[2026:RJ-JP:20523] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Criminal Miscellaneous Bail Application No. 3319/2026 Mohammed Sadeeque S/o Mohammed Ishaq, Aged About 45 Years, R/o Gali No. 02, Dhobi Talai, Bikaner (Raj.) (Presently Lodged In Central Jail Jaipur). ----Petitioner Versus Directorate Of Enforcement, Jaipur, Through Special PP ----Respondent For Petitioner(s) : Mr. Javed Khan For Respondent(s) : Mr. Ajatshatru Mina, SPP-ED with Ms. Apeksha Tiwari, Mr. Manav Sharma, Mr. Rhythm Shrimal HON'BLE MR. JUSTICE PRAVEER BHATNAGAR Order Date of conclusion of arguments:- 07.05.2026 Date on which the judgment was Reserved :- 07.05.2026 Whether the full judgment or only the operative part is pronounced:- Full Judgment Date of pronouncement:- 15.05.2026 1. The accused petitioner has filed the present bail application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in connection with ECIR No.JPZO/16/2025 dated 08.09.2025 registered by the Directorate of Enforcement, Zonal Office, Jaipur, for the offences punishable under Sections 3 read with Section 70 [2026:RJ-JP:20523] (2 of 15) [CRLMB-3319/2026] and Section 4 of the Prevention of Money Laundering Act, 2002 (for short, ‘PMLA’). 2. Learned counsel for the accused-petitioner submits that the petitioner has been falsely implicated in the present case and the arrest effected by the respondent- Directorate of Enforcement (for short, ‘DOE’) is illegal, arbitrary and contrary to the provisions of the PMLA. It is contended that regular banking transactions have been labelled as suspicious in the absence of any cogent material establishing generation, concealment, or projection of ‘proceeds of crime’ within the meaning of Section 2(1)(u) read with Section 3 of the PMLA. It is submitted that the petitioner belongs to a modest background and was engaged in a small-scale restaurant business under the name ‘Dubai Darbar’ besides carrying out charitable and religious activities through ‘Al-Furkan Educational Trust.’ It is further contended that the deposits reflected in the accounts of the petitioner pertain to income generated from restaurant business, bona fide donations and routine financial dealings, which have been deliberately misconstrued by the respondent and labelled as proceeds of crime to implicate the accused petitioner in the instant case. 2.1. Learned counsel further submits that the petitioner’s wife had cancer and substantial public contributions were collected towards her treatment. It is further submitted that statements of co-accused recorded under Section 50 of the PMLA cannot be treated as substantive evidence against the petitioner and there exists no nexus between the alleged scheduled offence and the [2026:RJ-JP:20523] (3 of 15) [CRLMB-3319/2026] purported proceeds of crime to attract Section 3 of the PMLA. It is also submitted that the investigation is already complete, the prosecution complaint has been filed, the petitioner has cooperated during the investigation and there is no likelihood of absconding or tampering with evidence. 2.2. It is further contended that the offence under Section 3 of the PMLA is not prima facie made out against the petitioner, as the respondent–DOE has failed to establish that the funds reflected in the accounts were derived from any scheduled offence. Learned counsel submits that though allegations under Section 27 of the Arms Act have been levelled and recovery of a country-made pistol is alleged to have been made from the possession of the petitioner, there exists no material connecting the petitioner with any illegal arms trade or supply of weapons. It is further argued that even if certain amounts are treated as unaccounted money, the same would at best attract proceedings under the Income Tax Act and not the provisions of the PMLA in the absence of any nexus with a scheduled offence. 