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2025 (3) TMI 510 - HC - Money LaunderingSeeking grant of regular bail - Money Laundering - proceeds of crime of more than 2000 crores - scheduled offences or not - serious crime or not - applicability of twin conditions under Section 45 of the PMLA - HELD THAT - In the instant case there are nearly 70 accused persons while charge sheet has only been filed against 11 persons. There are 457 witnesses in the scheduled offence and the trial is not likely to conclude. However the ED has submitted that at least 3 to 4 charge sheets are yet to be filed in the scheduled offence. It appears that the applicant was involved in the criminal acts of the syndicate and is in possession of the proceeds of crime and that he received commission from the liquor suppliers. The applicant was the key player in the syndicate - Prima facie the involvement of the applicant in the present case has been established as massive corruption had taken place in the Excise Department by way of extorting amount of Rs. 2000 crores approximately and causing huge loss to the State Exchequer which otherwise would have yielded revenue for Central and State government. An analysis of section 19 of the PMLA unveils a delicate interplay between legal principles enforcement challenges and evolving due process standards. The judiciary s commitment to balancing prompt law enforcement with the protection of individual rights particularly the right to receive timely notification of arrest grounds not only adds value but also amplifies the ongoing conversation about the equitable consideration of security and justice in the context of any crime whether financial or otherwise - the ED has shown the reason to believe that the applicant is guilty of the proceeds of crime. On the basis of statements recorded under Section 50 of the PMLA however retraction statement is made by the co- accused persons namely Arun Pati Tripathi Nitesh Purohit and Arvind Singh. The Apex Court in Directorate of Enforcement Vs. Aditya Tripathi 2023 (5) TMI 527 - SUPREME COURT has held that the power to arrest under the Prevention of Money Laundering Act (PMLA) cannot be exercised on the whims and fancies of Directorate of Enforcement (ED) officers. The court wondered if the ED even had a consistent uniform and one- rule-for-all policy on when they should arrest people. It said the ED s power to arrest must be based on objective and fair consideration of material against the accused. Conclusion - Prima facie it appears that in the investigation conducted during the predicate office the applicant had a key role in the liquor syndicate and was involved in money laundering and proceeds of crime along with other co-accused therefore the entitlement of the applicant to get bail under PMLA 2002 is not acceptable and considering the entirety of the matter this Court is of the opinion that the applicant is unable to satisfy twin conditions for grant of bail under Section 45 of the PMLA 2002 as such it is not a fit case for grant of bail to the applicant for the reasons mentioned hereinabove. 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 for the alleged offence punishable under Sections 3 4 of the PMLA 2002 is hereby rejected.
1. ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
2. ISSUE-WISE DETAILED ANALYSIS Entitlement to Bail under BNSS and PMLA The applicant sought bail under Section 483 of the BNSS and Section 45 of the PMLA, arguing that the investigation against him was complete and there was no need for his continued detention. The relevant legal framework includes Section 45 of the PMLA, which imposes two conditions for bail: the public prosecutor must be given an opportunity to oppose the bail application, and the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty and is unlikely to commit any offense while on bail. The Court emphasized that the applicant failed to satisfy these conditions, as there was substantial material indicating his involvement in the crime. The applicant was a key player in the syndicate involved in money laundering, and the evidence suggested that he had a significant role in the liquor scam. Validity of Arrest and Detention The applicant challenged the validity of his arrest, arguing that it was based on insufficient grounds. The Court noted that under the PMLA, arrests must be based on objective and fair consideration of material against the accused. The ED must have "reasons to believe" that the individual is guilty, which should not be based on mere suspicion. The Court found that the ED had shown reasons to believe that the applicant was guilty of possessing proceeds of crime, based on statements recorded under Section 50 of the PMLA. Although some co-accused retracted their statements, the Court held that these statements could still be considered to ascertain whether there were reasonable grounds to believe the applicant was guilty. Satisfaction of Twin Conditions under Section 45 of the PMLA The Court analyzed whether the applicant met the twin conditions under Section 45 of the PMLA for bail. It concluded that the applicant failed to satisfy these conditions, as the evidence suggested his involvement in money laundering and possession of proceeds of crime. The Court noted that the applicant's role in the syndicate and the substantial material against him indicated that he was not entitled to bail. Prolonged Incarceration and Right to Speedy Trial The applicant argued that his prolonged incarceration violated his right to a speedy trial under Article 21 of the Constitution. The Court acknowledged the importance of this right but emphasized that the nature of the allegations and the applicant's involvement in a serious economic offense justified his continued detention. The Court noted that the trial had not yet commenced, and the applicant's release could potentially hinder the investigation and trial process. Admissibility and Evidentiary Value of Statements under Section 50 of the PMLA The Court considered the admissibility and evidentiary value of statements recorded under Section 50 of the PMLA. It noted that such statements are not substantive evidence but can be used for corroboration. The Court emphasized that these statements, along with other evidence, provided reasonable grounds to believe the applicant was guilty. 3. SIGNIFICANT HOLDINGS The Court held that the applicant was not entitled to bail under Section 45 of the PMLA, as he failed to satisfy the twin conditions required for bail. The Court emphasized the seriousness of the allegations and the applicant's involvement in the liquor scam, which involved laundering proceeds of crime amounting to approximately Rs. 2000 crores. The Court reiterated that the power to arrest under the PMLA must be based on objective and fair consideration of material against the accused. It noted that the ED had provided sufficient reasons to believe the applicant was guilty, based on statements and other evidence. The Court concluded that the applicant's prolonged incarceration did not violate his right to a speedy trial, given the nature of the allegations and the potential impact on the investigation and trial process. The Court emphasized that the right to bail in cases of delay should be read into Section 439 of the Code of Criminal Procedure and Section 45 of the PMLA, but this did not apply to the applicant's case. Accordingly, the Court rejected the applicant's prayer for bail under Section 483 of the BNSS and Section 45 of the PMLA.
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