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2025 (1) TMI 10 - CHHATTISGARH HIGH COURT Money Laundering

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Serious economic offence bail test: gravity of allegations and trial risks outweighed liberty, so regular bail was refused.
Regular bail was refused in a prosecution alleging a large-scale liquor scam, corruption and forgery, because the Court found that the gravity of the accusations, the prima facie prosecution material, and the risk of interference with the trial outweighed the general rule favouring liberty. The Court applied settled bail factors, including the seriousness of the offence, the possibility of absconding or tampering with evidence, and the strength of the case at the investigation stage, and noted that multiple charge-sheets, voluminous records and numerous witnesses were involved. It held that prolonged custody, parity and the presumption of innocence did not, on these facts, justify release on bail.

Seeking grant of bail - Money Laundering - collecting illegal bribes and controlling the high level management of important State Departments and State Public Sector undertakings - HELD THAT:- In the case in hand, the factors enumerating in the case which should be taken in consideration while granting or refusing bail in a non-bailable case are that there are three charge sheets filed against the applicant in relation to the same allegations, 457 witnesses have been cited and more than 13,000 pages have been filed before the Special Court (PC) Raipur. It is trite that the court while considering an application seeking bail, is not required to weigh the evidence collected by the investigating agency meticulously, nonetheless, the court should keep in mind the nature of accusation, the nature of evidence collected in support thereof, the severity of the punishment prescribed for the alleged offences, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witness being tampered with, the larger interests of the public/State etc. Though, the findings recorded by the Court while granting or refusing bail would be tentative in nature, nonetheless the Court is expected to express prima facie opinion for granting or refusing to grant bail which would demonstrate an application of mind, particularly dealing with the economic offences - In the present case, the applicant was involved in the criminal acts of the syndicate and that he received commission from the liquor suppliers. However, no recovery of unaccounted money has been made in this regard and as per the investigating agency, the investigation is pending, hence, a conclusive determination of their role is yet to be made. As has been held in catena of decisions, the economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Undoubtedly, economic offences have serious repercussions on the development of the country as a whole. There is no denial to the fact that the economic offences constitute a separate class of their own, but trite it is that presumption of innocence is one of the bedrocks on which the criminal jurisprudence rests. Time and again, Apex Court has reiterated the need to integrate the right of investigating agencies to have effective interrogation of the accused with the right of liberty of the accused. In the instant case, the offence as alleged against the accused persons is very serious involving deep-rooted planning in which, huge financial loss is caused to the State exchequer. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of "grave offence" and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused - In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case but the consideration will have to be on case-to-case basis on the facts involved therein. Conclusion - The applicant's bail application was denied due to the gravity of the charges and the potential risks associated with his release. The court found sufficient grounds to believe that the applicant was involved in a criminal syndicate, justifying further judicial proceedings. The prayer for grant of bail to the applicant is liable to be rejected and it is hereby rejected.

2024 (12) TMI 1696 - RAJASTHAN HIGH COURT Money Laundering

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PMLA bail granted where pre-existing transactions were not linked to laundering, custody was prolonged, and parity favoured release.
Bail under the Prevention of Money Laundering Act was granted where the monetary transactions between the applicant and the co-accused predated the alleged REET 2021 and were not linked by the Enforcement Directorate to laundering activity. The Court also considered that the applicant was not shown to have directly entered the strong room or stolen the paper, the complaint had already been filed, he had spent a substantial period in judicial custody, and the main co-accused had obtained bail from the Supreme Court. On that basis, the rigours of Section 45 were treated as satisfied for bail purposes.

Entitlement to bail u/s 45 - Burden to demonstrate absence of prima facie offence - High Court jurisdiction to consider regular bail in PMLA proceedings - Connection of assets or transactions with proceeds of crime - Sections 3 and 4 of the Prevention of Money Laundering Act - HELD THAT:- In this case, it has been clearly demonstrated by the applicant/accused that the applicant/accused transferred an amount of ₹10 lakh from his SBI account to Ramkripal Meena before the REET 2021 examination. An amount of ₹3 lakh was also paid by Ramkripal Meena to the applicant/accused before the REET 2021 examination. Subsequently, after the REET 2021 examination, an amount of ₹3 lakh was deposited into the bank account maintained by the applicant/accused. The applicant/accused is not directly accused of entering the strong room and stealing the PayPal money in connivance with Ramkripal Meena. In this context, Ramkripal Meena received ₹1,77,80,000 in exchange for paper sales, and this amount has been recovered by the Enforcement Directorate from various individuals. Of this amount, ₹46,00,000 was recovered from Ramkripal Meena. While it is true that the provisions of Section 45 of the PMLA Act are mandatory provisions, and the burden of proof lies on the applicant/accused to demonstrate that no prima facie offense has been committed by them, in this context, in lieu of the amount of ₹10 lakh transferred from the applicant/accused's account on 26.05.2020, prior to the conduct of the REET 2021 examination, an amount of ₹3 lakh was transferred to the applicant/accused's account by Ramkripal Meena prior to the conduct of the examination and the applicant/accused's appointment as District Coordinator. The Enforcement Directorate has not questioned the said amount, nor can that transaction be linked to this offense. A charge sheet has been filed against the applicant/accused in the case before the relevant court. The applicant/accused has been in judicial custody for a long time. The bail application of the main accused, Ramkripal Meena, has been accepted by the Honorable Supreme Court in the aforementioned order. No comment is required at this stage on the other merits of the case. Considering the facts and circumstances of the case, and the grounds on which the Honorable Supreme Court in Manish Sisodia vs. Reliance [2024 (8) TMI 614 - SUPREME COURT] accepted the bail application of Ramkripal Meena, I consider the applicant/accused's bail application to be acceptable. Therefore, the applicant/accused's bail application is accepted. Consequently, the bail application filed on behalf of the applicant/accused Pradeep Parashar, son of Late Makhan Lal Parashar, is accepted and it is ordered that if the applicant/accused furnishes a personal bond of Rs. 50,000 and two strong and reliable sureties of Rs. 25,000 each to the satisfaction of the learned trial Court in this case for his appearance in the Court on the fixed dates and whenever he is summoned, and he is not required in any other case, he should be released on bail forthwith.

2024 (12) TMI 1309 - KARNATAKA HIGH COURT Money Laundering

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Issues: (i) Whether an appeal against confiscation ordered by the Special Court was maintainable under the Code of Criminal Procedure in the light of the Prevention of Money-Laundering Act, 2002. (ii) Whether the Special Court could confiscate the appellant's properties when the attachment had already been lifted and the appellant had purchased the properties thereafter.

Issue (i): Whether an appeal against confiscation ordered by the Special Court was maintainable under the Code of Criminal Procedure in the light of the Prevention of Money-Laundering Act, 2002.

Analysis: The provisions of the Code of Criminal Procedure apply to Special Court proceedings under the Prevention of Money-Laundering Act, 2002 save as otherwise provided. An order confiscating property by the Special Court operates as disposal of property. Since the Act does not provide a separate appeal against such confiscation, the statutory remedy lies under the appellate provision corresponding to disposal of property under the Code of Criminal Procedure.

Conclusion: The appeal was maintainable.

Issue (ii): Whether the Special Court could confiscate the appellant's properties when the attachment had already been lifted and the appellant had purchased the properties thereafter.

Analysis: Confiscation under the Prevention of Money-Laundering Act, 2002 is confined to properties involved in money-laundering or used for commission of the offence. The record showed that the provisional attachment had been lifted pursuant to the interim arrangement directed by the Supreme Court and that the appellant purchased the properties after the lifting of attachment. The Special Court also had the option to proceed against the fixed deposit furnished in compliance with the Supreme Court's order, rather than confiscating the appellant's properties. Confiscating property already transferred without subsisting attachment was therefore not justified.

Conclusion: The confiscation of the appellant's properties was unsustainable.

Final Conclusion: The impugned confiscation order, insofar as it related to the appellant's properties, could not stand and was set aside.

Ratio Decidendi: Where confiscation under the Prevention of Money-Laundering Act, 2002 is limited to property involved in money-laundering, the Special Court cannot confiscate a third party's property acquired after attachment has been lifted, and the proper course is to proceed against the property legitimately traceable to the offence or the substituted security.

Money-laundering confiscation must track attached or tainted property; post-lift purchases cannot be confiscated.
Under the Prevention of Money-Laundering Act, 2002, the CrPC applies to Special Court proceedings except where the Act provides , so an order confiscating property is treated as an order disposing of property and the appeal against it was maintainable under the corresponding CrPC appellate remedy. Confiscation is confined to property involved in money-laundering or used in the offence; where provisional attachment had already been lifted and the appellant purchased the properties thereafter, confiscation of those properties was unsustainable. The HC therefore set aside the confiscation order insofar as it related to the appellant's properties.

Confiscation of property - proceeds of crime - attachment and lifting of attachment - fixed deposit in lieu of properties - confiscation under Section 8(5) of the P.M.L.A. Act - application of the Code of Criminal Procedure to Special Court proceedings - appeal under Section 454 Cr.P.C. - third party purchaser rightsApplication of the Code of Criminal Procedure to Special Court proceedings - appeal under Section 454 Cr.P.C. - Availability of appeal to the High Court under Section 454 Cr.P.C. against an order of confiscation passed by the Special Court in PMLA proceedings - HELD THAT: - The Court examined the statutory scheme under the P.M.L.A. Act which makes the provisions of the Cr.P.C. applicable to proceedings before the Special Court except as otherwise provided. The High Court observed that an order of confiscation by the Special Court amounts to disposal of property under Section 452 Cr.P.C., and that against such disposal an appeal lies to the High Court under Section 454 Cr.P.C. The P.M.L.A. Act does not provide for a separate appeal remedy against an order of confiscation; accordingly the remedy of appeal under Section 454 Cr.P.C. is available and the present appeal is maintainable. [Paras 10]An appeal under Section 454 Cr.P.C. lies to this Court against the Special Court's order of confiscation in PMLA proceedings.Confiscation of property - proceeds of crime - fixed deposit in lieu of properties - confiscation under Section 8(5) of the P.M.L.A. Act - third party purchaser rights - attachment and lifting of attachment - Legality of confiscating properties purchased by a third party after attachment was lifted when the accused had furnished fixed deposit receipts as directed by the Supreme Court - HELD THAT: - The Court considered the factual sequence: (i) the accused was directed by the Supreme Court to furnish fixed deposit receipts of a nationalized bank of the amount equal to the assessed disproportionate assets with a lien in favour of C.B.I. and E.D.; (ii) on furnishing that fixed deposit the E.D. withdrew the provisional attachment and entries of lien were deleted; and (iii) thereafter the accused executed a registered sale deed in favour of the appellant, who acquired title and possession. The High Court construed Sub-section (5) of Section 8 P.M.L.A. to apply to properties "involved in money-laundering or which has been used for commission of offence of money-laundering" and concluded that the fixed deposit furnished pursuant to the Supreme Court order constituted the property involved to the extent of the quantified proceeds of crime. The Court held that the Special Court, instead of confiscating the fixed deposit (the asset substituted and available for confiscation), erred in confiscating the appellant's immovable properties which had been validly sold after the attachment was lifted. The Special Court therefore committed an error in ordering confiscation of the appellant's properties shown at Sl. No.2 of Schedule 'A'. [Paras 16]The confiscation of the appellant's properties is set aside because the fixed deposit furnished in compliance with the Supreme Court order was the asset available for confiscation to the extent of the proved proceeds of crime.Final Conclusion: The appeal is allowed; the High Court held that an appeal under Section 454 Cr.P.C. lies against confiscation orders of the Special Court in PMLA proceedings, and on the merits set aside the Special Court's confiscation of the appellant's properties (Sl. No.2 of Schedule 'A'), reasoning that the fixed deposit furnished pursuant to the Supreme Court order was the asset available for confiscation to the extent of the quantified proceeds of crime.

2024 (12) TMI 1530 - ALLAHABAD HIGH COURT Money Laundering

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ISSUES PRESENTED AND CONSIDERED

1. Whether the accused is entitled to bail in an investigation/prosecution under the Prevention of Money Laundering Act, 2002 (PMLA) where offences under the Indian Penal Code and Information Technology Act are alleged as predicate offences and an ECIR has been registered and complaint filed under Sections 3 and 4 PMLA.

2. Whether the statutory twin conditions in Section 45 of the PMLA (credible evidence of commission of scheduled offence and that the accused is not involved in other scheduled offences) are satisfied to bar grant of bail.

