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TMI Blog2025 (1) TMI 1449X X X X Extracts X X X X X X X X Extracts X X X X ..... -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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 deri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . JUSTICE CHANDRA DHARI SINGH For the Petitioner Through: Mr. Harshit Sethi, Ms. Mansi Tripathi and Mr. Kartik Yadav, Advocates For the Respondent Through: Mr. Arkaj Kumar, Standing Counsel with Ms. Vaishnavi Bhargava, Mr. Aakash Mishra and Mr. Ishank Jha, Advocates ORDER PER CHANDRA DHARI SINGH, J (Oral) 1. The instant bail application has been filed on behalf of the applicant/petitioner under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (hereinafter "BNSS") and/or Section 439 of the Code of Criminal Procedure, 1973 (hereinafter "CrPC") read with Section 45 of the Prevention of Money Laundering Act, 2002 (hereinafter "PMLA") seeking grant of regular bail in ECIR/DLZO-II/03/2024 dated 22nd April, 2024 registered under Sections 3 and 4 of the PMLA, arising out of FIR No. 59/2024 dated 12th March, 2024, registered at Police Station - Crime Branch, Delhi for offences punishable under Sections 274, 275, 276, 420, 468, 471 read with 120B and 34 of the Indian Penal Code, 1860 (hereinafter "IPC"). 2. The brief facts that led to the filing of the instant application are that on 12th March, 2024, FIR No. 59/2024 was registered at Police Station - Crime Branch, Delhi und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which he finally complied and appeared before the ED. Upon his appearance on the said date, the respondent proceeded to arrest the applicant after providing the applicant with memo of arrest and grounds of arrest. It has been alleged that the applicant has been known to the co-accused Akshay Kumar since 2012-2013. In the year 2022, both the applicant and Akshay Kumar planned to establish a business dealing with medicines. The applicant offered to arrange the necessary funds, following which they opened M/s Delhi Medicine Hub at Sector-11, Booth No. 39, Chandigarh for retail selling of cancer related medicines. 8. On 20th July, 2024, the respondent filed the first supplementary prosecution complaint implicating a total of 16 accused persons including the applicant. Subsequently, the learned Special Judge, vide its order dated 21st September, 2024, took cognizance of both, the prosecution complaint as well as the first supplementary prosecution complaint. 9. The applicant then filed a bail application seeking grant of regular bail, however, vide order dated 4th October, 2024, the said bail application was dismissed by the learned Court below. Hence, the present bail application. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. It is submitted that the trial is likely to be prolonged due to the voluminous nature of the record and the involvement of multiple accused persons, making prolonged detention unjustified. 18. Therefore, in view of the foregoing submissions, it is prayed that the instant application may be allowed, and the applicant be released on bail. 19. Per Contra, learned counsel appearing on behalf of the respondent ED vehemently opposed the instant application submitting to the effect that the same is liable to be dismissed being devoid of any merit. 20. It is submitted that the offence of money laundering as alleged against the applicant, is of a serious nature and has far-reaching consequences, particularly given the involvement in sale of spurious anti-cancer medicines. It is also submitted that the alleged offence not only involves financial fraud but also endangers public health and safety, thus justifying stringent legal action. 21. It is submitted that the applicant was not merely an investor in M/s Delhi Medical Hub but was actively involved in the financial management of the firm. It is submitted that the applicant knowingly facilitated transactions involving the proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and entire transactions which have been funneled among all the accused persons have to be taken into consideration for the constitution of an offence under Section 45 of the PMLA. 29. Therefore, in view of the foregoing submissions, it is prayed that the instant application may be dismissed. 30. Heard the counsel for the parties at length and perused the material available on record. 31. In light of the submissions made before this Court, it is made out that the grounds contended by the applicant for grant of bail are multifold. Firstly, it has been contended that the applicant's arrest was not conducted in compliance with the provisions of Section 19 of the PMLA which requires 'easons to believe' before making an arrest. Secondly, the statements made by co-accused Akshay Kumar under Section 50 of the PMLA form the sole basis for the applicant's arrest which are not sufficient to justify his arrest. Lastly, the applicant is exempted from the twin conditions of bail under Section 45 of the PMLA. However, even if it is assumed for the sake of arguments that he is not exempted under the proviso, the applicant satisfies the twin conditions prescribed under the aforesaid provision. