Sarla Gupta & Anr. v.

Directorate of Enforcement (2025)

Supreme Court rules that under PMLA/CrPC the accused are entitled to copies of all documents
produced or seized (not just those relied upon by the prosecution).

Facts of the Case

In July 2017, CBI registered an FIR against Sarla Gupta & Anr. under Sections 120B/420 IPC
and Section 13(1)(d) PC Act. The ED then opened an ECIR and, on 24 Aug 2018, filed a PMLA
complaint charging money-laundering under Section 3(4) PMLA. A Special Court took
cognizance on 17 Sept 2018. The appellants (Gupta & co.) were served with the complaint and
some supporting documents. They applied for additional disclosure, seeking (a) any documents
referred to in the complaint but not supplied, (b) legible copies of supplied documents, and (c)
any other evidence collected in investigation that had been withheld. The ED opposed. On 30
Mar 2019 the Special Court rejected the application, holding that “the prosecution is under an
obligation to supply only those documents which are referred to and relied upon in the
complaint/chargesheet and it is under no obligation to supply the documents which were
collected during the investigation which were not relied upon”. The appellants challenged this by
writ, and the Delhi High Court dismissed the petition.

A related appeal (Cr. App. 730/2024) concerned another PMLA case: after searches in Aug 2019
seized records from the appellants’ premises, they applied under Section 17 of PMLA (which
incorporates CrPC disclosure provisions) for a list and copies of seized items. The Adjudicating
Authority granted the application (appeal pending). Separately, one appellant sought in the
Special Court to force ED to supply the seized documents. The Special Court rejected this on 22
Mar 2022, and a 482 petition to the Punjab & Haryana High Court was dismissed.

The Ruling Applied to the Case

The Supreme Court applied the principle that disclosure obligations extend to all collected
materials, not just relied-upon evidence. It emphasized Section 207 of the CrPC (and by
extension Section 17 of the PMLA, via Section 46 PMLA) which entitle an accused to “all the
documents collected during the investigation”. Citing recent guidelines and precedents (e.g.
Manoj v. State of MP (2023)), the Court underscored that fairness requires prosecutors to furnish
lists of statements, documents, and other materials seized, even if not used at trial. In short, the
law demands full disclosure in the interests of a fair trial. Applying this, the Court held that ED’s
refusal to supply the undisclosed documents violated the appellants’ rights. The ED’s narrow
reading (supply only documents “referred to” in the complaint) was rejected in favor of the
broader rule of completeness.

The Court’s Holding (in Reverse)

If the Court had adopted the ED’s view, the outcome would have been the opposite: the Special
Court’s order and the High Court’s judgment would stand, and the appellants would lose. In that
scenario, only documents expressly relied on in the complaint would have been disclosed. The
appellants would not receive copies of the additional seized or “suppressed” materials they
sought. The Supreme Court’s actual holding overturned this: it quashed the impugned orders and
directed ED to furnish the accused with true, legible copies of all documents produced with
the PMLA complaint and all seized documents from their premises (within one month).
Thus, a ruling for the ED would have affirmed the restriction, whereas the Court’s decision
imposes the broader disclosure duty.

“This Case Would Be Different If…” Test

 If all seized documents had already been provided to the accused, then there would be no
undisclosed evidence and the ED’s limited disclosure would suffice – the appeals would
likely have been dismissed as moot.

 If the accused had not been charged in a PMLA complaint, Section 207 rights might not
arise. For example, without a complaint under Section 44(1)(b), the specific PMLA
disclosure provisions and CrPC regime may not apply, altering the entitlement.

 If the law did not incorporate CrPC disclosure (e.g. prior to the BNSS reform), the
Court’s fairness-based obligation would be weaker. For instance, absent any statutory
right to undisclosed material, the ED’s victory could stand.
  If the documents in question were privileged or truly irrelevant (e.g. unrelated third-party
papers), they might legitimately be withheld, and the appellants’ requests would fail.

By altering these facts, one can see the outcome would change: without undisclosed material or
without the legal right to it, the accused would not prevail.
 Sarla Gupta & Anr. v. Directorate of Enforcement (2025)

Court: Supreme Court of India

Date of Judgment: May 7, 2025

Judges: Justices Abhay S. Oka, Ahsanuddin Amanullah, Augustine George Masih.

Procedural History: This appeal by special leave (Crl. A. No. 1622 of 2022) arose from a Delhi
High Court order in a PMLA prosecution. The appellants had challenged an Enforcement
Directorate complaint in the Special PMLA Court by seeking production of all seized documents
and materials, including those not relied on in the charge. The ED opposed this demand. The
Delhi High Court held that, under PMLA procedures, only documents the prosecution intends to
use at trial need be furnished, effectively excluding “unrelied” evidence. The appellants obtained
special leave (granted 16.09.2022) and appealed to the Supreme Court, which reserved judgment.

Issue(s)

Whether an accused person in a PMLA prosecution is entitled, as of right, to the list of and
copies of all statements, documents, exhibits and other materials seized or collected by the ED
during investigation (including those not relied upon in the prosecution complaint), in order to
prepare a defence, consistent with the right to fair trial (Art. 21) and applicable provisions of the
CrPC. In particular, do Sections 207–208 CrPC (requiring pre-trial disclosure) apply to PMLA
trials, and can the trial court restrict disclosure only to documents relied on by the prosecution?