3. Whether the material collected during investigation (morphed social-media posts, invitation cards, large cash recovery, documents, phone accounts/statements and recorded witness testimony) constitutes credible evidence to oppose bail under Section 45 PMLA.

4. Whether commencement of trial and recording of prosecution evidence (P.W.-1) and framing of charge in the ECIR-linked proceedings affect the bail entitlement.

ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Bail under PMLA where predicate offences and ECIR exist

Legal framework - The Court applied the provisions of the Prevention of Money Laundering Act, 2002, in particular Section 3 (offence of money-laundering), Section 4 (punishment), and the bail bar in Section 45. The statutory scheme treats proceeds of scheduled offences as proceeds of crime; registration of ECIR and subsequent complaint under Sections 44/45 PMLA enables prosecution under PMLA.

Precedent treatment - Several Supreme Court and High Court decisions were cited by the applicant; the Court did not expressly adopt or overrule any of those decisions on law but considered the statutory test under Section 45 in light of the materials.

Interpretation and reasoning - The Court emphasised that where the statutory ingredients of PMLA are prima facie made out (predicate offences falling within the Schedule, identification of proceeds of crime, and registration of ECIR followed by complaint), the question of bail must be considered against the statutory bar. The Court examined whether the materials disclosed during investigation satisfy the twin conditions of Section 45 to deny bail.

Ratio vs. Obiter - Ratio: In PMLA matters, grant of bail is governed by the specific statutory test in Section 45 and requires examination of whether credible evidence exists against the accused; mere citation of authority favourable to accused does not displace the statutory test. Obiter: Not applicable as the decision is confined to application of Section 45 to the facts.

Conclusion - The Court applied Section 45 and concluded the statutory framework supports refusal of bail on the facts of the case.

Issue 2 - Satisfaction of twin conditions in Section 45 PMLA

Legal framework - Section 45 imposes twin preconditions for bail: (a) that the public prosecutor shows that there are reasonable grounds to believe that the accused is guilty of the scheduled offence, and (b) there is no reasonable ground to believe that the accused is not guilty (i.e., credible evidence exists against the accused). The Court considered whether the prosecution had adduced credible evidence during investigation and trial stage.

Precedent treatment - Although the applicant relied on multiple judicial pronouncements concerning bail law and PMLA, the Court did not find those sufficient to override the statutory test. The Court relied on the statutory standard rather than construing the precedents in favour of bail.

Interpretation and reasoning - The Court identified and analysed the prosecution material: morphed/edited photographs posted on Facebook and Instagram portraying the accused with the Prime Minister and other Ministers; invitation cards and other documents posted in the accused's name; statements by witnesses (including the testimony of P.W.-1 recorded at trial); recovery of large amounts of cash and related documents and material seized from premises; and the accused's statement during interrogation admitting impersonation and extortion for getting government work. The Court treated these materials as corroborative and sufficient to constitute "credible evidence" within the meaning of Section 45.

Ratio vs. Obiter - Ratio: Where social-media impersonation, documentary material implying misrepresentation, admissions in investigation, corroborative witness statements, and substantial recoveries are present, they satisfy the credible-evidence requirement under Section 45 to refuse bail. Obiter: Observations about timing of seizure and transfer of proceedings are ancillary and do not form the core ratio.

Conclusion - The Court found the twin conditions of Section 45 satisfied on the material on record and therefore held that bail could be refused lawfully under PMLA.

Issue 3 - Weight of investigative and trial materials (social-media posts, recoveries, witness testimony) in deciding bail

Legal framework - Bail under PMLA is not a routine exercise; the Court must consider the nature and gravity of the offence and the available material indicating involvement in money-laundering/proceeds of crime.

Precedent treatment - The applicant relied on authorities on bail and PMLA; however, the Court focused on the evidentiary matrix in the instant record rather than abstract precedents.

Interpretation and reasoning - The Court treated the following as material of probative value for opposing bail: (i) social-media posts and documents that were morphed/edited to create an impression of closeness to high dignitaries; (ii) admissions during interrogation regarding extortion by impersonation; (iii) recovery of large cash amounts and documents during search and seizure that corroborate the nature of illegal activity; and (iv) recorded testimony of a prosecution witness at trial (P.W.-1). The nexus between the alleged impersonation/extortion and the financial recoveries led the Court to regard the evidence as credible and weighty for the purposes of Section 45.

Ratio vs. Obiter - Ratio: Tangible recoveries, corroborative documentary/social-media evidence and witness testimony recorded at trial collectively amount to credible evidence under Section 45 to deny bail. Obiter: Specific observations about the sequence of search and seizure dates and non-inclusion of certain persons as accused are incidental and do not alter the ratio.

Conclusion - The Court concluded that the investigative and trial materials constituted credible evidence justifying refusal of bail.

Issue 4 - Effect of earlier bail in predicate FIR and progress of trial on PMLA bail application

Legal framework - Bail granted in an FIR under IPC/IT Act does not automatically entitle surrender of accused from PMLA proceedings; each forum must apply its statutory standard. Progress in the predicate trial is relevant but does not displace Section 45 if credible evidence under PMLA exists.

Precedent treatment - Applicant relied on earlier bail order in the predicate FIR and multiple authorities; the Court treated those as insufficient to satisfy the PMLA statutory test.

Interpretation and reasoning - The Court noted that although bail had been granted earlier in the FIR proceedings, the ECIR and complaint under PMLA remain distinct; ongoing trial and recording of a prosecution witness in the PMLA case underscores continuing prosecution; the existence of earlier bail in the FIR context does not negate credible evidence in the PMLA proceedings.

Ratio vs. Obiter - Ratio: Earlier bail in predicate proceedings does not compel grant of bail under PMLA where Section 45 conditions are otherwise met. Obiter: Remarks on case transfer and procedural posture are incidental.

Conclusion - The Court held that prior bail in the FIR did not justify bail under PMLA given the credible evidence on record; the progress of trial did not militate in favour of bail.

Final Disposition (conclusion linked to issues)

Applying the statutory framework of PMLA and having regard to the recorded materials (morphed social-media posts and documents, admissions, recoveries, and recorded prosecution testimony), the Court concluded that the twin conditions of Section 45 are satisfied and, in view of the nature and gravity of the alleged offence, declined to grant bail.

Bail denied for accused who impersonated having PM connections to extort money through fake social media posts under Section 45 PMLA
The HC dismissed the bail application in a money laundering case. The applicant impersonated himself as having connections with the Prime Minister and Government Ministers by posting morphed photographs and fake invitation cards on social media platforms. He used this false representation to extort money from people, promising to facilitate their work through government agencies. The court found substantial evidence including recovered money and documents corroborating the fraud. With trial commenced and one prosecution witness examined, the court determined the applicant failed to satisfy the twin conditions under Section 45 of PMLA, 2002, citing the serious nature and gravity of the offense.

2025 (1) TMI 150 - CHHATTISGARH HIGH COURT Money Laundering

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Regular bail refused in a serious economic offence where prima facie conspiracy and evidence concerns outweighed defence claims.
Regular bail may be refused in a serious economic offence where investigation discloses prima facie involvement in a conspiracy, illegal extortion and corruption-related syndicate activity, and where release may prejudice evidence or custodial interrogation. The Court examined each applicant's role separately but found the collected material showed active participation in the alleged illegal levy and routing of proceeds. Defence pleas of false implication and absence of material were treated as issues for trial and insufficient to displace the prosecution case at the bail stage. On that basis, the bail applications were rejected.

Grant of Regular bail - Moeny Laundering - collection of illegal levy amounts from the coal transporters - alleged offences under Sections 420, 120-B, 384 of the IPC and Sections 7, 7-A, 12 of the Prevention of Corruption Act, 1988 - HELD THAT:- The prosecution has collected the material regarding active involvement of the applicants in the syndicate and main accused-Suryakant Tiwari has extorted money, which has been utilized for purchase of properties. Thus, involvement of the applicants in commission of offence under Section 7, 7A & 12 of the PC Act, is prima facie reflected. Hon’ble the Supreme Court while considering the gravity of economic offence in case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [2019 (9) TMI 286 - SUPREME COURT] has held that 'Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation.' The prosecution has collected sufficient material to demonstrate that the applicants have active participation in the syndicate which has collected illegal money as per the directions of the main accused Suryakant Tiwari by extorting money which has also been utilized for purchase of properties by the accused persons and in the bail petition, they have contended that they are falsely implicated in the crime by taking the stand which is required to be ascertained by the trial Court only during the trial and the applicants have not placed any material to demonstrate that they are not prima facie involved in the commission of offence. The accused persons have nowhere stated that they are unknown to the main accused and there is no linkage between them for commission of offence by the main accused-Suryakant Tiwari with the add of government officers - looking to the involvement of the applicants, gravity of the offence which is economic offence, the applicants are not entitled to get bail. As such, this is not a fit case where the applicants should be granted regular bail. Conclusion - The prosecution has collected sufficient material to demonstrate that the applicants have active participation in the syndicate which has collected illegal money as per the directions of the main accused. This is not a fit case where the applicants should be granted regular bail. All the bail applications filed under Section 439 of the Cr.P.C. are liable to be and are hereby rejected.

2024 (12) TMI 1366 - KERALA HIGH COURT Money Laundering

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1. ISSUES PRESENTED and CONSIDERED

The legal judgment presents and considers the following core issues:

(i) Whether the writ petition is maintainable under Article 226 of the Constitution of IndiaRs.

(ii) Whether the order of provisional attachment of immovable properties dated 13-10-2023 is wholly without jurisdiction under the Prevention of Money-Laundering Act, 2002 (PML Act)Rs.

2. ISSUE-WISE DETAILED ANALYSIS

Issue No. (i): Whether this writ petition is maintainableRs.

Relevant Legal Framework and Precedents:

The PML Act provides a three-tier remedy for grievances, typically discouraging the use of Article 226 when statutory remedies exist. However, exceptions exist, such as violations of fundamental rights, principles of natural justice, jurisdictional errors, or questions of law, as established in Whirlpool Corporation v. Registrar of Trade Marks and V. Venkateswaran v. Ramchand Sobhraj Wadhwani.

Court's Interpretation and Reasoning:

The court emphasized that the discretionary power under Article 226 can be exercised in exceptional circumstances, especially when legal questions are involved, as noted in Godrej Sara Lee Ltd v. Excise & Taxation Officer. The distinction between maintainability and entertainability of writ petitions was also highlighted, referencing Prodair Air Products India Pvt. Ltd. v. State of Kerala.

Conclusions:

The court concluded that despite the availability of statutory remedies, the writ petition is maintainable if the initial order is without jurisdiction, as the statutory remedy may not be completely efficacious.

Issue No. (ii): Whether the order of provisional attachment of immovable properties is wholly without jurisdictionRs.

Relevant Legal Framework and Precedents:

Section 5 of the PML Act allows for provisional attachment of property derived from criminal activity related to a scheduled offence. The definition of "proceeds of crime" under Section 2(1)(u) is crucial, as it specifies that the property must be derived from criminal activity.

Court's Interpretation and Reasoning:

The court noted that properties acquired before the commission of the alleged offence (prior to 2014) cannot be considered "proceeds of crime" under the PML Act. This interpretation is supported by the Supreme Court's ruling in Pavana Dibbur v. Directorate of Enforcement, which emphasized that only properties derived from criminal activity related to a scheduled offence can be attached.

Key Evidence and Findings:

The court examined the acquisition dates of the petitioners' properties and found that three properties were acquired before the PML Act was enacted and before the alleged criminal activity occurred.

Application of Law to Facts:

The court applied the legal principles to conclude that the attachment of properties acquired before the predicate offence is without jurisdiction, as they cannot be proceeds of crime.

Conclusions:

The court quashed the provisional attachment of the three properties acquired before 2014, deeming it null and void. For other properties, the petitioners were advised to pursue statutory remedies.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning:

"The proceeds of crime being the core of the ingredients constituting the offence of money laundering, that expression needs to be construed strictly. In that, all properties recovered or attached by the investigating agency in connection with the criminal activity relating to a scheduled offence under the general law cannot be regarded as proceeds of crime."

Core Principles Established:

1. Properties acquired before the commission of an alleged offence cannot be attached as proceeds of crime under the PML Act.

2. The writ petition is maintainable if the provisional attachment order is without jurisdiction, despite the existence of statutory remedies.

