Delhi HC Grants Bail to PFI-Linked Accused in PMLA Case, Cites Rs 3.15 Lakh Threshold and Delayed Arraignment

Justice Anup Jairam Bhambhani granted regular bail to Wahidur Rahman, accused No. 30 in a PFI money-laundering case, finding his alleged transactions of Rs 3.15 lakh far below the PMLA's Rs 1 crore threshold and his arraignment arriving only in the 7th Supplementary Prosecution Complaint filed in May 2025.

The High Court of Delhi on 29 May 2026 admitted Wahidur Rahman to regular bail in a Prevention of Money-laundering Act 2002 prosecution arising from the Enforcement Directorate's investigation into the Popular Front of India and its alleged financial conduit, the Social Democratic Party of India. Justice Anup Jairam Bhambhani, sitting singly, held that the petitioner's individual financial exposure of Rs 3.15 lakh — measured against SDPI's aggregate alleged proceeds of crime of Rs 32.94 crores — was so disproportionately small that subjecting him to the full rigour of the twin conditions under section 45 of the PMLA would be incongruous. The court also weighed the petitioner's delayed appearance in the prosecution complaints, parity with a co-accused already on bail, and over a year of pre-trial custody against a trial that has not yet reached the charge stage.

The Enforcement Case Against Wahidur Rahman

The Enforcement Directorate registered ECIR/STF/17/2022 on 21 September 2022 on the basis of an NIA FIR — RC-14/2022/NIA/DLI dated 13 April 2022 — alleging that office-bearers and members of PFI were conspiring to raise funds, domestically and internationally, for terrorist activities across India. The FIR was registered under sections 120-B and 153-A of the Indian Penal Code 1860 and sections 17, 18, 18-B, 20, 22-B, 38 and 39 of the Unlawful Activities (Prevention) Act 1967.

By a Gazette Notification dated 27 September 2022, the Ministry of Home Affairs declared PFI and its associates an “unlawful association” under the UAPA. That notification was confirmed by the UAPA Tribunal on 21 March 2023 under section 4(3) of the UAPA.

ED's investigation concluded that SDPI, established in 2009, operated under PFI's control and served as a front for laundering proceeds of crime while furthering PFI's political objectives. SDPI's National President, Moideen Kutty K @ MK Faizy, confirmed the functional linkage between the two organisations in a statement recorded under section 50 of the PMLA.

Wahidur Rahman was named for the first time in the 7th Supplementary Prosecution Complaint dated 1 May 2025, where he was arraigned as accused No. 30. He was arrested by ED on 20 March 2025 and has remained in judicial custody since. The prosecution complaint was filed under sections 44 and 45 of the PMLA for offences under sections 3, 4 and 70 of the PMLA.

ED alleged that the petitioner was engaged as a Physical Education trainer with PFI, demonstrating Karate and Mixed Martial Arts at PFI gatherings — a position the petitioner himself confirmed in his statement under section 50 of the PMLA. ED further alleged that he actively participated in layering proceeds of crime by projecting them as legitimate donations to SDPI.

The Specific Transactions ED Relied Upon

ED placed before the court a detailed account of the transactions attributed to the petitioner. On 29 July 2018, the petitioner directly transferred Rs 1,00,000 from his own bank account to SDPI's bank account. The very next day, 30 July 2018, he made a cash deposit and a bank transfer of Rs 50,000 each into the bank account of one Rajik Mohammad Anifa, which amounts were then immediately transferred into SDPI's account at Punjab National Bank. A cash deposit slip bearing the petitioner's signature was obtained from the bank and admitted by the petitioner in his statement dated 20 March 2025. Rajik Mohammad Anifa, however, stated in his own section 50 statement that he did not recall making any donations to SDPI and did not know why the petitioner had transferred those amounts into his account.

