2025 (1) TMI 849 - HC - Money Laundering

Money Laundering - grant of bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhita (BNSS) 2023 read with Section 45 of the Prevention of Money Laundering Act (PMLA), 2002 - alleged custom rice milling levy scam - scheduled offence - prolonged pre-trial incarceration - violation of right to speedy trial - HELD THAT - From the investigation of the ED, it has been revealed that the applicant was one of the key conspirator and main beneficiary of the POC extorted from the rice millers. It has also been revealed that the rice milers were forced for payment of the same under threat that their incentive bills would not be cleared from the MARKFED. As per Section 50 (4) of the PML Act, the statements recorded under Section 50 of the PMLA has evidentiary value as the proceedings under Section 50 (2) and (3) are deemed to be a judicial proceeding within the meaning of Section 193 and 228 of the IPC, 1860. The applicant is closely connected with POC as he had deputed some persons at certain place and the cash was not physically taken by him but it was initially demanded by the applicant and payment, he conveyed it to the rice millers over phone. It has come in the statements of some of the rice millers who have personally handed over the extortion amount as demanded by the applicant. In Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation 2013 (5) TMI 896 - SUPREME COURT , it has been observed that the economic offences having deep rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of country. The application for bail of the Appellant should be seen at this stage while the Appellant is involved in the economic offence, in general, and for the offence punishable Under Section 4 of the PMLA, in particular. The present case related to grant of bail in connection with the offence registered against the applicant by the ED under various provisions of Sections 3 and 4 of the PMLA (ECIR registered by the ED) respectively. In the context of interpretation of Section 45 of the PMLA, held that the twin conditions obligate the Court to arrive at a positive finding that applicant has not committed an offence under the PMLA. A tentative finding should be recorded on the basis of broad probabilities and detailed reasons are not necessary to be assigned, nor evidence be weighed meticulously. Under PMLA, there is a presumption of guilt on the accused which they have to disprove to get bail. In an older version of the PMLA, the first condition stated that it would be presumed that the accused was guilty of the scheduled offence , and the reversed burden of proof on the accused was to disprove their involvement in the scheduled offence - In Nikesh Tarachand Shah Vs. Union of India 2017 (11) TMI 1336 - SUPREME COURT a division bench of the court ruled that the first condition was unconstitutional. Right after this in 2018, this condition was amended, and the new version stated that the reversed burden of proof on the accused was now to disprove their involvement in the money laundering offence, and not the scheduled offence . The Court after examining the entire documents found substantial material indicating a strong nexus between the applicant and the other accused persons in the commission of the crime. There were documents and evidences that reflected the involvement of the applicant and he is the key conspirator and beneficiary from the said scam. Thus, the guilt of the accused in the offence of money laundering has been gathered and since, the allegations against the applicant were extremely serious and taking into account, the nature and gravity of the offence and from perusal of the record and in view of the fact that looking to the special and stringent provision under Section 45 (1) of the PMLA for grant of bail, in the considered opinion of this Court, prima facie the money trail has been established by the prosecution and therefore, it is not proper to order release of present applicant on regular bail for the reasons. Conclusion - The conditions specified under Section 45 of the PMLA are mandatory and need to be complied with. Economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously. The applicant's bail application was rejected due to failure to satisfy the conditions under Section 45 of PMLA. The prayer for bail made by the applicant under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 ( BNSS ) read with Section 45 of the PMLA, 2002 for the offences under Section 3 4 of the PMLA, 2002, is hereby rejected.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the applicant is entitled to bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhita (BNSS) 2023 read with Section 45 of the Prevention of Money Laundering Act (PMLA), 2002?
• Whether the applicant's prolonged pre-trial incarceration violates his right to a speedy trial under Article 21 of the Indian Constitution?
• Whether the applicant fulfills the conditions for bail as per Section 45 of the PMLA, considering the nature of the allegations and the evidence presented?
• Whether the allegations against the applicant constitute an economic offence that requires a different approach in the matter of bail?
• Whether the applicant's health conditions warrant the grant of bail on medical grounds?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Bail under BNSS and PMLA