Final Determinations on Each Issue:

The writ petition is partially allowed. The provisional attachment of properties acquired before 2014 is quashed, while the petitioners must seek statutory remedies for other properties.

Writ petition maintainable against provisional attachment order under PML Act when wholly without jurisdiction
Kerala HC held that writ petition challenging provisional attachment order under PML Act is maintainable when order is wholly without jurisdiction, despite statutory remedies being available. Court found provisional attachment of properties purchased by petitioners prior to 2014 was ex-facie null and void, as no case existed that proceeds of crime involving petitioners had been taken out of country. Properties acquired before commission of alleged offence cannot be attached as proceeds of crime under PML Act. Writ petition allowed in part, setting aside provisional attachment order for pre-2014 properties.

Provisional attachment under the PML Act - proceeds of crime - attachment of property acquired prior to commission of predicate offence - maintainability of writ petition despite alternative statutory remedy - jurisdictional limit of section 5(1) of the PML Act - attachment of property by equivalent valueMaintainability of writ petition despite alternative statutory remedy - provisional attachment under the PML Act - Writ petition challenging the provisional attachment is maintainable in circumstances where the initial attachment order is alleged to be without jurisdiction. - HELD THAT: - The Court observed that availability of a three tier statutory remedy under the PML Act does not automatically oust the High Court's discretion under Article 226. Constitutional jurisdiction may be exercised where exceptional circumstances exist or where the impugned order is without jurisdiction. The Court relied on authorities establishing that an alternative remedy is a factor in deciding whether to entertain a writ but does not render a writ incapable of being received where jurisdictional infirmity is alleged. Given the legal question and the contention that the provisional attachment may be non est, the petition was retained while the petitioners were permitted to pursue statutory remedies in respect of the remaining attachments. [Paras 11, 12, 13, 14, 15]Writ petition is maintainable and has been retained insofar as jurisdictional challenge to the provisional attachment is raised; petitioners may pursue statutory remedies for other aspects.Proceeds of crime - attachment of property acquired prior to commission of predicate offence - jurisdictional limit of section 5(1) of the PML Act - Provisional attachment under section 5(1) of the PML Act of immovable properties acquired by the petitioners prior to the period of the alleged predicate offences is wholly without jurisdiction and is quashed. - HELD THAT: - The Court analysed the definition of 'proceeds of crime' and held that only property 'derived or obtained' as a result of criminal activity relating to a scheduled offence, or the value thereof (or an equivalent where the proceeds are held abroad), can be attached. The statute does not permit attaching unconnected properties merely because the owner is suspected of involvement in a scheduled offence; retroactive extension to property acquired before the commission of the predicate offence would be arbitrary. Reliance was placed on Pavana Dibbur and on the interpretation that properties acquired prior to the criminal activity cannot be treated as proceeds of crime absent a finding that proceeds were taken out of the country. Applying these principles to the materials, the Court found the first three immovable properties were purchased well before the period of the alleged offences and no case was made that proceeds had been taken abroad; therefore their provisional attachment was ex facie null and void. [Paras 24, 25, 27, 28, 29]Provisional attachment of the three immovable properties acquired on 26.09.1997, 18.06.1999 and 18.04.1987 is quashed as being without jurisdiction; attachments in respect of the remaining properties are left open to statutory challenge.Final Conclusion: Writ petition allowed in part: provisional attachment under the PML Act quashed insofar as it related to three immovable properties acquired by the petitioners prior to the period of the alleged predicate offences; the petitioners are relegated to pursue statutory remedies in respect of the remaining attached properties.

2024 (12) TMI 1557 - TELANGANA HIGH COURT Money Laundering

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Issues: (i) Whether prosecution under the Prevention of Money Laundering Act, 2002 could be maintained against a person not shown as an accused in the predicate offence and shown only as a witness there; (ii) Whether the absence of Section 12 of the Prevention of Corruption Act, 1988 in the ECIR and the fact that the alleged predicate offence had occurred before that provision was notified as a scheduled offence defeated the PMLA proceedings; (iii) Whether the pending stay of the predicate proceedings and the material relied upon were sufficient to quash the complaint and summons under Section 482 of the Criminal Procedure Code.

Issue (i): Whether prosecution under the Prevention of Money Laundering Act, 2002 could be maintained against a person not shown as an accused in the predicate offence and shown only as a witness there.

Analysis: Liability for money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 turns on knowingly assisting or being involved in a process connected with proceeds of crime, and not on formal arraignment as an accused in the predicate case. The offence is distinct from the scheduled offence and may extend to a person who assists in concealment, possession, acquisition, use, or projection of proceeds of crime. A witness or approver in the predicate case is not immunised from PMLA prosecution if the complaint otherwise discloses involvement in laundering activity.

Conclusion: The objection was rejected and PMLA proceedings against the petitioner were held maintainable.

Issue (ii): Whether the absence of Section 12 of the Prevention of Corruption Act, 1988 in the ECIR and the fact that the alleged predicate offence had occurred before that provision was notified as a scheduled offence defeated the PMLA proceedings.

Analysis: The record showed that the FIR and charge sheets in the predicate matter invoked Section 12 of the Prevention of Corruption Act, 1988 as well as Section 120B of the Indian Penal Code, and the omission in the ECIR was treated as a curable omission because the prosecution complaint itself set out the scheduled offences. The Court also treated money laundering as a continuing offence, so the relevant inquiry was whether a scheduled offence existed when the ECIR was registered and whether proceeds of crime were being dealt with at that stage. On that footing, the existence of the scheduled offence and the continuing character of the laundering allegation were affirmed.

Conclusion: The challenge based on absence or timing of the scheduled offence failed.

Issue (iii): Whether the pending stay of the predicate proceedings and the material relied upon were sufficient to quash the complaint and summons under Section 482 of the Criminal Procedure Code.

Analysis: A stay of the predicate trial does not amount to discharge, acquittal, or quashing of the scheduled offence, and therefore does not extinguish the foundation for PMLA proceedings. At the stage of Section 482 scrutiny, the Court only examined whether the allegations prima facie disclosed the offence. The alleged handing over of bribe money and the surrounding material were considered sufficient at that threshold, and the summons was not shown to be vitiated by non-application of mind on the face of the record.

Conclusion: The request to quash the complaint and summons was rejected.

Final Conclusion: The criminal petition was found meritless because the complaint disclosed a prima facie case of money laundering, the petitioner need not have been an accused in the predicate case, and the subsisting scheduled offence and continuing nature of the alleged laundering supported the prosecution.

Ratio Decidendi: A person need not be an accused in the predicate offence to be prosecuted under the Prevention of Money Laundering Act, 2002 if the complaint prima facie shows knowing involvement in dealing with proceeds of crime, and a mere stay of the predicate proceedings does not nullify such prosecution.

Money laundering prosecution can proceed without predicate-accused status where the complaint shows prima facie involvement in proceeds of crime.
Prosecution under the Prevention of Money Laundering Act, 2002 can lie even where a person was not arraigned as an accused in the predicate offence, if the complaint prima facie shows knowing involvement in concealment, possession, acquisition, use, or projection of proceeds of crime. An omission in the ECIR regarding a scheduled offence was treated as curable where the complaint disclosed the predicate offences, and money laundering was treated as a continuing offence. A stay of the predicate proceedings did not erase the scheduled offence or justify quashing under Section 482 CrPC, and the summons was upheld because the allegations and material disclosed a prima facie case.

Money Laundering - predicate/scheduled offence - maintainability of proceedings under the PMLA, when he is not named as an accused in the predicate offence - Petitioner's role as a witness in the predicate offence - HELD THAT:- From the definition of Section 3 of the PMLA, it is clear that any person who knowingly assists or indulges in any activity or is involved in any of the processes connected with the proceeds of crime is guilty of the offence of money laundering. The essential ingredient for the offence of money laundering, therefore, is the existence of proceeds of crime. The ‘proceeds of crime’ means any property which is derived or obtained as a result of a criminal activity. Such criminal activity relates to the offences included in the Schedule to the PMLA. In other words, any property derived or obtained as a result of commission of any of the offences mentioned in the Schedule to the PMLA will be treated as ‘proceeds of crime’. While the offence of money laundering is dependent on the existence of the predicate offence, it is also an independent offence which seeks to prosecute the persons dealing with proceeds of crime. In other words, the offence of money laundering is not concerned with the ingredients of the alleged predicate offence. It is only concerned with the generation of proceeds of crime and whether the accused has dealt with such proceeds of crime. The status of the Petitioner as a witness in the predicate offence is also not a ground to quash the proceedings under the PMLA. The Allahabad High Court in Mohan Lal Rathi v. Union of India [2023 (9) TMI 1069 - ALLAHABAD HIGH COURT] dealt with a case where the Petitioner therein had turned an approver and was granted pardon in the predicate offence. In the said case, the Petitioner therein contended that as he was granted pardon and he was an approver/witness, the proceedings against him under the PMLA cannot be continued. The Allahabad High Court rejected the said contention and held that proceedings under the PMLA were maintainable despite grant of pardon. The next ground raised by the Petitioner was that no scheduled offence as alleged existed when the FIR in relation to the predicate offence was registered. In support of the said ground, the Petitioner advanced two arguments. Firstly, that when the ECIR was registered only Section 120B of the IPC was stated to be the alleged predicate offence - there can be no dispute that Section 120B of the IPC alone cannot be treated as a scheduled offence to invoke the proceedings under the PMLA. However, the contention that only Section 120B of the IPC was invoked as the predicate offence in the present case is misconceived. The FIR and Charge Sheets in relation to the predicate offence clearly mention that Section 12 of the PCA was also invoked. The said FIR and the Charge Sheets have been referred to in the ECIR. In the present case, the question is whether as on the date of registration of the ECIR, there was material with the Respondent to show that the Petitioner or the other accused were dealing with any part of the proceeds of crime. As per the ECIR dated 26.11.2018, the alleged proceeds of crime is the alleged bribe amount of Rs. 5 crore. As on the date of registration of the ECIR, only Rs. 50 lakhs were seized. It is reasonable to draw an inference that the remaining part of the alleged proceeds of crime worth Rs. 4.5 crore were either being concealed or used or being projected as untainted money or were in possession of any or all of the accused. Therefore, there is enough prima facie material to hold that as on the date of the registration of the ECIR, i.e., 26.11.2018, the offence of money laundering was continuing - Both of the said offences were part of the Schedule to the PMLA as on the date of registration of the ECIR. Therefore, this Court cannot accept the argument of the Petitioner that no scheduled offence existed when the alleged act of bribery took place and when the proceeds of crime were seized. In Y. Balaji [2023 (6) TMI 594 - SUPREME COURT], the Supreme Court held that an offence of corruption constitutes and the generation of proceedings are like ‘Siamese twins’. Therefore, there is sufficient material to justify the filing of the impugned prosecution complaint and to continue the proceedings under the PMLA. Conclusion - i) The PMLA proceedings are maintainable against the Petitioner despite him not being named as an accused in the predicate offence, as the offence of money laundering is independent and focuses on the handling of proceeds of crime. ii) The timing of the inclusion of Section 12 of the PCA in the Schedule to the PMLA does not affect the proceedings, as money laundering is a continuing offence. iii) The stay on the trial of the predicate offence does not affect the PMLA proceedings, as there is no final absolution of the accused in the scheduled offence. iv) The Petitioner's status as a witness in the predicate offence does not preclude prosecution under the PMLA. Petition dismissed.

2024 (12) TMI 613 - CALCUTTA HIGH COURT Money Laundering

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Bail granted in money laundering case as ED fails to establish link between crime proceeds and accused's bank accounts under section 50 PMLA
The HC granted bail to the petitioner in a money laundering case despite stringent PMLA provisions. The court found that ED failed to establish the link between proceeds of crime and petitioner's bank accounts, and prosecution cannot commence solely on co-accused statements under section 50 PMLA. The petitioner was not named in the predicate offense FIR or charge sheet. Considering prolonged custody of eleven months without interrogation, voluminous evidence requiring extensive trial time, and the constitutional right to speedy trial, the court released the petitioner on bail with stringent conditions to address concerns about witness tampering and absconding.

