Punjab and Haryana HC rejects Sukhpal Khaira’s plea to halt money-laundering trial

Although Khaira’s NDPS trial has been stayed by the Supreme Court since April 10, 2024, the High Court held that established drug proceeds and prior convictions enable the PMLA prosecution to continue.

The proceedings stem from an investigation into drug smuggling in Fazilka, Punjab, for which Gurdev Singh was convicted. ED’s findings suggested that Khaira allegedly provided protection to Gurdev, and was linked to illicit funds. Khaira was arrested under PMLA in November 2021 and granted bail two months later. Subsequent bail followed his arrest in a revived NDPS case last September. While Khaira obtained a stay on NDPS trial proceedings from the Supreme Court, he sought deferment of the PMLA case, arguing its outcome depended on the fate of the predicate NDPS offence.

Senior Advocate Vikram Chaudhri, for Khaira, argued that prosecuting under PMLA while the underlying NDPS charges are stayed would breach legal precedent, relying on Supreme Court rulings such as Vijay Madanlal Choudhary v. Union of India. ED’s Special Counsel Zoheb Hossain, countering for the respondent, cited Pavana Dibbur v. Directorate of Enforcement to contend that money laundering prosecutions may proceed regardless of a stay on predicate offences—particularly since the generation of proceeds stands proved through Gurdev Singh’s conviction.

Justice Dahiya found that the conviction of Gurdev Singh and the existence of proceeds of crime were sufficient to sustain charges against Khaira under PMLA. The judge noted: “Money laundering is an independent offence and scheduled offences are only essential for initiation, but not for completion, of proceedings. Khaira’s alleged involvement pertains to the use, not generation, of illegal funds.” Eight of 39 witnesses have already testified in the ongoing PMLA trial.

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