Issues: (i) Whether the remand orders were vitiated for non-application of mind and for not recording compliance of the safeguards under Section 19 of the Prevention of Money-Laundering Act, 2002; (ii) Whether the petitioners' confinement during search from 04.01.2024 to 08.01.2024 amounted to arrest, making the subsequent production beyond 24 hours illegal; (iii) Whether there was violation of Section 19(2) of the Prevention of Money-Laundering Act, 2002 by failure to forward the arrest material to the Adjudicating Authority immediately; (iv) Whether there was non-compliance of Section 19(1) of the Prevention of Money-Laundering Act, 2002 in the absence of recorded reasons to believe based on material in possession.

Issue (i): Whether the remand orders were vitiated for non-application of mind and for not recording compliance of the safeguards under Section 19 of the Prevention of Money-Laundering Act, 2002.

Analysis: Section 19 requires recording in writing of reasons to believe, immediate forwarding of the arrest order and material to the Adjudicating Authority, and production before a court having jurisdiction within 24 hours. The remand court was bound to satisfy itself that these safeguards were complied with and to reflect such satisfaction in the remand order. The impugned remand orders recorded only a prima facie view of the investigation and custodial need, but did not record satisfaction regarding compliance of Section 19(1), 19(2) or 19(3).

Conclusion: The remand orders suffered from non-application of mind and were illegal.

Issue (ii): Whether the petitioners' confinement during search from 04.01.2024 to 08.01.2024 amounted to arrest, making the subsequent production beyond 24 hours illegal.

Analysis: The material on record, including the panchnamas and the respondents' own replies, showed that the petitioners were kept within the premises during the search and their movement was controlled by the authorities. The Court held that the right of an occupant to attend a search does not authorise prolonged restraint within the premises, and that such restraint amounted in substance to arrest. Since the petitioners were not produced before the competent court within 24 hours from 04.01.2024, the arrest and the ensuing remand process were hit by illegality.

Conclusion: The petitioners were deemed to have been arrested on 04.01.2024, and the failure to produce them within 24 hours vitiated the subsequent proceedings.

Issue (iii): Whether there was violation of Section 19(2) of the Prevention of Money-Laundering Act, 2002 by failure to forward the arrest material to the Adjudicating Authority immediately.

Analysis: Section 19(2) is mandatory and requires immediate forwarding of the arrest order and supporting material in a sealed envelope. The respondents admitted that the material was not forwarded before the first remand on 09.01.2024 and that preliminary scrutiny was completed only on 10.01.2024. That sequence was inconsistent with the statutory mandate and also prevented the remand court from verifying compliance at the proper time.

Conclusion: There was violation of Section 19(2), rendering the arrest and consequent custody illegal.

Issue (iv): Whether there was non-compliance of Section 19(1) of the Prevention of Money-Laundering Act, 2002 in the absence of recorded reasons to believe based on material in possession.

Analysis: The grounds of arrest and remand applications did not disclose any recorded reasons to believe based on material already in possession before arrest. The reasons recorded were expressed in vague and general terms, and the respondents' own timeline suggested that scrutiny of material occurred after arrest and after remand. The Court held that mere references to prima facie involvement or non-cooperation could not substitute the statutory requirement of a written and material-based reason to believe.

Conclusion: Section 19(1) was not duly complied with.

Final Conclusion: The arrest orders, arrest memos, remand orders and all consequential custody orders were set aside, and the petitioners were directed to be released forthwith unless required in any other case.

Ratio Decidendi: In proceedings under the Prevention of Money-Laundering Act, 2002, the safeguards in Section 19 are mandatory; the remand court must independently satisfy itself that the arresting officer recorded reasons to believe on the basis of material in possession and that the arrest material was immediately forwarded to the Adjudicating Authority, failing which the arrest and all consequential orders are vitiated.

Issues: (i) Whether the petitioner was entitled to regular bail on the basis of parity with co-accused; (ii) whether prolonged custody, stage of trial, and alleged delay warranted enlargement on bail; (iii) whether the medical condition of the petitioner justified grant of regular bail.

Issue (i): Whether the petitioner was entitled to regular bail on the basis of parity with co-accused.

Analysis: The petitioner sought bail by relying on orders granting relief to co-accused. The Court found that the petitioner stood on a different footing because he was treated as the main in the prosecution case, whereas the co-accused relied upon were placed in comparatively subordinate roles or were added at a later stage. The material on record was found to indicate a pivotal role of the petitioner in the alleged laundering activity.

Conclusion: The plea of parity was rejected and the petitioner was not entitled to bail on that ground.

Issue (ii): Whether prolonged custody, stage of trial, and alleged delay warranted enlargement on bail.

Analysis: The Court noted that the trial had only recently progressed, with charge having been framed and a limited number of witnesses examined out of the total cited. It accepted the prosecution stand that the case was at a nascent stage and that there were prima facie materials indicating the petitioner's role in the offence. The Court also found that the statutory position under the Prevention of Money Laundering Act did not support the contention that the trial for the laundering offence could not proceed until the scheduled offence was concluded. In these circumstances, delay and custody were not treated as sufficient to justify bail.

Conclusion: The request for bail on the ground of delay and stage of trial was rejected.

Issue (iii): Whether the medical condition of the petitioner justified grant of regular bail.