2.3. Learned counsel for the petitioner further submits that the present ECIR has been registered based on FIR Nos.44/2017, 404/2019, 13/2022 and 299/2025 registered at Police Station Gangashahar and Police Station Kotegate, Bikaner respectively. It is argued that FIR Nos.44/2017 and 404/2019 do not disclose any scheduled offence under the PMLA and therefore, could not legally form the basis for initiation of proceedings under the PMLA. It is further submitted that in FIR No.299/2025, the offences [2026:RJ-JP:20523] (4 of 15) [CRLMB-3319/2026] constituting the scheduled offences were added subsequently and no charge-sheet has yet been filed therein; therefore, subsequent addition of offences cannot retrospectively validate proceedings under the PMLA. 2.4. Learned counsel further submits that the principal reliance of the respondent–DOE is upon FIR No.13/2022 registered under Sections 307, 323, 341, 147, 148 and 149 of Indian Penal Code, 1860 (for short, ‘IPC’) along with Section 27 of the Arms Act, which pertains to a solitary incident of clash between two groups alleged to have taken place on 03.01.2022. It is argued that neither the FIR nor the charge-sheet contain any allegation regarding generation of money, illegal gain or acquisition of property from the alleged occurrence and the respondent has failed to demonstrate as to how the alleged incident generated any proceeds of crime within the meaning of Section 2(1)(u) of the PMLA and mere addition of Section 27 of the Arms Act would not ipso facto attract the provisions of the PMLA. 2.5. It is further contended that the respondent–DOE has treated ordinary banking transactions spread over nearly ten years as proceeds of crime without establishing any nexus with the alleged scheduled offence of the year 2022. The deposits relied upon by the respondent pertain to periods much before the filing of FIR No. 13/2022 and therefore, cannot be connected with the alleged scheduled offence. 2.6. It is further submitted that the respondent has failed to identify any specific tainted property allegedly derived from [2026:RJ-JP:20523] (5 of 15) [CRLMB-3319/2026] criminal activity relating to the scheduled offence and has merely aggregated credits and debits of various accounts to inflate the alleged amount involved in money laundering artificially and even the prosecution complaint records that no proceeds of crime are presently available for attachment and no undisclosed property or disproportionate asset attributable to the petitioner has been recovered. 2.7. Learned counsel further submits that the petitioner maintained only one bank account during the period from 2012 to 2020 and thereafter only two accounts and therefore, the allegation regarding the operation of multiple suspicious accounts is per se false. It is also submitted that approximately Rs.64 lakhs received from ‘Edaratul Masjid Val Madaris Trust,’ Mumbai, was specifically donated for the construction of ‘Masjid-e-Ayesha’ and utilised for the said purpose, as duly supported by bills, vouchers and invoices. It is further contended that mere procedural irregularity under the Foreign Contribution (Regulation) Act, 2010 (for short, ‘FCRA’) would not automatically constitute an offence of money laundering, as offences under the FCRA are not scheduled offences under the PMLA. 2.8. Learned counsel further submits that proceedings initiated against the petitioner under Sections 108 and 116(3) Code of Criminal Procedure, 1973 (now, Sections 136 and 144(3) Bharatiya Nagarik Suraksha Sanhita, 2023) in relation to the alleged inflammatory speech were ultimately dropped. Furthermore, it is contended that under the scheme of the PMLA, [2026:RJ-JP:20523] (6 of 15) [CRLMB-3319/2026] the foundational facts relating to commission of a scheduled offence and generation of proceeds of crime are first required to be established by the respondent–DOE and only thereafter the burden contemplated under Section 45 of the PMLA would shift upon the accused petitioner. 2.9. Lastly, it is submitted that the petitioner is a permanent resident of Bikaner having deep roots in society, all documentary evidence is in the possession of the respondent-DOE, the alleged amount involved is below Rs.1 Crore and the petitioner is entitled to the benefit of the proviso to Section 45(1) of the PMLA, therefore, considering the aforesaid facts and taking into account the long incarceration of the accused petitioner, the present bail application may be allowed. 3. Per contra, learned counsel appearing for the respondent– DOE has opposed the bail application and submits that the material collected during the investigation clearly discloses the involvement of the petitioner in the offence of money laundering punishable under Sections 3 and 4 of the PMLA. It is argued that the present case involves systematic layering and routing of funds through multiple bank accounts maintained and controlled by the petitioner, his family members and ‘Al-Furkan Educational Trust.’ 