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2023 (12) TMI 957 - BOMBAY HIGH COURT Money Laundering

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Production warrant request under Section 267 must yield to trial court review where bail is granted but bond remains unexecuted
A request for a production warrant under Section 267 CrPC had to be assessed in light of a later grant of bail, but the bail bond had not yet been executed. The Court did not decide the merits of the warrant request; instead, it held that the legal effect of the bail order and the non-execution of the bond must be examined by the trial court in the first instance. The accused's present custody status and the continued relevance of the production warrant were therefore left for determination at trial level.

Production of accused under Section 267 CrPC - Effect of grant of bail where bail bond is not executed - Judicial custody and custody for purposes of production - Consequences of non-execution of bail bondProduction of accused under Section 267 CrPC - Judicial custody and custody for purposes of production - Scope and applicability of an order under Section 267 CrPC for production of an accused who was then in custody of another court - HELD THAT: - The High Court examined the CBI's challenge to the Special Judge's refusal to grant a production order under Section 267 CrPC for respondent No.1. The Court noted the factual background that respondent No.1 was then in custody in connection with proceedings before the PMLA Special Court and that the Special Judge had allowed only interrogation through jail authorities subject to orders of the Special PMLA Court. The Court observed that when the impugned order was passed there existed no bail order in favour of respondent No.1 and that the question of production for purposes of the CBI investigation arises against the legal status of the accused's custody as determined by the courts having him in charge. The application was disposed of by reference to the changed circumstances (subsequent grant of bail), rather than by directing production itself. [Paras 16, 17, 18, 23]The challenge to the Special Judge's order was disposed of without ordering production; the Court recorded that production/ interrogation in the circumstances must be assessed in light of the accused's custody status and the orders of the courts in whose custody he is held.Effect of grant of bail where bail bond is not executed - Consequences of non-execution of bail bond - Legal effect of a bail order granted by a Division Bench where the accused has not executed the bail bond, and allocation of responsibility to the trial court - HELD THAT: - The Court found that the Division Bench granted bail to respondent No.1 on 5.12.2023 but that the bail bond had not been executed as of the date of the hearing. Relying on the principles embodied in the procedure for effecting release on bail, the Court observed that an accused is not released on bail unless the bail bond of the accused and surety are obtained in terms of the bail order. Given this position and the subsequent grant of bail, the High Court held that the trial Court is the appropriate forum to determine the consequences flowing from the bail order, including the legal effect of non-execution of the bail bond and any incidental directions relating to custody or production for investigation. [Paras 21, 22, 23]The High Court directed that the trial Court shall determine the consequences of the Division Bench's bail order, including the effect of non-execution of the bail bond, and disposed of the CBI's application accordingly.Final Conclusion: The High Court disposed of the CBI's application challenging the Special Judge's order without directing production; noting that bail was subsequently granted by the Division Bench but the bail bond remained unexecuted, the Court directed the trial Court to determine the consequences of the bail order, including the effect of non-execution of the bail bond.

2023 (12) TMI 855 - DELHI HIGH COURT Money Laundering

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Issues: (i) Whether the Sub-Registrar could refuse registration of the sale certificate of the auction purchaser on the basis of the Enforcement Directorate's later communication and provisional attachment; (ii) whether the availability of proceedings before the PMLA Tribunal barred the exercise of writ jurisdiction under Article 226.

Issue (i): Whether the Sub-Registrar could refuse registration of the sale certificate of the auction purchaser on the basis of the Enforcement Directorate's later communication and provisional attachment.

Analysis: The property was auctioned and sale consideration paid before any communication from the Enforcement Directorate restraining transfer was received by the registering authority. The statutory procedure under Section 17 of the Prevention of Money Laundering Act, 2002 requires search, seizure or freezing to be carried out in the manner prescribed, and Section 17(4) requires timely movement before the Adjudicating Authority after seizure or freezing. Those safeguards had not been complied with. A sale certificate issued in a public auction is evidence of title, and the auction purchaser acquires title on confirmation of sale. In these circumstances, the registration authority had no legal impediment to register the sale certificate.

Conclusion: The refusal to register the sale certificate was unjustified and was set aside in effect; the auction purchaser was entitled to registration.

Issue (ii): Whether the availability of proceedings before the PMLA Tribunal barred the exercise of writ jurisdiction under Article 226.

Analysis: The existence of an alternate remedy is not an absolute bar to writ jurisdiction. The property had already been sold in auction before the PMLA steps were initiated, and the facts justified judicial intervention notwithstanding the pending tribunal proceedings.

Conclusion: The writ jurisdiction was rightly exercised and the objection based on alternate remedy was rejected.

Final Conclusion: The challenge to the refusal of registration failed, and the auction purchaser obtained relief directing the registration process to proceed; the PMLA proceedings before the Tribunal were left open for appropriate action in accordance with law.

Ratio Decidendi: Where the statutory safeguards under PMLA for seizure or freezing have not been followed before the auction purchaser's rights crystallise, a subsequent attachment cannot defeat the purchaser's title or prevent registration of the sale certificate, and the availability of tribunal proceedings does not by itself bar writ relief.

PMLA attachment cannot defeat a confirmed auction sale certificate or bar writ relief where statutory safeguards were unmet.
A sale certificate issued after a public auction could not be refused registration on the basis of a later Enforcement Directorate communication and provisional attachment, because the auction had been completed and consideration paid before the restraint reached the registering authority; the purchaser's title had crystallised on confirmation of sale, and the PMLA safeguards for search, seizure or freezing had not been shown to have been followed. The existence of proceedings before the PMLA Tribunal did not bar writ jurisdiction under Article 226, as an alternate remedy is not an absolute restriction and the facts justified intervention. The registration refusal was therefore held unsustainable, and registration was directed to proceed.

Sale certificate as evidence of title - Procedure prescribed by the PMLA for search, seizure and freezing of property - Requirement to file application before the Adjudicating Authority within thirty days for retention or continuation of freezing - Obligation to forward validated sale certificate to registering authorities under the Registration Act - Writ jurisdiction under Article 226 and the effect of availability of alternate remediesSale certificate as evidence of title - Obligation to forward validated sale certificate to registering authorities under the Registration Act - Registrar of documents was not precluded from registering the Sale Certificate executed by the Bank in favour of the auction purchaser. - HELD THAT: - The Court found that on the dates when the property was auctioned, consideration paid and possession handed over there was no communication from the Enforcement Directorate to the Registrar indicating the property was tainted. The Court relied on the settled proposition that a Sale Certificate issued to an auction purchaser by a bank in public auction is evidence of title and that the authorised officer must forward the duly validated sale certificate to the registering authorities. In the absence of any valid restraint communicated to the Registrar and having regard to the statutory scheme governing registration, the Registrar had no lawful impediment to register the Sale Certificate in favour of the petitioner. [Paras 10, 13, 14, 15]Registrar directed to proceed with registration of the Sale Certificate in favour of the petitioner.Procedure prescribed by the PMLA for search, seizure and freezing of property - Requirement to file application before the Adjudicating Authority within thirty days for retention or continuation of freezing - Non-compliance with the mandatory procedure under Section 17(4) of the PMLA vitiated any claim to restrain registration of the property. - HELD THAT: - Section 17(1)/(1A) and (4) of the PMLA require reasons to be recorded, and where property is seized or frozen the authority must, within thirty days, file an application before the Adjudicating Authority for retention or continuation. The record showed no compliance with these statutory requirements by the Enforcement Directorate prior to or contemporaneous with the bank's auction and sale. The Court applied the principle that where a statute prescribes a procedure to be followed, the procedure must be followed, and, relying on the Apex Court's decision in OPTO Circuits, held that failure to follow the mandatory PMLA procedure renders the attachment/freeze ineffective to block registration. [Paras 9, 10, 11, 12]The attempted restraint based on the PMLA steps was held ineffective for want of compliance with the mandatory procedure.Writ jurisdiction under Article 226 and the effect of availability of alternate remedies - High Court exercised its discretionary writ jurisdiction under Article 226 despite the pendency of proceedings before the Adjudicating Authority/Tribunal under the PMLA. - HELD THAT: - The Court noted that existence of an alternate remedy is not an absolute bar to exercise writ jurisdiction and that whether to entertain a writ petition is discretionary depending on facts and circumstances. Given that the auction, payment and delivery of possession to the petitioner occurred prior to initiation of steps under Section 17 of the PMLA and in view of the procedural non-compliance by the Enforcement Directorate, the Court was inclined to exercise its jurisdiction and grant relief. The High Court relied on settled law that the availability of an alternate remedy does not oust writ jurisdiction where facts justify interference. [Paras 16, 17, 18, 19]Writ petition entertained and allowed despite pending proceedings before the Tribunal.Final Conclusion: Writ petition allowed; Registrar of documents directed to register the Sale Certificate in favour of the petitioner. The Enforcement Directorate remains free to approach the Adjudicating Authority/Tribunal for retention or other orders after giving notice to the Bank.

2023 (12) TMI 1316 - UTTARAKHAND HIGH COURT Money Laundering

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Stringent twin conditions for PMLA bail not satisfied, so regular bail was refused on the material before the Court.
Regular bail under the Prevention of Money Laundering Act was declined because the statutory twin conditions in Section 45 were not met. The Court found the allegations specific and supported by the complaint material and recorded statements, and on that basis it could not form reasonable grounds to believe that the accused was not guilty or that he was unlikely to commit an offence while on bail. As those mandatory preconditions were unsatisfied, the prayer for regular bail was rejected.

Refusal of bail in offences under the Prevention of Money Laundering Act, 2002 - restrictions on grant of bail arising from the non-obstante clause in Section 45 of the PMLA - requirement of reasonable grounds for believing that the accused is not guilty (higher than prima facie) - offence of money laundering being predicated on handling or dealing with proceeds of crimeRefusal of bail in offences under the Prevention of Money Laundering Act, 2002 - requirement of reasonable grounds for believing that the accused is not guilty (higher than prima facie) - offence of money laundering being predicated on handling or dealing with proceeds of crime - Application for regular bail under Section 439 CrPC read with Section 45 of the Prevention of Money Laundering Act, 2002 was considered and rejected. - HELD THAT: - The Court applied the mandatory twofold test under Section 45 of the PMLA: (i) satisfaction that there are reasonable grounds for believing that the accused is not guilty of the offence, and (ii) that the accused is not likely to commit an offence while on bail. The expression "reasonable grounds" was held to mean something more than prima facie grounds and the non-obstante clause in Section 45 must be given full effect to restrict the power to grant bail. The complaint and record contain categorical and specific allegations assigning a definite role to the applicant in inducing complainants, impersonation as a PA to the Vice Chancellor, collection of donations/commissions and receipt/distribution of funds which are alleged to be proceeds of crime. In view of the seriousness and specificity of these allegations and the statutory mandate that bail under the PMLA be granted only upon the prescribed satisfaction, the Court was unable to record the requisite satisfaction that reasonable grounds exist to believe the applicant is not guilty; accordingly bail was refused. [Paras 15, 16, 17, 18, 19]Bail application rejected; observations restricted to disposal of the bail application and not affecting the trial.Final Conclusion: The High Court rejected the applicant's prayer for regular bail in the PMLA prosecution, holding that the mandatory conditions of Section 45 PMLA were not satisfied on the material before the Court.

2023 (12) TMI 1347 - JHARKHAND HIGH COURT Money Laundering

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Issues: (i) Whether the direction requiring written communication of grounds of arrest in Pankaj Bansal operated retrospectively so as to invalidate the petitioner's arrest; (ii) whether the petitioner was entitled to bail in view of the applicability of the rigors of Section 45 of the Prevention of Money Laundering Act, 2002.

Issue (i): Whether the direction requiring written communication of grounds of arrest in Pankaj Bansal operated retrospectively so as to invalidate the petitioner's arrest.

Analysis: The expression used in the Supreme Court's direction was read as prospective in operation. The reasoning proceeded on the basis that the term "henceforth" indicates application for the future and not to arrests already effected. It was also observed that treating the direction as retrospective would unsettle a large number of arrests made under Section 19(1) of the Prevention of Money Laundering Act, 2002. The remand papers were also noted to contain the grounds of arrest.

Conclusion: The petitioner's arrest was not held illegal on the ground urged, and the direction in Pankaj Bansal was treated as prospective.

Issue (ii): Whether the petitioner was entitled to bail in view of the applicability of the rigors of Section 45 of the Prevention of Money Laundering Act, 2002.

Analysis: The Court noted that the petitioner was not named in the earlier prosecution complaints and that the F.I.R. relied upon was not treated as bearing directly on the present money-laundering allegation. On that basis, it was held that the rigors of Section 45 would not apply in the present case. This led to the conclusion that bail could be granted on the terms imposed.

Conclusion: The petitioner was held entitled to bail.

Final Conclusion: The petitioner's custody was ordered to be terminated on bail, while the objection based on retrospective application of the written-grounds requirement was rejected.

