The Rajasthan High Court has dismissed a bail application filed by Mohammed Sadeeque in a money-laundering case registered by the Directorate of Enforcement (ED), holding that sufficient prima facie material existed to indicate involvement in offences under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA).
The bench of Justice Praveer Bhatnagar ruled that the petitioner failed to satisfy the mandatory “twin conditions” prescribed under Section 45 of the PMLA.
The matter arose from an Enforcement Case Information Report (ECIR) registered by the Directorate of Enforcement, Jaipur Zonal Office, based on multiple FIRs, including allegations involving offences under the Arms Act and other criminal provisions that allegedly qualified as scheduled offences under the PMLA. The petitioner sought bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS).
During arguments, the petitioner contended that he had been falsely implicated and that the ED had wrongly classified ordinary banking transactions as suspicious financial activity. It was argued that the petitioner was engaged in a small restaurant business and charitable activities through Al-Furkan Educational Trust and that deposits reflected legitimate income, donations, and routine financial transactions rather than proceeds of crime. The petitioner also claimed that funds received for charitable purposes and medical treatment contributions had been incorrectly interpreted by investigators.
The defence further argued that no direct connection existed between the alleged scheduled offences and the purported proceeds of crime. It was submitted that even if some financial discrepancies existed, such issues might at best attract proceedings under tax laws and not the stringent provisions of PMLA. The petitioner also maintained that no undisclosed assets or specific tainted properties had been identified by the ED and claimed that investigators had merely aggregated credits and debits across accounts to artificially inflate the alleged money-laundering amount.
The ED, however, strongly opposed the bail plea and argued that the investigation had uncovered systematic routing and layering of funds through multiple accounts allegedly maintained and controlled by the petitioner, his relatives and Al-Furkan Educational Trust. According to the agency, large cash deposits followed by immediate withdrawals through self-cheques, ATM withdrawals and counter transactions indicated concealment and movement of proceeds of crime.
The agency further alleged that despite substantial financial transactions, the petitioner failed to establish legitimate sources of income matching the scale of account activity. The ED also asserted that the Trust was effectively controlled by the petitioner and that office-bearers had allegedly signed blank or pre-signed cheques without knowledge of fund utilisation. The prosecution additionally argued that proper books of accounts, audited financial statements and income tax returns had not been maintained despite significant monetary transactions.
Justice Praveer Bhatnagar observed that FIR No.13/2022 contained offences under Section 307 IPC and Section 27 of the Arms Act, which constituted scheduled offences under the PMLA. The Court noted that investigation materials included allegations regarding recovery of a country-made firearm and statements of co-accused recorded under Section 50 of PMLA indicating that the petitioner had allegedly supplied firearms.
The Court also referred to another FIR involving allegations relating to inflammatory speeches and later inclusion of additional offences under the Bharatiya Nyaya Sanhita (BNS), corresponding to provisions such as cheating, criminal conspiracy and waging war-related offences, which also fell within the category of scheduled offences under PMLA. The Court held that the petitioner’s argument that no scheduled offence existed was prima facie contrary to material placed on record.
On the financial aspect, the Court recorded that the ED investigation disclosed cash deposits of approximately ₹52.45 lakh and withdrawals of around ₹105.84 lakh through various accounts allegedly controlled by the petitioner and entities linked with him. According to the Court, the pattern of transactions prima facie indicated routing and layering of funds and raised questions regarding the legitimacy of financial activities.
The Court also relied upon judicial precedents concerning the evidentiary value of statements recorded under Section 50 of the PMLA and the mandatory nature of the bail conditions under Section 45. Referring to Supreme Court rulings, the Court reiterated that before granting bail in PMLA cases, it must be satisfied that reasonable grounds exist for believing that the accused is not guilty and is unlikely to commit any offence while on bail.
Holding that sufficient material existed indicating involvement of the petitioner in the alleged offence and that the statutory conditions for bail had not been met, the High Court dismissed the bail application. However, it clarified that the observations made in the order were only for the purpose of deciding the bail plea and would not affect the merits of the trial proceedings.
Case Details
Case Title: Mohammed Sadeeque Versus Directorate Of Enforcement
Case No.: S.B. Criminal Miscellaneous Bail Application No. 3319/2026
Date: 07.05.2026
Counsel For Appellant: Javed Khan
Counsel For Respondent: Ajatshatru Mina
