Can a Person Be Prosecuted for PMLA Even If Not Named as an Accused in the Predicate FIR or Charge-Sheet?: Delhi Procedure and Defence Guide

PMLA • Enforcement Directorate • 2026 Legal Research Guide

A person who was never made an accused by the police or investigating agency in the scheduled-offence FIR or charge-sheet may still, in an appropriate case, be prosecuted separately for money-laundering. But the Enforcement Directorate cannot lawfully substitute relationship, proximity or suspicion for the statutory requirements of proceeds of crime and the later person's own alleged participation in a process or activity covered by Section 3 of the Prevention of Money-Laundering Act, 2002.

Research and professional guidance by

Current legal review: 16 August 2026. This guide states the present directly relevant Supreme Court position in Pavana Dibbur v. Directorate of Enforcement, 2023 INSC 1029, while separately flagging the live 2026 Supreme Court proceedings in Directorate of Enforcement v. Gagandeep Singh & Others.

Direct Answer

Yes. A person's absence from the predicate FIR or predicate charge-sheet does not, by itself, prevent prosecution under Section 3 PMLA.

The Supreme Court in Pavana Dibbur v. Directorate of Enforcement expressly concluded that it is not necessary for a person accused under Section 3 PMLA also to have been shown as an accused in the scheduled offence.

That can occur because the person alleged to have committed the scheduled offence and the person alleged later to have dealt with its proceeds need not always be the same person.

But this does not mean that ED can prosecute every relative, employee, director, account holder, purchaser, broker, accountant or associate of the predicate accused.

There must still be a legally sustainable chain connecting:

scheduled criminal activity → property derived or obtained from that activity → proceeds of crime → the later person's own Section 3 process or activity.

Quick Navigation

1. Why the two accused lists can be different
2. The five-gate PMLA prosecution test
3. What Pavana Dibbur actually decided
4. Why proceeds of crime remain indispensable
5. Late-added accused and Section 44
6. Intermediary, director, employee and account-holder cases
7. Safeguards against guilt by association
8. Evidence and document checklist
9. Defence strategy and remedies
10. 2026 Supreme Court current-law watch
11. FAQs

1. Two Separate Accused Architectures: Predicate Offence and PMLA

A recurring mistake in PMLA analysis is to assume that the list of accused persons in the scheduled offence and the list of accused persons in the money-laundering prosecution must be identical.

They need not be.

Scheduled-Offence Case

This prosecution concerns the criminal activity that allegedly generated the relevant property. Depending on the facts, it may involve cheating, corruption, narcotics, specified forgery, organised financial offences or another offence contained in the PMLA Schedule.

PMLA Case

This prosecution concerns an alleged process or activity connected with property said to constitute proceeds of crime. A person may allegedly enter this chain only after the underlying criminal activity has already occurred.

Consider a simplified example.

Person A allegedly commits a scheduled offence and thereby generates ₹5 crore.

Person B was not present when that scheduled offence was committed, was not named in the FIR and was not charge-sheeted by the police.

If the prosecution subsequently alleges, with supporting evidence, that B knowingly allowed accounts under B's control to be used to conceal or route those particular proceeds, B's absence from the predicate charge-sheet is not automatically fatal to a Section 3 prosecution.

The accusation against B is not necessarily that B committed A's scheduled offence. The accusation may instead be that B later participated in a process or activity connected with the proceeds generated by it.

The crucial distinction: “Not accused of the predicate offence” is not the same proposition as “incapable of committing the separate offence of money-laundering.”

2. The Five-Gate Test Before a Later Person Can Properly Face PMLA

The safer way to analyse a late-added or intermediary accused is to refuse to start with the person's relationship to the principal accused. Start with the statutory chain.