On the same date, 30 July 2018, the petitioner deposited Rs 1,00,000 in cash into the bank account of one Mohd. Rila at Axis Bank, which was again transferred to SDPI. Mohd. Rila confirmed in his section 50 statement that he had transferred the amount to SDPI at the petitioner's instance. The petitioner also deposited Rs 1,50,000 in cash into his own Axis Bank account on 30 July 2018. When questioned under section 17 of the PMLA, the petitioner denied ever donating money to SDPI and stated that an unidentified person had given him cash and asked him to transfer Rs 1 lakh to SDPI.

The final transaction attributed to the petitioner was a transfer of Rs 15,000 from his Karur Vysya Bank account to SDPI's account on 14 August 2022. ED noted that all these transactions, taken together, amounted to Rs 3.15 lakh, even though the petitioner's stated annual income was only Rs 1 lakh.

ED also pointed to the petitioner's email ID — wahidpfi777@gmail.com — and phone contacts saved as “PFI”, “SDPI” and “PFI SDPI” as evidence of close linkage with the banned organisation. It further alleged that the petitioner participated in protests against PFI's ban in 2022 and was arrested for throwing a petrol bomb during those protests.

ED argued that the petitioner's role was distinct from that of co-accused MK Faizy, who had left PFI by 2018, whereas the petitioner's association continued at least until PFI was banned in 2022. On that basis, ED contended that the petitioner could not seek parity with MK Faizy and that the twin conditions under section 45 of the PMLA were not satisfied.

The Petitioner's Case for Bail

Mr. Adit S. Pujari, appearing for the petitioner, advanced several arguments. He pointed out that the ECIR was registered in 2022 and the petitioner appeared for the first time only in the 7th Supplementary Prosecution Complaint as accused No. 30, which itself indicated that he was not perceived as a central figure in the earlier phases of investigation.

He argued that the alleged transactions, the last of which was on 14 August 2022, pre-dated PFI's declaration as an unlawful association on 27 September 2022. He submitted that ED had failed to demonstrate how the alleged proceeds of crime were derived from any scheduled offence, which is a prerequisite for invoking the offence of money-laundering under sections 3 and 4 of the PMLA.

On the monetary threshold, counsel drew attention to the proviso to section 45 of the PMLA, which contemplates a threshold of Rs 1 crore. Since the aggregate transactions attributed to the petitioner amounted to only Rs 3.15 lakh, he argued that the rigour of the twin conditions was correspondingly reduced.

Counsel also relied on the judgment of a Co-ordinate Bench dated 16 February 2026 in BAIL APPLN. 3620/2025, which had admitted co-accused MK Faizy to regular bail. That bench had observed that there was prima facie no evidence that the funds received were generated from the commission of any scheduled offence, and that the mere receipt of money from unknown sources, even if used for illegal activities, did not by itself make those funds proceeds of crime under section 3 of the PMLA.

Counsel further noted that Rajik Mohammad Anifa and Mohd. Rila — the persons into whose accounts the petitioner allegedly routed funds — had been arraigned only as witnesses, not as accused. He also pointed out that eight other co-accused persons had been admitted to regular bail by the Sessions Court and Co-ordinate Benches of this court, and that the trial, still pending at the stage of arguments on charge, involved approximately 250 prosecution witnesses and nearly 600 documents across seven prosecution complaints.

How the Court Reasoned

Justice Bhambhani began by reiterating that at the bail stage the court is not required to conduct a meticulous examination of evidence but only to assess whether the statutory parameters under section 45 of the PMLA are satisfied.

On the email ID and phone contacts, the court held that when a person is admittedly associated with an organisation in a professional or functional capacity, maintaining email identifiers or contact entries reflecting that organisation's name is neither unusual nor inherently suspicious. Without corroborative material linking those identifiers to specific acts of money-laundering, they could not be accorded decisive weight at the bail stage.

The court treated the timing of the petitioner's arraignment as a relevant consideration. The ECIR dated 21 September 2022 was founded on an FIR of 13 April 2022, yet the petitioner appeared for the first time in the 7th Supplementary Prosecution Complaint of 1 May 2025 as accused No. 30. The court observed that this sequence suggested the petitioner was not perceived, during the earlier phases of investigation, as occupying any central or commanding role in PFI or SDPI's affairs.

