JUDGMENT : J. C. DOSHI, J. 1. The present petition is filed under Section 482 of the Cr.PC for the following reliefs:- A) Your Lordship may be pleased to admit and allow this Application; (B) Your Lordships may be pleased to issue writ of certiorari or any other write, order or direction to quash and set aside the complaint dated 30.03.2015 being PMLA Complaint No. 05 of 2015, qua the present petitioners, lodged in the Court of Hon ble Principal District and Sessions Judge (Designated Special Court under PMLA 2002), Ahmedabad (Rural). C) Your Lordships may be pleased to quash the summons dated 30.03.2015 issued upon the present petitioners, qua the present petitioners in PMLA Complaint No. 05 of 2015 issued by the Honble Principal District and Sessions Judge (Designated Special Court under PMLA 2002), Ahmedabad (Rural) and pass any such other or further orders as may be deemed fit and proper. (D) Your Lordships may be pleased, pending admission, final hearing and disposal of this petition, to stay the further proceedings of PMLA Complaint No. 05 of 2015 qua the present petitioners, lodged in the Court of Hon'ble Principal District and Sessions Judge (Designated Special Court under PMLA 2002), Ahmedabad (Rural).” FACTS OF THE CASE ARE AS UNDER:- 2. An FIR being I-C.R. No. 14 of 2010 came to be registered with DCB Police Station, Vadodara City against the employees of M/s Biotor Industries Ltd. for the offences punishable under Sections 420 , 467, 468, 471 and 120B of the INDIAN PENAL CODE , 1860. Based on the charge-sheet filed in the said FIR, the Enforcement Directorate registered ECIR/46/AZO/2010 under the Prevention of Money Laundering Act, 2002. In parallel, the CBI, BS&FC, Mumbai, also registered multiple FIRs being RC/BSM/2011/E0001 (Bank of Maharashtra), RC/BSM/2011/E0006 (Oriental Bank of Commerce), and RC/BSM/2011/E0007 (Corporation Bank), all involving similar allegations against the office bearers of M/s Biotor Industries Ltd. 2.1. During the investigation of RC6(E)/2011 by the CBI, documents were seized from Gujarat Mercantile Co-operative Bank by way of a seizure memo. The petitioner was initially treated as a witness. Subsequently, in the proceedings arising from ECIR/46/AZO/2010, the Enforcement Directorate recorded the statement of petitioner no.2, who appeared pursuant to a summon. During the investigation of RC6(E)/2011 by the CBI, documents were seized from Gujarat Mercantile Co-operative Bank by way of a seizure memo. The petitioner was initially treated as a witness. Subsequently, in the proceedings arising from ECIR/46/AZO/2010, the Enforcement Directorate recorded the statement of petitioner no.2, who appeared pursuant to a summon. Eventually, a complaint being PMLA Complaint No. 05 of 2015 was filed before the Court of Hon'ble Principal District Court, Ahmedabad (Rural), being specially designated Court under PMLA against various accused including the office bearers of M/s Biotor Industries Ltd., and also impleading Gujarat Mercantile Co-operative Bank Ltd. and petitioner no.2 in the capacity of its Managing Director. 2.2. The gravamen of the allegation against the petitioners is that the bank acted negligently and liberally in opening VLA and firm accounts of M/s Biotor Industries Ltd. without proper KYC compliance. It is the case of the petitioners that the said accounts were old and were opened with requisite documentation. Notably, though several nationalized banks without being aware have forged and fraudulent transactions, they have not been arrayed as accused. The petitioners contend that mere allegations of negligence or liberal banking practices do not attract criminal liability under Section 3 of the PMLA, which requires knowledge or assistance in laundering proceeds of crime. 2.3. Hence, the present petition seeking appropriate relief. SUBMISSION OF THE PETITIONERS:- 3. Learned Senior Counsel Mr. I.H. Saiyed, assisted by learned advocate Mr. Chirag B. Upadhyay, appearing for the petitioners, invited the attention of this Court to the complaint filed by the Enforcement Directorate before Special Court. He submitted that, as per the said complaint, the main allegations pertain to offences committed by the principal accused. The role attributed to the present petitioners is limited to allegations of negligence or laxity in permitting the opening of VLA accounts and firm accounts, and in inadequately conducting KYC verifications. It is alleged that such lapses on the part of the petitioners may invite breach of regulation made by RBI, but cannot be treated as facilitating principal accused in laundering and siphoning of the proceeds of crime thereby aiding main/principal accused in commission of alleged offence. 