Article 21 right to speedy trial - Section 45 PMLA bail conditions - Section 24 PMLA presumption and foundational facts - evidentiary value of co-accused statement under section 50 of the PMLA - hospitalisation during custody deemed judicial custodyArticle 21 right to speedy trial - Section 45 PMLA bail conditions - Grant of bail to the petitioner in view of prolonged pre trial incarceration and absence of necessity for further custodial interrogation - HELD THAT: - The Court applied the established bail principles and recognised that prolonged incarceration before trial engages Article 21 and may warrant bail even in serious offences. The petitioner had been in custody for a considerable period, was last interrogated about eleven months prior to the order, and further custodial interrogation was unnecessary. The prosecution relies upon voluminous documentary and electronic material (180 witnesses and 438 documents) which are in the custody of the Enforcement Directorate and hence there is limited prospect of tampering. Delay in commencement and conclusion of trial, not wholly attributable to the petitioner, together with the constitutional right to speedy trial, led the Court to exercise its discretion under Section 45 of the PMLA and constitutional powers to grant bail despite the seriousness of allegations, subject to stringent conditions to allay risk of abscondence or witness tampering. [Paras 33, 34, 35, 37, 38]Bail allowed and petitioner ordered released on furnishing bond and sureties subject to stringent conditions.Evidentiary value of co-accused statement under section 50 of the PMLA - principle that prosecution cannot commence with co-accused statement - The admissibility and weight of statements of co-accused recorded under section 50 of the PMLA at the bail stage - HELD THAT: - The Court held that statements of co-accused recorded under section 50 are not substantive evidence for the purpose of deciding bail and cannot form the sole or conclusive basis for prosecution at the bail stage. The veracity and weight of such statements must be tested at trial; only broad probabilities can be considered at bail. Established authorities indicate that a conviction cannot safely be based solely on co-accused confession/statements and such statements may only be used at trial to lend assurance to other independent evidence after careful evaluation. [Paras 23, 24, 26]Statements of co-accused under section 50 cannot be treated as conclusive evidence at the bail stage; their truth must be weighed at trial.Section 24 PMLA presumption and foundational facts - prosecution must establish foundational facts before presumption shifts - Whether the prosecution had established the foundational facts under Section 24 of the PMLA so as to shift the onus to the accused - HELD THAT: - The Court reiterated the principle that before the statutory presumption under Section 24 operates, the prosecution must establish foundational facts: (i) commission of criminal activity relating to a scheduled offence, (ii) that the property in question was derived or obtained as a result of such activity, and (iii) the person is involved in processes connected with such property. The Court observed that the petitioner was not named in the FIR, charge sheet or supplementary charge sheets of the predicate offence and that whether the seized material discloses an unbroken money trail linking proceeds of crime to the petitioner is a factual question to be decided at trial. [Paras 19, 20, 21, 22, 28]Foundational facts required by Section 24 were not treated as finally established for the purpose of denying bail; determination of the money trail and applicability of the presumption is left to trial.Hospitalisation during custody deemed judicial custody - Effect of petitioner's prolonged hospitalisation during detention on custody calculation - HELD THAT: - The Court held that periods of hospitalisation during incarceration are to be regarded as judicial custody for purposes of considering the length of pre trial detention. Although the Enforcement Directorate emphasised that the petitioner was in formal judicial custody only for a part of the detention period, the Court treated hospitalisation during custody as part of the custodial period, thereby strengthening the conclusion that the petitioner had been detained for a substantial time. [Paras 36]Hospitalisation during the period of detention is deemed judicial custody for purposes of assessing prolonged pre trial incarceration.Conditions of bail to prevent tampering and abscondence - Imposition of bail conditions to safeguard investigation and trial - HELD THAT: - Given the Court's grant of bail, it imposed stringent conditions tailored to address the prosecution's concerns about witness intimidation, tampering with evidence and abscondence. Conditions included surrender of passport, territorial restriction without court permission, appearance on every trial date, prohibition on tampering or contacting witnesses, provision and maintenance of mobile number, and bond with sureties (half local). The trial Court was empowered to cancel bail on violation of conditions. [Paras 40, 41]Bail granted subject to specified stringent conditions; violation permits cancellation of bail by trial Court.Final Conclusion: The petition for bail is allowed; the petitioner is ordered released on bail on furnishing the prescribed bond and sureties and subject to stringent conditions (passport surrender, territorial restriction, attendance at trial, no tampering or contact with witnesses, provision of mobile number), with the trial Court empowered to cancel bail on breach. Observations are limited to the bail application and do not prejudice trial proceedings.

2024 (12) TMI 612 - CALCUTTA HIGH COURT Money Laundering

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PMLA bail turns on prima facie proof, broad probabilities, and personal liberty where custodial interrogation is no longer needed.
At the bail stage under the Prevention of Money Laundering Act, 2002, the Court examined whether the prosecution material prima facie established proceeds of crime, and found that the alleged cash payment theory was not clearly substantiated on the record. It treated statements recorded during investigation as not substantive evidence by themselves and assessed the case on broad probabilities rather than detailed proof. As investigation had ended and custodial interrogation was no longer required, the Court held that concerns of tampering or flight risk could be managed through strict conditions. Relying on personal liberty and the risk of punitive pre-trial incarceration, the application for bail was allowed subject to stringent conditions.

Twin conditions for bail under section 45 of the PMLA - presumption under section 24 of the PMLA - inadmissibility of custodial statement under section 50 of the PMLA - foundational facts for establishing proceeds of crime - flight risk and tampering-with-evidence considerations on bail - Article 21 protection against prolonged pre-trial incarcerationTwin conditions for bail under section 45 of the PMLA - Article 21 protection against prolonged pre-trial incarceration - Grant of bail to the petitioner in a PMLA prosecution subject to satisfaction of statutory conditions and imposition of stringent terms - HELD THAT: - The Court applied the statutory twin conditions enunciated under section 45 of the PMLA and the guidance of the Supreme Court in Vijay Madanlal Choudhary that bail determination under the Act requires assessment on broad probabilities as to mens rea and the likelihood of reoffending. Balancing the right to personal liberty under Article 21 with the statutory scheme, the Court found that continued detention was not required for custodial interrogation, that concerns about flight risk and tampering could be addressed by conditions, and accordingly ordered release on bail subject to specified stringent conditions including bond, surrender of passport and territorial restrictions. The Court emphasised that its observations were limited to the bail application and would not influence trial. [Paras 38, 39, 40, 41, 42]Bail allowed subject to stringent conditions including bond, adequate sureties, surrender of passport, non-departure without leave, attendance at trial, prohibition on tampering or contacting witnesses and furnishing mobile numberPresumption under section 24 of the PMLA - foundational facts for establishing proceeds of crime - Whether the statutory presumption under section 24 is attracted on the materials before the Court - HELD THAT: - The Court reiterated that the presumption under section 24 arises only after the Enforcement Directorate establishes three foundational facts: commission of a scheduled offence, derivation of property from such activity, and the accused's involvement in processes connected with that property. The Court observed that the ED had not prima facie established these foundational facts to the requisite degree on the record before it - in particular, allegations of large cash payments relied upon largely on an excel sheet from a third person's laptop were not satisfactorily substantiated - and that it is for the ED to establish those facts at trial after which the onus would shift to the accused to rebut the presumption. [Paras 23, 24, 34, 35]Foundational facts for attracting the presumption under section 24 were not demonstrated on the material before the Court for the purpose of denying bailInadmissibility of custodial statement under section 50 of the PMLA - Weight to be accorded to statements recorded under section 50 of the PMLA in the bail exercise - HELD THAT: - Relying on binding precedent, the Court held that statements recorded under section 50 while the maker is in custody pursuant to proceedings by the same investigating agency are inadmissible against the maker and, in any event, such statements cannot be treated as substantive evidence but may only lend corroboration to other material. The Court noted that much of the prosecution case rested on statements recorded under section 50 of the PMLA and that such statements, and statements of co-accused, require careful scrutiny at trial rather than being treated as conclusive in the bail proceedings. [Paras 27, 28, 29, 30]Section 50 statements recorded in custody are of limited evidentiary value for the present bail determination and cannot be treated as conclusive against the petitionerFlight risk and tampering-with-evidence considerations on bail - Whether the petitioner posed a real risk of flight or tampering with evidence/witnesses such as to preclude bail - HELD THAT: - The Court considered the ED's apprehensions that the petitioner could tamper with evidence or influence witnesses and that he was a flight risk. It observed that the core documentary evidence was already in custody of the ED and witnesses cited were official witnesses, reducing scope for tampering or influence. The Court held that concerns could be addressed by imposing stringent bail conditions (including surrender of passport and territorial limits) and therefore these apprehensions did not outweigh the petitioner's right to liberty in the present factual matrix. [Paras 35, 36]Apprehensions regarding flight risk and tampering were not of such weight as to deny bail; they can be mitigated by stringent bail conditionsFinal Conclusion: The High Court allowed the petition for pre-trial bail under the PMLA, applying the statutory twin conditions and relevant precedents, observed that the ED had not prima facie established foundational facts to attract the presumption under section 24, treated custodial section 50 statements as of limited evidentiary value for bail, and imposed stringent conditions to address flight and tampering concerns while clarifying that observations are confined to the bail order and will not influence trial.

2024 (12) TMI 359 - CHHATTISGARH HIGH COURT Money Laundering

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Regular bail in serious economic offence allegations denied where investigation material showed a pivotal role in the alleged scam.
Regular bail in serious liquor-scam and corruption allegations was assessed against the gravity of the accusations, the investigation material, the filing of the charge-sheet, and the claim that the applicant formed part of a criminal syndicate causing loss to the State exchequer. The Court applied settled bail principles for serious economic offences, balancing prima facie evidence, the nature of the material, the risk of interference with the process, and personal liberty against public interest. It noted that custody duration and medical discomfort alone did not justify bail where the collected material indicated a pivotal role in the alleged scheme, and regular bail was declined.

Grant of regular bail - economic offences as a class apart - balancing liberty under Article 21 with public interest in prosecution - prima facie satisfaction at bail stage - severity of punishment and gravity of offence in bail consideration - reasonable apprehension of tampering with witnesses - selective or pick-and-choose investigation does not automatically entitle to bail - requirement of evidence of flight risk - medical infirmity as ground for bail - relevance of charge-sheet filing to custodial necessityGrant of regular bail - economic offences as a class apart - severity of punishment and gravity of offence in bail consideration - prima facie satisfaction at bail stage - Whether the applicant should be enlarged on regular bail in FIR No.04/2024 - HELD THAT: - The Court considered the nature and gravity of the offences alleged (including offences under the Prevention of Corruption Act and various IPC provisions), the role attributed to the applicant as one of the heads of a criminal syndicate, and the magnitude of alleged loss to the State exchequer. While the law recognises that "bail is the rule and jail is the exception", economic offences involving deep-rooted conspiracies and large public loss are to be viewed seriously. On the record the prosecution has filed charge sheets and the material collected-including purported whatsapp chats and other documentary evidence-gives rise to a prima facie view against the applicant. Considering the seriousness of the allegations, the nature of supporting material, and the potential severity of punishment, the Court found it not proper to release the applicant on regular bail. The Court acknowledged precedents emphasising Article 21 and right to speedy trial but held that those considerations did not outweigh the gravity of the charges and the prima facie satisfaction in this case. [Paras 36, 38, 39, 44, 45]Application for regular bail is rejected.Relevance of charge-sheet filing to custodial necessity - balancing liberty under Article 21 with public interest in prosecution - Whether filing of charge-sheet and documentary nature of evidence render continued custody unnecessary and thereby justify bail - HELD THAT: - The Court noted that charge sheets have been filed and that some evidence is documentary; however, it also noted ongoing investigation and that further charge-sheets remain to be filed. The existence of a charge-sheet and documentary evidence does not automatically render custody unnecessary where the offences are serious, further investigation is continuing, and prima facie material implicates the accused. Thus, although the Court took into account the filing of charge-sheet, it concluded that this factor alone did not justify bail in the facts of this case. [Paras 4, 29, 43]Filing of charge-sheet and documentary character of evidence are insufficient, by themselves, to entitle the applicant to bail.Medical infirmity as ground for bail - medical condition and parity in bail - Whether the applicant's age and medical conditions justify grant of bail - HELD THAT: - The Court examined the medical claims and the contention of parity with co-accused granted protection. It found that the applicant's asserted medical conditions did not constitute a sufficiently serious infirmity to warrant bail on that ground. Parity with other accused or interim protections granted to some co-accused did not automatically entitle the applicant to the same relief, particularly given the role attributed to him and the seriousness of allegations. [Paras 16, 37]Medical condition and parity contentions do not justify grant of bail in the present case.Selective or pick-and-choose investigation does not automatically entitle to bail - reasonable apprehension of tampering with witnesses - Whether apparent inconsistencies in investigation, non-inclusion of certain alleged actors as accused, or selective prosecution entitle the applicant to bail - HELD THAT: - The Court observed prima facie inconsistencies in the investigation (names of distillers and others mentioned but not made accused), and noted arguments about pick-and-choose conduct. Nevertheless, the Court held that such alleged investigative inconsistencies do not automatically entitle the applicant to bail where continuing investigation is underway and prima facie material implicates the accused. The balance to be struck requires consideration of prejudice to investigation and prevention of unjustified detention; on the facts, the Court found prejudice to the public interest in releasing the accused given the gravity and prima facie evidence. [Paras 43]Alleged selective investigation does not warrant bail in the circumstances before the Court.Final Conclusion: Taking into account the nature and gravity of the offences, the prima facie material on record, the magnitude of alleged loss to the State exchequer for the financial year 2019-20 to financial year 2022-23, and the ongoing investigation, the prayer for regular bail is refused.