3.1. Learned counsel further submits that the ECIR is founded upon FIR Nos. 44/2017, 404/2019, 13/2022 and 299/2025, which collectively disclose continuous criminal activity of the petitioner. It is argued that FIR No. 13/2022 involving offences under Section 307, 323, 341, 147, 148, 149 and 120-B IPC, along with Section [2026:RJ-JP:20523] (7 of 15) [CRLMB-3319/2026] 27 of the Arms Act, constitutes a scheduled offence under the PMLA and thereby forms the basis for registration of the ECIR. 3.2. It is further contended that the investigation revealed huge cash deposits followed by immediate withdrawals through self- cheques, ATM withdrawals and counter transactions, thereby indicating layering and concealment of proceeds of crime. It is also submitted that despite such substantial financial transactions being made, the petitioner has failed to disclose any lawful or commensurate source of income corresponding to the magnitude of transactions reflected in the accounts. It is further submitted that the bank accounts reflected negligible closing balances and repeated depletion of funds, thereby indicating use of such accounts as transit accounts for routing proceeds of crime and the petitioner’s restaurant business could not reasonably explain the volume of transactions reflected in the accounts. 3.3. Learned counsel further submits that though the petitioner has portrayed ‘Al-Furkan Educational Trust’ as a charitable institution, investigation conducted under Section 50 of the PMLA revealed that the petitioner exercised exclusive control over the trust accounts and the rest of the office bearers merely signed blank or pre-signed cheques without knowledge regarding the utilisation of funds. It is further submitted that no proper books of account, audited statements, or Income tax returns were maintained by the trust despite the large financial transactions between 2015 and 2019. [2026:RJ-JP:20523] (8 of 15) [CRLMB-3319/2026] 3.4. It is further contended that approximately Rs.64 lakhs received from ‘Edaratul Masjid Val Madaris Trust,’ Mumbai, violated the provisions of the FCRA, as the trust was neither registered under the FCRA nor had prior permission for receipt of foreign contribution. It is also contended that the petitioner continued to operate the bank account of his deceased wife even after her demise and the explanation regarding medical donations and salary receipts is unsupported by reliable documentary evidence. 3.5. Lastly, it is contended that the statements of co-accused Mohd. Salim Khan and Aman Hussain recorded under Section 50 of the PMLA clearly reveal that the petitioner had ready access to illegal weapons and was involved in the illicit arms trade. It is further alleged that the petitioner has persistently provoked public sentiments, exploited religious issues and collected funds under the guise thereof. It is also contended that the petitioner in the present case has failed to satisfy the twin conditions stipulated under Section 45 of the PMLA. Therefore, considering the gravity and magnitude of the offence and the likelihood of influencing witnesses and tampering with evidence in the event of release on bail, the accused-petitioner is not entitled to bail. 3.6. In support of his submissions, learned counsel for the respondent–DOE has placed reliance upon the judgments:- A. Abhishek Banerjee vs. Enforcement Directorate, 2024 INSC 668. B. S. Nagarajan v. Enforcement Directorate, 2026 SCC OnLine Mad 3626 [2026:RJ-JP:20523] (9 of 15) [CRLMB-3319/2026] C. Akshay Kumar v. Enforcement Directorate, 2025 SCC OnLine Del 464. D. Union of India vs. Kanhaiya Prasad, 2025 INSC 210. E. Directorate of Enforcement vs. Aditya Tripathi, 2023 SCC OnLine SC 619. F. S. Jayalakshmi v. Enforcement Directorate, 2024 SCC OnLine Mad 4568 G. Y. Balaji vs. Karthik Desari & Anr., 2023 SCC OnLine SCC 645. H. Pradeep Nirankarnath Sharma vs. Directorate of Enforcement, 2025 INSC 349. I. M. Sivasankar vs. Union of India, 2023 SCC OnLine Ker 2228. 4. Heard learned counsel for the parties and perused the material available on record. 