Analysis: The petitioner relied on ailments requiring treatment, but the Court accepted the submission that he was being monitored by jail doctors and had been sent for treatment to a higher medical centre. The medical material did not persuade the Court that regular bail was necessary on this ground.

Conclusion: The medical plea did not warrant grant of regular bail.

Final Conclusion: No fresh circumstance was found to enlarge the petitioner on regular bail, and the trial court was directed to expedite the proceedings.

Ratio Decidendi: Parity with co-accused, custody during trial, and medical claims do not justify regular bail where the accused is treated as the principal offender, the trial is at an early stage, and the record discloses prima facie material linking the accused to the offence.

Issues: Whether the applicant was entitled to regular bail under the Prevention of Money Laundering Act, 2002 in light of the statutory twin conditions, the evidentiary value of statements recorded under section 50, and the approver's statement.

Analysis: Bail in a money-laundering case is controlled by section 45 of the Prevention of Money Laundering Act, 2002, which requires the Court to be satisfied that there are reasonable grounds for believing that the accused is not guilty and is not likely to commit any offence while on bail. The material placed before the Court included statements of the approver and other witnesses recorded under section 50 of the Prevention of Money Laundering Act, 2002, together with corroborative call-detail and location records. The Court held that statements under section 50 are admissible and can be relied upon at the bail stage. It further held that an accused need not be named in the scheduled offence for prosecution under the Prevention of Money Laundering Act, 2002, because money-laundering is an independent offence connected with proceeds of crime. The Court also found that the approver's statement could not be discarded at the threshold, as its credibility and corroboration were matters for trial, especially where there was additional supporting material.

Conclusion: The applicant failed to satisfy the twin conditions for bail and the application was not allowed.

Ratio Decidendi: In a prosecution under the Prevention of Money Laundering Act, 2002, bail cannot be granted unless the Court is satisfied, on the basis of material collected during investigation, that there are reasonable grounds for believing the accused is not guilty and will not commit any offence on bail; admissible section 50 statements and corroborative material may be relied upon at the bail stage.

Issues: Whether the applicant was entitled to anticipatory bail under the proviso to Section 45 of the Prevention of Money Laundering Act, 2002 on the ground that he was sick or infirm, aged 83 years, and had cooperated with the investigation.

Analysis: The applicant's claim of sickness and infirmity was examined on the basis of a medical report from a duly constituted Medical Board. The report recorded ischemic heart disease, hypothyroidism, bilateral knee osteoarthritis and lumbar spondylosis, and noted that the morbidities were under control with oral medication but required periodic evaluation. The report also indicated difficulty in movement due to age and osteoarthritis. The record further showed that the applicant had appeared in response to summons on some occasions and that the complaint was filed shortly after his last appearance. In these circumstances, the proviso to Section 45 was treated as enabling judicial discretion in favour of bail where exceptional facts justified it.

Conclusion: The applicant was entitled to anticipatory bail.

Final Conclusion: The application succeeded on the basis that advanced age, medically verified infirmities, and the surrounding procedural circumstances justified release on anticipatory bail under the proviso to Section 45 of the Prevention of Money Laundering Act, 2002.

Ratio Decidendi: Under the proviso to Section 45 of the Prevention of Money Laundering Act, 2002, anticipatory bail may be granted in favour of a person who is shown on reliable medical evidence to be sick or infirm, where the circumstances justify a favourable exercise of judicial discretion.

Issues: Whether the applicant was entitled to regular bail in view of the statutory twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002.

Analysis: The application was considered under Section 439 of the Code of Criminal Procedure, 1973 read with Section 45 of the Prevention of Money Laundering Act, 2002. The Court noted that the statutory bar requires the Public Prosecutor to be heard and, where opposed, requires reasonable grounds to believe that the accused is not guilty of money-laundering and is not likely to commit any offence while on bail. On the material placed before it, including the prosecution complaint and the applicant's statements, the Court found prima facie material showing bogus and paper transactions through the applicant's concerns, absence of supporting documents for claimed movement of goods, journal voucher adjustments, and diversion of funds. The Court also treated the offence as a serious economic offence and relied on the settled position that the twin conditions are mandatory and must be satisfied even in a bail application under Section 439.

Conclusion: The twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 were not satisfied and bail was refused.

Issues: (i) Whether the petition under Section 482 of the Code of Criminal Procedure, 1973 could be entertained to enforce or protect the alleged sanctity of proceedings pending before the Supreme Court and the National Green Tribunal. (ii) Whether the communication issued by the Enforcement Directorate under Section 66(2) of the Prevention of Money Laundering Act, 2002 could be treated as an impermissible direction to register the FIR and whether the resulting investigation was liable to be quashed.

Issue (i): Whether the petition under Section 482 of the Code of Criminal Procedure, 1973 could be entertained to enforce or protect the alleged sanctity of proceedings pending before the Supreme Court and the National Green Tribunal.

Analysis: The relief sought was, in substance, a request to enforce superior court and tribunal orders and to obtain protection against parallel action by the investigating agencies. The inherent jurisdiction under Section 482 is not a substitute for approaching the competent forum that passed the orders said to be affected. The Court held that it had no jurisdiction to grant such relief in the present proceedings.

Conclusion: The issue was answered against the petitioner.