2024 (12) TMI 293 - DELHI HIGH COURT Money Laundering

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Issues: (i) Whether the alleged collection and deposit of funds by the petitioners constituted 'proceeds of crime' so as to attract the offence of money laundering under the Prevention of Money Laundering Act, 2002. (ii) Whether the petitioners were entitled to bail in view of prolonged incarceration and the likely delay in conclusion of trial, notwithstanding the stringent bail conditions under the Prevention of Money Laundering Act, 2002.

Issue (i): Whether the alleged collection and deposit of funds by the petitioners constituted 'proceeds of crime' so as to attract the offence of money laundering under the Prevention of Money Laundering Act, 2002.

Analysis: The expression 'proceeds of crime' was treated as the core ingredient of the offence under Section 3 of the Prevention of Money Laundering Act, 2002 and was held to mean property derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence. The funds alleged against the petitioners were found to have been collected before the alleged scheduled offence and not as a result of it. On that basis, the Court held that the complaint did not, prima facie, establish that the petitioners had generated or dealt with proceeds of crime in the manner required by the statute. The Court also noted that the petitioners, on the admitted case of the prosecution, had only collected and deposited the funds and did not have dominion and control over the alleged proceeds.

Conclusion: The offence of money laundering was not made out against the petitioners, prima facie, and the statutory threshold under Section 45 of the Prevention of Money Laundering Act, 2002 stood satisfied in their favour.

Issue (ii): Whether the petitioners were entitled to bail in view of prolonged incarceration and the likely delay in conclusion of trial, notwithstanding the stringent bail conditions under the Prevention of Money Laundering Act, 2002.

Analysis: The Court relied on the constitutional protection of personal liberty under Article 21 of the Constitution of India and the principle that bail is the rule and jail is the exception. It held that stringent statutory restrictions cannot justify continued incarceration for an unreasonably long period where the trial is unlikely to conclude within a reasonable time. Considering the custody already undergone, the large number of witnesses and voluminous documentary material, the Court found that the trial would take considerable time and that the constitutional right to liberty warranted release on bail.

Conclusion: The petitioners were entitled to bail on the ground of prolonged incarceration and delay in trial.

Final Conclusion: The petitions were allowed and the petitioners were ordered to be released on bail subject to conditions, with the merits of the case left open for trial.

Ratio Decidendi: For money-laundering liability, the property must be shown, prima facie, to have been derived or obtained as a result of a completed scheduled offence, and prolonged pre-trial incarceration may justify bail where the trial is unlikely to conclude within a reasonable time despite statutory restrictions.

PMLA proceeds of crime and prolonged pre-trial incarceration can justify bail despite strict statutory conditions.
PMLA liability turns on whether the property is prima facie shown to be "proceeds of crime", meaning property derived directly or indirectly from a completed scheduled offence; funds collected before the alleged scheduled offence and without dominion or control over the alleged proceeds may not satisfy that threshold. The document also notes that, despite stringent bail conditions under the Prevention of Money Laundering Act, prolonged pre-trial incarceration and a likely long delay in trial can justify bail under Article 21, where continued detention would be unreasonable. The merits of the prosecution remain open for trial.

Proceeds of crime - offence of money-laundering - condition precedent of scheduled offence - requirement of dominion and control - twin conditions of section 45 of PMLA - right to liberty and speedy trial under Article 21Proceeds of crime - offence of money-laundering - condition precedent of scheduled offence - requirement of dominion and control - Whether the material in the Complaint prima facie establishes that the funds collected by the petitioners are 'proceeds of crime' and thus make out an offence under Section 3 of the PMLA. - HELD THAT: - The Court held that the core ingredient of the money laundering offence is 'proceeds of crime', which must be property derived or obtained 'as a result of' criminal activity relating to a scheduled offence. The ED's case that funds collected to commit an intended scheduled offence amount to proceeds of crime is contrary to that scheme: collection of funds preceding a scheduled offence cannot, without more, be treated as proceeds generated 'as a result of' that offence. Prima facie there is no evidence on the face of the Complaint that any scheduled offence had already been committed so as to convert the collected funds into proceeds of crime. Further, even on the ED's case, the petitioners merely collected and forwarded funds to PFI accounts or accountants; there is prima facie lack of dominion and control by the petitioners over the alleged proceeds, which is material to positing possession/use/concealment under Section 3. For these reasons the Court was not satisfied prima facie that the offence of money laundering was made out against the petitioners. [Paras 40, 41, 43]Prima facie the Complaint does not establish that the funds are 'proceeds of crime' nor that the petitioners had the requisite dominion and control to make out an offence under Section 3 of the PMLA.Twin conditions of section 45 of PMLA - right to liberty and speedy trial under Article 21 - bail is the rule and jail is the exception - Whether, having regard to the twin conditions in Section 45 of the PMLA and the petitioners' period of incarceration and prospects of trial, bail should be granted. - HELD THAT: - The Court applied the constitutional principle that personal liberty under Article 21 must prevail where there is no reasonable likelihood of trial concluding within a reasonable time. Noting that trial was at the stage of supply of documents and framing of charges, that 185 prosecution witnesses and voluminous documentary and digital material are listed, and that the petitioners had already undergone over two years' incarceration, the Court found that the twin conditions under Section 45 had been satisfied for the purpose of considering bail: the Public Prosecutor had been given opportunity to oppose and, on prima facie assessment, reasonable grounds existed to believe the petitioners were not guilty and were not likely to commit an offence while on bail. Reliance was placed on the constitutional jurisdiction to relax statutory bail thresholds in cases of prolonged incarceration and no prospect of expeditious trial. Accordingly, conditional bail was directed with specified terms (personal bond, surety, surrender of passport/permission to travel, contact and address particulars, prohibition on tampering or contacting witnesses, and cooperation with investigation). [Paras 46, 49, 50, 53, 54]Petitioners are to be released on bail subject to specified conditions, in view of prolonged incarceration, absence of prospect of speedy trial and satisfaction of the twin conditions under Section 45 of the PMLA.Final Conclusion: The High Court found prima facie that the ED's Complaint did not establish that the funds were 'proceeds of crime' nor that the petitioners had requisite dominion and control to attract Section 3 of the PMLA; having regard to prolonged pre trial incarceration and no reasonable prospect of an early trial, the Court granted conditional regular bail to the petitioners, without prejudice to the merits of the pending proceedings.

2024 (12) TMI 1458 - KARNATAKA HIGH COURT Money Laundering

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Issues: (i) whether attachment and retention proceedings under the Prevention of Money Laundering Act, 2002 could be sustained against a bona fide purchaser who acquired the properties before registration of the predicate offences; (ii) whether an offence under Section 120-B of the Indian Penal Code, 1860 becomes a scheduled offence when the alleged conspiracy is to commit offences not otherwise included in the Schedule.

Issue (i): whether attachment and retention proceedings under the Prevention of Money Laundering Act, 2002 could be sustained against a bona fide purchaser who acquired the properties before registration of the predicate offences.

Analysis: The properties were acquired through sale deeds executed before the predicate crimes and before the Enforcement Case Information Report was registered. The petitioner was not an accused in the predicate offences or in the money-laundering proceedings. On the admitted chronology, the purchase preceded the criminal proceedings against the vendors, and the petitioner's possession of the properties could not, on those facts, be treated as involving proceeds of crime. Proceedings under the Act cannot be used to fasten liability on a purchaser who had no involvement in the alleged criminal activity and whose transactions had already been completed.

Conclusion: The impugned attachment proceedings were unsustainable against the petitioner and were quashed qua the petitioner.

Issue (ii): whether an offence under Section 120-B of the Indian Penal Code, 1860 becomes a scheduled offence when the alleged conspiracy is to commit offences not otherwise included in the Schedule.

Analysis: The Schedule to the Act does not become redundant merely because conspiracy is alleged. Section 120-B is a scheduled offence only where the conspiracy alleged is to commit an offence that is itself already included in the Schedule. A conspiracy to commit a non-scheduled offence does not, by itself, enlarge the Schedule or convert every such offence into a scheduled offence. Penal provisions must be strictly construed, and the legislative choice to limit scheduled offences cannot be defeated by a broad reading of conspiracy.

Conclusion: Section 120-B of the Indian Penal Code, 1860 does not make a non-scheduled offence a scheduled offence unless the object of the conspiracy is itself a scheduled offence.

Final Conclusion: The challenge to the attachment order succeeded, and the proceedings could not be continued against the petitioner on the admitted facts and chronology.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, proceedings cannot be sustained against a bona fide purchaser whose acquisition preceded the predicate offences and who had no alleged involvement in the criminal activity, and a conspiracy provision cannot be used to treat a non-scheduled offence as scheduled unless the object of the conspiracy is itself a scheduled offence.

Bona fide purchaser protection under PMLA limits attachment where acquisition preceded predicate offences and no criminal involvement is alleged.
Attachment and retention under the Prevention of Money Laundering Act cannot be sustained against a bona fide purchaser who acquired property through sale deeds before the predicate offences were registered and who was not alleged to be involved in the criminal activity; on those facts, the attachment was unsustainable against that purchaser. Section 120-B of the Indian Penal Code does not, by itself, convert a non-scheduled offence into a scheduled offence: conspiracy is relevant only where the object of the conspiracy is itself a scheduled offence. The legal position is that the Schedule to the Act cannot be expanded by treating every alleged conspiracy as sufficient to trigger PMLA consequences.

Bona fide purchaser - attachment of proceeds of crime - scheduled offence under the PMLA - criminal conspiracy under Section 120-B IPC - requirement of existence of scheduled offence for invoking PMLABona fide purchaser - attachment of proceeds of crime - Validity of attachment under the PMLA of properties transferred to the petitioner by sale deeds executed before registration of predicate offences - HELD THAT: - The petitioner purchased parcels of land by sale deeds executed between 25-10-2021 and 26-08-2022; those transactions and subsequent Joint Development Agreement pre dated registration of the predicate crimes and the ECIR. The Court accepted that the petitioner is a bona fide purchaser who was not an accused in either the predicate offences or the ECIR proceedings. Applying the principle that purchasers who acquire property before the commission or detection of the scheduled offence cannot be indiscriminately drawn into PMLA attachment proceedings, the Court held that permitting attachment of properties acquired by the petitioner long before initiation of the criminal proceedings would unjustly subject an innocent purchaser to the consequences of a vendor's later indictment. On these facts the impugned order of attachment was unsustainable and liable to be set aside. [Paras 9, 11, 12]Order of attachment dated 13-07-2024 quashed insofar as it affects the petitionerScheduled offence under the PMLA - criminal conspiracy under Section 120-B IPC - requirement of existence of scheduled offence for invoking PMLA - Scope of Section 120-B IPC in bringing offences within the Schedule to the PMLA and its application to the present proceedings - HELD THAT: - Relying on the reasoning in Pavana Dibbur, the Court accepted the proposition that Section 120-B will constitute a scheduled offence under the PMLA only if the alleged conspiracy is to commit an offence already specified in Parts A, B or C of the Schedule. A broad construction that any conspiracy to commit an offence (including offences not in the Schedule or without cross border implications) would convert that conspiracy into a scheduled offence would defeat the legislative scheme and render the Schedule otiose. On the material before the Court there was no basis to treat the petitioner's transactions as forming part of proceeds of any established scheduled offence; consequently the presence of an allegation of conspiracy in other complaints could not, without more, justify continuing attachment proceedings against the petitioner. [Paras 29, 30, 31]Section 120-B attracts PMLA only when the conspiracy concerns an offence already included in the Schedule; absent such linkage the PMLA proceedings cannot be sustained against the petitionerFinal Conclusion: Writ petition allowed; the Enforcement Directorate order dated 13-07-2024 (ECIR/BGZO/28/2023) is quashed insofar as it relates to the petitioner.