1. Gate 1 — Is there a scheduled offence?
   Identify the precise offence relied upon as the scheduled offence and verify that it legally falls within the PMLA Schedule. An ECIR or ED allegation cannot manufacture a scheduled offence that does not otherwise exist.
2. Gate 2 — What is the alleged proceeds-of-crime property?
   Identify the exact money, asset, receivable, property, equivalent value or other property said to have been derived or obtained from criminal activity relating to the scheduled offence. The phrase “proceeds of crime” cannot safely be used as a label without identifying its statutory source.
3. Gate 3 — What is the nexus between that property and the later person?
   Which account, asset, transfer, instrument, company, wallet, property or transaction allegedly connects the later person to the proceeds? General association should be replaced with transaction-specific particulars.
4. Gate 4 — Which Section 3 process or activity is alleged?
   Is the allegation concealment, possession, acquisition, use, projection as untainted, claiming as untainted, an attempt, knowing assistance, knowing participation or actual involvement? The prosecution theory should be identifiable.
5. Gate 5 — What proves the person's own role?
   The evidence must be tested against the precise statutory limb relied upon. Where ED alleges knowing assistance or knowing participation, the material relied upon for knowledge becomes particularly important. Where “actual involvement” is alleged, actual person-specific involvement must be established rather than inferred merely from status or relationship.

If the prosecution cannot coherently pass through these gates, the mere fact that the person knows, works for, is related to, transacted with or held an account for another accused should not be treated as a substitute for the statutory ingredients.

3. What Pavana Dibbur Actually Decided

Pavana Dibbur v. Directorate of Enforcement, 2023 INSC 1029 is unusually important because the Supreme Court dealt directly with the argument that the appellant could not be prosecuted under PMLA because she was not shown as an accused in the charge-sheets concerning the alleged scheduled offences.

The Court rejected that broad immunity argument.

Its conclusions included the proposition that it is not necessary for a person against whom an offence under Section 3 PMLA is alleged also to have been shown as an accused in the scheduled offence.

The Court further explained the practical reason: a PMLA accused may enter the factual picture after the scheduled offence has already been committed—for example, through alleged assistance in concealment or use of proceeds.

That part of Pavana Dibbur is the foundation for saying:

A person can potentially be accused under PMLA even where the predicate FIR and charge-sheet do not name that person.

But stopping the analysis there would seriously distort the judgment.

Pavana Dibbur simultaneously emphasised that proceeds of crime must actually exist and that the property must satisfy the statutory connection with criminal activity relating to a scheduled offence.

Indeed, on the facts before it, the Supreme Court held that one property acquired before the acts constituting the scheduled offence could not be connected with proceeds of that later criminal activity.

The appeal ultimately succeeded because the scheduled-offence foundation relied upon there did not legally survive: the Court held that the then Section 120-B IPC entry could become a scheduled offence only where the alleged conspiracy was to commit an offence otherwise included in the PMLA Schedule.

This makes Pavana Dibbur especially useful for balanced analysis. It supports a separate PMLA accused architecture, but it does not dilute the need to establish the scheduled offence and proceeds-of-crime foundation.

4. The PMLA Accused May Be Different — the Proceeds Cannot Be Fictional

Section 2(1)(u) defines “proceeds of crime” around property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence, together with the statutory extensions concerning value and relatable criminal activity.

This is the bridge between the two prosecutions.

The later PMLA accused need not necessarily have committed the scheduled offence, but the property with which the later person is alleged to have dealt must still qualify as proceeds of crime.

Therefore:

• a suspicious transfer is not automatically proceeds of crime;
• an unexplained credit is not automatically proceeds of crime;
• cash possession is not automatically proceeds of crime;
• an asset owned by a relative is not automatically proceeds of crime;
• an account used by an accused is not automatically a laundering account;
• a property purchased from an accused is not automatically tainted merely because of the seller's identity;
• business turnover is not automatically proceeds of crime merely because some other transaction is under investigation.

The legal inquiry is source-based and transaction-based.

5. Chronology Can Be Decisive

A transaction chart should always compare the date on which the alleged criminal activity generated property with the date on which the later person acquired, received, possessed or dealt with the disputed property.