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unishable under PMLA. Thirdly, such reasons should be recorded in 'writing' by the officer concerned and lastly, the person so arrested should be 'informed of the grounds of arrest'. 34. The compliance of these conditions is undoubtedly mandatory, which is also fortified by the explanation added to Section 45 of the PMLA, which provides as under: "Section 45. Offences to be cognizable and non-bailable. *** Explanation. For the removal of doubts, it is clarified that the expression "Offences to be cognizable and non-bailable" shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1973 (2 of 1974), and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfillment of conditions under section 19 and subject to the conditions enshrined under this section." 35. Having examined the statutory framework governing the power of arrest under Section 19 of the PMLA, this Court shall now proceed to consider the judicial precedents that have in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also a solemn function of the arresting authority which brooks no exception." 38. In case of Pankaj Bansal v. Union of India, (2024) 7 SCC 576, the Hon'ble Supreme Court while reiterating the principles laid down in case of Vijay Madanlal Choudhary (Supra) has made the following observations on the scope of Section 19 of the PMLA: "17. At this stage, it would be apposite to consider the case law that does have relevance to these appeals and the issues under consideration. In Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : 2022 SCC OnLine SC 929 : (2022) 10 Scale 577], a three-Judge Bench of this Court observed that Section 65 PMLA predicates that the provisions of the Code of Criminal Procedure, 1973, shall apply insofar as they are not inconsistent with the provisions of PMLA in respect of arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings thereunder. It was noted that Section 19 PMLA prescribes the manner in which the arrest of a person involved in money laundering can be effected. It was observed that such power was vested in high-ranking officials and that apart, Section 19 PM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24, dated 12.03.2024, was registered in Crime Branch, Delhi Police, New Delhi for offences under sections 274/275/276/420/ 468/471/12013 and 34 of Indian Penal Code, 1860, against Sh. Viphil Jain S/o Late Sh. Pawan Kumar Jain r/o H. No. T 21, Gali No. 8, Gautumpupri, New Seelampur, Bhajanpura, North East, Delhi and Sh. Suraj Shat S/o Sh. Kartik Shat r/o G 315/5, Gali No. 15, West Karawal Nagar, North East, Delhi. *** *** During the investigations, it is revealed that you, Rajesh Kumar, is a partner in M/s Delhi Medicine Hub along with Akshay Kumar. Akshay Kumar, during his statement recorded under section 50 of the PMLA on 05.04.2024, admitted that he came in contact with Tushar Chauhan through India Mart Online Application for purchase of Cancer Medicine. *** Further Akshay Kumar admitted that you both took all financial and business decision mutually and you both have control over business of anti-cancer medicines in Ws Delhi Medicine Hub. That whatsapp chats between Neeraj Chauhan and you, Rajesh Kumar, revealed that you, Rajesh Kumar demanded sealed and unsealed Keytruda injection from Neeraj Chauhan. You, Rajesh Kumar through his firm i.e. M/s Delhi Medicine Hub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e medicines. 45. It is also evident from the bare reading of the grounds of arrest that the generated proceeds of crime were allegedly transferred to the accounts of the associates and their family members. This shows the role of the applicant in the laundering and distribution of the illicit gains. 46. 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 relevant portion of various statements recorded under Section 50 of the PMLA is as under: "..Statement of Shri Akshay Kumar S/o Shri 1\ilaman Ram Sharma Rio 599, Burail, Sector-45, Chandigarh-160047; having DOB: 30.09.1985: mobile no 6239172836 and 9855003814, Email id: [email protected], Aged-39 years, recorded before the Assistant Director, Enforcement Directorate u/s 50 of PMLA, 2002 on 23.05.2024, In response to the summon no. PMLA/Summon/DLZO2 /2024/2496 dated 27.03.2024 and in compliance of order dated 22.05.2024 passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiving evidence on affidavits; (e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). (5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act: Provided that an Assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2024) 9 SCC 22 has again made similar observations: "21. …Section 160 which falls under Ch. XII empowers the police officer making an investigation under the said chapter to require any person to attend within the limits of his own or adjoining station who, from the information given or otherwise appears to be acquainted with the facts and circumstances of the case, whereas, the process envisaged by Section 50 PMLA is in the nature of an inquiry against the proceeds of crime and is not "investigation" in strict sense of the term for initiating prosecution; and the authorities referred to in Section 48 PMLA are not the police officers as held in Vijay Madanlal [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1]. 22. 