3.1. Learned Senior Counsel further submitted that Petitioner No.1 is a Co-operative Bank and Petitioner No.2 is its Managing Director. As per allegation, certain private individuals had opened accounts with the said bank. 3.1. Learned Senior Counsel further submitted that Petitioner No.1 is a Co-operative Bank and Petitioner No.2 is its Managing Director. As per allegation, certain private individuals had opened accounts with the said bank. According to the prosecution, the proceeds of crime, as derived by the principal accused, were routed through these accounts and subsequently withdrawn or transferred by way of demand drafts, which were signed by Petitioner No.2. Beyond these alleged transactions, no further overt act or specific role has been attributed to the petitioners. 3.2. Learned Senior Counsel contended that the alleged conduct, namely being liberal in opening bank accounts or issuing demand drafts on the basis of customer instructions, cannot per se be construed as an offence, particularly when the petitioners are not named or implicated in the scheduled/predicated offences under the Prevention of Money Laundering Act, 2002 (for short, ‘the Act’). 3.3. Learned Senior Counsel further invited the attention of this Court to the statutory definitions under the Prevention of Money Laundering Act, 2002—specifically, Section 2 (1)(u) defining “proceeds of crime”, Section 2 (1)(v) defining “property”, and Section 3 , which defines the offence of money laundering. He submitted that a plain and conjoint reading of the aforementioned provisions clearly establishes that the petitioners have been falsely implicated. He contended that routine banking transactions conducted by the petitioners—wherein the alleged proceeds of crime may have been deposited or transferred—cannot, by themselves would not attract culpability under the Act unless it is established that petitioner was knowingly in concurrent with principal accused in laundering amount. 3.4. He further referred to the judgment rendered by the Hon’ble Supreme Court in Sanjay Dutt & Ors. v. State of Haryana & Anr., reported in 2025 INSC 34 , particularly paragraphs 10 to 13, to contend that Petitioner No.2, who is a Director of the bank, has been arraigned solely in his personal capacity without any specific or direct allegation connecting him with the predicated offence or the process of money laundering. 3.5. Learned Senior Counsel submitted that unless specific and direct responsibility is attributed to the Director in the commission of the alleged offence, prosecution solely on the ground of his designation as Managing Director is untenable. 3.5. Learned Senior Counsel submitted that unless specific and direct responsibility is attributed to the Director in the commission of the alleged offence, prosecution solely on the ground of his designation as Managing Director is untenable. He further submitted that, given the scale and operations of Gujarat Mercantile Co- operative Bank, it is highly unrealistic to presume that the Director is conversant with or monitors all individual transactions conducted by various account holders. 3.6. He asserted that the allegations levelled against the petitioners are vague, sweeping, and manifestly vexatious, amounting to an abuse of process of law. He submitted that a Managing Director cannot be expected to scrutinize or oversee every banking transaction, and in the absence of specific involvement or criminal intent, compelling the petitioners to face the rigours of a criminal trial would be grossly unjust. Accordingly, he urged the Court to exercise its inherent jurisdiction and quash the proceedings against the petitioners. SUBMISSION OF THE RESPONDENTS:- 4. Learned advocate Mr. Ankit Shah for respondent No.2 vehemently opposed the present petition and submitted that the inherent powers under Section 482 of the Code of Criminal Procedure, 1973 are to be exercised sparingly and in exceptional circumstances, only where the FIR/complaint is found to be vague, absurd, or discloses no prima facie case. 4.1. He further submitted that the present case does not fall within such exceptional category, as specific and sustainable allegations have been levelled against the petitioners. He pointed out that the statement of Petitioner No.2 – Mr. Dahyabhai I. Thakkar has been recorded during the course of investigation, wherein he has admitted that multiple VLA and firm accounts were opened and operated in the bank at the relevant time, which were subsequently utilized for the preparation and issuance of demand drafts. Such conduct, according to the learned advocate, prima facie reflects complicity and therefore warrants further investigation and trial. 4.2. Learned advocate Mr. Ankit Shah also referred to the statement of Petitioner No.2, recorded under Section 50 of the Act on 10.09.2014 by the Director of Enforcement, Ahmedabad. He specifically drew the attention of this Court to Question No.7, in response to which Petitioner No.2 admitted that the bank has three Directors and two Officers, all of whom are authorized to issue demand drafts. 