Question	Why it matters	Defence document
When did the scheduled criminal activity allegedly occur?	There must be criminal activity capable of generating the relevant proceeds.	FIR, complaint, charge-sheet/police report, predicate case order
When was the disputed property generated?	Tests whether the property can chronologically originate from the alleged crime.	Bank statements, sale deeds, ledgers, invoices
When did the later person receive or acquire it?	Identifies whether the person entered before, during or after generation of the alleged proceeds.	UTR, account statement, agreement, registry documents
Was the property already owned before the alleged scheduled activity?	A pre-existing asset may materially undermine the alleged proceeds nexus depending on the prosecution theory.	Old title deed, tax record, loan statement, source documents

The chronology point is not theoretical. It formed an important part of the analysis in Pavana Dibbur.

6. What Section 3 Requires from the Later Person

Section 3 reaches multiple kinds of conduct connected with proceeds of crime, including concealment, possession, acquisition, use, projecting or claiming property as untainted, together with attempt, knowing assistance, knowing participation and actual involvement.

For a late-added accused, the prosecution complaint should therefore be read person by person.

Ask:

• What exact property is attributed to this accused?
• What exact date did the accused allegedly become involved?
• Which account or asset was under the accused's control?
• Who instructed the disputed transaction?
• Who benefited?
• What communication allegedly proves knowledge?
• Was money retained, immediately transferred, invested, returned or used for a documented purpose?
• Does the transaction have a legitimate contractual explanation?
• Does the prosecution allege concealment, acquisition, possession, use or projection?
• What documentary or digital material supports that allegation?

The answer should not simply be: “He is a director”, “she is the wife”, “he works for the company” or “the money passed through her account.”

Those may be investigative facts. They are not, without more, the complete legal analysis of Section 3.

7. Late-Added Accused: Can ED Add Someone Later?

Yes, the PMLA framework expressly contemplates continued investigation and subsequent complaints.

Explanation (ii) to Section 44 treats the statutory “complaint” as including a subsequent complaint resulting from further investigation for bringing additional oral or documentary evidence against an accused person, whether that person was named in the original complaint or not.

Therefore a person might be absent from:

• the predicate FIR;
• the predicate charge-sheet;
• the original ECIR description;
• even the first PMLA prosecution complaint;

and nevertheless later appear in a subsequent PMLA complaint if further investigation is relied upon.

But a procedural power to add a person is not substantive proof that the person committed Section 3.

Late addition answers “Can this person be brought before the PMLA court?” It does not by itself answer “Has the offence of money-laundering been proved against this person?”

8. Intermediary Roles: Where the Real Disputes Arise

Role	What may trigger ED scrutiny	What should not be presumed automatically	Defence focus
Bank-account holder	Receipt or onward transfer of disputed funds	That every credit was knowingly received as criminal proceeds	Purpose, instructions, source, retention, benefit, communication, account control
Company director	Company receiving, routing or acquiring alleged proceeds	That designation as director proves personal laundering	Actual role, board functions, signing authority, knowledge, Section 70 where invoked
Employee	Processing transactions or maintaining records	That ministerial execution equals knowing assistance	Job description, authority level, instructions, benefit, decision-making power
Spouse / relative	Asset or account standing in relative's name	That family relationship proves beneficial ownership or concealment	Independent income, source of funds, acquisition date, possession and control
Purchaser	Purchase of an asset from a predicate/PMLA accused	That every transaction with an accused is laundering	Consideration, valuation, timing, source, due diligence, possession, bona fides
Broker / agent	Structuring or facilitating property or financial transactions	That professional facilitation alone establishes knowing participation	Scope of mandate, fee, communications, knowledge of source, normal-course records
Accountant / professional adviser	Books, structuring, documentation or compliance work	That professional engagement itself establishes Section 3 liability	Engagement scope, information available at relevant time, advice given, independence
Nominee / accommodation entity	Asset or entity allegedly controlled for another person's benefit	That nomination or shareholding by itself proves laundering	Beneficial control, source, instructions, actual economic ownership, transaction trail

9. Account Ownership Is Not the Same as Knowing Assistance

Bank-account cases deserve special care because digital trails can create a visually persuasive but legally incomplete narrative.