Ratio Decidendi: A direction using the expression "henceforth" is ordinarily prospective, and bail under the Prevention of Money Laundering Act, 2002 may be granted where the Court finds that the rigors of Section 45 are not attracted on the facts of the case.

Prospective grounds-of-arrest direction and Section 45 rigors not attracted, so bail was granted under PMLA.
A direction requiring written communication of grounds of arrest was treated as prospective because the Supreme Court used the word "henceforth"; it was not applied to invalidate an arrest already made under the Prevention of Money Laundering Act, 2002, especially where the remand papers contained the grounds of arrest. The Court also held that the rigors of Section 45 were not attracted on the facts, noting that the petitioner was not named in earlier prosecution complaints and that the FIR relied on did not directly bear on the money-laundering allegation. Bail was therefore granted and custody ordered to terminate on bail.

Prosecution of money laundering as an independent offence - Predicate offence requirement for money laundering - Compliance with Section 19(1) PMLA - furnishing ground of arrest - Retrospective operation of judicial directions - Bail under PMLA and applicability of Section 45Retrospective operation of judicial directions - Compliance with Section 19(1) PMLA - furnishing ground of arrest - Whether the directions in Pankaj Bansal regarding furnishing grounds of arrest operate retrospectively and whether non compliance vitiates the arrest in the present case. - HELD THAT: - The Court declined the submission that the Supreme Court's direction in Pankaj Bansal (requiring furnishing the grounds of arrest in writing) has retrospective effect. The plain language of paragraph 35, specifically the word 'henceforth', was read as prospective so as not to require re opening or review of all arrests previously made under Section 19(1) PMLA. Further, on facts the Court accepted that there was substantial compliance with the object of Section 19(1) - namely to enable the arrested person to move for bail - since the petitioner had been repeatedly summoned, appeared voluntarily, was arrested thereafter and the remand application set out the grounds; accordingly no prejudice was shown that would render the arrest illegal in the present proceedings. [Paras 16, 17, 19]Pankaj Bansal's directions are prospective; no illegality of arrest was found on the ground pleaded in this petition.Predicate offence requirement for money laundering - Prosecution of money laundering as an independent offence - Whether absence of an identified scheduled predicate offence in the FIR precludes prosecution under the PMLA in the petitioner's case. - HELD THAT: - The Court noted contentions that many offences in the FIR (including those arising from accidental deaths and alleged MMDR violations) are not scheduled offences and relied on precedents addressing when conspiracy under Section 120B IPC becomes a scheduled offence. However, having considered the prosecution case and authorities recognising money laundering as an independent offence tied to proceeds of scheduled offences, the Court observed that the FIR's particulars would not be decisive against the ED in these proceedings. On the material before it, and bearing in mind the allegations of laundering through multiple accounts and transfers, the Court did not accept that the absence of a specific scheduled predicate offence in the FIR mandated refusal of relief in the present bail application. [Paras 10, 14, 20]The absence of scheduled offences in parts of the FIR does not automatically bar prosecution under PMLA in the circumstances of this case; the matter was not treated as dispositive against bail.Bail under PMLA and applicability of Section 45 - Prosecution of money laundering as an independent offence - Whether the petitioner should be released on bail notwithstanding the PMLA regime and the nature of allegations. - HELD THAT: - Weighing the factual matrix - petitioner not named in initial prosecutions and appearing only in a third supplementary prosecution complaint, the nature of allegations of laundering through relatives' accounts, and the Court's view on the limited bearing of the FIR's non scheduled offences - the Court exercised its discretion to grant bail. The Court recorded that the rigours of Section 45 PMLA would not be made applicable in the present case given these factors. Consequently bail was directed subject to stringent conditions to secure attendance and protect investigation interests, including bail bond and sureties, one surety being an income tax payee. [Paras 20]Petitioner released on bail subject to furnishing bond and two sureties (one surety to be an income tax payer) and other stated conditions.Final Conclusion: Petitioner directed to be released on bail on furnishing a bond with two sureties (one to be an income tax payee); the Court held that the Pankaj Bansal direction is prospective, found no fatal defect in the arrest on the cited ground, and treated the absence of scheduled offences in parts of the FIR as not decisive against bail in the present circumstances.

2023 (12) TMI 1111 - PUNJAB AND HARYANA HIGH COURT Money Laundering

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Issues Involved:
1. Legality of the arrest of the petitioners.
2. Compliance with statutory provisions under the Prevention of Money Laundering Act, 2002.
3. Validity of the remand orders.

Summary:

Legality of the Arrest:
The petitioners were arrested and remanded to judicial custody on 28.10.2023. The court needed to determine if the arrest complied with Sections 17-A, 18(1), and 19(1) of the Prevention of Money Laundering Act, 2002. The petitioners argued that they were effectively arrested on 27.10.2023 when they were restrained and taken in vehicles by the Enforcement Directorate (ED) officials without being informed of the grounds for their arrest, thus violating the statutory provisions.

Compliance with Statutory Provisions:
The petitioners contended that the restraint on 27.10.2023 constituted an arrest and since no grounds for arrest were provided then, it breached statutory requirements. They relied on judgments from the Bombay, Karnataka, and Andhra Pradesh High Courts, which state that a person's arrest begins when they are placed under restraint or their freedom is jeopardized. The Additional Solicitor General (ASG) argued that the petitioners were only detained for interrogation and were formally arrested on 28.10.2023, complying with statutory requirements.

Validity of the Remand Orders:
The court rejected the ASG's argument that the petitioners were not arrested on 27.10.2023 but merely detained for interrogation. The court concluded that the petitioners were unlawfully restrained on 27.10.2023, making it the actual date of arrest. Since the grounds for arrest were not provided on this date, there was a breach of mandatory statutory provisions. The court also dismissed the ASG's claim that the remand orders condoned these lapses, citing the Supreme Court's mandate that remand orders must reflect the application of judicial mind and adherence to statutory requirements.

Conclusion:
The court quashed the remand orders, declared the arrest of the petitioners to be non-est and void, and ordered their release from judicial custody. The petitioners were required to furnish personal and surety bonds, surrender their passports, and undertake not to leave India without the court's permission.

ED arrests declared void for failing to provide mandatory arrest grounds under PMLA Sections 17-A, 18(1), 19(1)
Punjab and Haryana HC quashed remand orders and declared arrests void under Prevention of Money Laundering Act, 2002. Court held that accused accompanying ED officials in vehicles on 27.10.2023 constituted unlawful restraint and actual arrest, but mandatory provisions under Sections 17-A, 18(1), and 19(1) were breached as grounds of arrest were not supplied. Trial judge failed to apply judicial mind regarding statutory breaches when making remand order. Petitioners ordered released from judicial custody subject to furnishing personal and surety bonds of Rs. 5,00,000 each and conditions regarding evidence tampering and witness influence.

Constructive arrest by restraint - requirement to communicate grounds/reasons for arrest - invalidity of remand where statutory arrest formalities are breached - quashing of remand orders for non application of judicial mind Constructive arrest by restraint - requirement to communicate grounds/reasons for arrest - The date on which the petitioners were arrested for purposes of statutory compliance and constitutional scrutiny. - HELD THAT: - The Court held that the effective date of arrest is the date on which the petitioners were placed under restraint and deprived of liberty by being taken in vehicles to the Enforcement Directorate headquarters, namely 27.10.2023, and not the subsequent date on which a formal arrest memo was drawn. Applying the principles in the authorities relied upon by the petitioners, the Court observed that accompanying the ED officials in vehicles that were seized or belonged to the ED, and where the material indicates the petitioners were 'coaxed' rather than having accompanied them voluntarily, amounted to deprivation of personal liberty. Consequently the Court treated 27.10.2023 as the reckonable date for determining compliance with the statutory requirement to communicate grounds/reasons for arrest. [Paras 12, 13, 15, 16] Arrest occurred on 27.10.2023 when the petitioners were restrained and taken by ED officials; the subsequent drawing of arrest memos on 28.10.2023 does not alter that reckoning. Requirement to communicate grounds/reasons for arrest - invalidity of remand where statutory arrest formalities are breached - quashing of remand orders for non application of judicial mind - Whether failure to supply the grounds/reasons of arrest on the actual date of restraint vitiated the remand orders and entitled the petitioners to release. - HELD THAT: - The Court found that on 27.10.2023 the petitioners were not supplied with the statutory grounds or reasons to believe that they had committed offences under the Prevention of Money Laundering Act, 2002. That pervasive breach of mandatory statutory provisions rendered the arrests non est and void. The Court also relied on the principle that a remand order cannot be used to cure or condone such flagrant statutory lapses, and that where material shows non application of judicial mind or failure to address these statutory breaches, remand orders are liable to be quashed. Applying those principles to the facts, the Court concluded that the remand orders were illegal and must be set aside. [Paras 13, 18, 19, 20] The failure to communicate grounds on 27.10.2023 vitiated the arrests and the consequent remand orders; the remand orders are quashed and the arrests are declared non est and void. Quashing of remand orders for non application of judicial mind - Relief to be granted following quashing of remand orders. - HELD THAT: - Exercising writ jurisdiction and having declared the arrests void and the remand orders unsustainable, the Court ordered the impugned remand orders quashed and directed release of the petitioners from judicial custody. The release is made subject to judicially imposed conditions to secure attendance and prevent tampering with evidence: furnishing personal and surety bonds to the satisfaction of the trial court, not tampering with prosecution evidence or influencing witnesses, surrender of passports, and an undertaking not to leave the country without prior permission of the trial judge. [Paras 20, 21] Impugned remand orders quashed; petitioners to be released subject to bonds, undertakings, surrender of passports and other specified conditions. Final Conclusion: The Court held that the petitioners were effectively arrested on 27.10.2023 when they were restrained and taken by ED officials without being supplied the grounds of arrest; that failure vitiated compliance with statutory arrest formalities and rendered the arrests non est; the remand orders were quashed and the petitioners directed to be released from judicial custody subject to specified bonds and conditions.

2023 (12) TMI 441 - KERALA HIGH COURT Money Laundering

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Issues: (i) Whether the acceptance of the police refer report, whereby the scheduled/predicate offences were found not made out, disables continuation of proceedings under the Prevention of Money Laundering Act, 2002. (ii) Whether the pending protest complaint and the subsequent allegations based on unscheduled offences sustain the continuation of proceedings under the Prevention of Money Laundering Act, 2002.

Issue (i): Whether the acceptance of the police refer report, whereby the scheduled/predicate offences were found not made out, disables continuation of proceedings under the Prevention of Money Laundering Act, 2002.

Analysis: The statutory scheme of the Prevention of Money Laundering Act, 2002 makes the existence of proceeds of crime arising from a scheduled offence the jurisdictional foundation for action under the Act. The definition of proceeds of crime and the offence of money-laundering both presuppose a criminal activity relating to a scheduled offence. On the facts, the investigation culminated in a refer report concluding that no offence was made out, and the jurisdictional court accepted that report. Once that foundation disappeared, the continuance of money-laundering proceedings could not be justified.

Conclusion: The issue is answered in favour of the petitioners. The accepted refer report meant that the predicate offences were no longer available to support continuation of proceedings under the Act.

Issue (ii): Whether the pending protest complaint and the subsequent allegations based on unscheduled offences sustain the continuation of proceedings under the Prevention of Money Laundering Act, 2002.

Analysis: A protest complaint, by itself, only operates as an objection to the final report and does not revive a concluded basis for money-laundering action unless it discloses a scheduled offence capable of constituting a predicate offence. The later complaint raised additional allegations relating to offences which were not scheduled offences, and the conspiracy allegation was tied to those unscheduled offences. As such, the pending protest complaint did not provide a valid statutory foundation for continuation of proceedings under the Act.

Conclusion: The issue is answered in favour of the petitioners. The pending protest complaint and the later allegations did not furnish a sustainable basis to continue the proceedings under the Act.

Final Conclusion: The money-laundering proceedings were quashed because the jurisdictional prerequisite of an existing predicate offence was not established on the record before the Court.

Ratio Decidendi: Proceedings under the Prevention of Money Laundering Act, 2002 cannot be initiated or continued unless there exists a live predicate offence giving rise to proceeds of crime; once that foundation is extinguished, ancillary action under the Act cannot survive.

PMLA proceedings need a live predicate offence; accepted refer report and unscheduled allegations could not sustain continuation.
Proceedings under the Prevention of Money Laundering Act, 2002 require a live predicate scheduled offence giving rise to proceeds of crime. Where the police refer report found no scheduled offence and the jurisdictional court accepted that report, the statutory foundation for money-laundering action fell away and continuation of proceedings was not sustainable. A pending protest complaint did not revive that foundation because it did not disclose a scheduled offence, and later allegations based on unscheduled offences could not support the Act's invocation. The commentary states that ancillary action under the PMLA cannot survive once the underlying predicate offence is extinguished on the record.