4.3. Referring to Answer to Question No.8, Mr. He specifically drew the attention of this Court to Question No.7, in response to which Petitioner No.2 admitted that the bank has three Directors and two Officers, all of whom are authorized to issue demand drafts. 4.3. Referring to Answer to Question No.8, Mr. Shah submitted that the petitioner had clearly stated that any demand draft issued by the bank upon the request of a client/customer must mandatorily bear the signatures of two signatories, one of whom must be a Director of the Bank. He further submitted that in the present case, the main accused siphoned off crores of rupees, and the tainted funds (proceeds of crime) were routed through various channels, including authorized bank accounts opened and operated through the petitioners' bank, thereby attracting provisions of the Act. 4.4. It was further submitted that the main accused, in connivance with co-accused, fabricated false documents and submitted the same as genuine to the petitioner-bank, thereby facilitating the misappropriation of a gigantic sum of Rs. 2,21,47,00,000/- (Rupees Two Hundred Twenty-One Crores Forty-Seven Lakhs only). 4.5. Learned advocate Mr. Shah contended that the petitioners facilitated the execution of this fraudulent scheme through a well- orchestrated modus operandi, as demonstrated in the flow chart submitted by the Enforcement Directorate, clearly establishing prima facie involvement of the petitioners. 4.6. Placing reliance on Section 3 and Section 24 of the Act, Mr. Shah submitted that even an indirect attempt to disguise or deal with the proceeds of crime attracts the offence of money laundering. He emphasized that Section 24 of the Act imposes a reverse burden of proof on the accused, requiring them to disprove their involvement once a prima facie case is established. 4.7. Accordingly, he submitted that the contentions raised by the petitioners are factual in nature and require adjudication during trial, and therefore, the present petition is devoid of merit and liable to be dismissed at the threshold. 4.8. Learned advocate Mr. Shah submitted that the argument that the Managing Director cannot monitor every bank transaction lacks merit when juxtaposed with the regulatory obligation under PMLA and RBI circulars requiring enhanced due diligence, especially in opening and operating firm accounts with significant financial movements. 4.9. 4.8. Learned advocate Mr. Shah submitted that the argument that the Managing Director cannot monitor every bank transaction lacks merit when juxtaposed with the regulatory obligation under PMLA and RBI circulars requiring enhanced due diligence, especially in opening and operating firm accounts with significant financial movements. 4.9. In light of the above, it is humbly submitted that the present petition deserves to be dismissed at the threshold and the petitioners should relegate to face trial, where all issues including intent, knowledge, and due diligence may be tested on the anvil of cross-examination. 4.10. Mainly upon such submission, learned advocate Mr. Shah submitted to dismiss this petition. FINDINGS AND ANALYSIS OF THE COURT:- 6. In a case pending before this Hon’ble Court, the issue pertains to the legal demarcation as to whether a petitioner, being a Co- operative Bank and its Managing Director, can be held liable for prosecution in respect of the alleged proceeds of crime which were purportedly deposited in account maintained by a customer of the Bank, and for the subsequent issuance of a demand draft from the said account by the Managing Director. 6.1. In the written complaint filed by the Deputy Director, Directorate of Enforcement, Ahmedabad Zonal Office, the role attributed to the accused–the present petitioner–is delineated under paragraph 12(g), wherein it is stated as under: “Role of Cooperative Banks:- “Investigation reveals that cooperative banks were very negligent/liberal in opening the VLA's Accounts and firms accounts. Even the KYC documentation was not carried out property. Introducer to the account was hardly a month old account holder in the bank. This resulted in opening of large scale dummy accounts. Immediately after opening of the account huge transaction started, even then bank did not bother to generate STR/CTR or become cautious. In fact they were not generating STR/CTR prior to these scam came to light. Operations in the accounts clearly reveals that the same were opened only for the specific purpose of getting issued Demand Drafts in favour of M/s BIL and withdrawal of cash. Directors in their deposition clearly tried to shirk out the responsibility by submitting that they were not monitoring any of the accounts or it was not their job as such. It is crystal clear that had due precaution were taken by these banks scam would not have extended to such a large extent. Directors in their deposition clearly tried to shirk out the responsibility by submitting that they were not monitoring any of the accounts or it was not their job as such. It is crystal clear that had due precaution were taken by these banks scam would not have extended to such a large extent. They were instrumental in projection of tainted money as untainted.” 