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Money Laundering - Case Laws
Showing 41 to 60 of 2022 Records
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2025 (2) TMI 423
Maintainability of proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) in the absence of a scheduled offence - applicant's arrest and subsequent detention - lack of necessary sanction and procedural irregularities - it was held by high Court that '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, deserves to be and is hereby rejected.'
HELD THAT:- There are no ground to interfere with the impugned order passed by the High Court. However, liberty is given to the petitioner to move the Trial Court, particularly taking note of the subsequent development.
SLP disposed off.
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2025 (2) TMI 422
Seeking grant of bail - Money Laundering - extortion of money by impersonating himself - twin conditions of Section 45 of PMLA, 2002 - it was held by High Court that 'Looking into the facts and circumstances of the case as well as nature and gravity of the offence, it is not inclined to release the applicant on bail.'
HELD THAT:- It is not required to interfere with the impugned order.
SLP dismissed.
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2025 (2) TMI 269
Seeking grant of regular bail - Money Laundering - proceeds of crime - reasons to believe - illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta - reasons to believe - it was held by High Court that 'The applicant has been unable to put forth any propositions before this Court that are sufficient for grant of bail and thus, the same are rejected.'
HELD THAT:- It is not required to interfere with the impugned judgment and order of the High Court; hence, the special leave petition is dismissed.
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2025 (2) TMI 268
Money Laundering - seeking grant of bail - illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta - twin conditions prescribed under Section 45 of the PMLA satisfied or not - it was held by High Court that this Court is of the view that considering the filing of the supplementary prosecution complaint and the ongoing nature of the investigation, this Court is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA.
HELD THAT:- It is not required to interfere with the impugned order - SLP dismissed.
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2025 (2) TMI 267
Legality of arrest of Petitioner - violation of Section 19 of the PMLA and Article 21 of the Constitution of India - Money Laundering - illegal mining of sand and selling the same without issuance of transit challans - proceeds of crime - scheduled offence or not - reason to believe - HELD THAT:- The term “reason to believe” cannot be equated with the term reasonable complaint or credible information or reasonable suspicion contained in Section 41 (1) (B) of the Cr.P.C. “Reason to believe” is the tangible evidence or material which constitutes sufficient cause to believe existence of certain facts. This reason to believe goes to the root of the power of arrest. The subjective opinion of Arresting Officer is based upon fair and objective consideration of material as available with him on the date of arrest. On the basis of reason to believe, the Court shall form the secondary opinion on the validity of the exercise undertaken for compliance of Section 19 (1) of the PMLA when the arrest is made.
Power to arrest under Section 19 (1) of the PMLA is not for the purpose of investigation. Arrest can and should wait and the power in terms of Section 19(1) of the PMLA can be exercised only when the material with the designated officers enables them to form an opinion by recording reasons in writing that the arrestee is guilty. Section 19(1) thus, does not permit arrest only to conduct investigation. Conditions of Section 19(1) have to be satisfied Clauses A, C, D and E to Section 41(1)(ii) of the Cr.P.C., apart from other considerations may be relevant.
In order to prove the involvement of the petitioner in illegal sand mining business, at least some material was required to be produced to the effect that the petitioner deposited money as per his share for winning the bid. No such evidence, unfortunately, was produced by the ED in course of its investigation.
There is absolutely no ambiguity with regard to the scope of Section 50. The only question is as to whether the statement of the petitioner involved him in an offence of moneylaundering. The petitioner admitted that he had financial transitions with M/s AMPL. According to the case of the prosecution, it is M/s AMPL and its Director who have proceeds of crime. There is absolutely no evidence that the petitioner directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity (here sand scam) connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property.
Conclusion - The statement containing “reason to believe” delivered by ED to petitioner does not contain satisfactory material to hold that the petitioner is guilty of offence under Section 3 of the PMLA. The petitioner’s arrest, dated 20th of September of 2024, is illegal and in violation of the safeguards contained in Section 19(1) of the PMLA.
Petition allowed.
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2025 (2) TMI 216
Money Laundering - legality of search and seizure conducted at his residence from 28.10.2024 to 29.10.2024, as well as the subsequent statement recorded under Section 17 of the Prevention of Money-Laundering Act, 2002 - proceedings based solely on the assumption or suspicion that the petitioner, as the former Commissioner of MUDA, might be in possession of records related to the offence of money laundering, is violative of statutory procedural safeguards - reason to believe under section 17 (1) of PMLA, 2002.
Whether the authorisation issued to conduct the impugned search and seizure at the residence of the petitioner on 28.10.2024 and 29.10.2024, and the consequent statement recorded under Section 17 of PMLA, 2002 suffers from lack of jurisdiction? - HELD THAT:- A careful perusal of Section 17 of the Act, 2002, the relevant portion of which is extracted hereunder, reveals that the competent authority under the Act to authorize a search and seizure of any premises is the Director or any other officer authorized by the Director, for the purposes of Section 17, provided such officer is not below the rank of Deputy Director. Therefore, the statute clearly limits the vesting of authority to record reasons to believe on the basis of material in possession with highest responsible authority to prevent the misuse of such provisions. Furthermore, the words “the Director” in sub-section (1) of Section 17 were substituted for the words “the Director or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section” vide the Amendment Act 21 of 2009 (w.e.f. 1.06.2009).
Where the Director has clearly authorised the Joint Director (an officer above the rank of Deputy Director) for purposes of Section 17 of PMLA, 2002 vide Circular No. Circular Order (Tech) No. 03/2011, dated 27.09.2011, the conduct of impugned search and seizure under Section 17 of PMLA, 2002 cannot be faulted for lack of jurisdiction.
Whether the said impugned search and seizure and the statement recorded, is bad in law for lack of the requisite “reason to believe” under section 17 (1) of PMLA, 2002, and is therefore, an abuse of process of law? - HELD THAT:- Concluding its observations in Arvind Kejriwal [2024 (7) TMI 760 - SUPREME COURT], the Supreme Court held that “reason to believe” must be distinguished from ‘mere grave suspicion’. “It refers to the reason for the formation of belief which must have rational connection with or an element bearing on formation of belief.” The reason must not be extraneous to the provision’s purpose. The Court further held that “reason to believe” should be furnished to the arrestee at the time of arrest to enable them to challenge the arrest. It opined that any State action prejudicing personal liberty is subject to judicial review. The Court concluded that doubts arise only when the reasons recorded by the authority are unclear or ambiguous, thereby necessitating deeper scrutiny to determine the validity of the “reason to believe.”
