The section 45 of Prevention of Money Laundering Act (PMLA) 2002 lays down stringent criteria for bail in cases related to money laundering. However, amidst its rigour, the provision also incorporates a crucial exception, especially benefiting women.
Section 45 of the PMLA specifies that bail can be considered for a money laundering accused if two conditions are met: there should be prima facie satisfaction that the accused didn’t commit the offence and that they are unlikely to commit any offence while on bail.
A 3-judge bench comprising AM Khanwilkar, Dinesh Maheshwari, and CT Ravikumar, JJ, delivered exhaustive judgments spanning 545 pages, addressing crucial aspects of the Prevention of Money Laundering Act, 2002 (PMLA). The focus was on the interpretation of Section 45 of the 2002 Act, which imposes twin conditions for granting bail in money laundering cases.
Read More: Section 45 of PMLA imposes No Bar on Bail, if Trial is Delayed: Justice Sanjiv Khanna
The Delhi High Court denied bail to Ambience Group promoter Raj Singh Gehlot in a money laundering case. Gehlot was arrested under the Prevention of Money Laundering Act last July after an Enforcement Directorate raid on his company AHPL and other Ambience group firms. The case stems from a 2019 FIR alleging money laundering in the construction of Leela Ambience Convention Hotel in Delhi. The ED found that a significant portion of the loan for the hotel project was diverted by AHPL and Gehlot. Gehlot sought bail citing his custody since July, but the ED opposed, citing the seriousness of the allegations. Justice Manoj Kumar Ohri dismissed the bail plea, citing the gravity of the alleged offences and the parameters of Section 45(1) of the PMLA.
The Punjab & Haryana High Court granted bail under the Prevention of Money Laundering Act, 2002 (PMLA) to a man weighing 153 kg due to his obesity, which was considered a disease leading to other health issues. The petitioner, Pranjil Batra, was represented by Mr Vikram Chaudhri and others, while the respondent was represented by Mr Satya Pal Jain. Batra, an employee of a co-accused company, handled software for accounting and business-related tasks, without holding any directorial or shareholder position. The court noted that the petitioner’s medical condition, including obesity, hypertension, diabetes, and coronary artery disease, posed serious health risks, qualifying him under Section 45 of the PMLA for bail. Justice Gurvinder Singh Gill emphasised that obesity is a disease itself, exacerbating other health issues. Consequently, the court ordered Batra’s release on regular bail upon furnishing necessary bonds to the satisfaction of the relevant judicial authorities.
The Delhi High Court recently rejected a bail plea filed by Dalip Jindal, who was accused of defrauding banks worth Rs. 527.32 crore under the Prevention of Money Laundering Act (PMLA). Jindal, associated with the Bankey Bihari Group of Companies, allegedly engaged in fraudulent transactions involving false sales and purchases. The court observed that the twin conditions specified in Section 45 of the PMLA were not satisfied, as evidence indicated Jindal’s involvement in money laundering activities. Despite arguments from both sides, including Jindal’s counsel, Mr. Mohit Mathur, and the respondent’s counsel, Ravi Prakash, the court held that Jindal failed to demonstrate innocence and potential compliance while on bail.
A Supreme Court division bench comprising Justice A.M. Khanwilkar, Justice Dinesh Maheshwari, and Justice C.T. Ravikumar has upheld the “twin conditions” for granting bail under the Prevention of Money Laundering Act, 2002 (PMLA). The bench’s decision came after considering multiple petitions challenging these conditions as arbitrary and against the presumption of innocence in criminal law jurisprudence. Despite arguments contending that the amendment to revive Section 45, previously struck down as unconstitutional, was invalid, the court upheld the validity of the “twin conditions” following a 545-page judgment. The bench stated that Parliament had the authority to amend the provision to address the defects highlighted in previous court rulings. It disagreed with observations made in previous cases and affirmed the seriousness of money laundering offences and their impact on national sovereignty and integrity.