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 inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 24 of the PMLA, it is evident that once a person is charged with the offence of money laundering under Section 3 of the PMLA, the law presumes that the proceeds of crime are involved in money laundering unless the contrary is proven by the accused. 60. 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. 61. 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. 62. With regard to the above, this Court has referred to the judgment of the Hon'ble Supreme Court in Prem Prakash v. Enforcement Directorate, (2024) 9 SCC 787, wherein, the following observations were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legal presumption that the proceeds of crime are not involved in money-laundering, by producing evidence which is within his personal knowledge. In other words, the expression "presume" is not conclusive. It also does not follow that the legal presumption that the proceeds of crime are involved in money-laundering is to be invoked by the authority or the court, without providing an opportunity to the person to rebut the same by leading evidence within his personal knowledge [Sarbananda Sonowal v. Union of India, (2005) 5 SCC 665]. 240. Such onus also flows from the purport of Section 106 of the Evidence Act. Whereby, he must rebut the legal presumption in the manner he chooses to do and as is permissible in law, including by replying under Section 313 of the 1973 Code or even by cross-examining prosecution witnesses. The person would get enough opportunity in the proceeding before the authority or the court, as the case may be. He may be able to discharge his burden by showing that he is not involved in any process or activity connected with the proceeds of crime. In any case, in terms of Section 114 of the Evidence Act, it is open to the court to presume the existence of any f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s firm to the accounts linked with known associates involved in the counterfeit medicine syndicate, thereby establishing the existence of proceeds of crime and the applicant's involvement in the process of money laundering. 67. 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. 68. Furthermore, as clarified by the Hon'ble Supreme Court in various judgments, the presumption under Section 24 (a) of the PMLA does not operate conclusively and allows the accused an opportunity to rebut the same through cross-examination, production of evidence, or explanations under Section 313 of the CrPC. In the absence of any such rebuttal, the presumption stands in favor of the respondent, and the applicant's continued deten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, 3[or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees] may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by-- (i) the Director; or (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government. [(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.] (2) The limitation on granting of bail specified in sub-section (1) is in addition to the limitations under the Code of Crimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) those accused, either alone or with others, of money laundering involving a sum of less than rupees one Crore. 79. Following a perusal of the statutory provision, it becomes imperative to examine the judicial pronouncements that have interpreted and applied Section 45 of the PMLA in various factual contexts. 80. The Hon'ble Supreme Court in Nikesh Tarachand Shah v. Union of India, (2018) 11 SCC 1 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 (Supra), reaffirming the strict nature of bail conditions under the PMLA. In Prem Prakash (Supra), the Hon'ble Supreme Court has also delved into the principles pertaining to bail in PMLA matters. The relevant paragraphs are as under: "Section 45 PMLA -- Contours 10. Considering that the present is a bail application for the offence under Section 45 PMLA, the twin conditions mentioned thereof become relevant. Section 45 (1) PMLA reads as under: "45. Offences to be cognizable and non-bailable. -- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 SCC OnLine SC 1920], this Court observed as under: "52. … From our experience, we can say that it appears that the trial courts and the High Courts attempt to play safe in matters of grant of bail. The principle that bail is a rule and refusal is an exception is, at times, followed in breach. On account of non-grant of bail even in straightforward open-and-shut cases, this Court is flooded with huge number of bail petitions thereby adding to the huge pendency. It is high time that the trial courts and the High Courts should recognise the principle that "bail is rule and jail is exception." 12. All that Section 45 PMLA mentions is that certain conditions are to be satisfied. The principle that, "bail is the rule and jail is the exception" is only a paraphrasing of Article 21 of the Constitution of India, which states that no person shall be deprived of his life or personal liberty except according to the procedure established by law. Liberty of the individual is always a Rule and deprivation is the exception. Deprivation can only be by the procedure established by law, which has to be a valid and reasonable procedure. Section 45 PMLA by imposing twin conditions does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medicines to unsuspecting patients and hospitals, underscores the organized and syndicated nature of the offence. 