6.2. The summary of the statement of petitioner No.2 – Shri Dahyabhai I. Thakkar is stated as under:- “Statement of Shri Dahyabhai I. Thakkar:- “Shri Dahyabhai I. Thakkar, Managing Director of Gujarat Mercantile Co-operative Bank Limited in his statement dated : 10.09.2014 interalia stated that the various VLA's and firm accounts opened and maintained in the Bank at the relevant time which were used for preparation of Demand Drafts favouring BIL. He also submitted various documents on record.” 6.3. Notably, no scheduled/predicated offence has been registered against the petitioners. In these circumstances, upon examining the allegations levelled in the complaint—particularly with respect to the role ascribed to the petitioners—it appears that the Enforcement Directorate is of the view that the petitioners acted in a negligent and overly permissive manner in facilitating the opening of the VLA account and other firm-related accounts. It is further alleged that, in several instances, proper KYC (Know Your Customer) documentation was not adhered to, resulting in the proliferation of numerous fictitious or dummy accounts. 6.4. Substantial financial transactions were allegedly observed immediately upon the opening of these accounts; however, the Bank failed to initiate appropriate measures such as generating Suspicious Transaction Reports (STRs) or Cash Transaction Reports (CTRs), or exhibiting due diligence in monitoring such activities. 6.5. The aforesaid conduct of the petitioners is now being construed as indicative of their complicity with the principal accused in the commission of the offence under the Act. 6.6. Section 2 (1)(u) of the Act defines proceeds of crime as under:- “ Section 2 (1)(u): - "Proceeds of Crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property;” 6.7. 6.6. Section 2 (1)(u) of the Act defines proceeds of crime as under:- “ Section 2 (1)(u): - "Proceeds of Crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property;” 6.7. “Property” is defined under Section 2 (1)(v) of the Act, which is as under:- Section 2 (1)(v): - "Property" - means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located;” Section 3 :- 6.8. An offence of money laundering is defined in Section 3 which reads as under:- “Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming.” 6.9. Therefore, it may be observed that any property or asset— whether lawfully or unlawfully acquired, tangible or intangible— including any deed or instrument evidencing title to or interest in such property or asset, if derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence, shall constitute "proceeds of crime" as defined under the Act. 7. Further, any person who, directly or indirectly, attempts to indulge in or knowingly assists or is knowingly a party to any process or activity connected with the proceeds of crime—including its concealment, possession, acquisition, use, or projecting or claiming it as untainted property—shall be liable to be prosecuted for the offence of money laundering. 7.1. Thus, the existence of the proceeds of crime in relation to criminal activity of any scheduled offence specified in the Schedule is sine qua non. Evidence of actual involvement or intention on the part of the accused in the scheduled offence, or any other person after completion of the scheduled offence to assist the accused in any activity with proceeds of crime — which includes concealment, possession, acquisition, or use thereof, or projecting or claiming the proceeds of crime as untainted property — is required. Evidence of actual involvement or intention on the part of the accused in the scheduled offence, or any other person after completion of the scheduled offence to assist the accused in any activity with proceeds of crime — which includes concealment, possession, acquisition, or use thereof, or projecting or claiming the proceeds of crime as untainted property — is required. Inadvertent or unwitting possession or incidental handling of property, i.e., proceeds of crime, without criminal intent, would not suffice to attract the offence under Section 3 , as the Legislature has used the word “knowingly” assist or “knowingly” be a part of the process of any activity connected with the proceeds of crime. 