New Delhi: Assets acquired from unknown or unexplained sources of income cannot, by themselves, be treated as “proceeds of crime” linked to a scheduled offence under the Prevention of Money Laundering Act (PMLA), 2002, the Allahabad high court has held.“A person may have assets derived from unknown sources of income. However, it cannot be presumed that the aforesaid assets are derived from a scheduled offence,” the court noted in its July 1 order, as per a Times of India report.The order was passed by Justice Vikram D. Chauhan while granting bail to to Sanjay Kumar alias Sanjay Dhiman, accused in a money laundering case and booked under the PMLA.The judge found that, at this stage of the proceedings, the prosecution had not been able to sufficiently establish identifiable proceeds of crime tied to a scheduled offence. The court also underlined the fact that the applicant had already spent a long time in jail and that the investigation stood completed.The case is related to action initiated by the Enforcement Directorate (ED) on the basis of several FIRs concerning alleged illegal mining activity in Himachal Pradesh. The ED’s case was that proceeds from this illegal mining were used for purchasing a stone crusher unit in Uttar Pradesh. The agency alleged that it was subsequently used for transactions linked to illegal mining.Arguing for bail, the applicant’s counsel told the court that his client’s name did not figure in any of the FIRs lodged in Himachal Pradesh.Further, the counsel pointed out that the cases in question had already ended in closure reports, several of which stood accepted by the concerned courts.The applicant had been behind bars since November 18, 2024, even as the trial itself was yet to properly take off, the counsel said, as per TOI.The high court mentioned that an offence of money laundering cannot exist without “proceeds of crime” that flow from a scheduled offence. “The ‘proceeds of crime’ are assets derived from criminal activity relating to a scheduled offence,” it observed.Such assets may invite action under other laws, but the PMLA’s own requirements cannot be met unless a clear link with a scheduled offence is shown, the court added.The high court allowed the bail application after considering the time already spent by the applicant in custody, the completion of the investigation and the fact that a co-accused had already been granted bail, and the material available.