85. The respondent has provided a detailed representation of the modus operandi of the accused persons in the form of a graphic illustration. 86. As emphasized by the Hon'ble Supreme Court in a catena of judgments, the offence of money laundering must be viewed in the context of the entire criminal enterprise rather than in isolation with respect to individual roles. The collective nature of the operations, the financial interlinkages between the accused persons, and the fraudulent intent evidenced through sustained unlawful activity, leave no doubt that the applicant was an integral part of the broader scheme to launder proceeds of crime. At this stage, this Court has referred to the judgment of the Hon'ble Supreme Court passed in the matter of Saumya Chaurasia v. Enforcement Directorate, (2024) 6 SCC 401, wherein, the Hon'ble Court extensively discussed the working of a syndicate and how the proceeds of crime are attributable to the same along with the discretion granted to the Courts under the proviso to Section 45 of the PMLA. The relevant paragraphs of the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned under Section 3 PMLA, 2002 being actually involved in the process of money laundering by way of possession, concealment, use, acquisition and projecting the proceeds of crime as untainted property. As per the findings of the investigation, it can be inferred that Saumya Chaurasia has directly acquired "proceeds of crime" as defined under Section 2(l)(u) PMLA, 2002 to an extent of more than Rs 30 crores. ED's investigation makes it evident that although all the money of extortion on coal & iron pellet transportation was collected by the syndicate of Suryakant Tiwari, he was not the final beneficiary of this scam. He did utilise large amounts of money for purchasing benami assets, but big chunks of the money were transferred to Saumya Chaurasia, spent on political funding and transferred as per the instructions of higher powers. Mr Manish Upadhyay, a relative of Mr Suryakant Tiwari, is a close associate of both Mrs Saumya Chaurasia & Mr Suryakant Tiwari. ED investigation has established that Mr Manish Upadhyay was inserted in as an extra layer of protection for cash dealings between Mr Suryakant Tiwari and Mrs Saumya Chaurasia. He used to transport cash from Mr Suryakant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the PMLA. 89. 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. 90. It is evident that an entire syndicate with established network and properly defined roles exist and operates at different levels, which, when taken into consideration in entirety clearly establish that the proceeds of crime are more than Rs. 1 Crore, and thus, the proviso is not applicable in the present case. 91. Now this Court shall decide as to whether the applicant satisfies the twin conditions of bail under Section 45 of the PMLA. 92. It is well settled, as reiterated by the Hon'ble Supreme Court in Vijay Madanlal Choudhary (Supra) and Manish Sisodia v. Enforcement Directorate, 2024 SCC OnLine SC 2274, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicate indicate that the rigors of Section 45 continue to apply. 98. The present bail application has also been filed under Section 439 of the CrPC, therefore, this Court, while considering the plea for bail, deems it necessary to evaluate the applicant's case through well-established principles governing the grant of bail under the said provision. Notwithstanding the rigors of Section 45 of the PMLA, the courts have consistently applied the 'triple test' as a guiding framework while considering bail applications under special statutes, including the PMLA. 99. The triple test, derived from Section 439 of the CrPC, consists of the various parameters. First, whether the accused is likely to abscond or evade the process of law if released on bail. Given the nature of offences under the PMLA, which often involve complex financial transactions and cross-border elements, the potential for absconding is a significant concern. Second, whether the accused, if released, is likely to influence witnesses or tamper with evidence. In money laundering cases, where the trail of proceeds of crime is intricate and dependent on multiple records and statements, the possibility of interference with o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t's continued detention is warranted to ensure the integrity of the investigation and prevent any potential misuse of the judicial process. 107. Having dealt with all the issues, 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. 108. The ongoing investigation is an extensive and meticulous effort by the investigating agency to unearth a broader nexus of financial misconduct and uncover deeper layers of the alleged offence. As new evidence continues to emerge, it may further solidify the allegations against the applicant. The complexity of the financial trail and its potential societal and national ramifications require continued custodial interr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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