Suppose ₹40 lakh reaches X's account from Y.

That fact establishes a transfer.

It does not, standing alone, answer:

• whether the ₹40 lakh constituted proceeds of crime;
• whether X knew the alleged source;
• whether X controlled the account at the relevant time;
• whether X retained or benefited from the money;
• whether the transfer discharged a legitimate debt;
• whether X was instructed to route it elsewhere;
• whether the onward transfer had an independent commercial explanation;
• which specific Section 3 process is alleged against X.

A serious investigation or defence should therefore construct a transaction matrix, not merely print a bank statement and circle a credit entry.

10. Directors and Companies: Do Not Collapse Section 3 and Section 70

Corporate PMLA cases introduce an additional issue.

Section 70 contains a statutory framework concerning offences by companies and persons who were in charge of and responsible to the company for its business at the relevant time, together with statutory defences and provisions concerning consent, connivance or neglect.

That framework should be analysed separately from the simplistic proposition that “every director is liable.”

Important questions include:

• What is the alleged offence of the company?
• Was the individual actually in charge of and responsible for the relevant business?
• What was the individual's functional role?
• Was the relevant transaction within that person's authority?
• Is consent, connivance or neglect specifically alleged?
• Does the statutory defence concerning absence of knowledge or due diligence arise on the evidence?

A company chart showing designation, signing authority, board responsibility and transaction-specific participation is often more useful than a generic list of directors.

11. Family Relationship Is Not a Substitute for a Money Trail

A spouse, parent, child, sibling or in-law can certainly become relevant to an investigation where evidence suggests that property has been placed in that person's name or accounts were deliberately used.

But relationship itself does not convert independently sourced property into proceeds of crime.

Where a family member is brought into a PMLA case, the defence file should ordinarily separate:

• pre-existing personal assets;
• salary/business income;
• inheritance;
• documented gifts;
• bank loans;
• sale proceeds;
• investment redemptions;
• joint family transactions;
• money actually received from the predicate accused;
• money merely presumed to belong beneficially to the predicate accused.

12. The Safeguard Against Guilt by Association: Build a Person-Specific Evidence Matrix

The prosecution complaint should be analysed accused-wise rather than story-wise.

Element	Prosecution question	Defence question
Scheduled offence	What offence generated the alleged proceeds?	Does that scheduled offence legally exist and survive?
Proceeds	What property came from that criminal activity?	Has the property actually been traced or only assumed?
Receipt / control	How did this accused obtain or control it?	Was the person really controlling the asset/account?
Section 3 act	What laundering process occurred?	Which statutory limb is specifically alleged?
Knowledge	What shows knowing assistance/participation where alleged?	Are there communications, instructions or circumstances actually proving knowledge?
Benefit	Who economically benefited?	Was the person merely a conduit, creditor, employee or independent counterparty?
Chronology	When did the alleged involvement begin?	Did the property or transaction predate generation of alleged proceeds?
Corroboration	What supports statements and allegations?	Do bank, tax, company and digital records corroborate or contradict the narrative?

13. What About Section 24 and the Reverse Burden?

Section 24 contains a statutory burden-of-proof framework in proceedings relating to proceeds of crime.

That makes source documentation and contemporaneous records particularly important in PMLA litigation.

However, Section 24 should not be treated as a licence to bypass the foundational legal inquiry. The accusation must first be examined against the scheduled offence, the alleged proceeds and the person's Section 3 role.

A reverse evidentiary burden cannot sensibly convert mere friendship, employment, directorship or kinship into the missing property nexus.

14. “I Was Not Named in the FIR” — What This Fact Is Actually Worth

It is relevant, but its legal significance depends on what you are trying to prove.