The Delhi High Court granted interim bail to Lava Managing Director under the Prevention of Money Laundering Act, 2002 (PMLA), emphasising the critical importance of prioritising life-threatening medical emergencies. The applicant, Hari Om Rai, sought bail on medical grounds due to chronic heart-related issues. Despite opposition from the Directorate of Enforcement, the court observed the severe nature of Rai’s medical condition and the urgent need for specialised care. Justice Swarna Kanta Sharma underscored the delicate balance between life and death in cardiac emergencies and granted interim bail for three months with specific terms and conditions.
The Delhi High Court rejected Manish Sisodia’s bail application in the Delhi Excise Policy Case under the Prevention of Money Laundering Act, 2002, citing violation of twin conditions. Despite arguments by senior advocates Mohit Mathur and Dayan Krishnan, who represented Sisodia, the court found insufficient evidence to infer Sisodia’s involvement in money laundering. Additional Solicitor General of India S.V. Raju, representing the Enforcement Directorate, argued that Sisodia played a key role in concealing and using proceeds of crime. Justice Dinesh Kumar Sharma observed that Sisodia failed to meet both the twin conditions and the triple test required for bail under Section 45 of the PMLA, thus denying him bail.
The Delhi High Court granted interim bail to Sameer Mahandru under the Prevention of Money Laundering Act (PMLA), 2002 in the Delhi Excise Policy Case. Mahandru, seeking interim bail, formed a partnership firm called “Indo Spirits” for a wholesale L-l license under the Delhi Excise Policy, 2021-22. The court observed that Mahandru’s health condition warranted immediate medical attention, satisfying the test of the proviso to Section 45(1) of the PMLA. Therefore, Mahandru was granted interim bail for six weeks on furnishing a personal bond of Rs. 10,00,000/- with two sureties.
The Delhi High Court rejected the bail application of Dalip Jindal under the Prevention of Money Laundering Act, 2002 (PMLA), citing incriminating evidence indicating his involvement in money laundering offences. Jindal, seeking bail in a case registered under Sections 3 and 4 of the PMLA, was allegedly linked to fraudulent activities related to the Bankey Behari Group of Companies. The court noted that investigations revealed substantial funds defrauded, and Jindal failed to demonstrate innocence or the likelihood of refraining from further offences while on bail. The court emphasised the gravity of economic offences and the absence of grounds to grant bail, ultimately dismissing the application.
A Single Bench of the Delhi High Court granted bail to chartered accountant Manish Kothari in a money laundering case under the Prevention of Money Laundering Act (PMLA) 2002, based on a prima facie view of the evidence. Kothari had filed a bail application after his earlier application was dismissed by the Special Judge. The court observed that while Kothari’s involvement in the case needed to be examined during the trial, his claim of acting on provided information couldn’t be dismissed outrightly. The Bench emphasised that bail proceedings shouldn’t turn into mini trials and should only be based on prima facie evidence. Kothari was granted bail with certain conditions.
Today, a two-judge bench of the Supreme Court declared Section 45(1) of the Prevention of Money Laundering Act, 2002 unconstitutional, citing violations of Articles 14 and 21 of the Constitution of India. This section imposed additional conditions for bail, requiring the Public Prosecutor’s opposition and satisfaction of the court regarding the accused’s innocence and future conduct. The bench, comprising Justice R.F Nariman and Justice Sanjay Kishan Kaul, found these conditions discriminatory and manifestly arbitrary, as they could deny bail to individuals unrelated to money laundering offences. The bench ordered all cases where bail was denied under this provision to be reconsidered without the application of these conditions, emphasising the importance of personal liberty and prompt judicial review.
In the Unitech Case, a Single Bench of the Delhi High Court granted bail to Preeti Chandra and criticized the sub-classification of women under the Prevention of Money Laundering Act, 2002 (PMLA) as arbitrary. Chandra, wife of Sanjay Chandra, was accused of involvement in illegal activities related to the Unitech Group. The court noted that applying twin conditions of Section 45 PMLA only to certain categories of women violates Article 14 of the Constitution. It ruled that Chandra is exempt from these conditions and must satisfy a triple test for bail. Chandra had been investigated multiple times and held in custody for over 20 months.
