Supreme Court Refuses to Quash Money Laundering Case Against Jacqueline Fernandez: What It Means

On September 22, 2025, the Supreme Court of India dismissed actor Jacqueline Fernandez’s plea seeking to quash the ₹215-crore money laundering case registered against her by the Enforcement Directorate (ED). The case arises from the infamous Sukesh Chandrashekhar extortion scandal, where Chandrashekhar, accused of impersonating senior government officials, allegedly duped a businesswoman of over ₹200 crore.

This development marks another setback for the Bollywood actor, who has consistently maintained that she is an innocent recipient of unsolicited gifts from Chandrashekhar. The Supreme Court, however, has made it clear that her defence must be tested before the trial court.

In this article, we break down the case background, the arguments made before the Supreme Court, the Court’s observations, and what this decision means for Fernandez and other accused persons in money laundering cases.

Background of the Case

The Enforcement Directorate initiated proceedings against Jacqueline Fernandez under the Prevention of Money Laundering Act, 2002 (PMLA). The central allegation is that she received luxury gifts worth around ₹7 crore from conman Sukesh Chandrashekhar, despite allegedly being aware of his criminal background.

The ED claims that Fernandez initially denied having any connection with Chandrashekhar, but later admitted to the relationship when confronted with evidence. Investigators also allege that she deleted data from her phone after Chandrashekhar’s arrest, which raised further suspicion of her involvement.

Jacqueline Fernandez had earlier approached the Delhi High Court seeking relief, but her petition was dismissed on July 3, 2025. Challenging that decision, she moved the Supreme Court in Jacqueline Fernandez v. Directorate of Enforcement.

Jacqueline Fernandez’s Defence

Represented by Senior Advocate Mukul Rohatgi, Fernandez argued that she had no connection with the alleged predicate offence of extortion under the Maharashtra Control of Organised Crime Act (MCOCA).

Rohatgi highlighted the following points in her defence:

1. No role in the predicate offence – Fernandez is not named in the extortion case against Sukesh Chandrashekhar.
2. Gifts, not laundered money – She claimed she only received gifts like jewellery, bags, and luxury items from Chandrashekhar, who was “infatuated” with her.
3. Lack of mens rea (criminal intent) – There is no allegation that she asked Chandrashekhar for money or helped him launder the proceeds of crime.
4. Witness, not accused – According to Rohatgi, she was initially supposed to be treated as a witness, not as an accused.
5. No MCOCA charges – Since she is not charged under MCOCA, she cannot be indirectly prosecuted under the PMLA by extending its scope.

In essence, her legal team argued that the ED’s case amounted to accusing Fernandez of negligence — that she “should have been more careful” in dealing with Chandrashekhar.

Supreme Court’s Observations

The Supreme Court bench of Justices Dipankar Datta and Augustine George Masih refused to interfere with the proceedings at this stage.

The Court made some important observations:

• Money trail linked to Fernandez – The bench noted that prosecution alleges a portion of the ₹200 crore extorted by Chandrashekhar reached Fernandez in the form of expensive gifts.
• Vijay Madanlal Choudhary precedent applies – The Court referred to the landmark Vijay Madanlal Choudhary v. Union of India (2022), which upheld the wide powers of the ED under PMLA. Though a review petition is pending, the Court clarified that Vijay Madanlal still holds the field as binding precedent.
• Trial court is the proper forum – The bench stressed that Fernandez should present her defence before the trial court, which would independently assess her role during charge framing.
• Delhi High Court order will not prejudice her – At Rohatgi’s request, the Court clarified that observations made by the Delhi High Court in dismissing her earlier plea would not prejudice the trial court proceedings.

Ultimately, the Supreme Court dismissed her plea but granted liberty to raise her arguments again at the trial stage.

Why Did the Supreme Court Refuse to Quash the Case?

The Supreme Court generally refrains from quashing criminal proceedings at the preliminary stage unless the allegations are manifestly false or frivolous. In Fernandez’s case, the prosecution has alleged a clear money trail linking her to the proceeds of crime, even if indirectly.

The Court’s reasoning can be understood as follows:

1. Existence of prima facie material – Since the ED has produced evidence that gifts received by Fernandez were allegedly purchased using proceeds of crime, the matter cannot be dismissed outright.
2. Applicability of PMLA – Under the PMLA, even indirect beneficiaries of laundered money can be prosecuted. Thus, receiving gifts linked to proceeds of crime may attract liability.
3. Stage of proceedings – The trial has not yet commenced. The trial court is the competent forum to decide whether Fernandez had knowledge of the money’s criminal origins.

Implications for Jacqueline Fernandez

This order means that Jacqueline Fernandez will now have to face trial in the money laundering case. While the Supreme Court has not ruled on her guilt, it has left it to the trial court to evaluate:

• Whether she knew the gifts were bought using proceeds of crime.
• Whether her alleged actions — such as deleting phone data — amount to an attempt to conceal evidence.
• Whether her relationship with Chandrashekhar was such that she can be said to have been “involved” in laundering activities.

If convicted under PMLA, Fernandez could face imprisonment and heavy fines. However, her defence team will now focus on disproving the prosecution’s claims before the trial court.

Broader Significance of the Case

This case is significant beyond Fernandez’s personal fate. It highlights several broader issues in money laundering prosecutions:

1. Celebrity involvement in financial crimes – High-profile cases attract intense public scrutiny and test the fairness of the legal process.
2. Scope of PMLA – The case illustrates how the PMLA’s wide ambit allows prosecution of even indirect recipients of proceeds of crime.
3. Judicial caution in quashing petitions – The Supreme Court’s refusal to intervene shows that courts prefer trials to run their course before deciding on culpability.
4. ED’s accountability – While the ED’s powers were upheld in Vijay Madanlal, courts have also cautioned against misuse of those powers. This case will again test how the ED presents evidence against a high-profile accused.

Conclusion

The Supreme Court’s dismissal of Jacqueline Fernandez’s plea to quash the ₹215-crore money laundering case is a reminder that the Indian judiciary adopts a cautious approach in financial crime matters. While Fernandez maintains that she is a victim of circumstances and merely received unsolicited gifts, the prosecution insists that the gifts were part of the money trail from Chandrashekhar’s extortion racket.

As the case now proceeds to trial, the focus will shift to whether the ED can establish Fernandez’s knowledge and involvement beyond a reasonable doubt. Until then, the controversy will continue to dominate headlines, not only for its legal significance but also for its impact on Bollywood’s relationship with law enforcement.

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