2024 (12) TMI 951 - CALCUTTA HIGH COURT Money Laundering

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HC upholds PMLA Section 17 freezing orders against company linked to entity under investigation
The HC upheld freezing orders under Section 17 and 17(1-A) of PMLA, 2002 against a company linked to an entity under investigation. The court distinguished the case from precedent where SC had stayed proceedings, noting ongoing investigation without judicial interference. The court held that Section 17(1-A) serves as intimation to affected parties while Section 17(2) mandates sealed submission of reasons to maintain investigation secrecy. Based on financial trail evidence linking the petitioner to the investigated entity, the court found the phrase "for purposes of investigation" in the notice sufficient to justify enforcement action. The writ application was dismissed.

Freezing order under Section 17(1-A) of the PMLA - reason to believe - proceeds of crime - search and seizure under Section 17 - forwarding reasons to the Adjudicating Authority in a sealed envelope - sufficiency of 'for the purposes of investigation' as stated in freezing notice - authority of delegated officers (Assistant Director/Deputy Director) to issue freezing/search ordersFreezing order under Section 17(1-A) of the PMLA - sufficiency of 'for the purposes of investigation' as stated in freezing notice - proceeds of crime - reason to believe - Validity of the freezing orders impugned in relation to the petitioner company and whether the brief reasons in the freezing notice ('for the purposes of investigation') were sufficient - HELD THAT: - The Court found that the investigation material placed before it establishes a monetary trail linking the petitioner to Corporate Power Limited and related entities. Section 17(1-A) permits freezing where it is not possible to seize property; Section 17(2) requires the authorised officer to forward the reasons and material to the Adjudicating Authority in a sealed envelope. The judge held that the phrase 'for the purposes of investigation' in the Section 17(1-A) notice, coupled with the reference to the ECIR and the financial trail produced by the investigating agency, amounted to enough information at the investigation stage and did not warrant interference. The petitioner retains the opportunity to explain the receipts before the Adjudicating Authority and is not deprived of an effective remedy under the statute.The freezing orders are not interfered with; the brief reasons in the Section 17(1-A) notice were held sufficient in the circumstances and the petition is dismissed on this ground.Authority of delegated officers (Assistant Director/Deputy Director) to issue freezing/search orders - search and seizure under Section 17 - Whether the issuing authority (Assistant Director/authorised subordinate officers) lacked competence to pass the freezing orders - HELD THAT: - The Court observed that earlier coordinate decisions accept that the Director may delegate authority to an officer not below the rank of Deputy Director, and such delegated authority permits a subordinate (e.g., Assistant Director) to execute search, seizure and freezing if the chain of authorization is established. The factual record in this case did not show any challenge to the delegation that would invalidate the orders, and the Court treated the precedent upholding delegated authority as applicable.No fault was found with the authority of the officers who issued the freezing orders; the challenge on delegation/competence did not succeed.Search and seizure under Section 17 - forwarding reasons to the Adjudicating Authority in a sealed envelope - Applicability of precedents cited by the petitioner (including Reshmi Metaliks) to the facts of this case - HELD THAT: - The Court distinguished the Reshmi Metaliks decision on the ground that that case arose where the Supreme Court had stayed proceedings in respect of an affected party; in the present matter no such stay or similar judicial bar existed and the investigation was ongoing. The Court therefore declined to treat those precedents as mandating interference with the impugned freezing orders here.Precedents relied upon by the petitioner were distinguished and did not warrant quashing of the freezing orders in the present facts.Final Conclusion: Writ petition dismissed; freezing orders under Section 17/17(1-A) of the PMLA upheld on the material and reasons available at the investigation stage, with the petitioner remaining entitled to pursue explanation and remedies before the Adjudicating Authority.

2024 (12) TMI 473 - CALCUTTA HIGH COURT Money Laundering

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Enforcement Directorate's asset freezing under Section 17 PMLA upheld based on sufficient investigation grounds
Calcutta HC dismissed a petition challenging freezing orders under Section 17 of PMLA, 2002. The Court held that the Enforcement Directorate had sufficient reasons to believe and justification for freezing petitioner's assets based on financial trails linking the company to another entity under investigation. The Court distinguished this case from precedents cited by petitioner, noting ongoing investigation without court interference. The phrase "for purposes of investigation" in Section 17(1-A) notices was deemed sufficient justification. Petitioner retained right to approach adjudicating authority. No interference warranted in investigating agency's actions.

Power of freezing under Section 17(1 A) of the PMLA - requirement to record and furnish "reasons to believe" and forwarding material to the Adjudicating Authority - concept of "proceeds of crime" and money trail as basis for suspicion - authority of subordinate officer (Assistant Director) to execute search, seizure and freezing under Section 17 - scope of judicial review of reasoned satisfaction of authorised officerPower of freezing under Section 17(1 A) of the PMLA - concept of "proceeds of crime" and money trail as basis for suspicion - Validity of the freezing orders issued under Section 17(1 A) of the PMLA in respect of the petitioner's accounts and holdings - HELD THAT: - The Court found that the investigating agency had placed material establishing a financial trail linking the petitioner's account to transactions emanating from the primary accused entity under investigation. In light of that money trail and the reference in the freezing order to the ECIR, the expression "for the purposes of investigation" in the Section 17(1 A) notice was held to constitute sufficient information to justify freezing pending inquiry. The Court observed that it is then open to the affected party to explain the source of funds before the adjudicating authority; interim judicial intervention was not warranted on the material placed by the Enforcement Directorate. [Paras 19, 23]Freezing orders under Section 17(1 A) are sustainable on the material furnished showing a money trail; no interference with the freezing orders on this ground.Requirement to record and furnish "reasons to believe" and forwarding material to the Adjudicating Authority - scope of judicial review of reasoned satisfaction of authorised officer - Sufficiency of reasons recorded and the statutory scheme for forwarding reasons and material to the Adjudicating Authority under Section 17(2) - HELD THAT: - The Court distinguished between the intimation function of Section 17(1 A) and the statutory mandate of Section 17(2) which requires the authorised officer to forward reasons and material to the Adjudicating Authority in a sealed envelope. The judgment held that while the Section 17(1 A) notice need only inform the affected person (and may state the action is "for the purposes of investigation"), the detailed reasons and material are to be sent to the Adjudicating Authority as mandated by Section 17(2). Thus the statutory scheme contemplates secrecy of investigative material while preserving the adjudicatory process for detailed scrutiny. [Paras 20, 21, 22]The phrase "for the purposes of investigation" in the Section 17(1 A) notice is sufficient for intimation; the authorised officer must forward detailed reasons and material to the Adjudicating Authority as per Section 17(2).Authority of subordinate officer (Assistant Director) to execute search, seizure and freezing under Section 17 - scope of judicial review of reasoned satisfaction of authorised officer - Whether the Assistant Director was a validly authorised officer to issue the freezing orders - HELD THAT: - The Court noted precedents and statutory interpretation recognizing that subordinate officers, when properly authorised by the Director, may execute search, seizure and freezing under Section 17. Having considered the authorities relied upon by both sides, the Court found no infirmity in the delegation or in the invocation of Section 17 by the authorised officer in the facts of the present case. [Paras 15, 16]No fault found with the authority of the Assistant Director to issue the freezing orders; delegation to subordinate officers is permissible when effected under the statute.Final Conclusion: Writ petition dismissed; the freezing orders impugned dated 13th-14th August, 2024 are upheld on the material placed by the Enforcement Directorate, subject to the petitioner's remedy before the Adjudicating Authority where the authorised officer has forwarded reasons and material.

2025 (1) TMI 9 - KERALA HIGH COURT Money Laundering

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PMLA bail conditions may yield where indefinite pre-trial custody and delayed trial threaten constitutional liberty, subject to safeguards.
Section 45 of the Prevention of Money Laundering Act imposes twin bail conditions: after hearing the Public Prosecutor, the court must have reasonable grounds to believe the accused is not guilty and unlikely to offend while on bail. The Code of Criminal Procedure applies only where consistent with the Act, which has overriding effect. Prolonged pre-trial custody, a filed money-laundering complaint, the absence of a charge sheet in the predicate offence, and an unlikely early trial may dilute the statutory conditions. Bail assessment proceeds on broad probabilities, while Article 21 liberty concerns may support release subject to safeguards against absconding or evidence tampering.

Seeking grant of bail - Money Laundering - proceeds of the crime - unexplained source of income - prolonged incarceration of the petitioners without the commencement of trial - applicability of twin conditions under Section 45 of the PMLA, 2002 - HELD THAT:- In the case on hand, the petitioners have been in judicial custody for the last 14 months; the investigation of the crime, so far as the petitioners are concerned, is complete, and the complaint has been filed. But the investigation into the predicate offence is not complete and the charge sheet has not been filed. Therefore, there is not even the remotest possibility of the trial in the crime commencing in the near future. So, keeping the petitioners in indefinite incarceration till the culmination of the trial will infringe on their right to life guaranteed under Article 21 of the Constitution of India. The petitioners have strong roots in the State. The apprehension of the prosecution that the petitioners may flee from justice, can be adequately safeguarded by imposing stringent conditions. The petitioners have volunteered to abide by any condition that may be imposed by this Court and they will cooperate with the investigation. On considering the prosecution allegations and the explanations put forward by the petitioners, which have been narrated above, this Court is satisfied that there are reasonable grounds to hold that the petitioners have not committed the above offences. As the petitioners have no criminal antecedents, going by the law laid down by the Honourable Supreme Court in Dheeraj Kumar Shukla v. State of Uttar Pradesh [2023 (1) TMI 1374 - SC ORDER], this Court has no hesitation to hold that the petitioners are not likely to commit an offence if they are enlarged on bail. This Court is convinced that the petitioners have satisfactorily diluted the twin conditions under Section 45 of the Act. Hence, the petitioners are entitled to be enlarged on bail. Conclusion - The prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. The applications are allowed, by directing the petitioners to be released on bail on them executing a bond for Rs. 2,00,000/- each, with two solvent sureties for the like sum, to the satisfaction of the jurisdictional court, which shall be subject to fulfilment of conditions imposed.

2024 (12) TMI 1147 - BOMBAY HIGH COURT Money Laundering

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Appeals against PMLA attachment orders must be heard on criminal side, not civil side
The Bombay HC determined that appeals challenging attachment orders under the Prevention of Money Laundering Act (PMLA) should be entertained on the criminal side rather than civil side. The court held that while the Adjudicating Authority follows civil procedure for attachment proceedings, these proceedings are supplementary to money laundering offenses and aid the Special Court's ultimate determination of criminal liability. Since property attachment depends on the outcome of criminal trials under PMLA and involves criminal elements, appeals against such orders must be heard on the criminal side of the HC.

Criminal character of proceedings under the Prevention of Money Laundering Act, 2002 - attachment and confiscation of proceeds of crime ancillary to criminal trial - ousting of civil court jurisdiction in matters under PMLA - Adjudicating Authority and Appellate Tribunal vested with powers of a Civil Court for specified purposes - appeals under Section 42 of PMLA to the High Court to be entertained on the criminal sideCriminal character of proceedings under the Prevention of Money Laundering Act, 2002 - attachment and confiscation of proceeds of crime ancillary to criminal trial - ousting of civil court jurisdiction in matters under PMLA - Appeals under Section 42 of the Prevention of Money Laundering Act, 2002 shall be entertained on the criminal side of the High Court. - HELD THAT: - The Court held that the PMLA is a special legislation whose object is prevention of money laundering and includes criminal offences punishable under the Act. Proceedings for attachment under the PMLA are instituted in aid of the trial of the offence and the ultimate fate of attached property (confiscation or release) depends on the conclusion of the criminal trial. Provisions such as the application of the Code of Criminal Procedure to arrest, investigation, attachment and prosecution, the bar on civil suits and the ouster of civil court jurisdiction under the statute, and the provision that confiscation follows conclusion of trial, demonstrate the criminal character of the scheme. While the Adjudicating Authority and the Appellate Tribunal are vested with certain powers of a civil court for adjudicatory purposes, those powers are ancillary and limited; they do not convert the statutory scheme into ordinary civil proceedings. Applying the test that criminal proceedings are those which may result in sentences including imprisonment or forfeiture/confiscation of property, the Court concluded that appeals from orders of the Adjudicating Authority/Appellate Tribunal under the PMLA fall on the criminal side. [Paras 11, 12, 18]The appeal under Section 42 of the PMLA is to be filed and entertained on the criminal side of the High Court.Final Conclusion: The High Court directed that the appeal under Section 42 PMLA shall be placed on the criminal side and listed accordingly after the Christmas vacation.

