Offence Of Money Laundering Is Standalone: Not Dependent On Outcome Of Predicate Offence: Punjab & Haryana High Court Refuses To Stay PMLA Trial Against Sukhpal Khaira

“Even if the petitioner is acquitted of charges under NDPS Act, his prosecution under PMLA will remain unaffected” –  On October 31, 2025, the Punjab & Haryana High Court rejecting a plea to stay proceedings in a money laundering case under the Prevention of Money Laundering Act, 2002 (PMLA), despite the Supreme Court’s interim stay on the trial in the scheduled (predicate) offence under the NDPS Act. The decision reiterates the autonomous character of money laundering offences under the PMLA and their distinct legal identity from predicate offences.

The Court, presided over by Justice Tribhuvan Dahiya, dismissed the petition filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) — corresponding to Section 482 of the Code of Criminal Procedure — in which the petitioner, Sukhpal Singh Khaira, sought deferment of proceedings in the PMLA case registered as ECIR/02/STF/2021. The plea was made on the ground that the trial in the underlying NDPS offence (FIR No. 35/2015) was stayed by the Supreme Court in SLP (Crl.) No. 2100/2024.

“Existence of Scheduled Offence Is a Sine Qua Non – But Not Necessarily Against the Same Accused”

The Court emphasized that while the offence of money laundering under Section 3 PMLA requires the existence of a scheduled offence, it is not necessary that the person prosecuted under PMLA must also be an accused in the predicate offence. Citing the authoritative ruling in Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1, the Court observed:

“The offence of money-laundering is an independent offence regarding the process or activity connected with the proceeds of crime which had been derived or obtained as a result of criminal activity relating to a scheduled offence... This offence otherwise has nothing to do with the criminal activity relating to a scheduled offence – except the proceeds of crime derived or obtained as a result of that crime.” [Para 269, Vijay Madanlal Choudhary]

Further strengthening this view, the Court also referred to the Supreme Court’s decision in Pavana Dibbur v. Directorate of Enforcement, 2023 SCC OnLine SC 1586, which held that a person not named in the predicate offence could still be prosecuted under PMLA if they knowingly dealt with or assisted in handling the proceeds of crime.

Sukhpal Khaira’s Role in Drug Money Allegations

The PMLA case against Khaira emerged from ECIR/02/STF/2021 registered by the Enforcement Directorate (ED) on January 21, 2021, based on a scheduled offence under FIR No. 35/2015 involving sections of the NDPS Act, Arms Act, and the Information Technology Act.

The predicate case involved the conviction of Gurdev Singh for drug trafficking. Based on statements recorded under Section 50 PMLA and further investigation, Khaira was alleged to have received drug money from Gurdev Singh, who purportedly funded Khaira’s election campaign. It was alleged that Khaira used his influence to protect Gurdev Singh’s heroin trade and received cash and financial support, amounting to proceeds of crime.

The ED’s complaint against Khaira was filed on January 6, 2022, and cognizance was taken by the Special Court on January 20, 2022. Subsequently, a supplementary chargesheet in the NDPS case was filed on January 20, 2024, naming Khaira as an accused based on fresh material collected by a Special Investigation Team. However, the Supreme Court stayed further proceedings in the predicate offence on April 10, 2024, based on a statement by the State.

Can PMLA Trial Continue While Predicate Offence Is Stayed?

Khaira’s counsel argued that since the trial in the scheduled offence was stayed, the PMLA trial, based on that offence, should also be deferred. It was submitted that the outcome of the scheduled offence would directly impact the money laundering case. Reliance was placed on a Telangana High Court decision in M/s Bharti Cement Corporation Pvt. Ltd. v. Directorate of Enforcement, where the Court held that the money laundering trial should pause pending the outcome of the predicate offence, as both were against the same accused.

However, Justice Dahiya rejected this analogy, pointing out a crucial distinction:

“The situation in the instant case is different, as the petitioner is accused of using the proceeds of crime generated due to commission of scheduled offences by a person who already stands convicted.”

The Court emphasized that since Gurdev Singh’s conviction in the predicate offence was not under challenge, the existence of a scheduled offence generating proceeds of crime stood established. The prosecution of Khaira under PMLA was based on allegations that he dealt with those proceeds, making the offence independent and capable of proceeding irrespective of the stay in Khaira’s NDPS trial.

“Scheduled Offence Proven, Trial Can Continue”: PMLA Is Not Subordinate To Predicate Trial

Rejecting the petitioner’s reliance on the Bharti Cement ruling, the High Court held that the facts were distinguishable. In Bharti Cement, the same individual was accused in both the predicate and money laundering offences. In contrast, Khaira was being prosecuted under PMLA for allegedly dealing with drug money after the offence had already been committed by Gurdev Singh, who stood convicted.

The Court held: “Even if the petitioner is to be acquitted of charges pertaining to the scheduled offences, his prosecution under the PMLA will remain unaffected.”

Further, it highlighted that the PMLA complaint and cognizance occurred before the supplementary chargesheet in the NDPS case, thereby affirming the PMLA case’s procedural independence.

PMLA Trial to Proceed Independently of Supreme Court Stay in Predicate Offence

The Punjab & Haryana High Court’s judgment underlines a growing judicial consensus that trials under the Prevention of Money Laundering Act do not automatically halt due to procedural or substantive developments in the scheduled offence, unless the very existence of the predicate offence is legally extinguished.

The Court concluded that no prejudice would be caused to Khaira in allowing the money laundering trial to proceed, especially in light of Gurdev Singh’s conviction and the ongoing trial in the Special Court, where 8 out of 39 prosecution witnesses have already been examined.

Accordingly, the petition was dismissed.

Date of Decision: 31.10.2025