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2026 (6) TMI 61 - DELHI HIGH COURT Money Laundering

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Unconditional concession and reasoned order requirements under PMLA: reservation of liberty did not waive the appeal challenge.
A reservation of liberty to seek relief before another forum did not amount to an unconditional concession abandoning the challenge to retention of the cash amount. The Delhi HC noted that the statement before the Tribunal preserved the appellants' challenge and did not dispense with merits adjudication. Under Section 26 of the Prevention of Money Laundering Act, 2002, the appellate authority was required to pass a reasoned, speaking order, consistent with natural justice. As the appeals had not been validly abandoned, the Tribunal could not dispose of them without such an order. The impugned order was set aside and the appeals were restored for fresh adjudication.

2026 (5) TMI 1379 - CALCUTTA HIGH COURT Money Laundering

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Issues: Whether the money-laundering prosecution could continue against the petitioner when the petitioner was not arraigned as an accused in the predicate offence, the CBI had not attributed criminality or diversion of funds to the petitioner, and the complaint rested mainly on the statement of a co-accused without independent supporting material.

Analysis: The offence under the Prevention of Money Laundering Act, 2002 depends on the existence of proceeds of crime derived from criminal activity relating to a scheduled offence, and liability under Section 3 attaches to any process or activity connected with such proceeds, including concealment, possession, acquisition, use, or projection as untainted property. Although a person need not be named in the scheduled offence to face proceedings under the Act, there must still be material showing involvement with proceeds of crime. Here, the transactions involving warehouse receipts and the movement of funds did not yield independent material establishing that the petitioner had handled proceeds of crime. The CBI investigation had not implicated the petitioner in the predicate offence, had not found diversion of funds in relation to the petitioner, and the allegation in the money-laundering case was substantially built on the statement of a co-accused recorded under Section 50 of the Act. Such a statement, without more, was insufficient to found a prima facie case for trial.

Conclusion: The petitioner could not be proceeded against on the material then available, and continuation of the money-laundering case against the petitioner was unjustified.

Final Conclusion: The revisional application succeeded and the prosecution was quashed against the petitioner, while the case continued against the other accused persons.

Ratio Decidendi: Proceedings under the Prevention of Money Laundering Act, 2002 require independent prima facie material showing involvement with proceeds of crime, and a co-accused's statement alone is insufficient to sustain prosecution where the predicate-investigation materials do not implicate the person proceeded against.

PMLA prosecution needs independent material linking the accused to proceeds of crime; a co-accused statement alone is not enough.
Proceedings under the Prevention of Money Laundering Act require independent prima facie material linking the person proceeded against to proceeds of crime derived from a scheduled offence. A person need not be named in the predicate offence, but liability cannot rest solely on a co-accused's statement where the investigation does not otherwise show handling, diversion, concealment, possession, acquisition, or projection of tainted funds. On the facts noted, the predicate investigation did not implicate the petitioner, and the material was found insufficient to sustain continued prosecution.

Proceeds of crime - transactions made through warehouse receipts without physical movement of the goods - criminal activity relating to a scheduled offence - foundational facts required for establishing an offence - Exoneration in scheduled offence investigation - Statement of co-accused - Prima facie case for trial - Abuse of process. Independent offence of money-laundering - Proceeds of crime - Exoneration in scheduled offence investigation - HELD THAT: - The Court held that an offence under Section 3 of the PMLA is independent and it is not mandatory that the accused must also be an accused in the scheduled offence. However, the sine qua non remains the existence of proceeds of crime derived from criminal activity relating to a scheduled offence and the accused's involvement in a process or activity connected therewith. In the present case, the very letters of credit and the petitioner's role therein had already been investigated in the predicate case, and the investigating agency in that case concluded that the petitioner was not a beneficiary and that diversion of funds by the petitioner was not established. Since the PMLA case proceeded on the same factual premise, and no independent material showed that the amounts received by the petitioner were tainted proceeds of crime, the petitioner could not be proceeded against for money-laundering on a notional or assumptive basis. [Paras 14, 16, 17, 18, 19] On the materials noticed by the Court, the essential link between the petitioner and proceeds of crime was not prima facie established, and the PMLA prosecution against the petitioner was held unsustainable. Statement of co-accused - Prima facie case for trial - HELD THAT: - The Court found that the Enforcement Directorate had primarily relied on the statement of the co-accused recorded under Section 50 of the PMLA. Such a statement, by itself, could not form the foundation of the prosecution and could at best lend support to other evidence. The Court further noted that the petitioner's transactions, conducted through warehouse receipts, could not prima facie be treated as mere paper transactions; that the alleged intermediary entity had not been arraigned as an accused either in the predicate case or in the money-laundering case; and that no independent material was shown to support the allegation that the petitioner was a beneficiary. Applying the test that even at the stage of charge there must exist some material capable of translating into evidence and giving rise to a strong suspicion, the Court concluded that the available material did not make out a case for the petitioner to stand trial. [Paras 13, 15, 20, 21, 22] The Court held that continuation of the proceedings against the petitioner would amount to abuse of process, and the money-laundering case was liable to be quashed insofar as the petitioner was concerned. Final Conclusion: The revisional application was allowed and the money-laundering case was quashed insofar as the petitioner was concerned. The Court held that, on the material placed, no prima facie case of involvement in proceeds of crime was made out against the petitioner, though the proceedings were directed to continue against the remaining accused.

