Srinagar, Nov 2, KDC: The Special Judge for Anti-Corruption and CBI Cases of Kashmir in Srinagar has ordered the closure of proceedings and acquitted three accused persons in a Prevention of Money Laundering Act (PMLA) case, ruling that once an accused is acquitted of the underlying “scheduled offence,” prosecution under the PMLA cannot stand.
The court of Special Judge (PMLA) Adnan Sayeed, as per Srinagar-based news gathering agency Kashmir Dot Com, passed the order last week while hearing a plea by Mohammad Hussain Dar, Abdul Hamid Lone, and Manzoor Ahmad Sheikh, who had sought quashing of the money-laundering proceedings against them. The Enforcement Directorate had filed the complaint in 2018, alleging that the three had generated proceeds of crime connected to a 2009 case registered under the Unlawful Activities (Prevention) Act at Sopore Police Station.
The court noted that two of the accused, Mohammad Hussain Dar and Abdul Hamid Lone, had already been acquitted on August 27, 2024, in the predicate UAPA case after a full trial, and no appeal had been filed against their acquittal, thereby giving it finality.
Citing paragraph 187(v)(d) of the Supreme Court’s landmark judgment in Vijay Madanlal Choudhary vs Union of India, the judge observed, “If a person is finally discharged or acquitted of the scheduled offence or the criminal case against him is quashed by a competent court, there can be no offence of money laundering against him or anyone claiming such property linked to the stated offence.”
The court also referenced rulings from the Delhi, Telangana, and Calcutta High Courts and reaffirmed that PMLA proceedings cannot survive once the foundational offence collapses.
“Since the accused persons have been acquitted in the scheduled offence, the question of money laundering does not arise,” the court said, adding that continuing such proceedings would be “against the settled position of law.”
The Enforcement Directorate, through its Special Public Prosecutor Abid Banday, opposed the plea, arguing that PMLA is an “independent and continuing offence” and that the acquittal in the UAPA case does not automatically nullify money-laundering proceedings. The agency cited a Madras High Court judgment stating that the PMLA’s objective is to “protect the economic health of the nation” and that investigations must proceed “in a fair and unbiased manner.”
However, the Srinagar court rejected the ED’s objections, holding that the money-laundering charge is inherently dependent on the existence of proceeds of crime generated from a proven scheduled offence.
The Special Judge said that “no offence of money laundering can survive when the scheduled offence itself has not been proved,” and noted that even the third accused, Manzoor Ahmad Sheikh, who was not named in the original UAPA FIR but was later implicated by the ED, could not be prosecuted once the main accused were acquitted.
The court ultimately ordered, “This application is allowed. Proceedings in this case are dropped, and the accused persons are acquitted under Section 45(1) of the PMLA for offences under Sections 3 and 4 of the Act.”
The order also directed that all bail and personal bonds of the accused be discharged and the case file consigned to records.
The accused, all residents of Sopore, were represented by advocates Irfan Hafiz Lone and Hasnain M. Khawja. (KDC)