Issue (ii): Whether the communication issued by the Enforcement Directorate under Section 66(2) of the Prevention of Money Laundering Act, 2002 could be treated as an impermissible direction to register the FIR and whether the resulting investigation was liable to be quashed.

Analysis: The Court treated the communication as information shared under the statutory mechanism, not as a command binding the police to register a particular case. It noted that the predicate offences included cognizable offences under the Indian Penal Code and that the petitioner failed to show any violation of Section 66(2) of the Prevention of Money Laundering Act, 2002. The Court further held that interference at the threshold would amount to obstructing the statutory process of investigation.

Conclusion: The issue was answered against the petitioner.

Final Conclusion: No ground was made out for notice or interference, and the petition was rejected at the threshold.

Ratio Decidendi: Information shared by the Enforcement Directorate under Section 66(2) of the Prevention of Money Laundering Act, 2002 does not become an unlawful direction merely because it leads the police to register cognizable offences, and the inherent criminal jurisdiction cannot be used to short-circuit an ongoing investigation.

Issues: (i) Whether the encumbrance entries relating to properties whose provisional attachment under the Prevention of Money Laundering Act, 2002 was not confirmed could be directed to be removed. (ii) Whether the provisional attachment and consequential confirmation relating to the other property could be quashed for want of notice and in view of the prior purchase by the petitioners.

Issue (i): Whether the encumbrance entries relating to properties whose provisional attachment under the Prevention of Money Laundering Act, 2002 was not confirmed could be directed to be removed.

Analysis: The provisional attachment in respect of the properties covered by the writ petition was not confirmed by the adjudicating authority. The record also did not show any effective reinvestigation or continuation of attachment after the confirmation failure. Once the attachment ceased to remain in force, the entries continued in the encumbrance certificate could not survive independently.

Conclusion: The encumbrance entries were liable to be removed, and the relief was in favour of the petitioners.

Issue (ii): Whether the provisional attachment and consequential confirmation relating to the other property could be quashed for want of notice and in view of the prior purchase by the petitioners.

Analysis: The property had been purchased before the provisional attachment, and the fact of such purchase was not brought to the notice of the adjudicating authority. The petitioners were also not issued notice before the provisional attachment order. The availability of alternative remedies did not require relegation to those forums in the peculiar facts, particularly when the attachment was unsupported on merits and was inconsistent with the treatment of the other similarly placed properties.

Conclusion: The provisional attachment order and the confirmation order were liable to be quashed, and the relief was in favour of the petitioners.

Final Conclusion: The writ petitions were allowed by granting relief against both the subsisting encumbrance entries and the attachment orders, while leaving open the authority to proceed afresh if the sale is later found to be sham or an accommodation transaction.

Ratio Decidendi: Where a provisional attachment under the Prevention of Money Laundering Act, 2002 is not confirmed and no effective continuation of the attachment is shown, the consequential encumbrance entry cannot survive; similarly, an attachment passed without notice to a prior purchaser and without addressing the purchaser's title cannot be sustained on merits.

Issues: (i) Whether proceedings under the Prevention of Money Laundering Act, 2002 could be sustained when the predicate offence alleged was conspiracy to commit an offence under Section 409 of the Indian Penal Code, 1860, which was treated as not constituting a scheduled offence; (ii) whether the provisional attachment and connected orders issued under the Prevention of Money Laundering Act, 2002 were without jurisdiction and liable to be quashed.

Issue (i): Whether proceedings under the Prevention of Money Laundering Act, 2002 could be sustained when the predicate offence alleged was conspiracy to commit an offence under Section 409 of the Indian Penal Code, 1860, which was treated as not constituting a scheduled offence.

Analysis: The complaint and provisional attachment proceeded on the basis that the alleged criminal conspiracy to commit the offence under Section 409 of the Indian Penal Code, 1860 amounted to the relevant predicate conduct. The governing principle applied was that prosecution under Section 3 of the Prevention of Money Laundering Act, 2002 requires proceeds of crime traceable to a scheduled offence. A mere allegation of conspiracy to commit an offence which is not itself a scheduled offence does not satisfy that jurisdictional requirement.

Conclusion: The PMLA complaint could not be sustained on that basis and was liable to be quashed.

Issue (ii): Whether the provisional attachment and connected orders issued under the Prevention of Money Laundering Act, 2002 were without jurisdiction and liable to be quashed.

Analysis: Once the complaint itself was held to be not maintainable for want of a scheduled offence and corresponding proceeds of crime, the attachment machinery invoked under Section 5 of the Prevention of Money Laundering Act, 2002 also lacked jurisdictional foundation. The impugned ECIR-linked proceedings and attachment orders stood on the same defective basis and could not survive independently.

Conclusion: The provisional attachment and the connected impugned orders were without jurisdiction and were quashed.

Final Conclusion: The connected proceedings under the Prevention of Money Laundering Act, 2002 could not be sustained in the absence of a valid scheduled offence foundation, and the consequential seized movable properties were directed to be released.

Ratio Decidendi: Proceedings under the Prevention of Money Laundering Act, 2002 cannot be maintained unless the alleged proceeds of crime are traceable to a scheduled offence; where that foundation is absent, the complaint and consequential attachment orders lack jurisdiction.

Issues: Whether the applicant was entitled to anticipatory bail in relation to offences under the Prevention of Money Laundering Act, 2002.