On the financial dimension, the court found the proportion of Rs 3.15 lakh against SDPI's aggregate alleged proceeds of Rs 32.94 crores so minuscule that the petitioner could not, on that basis alone, be characterised as a significant agent of the alleged money-laundering operations. The court then addressed the proviso to section 45 of the PMLA directly. It held that when an accused's alleged involvement is confined to a quantum substantially below the Rs 1 crore statutory threshold, it would be incongruous to subject him to the same degree of rigour as may apply to persons alleged to have laundered amounts equal to or exceeding that threshold. This factor, the court said, militated in favour of a more liberal approach to bail.

The court also applied the reasoning of the Co-ordinate Bench in MK Faizy's bail order. If the inflows into SDPI's accounts had not, at least at this stage, been demonstrated to constitute proceeds of crime within the meaning of section 3 of the PMLA, then the sums allegedly transferred by the petitioner to SDPI could not readily be labelled as proceeds of crime either. The court held that ED's failure to prima facie demonstrate how the funds were derived from an identified scheduled offence — a sine qua non for invoking sections 3 and 4 of the PMLA — could not be divorced from the bail analysis.

On the petrol bomb allegation, the court noted that those events, even if taken at face value, occurred before PFI was declared an unlawful association. Participation in protest activities in that temporal context could not, at this stage, be treated as a determinative factor for denying bail in a PMLA prosecution where the primary focus was on financial transactions.

The court acknowledged that the allegation of arranging cash deposits of less than Rs 2,000 from allegedly fake or non-existent donors to obfuscate the source of funds was a serious one. However, it held that such an allegation, resting on investigative analysis and inferences, must ultimately be established through admissible evidence at trial. Pre-judging its evidentiary worth to foreclose the petitioner's liberty would not be appropriate, particularly when other factors pointed towards a more tempered approach.

On the question of parity with MK Faizy, the court rejected ED's argument that the petitioner's role was categorically different. It noted that MK Faizy had been an office-bearer with both PFI and SDPI, whereas the petitioner's association with PFI was, even on ED's own case, as a Physical Education trainer who demonstrated Karate and Mixed Martial Arts at gatherings. The parity of reasoning from the MK Faizy bail order was therefore applicable.

Finally, the court weighed the duration of pre-trial custody. The petitioner had been in judicial custody since 20 March 2025 — over one year and two months at the time of the judgment — while the case remained at the stage of arguments on charge. With 250 witnesses and over 600 documents cited across seven complaints, the trial was evidently going to extend over a considerable period. Continued incarceration as an undertrial for an indeterminate period, the court held, would not comport with the fundamental principles governing personal liberty, especially when the petitioner's individual role appeared limited both in time and in quantum.

Outcome

Justice Bhambhani admitted Wahidur Rahman to regular bail in ECIR/STF/17/2022 pending trial, subject to the following conditions:

• The petitioner shall furnish a personal bond of Rs 50,000 with one surety in the like amount from a family member, to the satisfaction of the trial court.
• He shall provide the Investigating Officer a cellphone number on which he may be contacted at any time, and shall keep it active and switched on at all times.
• If he holds a passport, he shall surrender it to the trial court and shall not travel outside the country without prior permission of the trial court.
• He shall not contact, visit, or offer any inducement, threat or promise to any prosecution witness or person acquainted with the facts of the case, and shall not tamper with evidence or otherwise prejudice the pending trial.
• He shall promptly inform the Investigating Officer in writing of any change in his residential address or contact details.

The court did not impose a reporting requirement, noting that the petitioner would be appearing before the trial court from time to time in any event. The court directed that a copy of the judgment be forwarded to the concerned Jail Superintendent forthwith. All observations in the judgment were expressly confined to the bail petition and were not to be construed as an expression of opinion on the merits of the case at trial. The petition was disposed of accordingly.