2026 (5) TMI 1167 - CHHATTISGARH HIGH COURT Money Laundering

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Anticipatory bail in a serious economic offence turns on prima facie role, custodial interrogation, parity, and criminal antecedents.
The commentary addresses anticipatory bail in a coal levy scam, focusing on whether prima facie material, custodial interrogation, parity with co-accused, and criminal antecedents justified relief. It notes that the case diary and a co-accused's supplementary statement were said to indicate involvement in a serious economic offence involving alleged administrative influence, a shift from online to offline coal transport verification, and substantial public loss. It also states that parity was considered inapplicable because the other accused were said to be on different facts and the investigation remained pending.

Entitlement to anticipatory bail in view of the prima facie material - Custodial interrogation - Parity in bail - Economic offences deep-rooted conspiracies and involving huge loss of public funds - involvement of the applicants in commission of offence under Section 7, 7A & 12 of the PC Act. Anticipatory bail - Custodial interrogation - HELD THAT: - The Court found from the FIR and the material collected in the case diary that the applicant's involvement in the offences under the Prevention of Corruption Act was prima facie reflected. Particular reliance was placed on the memorandum statement of the co-accused indicating the applicant's influential position in the administration and his role in the shift from the online system to the manual system in relation to the alleged coal scam. On that basis, the Court held that confrontation of the applicant with the incriminating material required custodial interrogation. The Court further treated the allegations as involving a serious economic offence with deep-rooted conspiracy and adverse impact on public funds and the State economy, and held that the considerations governing bail operated against grant of anticipatory protection. [Paras 22, 25, 26, 27] The application for anticipatory bail was rejected as not fit for exercise of discretionary protection. Claim for anticipatory bail on the basis of parity with an earlier order of the coordinate Bench and with co-accused enlarged on bail. - HELD THAT: - The Court held that the earlier order of the coordinate Bench operated in a different factual setting, since that matter proceeded on the footing that the offence alleged there had been committed within the territory of another State and the applicant had not been arrayed as an accused in the crime registered there. In contrast, the present case concerned allegations within Chhattisgarh and an ongoing investigation against the applicant. The Court also held that parity with co-accused granted bail by the Supreme Court was unavailable because those accused had been granted bail after remaining in custody for a substantial period, whereas the present matter concerned a prayer for anticipatory bail. The plea of parity was therefore held to be misconceived. [Paras 24, 28] Parity was refused and did not furnish any ground to grant anticipatory bail. Final Conclusion: The High Court rejected the application for anticipatory bail, holding that the material on record prima facie disclosed the applicant's involvement and that custodial interrogation was necessary in view of the seriousness of the alleged economic offence. The pleas based on parity with an earlier order of the coordinate Bench and with co-accused enlarged on bail were held inapplicable.

2026 (5) TMI 1235 - PATNA HIGH COURT Money Laundering

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Issues: (i) whether the Enforcement Case Information Report and the connected proceedings could be quashed on the ground that the later ECIR was a parallel or repetitive investigation arising from the same facts; (ii) whether the summons issued under the PMLA and the communication of material under Section 66(2) of the PMLA could be interfered with; (iii) whether the statements recorded under Section 50 of the PMLA were liable to be quashed for want of safeguards against self-incrimination; and (iv) whether the petitioner, being a private and not a public servant, could resist the proceedings under the Prevention of Corruption Act, 1988.

Issue (i): whether the Enforcement Case Information Report and the connected proceedings could be quashed on the ground that the later ECIR was a parallel or repetitive investigation arising from the same facts.

Analysis: The challenge to the later ECIR was held to be premature and unsustainable because an ECIR is an internal document without statutory basis, unlike an FIR. The Court held that, absent a challenge to the predicate offences and in the absence of the ECIR being placed in public domain with demonstrable sameness, it could not be quashed merely on apprehension. The Court also accepted the distinction between the earlier and later predicate offences, noting the allegation of a larger conspiracy and relying on the settled principle that multiple FIRs are permissible where the incidents, offences, or conspiracy angles are distinct.

Conclusion: The challenge to the ECIR and the plea that it amounted to evergreening or parallel investigation failed and was rejected.

Issue (ii): whether the summons issued under the PMLA and the communication of material under Section 66(2) of the PMLA could be interfered with.

Analysis: The Court held that the power to summon under Section 50 of the PMLA forms part of the investigative machinery and cannot ordinarily be interdicted in writ jurisdiction at a pre-trial stage. It further held that Section 66(2) casts a duty on the Enforcement Directorate to share material with the competent law-enforcement agency where cognizable offences emerge, and that registration of an FIR on such information is a legally recognised consequence. The prayer to restrain further coercive action was therefore treated as premature and unsupported by any illegality in the statutory exercise of power.

Conclusion: The challenge to the summons and to the forwarding of information under Section 66(2) failed and was rejected.

Issue (iii): whether the statements recorded under Section 50 of the PMLA were liable to be quashed for want of safeguards against self-incrimination.

Analysis: The Court held that the petitioner had not been formally arraigned as an accused when the statements were recorded, and therefore the protections under Article 20(3) of the Constitution of India and the safeguards applicable to confession of an accused under Section 164(4) of the Code of Criminal Procedure, 1973 were not attracted. It further held that the special scheme of the PMLA, as interpreted by the Supreme Court, does not import Miranda-style warnings or the full procedural regime applicable to police confessions into Section 50 statements. The belated retraction was also not treated as a basis for quashing at this stage.

Conclusion: The request to quash the recorded statements was rejected.

Issue (iv): whether the petitioner, being a private person and not a public servant, could resist the proceedings under the Prevention of Corruption Act, 1988.

Analysis: The Court held that a private person can be proceeded against for aiding, abetting, or conspiring in offences under the Prevention of Corruption Act, 1988, even if not himself a public servant. The alleged role attributed to the petitioner, as reflected in the larger conspiracy allegations, was therefore not a legal bar to the proceedings.

