Issues: Whether the accused applicants were entitled to discharge under Section 227 of the Code of Criminal Procedure, 1973 in the absence of a subsisting predicate offence and identifiable proceeds of crime for the alleged offence of money laundering.

Analysis: The complaint under the Prevention of Money Laundering Act, 2002 was founded on the predicate offences arising from the two underlying criminal cases. The discharge orders in those predicate cases had held that the prosecution had not made out a prima facie case and, on that basis, no offence was found to have been committed. The Court treated those findings as meaning that no proceeds of crime had been generated from the scheduled offences. Relying on the statutory scheme of Sections 2(u), 3 and 4 of the Prevention of Money Laundering Act, 2002 and the principle that money-laundering is dependent on property derived or obtained as a result of criminal activity relating to a scheduled offence, the Court held that in the absence of subsisting predicate offences and proceeds of crime, the prosecution under the Act could not survive. The Court also noted that the attachment orders had been set aside and that the discharge orders in the predicate offences had attained finality.

Conclusion: The accused applicants were entitled to discharge and no charge could be framed against them for the alleged offence under the Prevention of Money Laundering Act, 2002.

Final Conclusion: The proceedings were terminated at the stage of charge, and all applicants stood discharged from the money-laundering case.

Ratio Decidendi: Money-laundering under the Prevention of Money Laundering Act, 2002 cannot be sustained unless there exists property constituting proceeds of crime derived or obtained from a subsisting scheduled offence; where the accused stand finally discharged in the predicate offence and no proceeds of crime survive, prosecution under the Act fails.

Issues: (i) Whether the applicant was entitled to bail on the ground that he was sick or infirm within the proviso to Section 45(1) of the Prevention of Money-laundering Act, 2002. (ii) Whether prolonged incarceration and delay in commencement of trial justified release on bail under Article 21 of the Constitution of India.

Issue (i): Whether the applicant was entitled to bail on the ground that he was sick or infirm within the proviso to Section 45(1) of the Prevention of Money-laundering Act, 2002.

Analysis: The medical material placed on record showed serious and continuing ailments, including chronic kidney disease, uncontrolled diabetes, peripheral neuropathy, disability, and need for regular physiotherapy and assistance in daily activities. The Court treated the applicant's present medical condition as material and found that the sickness was not a mere routine ailment but one of sufficient seriousness to attract the statutory proviso.

Conclusion: The applicant fell within the proviso to Section 45(1) and was entitled to bail on medical grounds.

Issue (ii): Whether prolonged incarceration and delay in commencement of trial justified release on bail under Article 21 of the Constitution of India.

Analysis: The applicant had remained in custody for about 18 months, charge had not been framed, and there was no realistic prospect of the trial commencing or concluding in the near future. The Court held that such inordinate delay, coupled with the absence of early trial progress, engaged the constitutional guarantee of a speedy trial and weakened the rigor of the bail restrictions.

Conclusion: Prolonged incarceration and delay in trial also justified grant of bail in favour of the applicant.

Final Conclusion: Bail was granted because the applicant satisfied the medical exception under the special statute and the continued pre-trial detention was found incompatible with the right to speedy trial.

Ratio Decidendi: A person need not suffer a life-threatening illness to qualify as "sick or infirm" under the proviso to Section 45(1) of the Prevention of Money-laundering Act, 2002, and prolonged pre-trial incarceration without near-term trial prospects may independently support bail consistently with Article 21.

Issues: Whether the condition restricting the applicant's foreign travel deserved deletion or modification, and whether the applicant could be permitted to travel abroad without repeated prior permission for each trip and destination.

Analysis: The application was considered in the context of the applicant's earlier bona fide appearance pursuant to summons, the fact that he had not been arrested under Section 19 of the Prevention of Money-laundering Act, 2002, and the Court's earlier order under Section 88 of the Code of Criminal Procedure, 1973. The reasoning accepted that the applicant's professional obligations required frequent and sometimes extended international travel, and that a rigid destination-specific permission regime created undue hardship and could impede the exercise of personal liberty. The objections based on flight risk, tampering with evidence, and analogy with other fugitive cases were not accepted in the applicant's case, particularly because the enforcement agency had not previously arrested him or challenged the earlier order. Reliance was placed on the principle that conditions cannot be imposed in a manner that unnecessarily burdens liberty where the accused was not arrested under Section 19 and had appeared in response to process.