Existence of predicate offence for initiation or continuation of proceedings under the PMLA - interpretation of the expression "proceeds of crime" for the purposes of PMLA - effect of acceptance of police final/refer report by the Magistrate on related PMLA proceedings - role and relevance of a protest complaint filed after acceptance of a police refer report - non independence of criminal conspiracy as a predicate offence unless linked to scheduled offencesEffect of acceptance of police final/refer report by the Magistrate on related PMLA proceedings - role and relevance of a protest complaint filed after acceptance of a police refer report - Whether the learned Magistrate accepted the refer/final report submitted by the Crime Branch and the legal consequence of such acceptance for the continuation of the PMLA proceedings - HELD THAT: - The Court examined the Magistrate's order dated 7.9.2023 and the circumstances in which it was passed, including the settlement between the parties and the affidavit of no objection filed by the defacto complainants. The term 'refer accepted' was held to indicate that the Magistrate accepted the conclusion recorded by the Crime Branch in its refer report; no defects or incompleteness were noted in the report and the material evidencing the settlement was before the Magistrate when the order was passed. While the Magistrate afforded the defacto complainant an opportunity by permitting the protest complaint to be pursued, that procedural step did not negate the acceptance of the refer report. Consequently, the acceptance of the police refer report operates to remove the predicate offences relied upon for invoking the PMLA unless and until the jurisdictional court later adjudicates otherwise on the protest complaint. [Paras 18, 19, 20, 21, 24]The Magistrate accepted the refer/final report of the Crime Branch; that acceptance materially affects the viability of continuing proceedings under the PMLA, subject to any subsequent adjudication on the protest complaint.Existence of predicate offence for initiation or continuation of proceedings under the PMLA - interpretation of the expression "proceeds of crime" for the purposes of PMLA - Whether proceedings under the PMLA could be continued in the absence of a predicate offence as concluded by the police refer report - HELD THAT: - Relying on the principles articulated by the Supreme Court in Vijay Madanlal Choudhary, the Court reiterated that the authority to proceed under the PMLA is triggered only upon existence of 'proceeds of crime' within the statutory definition, which in turn depends on criminal activity relating to a scheduled offence. The Crime Branch's refer report (Exhibit P18) recorded that no offences were made out after investigation (including scientific and witness evidence). In view of the accepted refer report and the settled legal position that absence of a predicate offence precludes PMLA action, the Court concluded that the predicate offences on which the present PMLA proceedings were founded no longer subsist and therefore the PMLA proceedings lack legal sanction. [Paras 16, 17, 22, 26, 27]In the absence of predicate offences as found in the accepted police refer report, continuation of the PMLA proceedings is unsustainable.Non independence of criminal conspiracy as a predicate offence unless linked to scheduled offences - Whether the non compoundable nature of certain offences or the allegation of criminal conspiracy prevents quashing of PMLA proceedings where the police have submitted a refer report finding no offence - HELD THAT: - The Court found the submission regarding non compoundability to be irrelevant in the circumstances of this case. Compounding considerations are inapplicable where the investigating agency has, after investigation, submitted a refer report concluding no offence. Further, criminal conspiracy (Section 120B IPC) has no independent existence as a predicate offence for PMLA purposes unless the conspiracy relates to offences scheduled under the PMLA; in this case the alleged conspiracy related primarily to offences not included in the PMLA schedule, and therefore could not sustain PMLA action. [Paras 14, 25, 26]The non compoundable character of some offences does not preclude quashing where the police have submitted a refer report finding no offence; conspiracy, unless tied to scheduled offences, cannot operate as a predicate for PMLA proceedings.Final Conclusion: The petition is allowed: proceedings pursuant to ECIR/KCZO/28/2020 and the notices issued (Exhibits P20 and P21) are quashed on the ground that the predicate offences relied upon have ceased to exist in view of the accepted police refer report; this does not preclude invocation of PMLA in future if predicate offences are thereafter established.

2023 (12) TMI 1289 - BOMBAY HIGH COURT Money Laundering

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Issues: (i) Whether the absence or quashing of one predicate complaint extinguished the basis for the PMLA prosecution and bail denial, and whether the applicant had to be an accused in the scheduled offence; (ii) whether the applicant could be granted bail under the first proviso to Section 45 of the Prevention of Money-Laundering Act, 2002 on the plea that the alleged proceeds of crime were below one crore rupees; (iii) whether the arrest complied with Section 19 of the Prevention of Money-Laundering Act, 2002 and Article 22(1) of the Constitution of India.

Issue (i): Whether the absence or quashing of one predicate complaint extinguished the basis for the PMLA prosecution and bail denial, and whether the applicant had to be an accused in the scheduled offence?

Analysis: The complaint under the Environment (Protection) Act, 1986 was held not to survive as a predicate offence after the revisional order quashing process, but FIR No. 177 of 2022 remained alive and contained scheduled offences. The scheme of the PMLA treats money-laundering as dependent on the existence of proceeds of crime arising from a scheduled offence, yet it is not necessary that the person proceeded against under Section 3 must also be shown as an accused in the scheduled offence. The Court applied the principle that an accused in a PMLA case may be proceeded against if he is alleged to have assisted in concealment, use, acquisition, possession, or projection of proceeds of crime, even if he was not an accused in the predicate case.

Conclusion: The applicant could still be proceeded against under the PMLA on the basis of the surviving scheduled offence, and the absence of his name as an accused in the predicate offence did not bar the prosecution.

Issue (ii): Whether the applicant could be granted bail under the first proviso to Section 45 of the Prevention of Money-Laundering Act, 2002 on the plea that the alleged proceeds of crime were below one crore rupees?

Analysis: The Court examined the complaint's valuation and estimation of proceeds of crime and held that accepting the applicant's plea would require a detailed fact-finding exercise not suitable at the bail stage. The allegations and materials prima facie showed an estimated value far in excess of one crore rupees. Applying the mandatory twin conditions under Section 45, the Court held that it had to be satisfied that there were reasonable grounds for believing that the applicant was not guilty and was unlikely to commit an offence on bail, and those conditions were not met on the material before it.

Conclusion: The applicant was not entitled to bail under the first proviso to Section 45, and the statutory twin conditions were not satisfied.

Issue (iii): Whether the arrest complied with Section 19 of the Prevention of Money-Laundering Act, 2002 and Article 22(1) of the Constitution of India?

Analysis: The arrest memo and the related materials showed that the grounds of arrest were read and explained to the applicant, his acknowledgment appeared on the memo, and his son also noted that the grounds were read over and explained. The Court found prima facie compliance with the statutory requirement to record reasons to believe and to inform the arrestee of the grounds of arrest.

Conclusion: The arrest was held to be in compliance with Section 19 of the PMLA and Article 22(1) of the Constitution of India.

Final Conclusion: The PMLA prosecution was found maintainable on the surviving scheduled offence and the material on record did not justify release on bail.

Ratio Decidendi: For an offence under Section 3 of the PMLA, the existence of a scheduled offence and proceeds of crime is essential, but the accused need not himself be charged in the predicate offence if he is alleged to have knowingly assisted in the process connected with the proceeds of crime; bail remains subject to the mandatory twin conditions under Section 45, and compliance with Section 19 is met where the grounds of arrest are duly communicated in substance.

PMLA prosecution and bail depend on proceeds of crime, twin conditions, and proper communication of arrest grounds.
PMLA liability depends on the existence of proceeds of crime arising from a scheduled offence, but the person proceeded against need not himself be arraigned in the predicate case if he is alleged to have assisted in concealment, possession, acquisition or projection of such proceeds. Bail under the first proviso to Section 45 remains governed by the statutory twin conditions, and a plea that the proceeds of crime are below the threshold requires material support at the bail stage. Arrest compliance turns on whether reasons for arrest are recorded and the grounds are communicated in substance to the arrestee as required by Section 19 and Article 22(1).

Offence of money-laundering under Section 3 PMLA - Proceedings as to predicate/scheduled offence - Proceeds of crime definition under PMLA - Twin conditions for bail under Section 45 PMLA - Arrest grounds and Section 19(1) compliance - ECIR and FIR distinction - Admissibility of statements recorded under Section 50 PMLAProceedings as to predicate/scheduled offence - Proceeds of crime definition under PMLA - Effect of revisional court quashing of process in the MoEF private complaint on existence of that predicate offence for the PMLA proceedings - HELD THAT: - The Court held that the revisional Court's order quashing the issuance of process in RCC No.12 of 2022 removes the predicate status of the MoEF complaint insofar as those allegations are concerned. Where the process is quashed and the revisional order is not stayed, the applicant cannot be deprived of the benefit of that order; accordingly the MoEF complaint cannot, at present, be treated as an existing predicate scheduled offence for the PMLA prosecution arising solely from that complaint. The respondent remains free to act if the revisional order is set aside in due course. [Paras 22]The MoEF private complaint (RCC No.12 of 2022) does not, in its present quashed state, constitute a predicate scheduled offence for the PMLA proceedings.Offence of money-laundering under Section 3 PMLA - Proceedings as to predicate/scheduled offence - Proceeds of crime definition under PMLA - Whether FIR No.177 of 2022 can constitute a scheduled/predicate offence supporting the PMLA complaint and prosecution of the applicant - HELD THAT: - The Court observed that FIR No.177 of 2022, though relating to some of the same property, is a distinct proceeding filed at the instance of a separate entity and encompasses offences (including cheating and forgery) that are scheduled offences for the purposes of PMLA. The pendency of a writ to quash the FIR does not mean the FIR is non-existent; prima facie the material in the ED complaint links the applicant to the property and to activities said to constitute dealing with proceeds of crime. It is not necessary that the accused in PMLA proceedings be an accused in the predicate FIR; what is required is existence of a scheduled offence and proceeds of crime in relation thereto. [Paras 23, 25, 26]FIR No.177 of 2022 is a live proceeding which, prima facie, can serve as a scheduled/predicate offence for the PMLA complaint against the applicant.ECIR and FIR distinction - Offence of money-laundering under Section 3 PMLA - Whether absence of a separate ECIR registered on the basis of FIR No.177 of 2022 vitiates the ED's PMLA complaint - HELD THAT: - Relying on the scheme of the PMLA and the reasoning in Vijay Madanlal Chaudhary, the Court held that ECIR is an internal, non-statutory document and there is no statutory requirement that an ECIR must be separately registered like an FIR. The special complaint procedure under the PMLA and the investigatory mechanism prescribed by the Act permit the ED to base its complaint on materials arising out of inquiries and other sources; the absence of a separate ECIR for FIR No.177 of 2022 does not render the ED's complaint invalid. [Paras 30, 31]Non-registration of a separate ECIR for FIR No.177 of 2022 does not invalidate the PMLA complaint.Arrest grounds and Section 19(1) compliance - Compliance with Section 19(1) PMLA and Article 22(1) regarding furnishing grounds of arrest to the applicant - HELD THAT: - The Court examined the arrest memo and found that the grounds of arrest were read over and explained to the applicant and that the applicant's signature (accompanied by the notation 'Dekha') and a note by his son indicated awareness of the reasons for arrest. On the material produced, the Court was not persuaded that there was non-compliance with Section 19(1) or Article 22(1). [Paras 29]The arrest memo and related material satisfy the requirements of Section 19(1) PMLA in this case; no fault in informing the applicant of the grounds for arrest was found.Twin conditions for bail under Section 45 PMLA - Offence of money-laundering under Section 3 PMLA - Whether the applicant satisfied the twin conditions under Section 45(1) PMLA to obtain bail - HELD THAT: - The Court applied the statutory twin conditions: (i) the court must be satisfied, after hearing the public prosecutor, that there are reasonable grounds for believing the accused is not guilty of the offence; and (ii) that the accused is not likely to commit any offence while on bail. Having regard to the nature of the allegations, the material in the ED complaint (including estimation of proceeds of crime linked to the property) and the statutory presumption framework, the Court was not satisfied that there are reasonable grounds to believe the applicant is not guilty. The Court accepted that prima facie assessment at bail stage requires consideration of broad probabilities and material on record; on that assessment the twin conditions were not met. [Paras 33, 34]The Court was not satisfied that the twin conditions under Section 45 PMLA were fulfilled and accordingly refused bail; the bail application was rejected.Final Conclusion: The High Court rejected the applicant's bail application under the PMLA: the MoEF private complaint, having had process quashed, cannot presently operate as a predicate offence for the ED's case, but FIR No.177 of 2022 remains a live scheduled offence capable of supporting the PMLA complaint; the arrest formalities under Section 19 were found to be compliant on the material produced; on a prima facie appraisal the twin conditions of Section 45 were not satisfied and bail was refused.

2023 (12) TMI 956 - BOMBAY HIGH COURT Money Laundering

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Prolonged pre-trial custody and Article 21 justified bail where trial delay made continued detention unjustified.
Prolonged pre-trial custody was treated as a serious curtailment of liberty under Article 21, and the Court held that statutory restrictions on bail do not exclude constitutional protection where trial completion within a reasonable time is unlikely. Because the petitioner had remained in custody for more than five years and eight months, no charge had been framed, and the maximum punishment for the alleged offence was seven years, continued detention was found unjustified. Bail was therefore granted during the pendency of the petition.