The Delhi High Court granted bail to petitioners in an extortion case, clarifying that Section 45 of the Prevention of Money Laundering Act (PMLA) doesn’t automatically prevent bail. Justice Dinesh Kumar Sharma emphasised the need to assess the evidence and determine if there are reasonable grounds to believe the accused is not guilty. The petitioners were accused of orchestrating a funds extortion scheme through impersonation, transferring extorted funds via hawala channels.
The court highlighted the importance of evidence linking the accused to the alleged crime and considered factors like the accused’s age and health, noting that pre-trial detention shouldn’t be punitive. It rejected arguments for denying bail solely based on the nature of the offence and emphasised the presumption of innocence until proven guilty. Despite prosecution claims labelling the petitioner as a hawala operator, the court stressed the need to evaluate the petitioner’s role specifically in the present case. It underscored the importance of focusing on the evidence and the presumption of innocence, especially in cases of serious offences.
The Supreme Court has invalidated twin conditions for granting bail under the Prevention of Money Laundering Act. In an order dated October 7, 2021, the Court issued guidelines for granting bail to accused individuals who were not arrested during the investigation. Additional Solicitor General Mr. S.V. Raju and Senior Advocate Mr. Sidharth Luthra agreed to two conditions for applying the guidelines: the accused must not have been arrested during the investigation and must have cooperated throughout. However, the Court cautioned against interpreting economic offences differently and emphasised its intention to simplify the bail process. The Court urged the parties to collaborate and specify the clarifications they require.
In a significant ruling, the Delhi High Court stated that Enforcement Directorate (ED) summons cannot be invalidated solely because the required documents for the investigation were not specified. The petitioner, named as accused No. 3, challenged the continuation of the ED investigation against M/s Technovaa Plastic Industries Private Limited and others. The petitioner argued that an audit declared unreliable by the National Company Law Tribunal Ahmedabad should invalidate any proceedings arising from it.
However, the ED contended that the petitioner cannot be shielded from coercive action at the initial stage and that protective orders cannot be granted ignoring the mandate of Section 45 of PMLA, 2002. Justice Anoop Kumar Mendiratta emphasised that ED summons cannot be quashed solely due to unspecified documents, highlighting the authority’s duty to inquire into proceeds of crime as per the PMLA, 2002.
The Delhi High Court upheld the remand of Chinese national Guangwen Kuang @ Andrew in the Vivo Prevention of Money Laundering Act (PMLA) Case. The petition challenged the remand order dated 10.10.2023 passed by the Sessions Court, seeking the release of the petitioner. The allegations involved the use of forged documents by Chinese shareholders of GPICPL, projecting the company as a subsidiary of Vivo, China. The petitioner facilitated the incorporation of the company. The court observed that the remand order complied with the provisions of Section 19 and Section 45 of PMLA, and the grounds for arrest included non-cooperation and evasive replies.
Advocate Rohit Tandon, detained in a money laundering case post-demonetisation, was granted bail by the Delhi High Court. Allegations included conspiracy to convert demonetised currency into monetised currency. Despite previous bail applications being dismissed, the court considered the SC ruling in Nikesh Tarachand Shah vs. Union of India, declaring Section 45(1) of PMLA unconstitutional. With the offence carrying a maximum sentence of seven years and the petitioners already in custody for over a year, bail was granted. They were directed to furnish a personal bond of Rs.5 lakhs each with two sureties and not to leave the country without the Trial Court’s permission.
The Delhi High Court denied bail to Abhishek Boinpally, stating that he doesn’t meet the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA Act). Boinpally challenged the legality of his arrest and sought bail through a writ petition. The court noted that the petitioner’s arguments lacked merit and upheld his detention, emphasising the importance of meeting the conditions outlined in Section 45 of the PMLA for bail eligibility.