Analysis: The application was considered in the context of the alleged role of the applicant in the projected transfer of properties linked to the proceeds of crime. The Court took note that the investigation had already progressed, the relevant material had been seized, the applicant had cooperated with the investigation, and the prosecution had not previously sought his arrest. The Court also considered the settled principles governing anticipatory bail, including the need to balance personal liberty with the seriousness of economic offences and the surrounding circumstances relevant to grant of pre-arrest protection.

Conclusion: The applicant was held entitled to anticipatory bail and was directed to be released in the event of arrest on furnishing the specified bond and surety, subject to compliance with the conditions under Section 438(2) of the Code of Criminal Procedure, 1973.

The core legal questions considered by the Court were:

(a) Whether the present Bench has the determination (jurisdiction) to entertain the writ petition challenging a provisional order of attachment passed under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA).

(b) Whether the authorities exercising powers under Section 5 of the PMLA, particularly in passing provisional attachment orders, fall within the category of "Central Agencies" equated with Police for the purpose of judicial assignment as per the Circular dated September 30, 2022 issued by the then Chief Justice of the Calcutta High Court.

(c) The legal nature of the exercise under Section 5 of the PMLA-whether it is akin to police investigation or a civil proceeding-and the consequent implications for jurisdictional determination.

(d) The interpretation and applicability of precedents, including the Division Bench judgment dated December 23, 2022, and the Supreme Court's judgment in Vijay Madanlal Choudhary and others vs. Union of India, in relation to the status of PMLA authorities and the nature of proceedings under Sections 5 and 50 of the PMLA.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a) & (b): Jurisdictional Determination and Classification of PMLA Authorities as Central Agencies/Police

The Court first examined the Circular dated September 30, 2022, issued by the then Chief Justice, which stipulated that writ petitions relating to CBI and Central Agencies under Article 226 of the Constitution fall under the comprehensive Subject Category 'Police' in the Appellate Side Rules. Consequently, CBI and Central Agencies were deleted as separate categories, implying that matters involving police or police-like agencies would be heard by a designated Bench.

The Court noted the bifurcation of residuary jurisdiction under Group-IX of writ matters between two Benches: one handling police inaction and related issues, and the other handling residual matters excluding police inaction. The legal question arose whether the Enforcement Directorate (ED) and other authorities under the PMLA exercising powers under Section 5 fall within the 'Central Agencies' equated with police for jurisdictional purposes.

Applying the principle of ejusdem generis, the Court held that the term 'Central Agencies' in the Circular must be construed narrowly and in the same vein as 'CBI' and 'Police', i.e., agencies involved in law enforcement and investigation. The Court rejected an expansive interpretation that would include all central government agencies, such as the Reserve Bank of India or other unrelated authorities, as such an interpretation would defeat the bifurcation's purpose.

The Court emphasized that the term 'police' in common parlance means a civil force whose primary function is to prevent and detect crimes and maintain law and order. Therefore, not all central agencies are 'police' or akin to police for jurisdictional classification.

Issue (c): Nature of Exercise under Section 5 of the PMLA

The Court analyzed the nature of the provisional attachment order under Section 5 of the PMLA. The petitioner argued that the provisional attachment is a civil consequence affecting property rights, distinct from criminal investigation or prosecution. The Court agreed, observing that provisional attachment pertains to civil rights and interests in property, although arising from a statute aimed at preventing money laundering, which has both civil and criminal consequences.

The Court distinguished Section 5 from Section 50 of the PMLA, the latter being an enabling provision empowering the Director to summon persons and exercise powers akin to a civil court for the purpose of inquiry. While Section 50 involves a process "in the nature of inquiry" and is not an investigation in the strict criminal sense, Section 5 involves a provisional attachment which is a civil action affecting property rights.

The Court noted that Section 5(5) mandates filing a complaint before the Adjudicating Authority within thirty days of provisional attachment, reinforcing that the attachment is an interim civil measure pending adjudication. The Adjudicating Authority is not a police or investigating authority but a quasi-judicial body.

Thus, the Court concluded that the exercise under Section 5 does not amount to police or police-like investigative action.

Issue (d): Interpretation of Precedents

The Court considered the Division Bench judgment dated December 23, 2022, which arose post-issuance of the Circular and interpreted the Circular in the context of Section 50 of the PMLA. That judgment held that the inquiry under Section 50 is not an investigation in the strict sense and that authorities under the PMLA are not police officers. The petitioner relied on paragraph 8 of that judgment, which stated that authorities under the PMLA are not police officers "as such."

The Court acknowledged that the Division Bench judgment was rendered in the context of Section 50 but observed that the term "authorities under the PMLA" in paragraph 8 referred broadly to Section 48 authorities, which include those exercising powers under Section 5 as well. The Court found the reasoning applicable to Section 5 as well.

The Court also examined the Supreme Court's judgment in Vijay Madanlal Choudhary and others vs. Union of India, which held that authorities under the PMLA are not police officers and that statements recorded by them do not attract the protections under Article 20(3) or Article 21 of the Constitution as police investigations would. The Supreme Court recognized that Section 50 proceedings have both civil and criminal components but are not strictly police investigations.

The Court noted that the Supreme Court's observations in paragraphs 436 to 438 emphasized that authorities under Section 48 cannot be described as police officers and that 'police' means a civil force maintaining law and order.