5. It is to be noted that FIR No.13/2022 registered at Police Station Kotegate, Bikaner, includes offences punishable under Section 307 IPC and Section 27 of the Arms Act, which are scheduled offences under the PMLA. The material placed on record reveals that, during the investigation of the aforesaid matter, a Desi katta was recovered from the possession of the petitioner and the other co-accused and recovery of empty cartridges was also affected at the crime scene. Furthermore, the statements of the co-accused persons in the aforesaid FIR, recorded during the investigation of this case under Section 50 of the PMLA, specifically state that the petitioner supplied the firearms to them. [2026:RJ-JP:20523] (10 of 15) [CRLMB-3319/2026] 5.1. The investigation also revealed that another FIR bearing No.299/2025 was lodged against the petitioner alleging that he delivered a speech intended to provoke religious sentiments, incite unrest and inflame communal feelings, which had the potential to lead to serious incidents fuelled by religious fanaticism. It is further alleged that the video, having a duration of approximately 3 minutes and 22 seconds, contained derogatory and provocative remarks against the country’s top leadership and statements inciting violence against persons of other religions, including phrases such as “cut off the head of those speaking against our religion.” The said video was widely circulated and viewed and prima facie appears capable of disturbing public order and provoking communal tension. Furthermore, the police authorities vide communication dated 16.11.2025 (RUD No.08) informed that additional offences under Sections 318, 61(2) and 148 of the BNS were invoked in the said FIR on account of substantial monetary deposits reflected in accounts maintained and operated by the petitioner, his family members and the Trust and charge-sheet in the said FIR is yet to be filed. 5.2. It is pertinent to note that Sections 318, 61(2) and 148 of the BNS (corresponding to Sections 420, 120-B and 121-A of the erstwhile IPC, 1860) are scheduled offences under the PMLA and the aforesaid FIR No.299/2025 was also merged with the present ECIR and taken up for investigation under the provisions of the PMLA. Though, at the time of registration of the ECIR, the scheduled offences corresponding to Sections 420 and 121-A IPC were not invoked; however, during investigation made in FIR [2026:RJ-JP:20523] (11 of 15) [CRLMB-3319/2026] No.299/2025, the investigating agency added the aforesaid scheduled offences and the respondent–DOE continued investigation under the PMLA and thereafter submitted prosecution complaint against the petitioner for offences under Sections 3 and 4 of the PMLA; thus, prima facie, the offences registered against the petitioner fall within the category of scheduled offences and sufficient material has been placed on record indicating involvement of the petitioner in illegal possession and alleged supply of firearms. Therefore, the contention raised on behalf of the petitioner that no scheduled offence exists so as to invoke the provisions of the PMLA appears to be misconceived and contrary to the material available on record. 5.3. The second limb of the argument advanced on behalf of the petitioner pertains to whether the petitioner was involved in generation and utilization of proceeds of crime arising out of the scheduled offences. In this regard, the investigation conducted by the respondent–DOE prima facie reveals substantial monetary transactions involving cash deposits of approximately Rs.52.45 Lakhs followed by immediate withdrawals amounting to approximately Rs.105.84 Lakhs through self-cheques, ATM withdrawals and counter transactions undertaken through various accounts maintained and controlled by the petitioner, his family members and ‘Al-Furkan Educational Trust’. 5.4. The investigation conducted by the respondent–DOE further indicates that the said accounts prima facie suggest use of accounts only for routing and layering of funds. The material [2026:RJ-JP:20523] (12 of 15) [CRLMB-3319/2026] collected during the investigation further indicates that such transactions were undertaken even prior to the incident forming the subject matter of FIR No.13/2022 and were utilised for unlawful activities connected with the scheduled offence. 