The Delhi High Court ruled that bail under the Prevention of Money Laundering Act (PMLA) cannot be automatically granted for treatment at a specialised hospital. Ramesh Chandra, aged above 85 and a director of Unitech Limited, sought extension of interim bail due to poor health. The court extended bail until March 16, 2024, directing Chandra to surrender to jail authorities. It emphasised that medical grounds alone do not guarantee bail, requiring a serious, life-threatening ailment necessitating specialised treatment. The court instructed jail authorities to monitor Chandra’s health closely and provide necessary medical care.
The Delhi High Court granted anticipatory bail to a Chartered Accountant (CA) in a case involving forged Form 15CA/CB certificates. The court observed that the allegation does not amount to a Money Laundering Offence. The petitioner, accused in the FIR, argued that the offence doesn’t fulfil the criteria of money laundering as no “proceeds of crime” were generated. The court considered the petitioner’s health condition, having undergone kidney surgeries, and granted bail on a personal bond of Rs. 1,00,000 with certain conditions.
The Supreme Court rejected a bail appeal under Section 45 of the Prevention of Money Laundering Activities Act, observing no obligation to grant bail solely based on gender. The appellant, Saumya Chaurasia, was arrested for various offences, including those under the IPC and PMLA. The court imposed a cost of Rs. 1 Lakh for misrepresentation of facts. Despite the appellant’s arguments, the court held that the discretion to grant bail lies with the court, considering each case’s facts.
The bench emphasised exercising discretion judiciously, taking into account factors like the person’s involvement in the alleged offences and the evidence collected by the investigating agency. Since there was no discharge, acquittal, or quashing of the criminal case against the main accused, Suryakant Tiwari, the appeal was dismissed.
The High Court of Patna granted anticipatory bail to the petitioner, ruling that the amendment to Section 45(1) of the Prevention of Money Laundering Act, 2002, introduced after the Supreme Court’s decision in Nikesh Tarachand Shah’s case, does not reinstate the twin conditions for bail, which were deemed unconstitutional. The petitioner, the widow of the deceased younger brother of the main accused, was involved in a case related to the purchase of properties and alleged deposits by the main accused. The court emphasised that the Supreme Court’s decision in Nikesh Tarachand Shah’s case remains relevant despite the amendment. The petitioner was directed to furnish a bail bond of Rs. 10,000 and to appear before the Police/Court as required.
The Delhi High Court recently ruled that granting bail on medical grounds under the first proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002 (PMLA) is discretionary. The petitioner, Sanjay Jain, sought bail due to health issues in a case involving the Enforcement Directorate. Jain’s wife filed a petition seeking his release on regular bail, citing his deteriorating health.
The court directed the Director of AIIMS to evaluate Jain’s medical condition, considering his multiple ailments. The Enforcement Directorate argued that Jain’s medical conditions weren’t serious and he was receiving adequate treatment in jail. However, the court emphasised the need for a medical expert’s opinion and directed AIIMS to form a Medical Board to assess Jain’s health.
The High Court of Jharkhand ruled that a person can be granted bail under Section 45 of the Prevention of Money Laundering Act (PMLA) if they are sick or infirm. The case involved allegations against the petitioner, a Chartered Accountant, regarding bribery in insolvency resolution processes. The court overturned a previous order and allowed the petitioner’s application to be represented by counsel instead of appearing personally.
The Delhi High Court considered a petition filed by Sanjay Jain under Section 45 of the Prevention of Money Laundering Act seeking regular bail. The case involved allegations of fraud and cheating against the MD of Indian Farmers Fertilizer Cooperative Limited (IFFCO) and others. The court noted that offences under Sections 420 and 120B of the Indian Penal Code, besides provisions of the Prevention of Corruption Act, are mentioned in Schedule-A of the PMLA, making them predicate offences for money laundering. The petitioner argued that for prosecution under the PMLA, there should be a scheduled offence with proceeds of crime generated, and the money trail should be unbroken. It was highlighted that IFFCO and IPL are private companies, and though the Prevention of Corruption Act does not apply to their office bearers, offences under Sections 120B r/w 420 IPC are scheduled offences under the PMLA. The court further considered arguments regarding bail conditions under Section 45 of the PMLA and the admissibility of confessions under Section 50 of the PMLA.