Argument	Legal strength
“I was not named in the predicate FIR, therefore PMLA can never apply to me.”	Too broad. Pavana Dibbur rejects this automatic-immunity theory.
“I was not charge-sheeted for the scheduled offence, therefore ED must identify a separate Section 3 role against me.”	Important. The PMLA accusation must be analysed on its own statutory ingredients.
“No property connected to me is derived from scheduled criminal activity.”	Potentially fundamental. Proceeds of crime are indispensable.
“The disputed asset predates the alleged scheduled criminal activity.”	Potentially powerful chronology issue. The precise prosecution theory must be tested.
“My only alleged connection is that I am a relative/director/employee.”	Requires person-specific scrutiny. Status alone should not substitute for the statutory conduct.

15. Late-Added Accused: Immediate Document Checklist

If a person has suddenly been summoned, named in a supplementary complaint or treated as a suspected intermediary despite being absent from the predicate case, the first task should be evidence preservation.

• Complete predicate FIR / criminal complaint.
• All predicate charge-sheets, supplementary charge-sheets and final reports.
• Orders taking cognizance in the scheduled offence.
• Current order sheets showing status of the predicate case.
• ECIR particulars available from the record.
• Original and subsequent PMLA prosecution complaints.
• Section 50 summons and statements.
• Bank statements for the relevant period.
• UTR/RRN and payment reference records.
• Loan agreements and repayment schedules.
• Sale deeds and purchase consideration evidence.
• Income-tax returns.
• GST and accounting records where relevant.
• Audited financial statements.
• Company master data, board minutes and signing-authority documents.
• Employment agreement and job description.
• Emails, WhatsApp messages and other relevant communications preserved from original devices.
• Invoices, work orders and service agreements.
• Proof of independent source of funds.
• Property ownership documents predating the disputed transactions.
• Chronological transaction chart.

16. Build a Transaction Matrix Before Giving a Section 50 Explanation

A useful litigation-preparation matrix should contain at least:

Date	Amount / Property	Source	Destination	Purpose	Supporting Document	ED Allegation	Defence Explanation
DD/MM/YYYY	₹ / asset	Sender / seller	Recipient / purchaser	Loan / invoice / sale / transfer	Bank / agreement / invoice	Concealment / possession / acquisition / use etc.	Fact-specific response

This reduces the danger of giving broad explanations disconnected from the actual financial trail.

17. Statements Should Be Tested Against Documents

PMLA cases frequently rely upon statements, bank records, corporate documents, digital communications and property records together.

The defence should therefore compare each important statement with objective contemporaneous material.

For example:

• Does the statement say X controlled an account that bank mandate documents show was controlled by Y?
• Does the allegation say consideration was unexplained when a loan disbursement exists on the same date?
• Does the allegation say a property was acquired from crime proceeds when title and payment predate the alleged crime?
• Does a witness call a transfer “commission” while invoices describe documented services?
• Does a WhatsApp extract omit surrounding messages that materially change the transaction context?

Digital evidence should be preserved in original form where possible. Screenshots should neither be automatically dismissed nor treated as complete forensic proof without examining source, context, metadata, device and corroboration.

18. Defence Strategy When the Person Was Never a Predicate Accused

A. Attack the “proceeds” foundation first

Ask which property is allegedly derived or obtained from the scheduled criminal activity. If that answer is missing, the rest of the laundering theory may be structurally weak.

B. Separate every accused

Prepare a separate allegation sheet for each person. Avoid defending “the group” when the prosecution must establish individual participation.

C. Establish chronology

Map the alleged crime, generation of proceeds, receipt, acquisition, transfer and disposal on one timeline.

D. Prove legitimate source contemporaneously

Produce source material rather than only oral denial: bank disbursements, tax returns, invoices, sale proceeds, investments, audited accounts, inheritance or other lawful-source material as applicable.

E. Identify the exact Section 3 limb

Force analytical clarity: what exactly did the person allegedly conceal, possess, acquire, use, project or claim? If “knowing assistance” is alleged, what shows knowledge?

