involved
in the commission of the offence of money
laundering under the provisions of the
Prevention of Money Laundering Act,
2002. 25."

19. The increasing tendency of citing
irrelevant orders has compelled the Court
to verify the order from the web site of
Hon'ble
Madras
High
Court,
which
revealed the Writ Petition in which the
interim order dated 13.04.2023 relied upon
by the learned Counsel for the applicant
was passed, already stands allowed way
back on 12.12.2023 for the following
reasons: -

"4.This Court has, in similar
cases,
expressed
its
view
that
the
proceedings under PMLA Act cannot
proceed further once the FIR on predicate
offence is quashed. The law is well settled
by the larger Bench of the Hon'ble Supreme
Court in the case of Vijay Madanlal
Choudhary and others v. Union of India
and others reported in (2022) SCC Online
SC 929, wherein, it is ruled as follows :

"467. ... (v)(d) The offence under
Section 3 of the 2002 Act is dependent on
illegal gain of property as a result of
criminal activity relating to a scheduled
offence. It is concerning the process or
activity connected with such property,
which constitutes the offence of moneylaundering. The Authorities under the 2002
1014 INDIAN LAW REPORTS ALLAHABAD SERIES
Act cannot prosecute any person on
notional basis or on the assumption that a
scheduled offence has been committed,
unless it is so registered with the
jurisdictional
police
and/or
pending
enquiry/trial including by way of criminal
complaint before the competent forum. If
the person is finally discharged/acquitted
of the scheduled offence or the criminal
case against him is quashed by the Court of
competent jurisdiction, there can be no
offence of moneylaundering against him or
any one claiming such property being the
property linked to stated scheduled offence
through him."

5.This
view
has
also
been
approved by Hon'ble Supreme Court in
several cases. Even in the order produced
before this Court, the Hon'ble Supreme
Court had occasion to observe that nothing
survives once the FIR on predicate offence
has been quashed. In such circumstances,
this Court finds no reason to keep all the
matters pending.

6.Hence, all these writ petitions
are allowed and the impugned proceedings
of
the
respondent
in
ECIR/CEZOI/17/2020, dated 23.03.2020, is quashed.
No
costs.
Consequently,
connected
miscellaneous petitions are closed."

20. Citing an interim order passed by
another High Court in a case which already
stands decided long ago, does not reflect
well upon the quality of professional
assistance rendered by Sri Tushar Agarwal
and Sri Aishwarya Pratap Singh, learned
counsel for the applicant.

21. The tendency to multiply the
number of judgments cited does not serve
the interests of justice, as it results in
wastage of precious time of the Court,
which can be utilized to decide numerous
other pending matters. This Court has time
and again requested the learned Counsel to
be precise and concise in their submissions
and to refrain from citing irrelevant or
unnecessary judgments.

22. Per contra, Shri Rohit Tripathi, the
learned counsel for the Directorate of
Enforcement has relied upon a decision of
the Hon'ble Supreme Court in the case of
Pavana
Dibbur
v.
Directorate
of
Enforcement, (2023) 15 SCC 91, wherein
the Hon'ble Supreme Court has held that: -

"15. The condition precedent for
the existence of proceeds of crime is the
existence of a scheduled offence. On this
aspect, it is necessary to refer to the
decision of this Court in Vijay Madanlal
Choudhary [Vijay
Madanlal
Choudhary v. Union of India, (2023) 12
SCC 1]. In para 109 of the said decision,
this Court held thus:

"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.
Similarly, in the event the person named in
the criminal activity relating to a scheduled
offence is finally absolved by a court of
competent jurisdiction owing to an order of
discharge, acquittal or because of quashing
of the criminal case (scheduled offence)
5 All. Neeharika Singh Vs. Directorate of Enforcement Lko.
1015
against him/her, there can be no action for
money laundering against such a person or
person claiming through him in relation to
the property linked to the stated scheduled
offence. This interpretation alone can be
countenanced on the basis of the provisions
of the 2002 Act, in particular Section
2(1)(u) read with Section 3. Taking any
other view would be rewriting of these
provisions and disregarding the express
language of definition clause "proceeds of
crime", as it obtains as of now." (emphasis
in original and supplied)