In the present case, the alleged predicate offence pertains to the illegal allotment of sites during the petitioner’s tenure as the Commissioner of MUDA. However, there is no evidence to demonstrate that any consideration passed in relation to the conveyance or relinquishment of such sites was received by the petitioner. Consequently, the petitioner cannot be attributed any role in possessing, concealing, or using the proceeds of crime to constitute an offence under Section 3 of the PMLA, 2002 - the existence of “reason to believe,” as required under the Prevention of Money Laundering Act, 2002 (PMLA), mandates the presence of sufficient cause to indicate the commission of the offence of money laundering. Additionally, it necessitates a corresponding justification for the seizure of any records or proceeds of crime discovered during the search. Such a requirement ensures that the said property is not dissipated, layered, or integrated in a manner that renders it seemingly legitimate.
It is now well settled that reason to believe must exist on the basis of evidence regarding the existence of certain facts. In the instant case, no such material as was in possession at the time of search, has been furnished to this Court to probablize the purported involvement of the petitioner. In absence of the same, any conclusion arrived at necessitating the search does not satisfy the threshold of “reason to believe”, as envisaged under the PMLA, and is therefore, no more than a mere suspicion of involvement in the offence under the Act. Thus, this Court is of the opinion that the impugned search and seizure conducted at the residence of the petitioner was unwarranted and based on unfounded suspicion, and is therefore, an abuse of process of law.
Whether the impugned summons/notices issued under Section 50 of PMLA, 2002 and the various statements recorded thereunder, be sustained under the law? - HELD THAT:- In the present case, summons under Section 50 were issued following the ‘illegal’ search and seizure conducted under Section 17 of the PMLA. However, as established in the preceding paragraphs, the reasons recorded for the search do not satisfy the essential elements required to establish the commission of an offence under Section 3 of the PMLA. As a result, the search and seizure lacked proper authority for there being no proper reason to warrant such a search. The respondent-Agency can summon any person to record a statement or produce a document or record only in cases where there is credible evidence that an offence under Section 3 of PMLA has been committed, and in such circumstances, the person who has been summoned cannot raise any grievance against the issuance of summons.
In light of the circumstances of this case, where no prima facie case has been established showing that an offence has been committed under the PMLA, and no incriminating material has been elicited at the time of search and seizure, the issuance of summons to the petitioner lacks legal authority. The petitioners cannot be compelled to appear and record their statements or produce documents, as such actions would unjustly infringe upon their personal right to liberty.
Whether, in the course of its administration and execution of the PMLA, 2002, the attachment of property under Section 5 of the Act must mandatorily precede the conduct of search and seizure under Section 17 of the said Act? - HELD THAT:- As against the submission of the learned ASG that the instant petition suppresses material facts of the petitioner and the scope of responsibilities incumbent upon him, in relation to holding of the office of Commissioner of MUDA in the past, it is to be observed that the petitioner is not an accused in the predicate offence and that unless the petitioner were to be informed that the investigation conducted is in relation to the particular predicate offence, and that the impugned search and seizure and the subsequent issuance of summons were in relation to purported role of the petitioner in the illegal allotment of 14 sites to an accused in the predicate offence, it cannot be expected of the petitioner to disclose past fact of having discharged any duties of such nature.
The right to liberty and privacy under Article 21 of the Constitution vests a right against the conduct of arbitrary searches, and therefore, the search conducted on the premises of the petitioner under the garb of investigation, when there is no prima facie evidence to establish the offence under Section 3 is but an abuse of process of law. The Enforcement Directorate cannot give the elements of procedural fairness contained in the PMLA a go-by in the course of its administration. It is pertinent that the right to liberty and privacy of individuals cannot be trampled upon and that any curtailment of civil liberties is subject to the due process of law.
Conclusion - i) The search and seizure conducted at the petitioner's residence and the statement recorded under Section 17 (1) (f) of the PMLA are declared invalid and illegal. ii) The statement recorded under Section 17 (1) (f) is ordered to be retracted. iii) The summons issued under Section 50 of the PMLA and the various statements recorded thereunder are quashed. iv) The petitioner is granted the liberty to initiate action under Section 62 of the PMLA against the concerned officer, as the matter of whether the search and seizure were vexatious is subject to trial.
Petition allowed.
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2025 (2) TMI 183
Money Laundering - seeking grant of bail - Primary allegation is that contractual obligation under the Work orders was to supply 300 gram packet of food (khichdi) but M/s. Force One Multi Services supplied food packet weighing 100 grams and thus unjustly enriched itself - illegal misappropriation of money - no specific mechanism framed by MCGM to check the actual quantity delivered - proceeds of crime - whether the rigours of Section 45 would apply to the facts of the present case as made out by the Applicant? - HELD THAT:- In the predicate offence Chargesheet has not been filed as yet. Applicant is not made accused either in the predicate offence or in the ECIR offence, trial is not likely to start in the predicate offence and hence trial in PMLA offence cannot be commenced and most importantly Applicant is incarcerated for 1 year and 18 days after duly cooperating with the investigation.
The existence of the Scheduled Offence is a sine qua non for alleging the existence of proceeds of crime. Property derived or obtained, directly or indirectly, by a person as a result of criminal activity relating to a Scheduled Offence constitutes proceeds of crime. Thus existence of proceeds of crime at the time of trial of the offence under Section 3 of the PMLA can be proved only if the Scheduled Offence is established in prosecution of the Scheduled Offence. This clearly envisages that even if trial of the case under the PMLA proceeds it cannot be officially tested unless the trial of the Scheduled Offence concludes. In the present case before me in the Scheduled Offence, Chargesheet has not been filed and trial is not likely to start in the near foreseeable future. Therefore prima facie, there are no possibility of both trials concluding in the foreseeable future. Applicant is in judicial custody pending trail for more than one year.
Attention invited to the decision of the Supreme Court in the case of Manish Sisodia Vs. Directorate of Enforcement [2024 (8) TMI 614 - SUPREME COURT] with respect to application of rigours of Section 45 of the PMLA especially in cases where there is delay in trial. The Supreme Court has held that if there is delay in trial, rigours of Section 45 would be inapplicable.
It is seen that Applicant was arrested 17.01.2024. Thus he is in custody for the last more than 1 year, except from taking cognizance there is no other progress of the trial and the charges are yet to be framed and considered by the Special Court. There are 20 prosecution witnesses cited by the ED in their complaint and it would therefore be difficult to comprehend that trial is likely to be completed in the foreseeable future, rather there seems to be no possibility that trial would be concluded in a reasonable time. Applicant has fully cooperated with the prosecution Agency and made all disclosures. Hence his further incarceration shall not serve any useful purpose rather it would amount to punishing him before guilt is proved.