Prolonged custody and infringement of Article 21 - house arrest constitutes custody - bail where trial completion is unlikely and incarceration has exceeded a substantial part of the prescribed sentence - harmonisation of statutory bail restrictions with constitutional jurisdiction - maximum punishment under the Prevention of Money-Laundering Act as relevant to bail assessment - grant of interim bail pending petitionHouse arrest constitutes custody - prolonged custody and infringement of Article 21 - House arrest is to be treated as custody for purposes of computing period of incarceration and assessing infringement of Article 21. - HELD THAT: - The Court rejected the contention that the period of house arrest should be excluded from custody for computation of total period of incarceration, holding that house arrest amounts to arrest and materially curtails personal liberty. The reasoning recognises that any form of state-imposed restraint depriving a person of freedom engages Article 21 and must be included when assessing whether prolonged custody has occurred. [Paras 6, 7]House arrest counted as part of custody and relevant to Article 21 analysis.Bail where trial completion is unlikely and incarceration has exceeded a substantial part of the prescribed sentence - harmonisation of statutory bail restrictions with constitutional jurisdiction - maximum punishment under the Prevention of Money-Laundering Act as relevant to bail assessment - grant of interim bail pending petition - Bail was granted because the trial was unlikely to be completed within a reasonable time and the period of incarceration already undergone exceeded a substantial part of the maximum prescribed sentence under the PMLA. - HELD THAT: - Applying the principle that constitutional jurisdiction to grant bail can be harmonised with statutory restrictions, the Court relied on the proposition that where there is little prospect of trial completion in reasonable time and the accused has undergone a substantial part of the prescribed sentence, bail may be granted to safeguard Article 21. The Court found the petitioner had been in custody/house arrest for over five years and eight months in a case where the maximum sentence is seven years, thereby exceeding a substantial part of the prescribed punishment and making the likelihood of timely trial completion bleak. On that basis the Court exercised its constitutional jurisdiction to grant interim bail during the pendency of the petition. [Paras 7, 8, 9, 10]Petitioner released on interim bail during pendency of the petition subject to specified conditions.Final Conclusion: The High Court held that house arrest constitutes custody for Article 21 purposes and, applying the principle that prolonged incarceration in cases where trial completion is unlikely and custody exceeds a substantial part of the prescribed sentence justifies bail, granted the petitioner interim bail during the pendency of the petition subject to furnishing bond, supervision conditions and restrictions on movement.

2023 (12) TMI 440 - TELANGANA HIGH COURT Money Laundering

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Regular bail in money-laundering probe allowed where arrest and custody were found arbitrary and no new incriminating material emerged.
In a money-laundering investigation, the HC held that regular bail could be granted where the agency already possessed the incriminating material, no materially new facts emerged from the accused's examination, and the arrest and custodial handling appeared arbitrary and oppressive. The Court noted that the alleged fund movements were old, the core material was already known through earlier statements, and continued detention could not be used punitively at the investigation stage. Recognising the seriousness of economic offences, the Court nevertheless found that any flight-risk concern could be met by bail conditions and accordingly granted regular bail.

Recorded "reason to believe" and twin conditions for arrest under PMLA - Admissibility and probative value of statements recorded under Section 50 of the PMLA - Investigative fairness and non-abuse of powers by the Enforcement Directorate - Grant of regular bail in grave economic offences - balancing gravity of offence and personal liberty - Flight risk and conditional bailRecorded "reason to believe" and twin conditions for arrest under PMLA - Investigative fairness and non-abuse of powers by the Enforcement Directorate - Legality of the arrests of the petitioners A1 and A3 under the PMLA in light of statements recorded and the conduct of the Enforcement Directorate. - HELD THAT: - The Court examined the chronology and material relied upon for arrest and found that the information about the petitioners was already in the possession of the Enforcement Directorate from statements of A2 recorded in September and that no new material emerged from examination of A1 and A3. The manner in which the petitioners were kept under ED control, restricted during travel and interrogation, and the circumstances of recording their statements gave rise to a probable inference that statements were recorded under pressure. While the Court observed that arrest may validly follow investigation and that Section 50 is a gathering and investigatory provision (not a prerequisite to arrest), the manner of the ED's exercise of power indicated arbitrariness in this case. The Special Court's remand order was noted, but the High Court found non-application of mind to be apparent from the docket order and emphasised that ED must act with utmost probity. Consequent to these findings, the Court treated the legality of the arrests contextually for purposes of bail relief. [Paras 36, 37, 38, 40, 41]The arrests, though not quashed outright, were found to have been effected in circumstances evincing arbitrariness and probable duress in recording statements; the Court granted relief by way of regular bail notwithstanding these arrests.Admissibility and probative value of statements recorded under Section 50 of the PMLA - Investigative fairness and non-abuse of powers by the Enforcement Directorate - Whether statements recorded under Section 50 of the PMLA could be the sole basis for arrest and remand in the present case. - HELD THAT: - The Court reiterated that Section 50 empowers ED to summon, record statements and collect evidence and that any person (including an accused) may be examined under that provision. However, the Court recorded that a retracted statement cannot be given overriding weight where the circumstances suggest coercion or where the same information was earlier supplied by another witness (A2). The Court noted authorities emphasising fairness and transparency of ED, and observed that here no new material was collected from the petitioners' examination that was not already known to the agency. While acknowledging that convictions can be sustained on circumstantial evidence and that arrest may be justified without a prior Section 50 recording, the Court found that reliance solely on alleged Section 50 statements, recorded in the milieu described, was not adequate to deny bail in the facts of this case. [Paras 35, 36, 37, 38, 39]Section 50 statements alone, especially if retracted and recorded in circumstances suggesting duress or when the information was already available from other sources, could not justify continued detention; the Court granted bail subject to conditions.Grant of regular bail in grave economic offences - balancing gravity of offence and personal liberty - Flight risk and conditional bail - Whether the petitioners, accused in alleged grave economic offences, are entitled to regular bail and on what conditions. - HELD THAT: - Applying the established principles that bail is the rule and refusal the exception, and having regard to precedents recognizing the serious nature of economic offences while insisting on case-by-case adjudication, the Court found that the prosecution case was primarily circumstantial and that complicity could be evaluated during trial which was unlikely to commence soon. The Court acknowledged the ED's contention on flight risk but held that such apprehension could be addressed by imposing stringent conditions. In exercise of judicial discretion, the Court concluded that the balance favoured release on bail subject to personal bonds, surrender of passports, furnishing addresses and compliance with Section 437(3) Cr.P.C. conditions. [Paras 42, 44, 45, 46]Regular bail granted to the petitioners on conditions: execution of personal bonds with sureties, surrender of passports, restriction on leaving Hyderabad without court permission, furnishing of address details to ED and compliance with other conditions under Section 437(3) Cr.P.C.Final Conclusion: Both criminal petitions are allowed: regular bail is granted to the petitioners A1 and A3 on conditions including personal bonds with sureties, surrender of passports and other standard conditions; miscellaneous applications, if any, are closed.

2023 (12) TMI 1317 - ORISSA HIGH COURT Money Laundering

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Issues: (i) whether there was non-compliance with the mandate of Section 19 of the Prevention of Money Laundering Act, 2002 in effecting the petitioner's arrest, and (ii) whether the petitioner, being a woman and having remained in custody for a substantial period, was entitled to bail in view of the proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002.

Issue (i): whether there was non-compliance with the mandate of Section 19 of the Prevention of Money Laundering Act, 2002 in effecting the petitioner's arrest

Analysis: The arrest and remand sequence showed that the petitioner remained in the custody of the Enforcement Directorate for several days before formal arrest was recorded, and the supporting materials did not satisfactorily establish timely compliance with the statutory safeguards governing arrest. The delay in formal compliance with the arrest procedure was treated as a serious irregularity in the context of personal liberty, and the Court found that the statutory mandate had been complied with only belatedly.

Conclusion: The arrest procedure was not duly complied with in the manner required by Section 19 of the Prevention of Money Laundering Act, 2002.

Issue (ii): whether the petitioner, being a woman and having remained in custody for a substantial period, was entitled to bail in view of the proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002

Analysis: The proviso to Section 45(1) was treated as conferring a judicial discretion, not an automatic right to bail, but the Court found the petitioner fit for the exercise of that discretion on the facts. The prolonged pre-trial incarceration, uncertainty in the commencement and completion of trial, prior custodial interrogation, and the ability to control the usual bail risks through conditions such as surrender of passport, appearance before the court, and cooperation with the investigating agency were treated as material factors. The Court also noted the importance of the constitutional guarantee of a speedy trial.

Conclusion: The petitioner was entitled to bail in the exercise of discretion under the proviso to Section 45(1) of the Prevention of Money Laundering Act, 2002.

Final Conclusion: The bail application was allowed, and the petitioner was directed to be released on bail on conditions designed to secure her attendance and prevent misuse of liberty.

Ratio Decidendi: In proceedings under the Prevention of Money Laundering Act, 2002, the proviso to Section 45(1) confers a discretion to grant bail to a woman accused, and prolonged pre-trial detention with delayed compliance of arrest safeguards may justify release on bail subject to suitable conditions.

PMLA arrest safeguards and bail discretion for a woman accused justified release after prolonged pre-trial custody.
Non-compliance with the arrest safeguards under Section 19 of the Prevention of Money Laundering Act was treated as a serious irregularity where the accused remained in Enforcement Directorate custody before formal arrest was recorded, and the Court found the statutory mandate was complied with only belatedly. The proviso to Section 45(1) was treated as conferring judicial discretion, not an automatic right to bail, but the accused was held fit for release on bail because of prolonged pre-trial incarceration, uncertainty about trial progress, prior custodial interrogation, and the availability of restrictive conditions to manage bail risks. The constitutional concern for a speedy trial also weighed in favour of bail.

Non-compliance of Section 19 of PMLA - Proviso to Section 45(1) of PMLA - discretionary grant of bail to women - Tripod test for bail (flight risk, tampering of evidence, influencing witnesses) - Pre-trial detention and right to speedy trial under Article 21 - Court's power to cancel bail on breach of conditionsNon-compliance of Section 19 of PMLA - Validity of arrest and compliance with the mandate of Section 19 of the PMLA - HELD THAT: - The Court found that the petitioner was taken into ED custody on 05.12.2022 and remained in ED custody for seven days before a formal arrest on 13.12.2022. Documents placed before the Court show that the formal communication and arrest formalities, including execution of Form No. III and an arrest memo, were carried out on 13.12.2022. However, no document was produced to show compliance with Section 19 immediately upon taking the petitioner into custody on 05.12.2022 or to show the remand order by the Special Court authorising custody on that date. The Court held that the ED's action of formally arresting the petitioner only after seven days of custody was not in accordance with law, observing that the agency is bound to scrupulously satisfy the requirements of Section 19 and ideally communicate the grounds within the statutory time (24 hours). The Court noted that the mandate of Section 19(1) was, however, complied with belatedly on 13.12.2022. [Paras 4, 5]The initial custody period without contemporaneous compliance with Section 19 was held to be not in accordance with law, though the formal requirements were complied with belatedly on 13.12.2022.Proviso to Section 45(1) of PMLA - discretionary grant of bail to women - Tripod test for bail (flight risk, tampering of evidence, influencing witnesses) - Pre-trial detention and right to speedy trial under Article 21 - Whether the petitioner, being a woman, was entitled to bail under the proviso to Section 45(1) of the PMLA and whether the petitioner satisfied conditions for grant of bail - HELD THAT: - The Court accepted the ED's submission that the proviso does not mandate release of women accused but confers a discretion on the Court to grant bail. Applying that discretionary standard, the Court considered the totality of circumstances: the petitioner had been in pre-trial detention for about one year; there was uncertainty as to commencement and speedy conclusion of trial because execution of warrants against co-accused remained pending; the petitioner had undergone custodial interrogation; and the tripod test factors did not weigh against bail - she was not shown to be a flight risk (passport surrender was available as a condition), there was limited risk of tampering with documentary evidence given the complaint filed, and influence on witnesses could be addressed by appropriate conditions. The Court relied on principles requiring reasonable expedition of trial under Article 21 and previous decisions recognising the proviso as conferring judicial discretion. In view of these considerations the Court concluded that the petitioner merited relaxation of the rigour of Section 45(1) under the proviso and awarded bail subject to stringent conditions to secure attendance and prevent obstruction of justice. [Paras 6, 7, 8, 9]Discretion exercised under the proviso to Section 45(1) to grant bail to the petitioner on conditions; the petitioner satisfied the relevant considerations (tripod test and pre-trial detention) for release.Court's power to cancel bail on breach of conditions - Terms and conditions of bail and the trial Court's power to cancel bail - HELD THAT: - The Court directed release on bail on furnishing bond and sureties and imposed conditions including prohibition on tampering with witnesses or evidence, requirement to appear on all dates unless excused, deposit of passport, provision of contact and residence details, cooperation with ED and appearance before ED when required, and consequences for non-appearance including initiation of proceedings under relevant criminal provisions. The Court made clear that the trial Court in seisin of the case retains the power to cancel bail if conditions are violated or if cause for cancellation otherwise arises, and that observations made were confined to the bail adjudication and not final on merits. [Paras 10]Bail granted subject to specified conditions and with liberty to the trial Court to cancel bail on violation or other grounds.Final Conclusion: Bail application allowed: petitioner released on bail on furnishing bond and sureties and subject to specified conditions; initial custodial period without contemporaneous compliance with Section 19 PMLA was found not in accordance with law though formalities were completed belatedly, and the Court exercised discretion under the proviso to Section 45(1) PMLA to grant bail having regard to pre-trial detention, tripod-test considerations and the need for a speedy trial.