16. In paras 134 and 135, this
Court held
thus
:
(Vijay
Madanlal
Choudhary case)

"134. From the bare language of
Section 3 of the 2002 Act, it is amply clear
that the offence of money laundering is an
independent offence regarding the process
or activity connected with the proceeds of
crime which had been derived or obtained
as a result of criminal activity relating to
or in relation to a scheduled offence. The
process or activity can be in any form - be
it
one
of
concealment,
possession,
acquisition, use of proceeds of crime as
much as projecting it as untainted property
or claiming it to be so. Thus, involvement
in any one of such process or activity
connected with the proceeds of crime
would
constitute
offence
of
money
laundering. This offence otherwise has
nothing to do with the criminal activity
relating to a scheduled offence - except
the proceeds of crime derived or obtained
as a result of that crime.

135.Needless to mention that
such process or activity can be indulged in
only after the property is derived or
obtained as a result of criminal activity (a
scheduled offence). It would be an offence
of money-laundering to indulge in or to
assist or being party to the process or
activity connected with the proceeds of
crime; and such process or activity in a
given fact situation may be a continuing
offence, irrespective of the date and time of
commission of the scheduled offence. In
other words, the criminal activity may have
been committed before the same had been
notified as scheduled offence for the
purpose of the 2002 Act, but if a person has
indulged in or continues to indulge directly
or indirectly in dealing with proceeds of
crime, derived or obtained from such
criminal activity even after it has been
notified as scheduled offence, may be liable
to be prosecuted for offence of money
laundering under the 2002 Act - for
continuing to possess or conceal the
proceeds of crime (fully or in part) or
retaining possession thereof or uses it in
trenches until fully exhausted. The offence
of money-laundering is not dependent on or
linked to the date on which the scheduled
offence, or if we may say so, the predicate
offence has been committed. The relevant
date is the date on which the person
indulges
in
the
process
or
activity
connected with such proceeds of crime.
These ingredients are intrinsic in the
original provision (Section 3, as amended
until 2013 and were in force till 31-72019); and the same has been merely
explained
and
clarified
by
way
of
Explanation vide Finance (No. 2) Act,
2019. Thus understood, inclusion of clause
(ii) in Explanation inserted in 2019 is of no
consequence as it does not alter or enlarge
the scope of Section 3 at all." (emphasis
supplied)

17. Coming back to Section 3
PMLA, on its plain reading, an offence
under Section 3 can be committed after a
scheduled offence is committed. For
example, let us take the case of a person
who is unconnected with the scheduled
offence,
knowingly
assists
the
concealment of the proceeds of crime or
1016 INDIAN LAW REPORTS ALLAHABAD SERIES
knowingly assists the use of proceeds of
crime. In that case, he can be held guilty
of committing an offence under Section 3
PMLA. To give a concrete example, the
offences under Sections 384 to 389 IPC
relating to "extortion" are scheduled
offences included in Para 1 of the
Schedule to PMLA. An accused may
commit a crime of extortion covered by
Sections 384 to 389IPC and extort money.
Subsequently, a person unconnected with
the offence of extortion may assist the said
accused in the concealment of the
proceeds of extortion. In such a case, the
person who assists the accused in the
scheduled offence for concealing the
proceeds of the crime of extortion can be
guilty of the offence of money-laundering.
Therefore, it is not necessary that a person
against whom the offence under Section 3
PMLA is alleged must have been shown as
the accused in the scheduled offence.
What is held in para 135 of the decision of
this
Court
in Vijay
Madanlal
Choudhary [Vijay
Madanlal
Choudhary v. Union of India, (2023) 12
SCC 1] supports the above conclusion. The
conditions precedent for attracting the
offence under 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
PMLA.