The ED's counsel argued that the Circular does not distinguish between CBI and other Central Agencies and that all such agencies should be treated as police for jurisdictional purposes. The Court rejected this argument, emphasizing the need to interpret the Circular in light of its purpose and the nature of the agencies involved.

The ED also sought to distinguish Section 50 from Section 5, arguing that Section 50 confers civil court-like powers, whereas Section 5 does not. The Court, however, held that since Section 5 results in a civil consequence (provisional attachment), it is even more clearly a civil action than Section 50 proceedings.

3. SIGNIFICANT HOLDINGS

The Court held that the authorities exercising powers under Section 5 of the PMLA do not act as police or Central Agencies akin to police for the purpose of judicial assignment under the Circular dated September 30, 2022. The Court stated:

"The term 'police', in usual parlance, connotes a law enforcement agency and/or an investigating body. Central Agencies akin to it may include not only the CBI but also other paramilitary forces or other disciplined forces but not the Enforcement Directorate, at least within the contemplation of Section 5 of the PMLA."

The Court further observed:

"A provisional order of attachment of a property for a particular period in respect of a person is an absolutely civil consequence, which pertains clearly to the rights and interests of a person with regard to a property."

It was also held that:

"The expression 'Central Agencies' has to be taken in the same light as CBI and Police as used in the Circular."

On the nature of powers under Section 50 and their relation to Section 5, the Court noted:

"Section 50 of the Act, if read closely, is merely an enabling provision and a tool for the authorities to gather evidence by issuing summons... Sub-Section (1) of Section 50 provides merely that the Director shall, for the purposes of Section 13, have the same powers as are vested in a civil court... Powers akin to a civil court may be exercised in proceedings under the Criminal Procedure Code as well and also in certain proceedings which fall within the contemplation of criminal jurisprudence."

Accordingly, the Court concluded that the present Bench has jurisdiction to entertain the writ petition challenging the provisional attachment order under Section 5 of the PMLA, as the authority passing such order does not fall within the 'police' or 'Central Agencies' category for jurisdictional purposes.

The Court's final determination was that the writ petition should be heard by the Bench handling residuary writ matters excluding police inaction matters, confirming the Bench's competence to decide the matter.

Issues: Whether a person can be continued in proceedings under the Prevention of Money Laundering Act, 2002 after being finally discharged or exonerated in the scheduled offence.

Analysis: The controlling principle applied was that the offence of money laundering is linked to property derived or obtained from criminal activity relating to a scheduled offence. Where the person concerned is finally discharged, acquitted, or the scheduled criminal case is quashed by a competent court, the foundation for proceeding under the money-laundering law in relation to that person and the linked property ceases to exist. The decision relied on the settled interpretation of the definition of proceeds of crime and the scope of the offence under the money-laundering statute.

Conclusion: The petitioner could not be continued in the money-laundering proceedings after the scheduled offence had been finally resolved in his favour, and discharge from the PMLA charges followed.

Ratio Decidendi: Once the person alleged to have committed the scheduled offence is finally discharged, acquitted, or the scheduled case is quashed, proceedings for money laundering cannot survive against that person in relation to the linked property.

ISSUES PRESENTED AND CONSIDERED

1. Whether the investigation of alleged mob violence, robbery and assault on central agency officials by a large armed mob should be transferred from the State police to a Central agency.

2. Whether allegations of police partiality, procedural irregularities in FIR registration and omissions of serious penal provisions justify exclusion of local police personnel from investigation.

3. Whether, instead of a complete transfer, a Special Investigation Team (SIT) comprising personnel of a Central agency and the State police should be formed, and on what terms it should operate.

4. Whether the scope of the FIRs and the addition/omission of specific penal provisions (e.g., Sections corresponding to attempt to murder, grievous hurt by dangerous means, dacoity) bears on the propriety of allowing the State police to continue investigation.

5. What supervisory and reporting mechanisms (Magistrate/Court monitoring/final report conditions) should govern any further investigation to ensure fairness and effectiveness.

ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Appropriateness of transfer to a Central agency

Legal framework: The power to transfer criminal investigations to a Central agency arises where impartiality, effectiveness or inter-state/international dimensions warrant such transfer; principles established by higher courts guide neutrality and propriety of central agency involvement.

Precedent treatment: The Court noted the petitioner relied upon the conditions articulated in Vinit Narayan for ensuring neutrality of a central investigation agency. The State relied on precedents cautioning against transfer absent satisfaction of specified criteria (as invoked from State jurisprudence).

Interpretation and reasoning: The Court found a grave incident involving assault, robbery and near-fatal injury to central agency officers. Although the central petitioner sought exclusive transfer, the Court weighed (a) the seriousness of alleged police conduct (irregular FIR registration and omissions), (b) the State police's investigative defects and inability to apprehend a prominent local accused, and (c) practical considerations (need for inter-State or international measures). The Court balanced the central agency's role against the fact that a central investigating agency accompanying armed forces had itself not effected entry/arrest, and that the predicate financial-offence investigations remained with State police.

Ratio vs. Obiter: Ratio - Where impartiality and investigative inadequacy are sufficiently indicated, involvement of a central agency is warranted; however, exclusive transfer is not automatically required. Obiter - Practical observations on central agency capabilities vis-à-vis predicate offence investigations and the ED's own operational limitations.