2024 (12) TMI 163 - DELHI HIGH COURT Money Laundering

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Arrest under Section 19 of PMLA upheld, petition challenging arrest memo dismissed
HC dismissed petition challenging arrest under Section 19 of PMLA. Petitioner sought quashing of arrest memo and order, alleging violation of constitutional safeguards and failure to provide reasons for arrest. Court held arrest was valid and did not violate PMLA provisions. Judicial review of arrest grounds (including reasons to believe) did not warrant adverse inference. Court noted petitioner could challenge all grounds during bail proceedings where broader considerations apply. Petition dismissed with clarification that observations were limited to assessing arrest legality, not case merits.

Grounds of arrest - reasons to believe - need and necessity to arrest - relevance of exculpatory material - judicial review (not merits review) - information to the accused and compliance with Section 19(2) PMLA - forwarding of arrest order and material to the Adjudicating Authority - right against self incrimination / non cooperation - remand orders and their relation to legality of arrestGrounds of arrest - reasons to believe - Validity and sufficiency of the grounds of arrest and whether the grounds subsume the 'reasons to believe' required under Section 19 PMLA. - HELD THAT: - The Court examined whether the arresting officer's opinion was formed on the material in possession, whether the opinion logically flowed from those facts, and whether any vital ground was omitted or any error of law committed. The grounds of arrest in this case were detailed and ran into multiple paragraphs; the remand application contained substantially the same facts. The Court accepted that the grounds, as formulated by the ED on 09 July 2024, contained sufficient narrative matter which the ED treated as subsuming the 'reasons to believe' (notwithstanding that the separate requirement to furnish written 'reasons to believe' was articulated by the Supreme Court a few days later). On the facts before it, the Court found no perversity, mis application of law, or failure to consider any vital material that would vitiate the officer's opinion recorded in the grounds of arrest. [Paras 46, 47, 48, 53]The grounds of arrest (as filed on 09 July 2024) were not vitiated and, on the material before the Court, the officer's opinion as recorded in those grounds could not be faulted.Information to the accused and compliance with Section 19(2) PMLA - forwarding of arrest order and material to the Adjudicating Authority - Whether the statutory requirements to inform the accused of grounds of arrest and to forward the arrest order and material to the Adjudicating Authority were complied with. - HELD THAT: - The Court noted the statutory mandate to inform the arrestee of grounds and to forward a copy of the arrest order and material to the Adjudicating Authority. The arrest occurred on 09 July 2024 at 10:38 p.m.; the ED produced records showing forwarding to the Adjudicating Authority on the morning of 10 July 2024. Given the timing and the contemporaneous records shown from the ED file, and considering the legal position at the time of arrest (pre Arvind Kejriwal pronouncement requiring separate reasons to be furnished), the Court found that the communication of grounds and the forwarding to the Adjudicating Authority was made in accordance with the statutory scheme. [Paras 47, 49, 52, 53, 55]Statutory requirements to inform the arrestee of the grounds and to forward the arrest order with material to the Adjudicating Authority were satisfied in the circumstances of this case.Reasons to believe - judicial review (not merits review) - Whether the 'reasons to believe' were required to be furnished as a separate document at the time of this arrest and the scope of judicial review of those 'reasons to believe'. - HELD THAT: - The Court analysed the temporal aspect: the arrest occurred on 09 July 2024 while the Supreme Court's decision in Arvind Kejriwal (which expressly required furnishing of 'reasons to believe') was pronounced on 12 July 2024. It found it unrealistic to impose the later articulation retrospectively on the ED for the 09 July arrest. The Court reiterated that judicial review of the authorised officer's opinion is available but is confined to jurisdictional and legal errors and not a merits or mini trial; the court must examine whether the reasons are based on material that establishes a logical nexus to the conclusion reached, and whether any vital exculpatory material was ignored or any decision making error occurred. [Paras 39, 40, 46, 55, 58]The ED was not obliged retroactively to furnish a separate 'reasons to believe' document for the 09 July 2024 arrest; judicial review is available but limited to legal or jurisdictional infirmities and not a merits review.Relevance of exculpatory material - Whether the ED disregarded or failed to consider exculpatory material such that the arrest was vitiated. - HELD THAT: - The Court scrutinised the specific exculpatory materials relied upon by the petitioner (e.g., a scanned letter of MKA dated 17 September 2019, FARs by other auditors, setting aside of 'fraud' declarations and stays of 'wilful defaulter' statuses). It accepted the ED's contention that certain documents claimed to be exculpatory were not in the IO's possession at the time, were limited in scope or bore disclaimers, or were otherwise not conclusive. The Court found that the ED had in its possession significant inculpatory material (money trail, large diversions, numerous companies and properties, admissions by lower rung employees) and that the alleged exculpatory material did not demonstrate that the arresting officer had ignored a vital absolving ground that would render the arrest illegal. [Paras 56]The contention of non consideration of exculpatory material did not establish a legal infirmity in the arrest on the facts before the Court.Need and necessity to arrest - Section 41 Cr.P.C. parameters - Whether, on the material, there was need and necessity to arrest the petitioner in July 2024. - HELD THAT: - Although the broader question of whether 'need and necessity' is a separate ground for challenging arrest has been referred to a larger Bench by the Supreme Court, the Court here applied the relevant principles and Section 41 Cr.P.C. considerations. On the facts (large alleged diversion of public money, risk of tampering with evidence, transfers of properties to relatives, insolvency context and proposed extreme haircut), the Court held that the ED's assessment of need and necessity to arrest in July 2024 could not be faulted and was supported prima facie by the material in possession. [Paras 41, 53, 54, 55, 57]On the material before it the Court found the ED's assessment of necessity to arrest to be sustainable and not vitiated.Right against self incrimination / non cooperation - Whether alleged non cooperation by the petitioner could by itself justify arrest under Section 19 PMLA. - HELD THAT: - The Court observed the constitutional protection against self incrimination and noted the settled principle that 'mere non cooperation' is not by itself a sufficient ground for arrest under Section 19. It recorded that the petitioner had attended ED multiple times and had statements recorded; nonetheless, the ED combined alleged non cooperation with other factors in forming its opinion. The Court did not accept non cooperation alone as justification for arrest on the facts of this case. [Paras 27, 44, 56]Non cooperation alone is not a lawful basis for arrest; on the facts, non cooperation was one factor among others and did not alone vitiate the arrest.Remand orders and their relation to legality of arrest - Whether the subsequent remand orders cured any alleged illegality in the arrest. - HELD THAT: - The Court reiterated settled law that a remand order cannot cure an arrest that is unconstitutional or unlawful under Section 19. It then examined the remand orders and found they contained assessments of the grounds of arrest and that the magistrate had satisfied himself as required. Given the Court's finding that the arrest itself was not vitiated, the remand orders did not suffer from the defect of validating an unlawful arrest. [Paras 45, 53, 59]Remand orders did not cure any non existent illegality; the remand orders were not vitiated in the circumstances of this case.Final Conclusion: The petition challenging the validity of arrest is dismissed. On the material before the Court the arrest under Section 19 PMLA and the consequent remands did not violate Section 19; judicial review (not a merits review) was applied and found no jurisdictional or legal infirmity that would vitiate the arrest. The petitioner remains entitled to agitate all factual and evidentiary contentions, including those relied upon as exculpatory, at the appropriate stage such as a bail hearing or trial.

2024 (12) TMI 90 - CALCUTTA HIGH COURT Money Laundering

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Issues: (i) Whether the petitioner was entitled to bail in a prosecution under the Prevention of Money-Laundering Act, 2002 in view of the material collected, the stage of the trial, and the allegation of prolonged incarceration. (ii) Whether the presumption under section 24 of the Prevention of Money-Laundering Act, 2002 had to be tested against the foundational facts and whether the statements of the petitioner and co-accused could, at the bail stage, justify continued custody.

Issue (i): Whether the petitioner was entitled to bail in a prosecution under the Prevention of Money-Laundering Act, 2002 in view of the material collected, the stage of the trial, and the allegation of prolonged incarceration.

Analysis: The Court noted that the petitioner had remained in custody for more than twenty months, charge had not yet been framed, and the trial was not likely to commence soon. The prosecution case depended largely on voluminous documentary material, statements, and witnesses, most of which were already in the custody of the Enforcement Directorate, reducing the risk of tampering. The Court also considered the constitutional protection of personal liberty and speedy trial under Article 21, and held that prolonged pre-trial incarceration cannot be allowed to become punishment before trial.

Conclusion: The petitioner was entitled to bail.

Issue (ii): Whether the presumption under section 24 of the Prevention of Money-Laundering Act, 2002 had to be tested against the foundational facts and whether the statements of the petitioner and co-accused could, at the bail stage, justify continued custody.

Analysis: The Court proceeded on the basis that the statutory presumption under section 24 operates only after the prosecution establishes foundational facts connecting a scheduled offence, the property, and the accused with proceeds of crime. At the bail stage, the Court held that the case could not rest conclusively on the statements of the petitioner or co-accused, and that such statements were matters for trial rather than final evaluation on bail. The Court further held that disputed factual issues regarding the scope of the investigation and the evidentiary value of recovered material had to be examined at trial.

Conclusion: The presumption was not treated as a bar to bail on the facts of the case.

Final Conclusion: Bail was granted with stringent conditions in view of the petitioner's right to liberty and speedy trial, while leaving the merits of the prosecution case open for determination at trial.

Ratio Decidendi: In a money-laundering prosecution, prolonged incarceration, absence of imminent trial, and the limited utility of disputed statements and custodial material at the bail stage can justify release on bail, particularly where the prosecution already holds the documentary record and the risk of interference with evidence is minimal.

Prolonged pre-trial custody and disputed statements can support bail in a money-laundering prosecution.
Prolonged pre-trial custody in a PMLA prosecution may justify bail where the accused has remained in custody for over twenty months, charge has not been framed, and trial is not likely to begin soon. The Court also noted that where the prosecution already holds the key documentary record and witness material, the risk of tampering is reduced, and Article 21 concerns of personal liberty and speedy trial weigh in favour of release. On section 24, the statutory presumption was treated as operating only after foundational facts are established, and disputed statements of the accused or co-accused were held to be matters for trial, not a conclusive basis to deny bail.