Rule(s)

 Disclosure of Materials not Relied Upon: The Supreme Court held that the accused is
entitled to know all materials in the ED’s custody, even those not used in the complaint.
“It is held that a copy of the list of statements, documents, material objects and exhibits
that are not relied upon by the investigating officer must also be furnished to the
accused”. The purpose is to ensure the accused can invoke Section 91 CrPC to seek
production of any such materials at the appropriate stage.
  Fair Trial and Right to Defend: The Court reaffirmed that fair trial (Article 21) includes
the right to defend by presenting evidence. The accused has “the right to have a fair
trial… [which] includes the right to defend,” meaning the right to produce documents and
examine witnesses. Consequently, the accused may apply (even at the defence stage) to
compel the prosecution or a third party to produce documents or witnesses. Such
applications should be granted liberally; refusals are permitted only on the limited
grounds of vexation, delay, or obstructing justice (per Section 232(3)/233(3) CrPC).

 Comprehensive Disclosure Order: Once the Special Court takes cognizance of the
complaint, it must direct that the accused be supplied with the core prosecution materials
and the list of unrelied items. Specifically, the Court must furnish the complainant’s
statements and any witness statements recorded before cognizance; any statements under
Section 50 of the PMLA; the original complaint and any supplementary complaints with
their annexures; and a list of all documents/objects seized or collected by the ED but not
relied upon.

 Liberal Construction (Reverse Burden Context): Given the PMLA’s reverse burden
(Section 24), the Court stressed that Section 232(3) CrPC (accused’s right to apply for
documents) must be liberally construed in favour of the defence. The burden on the
accused to disprove money-laundering is “onerous,” so courts should generally allow
document production unless the prosecution can show clear prejudice.

 Bail-Stage Invocation (Noted by Court): The judgment also observed that the accused
may invoke Section 91 CrPC even at the bail stage under Section 45 PMLA, subject to
the court’s discretion to prevent harm to ongoing investigation. (This underscores the
principle of full access to materials throughout the proceedings.)

Application

 The appellants (PMLA accused) argued that the High Court’s restrictive approach
violated their constitutional right to a fair trial. They relied on precedents (e.g. Tarsem
Lal v. Directorate of Enforcement, 2010) holding that PMLA complaints (once filed
under Section 44(1)(b)) are governed by Sections 200–205 CrPC. They contended that
 Sections 207–208 CrPC thus require furnishing all materials gathered by the ED, and that
withholding possibly exculpatory evidence frustrates Article 21. Senior Counsel R.
Basant and G. Sankaranarayanan emphasized that, under the PMLA’s reverse burden
(Sec. 24), the accused needs access to any documents that might explain away alleged
transactions. They cited Manoj Kumar v. State of M.P. (SC) for the proposition that an
accused must receive a list of all statements and objects not relied on by the prosecution.

 The ED (ASG Raju) argued against any blanket disclosure, warning that handing over all
unrelied documents would invite fishing expeditions and cause delay. It urged the court to
require the defence to show a prima facie relevance for any specific document request
(similar to the Section 233(3) screening). The ED characterized the accused’s demand as
overly broad.

 Court’s Analysis: The Supreme Court sided firmly with the appellants. It noted the
PMLA’s unique structure, especially Section 24’s reverse onus, and held that this makes
generous disclosure all the more necessary for a fair trial. Emphasizing Tarsem Lal, the
Court confirmed that a PMLA trial effectively adopts CrPC provisions post-cognizance.
It rejected the High Court’s view (that Sections 207/208 do not apply), finding that view
“arbitrary and inconsistent with settled precedent”. The Court reminded that a fair trial “is
a part of the right guaranteed under Article 21,” which subsumes the right of the accused
to defend by producing evidence.

Applying these principles, the Court directed that, upon cognizance, Sarla Gupta and her co-
accused must receive the full prosecution record and a complete list of unrelied materials. Justice
Oka (for the bench) explicitly ordered that the Special Court “must direct that along with the
process, a copy of the complaint and documents be supplied to the accused,” including
“statements… recorded by the Special Judge before taking cognizance” and Section 50
statements produced to the court. Crucially, the Special Court must also furnish a list of all seized
documents/objects not relied on, so the accused “has knowledge of the documents, objects etc. in
the custody of the investigating officer… not relied upon by them, so that… [they] can apply by
invoking Section 91 CrPC” to obtain them. The High Court’s contrary directive was set aside.

Conclusion
The appeal was allowed. The Supreme Court quashed the Delhi High Court’s order and remitted
the matter for compliance with these disclosure directions. In sum, the Court held that in a
PMLA prosecution the accused must be given the list (and opportunity to obtain) all materials
gathered during investigation, not just those the ED relies on. This ensures that Sarla Gupta, and
similarly situated defendants, have access to the potentially exculpatory evidence necessary to
meet the heavy burden imposed by the PMLA and to vindicate their fair-trial rights.