The Special Court under the Prevention of Money Laundering Act granted bail to Shiv Sena Member of Parliament Sanjay Raut after three months of his arrest in connection with the Patra Chawl redevelopment project in Mumbai. Allegedly involving a scam of over Rs. 1000 crores, the case centres around real estate businessman Pravin Raut, accused of cheating Patra Chawl residents. The court found no predicate offence or proceeds of crime established under the PMLA. It termed the arrest of MP Raut as illegal, emphasising the need for evidence, trials, and judgments even in PMLA cases.
The Supreme Court of India ruled that the conditions of Section 45 of the Prevention of Money Laundering Act, 2002 apply to anticipatory bail applications for money laundering offences. In a case involving an FIR by the Economic Offences Wing, a respondent approached the High Court seeking anticipatory bail. The High Court granted bail without considering Section 45, citing a previous Supreme Court decision. The Supreme Court overturned this decision, emphasising that Section 45 applies to anticipatory bail applications.
The Allahabad High Court denied bail to Abdul Razak Peediyakkal under the Prevention of Money Laundering Act, 2002, citing failure to meet the twin conditions of Section 45. Peediyakkal argued that he was falsely implicated as no case was made out against him under Section 3 of the PMLA. However, the court held that being involved in the original criminal activity is not necessary for prosecution for money laundering. As the applicant’s involvement in the offence was not ruled out, bail was rejected, and the trial court was directed to expedite proceedings.
The Chhattisgarh High Court denied bail to Mr. Laxmikant Tiwari under Section 45 of the Prevention of Money Laundering Act, 2002. Tiwari filed a bail application after being arrested in connection with offences under Sections 3 & 4 of the PMLA. The court noted that no case was registered against Tiwari in a related crime number and concluded that he failed to satisfy the twin conditions for bail under the PMLA. As a result, his bail application was rejected.
The Calcutta High Court ruled that charges under section 24 of the Prevention of Money Laundering Act (PMLA), 2002, related to fraudulent obtaining of money, cannot absolve one before a full-fledged trial. In the case of Mili Ghosh, the petitioner sought to overturn orders rejecting her discharge applications in cases under PMLA. Allegations involved a criminal conspiracy resulting in misappropriation from banks.
The court noted that a portion of the laundered money was transferred to the petitioner’s husband’s account, used for purchasing property jointly. Section 3 of PMLA broadly covers activities connected to money laundering. The court observed that despite the petitioner’s absence from certain events, her involvement in the laundering process couldn’t be ruled out. It held that a prima facie case existed against her, and she couldn’t be exonerated before a full trial.
The Punjab & Haryana High Court ruled that if the court has reason to believe a person isn’t guilty under the Prevention of Money Laundering Act, 2002, the Public Prosecutor need not be heard before granting bail. In a case involving Parkash Gurbaxani and Ashok Solomon, initially accused under Section 420 IPC, which is a scheduled offence under PMLA, the ECIR was quashed due to lack of scheduled offences. The petitioners argued they were falsely implicated, having been in custody since 16.02.2021, and cooperated during questioning. The court clarified that bail couldn’t be denied based solely on twin conditions under Section 45 of PMLA, which were now disregarded. It emphasised that without a specific amendment declaring them unconstitutional, these conditions couldn’t be revived. Therefore, the court considered the bail petitions under Section 438 of CrPC.
The Supreme Court clarified that under Section 3 of the Prevention of Money Laundering Act (PMLA), a person can be charged even if not directly involved in the scheduled offence but aids in concealing criminal gains. This ruling stems from a case involving Pavana Dibbur, former vice-chancellor of Alliance University, accused of fraudulent activities. Initially, the High Court upheld the charges, but the Supreme Court disagreed, stating that participation in money laundering itself is a crime. They emphasised that for a PMLA Section 3 offence, there must be a scheduled offence and proceeds connected to it. If all accused in the scheduled offence are acquitted, there can be no prosecution under PMLA Section 3. Similarly, if the scheduled offence proceedings are quashed, the PMLA charge also falls. In this case, since there was no allegation of criminal conspiracy in the scheduled offence, the appellant cannot be prosecuted under PMLA Section 3.
