KISHORE S/O PESSULAL DEWANI v. THE DIRECTORATE OF ENFORCEMENT
Quashing of PMLA Process where Alleged Tainted Property was Acquired Years Prior to the Commission of the Scheduled Offence.
Court: Bombay High Court
Citation: 2026:BHC-AS:9200-DB
Decision Date: 23-02-2026
List of Laws
Prevention of Money Laundering Act, 2002; Code of Criminal Procedure, 1973; Bharatiya Nagarik Suraksha Sanhita, 2023; Prevention of Corruption Act, 1988; Indian Penal Code, 1860
- Facts: The Applicant, an advocate and Chartered Accountant, was named as Accused No. 11 in a PMLA complaint initiated by the Directorate of Enforcement (ED). The prosecution alleged that the Applicant assisted the family of the principal accused, former Home Minister Anil Deshmukh, in laundering money. Specifically, the ED pointed to M/s Premier Port Links Pvt. Ltd., a company where the Applicant was a director, which had purchased properties in Dhutum Village between 2005 and 2007. The prosecution's case was that the proceeds of crime (amounting to Rs. 4.70 crores) were generated through the collection of "good luck money" from bar owners between December 2020 and February 2021. The ED contended that earlier transactions and loans in 2013 and share transfers in 2010 were part of a layering process.
- Procedural Posture: The Applicant filed a Criminal Application under Section 482 of the Code of Criminal Procedure, 1973 (now Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023) before the Bombay High Court. He sought to quash the order dated 16.09.2021 passed by the Designated PMLA Court, which had issued process against him, and to quash the complaint in PMLA Special Case No. 1089 of 2021.
- Issue: Whether the Designated Court was justified in issuing process against the Applicant when the properties alleged to be "proceeds of crime" were acquired nearly 15 years prior to the commission of the alleged scheduled offence.
- Holding: No, the issuance of process and the complaint against the Applicant were quashed.
- Reasoning: The Court reasoned that "proceeds of crime" as defined under Section 2(1)(u) of the PMLA is a sine qua non for the offence of money laundering. Relying on "Vijay Madanlal Choudhary v. Union of India", the Court held that property must be derived or obtained as a result of criminal activity relating to a scheduled offence. In this case, the alleged scheduled offence occurred in 2020-2021. The properties in question were purchased between 2005 and 2007, making it chronologically impossible for them to be derived from the 2020-2021 criminal activity. The Court further noted that the Designated Court failed to apply its mind to the "sufficient ground for proceeding" test, as the order lacked reasoning to link the Applicant to any proceeds of crime. Consequently, continuing the proceedings would constitute an abuse of the process of law.
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