Conclusion: The objection based on the petitioner's status as a private person was rejected.

Final Conclusion: The writ petition was found to be devoid of merit. The Court declined to interfere with the impugned ECIR, the summons, the recorded statements, or the inter-agency communication, and left the parties to proceed in accordance with law.

Ratio Decidendi: An internal ECIR under the PMLA cannot be quashed on mere apprehension of repetition when the predicate offences and alleged conspiracy are distinct, and statements recorded under Section 50 before formal arraignment as an accused do not attract the protections applicable to accused-person confessions under Article 20(3) or Section 164(4) of the Code of Criminal Procedure, 1973.

PMLA investigation powers upheld: ECIR, summons, Section 50 statements, and corruption proceedings against a private person survived challenge.
An internal ECIR under the PMLA cannot be quashed merely on apprehension of repetition where the predicate offences and alleged conspiracy are distinct; the challenge was therefore rejected as premature. Summons issued as part of PMLA investigation and the sharing of material under Section 66(2) were treated as lawful investigative steps, so pre-trial interference was declined. Statements recorded under Section 50 were not quashed because the person was not formally arraigned as an accused when they were taken, and Article 20(3) protections and Section 164(4) CrPC safeguards were held inapplicable at that stage. A private person may also face proceedings for abetment or conspiracy under the Prevention of Corruption Act.

Maintainability of Enforcement Case Information Report and the connected proceedings - Parallel Investigation - institution of Second FIR and consequent proceeding arising out of this FIR on the ground that the communications made by respondent-ED under Section 66(2) of the PMLA have raised overlapping allegation viz-a-viz the FIR - Statements under Section 50 PMLA - Right against self-incrimination - Summons under Section 50 PMLA - Violation of Article 20(3), Article 21, Section 164 CrPC or alleged non-observance of Miranda-type safeguards - Private person liability under the Prevention of Corruption Act. ECIR maintainability - Internal departmental document - Prematurity of challenge - HELD THAT: - The Court held that an ECIR has no statutory status under the PMLA and functions only as an internal departmental document for initiation of inquiry or investigation. Relying on Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], it held that no person can claim, as of right, quashing of such an internal document, except in a case where the predicate offence itself has been quashed. The challenge to ECIR-13 was also found premature because the petitioner's assertion that it merely repeated ECIR-4 rested on conjecture, the document having not entered the public domain or taken the shape of a prosecution complaint. [Paras 38, 39] The prayer for quashing ECIR-13 was rejected as not maintainable and premature. Second FIR - Test of sameness - Distinct scheduled offences - HELD THAT: - Applying the principle in Babubhai [2010 (8) TMI 892 - SUPREME COURT], the Court held that permissibility of a subsequent FIR depends on the facts and on whether the later case concerns the same occurrence or a different incident or crime. It accepted the ED's stand that ECIR-13 arose from FIR No. 05 of 2025, concerned a larger conspiracy, involved additional offences and accused, and was therefore not a mere repetition of the earlier matter. Relying also on Ram Lal Narang [1979 (1) TMI 241 - SUPREME COURT], the Court held that investigation to unearth the conspiracy angle was legally permissible and that institution of ECIR-13 could not be treated as impermissible evergreening of jurisdiction. [Paras 40, 41, 42] The challenge founded on the bar against a second FIR or parallel investigation failed. Statements under Section 50 PMLA - Right against self-incrimination - Section 164 CrPC safeguards - Miranda rights - HELD THAT: - The Court held that the protection against self-incrimination and the safeguards of Section 164(4) CrPC attach to an accused person and not to a person who, at the time of recording of the statement, had not yet been arraigned as an accused. Following Vijay Madanlal Choudhary (supra), it held that authorities under the PMLA are not police officers, and statements recorded by them under Section 50 are not hit by Article 20(3) or Article 21 unless recorded after formal arrest. It further held that Section 164(4) CrPC applies to confessions of an accused and cannot be imported into Section 50 proceedings, and that Miranda rights have no independent legal force in the Indian legal system so as to be grafted into the PMLA. As the petitioner became an accused only later, he could not claim those protections for the earlier statements. The Court also declined to examine the effect of retraction at this stage, leaving that issue open for trial. [Paras 44, 45, 46, 47] The prayer to quash the petitioner's statements recorded on the specified dates was refused. Summons under Section 50 PMLA - Investigative powers - Prematurity of writ challenge - HELD THAT: - The Court held that the power to summon any person whose attendance is considered necessary is expressly conferred by Section 50 and forms part of the statutory process of investigation. Issuance of summons by itself does not infringe any right so as to warrant interference in writ jurisdiction, and courts ordinarily do not interdict statutory investigation at that stage. In view of Vijay Madanlal Choudhary and the principle in Kunisetty Satyanarayana [2006 (11) TMI 543 - SUPREME COURT], the challenge to the summons was held to be premature and devoid of merit. [Paras 48, 49] The prayer to quash the summons dated 09.09.2025 and 15.09.2025 was rejected. Information sharing under Section 66(2) PMLA - Further investigation - HELD THAT: - The Court held that Section 66(2) casts a mandatory obligation on the ED to share information and material with other law-enforcement agencies where necessary for discharge of their statutory functions, and that if the information disclosed cognizable offences, registration of an FIR could follow. It further held that the objection that further investigation required prior permission of the court did not assist the petitioner, since, on the authorities relied on by the Court, such a requirement would arise only in the circumstances discussed there and not at the present stage of the matter. The decisions cited by the petitioner on further investigation were held inapplicable on the facts. [Paras 50, 51] The challenge to the ED's communications under Section 66(2) and to the continuation of investigation on that ground was rejected. Private person liability under the Prevention of Corruption Act - Aiding and abetting corruption offences - HELD THAT: - The Court held that the petitioner's contention that, being a contractor and not a public servant, he could not be proceeded against in relation to offences under the Prevention of Corruption Act was contrary to settled law. Relying on Jitender Kumar Singh [2014 (2) TMI 1401 - SUPREME COURT], it held that even in the absence of a public servant being tried, a private person can be tried for offences under the Prevention of Corruption Act as well as allied non-PC Act offences. [Paras 52] The objection to the proceedings on the ground that the petitioner was not a public servant was rejected. Final Conclusion: The writ petition was dismissed in entirety. The Court held that the challenge to ECIR-13 was not maintainable at that stage, the attack on the petitioner's statements and summons under Section 50 of the PMLA was untenable, and no ground was made out to restrain the ED from continuing investigation in accordance with law.