The Delhi High Court granted bail to Sai Chandrasekhar, accused of bank loan fraud under the Prevention of Money Laundering Act (PMLA). The case involves allegations of manipulating stocks resulting in a Rs. 1000 crore fraud. The accused, represented by Tanveer Ahmed Mir, argued that investigation is complete, and evidence is documentary and in possession of authorities, so further incarceration is unjustified. The respondent’s counsel claimed the accused conspired to cheat the company and manipulated inventory. Justice Rajnesh Bhatnagar noted that since certain bail conditions under the PML Act were struck down by the Supreme Court, regular bail conditions apply. With no flight risk or evidence tampering concerns, the court granted bail on the condition of a personal bond of Rs. 1,00,000/- and other restrictions.
The Delhi High Court granted bail to former Mumbai police chief Sanjay Pandey in a Prevention of Money Laundering Act (PMLA) case, finding insufficient evidence. The case involved allegations of illegal phone tapping at the National Stock Exchange (NSE). The court noted that the Enforcement Directorate (ED) failed to establish Pandey’s involvement in any criminal activity or acquisition of proceeds from a scheduled offence. The case originated from a CBI FIR against Pandey’s company, ISEC Services Private Limited, for alleged offences under various laws.
The court observed that no criminal conspiracy was proven between ISEC and NSE for illegal phone tapping. Justice Jasmeet Singh ruled that there were reasonable grounds to believe Pandey was not guilty and granted bail, imposing conditions including cooperation with the investigation and court appearances.
The Delhi High Court dismissed a petition by former Himachal Pradesh Chief Minister, Virbhadra Singh, stating that offenses under the Prevention of Money Laundering Act (PMLA) are cognizable. Singh, accused in a disproportionate assets/money laundering case, sought to quash proceedings against him and his family. The court clarified that arrest procedures under the Code of Criminal Procedure apply to PMLA proceedings. The Enforcement Directorate (ED) initiated the case based on a CBI complaint, alleging Singh amassed disproportionate assets during his tenure as Union steel minister. Despite Singh’s plea of “political vendetta,” the court refused to quash the case, with criminal proceedings subsequently initiated. The ED challenged Singh’s petition, arguing it premature, and the court dismissed it, stating it’s not the appropriate forum.
The court emphasised that PMLA investigations are distinct from general criminal law and do not require police powers. It upheld that offences under PMLA are cognizable, allowing arrests without court warrants, and ED’s investigative powers are not equivalent to those of the police. Therefore, general arrest procedures and fundamental rights still apply, albeit with modifications to accommodate PMLA provisions.
The Orissa High Court ruled that Section 45 of the Prevention of Money Laundering Act (PMLA) does not apply where alleged crime proceeds are under Rs. 1 Crore. The ruling came while considering an application for exemption from personal appearance under Section 205 of the Criminal Procedure Code (CrPC). The petitioner sought to quash an order denying exemption in a PMLA case. The court found the trial court’s order unsustainable, citing precedent and legal provisions. After arguments on the applicability of Section 205 CrPC in PMLA cases, the High Court set aside the order and remanded the matter for fresh consideration. Justice A.K. Mohapatra concluded the case, setting aside the impugned order.
The Delhi High Court granted bail to Raghav Magunta, son of a YSRCP MP, on medical grounds in the Delhi Excise Policy case. The case involves alleged irregularities in modifying the excise policy, with accusations against Manish Sisodia, a senior AAP leader. The court noted Magunta’s cooperation in the investigation and made the interim bail absolute. Siddharth Aggarwal, representing Magunta, argued that twin conditions under Section 45(1)(ii) of the Prevention of Money Laundering Act (PMLA) do not apply since the public prosecutor didn’t oppose the bail application. Justice Dinesh Kumar Sharma emphasized that the order shouldn’t set a precedent, and Magunta was released on regular bail with certain conditions.
