Introduction:
The Supreme Court of India on September 22, 2025, dismissed a plea moved by Bollywood actress Jacqueline Fernandez seeking quashing of proceedings in the ₹200 crores money laundering case connected with alleged conman Sukesh Chandrasekhar. The petition was filed against the backdrop of an earlier order by the Delhi High Court, which in July 2025 had declined to quash the Enforcement Directorate’s (ED) Enforcement Case Information Report (ECIR) and the supplementary complaint arraigning her as the tenth accused. A bench of Justice Dipankar Datta and Justice A.G. Masih heard the matter, wherein Senior Advocate Mukul Rohatgi represented Fernandez, while the Directorate of Enforcement appeared in opposition. The case, titled Jacqueline Fernandez v Directorate of Enforcement, SLP (Crl) No. 14759/2025, raised substantial questions concerning the scope of Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA), the element of “knowledge” or mens rea in money laundering offences, and the impact of the Supreme Court’s earlier ruling in Vijay Madanlal Choudhary v Union of India.
Arguments of the Petitioner:
Jacqueline Fernandez, through her counsel Senior Advocate Mukul Rohatgi, argued that the case against her was unsustainable in law and fact because the prosecution’s primary case rested only on her acceptance of certain gifts from Sukesh Chandrasekhar. According to her, this act, in itself, could not amount to a money laundering offence unless there was positive evidence showing that she had knowledge that the said gifts were proceeds of crime. Rohatgi emphasized that Section 3 of the PMLA requires proof of knowing involvement, i.e., abetment cannot be established unless there is clear evidence of intent or awareness. He stressed that the Supreme Court in Vijay Madanlal had held that abetment or assistance under PMLA cannot be inferred on mere suspicion and must demonstrate active and knowing participation.
Rohatgi further elaborated that the Enforcement Directorate itself had admitted that Sukesh Chandrasekhar, lodged in Tihar Jail, had unhindered access to mobile phones and technology through collusion of jail officials, and that it was through these means that he had duped several individuals, including Fernandez. In fact, the ED’s own case showed that Sukesh deliberately targeted film stars and prominent individuals by misrepresenting himself as a wealthy businessman who was politically harassed. The petitioner’s plea maintained that she too was an “innocent victim” of Sukesh’s deceit and manipulation, rather than a collaborator or beneficiary of his alleged crimes.
He also drew attention to the fact that Fernandez was cited as a prosecution witness in the predicate offence of extortion, which formed the foundation for the money laundering case. According to him, once the agency had chosen to present her as a witness in the main predicate offence, it was illogical to arraign her as an accused in the consequential money laundering offence. Rohatgi stressed that there was an inconsistency in the prosecution’s approach — on one hand, treating her as a witness, and on the other, prosecuting her as an accused in a connected matter.
In addition, the counsel placed reliance on the Maharashtra Control of Organized Crime Act (MCOCA), which was invoked in the predicate offence, arguing that its provisions overlapped substantially with Section 3 of the PMLA. According to him, since Fernandez was not charged under MCOCA in the extortion case, she could not be indirectly implicated under PMLA for the same factual allegations. He argued that if the MCOCA court itself did not find sufficient basis to treat her as an accused in the organized crime case, it was impermissible to camouflage her prosecution under the PMLA umbrella.
Rohatgi strongly objected to the Delhi High Court’s earlier reasoning that issues of knowledge, intent, and “turning a blind eye” could only be adjudicated at trial. He argued that such reasoning wrongly prolonged harassment of an individual who was clearly duped and had no culpable knowledge. He urged the Court to hold that absence of mens rea was evident from the record itself and, therefore, trial was unnecessary.
Arguments of the Respondent:
The Enforcement Directorate, opposing the plea, relied heavily on the framework of PMLA as interpreted in the landmark judgment of Vijay Madanlal Choudhary. According to the ED, the offence of money laundering does not require the accused to be directly involved in the predicate offence but merely to be found in possession or use of proceeds of crime, knowingly or with reason to believe their criminal origin. The agency argued that acceptance of expensive gifts from an individual facing charges of organized extortion raised a legitimate presumption that the recipient should have been aware, or at least cautious, about the source of such largesse.
The ED emphasized that Fernandez was not being accused of orchestrating the extortion but of knowingly enjoying benefits derived from it. The agency pointed out that lavish gifts, ranging from jewelry to luxury goods, were transferred by Sukesh to the actress, and that she continued her association with him even after being cautioned by some individuals about his dubious reputation. The prosecution submitted that the trial court was the appropriate forum to evaluate whether such circumstances amounted to “turning a blind eye” and whether that constituted knowledge for purposes of Section 3.
The ED rejected the contention that treating Fernandez as a witness in the predicate offence precluded her arraignment in the money laundering case. It argued that roles and responsibilities in the two proceedings were distinct, and the prosecution had full discretion in categorizing individuals differently in the predicate offence and the laundering offence. The agency maintained that Fernandez’s plea to be discharged at the threshold was premature and would amount to bypassing the evidentiary scrutiny that only a trial could provide.
Court’s Judgment:
The Supreme Court bench, after hearing the parties, dismissed the plea for quashing the proceedings but granted liberty to Fernandez to contest the allegations at the stage of framing of charges and during the trial. Justice Dipankar Datta, speaking for the bench, observed that the legal framework under PMLA, as interpreted in Vijay Madanlal, leaves little room for the Court to quash proceedings at the threshold merely on the ground that knowledge has not been established. At the stage of framing of charges, the Court is bound to assume the allegations to be true and cannot conduct a mini-trial on mens rea.
Justice Datta candidly noted that while Fernandez may argue that she was duped and that her acceptance of gifts was innocent, the legal presumption under PMLA requires trial courts to scrutinize whether such innocence was genuine or whether she consciously chose to ignore warning signs. He remarked that it was indeed a difficult position, where a person may be implicated for merely being associated with a friend who later turns out to be a criminal, but emphasized that this was precisely the scope of the money laundering statute as upheld in Vijay Madanlal.
The bench declined to interfere with the Delhi High Court’s order, noting that the observations made therein were confined to the context of deciding the quashing petition and would not prejudice Fernandez at trial. Justice Datta clarified that the trial court would independently assess whether sufficient grounds existed to frame charges and that Fernandez would be entitled to raise all her legal and factual defences at that stage.
The order stated: “Dismissed with liberty to approach the Court. The observations made in the impugned judgment were only for the purpose of disposing of the petition. At the time of framing of charges, the special court shall be at liberty to hear the petitioner and pass the order.” With this, the Supreme Court closed the matter at the current stage, while leaving the door open for Fernandez to seek relief later in the trial process.
The judgment reinforced the principle that PMLA proceedings are difficult to quash at the pre-trial stage because the statute operates on broad definitions of “proceeds of crime” and “involvement,” and the question of knowledge is deeply fact-intensive, requiring evidentiary appreciation. While sympathetic to the argument that Fernandez may have been an unwitting victim of Sukesh’s manipulations, the Court remained bound by precedent and statutory language, ultimately preferring to allow the trial process to unfold rather than short-circuiting it.