Conclusion: The restrictive travel condition was modified in the applicant's favour, and he was permitted to travel abroad during the pendency of trial without the impugned embargo, subject to the additional safeguards imposed by the Court.

Final Conclusion: The order grants relief by relaxing the foreign-travel restriction while preserving attendance and trial-related safeguards.

Ratio Decidendi: Where an accused has not been arrested under Section 19 of the Prevention of Money-laundering Act, 2002 and has bona fide appeared before the Court in response to summons, travel restrictions may be modified so that they do not unnecessarily impede personal liberty, provided the trial remains safeguarded by appropriate conditions.

Issues: Whether the materials on record disclosed a prima facie case to frame charge for money-laundering under the Prevention of Money Laundering Act, 2002 on the basis that the accused generated proceeds of crime through bogus transactions linked to scheduled offences and used the funds in furtherance of the alleged criminal activity.

Analysis: The complaint and accompanying statements disclosed a scheduled offence foundation in the form of the predicate FIRs involving offences under the Indian Penal Code, 1860. The material further indicated that funds were routed through companies controlled by the accused by means of bogus bills and entry operators, that cash was received against those entries, and that the money was then alleged to have been used for the riots. The definition of proceeds of crime under the Act was applied in its broad form to cover property derived, directly or indirectly, from criminal activity relatable to a scheduled offence. The recorded statements under Section 50 of the Act were treated as admissible at the charge stage and, taken at face value, supported the prosecution version. On that basis, the Court found grave suspicion and held that the absence of a separate attachment order did not defeat the prosecution at this stage.

Conclusion: Charge under Section 3 punishable under Section 4 of the Prevention of Money Laundering Act, 2002 was made out against the accused.

Final Conclusion: The complaint disclosed sufficient prima facie material to proceed against the accused for money-laundering, and the trial was directed to continue on that footing.

Ratio Decidendi: At the stage of framing charge under the Prevention of Money Laundering Act, 2002, a prima facie showing that the accused knowingly participated in the generation, possession, use, or projection of property derived from criminal activity relatable to a scheduled offence is sufficient to proceed.

(a) Whether the accused persons committed the offence of money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA), punishable under Section 4 of the Act, by securing allocation of the Marki Mangli-I coal block through false claims and misrepresentations and subsequently generating proceeds of crime through share transfers and coal productionRs.

(b) Whether the share capital raised by the accused company through issuance of equity shares and the subsequent sale of shares to a third party constitute proceeds of crime derived from criminal activity under PMLARs.

(c) Whether the coal produced and sold by the accused company from the allocated coal block amounts to proceeds of crime under the definition provided in Section 2(1)(u) of PMLARs.

(d) Whether the provisional attachment of assets amounting to significant sums connected to the accused company and individuals is justified under PMLARs.

(e) Whether the prosecution complaint filed under Section 45 of PMLA discloses a prima facie case warranting cognizance and issuance of summons to the accused personsRs.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Commission of Money Laundering Offence under PMLA

The legal framework centers on the provisions of the Prevention of Money Laundering Act, 2002, particularly Sections 3 and 4. Section 3 defines the offence of money laundering, while Section 4 prescribes punishment. Additionally, Section 2(1)(u) defines "proceeds of crime" as any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to scheduled offences.

The Court considered the allegations that the accused persons secured the allocation of the Marki Mangli-I coal block by submitting applications and documents falsely representing the existence and directorship of the company M/s B.S. Ispat Ltd. (A-1) before its formal incorporation on 01.12.1999. The applications dated 28.06.1999 and 23.07.1999 were submitted by accused persons describing themselves as directors of the company which did not legally exist at that time.