The Delhi High Court instructed the Registrar of Adjudicating Authority under the Prevention of Money Laundering Act (PMLA) to ensure that all orders are served and uploaded on the website within 48 hours. This directive came in response to a petition by Bliss Adobe Pvt. Ltd., seeking a copy of an order and a stay on its implementation to appeal to the Appellate Tribunal. The court emphasised the importance of timely dissemination of orders to ensure fairness and avoid disputes.
The Telangana High Court denied anticipatory bail in a money laundering case, citing concerns that granting bail could hinder the investigation and evidence collection. The accused, alleged to be the main conspirator, is accused of misappropriating procurement orders for medicines and medical equipment, resulting in a loss of approximately Rs. 211 Crore to the state exchequer. The Department of Enforcement (DOE) alleges non-cooperation from the accused and seeks custody for further investigation. The accused claims cooperation and argues that the investigation is nearly complete. Justice K. Lakshman ruled that, based on Section 45 of the PMLA and Supreme Court precedent, the court couldn’t ascertain the accused’s innocence. The court directed the accused to surrender within ten days and instructed the Designated Court to reconsider the remand application.
The Delhi High Court granted bail to Dubai-based businessman Ramesh Mangalani under the Prevention of Money Laundering Act, 2002 (PMLA), for alleged involvement in syphoning off funds through fake invoices. The case, registered by the Enforcement Directorate (ED) under Sections 3 and 4 of the PMLA, stemmed from a complaint by Vinod Rajagopalan of M/s. Malav Holdings Private Limited. Mangalani, a resident of Dubai, cooperated with the investigation upon arrival in India and was subsequently arrested in Mumbai. He argued that he had no control over the affairs of Phoenix FZC and merely acted as an authorised signatory on instructions from family friends. The court found reasonable grounds to believe Mangalani’s innocence and concluded that he was not likely to commit further offences while on bail, considering his cooperation and role in the transactions.
In a significant ruling, the Additional Sessions Court, Delhi, emphasized that the term “proceeds of crime” cannot be presumed merely because it is mentioned in the complaint by the Enforcement Directorate (ED) in a Prevention of Money Laundering Act (PMLA) case. The case involved Mohan Madaan, accused in ECIR No.23/STF/2021, where it was alleged that his company exported sub-standard goods and fraudulently claimed duty drawbacks and refunds. The court noted that the prosecution must provide evidence demonstrating that the money was derived from criminal activity, rather than merely reciting the term “proceeds of crime.” It also highlighted discrepancies in witness statements and the absence of a charge sheet in the predicate offence after two years.
The Orissa High Court denied anticipatory bail to Khageswar Patra, an accused in the Odisha Honey Trap case, citing non-compliance with Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA). The case involved a racket allegedly blackmailing influential individuals with intimate pictures. Assets worth Rs 30 crore were seized from one accused, Archana Nag. Patra, arrested by the Enforcement Directorate, sought bail, claiming innocence and returning loans to co-accused. However, the court noted failure to satisfy the conditions under Section 45(1)(ii) of the PMLA and rejected the bail application, considering the gravity of the allegations and legal precedents.
The Punjab and Haryana High Court ruled that the truthfulness of the prosecution’s case under the Prevention of Money Laundering Act, 2002 (PMLA) would be determined during the trial. Anita Seth and her husband, along with others, faced accusations under various sections of the PMLA. Anita was granted anticipatory bail, while her husband was arrested for allegedly providing forged sureties. Anita’s counsel argued that she was unaware of the forgery and cited her poor health as grounds for bail. The state opposed, alleging serious fraud. However, the court granted Anita bail, noting the absence of evidence linking her to the forgery and emphasising the trial’s role in determining the case’s truthfulness.
The Patna High Court denied bail to an accused facing charges under the Prevention of Money Laundering Act, citing the grave impact of economic offences on the community. The case involved misutilization of bank accounts, with large sums deposited and transferred without consent. Justice Anjani Kumar Sharan emphasised the seriousness of economic crimes and the need to hold offenders accountable. Refusing bail, the court stressed the importance of maintaining public trust in the justice system and safeguarding the national economy and interests.
