Protected in Predicate Case, But Not PMLA: Delhi HC Draws Legal Line

The Delhi High Court’s ruling in the Ram Singh case reinforces a distinction in money-laundering law: protection from arrest in a predicate offence does not automatically shield an accused from Enforcement Directorate proceedings under the Prevention of Money Laundering Act (PMLA).

Justice Madhu Jain, while denying anticipatory bail, held that protection granted in the underlying FIR operates within that proceeding. PMLA proceedings are distinct and independent. Therefore, Singh could not claim pre-arrest protection merely because the Supreme Court had protected him in the predicate offence.

The court also applied the bail framework under Section 45 of the PMLA. Its “twin conditions” require reasonable grounds for believing that an accused is not guilty and that the person is unlikely to commit an offence while on bail. The Supreme Court initially struck down the earlier formulation in Nikesh Tarachand Shah, but Parliament amended Section 45. In Vijay Madanlal Choudhary, the Constitution Bench upheld the provision and its bail requirements.

For Singh, the court found material against him. The investigation allegedly traced proceeds of crime worth around ₹26.18 crore to him. It also considered statements recorded under Section 50, financial trail and bank-account analysis as material connecting him with the proceeds.

His conduct before the ED weakened his claim. Despite repeated summonses requiring personal appearance, neither Singh nor an authorised representative appeared. Instead, a written response was submitted through his lawyer. The court viewed this as an attempt to avoid the inquiry.

The ruling has implications for accused persons who enjoy protection in predicate cases. Such protection does not prevent the ED from investigating laundering, tracing transactions or seeking custodial questioning where legally justified. An accused may need separate relief in PMLA proceedings.

At the same time, the cases remain legally connected because PMLA liability depends on proceeds of crime arising from a scheduled offence. Developments affecting the foundational offence can have consequences for the money-laundering case.

The message is clear: protection in the predicate case and protection from ED arrest remain separate legal questions.