Conclusions: The Court declined to order an outright exclusive transfer to a Central agency but held that involvement of a Central agency in a cooperative investigatory structure was imperative given the demonstrated investigative shortcomings and allegations of bias.

Issue 2 - Effect of alleged police partiality and FIR irregularities on exclusion of local police

Legal framework: Fair and effective investigation requires impartial FIR registration and adherence to procedure; material irregularities, tampering/interpolations or improper prioritisation of FIRs can vitiate confidence in local investigation.

Precedent treatment: The Court referenced earlier adverse observations made by a co-ordinate Bench in relation to a counter FIR and noted precedent principles requiring impartiality; the State's reliance on limiting transfer absent clear criteria was considered.

Interpretation and reasoning: The Court identified facts: a counter version FIR (allegedly registered as the first FIR despite an earlier GD entry), alleged interpolations (addition of outraging modesty), omission of serious offences in subsequent FIRs, and a stay by a co-ordinate Bench with adverse remarks against police. These facts, taken collectively, cast serious doubt on the impartiality of the Nazat Police Station personnel. The Court concluded that such doubt justified excluding personnel of that station (and its outposts) from participating in further investigation.

Ratio vs. Obiter: Ratio - Material irregularities in FIR registration and demonstrable judicial censure of police conduct justify exclusion of the implicated local station's personnel from investigation. Obiter - Comment on interpolation and sequence of GD entries as illustrative of bias.

Conclusions: Personnel of the implicated local police station/outposts must be excluded from the investigation; the existing investigating officer must cease further action and hand over the case diary and materials to the new team.

Issue 3 - Formation, composition and powers of a Special Investigation Team (SIT)

Legal framework: Where neither exclusive transfer nor sole State investigation is appropriate, courts may direct constitution of an SIT incorporating Central and State officers; such SITs must have clear leadership, composition, powers, reporting obligations and independence to ensure effectiveness.

Precedent treatment: The Court considered the governing principles for central involvement and collaborative investigation and observed the CBI's willingness to investigate subject to nomination delays.

Interpretation and reasoning: Given the need for impartiality, competence to pursue inter-State/international leads, and the State's operational capacity, the Court directed formation of an SIT headed by a Central agency officer (rank: SP) nominated by the Central agency together with a named State SP; each head may induct equal numbers from CBI and State police. The SIT is empowered to seek assistance from State and Central forces for search, seizure and arrest. The Court specified exclusion of implicated local station personnel and stoppage of ongoing State-led investigation.

Ratio vs. Obiter: Ratio - An SIT headed by a Central agency officer, with balanced representation and operational autonomy to seek force assistance, is an appropriate investigatory mechanism where impartiality and capacity concerns exist but exclusive Central agency control is not ordered. Obiter - Practical comments on the CBI's ability to handle inter-State/international measures.

Conclusions: A constitutionally permissible, court-supervised SIT comprising CBI and State personnel, led by a CBI SP and a State SP, with specified powers and exclusion of Nazat station personnel, should investigate the linked FIRs.

Issue 4 - Sufficiency of the FIRs and addition/omission of serious penal sections

Legal framework: Proper investigation requires that FIRs and subsequent charge sheets include applicable serious provisions when facts prima facie disclose them; omission may indicate deliberate narrowing of scope or negligence.

Precedent treatment: The Court noted the State's subsequent attempts to add graver sections and the petitioners' contention that serious provisions were deliberately omitted; earlier judicial criticism of the initial counter FIR was relevant.

Interpretation and reasoning: The Court observed omissions (e.g., attempt to murder, grievous hurt by dangerous means, dacoity) despite evidence such as serious injuries and looting. The suo moto FIR was described as watered-down. These omissions, combined with unconventional FIR sequencing and interpolations, contributed to the finding of investigative inadequacy and potential bias, thereby reinforcing the need for an SIT and judicial oversight.

Ratio vs. Obiter: Ratio - Failure to include prima facie applicable serious penal provisions in FIRs supports judicial intervention to ensure complete and impartial investigation. Obiter - Specific evaluation of evidentiary sufficiency for each omitted section was not finally adjudicated.

Conclusions: The omissions in the FIRs are material to the Court's decision to supervise and reconstitute investigation through an SIT; the SIT must properly examine and, if justified, frame all applicable offences.

Issue 5 - Supervisory/control mechanisms for continued investigation

Legal framework: Courts can impose reporting obligations, Magistrate-supervision and conditions on filing final reports to safeguard fair investigation; monitoring is warranted where impartiality or effectiveness is in question.

Precedent treatment: The Court balanced respect for prosecutorial independence with the need for judicial oversight in compromised investigations.

Interpretation and reasoning: To ensure transparency and fairness, the Court directed that the SIT report to the jurisdictional Magistrate for regular steps, that the SIT shall not report to State or Centre but to the Magistrate, that the Court will monitor the investigation, and that no final report shall be filed without the leave of the Court. The Court also preserved existing security measures (pickets, CCTV) and required progress reporting.

Ratio vs. Obiter: Ratio - Where investigative impartiality is in doubt, judicially-mandated Magistrate supervision coupled with Court monitoring and leave-before-final-reporting are appropriate safeguards. Obiter - Procedural preference for Magistrate reporting rather than reporting to executive authorities.

