NEW DELHI: The Delhi High Court on Wednesday observed that donations collected by the office bearers of the banned Popular Front of India (PFI) cannot be classified as “proceeds of crime” under the Prevention of Money Laundering Act (PMLA).
The court emphasised that invoking the offence of money laundering requires proof that the funds were directly generated through criminal activities.
This observation was made while granting bail to three office bearers of PFI’s Delhi unit - Parvez Ahmed (President), Mohd Ilyas (General Secretary), and Abdul Muqeet (Office Secretary).
The trio was accused of generating funds for PFI activities, allegedly linked to the anti-CAA-NRC protests in 2020 and the Delhi riots.
Justice Jasmeet Singh clarified that the Enforcement Directorate (ED) can apply Section 3 of the PMLA only when the funds in question are demonstrably linked to prior criminal conduct.
“The collection of funds for committing crimes does not fall within the definition of proceeds of crime under the PMLA,” the court remarked, pointing out that the act’s provisions require the money to originate from a scheduled offence.
The Ministry of Home Affairs had banned PFI in 2022, citing concerns over national security.
The ED alleged that the funds collected by the accused were used to finance unlawful activities. However, Justice Singh dismissed this argument, stating that the sequence of events outlined by the ED did not align with the legal framework of money laundering.
“The ED’s case assumes that funds collected were subsequently used for a scheduled offence. This reasoning is akin to putting the cart before the horse. Unless the funds are the direct result of a scheduled offence, they cannot be deemed proceeds of crime.”