2026 (5) TMI 1166 - CHHATTISGARH HIGH COURT Money Laundering

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Anticipatory bail in an economic offence denied where ongoing investigation and custodial interrogation were needed to trace laundering trails.
Anticipatory bail was refused in an alleged organised economic offence involving illegal online betting, cheating, forgery, corruption and laundering through fake accounts, hawala channels, shell entities and foreign transfers. The Court applied the settled principle that economic offences are a distinct class and warrant a stricter approach at the pre-arrest stage, especially where investigation is continuing and custodial interrogation may be needed to trace the transaction chain, digital evidence and conspiracy links. Allegations of non-naming in earlier proceedings, mala fides and parity were not accepted, as they required fuller evidentiary appraisal and did not outweigh the need for an effective investigation.

Entitlement to anticipatory bail - large-scale economic offence involving organised illegal online betting, corruption, and laundering of proceeds of crime - Custodial interrogation - Reasonable Apprehension - Parity in bail - Mala fide implication. Anticipatory bail - Economic offences - Custodial interrogation - Anticipatory bail was not warranted in the case arising out of the alleged Mahadev Online Book App scam. - HELD THAT: - The Court held that the case concerns grave economic offences involving organised illegal betting, corruption, laundering of proceeds, and a deep-rooted conspiracy extending across jurisdictions. Relying on the settled principle that economic offences stand on a different footing in bail matters, the Court found that investigation was still in progress and that crucial aspects relating to digital evidence, financial trails, hawala transactions and conspiracy linkages were yet to be fully unearthed. In that background, and in view of the prosecution assertion that custodial interrogation may become necessary, grant of anticipatory bail at that stage was considered likely to adversely affect a fair and effective investigation. [Paras 23, 28, 29, 30, 31] Anticipatory bail was declined having regard to the gravity of the alleged economic offences, the ongoing investigation and the possible need for custodial interrogation. Mala fide implication - Parity in bail - The applicant's plea that his implication was mala fide because he was not named in earlier proceedings, and his claim of parity with other accused, were rejected. - HELD THAT: - The Court held that the mere fact that the applicant had not been arraigned in earlier FIRs, prosecution complaints or charge-sheets did not by itself establish innocence or prevent further investigation if material subsequently surfaced. Allegations of political vendetta, fabricated implication and successive arrests were treated as matters requiring evidence and not capable of conclusive adjudication at the anticipatory bail stage. The Court further held that parity could not be claimed mechanically in cases of criminal conspiracy and economic offences, since the role attributed to each person has to be examined independently, and the absence of an immediate charge-sheet against the applicant was not conclusive of absence of incriminating material. [Paras 26, 27] The pleas of mala fides, absence of earlier arraignment and parity were not accepted as grounds for anticipatory bail. Final Conclusion: The anticipatory bail application was dismissed. The Court held that, in view of the grave nature of the alleged economic offences, the ongoing investigation into digital and financial evidence, and the possible need for custodial interrogation, no case for exercise of discretionary anticipatory bail jurisdiction was made out.

2026 (5) TMI 1030 - RAJASTHAN HIGH COURT Money Laundering

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Issues: (i) Whether the material on record disclosed scheduled offences and a prima facie basis to invoke the provisions of the Prevention of Money Laundering Act, 2002 against the accused petitioner. (ii) Whether the accused petitioner satisfied the twin conditions for bail under Section 45 of the Prevention of Money Laundering Act, 2002.

Issue (i): Whether the material on record disclosed scheduled offences and a prima facie basis to invoke the provisions of the Prevention of Money Laundering Act, 2002 against the accused petitioner.

Analysis: The record showed that the prosecution was founded on FIRs which included offences under the Indian Penal Code, 1860, the Arms Act, 1959 and later invoked offences under the Bharatiya Nyaya Sanhita, 2023, all of which were treated as scheduled offences. The Court noticed material indicating recovery of arms, statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002, and financial transactions through accounts controlled by the petitioner, family members and the trust. On that basis, the contention that no scheduled offence existed or that the PMLA could not be invoked was found to be contrary to the material on record.

Conclusion: The existence of scheduled offences and a prima facie basis for proceeding under the Prevention of Money Laundering Act, 2002 was accepted against the accused petitioner.

Issue (ii): Whether the accused petitioner satisfied the twin conditions for bail under Section 45 of the Prevention of Money Laundering Act, 2002.

Analysis: The Court relied on the investigation material showing substantial cash deposits, immediate withdrawals, routing of funds through multiple accounts, and exclusive control over trust accounts. It further noted the absence of proper books of account, audited statements and income tax returns for the relevant period, and treated the statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002 as material admissible at this stage. Applying the mandatory twin conditions under Section 45 and the statutory presumption under Section 24, the Court held that the petitioner had not shown reasonable grounds for believing that he was not guilty or that he would not commit an offence while on bail.