Conclusion - The Applicant having been incarcerated for more than one year, in the prima facie facts of the present case, trial of the Scheduled Offence and consequently PMLA offences not likely to be completed in the foreseeable future, if Applicant's detention is further continued, it would amount to infringement of his fundamental right under Article 21 of the Constitution of India of a speedy trial and guarantee of personal liberty. Principal allegation that Applicant being in an influential position in the State at the then time may have been related in the so called alleged situation as put forth by the prosecution but the said situation no longer prevails in the current dispensation. Therefore any apprehension of prosecution regarding tampering with the evidence can be redressed by imposing appropriate conditions.
Applicant is granted bail subject to the fulfilment of terms and conditions as imposed - bail application allowed.
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2025 (2) TMI 144
Prayer for conducting preliminary investigation/inquiry into the fraudulent activities undertaken - misappropriation of public monies for personal enrichment - defrauding investors - round tripping of funds through shell companies based in tax havens - making unsecured advances to subsidiaries with the intention to launder public money - creation of dubious and fictitious invoices, all of which are predicate offences under the Indian Penal Code, 1860 and the Prevention of Money Laundering Act, 2002 - HELD THAT:- Admittedly, detailed statement of the petitioner came to be recorded by the EOW on 28th October, 2024. Looking to the enormity of the offences and the fact that it involves thousands of crores of rupees, spans multiple jurisdictions and implicate nationalized Banks as well as foreign entities based in Mauritius, USA, Australia and UAE involving substantial financial implications, at both, national and international levels, the D.C.P, EOW, Mumbai requested the aforesaid Authorities for taking appropriate action.
Both the EOW as well as the CBI, for the reasons best known to these Agencies, are reluctant to inquire/investigate into the complaints made by the petitioner having such large scale alleged misappropriation of public funds as well as laundering, by Mr. Anand Jaikumar Jain, who is the Promoter and Director of Jai Corp Ltd along with its subsidiary companies and others.
There are no words to demonstrate the conduct of the Investigating Agencies viz: EOW as well as CBI. There will be no fair and impartial investigation into the alleged crimes either by the EOW or by the Superintendent of Police, CBI, EOW and hence, a special team needs to be constituted by the Zonal Director CBI to ensure efficient investigation into the offences of such magnitude. The need to instill confidence in the investigations and consequently, in the administration of justice, is of utmost concern. The case in question, has national and international ramifications. No doubt, the EOW in its internal notings which were placed for perusal, observed, that considering the magnitude of the alleged scam which runs into thousands of crores of rupees, multiplicity of jurisdictions, the role of nationalized Banks (Union Bank, IDBI Bank, IDFC Bank) and Mauritius based private equity fund plus trans-border transactions with USA, Australia and UAE, it is in the best interests of investigation that the matter be handled by CBI, SFIO. This is the noting by the Joint Commissioner of Police EOW on 4th November, 2024. The reluctance to inquire/investigate was writ large during the hearing of the petition.
Conclusion - The High Court has the jurisdiction to direct an investigation by the CBI without State consent when necessary to ensure a fair and impartial inquiry, particularly in cases with national and international implications. The Court directed the formation of a Special Investigation Team (SIT) under the supervision of the CBI's Zonal Director to investigate the allegations.
Zonal Director, CBI, Mumbai shall form a Special Investigation Team comprising of officers as are required for conducting thorough investigation into the two complaints dated 22nd December, 2021 and 3rd April, 2023 of the petitioner - Joint Director of the Central Bureau of Investigation, Mumbai (Anti Corruption Bureau) shall supervise the investigation - Petition allowed.
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2025 (2) TMI 108
Money Laundering - Seizure of bank lockers and Gold - Challenge to order passed by the Adjudicating Authority confirming the seizure of the properties belonging to the appellants - HELD THAT:- The appellant has questioned the seizure of bank lockers on the ground that they were already under seizure by the CBI and for the aforesaid reason,there was no chance to deal with those lockers by the appellants. A specific reference of locker no. 86 and 96 in the name of the appellant was given. It is found that if the lockers are already under seizure of CBI, it could not have been seized by the respondent by invoking Section 17(1) of the Prevention of Money- Laundering Act, 2002. In fact, it could have been when they apprehend concealment or tampering of the record or the property. The concealment could not have been when the lockers were already seized by the CBI. Thus, there are no justification on the part of the respondent to seize the locker no. 86 and 96 in the name of the appellant, Shri Luv Bhardwaj.
There are no justification to seize 3.2 kg gold found at the time of search. The appellant has given reference of the Circular issued by the CBDT and submitted that the said gold was belonging to his mother, wife, unmarried daughter apart from recently wedded sister. A woman is entitled to keep 500 gms gold while an unmarried woman is entitled to 250 gms gold.
Once the locker was under seizure with the CBI, there remained no justification or reason to seize the same locker and thereby interference in the seizure of those lockers is also made for the reason that seized lockers cannot be seized again rather they can again be seized, if it is released by the CBI. The respondent would be at liberty to seize those lockers by taking an action afresh for which this order would not come thereby.
Conclusion - The properties already under seizure by one authority (CBI) should not be seized again by another unless specific conditions are met, such as release by the initial authority. The respondent's actions lacked justification in several instances, leading to partial interference with the impugned order.
Appeal disposed off.
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2025 (2) TMI 107
Money Laundering - proceeds of crime - challenge to Provisional Attachment Order - selection process of Assistant Teachers of primary schools said to have been conducted in an unfair manner to give appointment to the ineligible candidates - offence under Sections 7, 7A and 8 of the Prevention of Corruption Act, 1988 and Section 120-B, 420, 467, 468, 471 and 34 of IPC, 1860 - HELD THAT:- The analysis of the bank account would show receipt of huge money from different sources without giving description or the basis to disclose the source.
The appellant has failed to disclose his business with required details so as to justify transactions shown in the bank account which otherwise remain unexplained even during the course of arguments. The Directors other than Prabir Das were dummy in view of their statement. They were not knowing about the business of the firm if it was existing. All those facts are relevant in the light of the allegation against the appellant and unusual practice by which Prabir Das having share of 10% transferred huge sum in favour of the firm.
Conclusion - i) The attachment of the bank accounts of M/s SKP Enterprises was justified under the Prevention of Money Laundering Act, 2002. ii) The appellant failed to provide sufficient evidence of legitimate sources for the funds, leading to the dismissal of the appeal.