2023 (11) TMI 1316 - CALCUTTA HIGH COURT Money Laundering

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Issues:
1. Bail application of a septuagenarian petitioner accused in a case involving illegal appointments in schools in West Bengal.

Analysis:
The petitioner, a septuagenarian who served as the President of the West Bengal Board of Secondary Education, is accused of being involved in a conspiracy to issue illegal recommendation and appointment letters for Group 'C' posts in various schools in the state. The Central Bureau of Investigation (CBI) initiated an investigation following a court directive, leading to the petitioner's arrest and subsequent custody for 440 days. The allegations include issuing appointment letters based on forged recommendations and bypassing official procedures. The petitioner's health condition, age, and lack of possibility of abscondence were highlighted in the bail application, emphasizing his cooperation during the investigation. The CBI, on the other hand, argued against bail, citing the gravity of the offense and ongoing investigation uncovering a money trail related to illegal appointments.

The principles governing the grant of bail were considered by the court, focusing on factors such as the nature and gravity of the offense, materials collected during the investigation, detention necessity, flight risk, possibility of similar offenses, and witness intimidation. The court emphasized the importance of the presumption of innocence and the balance between individual liberty and the seriousness of the charges. The court applied the tripod test to assess the petitioner's eligibility for bail, considering his age, health condition, lack of official position, and the progress of the investigation, including the absence of evidence tampering or witness intimidation by the petitioner.

The court acknowledged the severity of the allegations involving corruption but noted the absence of a money trail or disproportionate assets linked to the petitioner. Despite the gravity of the offense, the court highlighted the importance of not prolonging undertrial detention solely based on the seriousness of the charges. The court expressed concerns about the trial's timely conclusion, especially considering the large number of witnesses and voluminous documents involved. Additionally, the absence of prosecution sanction and the remote possibility of trial commencement in the near future were significant factors in the court's decision to grant bail to the petitioner.

Ultimately, the court granted bail to the petitioner, subject to strict conditions, including a bond amount, sureties, appearance before the trial court, non-interference with witnesses or evidence, restrictions on entering specific jurisdictions, cooperation with the investigating agency, and surrendering the passport. Failure to comply with the conditions would lead to automatic bail cancellation by the trial court.

Former Board President gets bail in illegal school appointment conspiracy case despite corruption allegations
The HC granted bail to the petitioner, a former Board President accused of conspiracy in illegal appointments to Group C posts in West Bengal schools. The court found that continued detention was unjustified as evidence consisted of documents already with investigating agency and public servant statements, making witness intimidation unlikely. Despite acknowledging the gravity of corruption allegations affecting public employment aspirations, the court noted no money trail was established and trial conclusion remained distant due to voluminous evidence. Given the petitioner's age, health issues, and over one year detention without sanction for prosecution, continued detention violated Article 21 principles. Bail was granted with Rs. 50,000 bond and conditions including court appearances and restrictions from certain jurisdictions.

Tripod test (flight risk, likelihood of repetition, tampering/intimidation) - presumption of innocence under Article 21 - continued detention versus liberty of an undertrial - requirement of sanction for prosecution and its bearing on trial commencement - conditional bail: bond, sureties, territorial and cooperation conditionsTripod test (flight risk, likelihood of repetition, tampering/intimidation) - absence of flight risk - no likelihood of tampering or intimidation - no risk of repetition - presumption of innocence under Article 21 - Petitioner entitled to bail on application of the tripod test and Article 21 considerations. - HELD THAT: - The court applied the tripod test and concluded that continued detention was not justified. The petitioner is a septuagenarian with frail health, strong societal roots and had complied with summons during investigation, making abscondence unlikely. The allegations relate to abuse of an official position no longer held by the petitioner, rendering repetition of similar offences implausible. The primary evidence consists of documents already seized and statements of public servants, diminishing the prospect of the petitioner intimidating witnesses or tampering with evidence. Two charge sheets have been filed and investigation, as to the petitioner, is substantially advanced; no money trail or disproportionate assets have been shown so far. Balancing these factors against the gravity of alleged offences, and mindful of the presumption of innocence and the unfairness of prolonged pre-trial detention, the court held that detention could not be continued merely on the basis of offence gravity. [Paras 13, 14, 16, 19, 20]Grant bail to the petitioner on the grounds that absence of flight risk, low likelihood of repetition, and minimal risk of tampering outweigh continued pre-trial detention.Conditional bail - surety and bond - territorial restriction as bail condition - deposit of passport - obligation to appear and cooperate - Bail to be granted subject to specified conditions including bond, sureties, territorial restriction, passport deposit and cooperation with investigation. - HELD THAT: - Recognising the entitlement to bail, the court imposed strict conditions to safeguard trial progress and prevent any evasion or interference. The petitioner was directed to furnish a specified bond with two sureties (one local), appear on every date of hearing, refrain from intimidating witnesses or tampering with evidence, cooperate with the Investigating Agency, deposit his passport prior to release, and observe designated territorial exclusions. The court further provided that failure to appear without justifiable cause would permit automatic cancellation of bail by the trial court. [Paras 21, 22, 23]Bail allowed on the stated conditions; non-appearance will entitle the trial court to cancel bail.Final Conclusion: The petition is allowed: the petitioner is released on bail subject to strict conditions (bond with two sureties, territorial restrictions, passport deposit, obligation to appear and cooperate), and failure to appear will permit cancellation of bail by the trial court.

2023 (11) TMI 1237 - DELHI HIGH COURT Money Laundering

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PMLA bail on broad probabilities: prolonged custody and likely trial delay can justify release despite serious allegations.
In bail proceedings under the Prevention of Money Laundering Act, 2002, the Court held that the twin conditions must be assessed on broad probabilities and not through a meticulous appraisal of evidence or a finding of innocence. Prolonged incarceration, the accused's age and ailments, and the likelihood of delay in trial were treated as relevant considerations, while bare allegations of acting as a hawala operator or being a flight risk were found insufficient without substantive material. The question of knowing involvement in proceeds of crime and the required mens rea was left for trial, and regular bail was granted subject to conditions.

Section 3 PMLA - offence of money laundering - Section 45 PMLA - twin conditions for grant of bail - mens rea / knowledge in PMLA - bail on broad probabilities - Section 50 PMLA - evidentiary value of post-arrest statement - right to speedy trial / prolonged incarceration as bail considerationSection 45 PMLA - twin conditions for grant of bail - bail on broad probabilities - right to speedy trial / prolonged incarceration as bail consideration - Whether the petitioner is entitled to bail under Section 45 of the PMLA - HELD THAT: - The court applied the established test under Section 45 of PMLA and the governing principles that bail enquiries are to be conducted on broad probabilities without a meticulous appraisal of evidence. While acknowledging the seriousness of the allegations and the prosecution's case that prima facie indicates involvement in money laundering, the court observed that the question of knowledge and mens rea as to dealing in proceeds of crime must be established at trial. The court balanced the statutory embargo against the petitioner's advanced age, medical ailments and prolonged custody exceeding two years, and the unlikelihood of trial concluding soon. Relying on precedents emphasising that prolonged pre trial incarceration and the right to a speedy trial are relevant considerations, the court concluded that on broad probabilities the petitioner should be admitted to bail subject to conditions designed to allay risks of absconding or tampering with evidence. [Paras 22, 23, 24, 25, 26]Bail granted subject to specified conditions (personal bond, sureties, regular appearances, travel restrictions, communication of mobile/address details and restrictions on influencing witnesses)Section 3 PMLA - offence of money laundering - mens rea / knowledge in PMLA - Section 50 PMLA - evidentiary value of post-arrest statement - Whether the prosecution has established, at the bail stage, that the petitioner knowingly dealt with proceeds of crime so as to bar bail - HELD THAT: - The court noted the prosecution material including confessional disclosures by co accused, admissions attributed to the petitioner and witness statements; however, it restrained from making detailed findings on the merits at the bail stage. The court observed that the core questions of the petitioner's role in the present case, the existence of knowledge or mens rea, and the probative value of statements recorded under Section 50 of PMLA (particularly post arrest statements) are matters to be adjudicated at trial. Mere allegations or disclosures in the investigation, without more, do not suffice to deny bail where broad probabilities favour release, especially given the petitioner's custodial period and health considerations. [Paras 20, 21, 22]Prosecution's case on knowledge and mens rea left open for trial; not a bar to bail at this stageFinal Conclusion: The petition is disposed of by admitting the petitioner to bail under Section 45 PMLA on furnishing the prescribed bonds and compliance with enumerated conditions; questions of guilt, mens rea and the evidentiary weight of statements are to be addressed at trial.

2023 (11) TMI 1251 - MADRAS HIGH COURT Money Laundering

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PMLA authorities cannot prosecute on notional basis without registered scheduled offence with jurisdictional police
The HC granted interim stay of summons issued to District Collectors in money laundering proceedings. The court held that PMLA authorities cannot prosecute on notional basis or assumption that scheduled offence was committed unless registered with jurisdictional police and pending enquiry/trial. Following SC precedent in Vijay Madanlal Choudhary, the court ruled that proceeds of crime under Section 2(1)(u) PMLA must exist before authorities can initiate prosecution. Mere existence of undisclosed income cannot establish proceeds of crime unless property derived from criminal activity relating to scheduled offence. The court found the enquiry contemplated by impugned summons exceeded respondent's jurisdiction, being merely an attempt to investigate possibility of identifying proceeds of crime from unregistered criminal activity.

Offence of money-laundering - proceeds of crime - inquiry under Section 50(2) of the PMLA, 2002 - obligation under Section 66(2) of the PMLA, 2002 to share information - jurisdiction to investigate without State consent - federalism and separation of powers - prima facie maintainability of writ by the State - fishing expeditionPrima facie maintainability of writ by the State - jurisdiction to investigate without State consent - The writ petitions by the State Government and the District Collectors are prima facie maintainable to challenge the summons and the respondent's exercise of powers. - HELD THAT: - The Court observed that the State, by alleging invasion of its domain and usurpation of powers of State instrumentalities, suffers legal injury and is entitled to be heard. A distinction was noted between a State suing as an individual aggrieved person and a State challenging encroachment on federal competence; on the admitted facts and for the limited purpose of interim relief the Court is prima facie satisfied of maintainability. The District Collectors, being directly summoned, also possess locus to contest the process. This prima facie view is confined to deciding interim relief and is subject to final adjudication after pleadings. [Paras 8]Prima facie maintainable; State and District Collectors entitled to contest the impugned summons for interim relief.Offence of money-laundering - proceeds of crime - inquiry under Section 50(2) of the PMLA, 2002 - obligation under Section 66(2) of the PMLA, 2002 to share information - fishing expedition - Whether the impugned summons issued under Section 50(2) falls within the jurisdiction of the respondent under the PMLA or amounts to an impermissible attempt to investigate predicate offences and to 'fish out' proceeds of crime without their prior identification. - HELD THAT: - Relying on the Supreme Court's exposition that prosecution under Section 3 of the PMLA requires existence of 'proceeds of crime' as defined and that authorities under the Act cannot proceed on a notional basis, the Court examined the nature and annexure to the summons. The annexure sought detailed particulars of quarry sites and administrative records to ascertain whether scheduled offences had been committed. The Court found that the respondent's enquiry, as manifested by the summons, is directed at discovering whether a scheduled offence exists (and thereby discovering proceeds), rather than enquiring into identified proceeds of crime. In that manner the summons prima facie seeks to enable a fishing expedition to detect commission of scheduled offences and infer proceeds of crime, instead of acting upon established proceeds. The Court noted that if the respondent uncovers material pointing to offences, Section 66(2) requires sharing information with the concerned agency, and only upon existence of scheduled offences could further PMLA action be justified. [Paras 11, 14, 17]Prima facie, the summons exceed the respondent's jurisdiction under the PMLA by attempting to investigate predicate offences and identify proceeds of crime without prior establishment of proceeds; the enquiry appears to be a fishing expedition.Inquiry under Section 50(2) of the PMLA, 2002 - interim stay - Whether interim relief in the form of stay of operation of the impugned summons is warranted. - HELD THAT: - Having found a prima facie case that the summons seek an impermissible investigation into predicate offences and that balance of convenience favors the petitioners, the Court concluded that interim protection is appropriate. The Court clarified that the interim observations are for grant of relief only and that final disposal on merits will be uninfluenced by these interim conclusions. The parties were directed to complete pleadings and return for final hearing. [Paras 17, 18, 20]Interim stay granted on operation of the impugned summons in W.P. Nos. 33459, 33460, 33461, 33462 and 33467 of 2023; matter posted for further hearing.Final Conclusion: For the limited purpose of interim relief the High Court (Madras) prima facie held the writ petitions maintainable, concluded that the summons under Section 50(2) as framed appear to exceed the respondent's PMLA jurisdiction by seeking to investigate predicate offences and identify proceeds of crime without prior establishment of proceeds (thus amounting to a fishing expedition), and accordingly granted interim stay of operation of the impugned summons in the five specified writ petitions while directing completion of pleadings and listing the matters for final hearing.

