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TMI Blog2025 (2) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... 20B 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 by SI Gulab Singh. The complaint alleged the involvement of several accused persons in the procurement, manufacturing and sale of spurious anti-cancer medicines. 3. In the said FIR, it has been alleged that the primary accused, namely Viphil Jain and Suraj Shat, in collusion with their several associates, were engaged in the illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta. These counterfeit drugs were allegedly manufactured and distributed in the market to unsuspecting cancer patients. 4. Pursuant to the information received, the police formed six teams to conduct simultaneous raids across Delhi-NCR on 11th March, 2024. During the raid at Flat No. 1101, Block-2, Eleventh Floor, CSP Units, DLF Capital Greens, Moti Nagar, New Delhi, the accused persons were allegedly caught in the act of filling empty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the witnesses is very remote. 12. Subsequently, the applicant sought regular bail before the learned Special Judge, which was rejected vide order dated 18th September, 2024. Hence, the present bail application. 13. Mr. Siddharth Aggarwal, learned senior counsel appearing on behalf of the applicant submitted that the applicant has already been granted bail by the Coordinate Bench of this Court in FIR No. 59/2023. While granting bail, the Court observed that the evidence in the case is primarily documentary in nature and is already in police custody, thereby significantly reducing the possibility of tampering with evidence or influencing witnesses. The applicant submits that since the present case under the PMLA arises from the same predicate offence, the reasoning applied in the previous bail order should be extended to the present matter. 14. It is submitted that no spurious medicines, vials or incriminating materials have been recovered from the applicant. His arrest is based solely on the disclosure statements of co-accused persons, which as per the Hon'ble Supreme Court's decision in Prem Prakash v. Enforcement Directorate, (2024) 9 SCC 787, do not constitute substantive e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent's case lacks a complete evidentiary chain to establish the petitioner's involvement in the alleged offence. 19. It is submitted that as per the proviso to Section 45(1) of the PMLA, individuals accused of laundering money below Rs. 1 Crore are entitled to bail at the discretion of the Special Court and fall under the exemption from the applicability of the twin conditions prescribed under Section 45 of the PMLA. In the present case, the alleged amount involved falls below the said threshold, thereby making the applicant eligible for the benefit under the statutory provision. 20. It is submitted that the established principle that bail is the rule and jail is an exception, as reiterated by the Hon'ble Supreme Court in multiple judgments including Manish Sisodia v. Enforcement Directorate, 2024 SCC OnLine SC 1920. The applicant has been in custody for a substantial period and continued detention would amount to pre-trial punishment, violating the applicant's fundamental right under Article 21 of the Constitution of India. 21. It is submitted that considering the voluminous nature of documents and the complexity of the case, the trial is likely to be protracted. It is submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the procurement of empty vials and related paraphernalia through hawala channels, making it difficult for authorities to trace the source of funds. With regard to integration, it is submitted that the applicant reinvested the laundered funds into the conspiracy by providing financial support for procuring sealing and capping machines, thereby furthering the manufacturing and distribution of counterfeit medicines. The applicant's financial involvement clearly indicates his direct role in the perpetuation of the crime. 28. It is submitted that the learned Special Judge has rightly rejected the applicant's bail application after considering the severity of the allegations and the potential risk of evidence tampering and witness intimidation. It is submitted that the trial court correctly concluded that the applicant failed to satisfy the twin conditions under Section 45 of the PMLA, and that his release would compromise the integrity of the ongoing investigation. It is submitted that the learned Special Judge's order is well-founded and consistent with the legislative intent to curb organized economic offences. Reliance in this regard has been placed on the judgments of the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 624, which states that the courts should refrain from conducting a mini trial at the stage of bail and should instead assess whether a prima facie case is made out. 33. In the light of the foregoing submissions, it is prayed that the present bail application may be dismissed. 34. Heard the counsel for the parties at length and perused the material available on record. 35. 