Appeal dismissed.
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2025 (2) TMI 16
Money Laundering - seeking grant of bail - illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta - twin conditions prescribed under Section 45 of the PMLA satisfied or not - entire case of the respondent is based on mere conjectures and surmises, and no concrete evidence has been placed on record to substantiate the allegations leveled against the applicant - HELD THAT:- It is a settled position of law that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon’ble Supreme Court, while emphasizing the legal sanctity of such statements, has time and again observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA. In a recent judgment, the Hon’ble Supreme Court in Abhishek Banerjee v. Enforcement Directorate [2024 (9) TMI 508 - SUPREME COURT], has held that 'It has been specifically laid down in the said decision that the statements recorded by the authorities under Section 50 PMLA are not hit by Article 20 (3) or Article 21 of the Constitution, rather such statements recorded by the authority in the course of inquiry are deemed to be the judicial proceedings in terms of Section 50 (4), and are admissible in evidence, whereas the statements made by any person to a police officer in the course of an investigation under Ch. XII of the Code could not be used for any purpose, except for the purpose stated in the proviso to Section 162 of the Code. In view of such glaring inconsistencies between Section 50 PMLA and Sections 160/161CrPC, the provisions of Section 50 PMLA would prevail in terms of Section 71 read with Section 65 thereof.'
In the aforesaid judgment, the Hon’ble Court further underscored that such statements, being recorded in the course of an inquiry rather than an investigation, are not subject to the restrictions under Article 20 (3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50 (4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA.
It is well settled, as reiterated by the Hon’ble Supreme Court in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)]] and Manish Sisodia v. Enforcement Directorate [2024 (8) TMI 614 - SUPREME COURT], that while the stringent twin conditions under Section 45 of the PMLA restrict the right to bail, they do not impose an absolute bar. The discretion of the court in granting bail remains judicial and must be exercised in accordance with the settled legal principles. The governing principle that “bail is the rule, and jail is the exception” must be harmonized with the legislative mandate that requires satisfaction of the conditions laid down under Section 45 of the PMLA before bail can be granted.
In the present case, the respondent has placed on record material indicating the applicant’s active involvement in the procurement and sale of spurious anti-cancer medicines, the proceeds of which were funneled through various channels, including formal banking and hawala transactions. The applicant’s role in the laundering of illicit proceeds through his firms namely, M/s Delhi Medicine Hub and M/s Cancer Medicine Agency, stands corroborated by the investigative findings, including statements under Section 50 of the PMLA and independent documentary evidence.
The twin conditions prescribed under Section 45 of the PMLA have not been satisfied. The evidence on record, the ongoing nature of the investigation, and the applicant’s alleged role in the broader financial syndicate indicate that the rigors of Section 45 of the PMLA continue to apply.
Conclusion - This Court is of the view that considering the filing of the supplementary prosecution complaint and the ongoing nature of the investigation, this Court is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA. The respondent has presented sufficient material to warrant further judicial scrutiny, including financial records, electronic evidence, and statements of co-accused implicating the applicant. These materials suggest an active involvement in laundering proceeds of crime and a pattern of financial transactions that need further evaluation at trial.
In view of the seriousness of the allegations and the need to ensure the integrity of the investigation, this Court is not inclined to enlarge the applicant on bail - bail application rejected.
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2025 (2) TMI 15
Seeking grant of regular bail - Money Laundering - involvement of several accused persons in the procurement, manufacturing and sale of spurious anti-cancer medicines - amount involved falls below Rs. 1 Crore, making the applicant eligible for the benefit of the statutory proviso - twin mandatory conditions under Section 45 of the PMLA - reasonable grounds to believe for guilty of the offence - applicability of statutory presumption of guilt under Section 24 of the PMLA - admissible evidences or not - offences punishable under Sections 274, 275, 276, 420, 468, 471 read with 120B and 34 of the Indian Penal Code, 1860.
HELD THAT:- It is a settled position of law that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon’ble Supreme Court, while emphasizing the legal sanctity of such statements, has time and again observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA. In a recent judgment, the Hon’ble Supreme Court in Abhishek Banerjee v. Enforcement Directorate [2024 (9) TMI 508 - SUPREME COURT] held that 'It has been specifically laid down in the said decision that the statements recorded by the authorities under Section 50 PMLA are not hit by Article 20 (3) or Article 21 of the Constitution, rather such statements recorded by the authority in the course of inquiry are deemed to be the judicial proceedings in terms of Section 50 (4), and are admissible in evidence, whereas the statements made by any person to a police officer in the course of an investigation under Ch. XII of the Code could not be used for any purpose, except for the purpose stated in the proviso to Section 162 of the Code.'
The Hon’ble Supreme Court in the aforementioned judgment underscored that such statements, being recorded in the course of an inquiry rather than an investigation, are not subject to the restrictions under Article 20 (3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50(4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA.
Whether the applicant is exempted from the rigors of the twin conditions of bail, if not, then whether the applicant has satisfied the twin mandatory conditions under Section 45 of the PMLA? - HELD THAT:- The Hon’ble Supreme Court in Nikesh Tarachand Shah v. Union of India, [2017 (11) TMI 1336 - SUPREME COURT] struck down the twin conditions as unconstitutional. However, the legislature subsequently amended the provision to cure the defects, and it has since been upheld in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], reaffirming the strict nature of bail conditions under the PMLA. In Prem Prakash [2024 (8) TMI 1412 - SUPREME COURT], the Hon’ble Supreme Court has also delved into the principles pertaining to bail in PMLA matters.
This Court holds that the applicant cannot claim the benefit of the monetary threshold exemption under the proviso to Section 45 of the PMLA. The entire scheme of laundering illicit funds, as uncovered by the investigation, extends far beyond the threshold of one crore rupees, and the applicant’s role must be assessed in the broader context of the criminal conspiracy in which he actively participated.
This Court finds that the twin conditions prescribed under Section 45 of the PMLA have not been satisfied and the applicant’s contention regarding his bail in the predicate offence holds no weight in the present case. The evidence on record, the ongoing nature of the investigation, and the applicant’s alleged role in the broader financial syndicate indicate that the applicant has failed to satisfy the rigors of Section 45 of the PMLA - this Court does not find any merit in the contention of the applicant that he is exempted from the twin conditions under the proviso to Section 45 of the PMLA or that he satisfies the twin conditions under Section 45 of the PMLA.