The Supreme Court directed for timely trial completion in cases involving economic offences under the Prevention of Corruption Act, 1988, and the Prevention of Money Laundering Act, 2002, leveraging Artificial Intelligence technology. The appellant, Tarun Kumar, sought bail in connection with charges related to financial irregularities at Shakti Bhog Foods Ltd. Despite similar co-accused being granted bail, the court rejected bail for Tarun Kumar due to his alleged involvement in diverting loan funds.
The court emphasised the seriousness of economic offences, considering their impact on the economy and the challenges posed by modern technology. Justices Aniruddha Bose and Bela M Trivedi stressed the need for expeditious trials to uphold the right to a speedy trial under Article 21 of the Constitution.
The Chhattisgarh High Court granted anticipatory bail to Union Bank employees accused of money laundering by opening bank accounts without following procedure. Anoop Kumar Das, C Adinarayana, and Rajesh Agrawal were alleged to have opened 446 bank accounts without proper procedure. The court considered their seniority and health conditions, granting bail under certain provisions of the PMLA, 2002. Justice Parth Prateem Sahu directed their release on anticipatory bail upon arrest, with conditions including cooperation with investigators and court appearances.
The Allahabad High Court denied bail to Anil Kumar Sharma, the Managing Director of Amrapali Group of Companies, in connection with a multi-crore scam. The court highlighted the seriousness of the offence, emphasising the defrauding and cheating of home buyers and the financial system. Despite previous bail rejections and ongoing investigations, the court refused bail, citing the severity of money laundering and its impact on the national economy.
The Kerala High Court denied bail to Abdul Gafoor, Accused No.12, in a Prevention of Money Laundering Act, 2002 case due to lack of reasonable grounds to believe he is not guilty. The accused was involved in a scheme promising high returns on investment in a cryptocurrency, defrauding investors of a total of ₹1200 crore. Despite the bail application, the court found insufficient evidence to suggest the accused’s innocence, adhering to the criteria outlined in Section 45(1)(ii) of the PMLA.
The Delhi High Court rejected anticipatory bail for Karunakaran Ramachandran, accused of money laundering in connection with bogus contracts awarded by ILRL. The Directorate of Enforcement registered an ECIR against Ramachandran and others under the PMLA Act. The complainant alleged that Ramachandran awarded fake contracts worth around Rs. 94 crores. Ramachandran denied the allegations, stating he wasn’t involved in inducing the complainant to purchase shares. The state argued that contracts were awarded during Ramachandran’s tenure as Managing Director of ITNL. Justice Manoj Kumar Ohri dismissed the application but didn’t reject the Investigating Officer’s plea for custodial interrogation.
The Delhi High Court denied travel permission to Mandhir Singh Todd, accused in a Rs. 115 crore money laundering case, under the Prevention of Money Laundering Act, 2002 (PMLA). Todd sought bail to undergo medical treatment abroad, but the court refused, citing the availability of treatment in India. The accused faces charges related to fraudulent bank dealings, including submission of forged documents, resulting in substantial losses to HDFC Bank. The court noted that the petitioner had attempted to flee the country after the FIR was filed and declined the request for travel permission. Despite the petitioner offering to deposit passports and furnish additional sureties, the court held that there were no grounds to grant permission, given the seriousness of the charges and availability of treatment domestically.
The Punjab and Haryana High Court denied anticipatory bail to Jagadish Nangineni and Jagdish Chandra Sharma, accused of money laundering amounting to Rs. 220 crores. The case involves multiple transactions related to the sale and development of plots and villas, with incriminating documents indicating substantial fund transfers. Despite the petitioners’ request for bail citing the Covid-19 pandemic, the court, considering the seriousness of the allegations and ongoing investigations, rejected the plea. The court emphasised the need for the investigating agency to ascertain the exact role of the petitioners, highlighting the gravity of the economic offences involved.
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