• Legal Framework: The application for bail is governed by Section 483 of BNSS and Section 45 of the PMLA, which imposes twin conditions for granting bail: the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty and that he is not likely to commit any offence while on bail.
• Court's Interpretation: The court emphasized the stringent nature of Section 45 of the PMLA, which requires a higher threshold for granting bail in money laundering cases.
• Key Evidence and Findings: The investigation revealed that the applicant was involved in collecting extortion money from rice millers, which was allegedly used for acquiring properties, constituting proceeds of crime.
• Application of Law to Facts: The court found substantial material indicating a strong nexus between the applicant and the crime, thereby failing to satisfy the conditions for bail under Section 45 of the PMLA.
• Treatment of Competing Arguments: The applicant argued for bail based on prolonged incarceration and lack of direct evidence, while the respondent highlighted the gravity of the offence and the applicant's role as a key conspirator.
• Conclusions: The court concluded that the applicant does not meet the criteria for bail under the stringent provisions of the PMLA.

Issue 2: Right to Speedy Trial

• Legal Framework: Article 21 of the Indian Constitution guarantees the right to a speedy trial as a fundamental right.
• Court's Interpretation: The court acknowledged the importance of the right to a speedy trial but emphasized the seriousness of economic offences and the need for thorough investigation.
• Key Evidence and Findings: The investigation is ongoing, with multiple chargesheets yet to be filed, indicating the complexity of the case.
• Application of Law to Facts: The court noted that the delay in trial is not attributable to the applicant and considered the prolonged incarceration.
• Treatment of Competing Arguments: The applicant cited precedents where prolonged incarceration warranted bail, while the respondent argued the necessity of continued custody due to the ongoing investigation.
• Conclusions: The court held that the right to a speedy trial must be balanced with the need for a comprehensive investigation in economic offences.

Issue 3: Conditions for Bail under Section 45 of PMLA

• Legal Framework: Section 45 of the PMLA requires the court to be satisfied with the applicant's non-guilt and likelihood of not committing further offences.
• Court's Interpretation: The court emphasized the presumption of guilt under PMLA and the burden on the applicant to prove otherwise.
• Key Evidence and Findings: The applicant's involvement in the extortion scheme and acquisition of properties from proceeds of crime were key factors.
• Application of Law to Facts: The court found that the applicant failed to demonstrate non-guilt or lack of involvement in the offence.
• Treatment of Competing Arguments: The applicant argued for bail based on the lack of direct evidence, while the respondent highlighted the evidentiary value of statements and documents.
• Conclusions: The court held that the applicant does not fulfill the conditions for bail under Section 45 of PMLA.

Issue 4: Economic Offences and Bail Approach

• Legal Framework: Economic offences are considered grave and require a different approach in bail matters.
• Court's Interpretation: The court noted the serious impact of economic offences on the economy and society.
• Key Evidence and Findings: The applicant's alleged involvement in a large-scale extortion scheme was viewed as a serious economic offence.
• Application of Law to Facts: The court considered the gravity of the offence and the applicant's role in the conspiracy.
• Treatment of Competing Arguments: The applicant argued for bail based on personal liberty, while the respondent emphasized the need for stringent measures in economic offences.
• Conclusions: The court concluded that the nature of the offence warranted a stringent approach to bail.

Issue 5: Health Conditions and Bail on Medical Grounds

• Legal Framework: The proviso to Section 45 of PMLA allows for bail on medical grounds if adequate treatment cannot be provided in custody.
• Court's Interpretation: The court considered the applicant's health conditions but noted that adequate medical care was being provided in custody.
• Key Evidence and Findings: The applicant's medical records indicated manageable conditions, and regular check-ups were conducted.
• Application of Law to Facts: The court found no compelling medical reason to grant bail.
• Treatment of Competing Arguments: The applicant argued for bail based on health issues, while the respondent provided evidence of adequate medical care.
• Conclusions: The court held that the applicant's health conditions did not warrant bail.

3. SIGNIFICANT HOLDINGS

• Verbatim Quotes: "The conditions specified under Section 45 of the PMLA are mandatory and need to be complied with." "Economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously."
• Core Principles Established: The court reaffirmed the stringent conditions for bail under PMLA and the serious approach required for economic offences.
• Final Determinations: The applicant's bail application was rejected due to failure to satisfy the conditions under Section 45 of PMLA, the seriousness of the offence, and the adequacy of medical care in custody.