Whether the statutory presumption of guilt under Section 24 of the PMLA applies in the present case and whether the applicant has successfully rebutted this presumption? - HELD THAT:- From the bare perusal of Section 24 of the PMLA, it is evident that once a person is charged with the offence of money laundering under Section 3, the law presumes that the proceeds of crime are involved in money laundering unless the contrary is proven by the accused - In the present case, the investigating agency has relied not only on the statement of co-accused under Section 50 of the PMLA but also on financial records, WhatsApp communications, and transactional data, which indicate the applicant's active role in the alleged money laundering activities.
By virtue of Section 24 of the PMLA, the respondent is not required to conclusively establish the applicant's guilt at the pre-trial stage, rather, the applicant must demonstrate that the proceeds of crime attributed to him are not linked to money laundering. In the absence of any rebuttal by the applicant, the presumption under Section 24 of the PMLA stands in favor of the respondent, thereby justifying his continued detention.
In the present case, the respondent has placed on record material indicating that the applicant actively participated in procurement and sale of spurious anti-cancer medicines. The investigation has revealed that the applicant engaged in financial transactions involving the proceeds of crime, including payments made through banking channels and hawala transactions - Applying the legal presumption under Section 24(a) of the PMLA, once the respondent has demonstrated these foundational facts, the onus shifts to the applicant to rebut the presumption that the proceeds of crime were not involved in money laundering. The applicant, however, has failed to provide any credible evidence to rebut this presumption. Mere denial of involvement or assertion of being an investor in the firm without day-to-day operational control is insufficient to discharge the burden imposed by the statute.
Conclusion - i) This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, it is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. ii) The applicant has been unable to put forth any propositions before this Court that are sufficient for grant of bail and thus, the same are rejected.
Application dismissed.
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2025 (2) TMI 14
Money Laundering - challenge to summons issued by the Enforcement Directorate to the petitioners under Section 50(2) of the Prevention of Money Laundering Act, 2002 - petitioners challenge the summons on the ground that they had responded to the earlier summons issued by the Enforcement Directorate, the Enforcement Directorate ought not to have issued the impugned summons.
HELD THAT:- Section 44(1)(d) Explanation (ii) enumerates that “the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not”.
Although the alleged offence occurred prior to the amendment, impugned summons were issued after insertion of Explanation Clause under Section 44(1)(d)(ii). Therefore, there is no impediment for the authorities to issue summons for the purpose of collecting further information, documents, etc.
Courts at no circumstances shall dilute the rigor of investigation in money laundering cases instituted under the provisions of PMLA. Any judicial interference at the summons issuance stage may cause prejudice to an effective investigation. Therefore, the Courts should allow Investigating Agencies to function fairly and freely, enabling them to cull out the truth by collecting all necessary evidence, obtaining statements from the concerned individuals, and initiate all appropriate actions by following the due procedures as contemplated under the provisions of PMLA - Therefore, granting any leniency regarding appearance or otherwise, by the Courts based on misplaced sympathy or taking a lenient view, would undoubtedly hamper the investigation process. This would inevitably result in allowing individuals to escape from the clutches of PMLA proceedings, which is undesirable.
Conclusion - The validity of the summons issued by the Enforcement Directorate affirmed. The petitioners must comply with the summons and provide any additional explanations or documents required.
Petition dismissed.
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2025 (1) TMI 1450
Seeking grant of regular bail - Money Laundering - reasons to believe - compliance with the statutory requirements under Section 19 of the PMLA - whether the applicant’s arrest was carried out in adherence to the statutory requirements under Section 19 of the PMLA which mandates that the authorized officer must have ‘reason to believe’ based on material evidence before arresting an individual accused of money laundering? - HELD THAT:- This Court is satisfied that the investigating authority followed due process and substantiated the 'reason to believe' with concrete evidence rather than mere suspicion. Accordingly, the challenge to the legality of the arrest is without merit, and no relief is warranted to the applicant on this ground.
The investigating authority did not rely solely on the statement of any one co-accused, rather it relied upon the statement of the applicant as well as other co-accused persons namely Neeraj Chauhan, Tushar Chauhan and Viphil Jain along with the documentary evidence including the Whatsapp chats etc. which shows the financial trail of the proceeds of crime in the instant matter. The same goes to show that the respondent ED has corroborating evidence on its record to justify the implication of the applicant herein - This Court is satisfied that the respondent ED has considered independent material, including financial records, digital evidence, and the applicant’s own communications, which substantiate the applicant’s involvement in the alleged offence.
Whether the statements recorded under this provision are admissible as evidence and to what extent they can be relied upon to justify the applicant’s arrest and continued detention? - HELD THAT:- The statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon’ble Supreme Court in Rohit Tandon v. Directorate of Enforcement [2017 (11) TMI 779 - SUPREME COURT], while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA - this Court is of the considered view that statements recorded under Section 50 of the PMLA are admissible in evidence and can be relied upon to establish culpability in money laundering cases.
It is observed by this Court that the respondent had sufficient material in its possession, including financial records, digital evidence, and the applicant’s communications, to establish a valid 'reason to believe' that the applicant was guilty of the offence of money laundering. The procedural safeguards under the Act were duly followed, and the challenge to the legality of the arrest is without any merit - the contention that the applicant’s arrest was solely based on the statement of co-accused persons under Section 50 of the PMLA is unfounded.
Compliance with the twin conditions of bail under Section 45 of the PMLA or not - HELD HAT:- Having considered the legislative intent behind Section 45 of the PMLA and the judicial precedents interpreting its application, this Court shall now proceed to apply the established principles to the facts of the present case to assess whether the applicant has successfully satisfied this Court that he falls under the proviso to Section 45 of the PMLA and if not, whether he has discharged the burden of proving that he is not guilty of the alleged offence and is unlikely to commit any offence while on bail - The material on record demonstrates that the accused persons operated in a highly coordinated and systematic manner, with clear understanding and collaboration among them to facilitate the offence.
The applicant has failed to discharge the burden placed upon him under Section 45(1)(ii) of the PMLA which requires him to that there are reasonable grounds for believing that he is not guilty of the offence. The material produced by the respondent, including financial transactions linked to the proceeds of crime and the applicant’s own admissions, points to his direct and active involvement in the offence. Mere assertions that the applicant was a passive investor and was unaware of the illegality of the transactions do not satisfy the threshold required to overcome the presumption under the PMLA - Further, the second limb of Section 45(1)(ii) of the PMLA, which mandates that the applicant must satisfy the Court that he is not likely to commit any offence while on bail, is also not met.