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 multi-fold. Firstly, the alleged amount involved falls below Rs. 1 Crore, making the applicant eligible for the benefit of the statutory proviso that allows discretion in granting bail. Secondly, it has been contended that even if it is assumed for the sake of argument that the proviso is not applicable to him, the applicant has satisfied the twin mandatory conditions under Section 45 of the PMLA, i.e., whether there are reasonable grounds to believe that he is not guilty of the offence and whether he is unlikely to commit any offence while on bail. Lastly, the statutory presumption of guilt under Section 24 of the PMLA applies in the present case and in view of the same, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. At this stage, it is to be determined 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. In light of the same, it is imperative to carefully examine the prosecution complaint, statements of the applicant and co-accused persons alongwith the relevant bank statements. 40. Accordingly, this Court has referred to the statement of the co-accused persons, relevant extracts of which are as under: "Statement of Sh. Suraj Shat recorded under Section 50 of the PMLA reads as: iv. He disclosed that he had purchased two Cap Sealing Machine "Vial Cap Sealing Machine" in his name; one for 49 Page 42 of 140 the purpose of re-capping of vials of Keytruda anti-cancer medicines and another for the purpose of re-capping of vials of Opdyta anti-cancer medicine on instruction of Aditya Krishna as Aditya Krishna was also engaged in the preparation and distribution of spurious anti-cancer medicines. v. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GI Airport for further supply to various places all over India. He also stated that these small packs of unsealed vials of anti-cancer medicines were further delivered through one Vinod, employee of Blue Dart. For this work, Aditya Krishna used to give him Rs. 500/- per small box (parcel). xi. He received funds in his bank account 016651100004793 from M/s Popular Medicines Specialties on instruction of his employer Viphil Jain. He stated that M/s Popular Medicines Specialty controlled by Aditya Krishna to whom Viphil Jain used to sell unsealed vials of spurious anti-cancer medicines. Sometimes, Viphil Jain used to sell these vials on credit to Aditya Krishna. He further stated that the funds received in his bank accounts from Aditya Krishna is nothing but the sale proceeds of these vials of spurious anti-cancer medicines sold without bill. On instruction of Viphil Jain, he received funds in his bank account and transferred it to the bank account numbers provided to him by Viphil Jain." *** "I used to supply Refilled Anti Cancer Injections in the market as per th instructions of Viphil Jain by contacting my acquaintance Aditya Krishna who lives in Mujaffarpur, Bihar. Aditya Kr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ti-cancer medicines without any bill and invoice in cash from Aditya Krishna, Neeraj Chauhan, Gagan Khurana, Ayonij Jain and himself and used to sell the same to his customers in India as well as abroad. xi. That Viphil Jain received funds to the tune of Rs. 23,00,000/- from M/s Delhi Medicine Hub (Akshay Kumar) in the bank account of his son Sanyam Jain. He used to sell unsealed vials of anti-cancer medicines without any bill and invoice to M/s Delhi Medicine Hub mostly in cash. However, some balance funds were received in his bank account. As such, M/s Kesha Enterprises also paid the balance amount in the bank account of his son Sanyam Jain. xii. He had received funds of Rs. 11.40 lacs from M/s Delhi Medicine Hub (Akshay Kumar) Rs. 95,000/- from M/s Cancer Medicine (Akshay Kumar) in the bank account number 1338104000051484 Rs. 24.46 lacs from Aditya Krishna Rs. 7.55 lacs from M/s Popular Medicine Specialties Rs. 13.00 lacs from Suraj Shat in the bank account of his wife Deepali Jain, which was nothing but the sale proceeds of spurious/ fake anti-cancer medicines." Statement of Sh. Parvez Khan recorded under Section 50 of the PMLA reads as: "xi. That, Pravez Khan earlier s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditya Krishan deposited cash amount Rs. 18,00,000 from 07.12.2023 to 11.12.2023 (i.e. within 5 days and in 4 tranches) details as below: Bank account No. 52510901529 of Aditya Krishna maintained with Standard Chartered Bank TABLE-19 Sr. No. Date Credit as cash 1 07.12.2023 10,00,000/- 2 09.12.2023 2,00,000 3 10.12.2023 4,00,000 4 10.12.2023 2,00,000 Total (A) 18,00,000/- 6.18 Further on scrutiny of account no. 030605010481 in the name of Aditya maintamed ICICI Bank Lmuted (RUD-34), it is revealed that Aditya Krishan deposited cash amount Rs. 25,90,000 from 09.05.2023 to 29.02.2024 details as below: Bank account No. 030605010481 of Aditya Krishna maintained with ICICI Bank Limited TABLE-20 Date Description Credit (Cash) 09-05-2023 CAM/02512SRY/CASH DEP-Other/09-05-23/8912 98000 09-05-2023 CAM/02512SRY/CASH DEP-Other/09-05-23/8914 67500 09-05-2023 CAM/02512SRY/CASH DEP-Other/09-05-23/8916 20500 22-05-2023 CAM/68011SRY/CASH DEP-Other/22-05-23/6013, 71000 22-05-2023 CAM/68011SRY/CASH DEP-Other/22-05-23/6015, 4000 23-05-2023 BY CASH-HYDERABAD SHAKER, 150000 25-05-2023 BY CASH -MUZZAFARPUR, 190000 29-05-2023 CAM 02512SRY/CASH DEP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shna maintained