The Court noted the relevance of the Supreme Court's decision in Vijay Madanlal Choudhary & Ors. Vs Union of India & Ors., which clarified the scope of PMLA offences and the approach to cognizance. The prosecution complaint also referenced the ongoing CBI case against the accused for offences under IPC Sections 120-B and 420 relating to the coal block allocation.

On the facts, the Court found that the false claims and misrepresentations regarding the company's existence and directorship were material to securing the coal block allocation, which is a scheduled offence under the PMLA framework. The Court held that the generation of proceeds through share transfers and coal production flows from this initial illegality, thereby constituting money laundering.

The competing argument that the company was incorporated later and thus the applications were valid was rejected due to the clear timeline and documentary evidence showing the company's non-existence at the time of initial applications.

Conclusion: Prima facie case established that accused persons committed money laundering under Section 3 PMLA by securing coal block allocation through false representation.

Issue (b): Share Capital Raised and Sale of Shares as Proceeds of Crime

The Court examined the detailed shareholding pattern and issuance of equity shares by the accused company. Initially, 700 shares existed, held by the Agrawal and Daga groups. Subsequently, large tranches of shares were issued in financial years 2002-03 and 2010-11, raising share capital of Rs. 28 crores and Rs. 32 crores respectively, including premium amounts.

Shareholding was distributed among the Agrawal, Daga, and Sarda groups, with companies jointly controlled by these groups acquiring substantial shares. The total share capital raised was Rs. 60.05 crores via issuance of 1,50,51,000 equity shares.

The Court found that these amounts were directly derived from criminal activity, i.e., the initial false claim for coal block allocation. The subsequent issuance of shares and sale of entire shareholding to M/s Oriental Iron Casting Ltd. for Rs. 116.58 crores were transactions tainted by the proceeds of crime.

The Court relied on audited financial statements showing fixed assets and land valuations consistent with inflated values linked to the coal block allocation. The share purchase agreement and amounts received by the groups further corroborated the flow of illicit funds.

Arguments that the share transactions were legitimate business dealings were countered by the prosecution's evidence linking the capital raised to the initial illegality. The Court thus held that the share capital raised and sale proceeds constitute proceeds of crime under Section 2(1)(u) PMLA.

Conclusion: The issuance of shares and sale of shareholding by the accused company represents proceeds of crime derived from scheduled offences, amounting to money laundering.

Issue (c): Coal Production and Sale as Proceeds of Crime

The Court considered the production of coal from March 2011 to 2014-15, amounting to 1,91,253 MT valued at Rs. 27.15 crores. The coal was produced from the allocated Marki Mangli-I coal block, which was secured through the initial false claims.

Under PMLA, proceeds of crime include property derived from scheduled offences. The Court held that the coal production and sale proceeds are directly linked to the illegal coal block allocation and thus fall within the definition of proceeds of crime.

Competing arguments that coal production was a legitimate commercial activity were rejected as the foundational allocation itself was obtained by misrepresentation, rendering all subsequent gains tainted.

Conclusion: Coal produced and sold by the accused company constitutes proceeds of crime under PMLA.

Issue (d): Provisional Attachment of Assets

The Court reviewed the orders of provisional attachment of assets worth Rs. 78.25 crores and further Rs. 60.05 crores, confirmed under PMLA. The attachments related to properties and assets of the accused company and individuals connected to the proceeds of crime.

Given the prima facie case of money laundering and the quantum of alleged proceeds, the Court found the provisional attachment justified to prevent dissipation of tainted assets.

Conclusion: Provisional attachment of assets under PMLA was appropriate and in accordance with statutory provisions.

Issue (e): Prima Facie Case and Cognizance

The Court examined the prosecution complaint, supplementary complaint, documentary evidence, and statements of witnesses and accused persons. The reliance on the Supreme Court's decision in Vijay Madanlal Choudhary & Ors. was noted, which supports taking cognizance upon prima facie satisfaction.