Conclusion: The accused petitioner did not satisfy the twin conditions for bail under Section 45 of the Prevention of Money Laundering Act, 2002.

Final Conclusion: Bail was declined because the Court found a prima facie case under the money-laundering statute and held that the statutory bail threshold was not met on the material then available.

Ratio Decidendi: In a prosecution under the Prevention of Money Laundering Act, 2002, bail can be granted only if the accused satisfies the mandatory twin conditions under Section 45, and prima facie material showing scheduled offences, proceeds of crime, and fund-layering justifies refusal of bail.

PMLA bail threshold and prima facie scheduled-offence material justified refusal of bail on the record before the HC.
Prima facie material showed scheduled offences, recovery of arms, Section 50 statements and financial transactions through accounts controlled by the petitioner, family members and a trust, so invocation of the Prevention of Money Laundering Act, 2002 was sustained against the accused petitioner. On bail, the Court applied the mandatory twin conditions under Section 45 and the statutory presumption under Section 24, relying on evidence of cash deposits, immediate withdrawals, routing of funds through multiple accounts, and the absence of proper books, audited statements and income tax returns. The petitioner failed to show reasonable grounds for believing he was not guilty or would not reoffend, so bail was declined.

Scheduled offence under the PMLA - Proceeds of crime - Entitlement to bail - Twin conditions for bail under the PMLA - routing and layering of funds - Admissibility of statements recorded under Section 50 of the PMLA - Presumption of culpability - Reasonable grounds for believing not guilty. Scheduled offence under the PMLA - Proceeds of crime - Prima facie involvement in money laundering - The material on record prima facie disclosed the existence of scheduled offences and the petitioner's involvement in generation, routing and utilisation of proceeds of crime so as to attract the provisions of the PMLA. - HELD THAT: - The Court held that FIR No. 13/2022 included offences which are scheduled offences under the PMLA, and the material collected in investigation, including recovery of a firearm and statements of co-accused, prima facie indicated the petitioner's involvement in illegal possession and alleged supply of firearms. The Court further noted that in FIR No. 299/2025, offences corresponding to scheduled offences were added during investigation, whereafter the respondent continued investigation under the PMLA and filed the prosecution complaint. On the question of proceeds of crime, the Court found prima facie material showing substantial deposits and withdrawals through accounts operated by the petitioner, his family members and the Trust, suggesting routing and layering of funds. The Court also took note of the allegation that the petitioner exercised effective control over the Trust accounts, that other trustees signed blank or pre-signed cheques without knowledge of utilisation, and that no proper books, audited statements or income-tax returns were maintained, thereby rendering the explanation of charitable transactions not prima facie acceptable. [Paras 5] The contention that no scheduled offence existed and that the transactions could not be treated as connected with money laundering was rejected at the bail stage. Twin conditions for bail under the PMLA - Admissibility of statements recorded under Section 50 of the PMLA - Burden regarding proceeds of crime - The petitioner was not entitled to bail as the mandatory twin conditions governing bail under the PMLA were not satisfied. - HELD THAT: - The Court accepted that statements recorded under Section 50 of the PMLA are admissible in evidence and relied on Abhishek Banerjee & Anr. v. Directorate of Enforcement [2024 (9) TMI 508 - SUPREME COURT] for that proposition, observing that the lawfulness of the transactions is a matter for trial. It then applied the principle stated in Union of India vs. Kanhaiya Prasad [2025 (2) TMI 563 - SUPREME COURT] that the bail conditions under Section 45 of the PMLA, by reason of the overriding non-obstante clause, are mandatory and continue to govern bail notwithstanding the general provisions of criminal procedure. Having regard to the prosecution complaint, the statements recorded under Section 50, the recoveries and the financial transactions reflected in the accounts, the Court concluded that sufficient prima facie material existed against the petitioner and that he had failed to establish reasonable grounds for believing that he was not guilty or that he would not commit an offence while on bail. [Paras 5] Bail was declined because the petitioner failed to satisfy the mandatory twin conditions under the PMLA. Final Conclusion: The Court dismissed the bail application, holding that the material on record prima facie disclosed scheduled offences, routing and layering of funds, and the petitioner's involvement in the alleged offence of money laundering. It held that the mandatory twin conditions for bail under the PMLA were not satisfied.

2026 (5) TMI 1854 - CHHATTISGARH HIGH COURT Money Laundering

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Issues: (i) Whether a writ petition challenging a provisional attachment order under the Prevention of Money Laundering Act, 2002 is maintainable despite the statutory adjudicatory and appellate remedies; (ii) Whether the provisional attachment was ex facie without jurisdiction, arbitrary, or otherwise liable to be interfered with at the threshold.

Issue (i): Whether a writ petition challenging a provisional attachment order under the Prevention of Money Laundering Act, 2002 is maintainable despite the statutory adjudicatory and appellate remedies.

Analysis: The statutory scheme requires the Adjudicating Authority to determine, under Section 8, whether the attached property is involved in money-laundering, followed by appeals under Sections 26 and 42. This constitutes an efficacious alternative remedy. The exceptional grounds for exercising judicial review despite an alternative remedy-patent absence of jurisdiction, breach of principles of natural justice, or manifest illegality-were not established. Questions concerning the source of assets, their nexus with proceeds of crime, and the evidentiary basis for attachment involve disputed questions of fact reserved for the statutory forums.

Conclusion: The writ petition was not maintainable at this stage; the petitioner must pursue the statutory remedies under the Prevention of Money Laundering Act, 2002. This conclusion is against the petitioner.

Issue (ii): Whether the provisional attachment was ex facie without jurisdiction, arbitrary, or otherwise liable to be interfered with at the threshold.