with ICICI Bank Limited TABLE-21 Date Description Credit (Cash) 10-02-2023 CAM/34361HHR/CASH DEP/10-02-23 9183, 30000 20-03-2023 CAM/62541SRYCASH DEP/20-03-23/3920, 25500 05-05-2023 CAM/02512SRY/CASH DEP-Other 05-05-23/8519, 100000 05-05-2023 CAM/02512SRY/CASH DEP-Other/05-05-23/8521, 76000 05-05-2023 CAM/02512SRY/CASH DEP-Other/05-05-23/8523, 10000 24-05-2023 CAM/02512SRY/CASH DEP-Other/24-05-23/510, 88500 24-05-2023 CAM/02512SRY/CASH DEP-Other/24-05-23 512, 99000 07-07-2023 BY CASH -NAGARCOIL 6095 ADITYA, 12000 10-08-2023 CAM/00011ARY/CASH DEP-Other/10-08-23 9978, 100000 13-09-2023 CAM/60952SRY/CASH DEP-Other/13-09-23/8059, 12000 22-02-2024 CAM/54241HRY/CASH DEP-Other/22-02-24/6988, 94500 22-02-2024 CAM/54241HRY/CASH DEP-Other/22-02-24/6990, 5500 22-02-2024 CAM/54241HRY/CASH DEP-Other/22-02-24/6992, 89500 Total (C) 7,42,500/- Total Cash Deposit: A+B+C = Rs. 51,34,500/- 6.20 During his custodial Interrogation, Aditya Krishna stated that he used to purchase Keytruda Injection from Viphil Jain and sold the same in open market thereby generating proceeds of crime. He further stated that the sale and purchase o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-12-2023 UPI/371441539759/UPI/shatsuraj@okaxi/CnetralBank.Of/ICIa479282d1c36433fa01fa32da95of998/ 50000 20-12-2023 UPI/335427327398/UPI/shatsuraj@okaxi/CnetralBank.Of/ICI0c27042d8511484eb99a57ba3219cbd9/ 50000 23-12-2023 UPI/372275903459/UPI/shatsuraj@okaxi/CnetralBank.Of/ICI29f0735ad0bd4ed78953046d824595b3/ 50000 23-12-2023 UPI/372377444371/UPI/shatsuraj@okaxi/CnetralBank.Of/ICIda7d7b3ed85f46cfaa61fd21372caa9d/ 50000 09-03-2024 UPI/406922161277/UPI/shatsuraj-1@oka/Yes Bank Ltd./ICI3803739fb30d459985640a15c541b3 50000 Total 8,36,000 6.23 Further, Aditya Krishna his custodial Interrogation, admitted to have used the Hawala Channels to receive payments and make payments for the sale and purchase of anti-cancer medicines which remain unaccounted as the amount which was sent or received by Hawala Channel never came In the banking system. The whatsapp chat of Aditya Krishna which evidences that Aditya Krishna uses Hawala Channel for making and receiving payments is as below: 6.24 Further, Aditya Krishan transferred Rs. 80,000/- on 08.02.2024 his bank account No. 030605010481 maintained with ICICI Bank Limited to the account No. 016631100004793 of Suraj S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Section 45 of the PMLA, which lays down the statutory mandate regarding the grant of bail in such cases and establishes the twin conditions that the applicant must fulfill to secure release on bail. "Section 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 2[under this Act] shall be released on bail or on his own bond unless--] (i) the Public Prosecutor has been given a 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, 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 excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther law applicable at the time. This makes it clear that the provisions of the PMLA are to be applied over and above the general principles of bail applicable to criminal offences under the CrPC, thereby, reinforcing the stringent approach adopted by the legislature in dealing with money laundering offences. 46. Thirdly, the proviso to Section 45(1) of the PMLA carves out an exception to the rigorous twin conditions by allowing bail to be granted, at the discretion of the Special Court, to specific categories of persons, namely: (i) individuals below the age of sixteen years, (ii) women, (iii) persons who are sick or infirm, and iv) those accused, either alone or with others, of money laundering involving a sum of less than rupees one Crore. 47. 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. 48. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f bail. The discretion vests in the court, which is not arbitrary or irrational but judicial, guided by the principles of law as provided under Section 45 of the 2002 Act." These observations are significant and if read in the context of the recent pronouncement of this Court dated 9-8-2024 in of Sisodia v. Enforcement Directorate [Manish Sisodia v. Enforcement Directorate, (2024) 12 SCC 660 : 2024 SCC OnLine SC 1920], it will be amply clear that even under PMLA the governing principle is that "Bail is the Rule and Jail is the Exception". In para 52 of Manish Sisodia [Manish Sisodia v. Enforcement Directorate, (2024) 12 SCC 660 : 2024 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 princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itate 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. 