18. In a given case, if the
prosecution for the scheduled offence ends
in the acquittal of all the accused or
discharge of all the accused or the
proceedings of the scheduled offence are
quashed in its entirety, the scheduled
offence will not exist, and therefore, no one
can
be
prosecuted
for
the
offence
punishable under Section 3 PMLA as there
will not be any proceeds of crime. Thus, in
such a case, the accused against whom the
complaint under Section 3 PMLA is filed
will benefit from the scheduled offence
ending by acquittal or discharge of all the
accused. Similarly, he will get the benefit of
quashing the proceedings of the scheduled
offence. However, an accused in PMLA
case who comes into the picture after the
scheduled offence is committed by assisting
in the concealment or use of proceeds of
crime need not be an accused in the
scheduled offence. Such an accused can
still be prosecuted under PMLA so long as
the scheduled offence exists. Thus, the
second contention raised by the learned
Senior Counsel appearing for the appellant
on the ground that the appellant was not
shown as an accused in the charge-sheets
filed in the scheduled offences deserves to
be rejected."

23.
Therefore,
the
correct
legal
position which comes out from a reading of
Vijay Madanlal Chaudhary (Supra) and
Pavana Dibbur (Supra), is that the offence
of money laundering under Section 3 of
PMLA is independent of the scheduled
offence through which the proceeds of
crime were generated. In case all the
persons accused of commission of the
scheduled
offence
are
exonerated
or
discharged or acquitted, it would imply that
no scheduled offence was committed.
Without the scheduled offence having been
committed, there would be no proceeds of
crime
generated
from
the
scheduled
offence. In these circumstances, there can
be no 'money laundering' of the 'proceeds
of crime'. However, if numerous persons
are
accused
of
commission
of
the
scheduled offence and one or some of
them, but not all of them, are exonerated /
discharged or acquitted, it cannot be said
that the scheduled offence has not been
committed or that the proceeds of crime
have not been generated. In such a
5 All. Vishnu Prabhakar Vs. Union of India
1017
situation, if the prosecution against some
other accused person(s) is going on in
respect of a scheduled offence, even if a
person is not named as an accused in the
scheduled offence or if he / she has been
exonerated / discharged in respect of the
scheduled offence, it will not create a bar
against his / her prosecution under the
PMLA, if there is material to proceed
against him / her for prosecution under the
PMLA.

24. Having considered the aforesaid
facts and circumstances of the case, in the
light of the aforesaid cases, I am of the
considered
view
that
although
the
applicant's name has not been included in
the
charge-sheet
submitted
by
the
Investigating Officer regarding commission
of the scheduled offence, the complaint
filed by the Directorate of Enforcement
categorically states that besides aiding and
abetting her husband in commission of the
scheduled offence and generation of
proceeds of crime, the applicant is also
involved in assisting her husband Ajit
Kumar Gupta in layering and concealment
of the proceeds of crime. She has been a
recipient of the proceeds of crime. Some
part of the proceeds of crime have been
transferred to the applicant's bank account,
some part of the proceeds of crime have
been used for purchasing immovable
properties in the name of the applicant and
some part has been used for conversion of
land use of the property purchased in the
name of the applicant. Therefore, even if
the applicant's involvement in commission
of scheduled offences through which the
proceeds of crime were generated, has not
been established, the allegation that the
applicant is involved in concealment and
laying the proceeds of crime and that she
has utilized the proceeds of crime, still
needs to be investigated.

25. Therefore, I am of the view that
although the applicant has been absolved of
all the charges regarding commission of the
scheduled offence, she still has to face
prosecution for the offence of money
laundering which is a standalone offence
and which is independent and distinct from
the scheduled offence.

26. The application under Section 528
BNSS lacks merit and the same is hereby
dismissed.

27. It is clarified that this Court has
not examined the merits of the allegation
and any observation made in this order will
not affect the trial.
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(2025) 5 ILRA 1017
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 01.05.2025

BEFORE

THE HON'BLE SUBHASH VIDYARTHI, J.

Application U/S 482 No. 5057 of 2024

Vishnu Prabhakar ...Applicant
Versus
Union of India ...Opp.Party

Counsel for the Applicant:
Purnendu Chakravarty, Alok Kumar Singh,
Ankit Kumar Pandey, Ashutosh Verma,
Aviral Raj Singh, Dhruv Kumar Singh,
Palash Banerjee, Ritwick Rai, Vaibhav
Tiwari

Counsel for the Opp. Party:
Kuldeep Srivastava

No allegation against the applicant that he had
generated or acquired any proceeds of crimeonly allegation is that he has assisted in
generation of money -it is only when money is
generated as a result of such acts that PMLA