Analysis: A declaration of gold under the Income Declaration Scheme, 2016 and payment of tax do not establish its lawful source or immunise it from proceedings for money-laundering if it is connected with criminal activity. Retention proceedings following search and seizure under Sections 17 and 20 are distinct from provisional attachment under Section 5; the earlier retention proceedings did not create res judicata or preclude a later attachment upon material giving rise to a reason to believe that the property represented proceeds of crime. At the provisional stage, the sufficiency of the investigative material cannot be reassessed through writ jurisdiction where no patent jurisdictional error is apparent.

Conclusion: The provisional attachment was not shown to be ex facie without jurisdiction, contrary to the Prevention of Money Laundering Act, 2002, or manifestly arbitrary. This conclusion is against the petitioner.

Final Conclusion: The legality and evidentiary basis of the attachment are to be tested before the Adjudicating Authority and through the statutory appellate process, with all factual and legal contentions remaining available there.

Ratio Decidendi: Where the Prevention of Money Laundering Act, 2002 provides a complete mechanism for adjudication and appeal against provisional attachment, writ jurisdiction is ordinarily unavailable absent a patent jurisdictional defect, breach of natural justice, or manifest illegality.

Statutory remedies for PMLA attachment prevail unless jurisdictional defect, natural justice breach, or manifest illegality is established.
Under the Prevention of Money Laundering Act, 2002, challenges to provisional attachment ordinarily proceed through adjudication and appeals under the statutory mechanism rather than writ jurisdiction. Judicial review remains exceptional and requires a patent lack of jurisdiction, breach of natural justice, or manifest illegality. Disputes over the source of assets, their connection with proceeds of crime, and the evidentiary basis for attachment are factual matters for the Adjudicating Authority and appellate forums. A tax-paid declaration of gold does not by itself establish a lawful source or prevent money-laundering proceedings. Earlier retention proceedings after search and seizure do not bar a subsequent provisional attachment based on material supporting a reason to believe that property represents proceeds of crime.

Writ jurisdiction and efficacious alternative remedy - Provisional attachment of alleged proceeds of crime - Statutory adjudicatory mechanism under the PMLA - Maintainability of a writ petition against a provisional attachment order when the PMLA provides adjudication and appellate remedies - HELD THAT: - The PMLA provides a complete mechanism under which the Adjudicating Authority initially examines the attachment after notice and hearing, followed by statutory appeals. The extraordinary jurisdiction under Article 226 is ordinarily not to be exercised where that efficacious remedy exists, unless patent want of jurisdiction, breach of natural justice or manifest arbitrariness is shown. No such exceptional circumstance was established. [Paras 21, 26, 33] The writ petition challenging the provisional attachment was not entertained, leaving the petitioner to pursue remedies under the PMLA. Limited judicial review of provisional attachment - Disputed questions concerning proceeds of crime - Interference in writ jurisdiction with the prima facie satisfaction underlying provisional attachment of gold alleged to be proceeds of crime - HELD THAT: - At the stage of provisional attachment, the competent authority need only form a prima facie reason to believe on the available material. Questions concerning the source of the gold, its alleged nexus with proceeds of crime and the evidentiary material require factual examination by the statutory forum; writ jurisdiction cannot be used for a roving inquiry into the sufficiency or adequacy of that material. [Paras 27, 32] No jurisdictional error apparent on the face of the record justified interference with the attachment at the threshold. Income-tax disclosure and money-laundering proceedings - Independent power of provisional attachment - Effect of disclosure of gold under the Income Declaration Scheme, 2016, and earlier retention proceedings on its subsequent provisional attachment under the PMLA - HELD THAT: - Disclosure of property before income-tax authorities and payment of tax do not establish its lawful source or confer immunity from proceedings for money-laundering if the property is found to have been derived from criminal activity relating to a scheduled offence. Proceedings for retention of seized property are distinct from provisional attachment; an earlier retention proceeding does not operate as res judicata or preclude attachment upon the statutory satisfaction under Section 5. [Paras 28, 29, 30, 31] The prior tax disclosure and the earlier retention proceedings did not create an indefeasible right against provisional attachment of the gold. Final Conclusion: The writ petition was dismissed on account of the efficacious statutory remedies available under the PMLA. All factual and legal contentions were left open for consideration by the competent statutory forum.

2026 (5) TMI 1234 - DELHI HIGH COURT Money Laundering

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Release of excess proceeds of crime cannot be refused merely because a challenge to reduced quantification is pending.
Excess proceeds of crime recovered after a reduced quantification before the Adjudicating Authority were held liable for release to the appellant unless restrained by any order in the respondent's challenge. The refusal to release the amount was unsustainable because it rested only on the pendency of the respondent's appeal and did not assess any prima facie merit in that challenge. The merits of the pending challenge could not be adjudicated in the appellant's release application. The excess amount was directed to be released on furnishing an equivalent bank guarantee, subject to the outcome of the respondent's pending appeal/application.