Conclusions: The SIT shall operate under Magistrate supervision, with Court monitoring and a prohibition on filing any final report without leave of the Court; interim security arrangements to continue until SIT decides otherwise.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

• Whether the petitioner, accused of money laundering under the Prevention of Money Laundering Act, 2002 (PMLA), is entitled to bail given his prolonged incarceration and medical condition.
• How the legal framework under Section 45 of the PMLA, which imposes stringent conditions for granting bail, interacts with the constitutional right to a speedy trial under Article 21 of the Indian Constitution.
• The impact of the petitioner's medical condition and the completion of the investigation on his eligibility for bail.
• The applicability of precedents regarding the right to bail and the right to a speedy trial in the context of the petitioner's case.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Eligibility for Bail under PMLA

• Relevant legal framework and precedents: The petitioner is charged under Section 3 of the PMLA, punishable under Section 4. Section 45 of the PMLA imposes stringent conditions for bail, requiring the court to be satisfied that there are reasonable grounds for believing that the accused is not guilty and is unlikely to commit an offense if released.
• Court's interpretation and reasoning: The court considered the petitioner's prolonged incarceration of 14 months and his serious medical condition. The court referenced the Supreme Court's decision in Amar Sadhuram Mulchandani, which held that a 'sick or infirm' person is entitled to bail under Section 45(1) of the PMLA.
• Key evidence and findings: The petitioner's medical reports indicated serious health issues requiring continuous treatment, which supported the argument for bail.
• Application of law to facts: The court applied the legal standards from Section 45 of the PMLA and relevant Supreme Court precedents, concluding that the petitioner met the criteria for bail due to his medical condition and the improbability of trial commencement in the near future.
• Treatment of competing arguments: The prosecution's argument against bail, based on the seriousness of the offense, was outweighed by the petitioner's health condition and the right to a speedy trial.
• Conclusions: The court concluded that the petitioner should be granted bail, subject to conditions, as his continued detention would infringe upon his constitutional rights under Article 21.

Issue 2: Right to Speedy Trial and Prolonged Incarceration

• Relevant legal framework and precedents: Article 21 of the Indian Constitution guarantees the right to a speedy trial. The court referenced several Supreme Court decisions, including Union of India v. K.A. Najeeb and Manish Sisodia v. Directorate of Enforcement, which emphasize the importance of this right.
• Court's interpretation and reasoning: The court noted that the petitioner's incarceration had already exceeded a substantial part of the potential sentence and that the trial had not commenced, thus violating his right to a speedy trial.
• Key evidence and findings: The court found no likelihood of the trial commencing soon, given the complexity and volume of the case materials.
• Application of law to facts: The court balanced the statutory restrictions on bail with the constitutional right to a speedy trial, determining that the latter should prevail in this case.
• Treatment of competing arguments: The court addressed concerns about the petitioner potentially tampering with evidence by imposing stringent bail conditions.
• Conclusions: The court held that the petitioner's continued detention was unjustified and ordered his release on bail, emphasizing the need to protect constitutional rights.

3. SIGNIFICANT HOLDINGS

• Preserve verbatim quotes of crucial legal reasoning: "The presence of statutory restrictions like Section 43-D (5) of the UAPA per se does not oust the ability of the constitutional courts to grant bail on grounds of violation of Part III of the Constitution."
• Core principles established: The court reinforced the principle that bail should not be withheld as a punishment and that constitutional rights, such as the right to a speedy trial, must be upheld even in the face of statutory restrictions.
• Final determinations on each issue: The petitioner was granted bail due to his prolonged incarceration, medical condition, and the unlikelihood of the trial commencing soon. The court imposed conditions to mitigate concerns about the petitioner's potential interference with the investigation.

The judgment underscores the judiciary's role in balancing statutory provisions with constitutional rights, particularly in cases involving prolonged detention and health concerns. The court's decision to grant bail reflects a careful consideration of the petitioner's circumstances and the overarching principles of justice and human rights.

Issues: Whether proceedings under the Prevention of Money Laundering Act, 2002 can continue when the accused in the predicate offence has been finally acquitted and the predicate offence has attained finality.

Analysis: The governing rule applied was that the offence of money-laundering under section 3 is dependent on the existence of a scheduled offence and the alleged proceeds of crime arising from it. Once the person concerned is finally discharged, acquitted, or the criminal case for the scheduled offence is quashed by a competent court, the foundational substratum for prosecuting money-laundering no longer survives. On the facts, the co-accused in the predicate offence had been acquitted by the trial court, and that judgment had not been challenged. The Court therefore treated the prosecution under the PMLA as unsustainable, and declined to defer the matter pending any future decision of the Supreme Court.

Conclusion: The prosecution under the PMLA could not be continued against the petitioner after the final acquittal in the predicate offence.

Final Conclusion: The impugned charge order and the connected PMLA proceedings were set aside, leaving the petitioner free from the pending money-laundering proceedings on the present record.

Ratio Decidendi: A money-laundering prosecution cannot survive in the absence of a subsisting scheduled offence, and final acquittal or quashing of the predicate offence extinguishes the legal basis for proceedings under section 3 of the Prevention of Money Laundering Act, 2002.