The Court concluded that the prosecution complaint disclosed sufficient material to take cognizance of offence under Section 3 PMLA punishable under Section 4. The accused persons were accordingly summoned to face trial.

Conclusion: Prima facie case made out; cognizance taken and summons issued to accused persons.

3. SIGNIFICANT HOLDINGS

The Court held:

"Having perused and considered the entire material, I am of the view that prima facie case for summoning all the accused persons is clearly made out for the offence u/s 3 of PMLA punishable u/s 4 of the said Act."

The Court established the core principle that proceeds of crime under PMLA include any property derived directly or indirectly from scheduled offences, including share capital raised and assets acquired through false representations.

The Court affirmed that misrepresentation regarding company incorporation and directorship to secure government coal block allocation constitutes a predicate offence, and all subsequent financial transactions flowing from such allocation are subject to PMLA scrutiny.

Final determinations:

• Accused persons committed offence of money laundering under Section 3 PMLA.
• Proceeds generated through share issuance, share sale, and coal production are proceeds of crime.
• Provisional attachment of assets is justified and confirmed.
• Cognizance of offence is taken; summons issued to accused persons for trial.

Issues: Whether the Look Out Circular issued against the applicant should be recalled and whether the applicant should be permitted to travel without the earlier restrictions.

Analysis: The purpose of a Look Out Circular is to secure the presence of the person concerned and it operates as a coercive measure. The applicant had consistently appeared before the investigating agency, had complied with earlier directions, and there was no clear basis to conclude that continued retention of the circular was necessary. The Court also balanced the investigating agency's interest against the applicant's personal liberty and freedom of movement, and found that the continuation of the circular was unjustified. To protect the investigation, the applicant was required to furnish security, provide sureties, appear before the investigating agency, and intimate it if he travelled outside Dubai.

Conclusion: The Look Out Circular was recalled, and the applicant was allowed to travel subject to the imposed conditions.

Ratio Decidendi: A Look Out Circular is meant to secure attendance and may be withdrawn when the person has been cooperating and continued restraint is not justified, provided appropriate safeguards are imposed to protect the investigation.

Issues: Whether multiple alleged acts of money laundering arising from different transactions and different proceeds of crime could be clubbed in one complaint, and whether such joinder would justify return of the complaint for filing separate complaints.

Analysis: The complaint alleged that different land-acquisition transactions gave rise to separate proceeds of crime and that each alleged laundering episode constituted an independent offence under the Prevention of Money Laundering Act, 2002. On that basis, the Court held that clubbing all such transactions in one complaint would amount to joining different offenders and distinct offences in a manner inconsistent with the principle that each act of money laundering is a separate offence. The Court further held that such clubbing would run contrary to the rules governing joinder of charges and would complicate the trial.

Conclusion: The complaint in its present clubbed form was not maintainable and was returned to the complainant for filing fresh and separate complaints in accordance with law.

Final Conclusion: The Court declined to proceed on a consolidated complaint and required separate proceedings for distinct alleged laundering transactions.

Ratio Decidendi: Where different alleged transactions generate distinct proceeds of crime, each alleged act of money laundering is a separate offence and cannot be impermissibly clubbed into one complaint in a manner that offends the rules of joinder of charges.

Issues: Whether, on the materials placed by the prosecution, the applicant satisfied the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 for grant of bail.

Analysis: The application was examined on the footing that the twin conditions under Section 45 were operative. The decisive question was whether the Enforcement Directorate had prima facie established the foundational facts showing that the applicant was directly or indirectly involved in the process of money laundering and had received proceeds of crime. The Court found that the alleged money trail from the bank account in which the loan amount was said to have been parked to the accounts from which funds reached the applicant was not adequately demonstrated by bank statements or other corroborative material. It further found that several amounts relied upon by the prosecution pre-dated the alleged generation of proceeds of crime, and that the prosecution had not satisfactorily shown placement, layering, or integration linking the applicant to tainted funds. On that basis, the Court held that the prosecution had not prima facie established the foundational facts necessary to attract the rigours of Section 45, and the medical ground did not survive independently in view of the Supreme Court's prior refusal of extension of interim bail on that basis.