Claim for release of the excess amount recovered after reduction in the quantified proceeds of crime - Entitlement to the consequential relief - Failure to consider prima facie merits. Whether the appeal filed by the respondent challenging the reduction in the quantification of proceeds of crime by the Adjudicating Authority was prima facie meritorious or not has to be determined in the appeal filed by the respondent qua the reduced amount ? - HELD THAT: - The Court held that the Tribunal's refusal rested only on the pendency of the respondent's separate appeal and on the assumption that grant of relief would render that appeal infructuous. That approach was unsustainable because the prima facie merits of the respondent's appeal had not been considered at all, and that appeal or any application therein was not before the Tribunal while deciding the appellant's request. Since the appellant had partly succeeded before the Adjudicating Authority by securing reduction in the quantified proceeds of crime, it became entitled to the consequential relief of release of the excess recovered amount, subject to any contrary order passed in the respondent's own proceedings. In view of the appellant's offer to secure the differential amount, the Court directed release of that amount against an equivalent bank guarantee, to abide by the outcome of the respondent's pending application or appeal. [Paras 6, 7, 8, 9, 10] The impugned order was set aside, and the respondent was directed to release the excess recovered amount to the appellant on furnishing an equivalent bank guarantee. Interim protection of adjudicated amount - HELD THAT: - The Court kept intact the amount adjudicated by the Adjudicating Authority as proceeds of crime and directed that it be placed in fixed deposit, subject to the result of the pending appeals. The Court expressly refrained from expressing any opinion on the merits of either party's appeal or on the interim stay application. [Paras 11, 12] The adjudicated amount was ordered to remain in fixed deposit and to abide by the outcome of the pending appeals. Final Conclusion: The Court held that the Tribunal was not justified in refusing release of the excess recovered amount solely because the respondent's separate appeal was pending without examining its prima facie merits. The excess amount was directed to be released against bank guarantee, while the balance adjudicated amount was directed to remain in fixed deposit subject to the outcome of the pending appeals.

2026 (5) TMI 1029 - JHARKHAND HIGH COURT Money Laundering

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Prima facie case in money-laundering charge framing: prosecution material and Section 50 statements can sustain grave suspicion.
At the discharge and charge-framing stage in a PMLA prosecution, the Court held that only the prosecution material, taken at face value, must be examined to see whether it discloses a prima facie case or grave suspicion; a mini trial and assessment of the defence are impermissible. Applying that standard, the Court noted alleged routing, layering, concealment and projection of proceeds of crime through structured financial transactions, supported by documentary material and Section 50 statements. On that basis, the orders rejecting discharge and framing charge were sustained and no interference was warranted in revision.

Discharge and framing of charge - sufficient ground for proceeding - Prima facie case under PMLA - Proceeds of crime - Admissibility of statements under Section 50 PMLA - Territorial jurisdiction - Revisional interference. Discharge and framing of charge - Prima facie case under PMLA - Strong suspicion - Sufficient grounds existed to proceed against the petitioner for the offence under the PMLA and the rejection of discharge followed by framing of charge did not suffer from legal error. - HELD THAT: - In the case of Asim Shariff v. NIA, [2019 (7) TMI 1546 - SUPREME COURT], it has been held by the Hon’ble Apex Court that the words ‘not sufficient ground for proceeding against the accused’ clearly show that the Judge is not a mere post office to frame the charge at the behest of the prosecution, but has to exercise his judicial mind to the facts of the case in order to determine whether a case for trial has been made out by the prosecution. In assessing this fact, it is not necessary for the court to enter into the pros and cons of the matter or into a weighing and balancing of evidence and probabilities which is really his function after the trial starts. At the stage of Section 227, the Judge has merely to sift the evidence in order to find out whether or not there is sufficient ground for proceeding against the accused. The sufficiency of ground would take within its fold the nature of the evidence recorded by the police or the documents produced before the court which ex facie disclose that there are suspicious circumstances against the accused so as to frame a charge against him. From legal propositions it can be safely inferred that if, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is no sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for doing so and if, after such consideration and hearing as aforesaid, the Judge is of the opinion that there is ground for presuming that the accused has committed an offence, the trial Court shall frame the charge. However, the defence of the accused cannot be looked into at the stage of discharge. The accused has no right to produce any document at that stage. The application for discharge has to be considered on the premise that the materials brought on record by the prosecution are true. Thus, at the time of considering an application for discharge, the Court is required to consider the limited extent to find out whether there is prima facie evidence against the accused to believe that he has committed any offence as alleged by the prosecution; if prima facie evidence is available against the accused, then there cannot be an order of discharge. It is settled connotation of law that at the stage of framing of charge, the probable defence of the accused is not to be considered and the materials, which are relevant for consideration, are the allegations made in the First Information Report/complaint, the statement of the witnesses recorded in course of investigation, the documents on which the prosecution relies and the report of investigation submitted by the prosecuting agency. The probative value of the defence is to be tested at the stage of trial and not at the stage of framing of charge and at the stage of framing of charge minute scrutiny of the evidence is not to be made and even on a very strong suspicion, charges can be framed. It is apparent from record that the prosecution case is not based merely on procedural aspects of the tender process, but on the documented financial trail establishing the generation and laundering of bribe money. The material indicates that the petitioner paid illegal gratification to secure favourable Technical Appraisal Reports (TAR) and thereafter engaged in layering through fabricated invoices and a transaction which, upon examination of VAT returns, absence of production records, and timing of invoice, has been found to be colourable device for routing funds. The Court held that at the stage of discharge or framing of charge, the enquiry is confined to whether the material produced by the prosecution, taken at face value, discloses the ingredients of the alleged offence and raises grave suspicion; a mini trial or evaluation of the defence is impermissible. Applying that standard, the prosecution complaint, certified bank records, the alleged routing of funds through intermediary entities and relatives, the transaction shown through M/s Naskar Ceramics, and the structured movement of money to persons connected with the co-accused public servant furnished prima facie material showing concealment, layering and projection of the alleged proceeds of crime as untainted property. The petitioner's explanations founded on loans, business transactions and tender procedure were treated as matters for trial and not grounds for discharge at this stage. The Court therefore found prima facie involvement of the petitioner in the process or activity connected with proceeds of crime and held that the ingredients of the offence under Section 3 punishable under Section 4 of the PMLA stood sufficiently disclosed for the matter to proceed to trial. [Paras 117, 118, 125, 126, 127] The challenge to the orders refusing discharge and framing charge was rejected, as prima facie material existed to try the petitioner for money laundering. Admissibility of statements under Section 50 PMLA - Judicial proceedings - Corroborative evidentiary value - Statements recorded under Section 50 of the PMLA were admissible and could be relied upon at the stage of considering discharge and framing of charge. - HELD THAT: - In the case of Tarun Kumar v. Assistant Director [2023 (11) TMI 904 - SUPREME COURT] the Hon’ble Apex Court while relying upon the ratio rendered by the three judge Bench of the Hon’ble Apex Court in the case of Rohit Tandon [2017 (11) TMI 779 - SUPREME COURT] has observed that the statements of witnesses/ accused are admissible in evidence in view of Section 50 of the said Act and such statements may make out a formidable case about the involvement of the accused in the commission of a serious offence of money laundering. The Court held that proceedings under Section 50 of the PMLA are in the nature of inquiry, the authorities recording such statements are not police officers, and the statements are deemed to be part of judicial proceedings and are admissible in evidence. In the present case, those statements were not treated in isolation but as material corroborating the primary documentary evidence in the form of bank trails and transaction records. The Court therefore rejected the attempt to discredit the prosecution case on the footing that reliance had been placed on statements recorded under Section 50. [Paras 108, 109, 110, 111, 113] The Court accepted the legal admissibility and relevance of the Section 50 statements and held that they could validly support the prosecution case at the threshold stage. Territorial jurisdiction - Continuing offence - Scheduled offence nexus - The Special Court at Ranchi had territorial jurisdiction to try the PMLA case. - HELD THAT: - The Court held that the scheduled offence was registered at Ranchi and the alleged conspiracy relating to manipulation of the MECON tender was conceived and executed there. Since the proceeds of crime were stated to arise from that scheduled offence and the offence under Section 3 of the PMLA is a continuing offence, the nexus with Ranchi was sufficient to sustain the competence of the Special Court at Ranchi. The objection to territorial jurisdiction was accordingly found untenable. [Paras 98] The plea of lack of territorial jurisdiction was rejected. Revisional interference - Patent error - Orders refusing discharge - Interference in revision against orders refusing discharge or framing charge was not warranted in the absence of patent legal or jurisdictional error. - HELD THAT: - The Hon’ble Apex Court in the case of Asian Resurfacing of Road Agency (P) Ltd. v. CBI [2018 (4) TMI 3 - SUPREME COURT] has held that interference in the order framing charges or refusing to discharge is called for in the rarest of the rare cases only to correct the patent error of jurisdiction. The Court reiterated that revisional power cannot be equated with appellate power and does not permit meticulous reappraisal of the prosecution material. Such power is to be exercised only where continuation of proceedings is barred in law, the allegations taken at face value do not constitute the offence, or a patent error of law, procedure or jurisdiction is shown. As the Special Court had applied the correct threshold test and the record disclosed prima facie material giving rise to grave suspicion, no ground for revisional interference was made out. [Paras 121, 122, 123, 124, 127] The criminal revisions were not maintainable on merits as no patent illegality or jurisdictional error was shown in the impugned orders. Final Conclusion: The High Court held that the material collected by the prosecution disclosed a prima facie case of money laundering against the petitioner, that the Section 50 statements were admissible, and that the Special Court at Ranchi had jurisdiction. Finding no patent illegality in the orders refusing discharge and framing charge, the criminal revisions were dismissed.