7.2. In Vijay Madanlal Choudhary v. Union of India , (2002) SCC Online SC 929 , the Supreme Court, while addressing the challenge to the constitutionality of certain provisions of the PMLA and the procedure followed by the Enforcement Directorate in investigating the offence, has observed as under:– “i. The offence under Section 3 of the Act is contingent on the illegal gain of property arising from criminal activity related to a scheduled offence. In other words, an act would qualify as money laundering only if it generates proceeds of crime and involves tainted property. ii. The term "proceeds of crime" must be strictly construed. To qualify as proceeds of crime, the property must be derived or obtained, directly or indirectly, as a result of criminal activity related to a scheduled offence. ili. Projecting or claiming the property as untainted constitutes the offence of money laundering as an independent process or activity. iv. A person accused of involvement or activity related to the proceeds of crime derived from a predicate offence may not necessarily be connected to the predicate offence itself. v. The PMLA, 2002, is a self-contained legislation. Section 17 of the Act provides in-built safeguards, including the requirement that the exercise of power be undertaken by high-ranking officials, such as the Director or Deputy Director authorized by the Director. It also mandates the recording of reasons for the belief formed based on the information in the official's possession about the commission of any act of money laundering and conscious possession of proceeds of crime.” 7.3. It also mandates the recording of reasons for the belief formed based on the information in the official's possession about the commission of any act of money laundering and conscious possession of proceeds of crime.” 7.3. Now, reverting to the role attributed to the petitioners in the complaint, it is evident that the allegations are limited to the petitioner—being a Co-operative Bank and its Managing Director— having acted in a negligent or overly permissive manner while facilitating the opening of bank accounts, which were subsequently used as a conduit for the proceeds of crime. Importantly, there is no allegation or evidence to suggest that the petitioners either derived, obtained, or gained any benefit, directly or indirectly, from the alleged proceeds of crime, nor that they facilitated the offence with any mens rea. 7.4. Learned advocate Mr. Ankit Shah, though he strenuously opposed the petition and placed reliance on Section 3 of the Act, failed to demonstrate that the petitioners, by merely carrying out banking transactions within the framework of applicable regulations, had in any manner derived or obtained any benefit from the alleged proceeds of crime or from the amount allegedly siphoned off by the principal accused. 7.5. When the role of the petitioner is analysed in the context of the alleged offence, it is clear that the acts attributed to them pertain solely to routine banking functions—such as allowing the deposit of funds and issuance of cheques or demand drafts—which are otherwise legitimate activities governed by regulatory norms. The question that thus arises is: how can such actions amount to deriving, obtaining, or gaining any property, either directly or indirectly, within the meaning of “proceeds of crime”? 7.6. As stated hereinabove, learned advocate Mr. Shah has not been able to substantiate how the banking activities carried out by the petitioner constituted active assistance or participation in the acquisition or concealment of the proceeds of crime, or how such conduct could satisfy the essential ingredients of the offence of money laundering as contemplated under Section 3 of the Act. 8. The High Court of Karnataka at Bengaluru in Writ Petition No.32956 of 2024 in the case of Dr. Natesha D.B., v. Directorare of Enforcement after referring Section 2 (1)(na), Section 2 (1)(u) and Section 3 of the PMLA, 2002 act carved out the essential ingredients of Section 3 para 10 and 11 are reproduced as under:- “10. 8. The High Court of Karnataka at Bengaluru in Writ Petition No.32956 of 2024 in the case of Dr. Natesha D.B., v. Directorare of Enforcement after referring Section 2 (1)(na), Section 2 (1)(u) and Section 3 of the PMLA, 2002 act carved out the essential ingredients of Section 3 para 10 and 11 are reproduced as under:- “10. A cumulative reading of Sections 2 (1)(na), 2(1)(u), and 3 of the Prevention of Money Laundering Act, 2002 (PMLA) establishes the following essential elements required to attract an offence under Section 3 thereof: 1) The existence of proceeds of crime in relation to a criminal activity relating to any scheduled offence, specified in the schedule; and 2) Evidence of actual involvement or animus/intention on part of the accused in the scheduled offence(s), or any other person, subsequent to the accomplishment of the scheduled offence, to assist in any process or activity connected with the proceed of crime including, its - a) concealment, or b) possession, or c) acquisition, or d) use, or e) projecting or claiming the proceeds of the crime as untainted property. 