Isabella Mariam

The High Court of Delhi, Single Bench of Justice Neena Bansal Krishna, has granted regular bail to the National President of the Social Democratic Party of India (SDPI) who was arrested by the Enforcement Directorate in connection with alleged terror financing and money laundering linked to the banned Popular Front of India. The Court held that occupying a leadership position in an organisation during a period when it was lawful does not, without more, amount to an offence of money laundering under the Prevention of Money Laundering Act. The Court found that the agency's case was built substantially on the accused's associational ties rather than concrete, specific evidence of personal involvement in any process or activity connected with proceeds of crime. It further observed that SDPI has not been declared an unlawful association, and that continued detention in the absence of any foreseeable conclusion to trial would amount to pre-trial punishment impermissible under Article 21 of the Constitution.

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The Applicant sought regular bail under Section 439 CrPC read with Sections 45 and 65 of the Prevention of Money Laundering Act, 2002, in connection with ECIR dated 21.09.2022 based on an NIA FIR dated 13.04.2022 invoking offences under Section 120B IPC and provisions of the UAPA. The Enforcement Directorate (ED) alleged that members of Popular Front of India (PFI) conspired to raise funds domestically and abroad for terrorist activities and that Social Democratic Party of India (SDPI) functioned as its political front. The Applicant, a founding member of PFI and National President of SDPI, was arraigned in the 7th Supplementary Prosecution Complaint dated 15.06.2025.

The Applicant contended that he was neither named in the predicate FIR nor in earlier complaints, that SDPI was never declared unlawful, and that no material established that funds constituted “proceeds of crime.” The ED relied on statements under Section 50 PMLA, documents allegedly showing financial overlap, and receipt of funds in the Applicant’s account. The Court examined Sections 3, 2(1)(u), 45, and 66 of PMLA in determining whether the twin bail conditions were satisfied.

The Court recorded that the Applicant’s name “was neither mentioned nor were any allegations levelled against him, until the filing of the 7th Supplementary Prosecution Complaint dated 15.06.2025.” It observed that the ED’s case was premised on association, stating, “Thus, what emerges is that, the ED’s entire case against the Applicant is founded on guilt by association.”

On leadership roles, the Court stated, “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.”

With respect to proceeds of crime, it recorded, “There is prima facie no evidence that the funds being received are generated from commission of any scheduled offence.” It further stated, “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.”

On the belated implication, the Court recorded, “This belated inclusion of the Applicant in the 7th 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.”

Regarding prolonged custody, the Court observed, “Prolonged incarceration, when coupled with no real likelihood of early completion of trial, assumes constitutional significance.” It further stated, “Continued incarceration without commencement and foreseeable completion of trial would amount to pre-trial punishment, which is impermissible under Article 21.”

On statutory rigours, the Court recorded, “The rigours of Section 45 of PMLA cannot be permitted to operate so as to sanction indefinite detention of the Applicant.” The Court concluded, “In the light of aforesaid discussion, it is concluded that the parameters of Section 45 are satisfied, in the present case.”

“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: 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.”

“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.” The Court also mandated that “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.”

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“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. 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. The Applicant / Petitioner shall appear in Court as and when required. 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.”

“It is made clear that any observations made hereinabove, are not an expression on the merits of the case. 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. The present Bail Application is accordingly disposed of.”

Advocates Representing the Parties

For the Petitioner: Mr. Siddharth Agarwal, Senior Advocate, Mr. Rajat Bhardwaj, Ms. Ankita M. Bhardwaj, Mr. Dushyant Chaudhary, Mr. Mohd. Fiyaz, Mr. Vishwajeet Singh, Mr. Siddharth Singh, Advocates

For the Respondent: Mr. Zoheb Hossain, Special Counsel, Mr. Vivek Gurnani, Panel Counsel, Mr. Pranjal Tripathi, Mr. Kartik Sabharwal, Mr. Kanishk Maurya, Advocates

Case Title: Moideen Kutty K @ M.K. Faizy v. Directorate of Enforcement
Neutral Citation: 2026: DHC:1308
Case Number: BAIL APPLN. 3620/2025
Bench: Justice Neena Bansal Krishna