Conclusion: The applicant was found entitled to bail as the prosecution did not establish, at the threshold, a prima facie case of involvement in money laundering sufficient to satisfy the statutory embargo under Section 45.

Ratio Decidendi: For bail under the Prevention of Money Laundering Act, 2002, the prosecution must prima facie establish the foundational money trail connecting the applicant to proceeds of crime and showing involvement in placement, layering, or integration before the twin conditions under Section 45 can be said to be attracted.

Issues: Whether the order granting bail could be stayed or suspended for three weeks to enable challenge before the High Court.

Analysis: The bail application had been decided on merits after considering the statutory rigours under the twin conditions for bail. The Court held that once bail had been granted on merits, suspending its operation for a prolonged period would make the order ineffective and unjustifiably curtail the applicant's liberty. It further relied on the view that the Sessions Court does not have power to stay its own order granting bail, and that such interference is not warranted where the accused had already been subjected to strict bail conditions and there was no showing of misuse of liberty.

Conclusion: The request to stay or suspend the bail order was rejected.

Issues: (i) Whether the applicants were entitled to default bail under Section 167(2) of the Code of Criminal Procedure, 1973 despite the filing of a complaint by the Enforcement Directorate within the prescribed period, when the complaint itself stated that investigation was still continuing. (ii) Whether Section 44 Explanation (ii) of the Prevention of Money Laundering Act permits continued investigation and subsequent complaint in a manner that defeats the right to statutory bail under Section 167(2) of the Code of Criminal Procedure, 1973.

Issue (i): Whether the applicants were entitled to default bail under Section 167(2) of the Code of Criminal Procedure, 1973 despite the filing of a complaint by the Enforcement Directorate within the prescribed period, when the complaint itself stated that investigation was still continuing.

Analysis: The right to default bail accrues when the investigation is not completed within the statutory period and no complete report is filed. A report or complaint filed before completion of investigation cannot be treated as a finished investigation merely because it is presented within time. The complaint in the present matter itself recorded that further investigation was continuing and that the remaining proceeds of crime were still being traced, showing that the investigation against the applicants had not reached completion. The statutory protection under Section 167(2) is intended to prevent prolonged custody without completion of investigation.

Conclusion: The applicants were entitled to default bail; the complaint did not defeat their claim under Section 167(2).

Issue (ii): Whether Section 44 Explanation (ii) of the Prevention of Money Laundering Act permits continued investigation and subsequent complaint in a manner that defeats the right to statutory bail under Section 167(2) of the Code of Criminal Procedure, 1973.

Analysis: Section 44 Explanation (ii) recognises the possibility of further investigation and a subsequent complaint after a complaint has already been filed. That provision is analogous in effect to Section 173(8) of the Code of Criminal Procedure, 1973, but it does not authorise an indefinite or piecemeal investigation so as to nullify the statutory time limit governing custody. The ability to pursue further investigation cannot be used to postpone the stage at which the accused becomes entitled to default bail.

Conclusion: Section 44 Explanation (ii) does not override or defeat the applicants' right to default bail under Section 167(2).

Final Conclusion: The applicants were ordered to be released on bail because the investigation was not complete within the statutory period, notwithstanding the filing of the complaint and the possibility of further investigation.

Ratio Decidendi: For the purpose of Section 167(2) of the Code of Criminal Procedure, 1973, a complaint filed within time does not prevent default bail if the complaint itself shows that investigation is still incomplete and continuing; the power of further investigation cannot be used to defeat the statutory right to bail.

Issues: Whether the applicant made out a strong prima facie case for grant of bail in a prosecution under the Prevention of Money Laundering Act, 2002.