F. Examine Section 70 separately for corporate accused

Do not allow general directorship allegations to substitute for the specific statutory corporate-liability analysis.

G. Track the predicate case continuously

Discharge, quashing, acquittal, deletion of scheduled sections or other developments in the predicate case may materially affect the proceeds-of-crime foundation and should immediately be examined for consequences in the PMLA matter.

19. What If the Scheduled-Offence Accused Are Later Acquitted or Discharged?

Pavana Dibbur is again significant.

The Supreme Court concluded that even a person prosecuted under PMLA who was not an accused in the scheduled offence would benefit where all accused in the scheduled offence are acquitted or discharged, and similarly where the scheduled-offence proceedings are quashed.

The doctrinal reason is important: a later PMLA accused may be different from the predicate accused, but the alleged proceeds still require their scheduled-offence foundation.

However, because related questions are presently before the Supreme Court in the Gagandeep Singh batch, any live case in 2026 should be checked against the latest Supreme Court order before a final litigation position is taken.

2026 Current-Law Watch:
An official Supreme Court Office Report dated 13 July 2026 in Directorate of Enforcement v. Gagandeep Singh & Others, SLP (Crl.) No. 2234/2023, records pending questions including whether independent PMLA proceedings may be initiated against a person who is not an accused in the scheduled offence. The Court has also raised broader questions concerning Section 2(1)(u), developments in the predicate case and Section 44. These are pending issues, not a substitute for the existing holding in Pavana Dibbur.

20. Procedural Independence Does Not Mean Foundational Independence

Section 44 contains provisions clarifying the Special Court's PMLA jurisdiction and the relationship between the two prosecutions.

This sometimes leads to an overbroad statement that “PMLA is completely independent of the scheduled offence.”

That formulation needs qualification.

The money-laundering offence is distinct in the sense that it punishes the separate process or activity connected with proceeds.

But the statutory expression “proceeds of crime” itself requires criminal activity relating to a scheduled offence.

Therefore the better distinction is:

Separate offence and separate accused architecture — but with a statutory proceeds-of-crime bridge to the scheduled criminal activity.

21. Practical Red Flags for a Guilt-by-Association Case

A defence lawyer should examine particularly closely a complaint that relies heavily on formulations such as:

• “close associate of accused no.1”;
• “family member of the main accused”;
• “director of group company”;
• “employee of the accused company”;
• “known to the accused”;
• “money passed through his/her account”;
• “property stands in his/her name”;
• “participated in business meetings”;

without then identifying the property, transaction, Section 3 process and evidence connecting that individual to the alleged laundering activity.

These facts can form part of an evidentiary case. They should not become the entire case by themselves.

22. Can a Person Be Arrested Even Though Not Named in the Predicate FIR?

Absence from the predicate FIR is not, by itself, a statutory bar to ED investigating or prosecuting an alleged Section 3 role.

If arrest exposure arises, Section 19 PMLA and the current law governing arrest safeguards must be examined separately on the actual record.

A person should therefore not assume:

“Police never charge-sheeted me, so ED cannot arrest me.”

Nor should anyone assume the opposite—that a Section 50 summons means arrest is inevitable.

Summons, investigation, prosecution and arrest are legally distinct stages and should not be collapsed into one another.

23. If a Supplementary Complaint Suddenly Names You

Immediately compare the subsequent complaint with the earlier complaint and create a “new allegation chart”:

• What allegation is genuinely new?
• What new evidence is claimed?
• Was that evidence already available earlier?
• Which transaction is newly attributed to you?
• Which witness or document allegedly identifies your role?
• What proceeds-of-crime property is connected to you?
• Is the complaint merely repeating allegations against another accused?
• Does the complaint specify your own Section 3 conduct?

A supplementary complaint can expand the prosecution. It should not be permitted to erase the requirement of individual criminal ingredients.