Presumption under section 24 of the PMLA - Foundational facts for moneylaundering - Onus to rebut - Evidentiary value of statement under section 50 of the PMLA - Protection under section 25 of the Indian Evidence Act - Bail and Article 21 - right to speedy trial - Broad probabilities test at bail stage - Bail is rule and jail is exceptionPresumption under section 24 of the PMLA - Foundational facts for moneylaundering - Onus to rebut - Whether the prosecution established the foundational facts under section 24 of the PMLA so as to shift the onus on the accused - HELD THAT: - The Court applied the principle that prosecution must prima facie establish three foundational facts - commission of a scheduled offence, that the property was derived from such criminal activity, and that the person was involved in processes connected with the proceeds - before the legal presumption under section 24 shifts to the accused. Noting the authorities relied upon, the Court found that link and involvement required to attract the presumption were not satisfactorily established at the bail stage and that the petitioner must be afforded an opportunity before the trial Court to rebut the presumption by adducing evidence within his personal knowledge. The determination was made on broad probabilities appropriate to a bail application, not by weighing complete evidence for trial. [Paras 18, 19, 20, 21]Prosecution has not, at the bail stage, established the foundational facts to shift the onus under section 24; petitioner to be given opportunity in trial Court to rebut the presumption.Evidentiary value of statement under section 50 of the PMLA - Protection under section 25 of the Indian Evidence Act - Appropriate treatment at bail stage of statements recorded under section 50 of the PMLA and confessional statements - HELD THAT: - The Court reiterated the settled view that statements of coaccused recorded under section 50 are not substantive evidence against other accused and their evidentiary value must be tested at trial; such statements cannot be treated as gospel truth when considering bail and only broad probabilities are to be examined. The Court also noted that whether protection under section 25 of the Evidence Act is available to an accused in a moneylaundering prosecution is a question to be considered case by case at trial, and that a judge may examine whether the remaining evidence, excluding any confession, is sufficient to sustain conviction before relying on any confession. [Paras 23, 24]Statements under section 50 of the PMLA are not substantive proof for denying bail; admissibility and weight of confessional statements are to be tested at trial.Bail and Article 21 - right to speedy trial - Broad probabilities test at bail stage - Bail is rule and jail is exception - Whether petitioner ought to be released on bail given prolonged pretrial incarceration, volume of prosecution material, and absence of imminent trial - HELD THAT: - Relying on the principle that the right to speedy trial under Article 21 applies irrespective of the gravity of the offence and that bail is ordinarily the rule while custody the exception, the Court observed that the petitioner had been incarcerated for over twenty months with no immediate prospect of trial commencement despite voluminous prosecution material being in custody of the prosecution. The Court noted that coaccused in similar circumstances were granted bail, that documentary evidence was largely with the prosecution reducing tampering risk, and that appropriate stringent conditions could address apprehensions about interference with witnesses or evidence. Applying the broad probabilities test at the bail stage, the Court concluded that continued pretrial detention would unduly infringe the petitioner's Article 21 rights. [Paras 30, 31, 32, 33, 34]Petitioner entitled to bail; release ordered subject to stringent conditions.Final Conclusion: Bail granted to the petitioner in C.R.M. (S.B) 17 of 2024 upon furnishing bond with sureties and on specified conditions; observations confined to the bail determination and petitioner to be permitted to rebut the statutory presumption and have all evidentiary issues adjudicated at trial.

2024 (12) TMI 1541 - RAJASTHAN HIGH COURT Money Laundering

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1. ISSUES PRESENTED and CONSIDERED:

- Whether the accused-petitioner should be granted bail under Section 483 B.N.S.S. in connection with offences under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA).

- Whether the petitioner's involvement in obtaining a tender through illegal means and money laundering has been established.

- Whether the petitioner is entitled to bail based on his age and health conditions under Section 45 of the PMLA.

2. ISSUE-WISE DETAILED ANALYSIS:

Relevant legal framework and precedents: The court considered the provisions of the PMLA, specifically Section 45, along with precedents such as the case of Manish Sisodia Vs. Directorate of Enforcement and Daulat Singh @ Gatu Versus State of Rajasthan.

Court's interpretation and reasoning: The court noted that there was sufficient material against the petitioner to substantiate the allegations of obtaining the tender illegally and engaging in money laundering. The court also emphasized the mandatory nature of the bail provisions under the PMLA and the stringent conditions for granting bail under Section 45.

Key evidence and findings: Evidence included statements by witnesses implicating the petitioner in forging certificates, obtaining the tender through bribery, and receiving a substantial amount of money in his account. The court highlighted the importance of valid certificates from IRCON for procuring the tender.

Application of law to facts: The court applied the provisions of the PMLA and relevant precedents to assess the petitioner's eligibility for bail. It emphasized the need to satisfy the twin conditions under Section 45 for granting bail in such cases.

Treatment of competing arguments: The court considered arguments from both the petitioner's counsel and the ASG opposing the bail application. While the petitioner argued innocence and entitlement to bail based on age and health, the ASG presented evidence of conspiracy and money laundering activities.

Conclusions: The court concluded that there were reasonable grounds to believe the petitioner's involvement in the alleged offences, and he did not meet the conditions for bail under Section 45 of the PMLA. The bail application was dismissed based on the evidence and legal framework presented.

3. SIGNIFICANT HOLDINGS:

- The court held that there was enough material against the petitioner to substantiate the allegations, and he did not meet the conditions for bail under Section 45 of the PMLA.

- The court emphasized the mandatory nature of the bail provisions under the PMLA and the need to satisfy the twin conditions for granting bail in such cases.

- The petitioner's bail application was dismissed, and he was not entitled to release on bail based on the evidence and legal interpretations provided.

Bail Denied for Accused-Petitioner Under PMLA Section 45 Due to Evidence of Illegal Tender and Money Laundering
The court dismissed the accused-petitioner's bail application under Section 45 of the PMLA, finding sufficient material to substantiate allegations of illegal tender acquisition and money laundering. Despite arguments regarding age and health, the court emphasized the mandatory nature of bail provisions under the PMLA and the need to satisfy its twin conditions. Evidence, including witness statements and financial records, supported the allegations, leading to the conclusion that the petitioner did not qualify for bail.

Money Laundering - illegally obtaining the tender after bribing the concerned officials - twin conditions of section 45 of PMLA - HELD THAT:- The IRCON has categorically mentioned that to procure the tender under the Jal Jeevan Mission, the petitioner must have a valid certificate issued by the IRCON. In Mukesh Pathak's statement under Section 50 of the PMLA, it has been categorically mentioned that he forged the certificates and received money from the petitioner and other co-accused. The record also shows that the petitioner has received Rs.136.14 Crores from the State Government on the pretext of having valid certificates. The law itself is no longer res-integra, and for granting bail under Section 45 of the PMLA, twin conditions enshrined under Section 45 of the PMLA are to be satisfied. This Court is not satisfied that there are reasonable grounds for believing that the accused is not involved in such an offence and is not likely to commit any offence while on bail. In the case of Daulat Singh @ Gatu Versus State of Rajasthan, [2014 (4) TMI 1333 - RAJASTHAN HIGH COURT] the Division Bench of this Court, after interpreting the provisions enshrined under Section 37 of the NDPS Act, categorically held that provisions of Section 37 of the NDPS Act are mandatory. The Apex Court may grant release of bail under Article 142 of the Constitution without getting itself satisfied with the requirement of Section 37 of the Act, if that is necessary for doing complete justice; such Authority is not available to the High Court or trial court. The accused's bail cannot be granted until the Court prima facie held that no material indicates the accused's involvement in the alleged crime. The bail order passed in the case of Manish Sisodia [2024 (8) TMI 614 - SUPREME COURT] pertains to the power of the Hon’ble Apex Court enumerated under Article 142 of the Constitution of India. The same power cannot be exercised by the High Court as the provisions of Section 45 of the PMLA are mandatory, as held in the case of Madan Lal Choudhary Vs. Union of India, [2022 (7) TMI 1316 - SUPREME COURT (LB)]]. Conclusion - i) There was enough material against the petitioner to substantiate the allegations, and he did not meet the conditions for bail under Section 45 of the PMLA. ii) Petitioner was not entitled to release on bail based on the evidence and legal interpretations provided. Petition dismissed.

2025 (2) TMI 14 - MADRAS HIGH COURT Money Laundering

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The judgment revolves around the challenge to the summons issued by the Enforcement Directorate to the petitioners under Section 50(2) of the Prevention of Money Laundering Act, 2002 (PMLA). The core issues considered by the Court include the validity of the summons issued after the petitioners had already responded to an earlier summons and the interpretation of the legal provisions under the PMLA, particularly after the amendment introduced by Act 23 of 2019.

Issues Presented and Considered:

The primary issue is whether the Enforcement Directorate can issue a new summons under Section 50(2) of the PMLA after the petitioners had already responded to a previous summons. This involves examining the scope of the Directorate's powers post-amendment to Section 44(1)(d) of the PMLA, which includes Explanation (ii) introduced by Act 23 of 2019.

Issue-Wise Detailed Analysis:

Legal Framework and Precedents: The relevant legal framework includes Section 50(2) and Section 44(1)(d) of the PMLA. Section 50(2) empowers the Directorate to summon individuals for evidence or document production. Section 44(1)(d) Explanation (ii), inserted by the 2019 amendment, clarifies that complaints can include further investigations to gather additional evidence. The Supreme Court's decision in Vijay Madanlal Choudhary and Others vs. Union of India and Others was cited, which emphasizes the continuing nature of money laundering offenses.

Court's Interpretation and Reasoning: The Court interpreted the provisions to mean that the Enforcement Directorate retains the power to issue summons for further investigation even after a complaint has been filed. The amendment to Section 44(1)(d) supports this interpretation by allowing for additional evidence collection post-complaint. The Court emphasized that the summons issuance is a procedural step necessary for a thorough investigation under the PMLA.

Key Evidence and Findings: The Court noted that the petitioners had previously responded to a summons, but the subsequent summons was issued after the legislative amendment, which explicitly allows for further investigation. The Court found no procedural irregularities in the issuance of the summons.

Application of Law to Facts: The Court applied the amended provisions of the PMLA to the facts, concluding that the Enforcement Directorate acted within its powers by issuing the summons. The petitioners' previous compliance with an earlier summons did not preclude the Directorate from seeking additional information under the amended legal framework.

Treatment of Competing Arguments: The petitioners argued that the summons was unwarranted as they had already complied with an earlier one. The respondent countered that the summons was necessary for further investigation, as permitted by the amended PMLA. The Court sided with the respondent, highlighting the importance of allowing investigative agencies to conduct thorough investigations without undue interference.

Conclusions: The Court concluded that the summons issued under Section 50(2) of the PMLA was valid and necessary for further investigation. The petitioners were directed to comply with the summons and provide any additional information or documents required by the Enforcement Directorate.

Significant Holdings:

The Court held that the Enforcement Directorate's power to issue summons for further investigation is supported by the amended provisions of the PMLA. It emphasized that judicial interference at the summons stage could hinder effective investigations. The Court reiterated that money laundering is a continuing offense, and the Directorate's actions were consistent with the legislative intent to combat such offenses effectively.

Core Principles Established:

The judgment reinforces the principle that investigative agencies must be allowed to conduct comprehensive investigations into money laundering offenses. The Court underscored that judicial intervention should be minimal at the summons stage unless the authority issuing the summons lacks jurisdiction.

Final Determinations on Each Issue:

The Court dismissed the writ petitions, affirming the validity of the summons issued by the Enforcement Directorate. It concluded that the petitioners must comply with the summons and provide any additional explanations or documents required. The Court's decision was guided by the need to uphold the integrity of investigations under the PMLA and ensure that the legislative amendments are effectively implemented.

Enforcement Directorate can issue subsequent summons under Section 50(2) PMLA despite earlier responses from accused
Madras HC dismissed petitioners' challenge to Enforcement Directorate summons under Section 50(2) of PMLA, 2002. Petitioners argued they had already responded to earlier summons, making subsequent summons improper. Court held that Section 44(1)(d) Explanation (ii) permits further investigation and evidence collection through subsequent complaints. Despite the alleged offence predating the amendment, summons issued post-amendment were valid. Court emphasized that judicial interference at summons stage prejudices effective investigation and courts must allow investigating agencies to function freely in money laundering cases. Petition dismissed; compliance with summons mandated.

Money Laundering - challenge to summons issued by the Enforcement Directorate to the petitioners under Section 50(2) of the Prevention of Money Laundering Act, 2002 - petitioners challenge the summons on the ground that they had responded to the earlier summons issued by the Enforcement Directorate, the Enforcement Directorate ought not to have issued the impugned summons. HELD THAT:- Section 44(1)(d) Explanation (ii) enumerates that “the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not”. Although the alleged offence occurred prior to the amendment, impugned summons were issued after insertion of Explanation Clause under Section 44(1)(d)(ii). Therefore, there is no impediment for the authorities to issue summons for the purpose of collecting further information, documents, etc. Courts at no circumstances shall dilute the rigor of investigation in money laundering cases instituted under the provisions of PMLA. Any judicial interference at the summons issuance stage may cause prejudice to an effective investigation. Therefore, the Courts should allow Investigating Agencies to function fairly and freely, enabling them to cull out the truth by collecting all necessary evidence, obtaining statements from the concerned individuals, and initiate all appropriate actions by following the due procedures as contemplated under the provisions of PMLA - Therefore, granting any leniency regarding appearance or otherwise, by the Courts based on misplaced sympathy or taking a lenient view, would undoubtedly hamper the investigation process. This would inevitably result in allowing individuals to escape from the clutches of PMLA proceedings, which is undesirable. Conclusion - The validity of the summons issued by the Enforcement Directorate affirmed. The petitioners must comply with the summons and provide any additional explanations or documents required. Petition dismissed.

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