2023 (11) TMI 1228 - JHARKHAND HIGH COURT Money Laundering

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Issues: (i) Whether non-furnishing of the written grounds of arrest in terms of Section 19 of the Prevention of Money Laundering Act, 2002 vitiated the arrest and supported grant of bail; (ii) Whether, on the material collected, the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 were satisfied and the allegations disclosed a prima facie case of money-laundering.

Issue (i): Whether non-furnishing of the written grounds of arrest in terms of Section 19 of the Prevention of Money Laundering Act, 2002 vitiated the arrest and supported grant of bail.

Analysis: Section 19 requires recording of reasons to believe in writing and informing the arrested person of the grounds of arrest. The Court applied the principle that mere reading over of the grounds is not enough and relied on the binding effect of the requirement that a written copy of the grounds be furnished to the arrested person. On that basis, non-compliance with the statutory safeguard was treated as a serious infirmity affecting the arrest.

Conclusion: The arrest was held to be vitiated for want of compliance with Section 19, which favoured the petitioner.

Issue (ii): Whether, on the material collected, the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 were satisfied and the allegations disclosed a prima facie case of money-laundering.

Analysis: The Court held that, at the bail stage, only a prima facie assessment is required. The materials were found insufficient to show that the petitioner had participated in forgery, manipulation of title deeds, or generation and laundering of proceeds of crime. The Court distinguished suspicion from reason to believe, noted the absence of material linking the petitioner to the scheduled offence or to any proceeds of crime, and held that the allegations did not satisfy the essential ingredients of money-laundering. It further considered the custody period, the stage of trial, and the absence of criminal antecedents while assessing the likelihood of reoffending.

Conclusion: The twin conditions under Section 45 were held to be satisfied in favour of the petitioner, and bail was granted.

Final Conclusion: The application for bail was allowed, with release ordered on conditions, because the arrest suffered from statutory non-compliance and the available material did not disclose a sufficient prima facie case of money-laundering against the petitioner.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, written furnishing of the grounds of arrest is a mandatory safeguard, and at the bail stage the court must assess only whether the available material discloses a prima facie case and reasonable grounds for believing that the accused is not guilty and will not reoffend.

Mandatory written grounds of arrest under PMLA and a prima facie bail test led to release on conditions.
Written furnishing of the grounds of arrest under Section 19 of the Prevention of Money Laundering Act, 2002 was treated as a mandatory safeguard, and mere oral communication was held insufficient; the non-compliance was found to vitiate the arrest. At the bail stage, the Court applied the Section 45 twin conditions on a prima facie basis and found the material inadequate to link the accused with forgery, title manipulation, proceeds of crime, or the scheduled offence. In the absence of material showing essential ingredients of money-laundering, and considering custody and other relevant factors, bail was granted on conditions.

Informing grounds of arrest and furnishing written copy - reason to believe and requirement of tangible material - prima facie satisfaction for grant of bail under Section 45(1)(ii) of PMLA - mens rea as an essential ingredient of offence under PMLA - proceeds of crime as prerequisite for offence of money laundering - prospective versus retrospective effect of judicial directionsInforming grounds of arrest and furnishing written copy - prospective versus retrospective effect of judicial directions - Compliance with Section 19(1) of PMLA - whether the Enforcement Directorate furnished the arrested person a written copy of the grounds of arrest and consequence of non compliance. - HELD THAT: - The court examined Section 19(1) and the ratio in Pankaj Bansal, holding that the statutory and constitutional purpose of informing an arrested person is not satisfied by merely reading out grounds; a written copy must be furnished. The use of the word "henceforth" in Pankaj Bansal was held not to restrict the ratio to future cases; the ratio that no arrest can be made without serving a copy applies to the present case as well. The court found non compliance by the Enforcement Directorate with the mandate to furnish a written copy of the grounds of arrest and concluded that this defect vitiates the arrest for the purposes of bail consideration. [Paras 13, 14]Arrest was vitiated by non compliance with Section 19(1); on this ground the petitioner is entitled to bail.Reason to believe and requirement of tangible material - prima facie satisfaction for grant of bail under Section 45(1)(ii) of PMLA - mens rea as an essential ingredient of offence under PMLA - proceeds of crime as prerequisite for offence of money laundering - Whether, on the materials before the court, the petitioner satisfies the twin limbs of Section 45(1)(ii) (reasonable grounds for believing he is not guilty and is not likely to commit an offence while on bail), and whether prima facie a case under Section 3 punishable under Section 4 of PMLA is made out. - HELD THAT: - The court applied the "tangible material" test for formation of "reason to believe" and noted that the prosecution complaint contains allegations that amount to suspicion rather than reasoned belief supported by live link material. Specific deficiencies identified included absence of material implicating the petitioner in forging title deeds, no allegation of procuring certified copies from the Registrar of Assurances by the petitioner, no material showing the petitioner participated in obtaining holding numbers by forging documents, and that the payment of a part sum was from the company's audited receipts. The court emphasised that mens rea is an essential element under PMLA and that without proceeds of crime there can be no money laundering; on the available record the allegations fall short of the essential ingredients of Section 3. Applying the principles governing Section 45 (as explained in Vijay Madanlal Choudhary and allied decisions), the court held that it need only form a prima facie view on broad probabilities and found that the petitioner has satisfied both limbs for grant of bail at this stage. [Paras 15, 16, 18, 19]On the prima facie material, no case under Section 3/4 PMLA is made out against the petitioner and the petitioner satisfies the conditions of Section 45(1)(ii); bail is therefore warranted subject to conditions.Final Conclusion: The petition is allowed: the petitioner is released on bail subject to conditions imposed by the Special Judge, CBI cum PMLA, Ranchi; the findings are tentative and will not prejudice trial court proceedings.

2023 (12) TMI 528 - MADRAS HIGH COURT Money Laundering

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Issues: (i) Whether prosecution under the Prevention of Money Laundering Act, 2002 could proceed when the alleged predicate offence had been notified as a scheduled offence only later. (ii) Whether prosecution for possession of disproportionate assets under the Prevention of Corruption Act, 1988 and prosecution for money-laundering under the Prevention of Money Laundering Act, 2002 amounted to double jeopardy or subsumption of one offence within the other. (iii) Whether the Special Court was required to conduct an inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 before issuing summons on a complaint under the Prevention of Money Laundering Act, 2002. (iv) Whether a certificate for appeal to the Supreme Court was warranted.

Issue (i): Whether prosecution under the Prevention of Money Laundering Act, 2002 could proceed when the alleged predicate offence had been notified as a scheduled offence only later.

Analysis: The offence of money-laundering is an independent offence concerned with the process or activity connected with proceeds of crime. The relevant date is the date on which the person indulges in or continues to indulge in dealing with such proceeds, and not the date on which the scheduled offence was committed. The question whether the accused dealt with the proceeds of crime is a factual matter for trial.

Conclusion: The prosecution was maintainable and the issue was not fit for discharge at the threshold.

Issue (ii): Whether prosecution for possession of disproportionate assets under the Prevention of Corruption Act, 1988 and prosecution for money-laundering under the Prevention of Money Laundering Act, 2002 amounted to double jeopardy or subsumption of one offence within the other.

Analysis: The ingredients of the two offences are distinct. Possession of disproportionate assets may be complete even if the illegal money has been spent, whereas money-laundering is made out when a person directly or indirectly attempts to indulge in, assists in, or is actually involved in a process or activity connected with proceeds of crime and projects it as untainted property. The two enactments operate in different fields and one is not subsumed in the other.

Conclusion: The plea of double jeopardy was rejected and the two prosecutions were held to be distinct.

Issue (iii): Whether the Special Court was required to conduct an inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 before issuing summons on a complaint under the Prevention of Money Laundering Act, 2002.

Analysis: The Special Court under the Prevention of Money Laundering Act, 2002 is empowered to take cognizance directly on a complaint by the authorised authority. Since cognizance is not taken by a Magistrate and there is no committal process, the procedure under Section 202(2) of the Code of Criminal Procedure, 1973 does not apply. The authorities relied on by the petitioner were held to be in a different context.

Conclusion: No mandatory inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 was required before issuance of summons.

Issue (iv): Whether a certificate for appeal to the Supreme Court was warranted.

Analysis: The questions raised were already covered by binding Supreme Court authority, and the cited decision on benami property was found factually inapplicable. No unanswered substantial question of law arose for certification.

Conclusion: The request for a certificate for appeal was declined.

Final Conclusion: The revision and original petition were held to be without merit, and the connected miscellaneous petitions were closed.

Ratio Decidendi: Money-laundering under the Prevention of Money Laundering Act, 2002 is an independent and continuing offence based on dealing with proceeds of crime, and a Special Court under that Act may take cognizance directly without the Section 202(2) inquiry applicable to committal-based proceedings before a Magistrate.

Money-laundering is an independent offence; later scheduling of the predicate offence and Section 202 inquiry do not bar prosecution.
Money-laundering under the Prevention of Money Laundering Act, 2002 is an independent and continuing offence concerned with dealing in proceeds of crime, so prosecution may proceed even if the predicate offence was notified as a scheduled offence later, and the relevant date is when the accused dealt with the proceeds. Possession of disproportionate assets under the Prevention of Corruption Act, 1988 and money-laundering under the PMLA have distinct ingredients and operate in different fields, so a double jeopardy objection does not arise. A Special Court under the PMLA may take cognizance directly on a complaint by the authorised authority, and Section 202(2) CrPC inquiry is not mandatory before issuing summons.

Offence of money-laundering as independent offence - Proceeds of crime - Continuing offence - Double jeopardy not attracted between PC Act and PMLA offences - Special Court may take cognizance without committal - Section 44 PMLA overrides CrPC cognizance/committal procedure - Section 202(2) Cr.P.C. inapplicable to PMLA complaintsOffence of money-laundering as independent offence - Proceeds of crime - Continuing offence - Petitioner liable to be prosecuted under Section 3 of PMLA notwithstanding that the predicate offence was committed earlier, subject to factual determination whether he dealt with proceeds of crime after notification as a scheduled offence. - HELD THAT: - The Court applied the principle that the offence under Section 3 of the PMLA is an independent offence concerned with processes or activities connected with the proceeds of crime (concealment, possession, acquisition, use, or projecting as untainted property). The relevant date is when the respondent indulges in the process or activity connected with proceeds of crime; consequently even if the predicate criminal activity occurred earlier, continuing possession or dealing with proceeds after the relevant notification may attract PMLA liability. Whether the petitioner in the present facts has indulged in such dealing is a question of fact for trial. [Paras 8]PMLA prosecution under Section 3 is not barred merely because the predicate offence pre-dates its scheduling; factual inquiry at trial is required to determine dealing with proceeds.Double jeopardy not attracted between PC Act and PMLA offences - Prosecution under Section 3 of PMLA in addition to prosecution under Section 13(1)(e) of the PC Act does not amount to double jeopardy. - HELD THAT: - The Court held that the ingredients of the offence under Section 13(1)(e) of the PC Act (possession of disproportionate assets and inability to account) are different from the ingredients of Section 3 of the PMLA (process or activity connected with proceeds of crime). A public servant may be guilty under the PC Act even if illegally spent money is exhausted, whereas PMLA targets dealing with proceeds of crime and continuing possession or concealment. Given the distinct statutory elements, prosecuting under both statutes is not prohibited as double jeopardy. [Paras 9]The plea of double jeopardy is untenable; the two offences are distinct and separate.Certificate for appeal under Article 134A refused - Request for a certificate to appeal to the Supreme Court under Article 134A(b) was refused. - HELD THAT: - The Court refused to grant a certificate for appeal because the legal question relied upon by the petitioner is already covered by the Supreme Court's decision in Vijay Madan Lal Choudhary and a pending review petition does not justify issuance of a certificate. The purported conflict with the decision in Ganpati Dealcom was held not to be a comparable or conflicting precedent in the facts of this case. [Paras 10]No certificate for appeal under Article 134A(b) issued; petition does not raise an unanswered substantial question of law.Special Court may take cognizance without committal - Section 44 PMLA overrides CrPC cognizance/committal procedure - Section 202(2) Cr.P.C. inapplicable to PMLA complaints - Summons and proceedings by the Special Court under PMLA do not require a prior inquiry under Section 202(2) Cr.P.C.; Section 44 of PMLA permits Special Courts to take cognizance without committal. - HELD THAT: - The Court examined Section 44 of the PMLA and concluded it is an exception to the general cognizance/committal scheme under the Cr.P.C. A Special Court constituted under the PMLA may take cognizance of an offence under Section 3 on complaint by an authorized authority without committal, and shall try offences in accordance with Cr.P.C. as applied to a Sessions Court. Therefore the proviso to Section 202(2) Cr.P.C., which contemplates Magistrate-stage inquiry and production/examination of witnesses when cognizance is by a Magistrate for a Sessions-triable offence, has no application where the Special Court itself takes cognizance under the PMLA scheme. [Paras 13, 14, 18]No obligation to conduct a Section 202(2) Cr.P.C. inquiry before issuing summons in a complaint taken cognizance of by a PMLA Special Court; the Criminal Original Petition challenging summons is dismissed.Final Conclusion: Both the Criminal Revision Case and Criminal Original Petition are dismissed: (i) prosecution under Section 3 PMLA is maintainable subject to trial-level factual determination of dealing with proceeds; (ii) double jeopardy does not bar concurrent proceedings under the PC Act and PMLA; (iii) no certificate for appeal to the Supreme Court is granted; and (iv) Section 202(2) Cr.P.C. inquiry is inapplicable to complaints cognizable by a PMLA Special Court under Section 44, hence summons are sustained.