3) Mere inadvertent possession or incidental handling of the property (proceeds of crime), without the requisite criminal intent, would not suffice to attract an offence under Section 3 . 4) It is relevant to note that any process or activity connected with the proceeds of the crime comes to a close only upon cessation of illicit gains. 5) i) The scope of concealment includes removal, disposal or movement of the proceeds of crime in such a manner as to hide its illicit origins. ii) The scope of use, projection or claim of proceeds of crime as untainted property includes all processes committed to or activities undertaken to integrate illicit gains as legal. This typically involves layering of transactions to obscure the origin of the funds, and investing such proceeds in legitimate businesses or assets to make them appear lawful. 11.The aforementioned elements ensure that the scope of the investigation remains tied to the twin objectives of the PMLA: - Combating money laundering as a standalone offence. - Ensuring that the property associated with criminal activities is identified, confiscated, or attached to prevent misuse in the financial system.” 8.1. 11.The aforementioned elements ensure that the scope of the investigation remains tied to the twin objectives of the PMLA: - Combating money laundering as a standalone offence. - Ensuring that the property associated with criminal activities is identified, confiscated, or attached to prevent misuse in the financial system.” 8.1. Indeed, Section 24 of the Act casts a presumption against the accused, placing the burden upon him to rebut the allegation of involvement in money laundering as defined under Section 3 of the Act. However, before such presumption can operate, the prosecution cannot run away from establishing fundamental facts prima facie establishing guilt of the accused. 8.2. If the facts of the present case are tested on the touchstone of the essential ingredients of the offence of money laundering, it becomes evident that none of the requisite elements are satisfied— even if the contents of the complaint are taken at face value and presumed to be true. Insofar as the role of the present petitioners is concerned, the only allegation levelled is that of negligence in the discharge of his duties. Such an allegation, by itself, cannot amount to complicity or conspiracy with the principal accused in siphoning off crores of rupees, nor can it be construed as facilitation of the laundering process, or as evidence of the petitioner having obtained or derived any benefit from the alleged proceeds of crime. 8.3. Recently Bombay High Court established principle of due diligence in case under PMLA held not gaining monetary vantage and non involvement directly or indirectly is suffice to discharge accused. In Syam Radhakrishna Malpani v. The State of Maharashtra , Criminal Revision Application No.129 of 2013, it has been observed in paras 26 and 32, which are as under:- “26. The allegations levelled against the applicant centre on his role as a statutory auditor of certain companies controlled by the Bhujbals. It is alleged that, in the course of conducting audits for these entities, the applicant facilitated the concealment of illicit transactions and assisted mask the unlawful movement of proceeds derived from criminal activities allegedly committed by these companies. The prosecution contends that the applicant was aware of several suspicious transactions and fictitious business dealings undertaken by the said companies, yet failed to raise any red flags or report such anomalies, as required under his professional obligations. The prosecution contends that the applicant was aware of several suspicious transactions and fictitious business dealings undertaken by the said companies, yet failed to raise any red flags or report such anomalies, as required under his professional obligations. By allegedly failed to exercise due diligence and discharge of his duties in accordance with the standards expected of a statutory auditor, the applicant is said to have enabled the Bhujbals in acquiring and laundering tainted funds. Consequently, his inaction is construed as having knowingly contributed to the commission of the offence of money laundering. It is, however, not the case of the prosecution that the applicant was directly involved in the initial placement, subsequent layering, or final integration of the proceeds of crime into