24. Case Example: The Innocent Account Holder Problem

Assume a company employee is told to receive ₹8 lakh in a reimbursement account and transfer it to a vendor.

Months later, ED alleges that the incoming amount originated several layers earlier from proceeds of a scheduled offence.

The employee was never named in the predicate FIR.

The correct legal analysis is not simply:

“Money touched the employee's account, therefore employee is guilty.”

The investigation should examine:

• whether the ₹8 lakh itself is traceable within the statutory proceeds theory;
• why it reached the employee;
• whether the employee knew the alleged source;
• whether the employee selected the recipient;
• whether the employee retained any benefit;
• whether the transaction was in the ordinary course of employment;
• whether any false invoice or concealment mechanism existed;
• what communications preceded the transfer;
• whether the prosecution relies on knowing assistance or another Section 3 limb.

Only after those questions are answered can the employee's role be analysed meaningfully.

25. Case Example: Property Purchased Before the Alleged Crime

Suppose X bought a flat in 2018 from documented salary savings and a bank loan.

The scheduled criminal activity relied upon by ED allegedly begins in 2021.

If ED later alleges that the 2018 flat itself represents property generated from the 2021 offence, chronology becomes a fundamental challenge to that specific theory.

This does not automatically decide every possible attachment or equivalent-value question under the Act, but it demonstrates why a prosecution cannot ignore the temporal origin of the asset.

26. Case Example: Spouse Added Only in PMLA

A spouse is not named in the fraud FIR or charge-sheet. ED subsequently alleges that proceeds generated by the principal accused were transferred into the spouse's account and used to acquire an investment.

The spouse's absence from the predicate prosecution is not enough by itself to defeat PMLA.

But equally, marriage is not enough to prove PMLA.

The real questions concern:

• source of the money;
• control of the account;
• knowledge of the transfer;
• beneficial ownership;
• investment instructions;
• independent income;
• the particular Section 3 activity alleged.

27. When Can Quashing or Discharge Become a Serious Issue?

Case-specific remedies depend upon the procedural stage, but potential grounds requiring examination may include:

• absence of a legally sustainable scheduled offence;
• absence of property satisfying Section 2(1)(u);
• chronological impossibility in the proceeds theory;
• absence of any allegation constituting a Section 3 activity even if complaint allegations are taken at face value;
• person being implicated only by designation or relationship without the necessary individual allegations;
• later developments destroying the sole scheduled-offence foundation;
• procedural defects affecting cognizance or prosecution, depending upon the applicable law and dates.

Whether these matters justify quashing, discharge, bail or a trial defence is highly stage-specific. No universal outcome should be assumed.

28. BNS / BNSS / BSA Transition Must Be Checked in Current Cases

For conduct, investigation or court proceedings spanning 1 July 2024, lawyers should separately identify whether the IPC/CrPC/Evidence Act regime continues by virtue of applicable saving provisions or whether the Bharatiya Nyaya Sanhita, Bharatiya Nagarik Suraksha Sanhita and Bharatiya Sakshya Adhiniyam govern the relevant issue.

This is particularly important where:

• the predicate FIR is old but supplementary investigation is new;
• the prosecution complaint or cognizance occurs after commencement of BNSS;
• electronic evidence is being relied upon;
• old statutory section numbers are being mechanically repeated despite a later procedural stage.

The correct procedural regime should be determined from the exact dates and statutory saving provisions in the individual case.

29. Frequently Asked Questions

Can ED make me an accused if my name is not in the predicate FIR?

Potentially yes. Absence from the predicate FIR is not automatic immunity. ED must nevertheless establish the scheduled-offence/proceeds foundation and your own alleged Section 3 activity.

What if my name is also absent from the predicate charge-sheet?

The answer remains broadly the same under Pavana Dibbur. A person may allegedly enter the laundering process after commission of the scheduled offence. The prosecution must establish the person's separate PMLA role.

Does not being charge-sheeted by police prove innocence for PMLA purposes?