2023 (11) TMI 1085 - DELHI HIGH COURT Money Laundering

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Issues: (i) whether proceedings under the Prevention of Money Laundering Act, 2002 could continue in respect of predicate offences in the first two FIRs after one was compounded and the other quashed; (ii) whether the later FIR could validly be taken on record in the existing ECIR so as to sustain the investigation.

Issue (i): Whether proceedings under the Prevention of Money Laundering Act, 2002 could continue in respect of predicate offences in the first two FIRs after one was compounded and the other quashed.

Analysis: The existence of a scheduled offence is the jurisdictional foundation for action under the Prevention of Money Laundering Act, 2002. Where the predicate offence is finally extinguished by compounding or quashing, the proceedings for money laundering in relation to that offence cannot survive. The Court applied the settled principle that the offence under Section 3 of the Prevention of Money Laundering Act, 2002 is dependent on criminal activity relating to a scheduled offence and cannot continue on a notional basis once the underlying scheduled offence no longer exists.

Conclusion: The proceedings under the Prevention of Money Laundering Act, 2002 relating to the first two FIRs were quashed and cannot continue against the petitioner.

Issue (ii): Whether the later FIR could validly be taken on record in the existing ECIR so as to sustain the investigation.

Analysis: An ECIR is not equated with an FIR and is treated as an internal departmental record. On that basis, the later FIR, which concerned the same project and disclosed a fresh scheduled offence, could be taken on record in the existing ECIR. The Court held that the later FIR constituted a subsisting scheduled offence and therefore preserved the ECIR for purposes of inquiry and investigation under the Act, though not in relation to the earlier extinguished predicate offences.

Conclusion: The later FIR could sustain the ECIR and the investigation was permitted to continue on that basis.

Final Conclusion: The petition succeeded only to the extent of the earlier predicate offences, while the investigation was allowed to continue in relation to the later scheduled offence.

Ratio Decidendi: Proceedings under the Prevention of Money Laundering Act, 2002 cannot survive in relation to a scheduled offence that has been finally compounded or quashed, but an existing ECIR may continue where a subsequent scheduled offence arising from the same transaction remains subsisting.

Predicate offence extinction under PMLA bars laundering proceedings, but a later subsisting FIR can sustain the ECIR.
Proceedings under the Prevention of Money Laundering Act, 2002 cannot survive where the underlying scheduled offence has been finally extinguished by compounding or quashing, because the predicate offence is the jurisdictional foundation for action under Section 3. The Court therefore quashed the money-laundering proceedings linked to the first two FIRs. However, an ECIR is an internal record and is not equated with an FIR; the later FIR, involving the same project and disclosing a fresh subsisting scheduled offence, could validly be taken on record in the existing ECIR. Investigation was therefore permitted to continue only in relation to that later offence.

Dependency of money-laundering offence on scheduled offence - Effect of quashing or compounding of predicate offence on PMLA proceedings - ECIR as an internal departmental document distinct from an FIR - Jurisdictional fact - Legitimacy of taking subsequent FIRs on record in an existing ECIRDependency of money-laundering offence on scheduled offence - Effect of quashing or compounding of predicate offence on PMLA proceedings - Jurisdictional fact - Whether proceedings under the PMLA in respect of scheduled offences that have been compounded or quashed can be continued against the petitioner. - HELD THAT: - The Court accepted the settled proposition that Section 3 offence under the PMLA is dependent on illegal gain as a result of a scheduled offence and that in absence of a scheduled offence there can be no maintainable prosecution under the PMLA. Having noted that FIR No. 16/2018 was compounded and FIR No. 49/2021 was quashed (and that those orders have not been challenged by the State or complainants), the Court held that the department cannot initiate or continue any proceeding or investigation under the impugned ECIR with respect to the scheduled offences forming part of those two FIRs. The Court applied the principle that a jurisdictional fact (here, existence of the scheduled offence) is a condition precedent for PMLA action and, where that fact is finally extinguished by compounding or quashing, consequential proceedings in respect of that predicate cannot survive. [Paras 25, 34, 36]Proceedings under ECIR/09/HIU/2019 insofar as they relate to FIR No. 16/2018 and FIR No. 49/2021 stand quashed against the petitioner.ECIR as an internal departmental document distinct from an FIR - Legitimacy of taking subsequent FIRs on record in an existing ECIR - Whether the impugned ECIR could be maintained on the basis of a later-registered FIR taken on record by the department and whether the ECIR must be wholly quashed where earlier predicate FIRs were compounded or quashed. - HELD THAT: - Relying on the Supreme Court's distinction that ECIR is an internal document and not equivalent to an FIR, the Court held that the department may take subsequent FIRs relating to the same project on record in an existing ECIR for purposes of PMLA inquiry. Consequently, the existence of FIR No. 55/2023 (registered after quashing/compounding of the earlier FIRs) legitimizes continuation of the ECIR generally. However, the Court clarified that while the ECIR as a document may subsist on the basis of the later FIR, that does not permit continuation of investigation under the ECIR in respect of predicate offences already extinguished by compounding/quashing; thus the ECIR survives but not insofar as it concerns the first two FIRs. [Paras 29, 31, 32, 36]ECIR/09/HIU/2019 is not wholly quashed because FIR No. 55/2023 has been taken on record; the ECIR may legitimately include the later FIR, but investigation in respect of the first two FIRs cannot continue.Final Conclusion: The petition is partly allowed: ECIR/09/HIU/2019 dated 27.06.2019 is not quashed in its entirety because a subsequent FIR (No. 55/2023) has been taken on record and sustains the ECIR; however, all proceedings and investigation under the ECIR insofar as they relate to FIR No. 16/2018 and FIR No. 49/2021 (which were compounded/quashed) stand quashed as no scheduled offence survives in respect of those FIRs.

2023 (11) TMI 1033 - CALCUTTA HIGH COURT Money Laundering

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Issues Involved:
1. Whether the case relating to the scheduled offence should be committed to the Special Court designated under PMLA, 2002.
2. Interpretation of Section 44(1)(c) of PMLA, 2002 regarding the transfer of cases to the Special Court.

Summary:

Issue 1: Commitment of Scheduled Offence to Special Court
The petitioners challenged the order dated March 24, 2021, by the Learned Metropolitan Magistrate, which directed the appearance of all accused persons for committing the case to the Special Designated Court under Section 44(1)(c) of PMLA, 2002. The Enforcement Directorate (ED) had filed multiple FIRs and charge sheets against the accused under various sections of the IPC and PMLA for offences including criminal conspiracy, cheating, and forgery. The ED argued that the scheduled offences under IPC are connected to the offence of money laundering under PMLA, and hence, should be tried by the same Special Court.

Issue 2: Interpretation of Section 44(1)(c) of PMLA, 2002
The petitioners contended that the amended provisions of Section 44(1)(c) do not mandate the automatic transfer of cases to the Special Court. They argued that the word "shall" in Section 44(1)(c) should be interpreted as "may," giving discretion to the regular court. They relied on the judgment of the Hon'ble Supreme Court in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors., which emphasized that the provisions under Section 44 of PMLA are enabling and discretionary.

The ED countered that the legislative intent behind Section 44(1)(c) is to ensure that both the scheduled offences and the offence of money laundering are tried by the same Special Court. They cited the Supreme Court's decision in Rana Ayyub v. Directorate of Enforcement, which clarified that the trial of the scheduled offence should follow the trial of the offence of money laundering, and not vice versa.

Judgment:
The Court held that the legislative intention behind Section 44(1)(c) is clear and mandates that the same Special Designated Court should try both the scheduled offences and the offences under PMLA. The word "shall" in Section 44(1)(c) leaves no room for alternate interpretations. The Court affirmed the order dated March 24, 2021, passed by the Learned Metropolitan Magistrate, and dismissed the revisional application. The Court emphasized that a harmonious construction of the provisions leads to the conclusion that the Special Designated Court for trying offences under PMLA would also try the scheduled offences in the present case.

Special Designated Court must try both money laundering and related scheduled offences under Section 44 PMLA
The HC affirmed a Metropolitan Magistrate's order directing transfer of a scheduled offence case to the Special Designated Court under PMLA, 2002. The court held that conjoint reading of Section 44(1)(a), Section 44(1)(c) and explanations establishes legislative intent for the same Special Designated Court to try both money laundering offences and related scheduled offences. Given identical subject matter, factual foundation, and interconnected outcomes, harmonious construction mandates the Special Designated Court's jurisdiction over scheduled offences in such circumstances.

Offences triable by Special Courts - commitment of scheduled offence to the Special Court under Section 44(1)(c) of PMLA - primacy of the Special Court in territorial jurisdiction for PMLA matters - Explanation (i) - trial by same court not to be construed as joint trial - interpretation of 'shall' in Section 44(1)(c)Commitment of scheduled offence to the Special Court under Section 44(1)(c) of PMLA - primacy of the Special Court in territorial jurisdiction for PMLA matters - Explanation (i) - trial by same court not to be construed as joint trial - Validity of the order committing the scheduled offence to the Special Court under Section 44(1)(c) of the Prevention of Money Laundering Act, 2002. - HELD THAT: - A conjoint reading of Section 44(1)(a) and Section 44(1)(c), together with Explanation (i), manifests a legislative scheme giving primacy to the Special Court constituted under Section 43(1) to try offences under the PMLA and the scheduled offences connected to them. Clause (a) establishes the fundamental rule that an offence punishable under Section 4 of the PMLA and any connected scheduled offence shall be triable by the Special Court for the area where the offence of money-laundering has been committed. Clause (c) addresses the contingency where cognizance of the scheduled offence has been taken by a court other than the Special Court which has taken cognizance of the PMLA complaint and directs that such court, on an application by the authorised authority, shall commit the scheduled offence to the Special Court, which will proceed from the stage at which it is committed. Explanation (i) clarifies that trial of both sets of offences by the same court is not to be understood as a joint trial. Applying this scheme to the facts, the learned Magistrate correctly exercised the power under Section 44(1)(c) to commit the scheduled offence to the Special Designated Court that had taken cognizance of the PMLA complaint. The petitioners' contention that the provision is merely enabling or that 'shall' must be read as 'may' is inconsistent with the statutory text and the purposive reading endorsed by higher authorities that the Special Court has primacy and that commitment is mandated upon application by the prosecuting authority.The commitment order dated 24.03.2021 was valid; the revisional petition is dismissed and the Magistrate's order is affirmed.Final Conclusion: The High Court dismissed CRR 1620 of 2021 and affirmed the Metropolitan Magistrate's order committing the scheduled offence to the Special Designated Court under Section 44(1)(c) of the PMLA, 2002.

2023 (11) TMI 903 - ORISSA HIGH COURT Money Laundering

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PMLA bail under twin conditions turns on broad probabilities, cooperation, and absence of custodial necessity.
Section 45 of the Prevention of Money Laundering Act, 2002 requires satisfaction of the twin bail conditions: reasonable grounds to believe the accused is not guilty and that he is not likely to commit an offence while on bail. The discussion notes that bail assessment may proceed on broad probabilities, not a final determination of guilt. It records that the charge sheet had been filed, relevant documents were seized, the accused cooperated with investigation, and there was no material showing risk of absconding or tampering with evidence. Blindness and the absence of custodial necessity were treated as relevant considerations in assessing release.

