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TMI Blog2025 (2) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ision 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'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner Through: Mr. Amandeep Singh, Mr. Manu Pratap Singh and Ms. Akanksha Singh, Advocates For the Respondent Through: Mr. Arkaj Kumar, SC 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 under Section 483 along with Section 528 of the Bhartiya Nagarik Suraksha Sanhita, 2023 (hereinafter "BNSS") 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, 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 under Sections 274, 275, 276, 420, 468, 471 read with 120B and 34 of the IPC, based on a complaint given by SI Gulab Singh. The complaint alleged the involvement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rators/channels. 8. Subsequently, on 4th May, 2024, the respondent conducted search operations at the applicant's residential premises located in Chandigarh and the applicant was arrested on 22nd May, 2024 under Section 19 of the PMLA on the ground of his alleged involvement in the laundering of proceeds of crime. The applicant has remained in judicial custody since 27th May, 2024. 9. Thereafter, the respondent filed its initial prosecution complaint on 6th June, 2024, wherein the applicant was not named as an accused. However, the first supplementary prosecution complaint was filed on 20th July, 2024, wherein the applicant was formally added as an accused. It is alleged that the applicant actively participated in the process of laundering proceeds of crime arising from the sale of spurious anti-cancer medicines. 10. It is alleged that the applicant was an important gear in the present machine of sale of counterfeit medicines, generating proceeds to the tune of approximately Rs. 3 crores. It is further alleged that a sum of Rs. 2 crores was routed through banking channels to the accounts of various co-accused, while an additional amount of Rs. 80 lakhs was transacted through haw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is against the settled principles of criminal jurisprudence. 19. It is submitted that the prosecution has failed to establish the essential ingredients of the offence under Section 3 of the PMLA, and the applicant's role, if any, is at best peripheral and does not warrant continued incarceration. 20. Therefore, in view of the foregoing submission, it is prayed that the instant application may be allowed and the applicant be released on bail. 21. Per Contra, learned counsel for the respondent submitted that the present bail application is devoid of merit and liable to be rejected in light of the gravity of the offence and the material evidence collected during the course of investigation. 22. It is submitted that the applicant is involved in a grave economic offence under the PMLA, which has far-reaching ramifications on public interest and the integrity of the financial system. It is submitted that economic offences pose a serious threat to the national economy and public confidence. 23. It is submitted that there exists sufficient material on record, including documentary evidence and statements of co-accused persons, which prima facie indicate the applicant's active in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the ED. Furthermore, the applicant argues that no incriminating material was recovered from his premises, and his continued detention is unjustified, amounting to pre-trial punishment. 33. The applicant further submits that he has fully cooperated with the investigating authorities at every stage, providing necessary documentation and explanations. It has also been argued that the applicant has strong roots in society, with a permanent residence and legitimate business operations, making him neither a flight risk nor a threat to the ongoing investigation. The applicant also contends that the charges against him are primarily documentary in nature, and his continued incarceration serves no meaningful purpose. 34. The respondent, on the other hand, contends that the applicant is an integral part of a well-orchestrated money laundering operation involving substantial financial transactions aimed at disguising illicit funds. It has been submitted that the applicant's involvement has been established through financial records, transactions, and statements of co-accused persons, demonstrating a clear link to the proceeds of crime. It has been further argued that the applicant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 38. 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. 39. Therefore, in order to adjudicate the present bail application and determine whether the applicant has satisfied the twin mandatory conditions under Section 45 of the PMLA, it is imperative to carefully examine the prosecution complaint, statements of the applicant and co-accused persons and the relevant bank statements available on record. 40. For the sake of convenience, the statement of the applicant recorded under Section 50 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi Medicine Hub maintained with ICICI Bank Limited. On being asked specially I state that I and my partner Shri Rajesh Kumar used to promote these cancer medicines in Sri Guru Harkishan Hospital, Paras Hospital, Fortis Hospital, Max Hospital, IVY Hospital all located in Chandigarh. However, all the said hospitals except Sri Guru Harkishan Hospital denied facilitating these cancer medicines to their patients as we are not registered to sell these medicines legally." *** "……However, we purchased these unsealed cancer medicine which were spurious from Neeraj Cahuhan and Tushar Chauhan without any bill or tax invoices. Further, on being specifically asked, I state that we had sold these spurious fake cancer medicines to Sri Guru Harkishan Sahib, Chandigarh to the tune of 3 crores approx. On being specifically asked, I state that approximately funds Rs. 2 Crores were transferred to Neeraj Chauhan through banking channel and approximately Rs.80 Lakhs were transferred to Neeraj Chauhan through Hawala Channel in Cash in respect of sale proceeds of aforesaid fake and spurious cancer medicine. In this connection, I submit statement of bank accounts no. 632201515747 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hay Kumar are reproduced herein under: 6. Viphil Jain: Bank Name & A/c No Transactions Balance ICICI bank ltd. A/c No 113501003702 * 09.01.2023: Rs 1,00,000/-Credited from the account/mobile number 9717538497 (accused Tushar Chauhan) * 02.02.2023: Rs 25,000/-Credited from the account/mobile number 9717538497 (accused