51. The respondent has provided a detailed representation of the modus operandi of the accused persons in the form of a graphic illustration: 52. In Saumya Chaurasia v. Enforcement Directorate, (2024) 6 SCC 401, the Hon'ble Supreme Court has stated that the Courts should be mindful in keeping the evidence of movement of funds acquired out of the syndicate and utilization of the proceeds of crime to judge whether the individual is a part of the syndicate. The relevant part of the said precedent is herein below: "19. As stated hereinabove, the supplementary complaint was filed against the appellant along with the other accused on 30-1-2023, in which the summary of investigative findings against each of the accused persons have been recorded in Para 8 thereof. The detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Tiwari to Mrs Saumya Chaurasia. ED investigation has established that Mrs Saumya Chaurasia and her family went on a spree of acquiring immovable assets during the period which coincided with the coal levy scam. These assets of which she is the real beneficial owner were ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to the category of persons mentioned therein may be extended at the discretion of the court considering the facts and circumstances of each case, and could not be construed as mandatory or obligatory on the part of the court to release them. Similar benevolent provision for granting bail to the category of persons below the age of sixteen years, women, sick or infirm has been made in Section 437CrPC and many other special enactments also, however by no stretch of imagination could such provision be construed as obligatory or mandatory in nature, otherwise all serious offences under such special Acts would be committed involving women and persons of tender age below 16 years. No doubt the courts need to be more sensitive and sympathetic towards the category of persons included in the first proviso to Section 45 and similar provisions in the other Acts, as the persons of tender age and women who are likely to be more vulnerable, may sometimes be misused by the unscrupulous elements and made scapegoats for committing such crimes, nonetheless, the courts also should not be oblivious to the fact that nowadays the educated and well placed women in the society engage themselves in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifficult to satisfy the first condition that the applicant is 'innocent'. 62. For the second condition of Section 45 of the PMLA, the pattern of transactions and extensive network established for the distribution of spurious medicines suggests that the applicant had a well-structured setup. The involvement of multiple bank accounts, cash transactions and hawala channels indicate a high risk of continued engagement in similar activities if released. 63. The applicant's admission of using hawala channels to facilitate unaccounted transactions raises concerns about the potential interference with the investigation and further commission of the offence while on bail. 64. At this stage, it is pertinent to note that the learned senior counsel for the applicant has also contended that the applicant has been released on bail in the predicate offence in FIR No. 59/2024 vide order dated 29th July, 2024 in Bail Appln No. 2236/2024 by the Coordinate Bench of this Court. 65. It has been submitted that the present PMLA proceedings against the applicant arises out of the schedule offence in the aforesaid FIR and since the petitioner has been released on regular bail in that case, the same rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, it would be easiest mode for the accused in a case under the PMLA to scuttle and/or put an end to the investigation under the PMLA. Therefore, the said contention needs to be rejected." Based on the aforesaid observation, since the conclusion was drawn that in case of money laundering which involves many stages of "placement", "layering", it require systematic analysis and investigation and upholding the impugned order of remanding the applicants to the judicial custody, the application was dismissed. It is to be noted that this decision was delivered on 16-3-2021, a few days before the Supreme Court in Vijay Madanlal Choudhary case offered further clarification contemplating three contingencies when the ECIR i.e. investigation under PMLA, came to an end. 80. In the wake of the above reading, we are satisfied that grievance of the petitioners do not deserve any consideration. Necessarily, the writ petitions filed by different accused, seeking similar relief cannot be entertained. Hence, the petitions are dismissed. In view of the dismissal of the writ petitions, pending interim applications also stand disposed off." 68. The grant of bail in the predicate offence, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and (b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-laundering." 75. 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. 76. 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. 77. 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once these foundational facts are established by the prosecution, the onus must then shift on the person facing charge of offence of money-laundering-to rebut the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh 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 detention is justified under the PMLA. 83. Therefore, 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 is guilty of the offence of money laundering. The procedural safeguards under the PMLA were duly followed, and the challenge to the legality of the arrest is without merit. Furthermore, 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 and rejected. 84. 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, 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 war ..... X X X X Extracts X X X X X X X X Extracts X X X X
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