This Court finds that the twin conditions prescribed under Section 45 of the PMLA have not been satisfied. The evidence on record, the ongoing nature of the investigation, and the applicant’s alleged role in the broader financial and selling of spurious medicines syndicate indicate that the rigors of Section 45 of the PMLA continue to apply.
This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, it is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. These materials suggest an active involvement in laundering proceeds of crime and a pattern of financial transactions that need further investigation.
Conclusion - i) The applicant's arrest complied with the statutory requirements under Section 19 of the PMLA, supported by concrete evidence rather than mere suspicion. ii) Statements recorded under Section 50 of the PMLA are admissible as evidence and can be relied upon to establish culpability in money laundering cases. iii) The applicant was not exempt from the twin conditions of bail under Section 45 of the PMLA, given the organized nature of the offence and the broader context of the criminal conspiracy. iv) The applicant failed to satisfy the twin conditions for bail under Section 45 of the PMLA, as well as the general considerations for bail under Section 439 of the CrPC. v) The Court emphasized the importance of maintaining the integrity of the ongoing investigation and preventing potential misuse of the judicial process.
This Court is not inclined to release the applicant on bail and the instant application, is, hereby, dismissed.
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2025 (1) TMI 1449
Seeking grant of regular bail - Money Laundering - proceeds of crime - reasons to believe - illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta - reasons to believe - whether the applicant’s arrest was carried out in adherence to the statutory requirements under Section 19 of the PMLA which mandates that the authorized officer must have ‘reason to believe’ based on material evidence before arresting an individual accused of money laundering?
HELD THAT:- After thorough examination of the grounds of arrest, it becomes evident that the investigating agency has outlined specific details highlighting the applicant’s involvement in the alleged offence. It is observed that the applicant was duly informed about his firm’s involvement and that the applicant was a partner is M/s Delhi Medicine Hub along with co-accused Akshay Kumar and both mutually took financial and business decisions regarding the procurement and sale of spurious anti-cancer medicines, which is clearly evident from the grounds of arrest - The investigating authority has also relied on statements recorded under Section 50 of the PMLA, which reveal that the applicant was directly involved in sourcing counterfeit medicines without invoices, demanding sealed and unsealed Keytruda injections, and receiving payments through both formal banking channels and illegal hawala transactions.
The financial records cited hereinabove indicate substantial money transfers from M/s Delhi Medicine Hub to the accounts of known associates involved in the counterfeit medicine syndicate. These transactions, along with the applicant’s control over the business operations, substantiate the claim that he was engaged in money laundering activities - This Court is satisfied that the investigating authority followed due process and substantiated the 'reason to believe' with concrete evidence rather than mere suspicion. Accordingly, the challenge to the legality of the arrest is without merit, and no relief is warranted to the applicant on this ground.
A careful reading of the provision reveals that the authorities empowered under Section 50 of the PMLA possess the authority to enforce discovery and inspection, compel the attendance of individuals, examine them on oath, require the production of records, receive evidence through affidavits, and issue commissions for the examination of witnesses and documents - The provision further clarifies that any person summoned under sub-section (2) is legally bound to comply, state the truth regarding matters under inquiry, and produce the requisite documents as directed by the authorities. It is pertinent to note that such proceedings are deemed to be judicial proceedings under Sections 193 and 228 of the IPC.
Whether the statements recorded under this provision are admissible as evidence and to what extent they can be relied upon to justify the applicant’s arrest and continued detention? - HELD THAT:- The Hon’ble Supreme Court in Rohit Tandon v. Directorate of Enforcement, [2017 (11) TMI 779 - SUPREME COURT] made the following observations regarding the admissibility of statements recorded under Section 50 of the PMLA - it is evident that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon’ble Supreme Court, while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA.
Hon’ble Supreme Court also reaffirmed the admissibility of Section 50 of the PMLA distinguishing them from statements recorded under the CrPC. The Court underscored that such statements, being recorded during an inquiry rather than an investigation, are not subject to the restrictions under Article 20(3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50 (4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA. The Hon’ble Court further clarified that the provisions of Section 50 of the PMLA having an overriding effect by virtue of Sections 65 and 71 of the PMLA prevail over the procedural safeguards under the CrPC. - this Court is of the considered view that statements recorded under Section 50 of the PMLA are admissible in evidence and can be relied upon to establish culpability in money laundering cases.
In the present case, the investigating agency has relied not only on the statement of co-accused under Section 50 of the PMLA but also on financial records, WhatsApp communications, and transactional data, which indicate the applicant's active role in the alleged money laundering activities - By virtue of Section 24 of the PMLA, the respondent is not required to conclusively establish the applicant's guilt at the pre-trial stage, rather, the applicant must demonstrate that the proceeds of crime attributed to him are not linked to money laundering. In the absence of any rebuttal by the applicant, the presumption under Section 24 of the PMLA stands in favor of the respondent, thereby, justifying his continued detention.
In light of the principles enunciated by the Hon’ble Supreme Court in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] and reiterated in Prem Prakash [2024 (8) TMI 1412 - SUPREME COURT] this Court must determine whether the foundational facts necessary to invoke the presumption under Section 24 of the PMLA have been established by the respondent. The Hon’ble Supreme Court has categorically held that the prosecution must satisfy three essential ingredients. First, the commission of a scheduled offence must be established. Second, the property in question must be shown to have been derived or obtained, directly or indirectly, as a result of such criminal activity and third, the accused must be linked, directly or indirectly, to any process or activity connected with the proceeds of crime.
It is observed by this Court that the respondent has presented corroborative material, including financial transactions and records, linking the applicant to the proceeds of crime. Considering the presumption under Section 24 of the PMLA, the burden shifted to the applicant to disprove his involvement in the alleged offence. However, the applicant has failed to provide any credible evidence to rebut the statutory presumption - this Court finds that the applicant’s arrest was conducted in compliance with the statutory mandate of Section 19 of the PMLA.
It is pertinent to mention here that the word used in the proviso to Section 45 of the PMLA is ‘may’ which indicates that it is the discretion of the Court concerned and it is not a mandate. As observed by the Hon’ble Supreme Court in a catena of judgments, it is the discretion of the Court and all the other relevant factors are needed to be weighed in while adjudicating the bail application. The relevant factors include the gravity of the offence, likelihood of reoccurrence, criminal antecedents etc. - this Court holds that the applicant cannot claim the benefit of the monetary threshold exemption under the proviso to Section 45 of the PMLA.
Conclusion - This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, this Court is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. These materials suggest an active involvement in laundering proceeds of crime and a pattern of financial transactions that need further investigation.