Issues: (i) whether the material collected during investigation, including the disclosure statement, audio-video recordings and statement under section 164, disclosed a prima facie case for framing charges under the Prevention of Corruption Act and conspiracy; (ii) whether the disclosure statement and electronic recordings could be relied upon at the stage of framing charge in the absence of a section 65B certificate and in view of the objections to admissibility; (iii) whether the evidence on record established the foundational facts of demand and acceptance of illegal gratification so as to sustain the charges.

Issue (i): whether the material collected during investigation, including the disclosure statement, audio-video recordings and statement under section 164, disclosed a prima facie case for framing charges under the Prevention of Corruption Act and conspiracy.

Analysis: At the stage of discharge or framing of charge, the court is required to see whether the prosecution material, taken at face value, raises a strong suspicion and whether the case should proceed to trial, without conducting a mini trial. The material relied upon by the prosecution included the accused's disclosure statement, the alleged recordings, and the statement recorded under section 164. The court also considered the settled principles that the accused has no right to seek a meticulous evaluation of defence material at this stage, though the court must still apply judicial mind to the prosecution case.

Conclusion: The material was found insufficient to raise the requisite prima facie case against the petitioner for the charged offences.

Issue (ii): whether the disclosure statement and electronic recordings could be relied upon at the stage of framing charge in the absence of a section 65B certificate and in view of the objections to admissibility.

Analysis: The disclosure statement was treated as capable of limited use because it led to discovery of the spy watch and hard disks, attracting section 27. However, the electronic material recovered from the hard disks required compliance with section 65B, and the court held that such certificate is not confined to the charge stage and may be produced at a later stage of trial. On the facts, the court found that the material as produced did not by itself establish the petitioner's culpability. The objections regarding admissibility were therefore accepted only to the extent that the prosecution case could not be sustained solely on the existing record at the charge stage.

Conclusion: The objections did not justify sustaining the charges on the present material, and the electronic evidence did not provide sufficient basis to proceed against the petitioner at that stage.

Issue (iii): whether the evidence on record established the foundational facts of demand and acceptance of illegal gratification so as to sustain the charges.

Analysis: Proof of demand and acceptance is sine qua non for offences under section 7 and section 13(1)(d) of the Prevention of Corruption Act. The court examined the alleged conversations, delivery of cash, and the surrounding circumstances, but found that the transcripts did not disclose a clear demand by the petitioner and that the materials chiefly indicated delivery of cash rather than proved acceptance by the petitioner. In the absence of recovery from the petitioner and without reliable proof of demand, the foundational facts were held not to be established even on a prima facie basis.

Conclusion: The prosecution failed to establish the essential ingredients of demand and acceptance, and the charges could not be sustained.

Final Conclusion: The order framing charge was set aside and the petitioner was discharged, as the investigation material was held inadequate to justify continuation of the trial on the charged offences.

Ratio Decidendi: For offences under sections 7 and 13(1)(d) of the Prevention of Corruption Act, demand and acceptance of illegal gratification must be shown even at the prima facie stage, and electronic material or a disclosure leading to discovery cannot sustain charges unless it sufficiently establishes those foundational facts.

Issues: Whether proceedings under the Prevention of Money Laundering Act, 2002 can survive after the accused in the predicate offence has been finally acquitted, and whether the complaint and ECIR were liable to be quashed.

Analysis: The governing principle applied was that the offence under section 3 of the Prevention of Money Laundering Act, 2002 is dependent on the existence of a scheduled offence and the property allegedly derived from criminal activity relating to that offence. Where the person concerned is finally discharged, acquitted, or the criminal case for the scheduled offence is quashed, the substratum for the money-laundering prosecution ceases to exist. The Court applied this principle to the present case, noting that the co-accused had been acquitted in the predicate offence and that the acquittal had attained finality.

Conclusion: The PMLA complaint and consequential proceedings could not survive, and the ECIR and connected proceedings were quashed in favour of the petitioner.

Final Conclusion: The judgment holds that a final acquittal in the scheduled offence destroys the basis for money-laundering proceedings founded on that offence, subject to revival only if the legal position changes on further proceedings.

Ratio Decidendi: Proceedings for money-laundering cannot continue once the scheduled offence has ended in final acquittal, discharge, or quashing, because the offence under section 3 of the Prevention of Money Laundering Act, 2002 is contingent on a subsisting predicate offence.

Issues: Whether prosecution under the Prevention of Money Laundering Act can continue after the accused in the scheduled offence has been finally acquitted and the predicate proceedings have attained finality.

Analysis: The governing principle applied was that the offence of money-laundering under section 3 of the Prevention of Money Laundering Act is dependent on the existence of a scheduled offence and the illegal gain generated from criminal activity relating to that offence. The Court relied on binding precedent that where the person concerned is finally discharged, acquitted, or the criminal case relating to the scheduled offence is quashed, the legal substratum for a money-laundering prosecution disappears. The acquittal of the co-accused in the predicate case had attained finality and no contrary basis remained to sustain the complaint or the ECIR.

Conclusion: The complaint, ECIR, and all consequential proceedings were liable to be quashed.

Final Conclusion: The petition succeeded and the money-laundering proceedings could not survive in the absence of a subsisting scheduled offence.

Ratio Decidendi: A prosecution for money-laundering cannot stand when the scheduled offence has finally ended in acquittal, discharge, or quashing, because the existence of a subsisting predicate offence is an essential jurisdictional foundation for proceedings under the Prevention of Money Laundering Act.