Tushar Chauhan). * 20.03.2023: Rs 95,000/-Credited from the account/mobile number 9717538497 (accused Tushar Chauhan). * 12.06.2023: Rs 1,00,000/-Credited from the account of accused Tushar Chauhan. * 04.07.2023: Rs 90,000/-Credited from the account of accused Tushar Chauhan. * 31.07.2023: Rs 25,000/-Credited from the account of accused Suraj Shat. * 04.08.2023: Rs 45,000/- & 50,000/- Credited from the account/ mobile number 9717538497 (accused Tushar Chauhan). * 29.08.2023: Rs 24,000/-Credited from the account/mobile number 9717538497(accused Tushar Chauhan). * 03.01.2024 Rs 25,000/-Credited from the account/mobile number 9717538497 (accused Tushar Chauhan). * 06.02.2023: Rs 30,000/-Credited from the account/mobile number 9717538497 (accused Tushar Chauhan). * 14.02.2024: Rs 5,00,000/-Credited from the account of Delhi Medicine (Akshay Kuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,000/- credited from the Delhi Med (Akshay Chandigarh) 1,48,130/- 46. The relevant extracts of the First Supplementary Prosecution Complaint under the heading of „Investigation with Banks' reads as under: "..In his statement recorded under section 50 of PMLA, 2002, Akshay stated that he purchased spurious anti-cancer medicines from Neeraj Chauhan and Tushar Chauhan at the below mentioned rates and sold the same to Sri Guru Harkrishansahib C Eye Hospital Trust. TABLE-11 Sr.No. Name of the drug Purchase Price per vial from Neeraj Chauhan 1. Keytruda 1,30,000/- 2. Opdyta 62,000/- 3. Perjeta 1,25,000/- 5. Bevatas 8,500/- Further, Akshay Kumar stated that he used to earn profit by selling filled vials of spurious anti-cancer medicines having details as under:- TABLE-12 Sr.No. Description/Name of anti-cancer medicine Profit earned per vial of spurious anti-cancer medicines. 1. For Keytruda vial 10,000 2. For Tecentriq vial 12,000 3. For Perjeta vial 9,000 5. For Infinzi vial 10,000 Further, Purchase Manager of Sri Guru Harkrishan sahib C Eye Hospital Trust during their statement recorded under section 50 of PMLA, 2002 provided the details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as Hawala networks, thereby creating a financial trail of laundering proceeds or proceeds of crime. His admission regarding the deletion of WhatsApp conversations concerning these transactions further strengthens the interference of culpability. 51. It is further observed by this Court that the corroborative testimony of co-accused Rajesh Kumar, his business associate, reinforces the applicant's role in managing the financial affairs of M/s Delhi Medicine Hub. He stated that he executed bank transfers and cash withdrawals on the express instructions of the applicant, including payments made to co-accused persons namely Deepali Jain and Neeraj Chauhan. Furthermore, evidence derived from the supplementary prosecution complaint indicate that the profit generated from these transactions, amounting to Rs. 8,81,000/- from M/s Delhi Medicine Hub and Rs. 7,39,000/- from M/s Cancer Medicine Agency, constitutes proceeds of crime as defined under the PMLA. These financial gains, acquired through the sale of counterfeit medicines prima facie indicate the commission of offence of money laundering. 52. Moreover, the investigation findings also indicate that the applicant's illicit dealin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 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 Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. [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.]" 54. This Court shall now proceed to analyze the statutory framework under Section 45 of the PMLA which governs the grant of bail in cases of money laundering. Section 45 of the PMLA imposes strin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaining to bail under PMLA offences. 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), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless-- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not re-write this principle to mean that deprivation is the norm and liberty is the exception. As set out earlier, all that is required is that in cases where bail is subject to the satisfaction of twin conditions, those conditions must be satisfied. *** Scope of inquiry under Section 45 PMLA 16. Coming back to the scope of inquiry under Section 45, Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1], while reiterating and agreeing with the holding in Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : 2005 SCC (Cri) 1057], held that the court while dealing with the application for grant of bail in PMLA need not delve deep into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investigation and further commission of the offence while on bail. 65. Secondly, 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 evidence shows deliberate concealment of the origin of funds and the layering of transactions to evade detection by regulatory authorities. The sheer scale of operations, involving the movement of funds across multiple jurisdictions, use of hawala channels, and sale of counterfeit medicines to unsuspecting patients and hospitals, underscores the organized and syndicated nature of the offence. 66. The respondent has provided a detailed representation of the modus operandi of the accused persons in the form of a graphic illustration. 67. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not only entails significant financial implications but also poses a grave risk to public health and safety. 73. As observed in the foregoing paragraphs, but not being repeated for the sake of brevity, the applicant in the present case is alleged to have played an active role in the procurement, distribution, and financial management of the illicit business. 74. The evidence on record, including financial transactions and digital communications, suggests a well-orchestrated operation which demands a higher threshold of scrutiny before granting bail. The investigating agency has highlighted the potential risk of the applicant tampering with evidence and influencing witnesses, thereby, affecting the integrity of the ongoing investigation. 75. In the present case, the applicant has failed to demonstrate that his release would not pose a risk to the investigative process. The applicant's financial dealings, the intricate network of the accused persons, and the continuing investigation reinforce the respondent's concerns regarding the potential for tampering with evidence and influence of witnesses. 76. Thus, in addition to failing to satisfy the twin conditions under Section 45 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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