the financial system. Nor is there any suggestion that he personally benefited from such proceeds. The core allegation remains that the applicant, through professional negligence and wilful oversight, facilitated the laundering of illicit gains by others. XXXX 32. Apart from the bare assertions made in paragraph 11.44 of the complaint, there is no substantive material on record to demonstrate that the applicant had any knowledge of the sham transactions or that he was in any way negligent in the discharge of his duties. The complaint lacks material to establish a nexus between the applicant and the alleged criminal conspiracy or money laundering activities. Moreover, the applicant has neither been named nor charge sheeted in the related crimes, which further reinforces the absence of any direct or indirect involvement in the purported criminal conduct.” 8.4. Furthermore, petitioner No.2, being a Director and Managing Director of the Bank, cannot be reasonably expected to supervise each and every transaction conducted in the institution. The complaint does not disclose any specific act or omission that would attract personal liability upon petitioner No.2. There is no averment suggesting that he acted with intent or knowledge, or that he was individually culpable for any act constituting money laundering. 9. In In Sanjay Dutt & Ors. (supra) the apex Court in para 13 has observed as under:- “13. It is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. 9. In In Sanjay Dutt & Ors. (supra) the apex Court in para 13 has observed as under:- “13. It is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made an accused, if the statute provides for such liability and if there is sufficient evidence of his active role coupled with criminal intent. The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening criminal liability on an officer of a company, there is no presumption that every officer of a company knows about the transaction in question.” 10. In case of Vinod Bihari Lal v. State of U.P. , 2025 (0) AIJEL-SC 75397 , Hon’ble Supreme Court has held as under:- 37. This Court, in catena of decisions, has observed that it is not for the courts to embark upon an enquiry into the reliability or genuineness of the allegations made in the FIR at the stage of quashing of the proceedings. However, it is of paramount importance that the allegations made against the accused, if taken at face value, must disclose the commission of an offence, whether from the FIR, the chargesheet, or other relevant materials. It is incumbent upon the courts to exercise their discretionary powers where the materials on record indicate that the criminal proceeding are being misused as instruments of oppression or harassment. 38. In R.P. Kapur v. State of Punjab, reported as 1960 SCC OnLine SC 21, this Court held that where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge, the High Court can and should quash the proceedings. The relevant observations are reproduced hereinbelow: “6. It is well-established that the inherent jurisdiction of the High Court can be exercised to quash proceedings in a proper case either to prevent the abuse of the process of any court or otherwise to secure the ends of justice. Ordinarily criminal proceedings instituted against an accused person must be tried under the provisions of the Code, and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage. Ordinarily criminal proceedings instituted against an accused person must be tried under the provisions of the Code, and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage. It is not possible, desirable or expedient to lay down any inflexible rule which would govern the exercise of this inherent jurisdiction. However, we may indicate some categories of cases where the inherent jurisdiction can and should be exercised for quashing the proceedings. There may be cases where it may be possible for the High Court to take the view that the institution or continuance of criminal proceedings against an accused person may amount to the abuse of the process of the Court or that the quashing of the impugned proceedings would secure the ends of justice. If the criminal proceeding in question is in respect of an offence alleged to have been committed by an accused person and it manifestly appears that there is a legal bar against the institution or continuance of the Crl. Appeal No. 777-778/2025 21 of 38 said proceeding the High Court would be justified in quashing the proceeding on that ground. Absence of the requisite sanction may, for instance, furnish cases under this category. Cases may also arise where the allegations in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the first information report to decide whether the offence alleged is disclosed or not. In such cases it would be legitimate