The applicant has been unable to put forth any propositions before this Court that are sufficient for grant of bail and thus, the same are rejected. In view of the same, this Court is not inclined to release the applicant on bail and the instant application, is, hereby, dismissed along with the pending applications, if any - Bail application dismissed.
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2025 (1) TMI 1448
Seeking grant of bail - Money laundering - alleged illegal extortion on Coal Transportation, payments collected by the applicant and his associates - twin conditions of Section 45 of the PMLA, 2002 fulfilled or not - HELD THAT:- It is quite vivid that the applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002 and also considering the submission that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is mandatory requirement to get bail.
Hon'ble the Supreme Court in case of DIRECTORATE OF ENFORCEMENT VERSUS ADITYA TRIPATHI [2023 (5) TMI 527 - SUPREME COURT] has held that 'the High Court has neither considered the rigour of Section 45 of the PML Act, 2002 nor has considered the seriousness of the offences alleged against accused for the scheduled offences under the PML Act, 2002 and the High Court has not at all considered the fact that the investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is still going on and therefore, the impugned orders passed by the High Court enlarging respective respondent No. 1 on bail are unsustainable and the matters are required to be remitted back to the High Court for afresh decision on the bail applications after taking into consideration the observations made hereinabove.'
Considering the ECIR and other material placed on record, which prima facie shows involvement of the applicant in crime in question and also considering the law laid down by Hon’ble the Supreme Court, it is quite vivid that the applicant is unable to fulfill the twin conditions for grant of bail as provided under Section 45 of the PMLA, 2002. Thus, the Point is answered against the applicant.
Conclusion - Applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002. The bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 is liable to be and is hereby rejected.
Bail application rejected.
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2025 (1) TMI 1447
Maintainability of proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) in the absence of a scheduled offence - applicant's arrest and subsequent detention - lack of necessary sanction and procedural irregularities - Sufficiency of statements under Section 50 of the PMLA to establish a prima facie case of money laundering against the applicant - HELD THAT:- The crux of the allegation against the applicant is that he was involved in running an extortion racket by way of Rs. 20+20=Rs. 40/- per quintal of custom milled rice out of the special incentive price of Rs. 120/- payable by the State of Chhattisgarh to the custom rice millers. Hence the offence under Section 383/384 of the IPC has been levelled against the applicant. Similarly, the allegation of cheating under Section 420 IPC has been made against the applicant. Though it has been submitted by the counsel for the applicant that there is no direct or specific evidence against the applicant to suggest that he was involved in any of the offence as alleged in the subject ECIR or the prosecution complaint.
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 - 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.
In the present case, it is not acceptable that the applicant was not involved in the offence of money laundering. In fact, the applicant was assisting the co-accused Roshan Chandrakar in running an alleged extortion racket wherein an amount of Rs. 40/- (Rs. 20+20/-) per quintal was extorted from the custom milled rice out of the special incentive price of Rs. 120/- payable by the State Government to the custom rice millers Denial by the applicant itself is not sufficient to consider prima facie that there is no mens rea of the applicant in the said offences. Although the statements of the witnesses are required to be tested at the time of trial, but for the purpose of consideration of bail application, the statements of the witnesses are relevant for consideration of bail application of the applicant.
It cannot be said that there is no involvement of the applicant in the offence in question. 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. The investigation have revealed that the applicant was involved in the extortion of money from the rice millers which was allegedly used for constituting proceeds of crime.
The applicant’s medical record indicates manageable conditions and it has been found that there is no compelling medical reason for granting bail to the applicant. The Court has found substantial material indicating a strong nexus between the applicant and the crime, thereby failing to satisfy the conditions of bail under Section 45 of the PMLA.
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 - Considering the role of the applicant in obtaining the money through illegal source, which is the proceeds of crime and that there is sufficient evidence collected by the ED to prima facie show the involvement of the applicant in the alleged offences. It is an organized crime having various facets of its complexion, therefore, further considering the nature of offence and material collected during the investigation, this Court is satisfied that there is prima facie evidence for believing that the applicant is involved in the offence, therefore, it is not required to release the applicant on bail.
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, deserves to be and is hereby rejected.
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2025 (1) TMI 1265
Seeking grant of Regular Bail after prolonged incarceration - Money Laundering - twin conditions as contemplated under Section 45 of the PMLA or not - Section 439 of the Code of Criminal Procedure, 1973, read with Sections 45 and 65 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Supreme Court in the case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], considered the applicability of Section 436A of the Cr. P. C. which is concerning the maximum punishment for which an under trial prisoner can be detained, held that Section 436A of the Cr. P .C. has come into effect on 23.06.2006 and the said provision is the subsequent law enacted by the Parliament and the same will prevail and will apply in spite of rigors of Section 45 of the PMLA Act.
As per the settled legal position whereas at commencement of proceedings, the courts are expected to appreciate the legislative policy against grant of bail as enacted under Section 45 of the PMLA Act, but the rigours of such provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence - Thus, inspite of restrictive statutory provisions like Section 45 of the PMLA Act, the right of the accused undertrial under Article 21 of the Constitution of India cannot be allowed to be infringed. In such a situation, statutory restrictions will not come in the way of the Court to grant bail to protect the fundamental right of the accused under Article 21 of the Constitution of India.
It is an admitted position that both the cases will be tried simultaneously and trial has not yet commenced. Thus, this is a case where the trial is unlikely to conclude any time soon and is likely to take a considerably long time. As noted hereinabove, the Applicant has completed more than half of the punishment. The maximum punishment which can be imposed on the Applicant is 7 years and the Applicant has completed about 3 years and 10 months of imprisonment i.e. more than half of the punishment - the Applicant is entitled to the benefit of Section 436A of the CrPC.
Conclusion - i) The applicant is granted bail with a personal bond of Rs. 10,00,000/- and sureties. ii) The applicant is restricted from entering District Pune except for trial-related purposes. iii) The applicant must report to the Enforcement Directorate's Mumbai office twice a month. iv) The applicant must not tamper with evidence or influence witnesses. v) The applicant must surrender his passport and attend the trial regularly.
The Applicant – Anil Shivajirao Bhosale be released on bail in connection with ECIR No. ECIR/MBZO-II/20/2020 registered with the Enforcement Directorate on his furnishing P. R. Bond of Rs. 10,00,000/- with one or two solvent sureties in the like amount and subject to fulfilment of conditions imposed - bail application allowed.