5.5. This Court further noticed that the respondent–DOE has specifically alleged that the petitioner exercised effective and exclusive control over the accounts maintained in the name of ‘Al- Furkan Educational Trust’ and statements of office bearers recorded under Section 50 of the PMLA prima facie indicate that other trustees merely signed blank or pre-signed cheques without knowledge regarding the utilisation of funds. The material available on record further reveals that despite substantial financial transactions undertaken through the trust accounts, no proper books of account, audited statements or Income tax returns were maintained for the relevant period and, therefore, the contention raised on behalf of the petitioner that such transactions were undertaken towards charitable activities does not appear to be prima facie true, considering the nature and pattern of transactions reflected in the accounts. 5.6. Furthermore, the statement recorded under Section 50 of the PMLA, prima facie, discloses involvement of the petitioner in handling and operating the accounts through which the alleged proceeds of crime were routed and utilised. The Hon’ble Supreme Court in the case of Abhishek Banerjee & Anr., v. Directorate of Enforcement (supra), has explicitly held that statements recorded by the authorities under Section 50 of the PMLA are not hit by [2026:RJ-JP:20523] (13 of 15) [CRLMB-3319/2026] Article 20(3) or Article 21 of the Constitution and are admissible in evidence and whether the transactions were for lawful activities or not is a question which is to be determined by the trial Court after appreciating all the evidence. 5.7. At this stage, insofar as the applicability of Section 45 of the PMLA is concerned, it is now well settled that the twin conditions prescribed under Section 45 of the PMLA are mandatory in nature and the Hon’ble Supreme Court in the case of Union of India vs. Kanhaiya Prasad (Supra) has observed as under:- “12. It is well settled position of law that Section 45 of the PMLA starting with a non- obstante clause has an overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. Section 45 imposes two conditions for the grant of bail to any person, accused of an offence punishable for a term of imprisonment of more than 3 years under Part A of the Schedule. The two conditions are that (i) the prosecutor must be given an opportunity to oppose the application for bail; and (ii) the Court must be satisfied that there are reasonable grounds for believing that the accused person is not guilty of such offence and that he is not liable to commit any offence while on bail. As well settled, these two conditions are mandatory in nature and they need to be complied with before the accused person is released on bail. 13…..Hence the conditions enumerated in Section 45 will have to be complied with even in [2026:RJ-JP:20523] (14 of 15) [CRLMB-3319/2026] respect of application for bail made under Section 439 of Cr. P.C. Further, Section 24 provides that in case of a person charged with the offence of money-laundering under Section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering. Therefore, the burden to proof that proceeds of crime are not involved in money laundering would lie on the person charged with the offence. 20. The High Court has utterly failed to consider the mandatory requirements of Section 45 and to record its satisfaction whether any reasonable ground existed for believing that the respondent was not guilty of the alleged offence, and that he was not likely to commit any offence while on bail. Merely because the prosecution complaint had been filed and the cognizance was taken by the court that itself would not be the ground or consideration to release the respondent on bail, when the mandatory requirements as contemplated in Section 45 have not been complied with.” (Emphasis Supplied)” 5.8. Therefore, having regard to the material available on record, including the prosecution complaint, statements recorded under Section 50 of the PMLA, recovery effected during investigation and the financial transactions reflected in the accounts, this Court is of the prima facie view that sufficient material exists indicating involvement of the petitioner in the alleged offence and that the [2026:RJ-JP:20523] (15 of 15) [CRLMB-3319/2026] petitioner has failed to satisfy the twin conditions stipulated under Section 45 of the PMLA. 6. Consequently, the present bail application filed by the accused petitioner is hereby dismissed. 7. However, it is made clear that the observations made hereinabove are only for the purpose of deciding the present bail application and shall have no bearing on the merits of the case. (PRAVEER BHATNAGAR),J Ramesh Vaishnav /86