Bail under Section 45 of the Prevention of Money Laundering Act, 2002 - Twin conditions for grant of bail under PMLA - Prima facie satisfaction at bail stage - Absence of custodial necessity where accused not arrested during investigation - Risk of tampering with prosecution evidence as factor in bail - Disability (blindness) as relevant consideration in bailBail under Section 45 of the Prevention of Money Laundering Act, 2002 - Twin conditions for grant of bail under PMLA - Prima facie satisfaction at bail stage - Risk of tampering with prosecution evidence as factor in bail - Disability (blindness) as relevant consideration in bail - Absence of custodial necessity where accused not arrested during investigation - Whether the petitioner should be enlarged on bail in proceedings under the PMLA in view of the statutory conditions, factual matrix and attendant considerations - HELD THAT: - The Court applied the statutory test in Section 45 PMLA which requires, where the Public Prosecutor opposes bail, satisfaction on reasonable grounds that the accused is not guilty and not likely to commit an offence while on bail. At the bail stage the Court is to examine the matter on broad probabilities and not to finally determine guilt. The Court found that the trial in the CBI and ED matters had been clubbed and that a charge-sheet had been filed and documents seized, reducing the risk of tampering with evidence. The petitioner had cooperated throughout investigation, was not arrested during investigation, and there was no specific or prima facie material implicating him in the predicate offence; these circumstances diminished any custodial necessity. The petitioner's blindness, noted by the Supreme Court, was a relevant humanitarian factor. Taking these considerations together and applying the established principle that liberty should not be interfered with except for cogent reasons, the Court concluded that the twin conditions under Section 45 did not preclude bail in the present facts. Consequently bail was ordered subject to stringent terms to guard against risk of reoffending or tampering. [Paras 21, 22, 23, 26, 27]Petitioner enlarged on bail under Section 45 PMLA on conditions that he attend trial dates, abstain from criminal activity and not tamper with prosecution evidence; breach to invite cancellation of bail.Final Conclusion: Bail under Section 45 PMLA granted to the petitioner on stringent conditions, the Court recording lack of prima facie material against him, his cooperation during investigation, the filing of charge-sheet and seizure of documents, and his disability as factors justifying release subject to conditions guarding against tampering or reoffending.

2023 (11) TMI 1084 - DELHI HIGH COURT Money Laundering

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Interim stay of ECIR proceedings where customs predicate offence and connected complaint arose from the same factual matrix.
ECIR proceedings under the Prevention of Money-Laundering Act, including the summons, were stayed qua the petitioner because the ECIR rested on a customs offence treated as the scheduled predicate offence, and the petitioner had already obtained relief in the related customs adjudication. With the connected complaint proceedings also stayed earlier and all three matters arising from the same factual matrix, the Court found a sufficient prima facie basis for interim protection. The submission that money-laundering is an independent offence did not displace that interim relief on the facts before the Court.

Stay of proceedings pending determination of predicate proceedings - Proceedings under the Prevention of Money Laundering Act as independent offence - Provisional attachment of alleged proceeds of crime - Abuse of process of law - Effect of exoneration by appellate tribunal on consequent criminal proceedingsStay of proceedings pending determination of predicate proceedings - Effect of exoneration by appellate tribunal on consequent criminal proceedings - Abuse of process of law - Grant of interim stay of ECIR/DLZO-I/39/2023 and all proceedings emanating therefrom qua the petitioner until the next date of hearing. - HELD THAT: - The Court examined the Provisional Attachment Order and the material placed before the ED and noted that the ECIR was recorded with reference to Section 135 of the Customs Act, 1962 as a scheduled offence under the PMLA. The Court took into account that the adjudication proceedings against the petitioner had been dismissed by the CESTAT and that the Division Bench of this Court had affirmed that dismissal. The Court further noted its earlier order staying the operation of the impugned order and related proceedings in Ct. Case No.2012/2022. Given the common set of facts forming the genesis of the CESTAT proceedings, the complaint before the ACMM and the present ECIR, and having found merit in the petitioner's submissions on the peculiar facts and circumstances, the Court was of the prima facie view that there were sufficient materials to stay the ECIR proceedings qua the petitioner. The Court therefore directed that the ECIR dated 17.07.2023 and all proceedings emanating therefrom, including the summoning order dated 10.11.2023, shall remain stayed as against the petitioner until the next date of hearing, while permitting the ED to proceed against other persons named in the ECIR in accordance with law. [Paras 18, 19, 20, 21, 22]ECIR/DLZO-I/39/2023 dated 17.07.2023 and all proceedings emanating therefrom, including the summoning order dated 10.11.2023, are stayed qua the petitioner until the next date of hearing.Exemption from filing fees / procedural exemption - Application for exemption (CRL.M.A. 31442/2023) is allowed. - HELD THAT: - The Court allowed the application for exemption subject to all just exceptions and disposed of the application accordingly. [Paras 1, 2]The application for exemption is allowed subject to all just exceptions and stands disposed of.Final Conclusion: Interim relief granted: the ECIR dated 17.07.2023 and all proceedings emanating therefrom are stayed as against the petitioner until the next date of hearing; the ED remains at liberty to continue proceedings against other persons named in the ECIR; application for exemption allowed.

2023 (11) TMI 725 - DELHI HIGH COURT Money Laundering

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Issues: (i) Whether the summons issued under Section 50 of the Prevention of Money Laundering Act, 2002 were liable to be quashed; (ii) Whether the ECIR was liable to be quashed; (iii) Whether a restraint against coercive steps was warranted.

Issue (i): Whether the summons issued under Section 50 of the Prevention of Money Laundering Act, 2002 were liable to be quashed.

Analysis: Section 50 empowers the authorised officers to summon any person whose attendance is considered necessary for giving evidence or producing records during investigation or proceedings under the Act. The power is intended for collection of information and evidence, and a person summoned is bound to attend, state the truth, and produce documents as required. The Court relied on the settled position that such summons do not, by themselves, amount to a formal accusation or prosecution, and Article 20(3) protection is not attracted unless the person is an accused of an offence at the relevant time.

Conclusion: The summons were not liable to be quashed.

Issue (ii): Whether the ECIR was liable to be quashed.

Analysis: The petitioner was not shown to be an accused in the ECIR, the ECIR itself was not placed on record for examination, and the respondent's stand was that no prosecution complaint had been filed against the petitioner. The Court treated the challenge as premature and held that, in the absence of a formal accusation or clear basis to impeach the ECIR, quashing could not be granted at this stage.

Conclusion: The ECIR was not liable to be quashed.

Issue (iii): Whether a restraint against coercive steps was warranted.

Analysis: The Court noted that the petitioner had not been arrested despite repeated summons, that summons under Section 50 are distinct from the power of arrest under the Act, and that the availability of other statutory remedies, including anticipatory bail if occasion arises, weighed against passing a blanket restraint. The Court therefore declined to convert the writ proceedings into a surrogate for anticipatory bail protection.

Conclusion: No order restraining coercive steps was warranted.

Final Conclusion: The writ petition failed on the core prayers for quashing and coercive restraint, but the Court granted limited procedural accommodation by permitting attendance at the Kolkata office on notice, and the matter stood disposed of accordingly.

Ratio Decidendi: Summons issued under Section 50 of the Prevention of Money Laundering Act, 2002 for collection of evidence or information are not liable to be quashed merely because the noticee is not yet an accused, and a writ court will not grant blanket no-coercive protection or quash an ECIR in the absence of a formal accusation and a clear, ripe challenge.

PMLA summons and ECIR challenge fail when no formal accusation exists and coercive restraint is premature
Summons under Section 50 of the Prevention of Money Laundering Act were held to be a lawful investigative power for collecting evidence and records, and were not quashed merely because the noticee was not yet an accused; Article 20(3) protection was treated as inapplicable at that stage. The ECIR challenge was treated as premature because the petitioner was not shown to be an accused, the ECIR was not on record, and no prosecution complaint had been filed. The Court also declined blanket protection against coercive steps, noting that summons are distinct from arrest powers and that statutory remedies, including anticipatory bail if needed, remained available.

Summons under Section 50 of PMLA - Power to summon any person for investigation under PMLA - Article 20(3) protection not attracted at summons stage - Quashing of ECIR - No-coercive-steps / anticipatory relief - Attendance at zonal office (Kolkata) on notice - Applicability of Section 160 Cr.P.C. to Section 50 PMLA (pending adjudication)Summons under Section 50 of PMLA - Power to summon any person for investigation under PMLA - Validity of summons issued under Section 50 PMLA and prayer to quash them - HELD THAT: - The Court analysed Section 50 PMLA and authoritative pronouncements including Vijay Madanlal Choudhary, observing that authorised PMLA officials have wide power to summon any person for attendance, examination and production of records for purposes of investigation or proceedings under the Act. A summons under Section 50 is for collection of information or evidence and does not ipso facto make the noticee an accused; protections under Article 20(3) apply only if the person is an accused at the relevant time. Precedents disfavor interference at the stage of issuance of summons except in exceptional cases. On the facts, the petitioner had been summoned for recording statement and production of documents, had appeared once, and there were no demonstrable grounds of mala fides or prejudice warranting quashing of the impugned summons. [Paras 21, 25, 26]Summons under Section 50 PMLA are not quashed; no ground made out to interfere with issuance of summons.Quashing of ECIR - Prayerto quash the ECIR registered by the Enforcement Directorate - HELD THAT: - The Court noted that the petitioner had not placed a copy of the ECIR on record and, as per the respondent, the petitioner is not presently named as an accused in the ECIR. Reliance was placed on authority that a person not named as accused lacks locus to seek quashing of an ECIR and on the settled position that the ED is not obliged to furnish a copy of ECIR to the noticee at the investigation stage. Given these circumstances the petition for quashing was held to be premature. [Paras 30, 31]Prayer to quash the ECIR is dismissed as premature and without merit.Article 20(3) protection not attracted at summons stage - Claim for protection under Article 20(3) against being compelled to be a witness against oneself when summoned under Section 50 - HELD THAT: - The Court reiterated that protection under Article 20(3) is available only to a person who is an accused of an offence. Since the petitioner was not an accused as per the respondent's material, mere issuance of summons for collection of information would not engage Article 20(3). The Court relied on Vijay Madanlal Choudhary and related jurisprudence to hold that the contention that summons under Section 50 coerces self-incrimination is not sustainable at this stage. [Paras 32, 33]Claim of entitlement to Article 20(3) protection at summons stage is rejected.No-coercive-steps / anticipatory relief - Application for interim relief restraining the Enforcement Directorate from taking any coercive steps during investigation - HELD THAT: - The Court declined to grant a blanket direction of 'no coercive steps', noting jurisdictional and precedent-based cautions (Neeharika Infrastructure and allied decisions) that High Courts should not pass such orders which effectively amount to anticipatory bail without satisfying statutory tests. The Court observed that petitioner had been repeatedly summoned without arrest and that alternate remedies such as anticipatory bail under Section 438 Cr.P.C. remain available if apprehension of arrest arises. On the facts, no case was made out for prohibiting coercive steps. [Paras 37]Prayer for a direction of no coercive steps is refused.Attendance at zonal office (Kolkata) on notice - Direction as to place and manner of attendance for recording statement - HELD THAT: - While refusing to quash summons or ECIR, the Court recorded earlier orders of the Predecessor Bench and, having regard to the petitioner's age, health and status as a public functionary, directed that the Enforcement Directorate may require the petitioner's attendance at its Kolkata office by giving at least 24 hours' notice. The Court also directed issuance of simultaneous notices to the Commissioner of Police, Kolkata and the Chief Secretary, West Bengal to ensure adequate police protection and facilitation of the examination. [Paras 41]ED permitted to summon the petitioner at its Kolkata office on at least 24 hours' notice; police protection to be provided.Applicability of Section 160 Cr.P.C. to Section 50 PMLA (pending adjudication) - Whether Section 160 Cr.P.C. applies to summons under Section 50 PMLA - HELD THAT: - The Court expressly refrained from deciding the legal question whether Section 160 Cr.P.C. applies to Section 50 PMLA, observing that the controversy is pending before the Hon'ble Supreme Court in Nalini Chidambaram and related matters, and that the Coordinate Bench judgment in Abhishek Banerjee has been stayed by the Apex Court. Consequently the issue remains pending authoritative adjudication. [Paras 40]Question left undecided and noted as pending before the Supreme Court.Final Conclusion: The petition is dismissed. The impugned summons under Section 50 PMLA are not quashed and the prayer to quash the ECIR is held premature; no direction of 'no coercive steps' is granted. As a limited and case-specific accommodation, the Enforcement Directorate may summon the petitioner to its Kolkata office by giving at least 24 hours' notice, with simultaneous notice to local authorities to provide police protection. The question of applicability of Section 160 Cr.P.C. to Section 50 PMLA is left open pending adjudication before the Supreme Court.

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