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2025 (1) TMI 1264
Money Laundering - challenge to provisional attachment order - large scale illegal extortion punishable under section 384 read with 120 B of IPC - Non application of mind by the Adjudicating Authority - Absence of predicate offence - No nexus between the appellant and alleged proceeds of crime - appellants are bonafide purchaser of the property attached by the respondents - Absence of reasons to believe in the SCN.
Absence of predicate offence - HELD THAT:- The Apex Court in Sunil Kumar Agarwal [2024 (5) TMI 1346 - SC ORDER] found that the petitioner has already undergone incarceration for a period of 1 year and 7 months and was otherwise not named in the FIR, but without expressing any opinion on the issue, the interim bail was granted. The efforts of the appellant is to mis-lead the Tribunal by giving an impression of an order of the Apex Court to hold that the predicate offence does not exist and thus the proceedings under PMLA is not tenable. The written arguments also make a reference of it.
The perusal of the order for grant of the bail to the accused would reveal it to be on the ground of long period of incarceration in violation of Article 21 of the Constitution. The bail was granted on that ground. It was with the clarification that observation made in the order is for the purpose of grant of bail and not to have any effect on the merit of the complaint. There are no judgement of the Apex Court in favour of the appellant rather detailed judgement of the Supreme Court in the case of Saumya Chaurasia [2023 (12) TMI 685 - SUPREME COURT] holds it to be a case of schedule offence.
No nexus between the appellant and the alleged proceeds of crime - HELD THAT:- In the instant case, the syndicate of Suryakant Tiwari has not extorted money overnight but during the period of its operation which was started much prior to the registration of the FIR. It is otherwise settled law of the land that the properties acquired prior to the commission of the crime can also be made subject matter of the attachment if the proceeds are not available or vanished - The appellant may have acquired the property prior to the registration of the FIR but period of operation of crime started much prior to the registration of the FIR and otherwise if the proceeds has been vanished or siphoned off, the property of the equivalent value can be attached. It is otherwise submitted that appellants have been named for commission of the offence under the Act of 2002.
Appellants are bonafide purchaser of the property - HELD THAT:- The appellants have failed to disclose the source to acquire the cash used for acquisition of the properties and illustratively we may refer to 52 properties acquired by M/s. Indermani Minerals (India Pvt. Ltd.),showing it to be through bank channels and based on their financial condition - The statement recorded under section 50 of the Act of 2002 coupled with the documents seized from the custody of Suryakant Tiwari are sufficient to show layering of proceeds of crime and to channelize the same, immovable properties were purchased. The appellant Company has not purchased one or two properties, rather purchased as many as 52 properties without showing the source and document to prove it. In the appeal filed by them, even the Income Tax Return for financial year 2022-2023 was not enclosed. It was submitted later without showing its relevance for purchase of properties prior to it.
It is found that merely using the banking channel for purchase of the property by layering the money with deposit of cash in the Bank without disclosing the source with the material and proof, the source would not stand proved.
Absence of reason to believe - HELD THAT:- The appellants submits that no reasons to believe was given by the Adjudicating Authority while issuing show cause notice. It should have been for each appellant separately - There are no contest on the aforesaid before the Adjudicating Authority, otherwise it has given reasons to believe for issuance of notice. It is not necessary that for the show cause notice, it should be against the person committing the offence under section 3 of the Act of 2002, but can be against the person in possession of crime proceeds. It is not necessary to give reasons to believe separately but can be for the noticee together. The appellants are either the accused or in possession of proceeds of crime and has been indicated in the show cause notice.
The appellants are victims of extortion - HELD THAT:- The appellants are victims of extortion because they were involved in transportation of the coal and thereby had to pay Rs. 25/- per ton to the main accused. The argument aforesaid has been raised specifically in the appeal preferred by M/s. Indermani Minerals (India Pvt. Ltd.),. This argument endorsed the case of the respondents where serious allegations have been made against syndicate headed by Suryakant Tiwari for extortion of money and if the appellant was also victim, it could not be clarified as to why it did not register an FIR against the accused.
Conclusion - The appellants failed to provide credible evidence to substantiate their claims of bona fide acquisition and the absence of a nexus with the proceeds of crime. The existence of a predicate offence and the nexus between the appellants and the proceeds of crime is reaffirmed. The confirmation of the provisional attachment order upheld.
Appeal dismissed.
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2025 (1) TMI 1097
Seeking direction to the Enforcement Department (ED) to produce all the records as regards purported inquiry being conducted under the Foreign Exchange Management Act, 1999 - challenge to search and seizure proceedings - quashing of the illegal act of freezing of the bank account of the petitioner company - reasons to believe - HELD THAT:- Though the jurisdiction under Article 226 of the Constitution of India is plenary, however, there are self imposed limitations which are required to be followed before exercising the power of judicial review. Ordinarily, interference at the stage of investigation carried out by the law enforcement agencies is not advisable because the law enforcement investigation techniques include coercive as well as covert techniques.
The method of search and seizure is coercive as it is used to carry out the investigation/inquiry into the affairs if violation of a statutory provision is suspected. The search and seizure is a well known tool in the investigation which enables the law enforcement agencies to come to a conclusion. Though the Constitutional Courts are the sentinels of justice, however, this power is required to be exercised with due care and caution and interference at the stage of investigation is made in rare and exceptional cases.
It is evident that while carrying out search, proper information was supplied to the petitioner. Moreover, the petitioner has not attached the ECIR. The petitioner has attached the search and seizure memos and freezing orders sent by the ED to the various banks. In the freezing orders, it has been stated that the Assistant Director, Unit-III (2) ED has reasons to believe from the documents in his possession that the proceeds of crime might have been diverted to the above said bank account maintained with that particular bank. Moreover, as already noticed, these orders were passed on 26.11.2024, whereas on the date when the arguments are heard, 30 days are yet to be completed.
Section 5 (5) of the 2002 Act mandates the ED to file a complaint stating the facts of such attachment before the Adjudicating Authority within a period of 30 days. The Adjudicating Authority is entitled to adjudicate the matter on receipt of a complaint. Before the Adjudicating Authority all the stakeholders are entitled to participate and explain their position. The Adjudicating Authority is required to decide the matter in a time bound manner. Against the final order of confirmation of attachment, the appeal is maintainable before the Appellate Tribunal. Once the 2002 Act itself provides for sufficient safeguards, it is not found appropriate for this Court to interfere at this stage.
Conclusion - The legal authority of the ED to conduct search and seizure operations and freeze bank accounts without prior notice affirmed. The petitioners are provided with the opportunity to present their case before the Adjudicating Authority under the 1999 Act and the 2002 Act.
Petition disposed off.
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