Analysis: The material before the Court showed a prima facie trail of funds suggesting generation of proceeds of crime, layering, placement and integration through the conversion of the trust into a Section 8 company, alleged forged documents, cash withdrawals, and diversion of funds to related accounts and property purchases. The Court treated the statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002 and the documentary trail as sufficient at the bail stage to indicate involvement in the offence under Section 3 of the Prevention of Money Laundering Act, 2002. It also held that the absence of the applicant as an accused in the scheduled offence did not by itself defeat the money-laundering case, and that the bail principles under Section 439 of the Code of Criminal Procedure, 1973 did not assist the applicant on the facts.

Conclusion: The applicant did not establish a strong prima facie case for release on bail and the bail application was rejected.

Issues: Whether the applicant was entitled to regular bail, including statutory bail, in proceedings under the Prevention of Money-laundering Act, 2002 after filing of the charge-sheet.

Analysis: The application was examined in the light of the earlier rejection of bail and the asserted change in circumstance based on filing of the charge-sheet. It was held that mere filing of the charge-sheet does not by itself justify release on bail or dilute the allegations and material collected during investigation. The Court also held that the right to statutory bail under Section 167(2) of the Code of Criminal Procedure, 1973 does not survive once the charge-sheet has been filed. Considering the nature of allegations, the material on record, and the likelihood of the applicant influencing witnesses or tampering with evidence, the Court found that continued detention was necessary to secure a fair trial.

Conclusion: Bail was refused and the application was dismissed against the applicant.

Issues: (i) Whether the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 applied to the bail application. (ii) Whether the accused was entitled to bail on merits or under the proviso to Section 45 of the Prevention of Money Laundering Act, 2002 as a sick and infirm person.

Issue (i): Whether the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 applied to the bail application.

Analysis: The earlier decision striking down the unamended twin conditions was confined to the pre-amendment text. After amendment, Section 45 was treated as applying the twin conditions to bail under the Act. The decision noted divergent High Court views, but relied on the absence of any declaration of unconstitutionality of the amended provision and on the fact that the Supreme Court had stayed certain contrary High Court rulings.

Conclusion: The twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 were held applicable.

Issue (ii): Whether the accused was entitled to bail on merits or under the proviso to Section 45 of the Prevention of Money Laundering Act, 2002 as a sick and infirm person.

Analysis: The materials disclosed a prima facie role in laundering proceeds of crime through companies and foreign accounts, with allegations of large-scale economic offence, possible influence over witnesses, and an investigation at an initial stage. The medical material did not show such serious illness as to justify bail under the proviso, and the accused's own travel history indicated that the ailments were manageable rather than incapacitating. Even apart from Section 45, the ordinary bail considerations weighed against release.

Conclusion: Bail was refused both under Section 45 and under the general principles governing bail.

Final Conclusion: The application for regular bail was dismissed because the statutory bail restrictions were held applicable and the circumstances did not justify release on merits or on medical grounds.

Ratio Decidendi: For bail under the Prevention of Money Laundering Act, 2002, the amended Section 45 twin conditions apply unless the provision is held unconstitutional, and where the record shows a prima facie laundering case, risk of interference with witnesses, and no compelling medical incapacity, bail may be denied even under general bail principles.

Issues: Whether anticipatory bail should be granted in a case involving alleged violation of licence conditions, invocation of a scheduled offence, and the need for effective investigation in an economic offence.

Analysis: The prosecution case was that the applicant, through a structured arrangement involving developers and LLPs, diverted plots meant for the no profit no loss scheme, booked profit contrary to the licence conditions, and caused financial loss to the State, leading to addition of the scheduled offence under the Indian Penal Code and invocation of money-laundering provisions. The Court found that the alleged conduct disclosed a carefully designed scheme, required tracing of the money trail, and called for effective interrogation to ascertain the source and destination of the proceeds. It held that anticipatory bail is an extraordinary relief to be granted sparingly, particularly where grant of pre-arrest protection may frustrate investigation in a serious economic offence.

Conclusion: Anticipatory bail was declined, as the Court held that granting such protection would hamper investigation and impede meaningful interrogation of the accused.