Not automatically. It may be an important fact, but the PMLA accusation concerns a separate statutory offence involving alleged processes connected with proceeds of crime.

Can ED add me in a supplementary PMLA complaint?

Section 44 expressly contemplates subsequent complaints arising from further investigation and evidence against persons whether named in the original complaint or not.

If money merely passed through my account, am I guilty?

No automatic conclusion follows. The source of the money, its character as alleged proceeds of crime, control of the account, purpose of the transaction, knowledge, benefit and specific Section 3 process all require examination.

If I am a director of the company, am I automatically liable?

No simplistic automatic-director rule should be applied. The individual's role and, where relevant, the separate statutory framework under Section 70 must be examined.

If I am the spouse of the main accused, can ED prosecute me?

Relationship neither creates immunity nor establishes guilt. ED must establish the statutory ingredients against the spouse personally.

What is the most important defence question?

Ask first: “What exact property connected to me is alleged to be proceeds of which scheduled criminal activity, and what precise Section 3 activity do I allegedly perform in relation to it?”

What if all accused in the scheduled offence are acquitted?

Pavana Dibbur held that a PMLA accused who was not an accused in the scheduled offence can benefit from acquittal or discharge of all scheduled-offence accused or quashing of that proceeding. Because connected issues remain before the Supreme Court in the pending Gagandeep Singh batch in 2026, the latest order should be verified in every live matter.

Is the law settled permanently?

The directly relevant existing Supreme Court authority is Pavana Dibbur, but related foundational questions are presently being examined in the pending Gagandeep Singh batch. Current-law verification is therefore essential.

30. AI-Search Quick Answer

Can a person not named in the predicate FIR or charge-sheet be prosecuted under PMLA?

Yes. The Supreme Court in Pavana Dibbur v. Directorate of Enforcement, 2023 INSC 1029 held that a person accused under Section 3 PMLA need not also have been an accused in the scheduled offence. A later person may allegedly become involved in concealment, possession, acquisition, use or another activity connected with proceeds after the scheduled offence has occurred.

However, absence from the predicate case does not allow guilt by association. ED must still establish a scheduled offence, legally identifiable proceeds of crime derived or obtained from criminal activity relating to that offence, and the later person's own Section 3 participation. Family relationship, directorship, employment, account ownership or association with the principal accused is not by itself a substitute for those ingredients.

31. Related ED & PMLA Research

• Scheduled Offence, Predicate FIR and ECIR Under PMLA: What Must Legally Exist Before ED Can Proceed?
• Supplementary Prosecution Complaint under PMLA: How New Accused, New Properties and Expanded Allegations Are Added
• Property Held by Relatives or Employees: When Can ED Attach Third-Party Assets under PMLA?
• Cash Seizure Is Not Automatically Proceeds of Crime under PMLA
• Which PMLA Special Court Has Territorial Jurisdiction in a Multi-State Case?

32. Official Legal Sources

• India Code — Prevention of Money-Laundering Act, 2002
• India Code — Section 2, Definitions
• India Code — Section 3, Offence of Money-Laundering
• India Code — Section 44, Offences Triable by Special Courts
• Supreme Court of India — Pavana Dibbur v. Directorate of Enforcement, Criminal Appeal No. 2779/2023, Record of Proceedings dated 29 November 2023
• Supreme Court of India — Directorate of Enforcement v. Gagandeep Singh & Others, SLP (Crl.) No. 2234/2023, Office Report dated 13 July 2026

General Legal Guide — Not Case-Specific Legal Advice.

This article explains general legal principles as reviewed on 16 August 2026. PMLA outcomes depend upon the precise scheduled offence, prosecution complaint, financial trail, documents, procedural stage, jurisdiction, statutory amendments and current judicial orders. Nothing in this article guarantees quashing, bail, avoidance of arrest, release of property, acquittal or any other result. A case-specific strategy requires review of the complete record.

Related Delhi legal guides

Proceeds of crime analysis · Predicate and scheduled offences · Money-laundering defence guide

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