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2025 (3) TMI 1452 - HC - Money LaunderingSeeking grant of regular bail - Money Laundering - scheduled/predicate offence - proceeds of crime - collecting commissions and supplying unaccounted liquor to government liquor shops - twin conditions under Section 45 of the PMLA 2002 are satisfied or not - delay in trial proceedings - HELD THAT - It appears that the applicant had actively participated in the commission of predicate offence; had acquired proceeds of crime and had substantial share in proceeds of unaccounted liquor cannot be ignored. The investigation against 11 persons including the applicant is complete and three prosecution complaints against 11 accused persons spanning to nearly 20, 000 pages with over 30 witnesses and 250 documents have been filed by the investigating agency and the investigation is going on. Despite the alleged huge scam prosecution complaint has been filed against 11 persons. Even as per allegations made in the complaint filed by the ED role of other individuals have also been surfaced. There is no attachment of property against accused persons being distillers despite quantifying the same at over 200 crores and no proceedings under Section 8 of the PC Act has been initiated against them. Though it is true that the applicant has suffered long period of incarceration and the trial has not yet commenced and is not likely to conclude but the right to bail in cases of delay coupled with incarceration for a long period depending on the nature of the allegations should be read into Section 439 of the Code of Criminal Procedure and Section 45 of the PML Act. there is substantial material indicating a strong nexus between the applicant and the other accused persons in the commission of the crime. Records show that the grounds of arrest was communicated to the applicant by the ED in writing. Thus without giving any observation as to whether the statement recorded under Section 50 of the PMLA are admissible in evidence but their thorough consideration should be reserved for the trial court. It emphasized that at the bail stage these statements can be examined to ascertain whether there are reasonable grounds to believe that the applicant is not guilty. There is a difference between the admissibility of a statement of an accused recorded under Section 50 of the Prevention of Money Laundering Act (PMLA) and its evidentiary value. It can be foreseen that while the High Court in the specific facts and circumstances (where there was prima facie material against the petitioner) came to the conclusion that mere possession of proceeds of crime and upholding such proceeds as untainted would be sufficient to invoke the provisions of PMLA however the ratio of the said judgment may have the potential to have an unintended fallout in a different set of facts. Depending on the facts of the case such an interpretation may include persons who might have no genuine knowledge and connection with the predicate offence and/ or the tainted money circulated by the actual accused persons and may have to go through the rigours of trial for no fault - Mens rea is a critical ingredient for any criminal offence and therefore requires its presence in any action or consequence which arises out of or in relation to an offence. It is important that to prosecute someone for mere possession of purported proceeds of crime there should be an equal burden on the prosecution to prove at least a prima facie link to the proceeds of crime as defined under the Act. Money laundering is understood to encompass a scenario in which an individual commits an offense outlined in the PMLA schedule leading to the generation of property. This property subsequently qualifies as the proceeds of the crime. Furthermore the individual engaged in activities such as concealment possession or utilization of said proceeds of crime shall be deemed to have committed the offense of money laundering - the quantification of the Proceeds of Crime involves a multifaceted approach. It begins with the identification of initial assets stemming from criminal activity subsequently encompassing any assets obtained through these initial proceeds. Conclusion - It is thus held that in the investigation conducted during the predicate offence the applicant being the orchestrator of the entire liquor scam in the State of CG 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. 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 include:
2. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The legal framework primarily involves Section 45 of the PMLA, which imposes stringent conditions for granting bail. The twin conditions require that there be reasonable grounds for believing that the accused is not guilty of the offense and that the accused is not likely to commit any offense while on bail. The judgment also references several precedents, including the Supreme Court's decisions in Nikesh Tarachand Shah and Vijay Madanlal Choudhary, which discuss the constitutionality and application of Section 45 of the PMLA. Court's interpretation and reasoning: The Court interpreted Section 45 of the PMLA as imposing stringent conditions that must be satisfied for bail to be granted. It emphasized that these conditions are in place to prevent the serious crime of money laundering, which poses a threat to the financial system and national integrity. The Court also considered the applicant's role in the alleged scam and his possession of proceeds of crime. Key evidence and findings: The Court found substantial evidence indicating the applicant's involvement in the liquor scam and money laundering activities. This included statements recorded under Section 50 of the PMLA, digital evidence, and the applicant's alleged orchestration of the liquor syndicate. The Court noted that the applicant acted as a strongman in the syndicate, collecting commissions and concealing proceeds of crime. Application of law to facts: The Court applied the stringent conditions of Section 45 of the PMLA to the facts of the case, finding that the applicant failed to demonstrate that he was not guilty of the offense. The Court also considered the seriousness of the allegations and the ongoing investigation, which further justified the denial of bail. Treatment of competing arguments: The applicant's counsel argued for bail based on prolonged incarceration, lack of evidence, and the right to a speedy trial. However, the Court found these arguments insufficient to overcome the stringent conditions of Section 45 of the PMLA. The Court emphasized the seriousness of the allegations and the potential risk of the applicant tampering with evidence or influencing witnesses if released on bail. Conclusions: The Court concluded that the applicant did not satisfy the twin conditions for bail under Section 45 of the PMLA. The evidence against the applicant, coupled with the seriousness of the allegations, justified the denial of bail. 3. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "The provision for bail under Section 45 of PMLA lays down two essentials which are to be fulfilled for grant of bail. These conditions are called the 'twin conditions'. The two conditions that are to be established are that firstly, there are reasonable grounds for believing that the accused is not guilty of such offense and secondly, the accused is not likely to commit an offense while on bail." Core principles established: The judgment reinforces the principle that the stringent conditions under Section 45 of the PMLA must be satisfied for granting bail. It highlights the seriousness of money laundering offenses and the need for a cautious approach in granting bail to individuals accused of such crimes. Final determinations on each issue: The Court determined that the applicant failed to meet the twin conditions for bail under Section 45 of the PMLA. The evidence against the applicant, including his alleged role in the liquor scam and possession of proceeds of crime, supported the denial of bail. The Court rejected the applicant's arguments regarding prolonged incarceration and the right to a speedy trial, emphasizing the seriousness of the allegations and the ongoing investigation.
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