for the High Court to hold that it would be manifestly unjust to allow the process of the criminal court to be issued against the accused person. A third category of cases in which the inherent jurisdiction of the High Court can be successfully invoked may also arise. In cases falling under this category the allegations made against the accused person do constitute offence alleged but there is either no legal evidence adduced in support of the case or evidence adduced clearly or manifestly fails to prove the charge. In cases falling under this category the allegations made against the accused person do constitute offence alleged but there is either no legal evidence adduced in support of the case or evidence adduced clearly or manifestly fails to prove the charge. In dealing with this class of cases it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is manifestly and clearly inconsistent with the accusation made and cases where there is legal evidence which on its appreciation may or may not support the accusation in question[…]” (Emphasis supplied)” 11. In case of Abhishek v. State of M.P. reported in 2023 INSC 779 , the Hon’ble Supreme Court has held as under:- “16. Of more recent origin is the decision of this Court in Mahmood Ali and others vs. State of U.P. and others (Criminal Appeal No. 2341 of 2023, decided on 08.08.2023) on the legal principles applicable apropos Section 482 Cr.P.C. Therein, it was observed that when an accused comes before the High Court, invoking either the inherent power under Section 482 Cr.P.C. or the extraordinary jurisdiction under Article 226 of the Constitution, to get the FIR or the criminal proceedings quashed, essentially on the ground that such proceedings are manifestly frivolous or vexatious or instituted with the ulterior motive of wreaking vengeance, then in such circumstances, the High Court owes a duty to look into the FIR with care and a little more closely. It was further observed that it will not be enough for the Court to look into the averments made in the FIR/complaint alone for the purpose of ascertaining whether the necessary ingredients to constitute the alleged offence are disclosed or not as, in frivolous or vexatious proceedings, the Court owes a duty to look into many other attending circumstances emerging from the record of the case over and above the averments and, if need be, with due care and circumspection, to try and read between the lines.” 12. Applying the principles laid down in State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335] , it is apparent that continuation of the proceedings against the petitioner would be manifestly unjust, amounting to an abuse of process of law. The impugned FIR appears to be malicious and vexatious, filed with an oblique and ulterior motive. Applying the principles laid down in State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335] , it is apparent that continuation of the proceedings against the petitioner would be manifestly unjust, amounting to an abuse of process of law. The impugned FIR appears to be malicious and vexatious, filed with an oblique and ulterior motive. Relevant para is as under: “102. In the backdrop of the interpretation of the various relevant provisions of the Code under Ch. XIV and of the principles of law enunciated by this court in a series of decisions relating to the exercise of the extraordinary power under Art. 226 or the inherent powers under sec. 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under sec. 156(1) of the Code except under an order of a Magistrate within the purview of sec. 155(2) of the Code. (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a noncognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under sec. 155(2) of the Code. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a noncognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under sec. 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.” CONCLUSION:- 13. In view of the foregoing discussion and for the reasons stated hereinabove, there exists no justifiable ground to subject the petitioner–a Co-operative Bank–and its Managing Director to the rigours of criminal prosecution, particularly when there is no material to suggest that they acted in concert or in complicity with the principal accused, against whom allegations of siphoning off substantial amounts have been levelled. ORDER:- 14. Accordingly, the present petition is ALLOWED. PMLA Complaint No. 5 of 2015, insofar as it pertains to the present petitioners, is hereby quashed and set aside. Rule is made absolute. 15. It is clarified that the present order is confined to the adjudication of the petition filed by the present petitioners only. This Court has not examined, nor expressed any opinion on, the role or involvement of the other co-accused.