Safiya Malik

The High Court of Punjab and Haryana at Chandigarh, Single Bench of Justice Tribhuvan Dahiya dismissed petitions filed by Congress MLA Sukhpal Singh Khaira concerning a vigilance inquiry and a money laundering case. The Court refused to interfere with the vigilance inquiry initiated in a disproportionate assets case, observing that it would not be appropriate to restrain the Vigilance Bureau from conducting its inquiry at this stage and rejecting allegations of political vendetta or violation of the Supreme Court’s directions in Lalita Kumari v. Government of Uttar Pradesh. It further declined to defer proceedings in the money laundering trial, holding that the offence under the Prevention of Money Laundering Act, 2002, is independent and can continue despite the stay of the related NDPS proceedings.

Sukhpal Singh Khaira, a sitting MLA from Punjab, filed petitions before the High Court of Punjab and Haryana challenging the continuation of proceedings under the Prevention of Money Laundering Act, 2002, and a vigilance inquiry into alleged disproportionate assets. The Enforcement Directorate registered an Enforcement Case Information Report based on an earlier police case under the Narcotic Drugs and Psychotropic Substances Act and the Arms Act. Khaira was accused of using proceeds of crime generated by a co-accused convicted for drug smuggling. The investigation alleged that money obtained from the illegal trade was used to fund his election campaign and other personal expenditures, and that he had received financial support and assistance from the co-accused in return for protection and political influence.

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Khaira was arrested by the Enforcement Directorate and later granted bail. A complaint was filed before the Special Court under the PMLA, alleging offences under Sections 3 and 4 of the Act. During the pendency of proceedings in the related predicate offence, the Supreme Court passed an interim order staying the trial. On that basis, Khaira sought deferment of the PMLA proceedings before the trial court, which was rejected on the ground that the offence of money laundering is distinct and can proceed independently. He then approached the High Court contending that continuation of the trial would be unjust and contrary to the principles laid down in previous judgments concerning the relationship between predicate and money laundering offences.

The Enforcement Directorate opposed the plea, asserting that the PMLA prosecution stood independently supported by existing convictions in the predicate offence and evidence of proceeds of crime. Separately, Khaira sought quashing of a vigilance inquiry into alleged disproportionate assets, claiming it was politically motivated and inconsistent with the safeguards outlined in Lalita Kumari v. Government of Uttar Pradesh.

The Court noted the Supreme Court’s exposition in Vijay Madanlal Choudhary 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” and 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)”.

Relying on Pavana Dibbur, the Court recorded that “it is not necessary that a person against whom offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence” and that prosecution under PMLA may continue “so long as the Scheduled offence exists.” The Court referenced the Supreme Court’s illustration that a person unconnected with the scheduled offence can still commit money-laundering by assisting in concealment or use of proceeds of crime.

Applying these principles, the Court stated: “the offence of money laundering is independent of the scheduled offence; nevertheless, it gets its substratum from the proceeds of crime obtained as a result of commission of a scheduled offence. Therefore, existence of scheduled offence is a sine qua non so far as commission of offence under the PMLA is concerned, though the accused under the PMLA need not necessarily be a person accused of committing the scheduled offence…”

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Assessing the record, the Court observed that the petitioner is alleged in the PMLA case to have used proceeds of crime generated by co-accused Gurdev Singh, “who already stands convicted for commission of the scheduled offences.” It further recorded: “even if the petitioner is to be acquitted of charges pertaining to the scheduled offences, his prosecution under the PMLA will remain unaffected.” The Court stated that “the outcome of trial before the Special Court in PMLA case cannot be said to be connected to trial of the scheduled offences, as the latter will have no bearing on the former.” The Court also noted that the PMLA complaint (filed 06.01.2022, cognizance 20.01.2022) predated the supplementary chargesheet against the petitioner in the NDPS case (20.01.2024).

Regarding reliance on the Telangana High Court decision in M/s Bharti Cement Corporation Private Limited, the Court stated it was “misplaced” because in that case the same person was accused in both scheduled and PMLA offences and both were pending trial, whereas “the petitioner is accused of using the proceeds of crime generated due to commission of scheduled offences by a person who already stands convicted.”

“In view of the discussion, this Court finds no merit in the petition, and it stands dismissed.”

Advocates Representing the Parties

For the Petitioners: Mr. Vikram Chaudhri, Senior Advocate assisted by Ms. Hargun Sandhu, Advocate

For the Respondents: Mr. Zoheb Hossain, Special Counsel assisted by Mr. Lokesh Narang, Senior Panel Counsel

Case Title: Sukhpal Singh Khaira v. Directorate of Enforcement, Government of India
Neutral Citation:2025: PHHC:149670
Case Number: CRM-M-17884-2025
Bench: Justice Tribhuvan Dahiya