Final Conclusion: The application for pre-arrest bail was rejected in view of the seriousness of the allegations and the need for unimpeded investigation in an economic offence.

Ratio Decidendi: Pre-arrest bail should not be granted in a serious economic offence where custodial interrogation is necessary to uncover a deliberate scheme and the grant of protection is likely to hamper investigation.

Issues: Whether bail should be granted to the applicant under Section 439 of the Code of Criminal Procedure, 1973 read with Section 45 of the Prevention of Money-Laundering Act, 2002 on medical grounds.

Analysis: The application was pressed only on medical grounds. The medical report showed hematuria, burning sensation while passing urine, abdominal pain, per-rectal bleeding, asthma, anxiety and acid peptic disorder, and also indicated referral to J.J. Hospital and a pending CT scan. The Court accepted that the applicant required special medical care and treatment, and considered the prevailing COVID-19 situation as an additional circumstance affecting prison and hospital movement. The Court also noted that the applicant's presence for further investigation could be secured by imposing conditions, including surrender of passport, non-contact with witnesses, cooperation with the Enforcement Directorate and restrictions on travel.

Conclusion: Bail was granted on medical grounds, subject to stringent conditions to secure the applicant's presence and prevent interference with the investigation.

Issues: (i) Whether acceptance of the closure report in the scheduled offence extinguished the foundation for proceedings under the Prevention of Money-laundering Act, 2002 and prevented further custody of the accused. (ii) Whether judicial custody of the accused could be extended and their request for release on bond could be refused.

Issue (i): Whether acceptance of the closure report in the scheduled offence extinguished the foundation for proceedings under the Prevention of Money-laundering Act, 2002 and prevented further custody of the accused.

Analysis: The scheduled offence was accepted as closed, but the Court held that money-laundering under Section 3 is a distinct offence and proceeds on the basis of proceeds of crime, concealment, possession, acquisition, use, or projection of such property as untainted. The Court further treated the offence as a continuing activity so long as the proceeds of crime are enjoyed in any of the statutorily described forms. On that reasoning, closure of the predicate offence did not automatically nullify the basis of the PMLA proceedings at the stage of investigation and custody.

Conclusion: The closure of the scheduled offence did not bar continuation of the money-laundering proceedings or defeat the remand jurisdiction.

Issue (ii): Whether judicial custody of the accused could be extended and their request for release on bond could be refused.

Analysis: The Court found that investigation was still in progress and that further custodial detention was justified for the purposes of the PMLA inquiry. It held that sufficient grounds existed to extend judicial custody under Section 167 of the Code of Criminal Procedure, 1973, and that the request for release on bond could not be granted at that stage.

Conclusion: Judicial custody was extended and the request for release on bond was rejected.

Final Conclusion: The order maintained the accused in judicial custody for a further period and sustained the continuation of the PMLA proceedings notwithstanding closure of the scheduled offence.

Ratio Decidendi: Closure of the scheduled offence does not, by itself, extinguish proceedings for money-laundering where the alleged proceeds of crime and the continuing nature of the offence under the PMLA remain under investigation.

Issues: Whether the accused should be remanded to the custody of the Enforcement Directorate for further interrogation in connection with the alleged offence of money laundering arising from the scheduled offence.

Analysis: The accused had been searched, their statements had been recorded, and they were already in ED custody before production before the Court. The materials placed before the Court indicated alleged diversion of funds obtained as loan, non-implementation of the rehabilitation component of the project, and use and parking of alleged proceeds of crime as untainted assets. On that basis, the Court found that further interrogation in ED custody was necessary to unearth the trail of monies and to confront the accused with documents and other persons involved in the matter.

Conclusion: The request for custody was accepted, and the accused were remanded to the custody of the Enforcement Directorate for further interrogation.

Final Conclusion: The proceeding resulted in grant of ED custody for investigative interrogation in the money-laundering matter.

Ratio Decidendi: Where the materials disclose a prima facie case of laundering of alleged proceeds of crime and further interrogation is required to trace the money trail, custodial remand may be granted for effective investigation.