2026 (5) TMI 872 - CHHATTISGARH HIGH COURT Money Laundering

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PMLA bail principle: completed investigation and filed complaint can outweigh continued pre-trial detention under restrictive bail conditions.
In a PMLA prosecution, the Court held that regular bail could not be withheld indefinitely under Section 45 once investigation was complete, the prosecution complaint had been filed, and further custodial interrogation was unnecessary. The applicant had remained in custody for a substantial period, the ECIR stemmed from the predicate offence, and the investigative stage had ended. On those facts, continued pre-trial detention was found to serve no fruitful purpose, and prolonged incarceration was not justified merely by the statutory bail restrictions. Regular bail was therefore granted.

2026 (6) TMI 584 - TELANGANA HIGH COURT Money Laundering

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Tax evasion and money laundering proceedings in plot sales closed after authorities confirmed action was already underway.
Proceedings relating to alleged tax evasion and offences under the Prevention of Money Laundering Act, 2002 were sought in connection with the sale of more than 120 plots. The writ petition was closed after the State stated that action had already been initiated, including FIRs, attachment orders and a prosecution complaint, and that the authorities would continue in accordance with law.

2026 (5) TMI 648 - JHARKHAND HIGH COURT Money Laundering

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Issues: (i) Whether the orders rejecting discharge and framing charge in a money-laundering prosecution suffered from legal error warranting interference in revision. (ii) Whether the material collected in investigation disclosed a prima facie case against the accused for offences under the Prevention of Money Laundering Act, 2002. (iii) Whether the objections based on absence of money trail, non-naming in the predicate offence, and want of prior sanction justified discharge.

Issue (i): Whether the orders rejecting discharge and framing charge in a money-laundering prosecution suffered from legal error warranting interference in revision.

Analysis: The revisional court reiterated that interference with an order refusing discharge or framing charge is confined to cases of patent illegality or jurisdictional error. At the stage of discharge, the court is only required to see whether sufficient ground exists for proceeding and is not expected to conduct a mini trial or weigh the evidence as if deciding guilt. Revisional scrutiny is therefore narrow, and the trial court's satisfaction based on the prosecution material is not to be disturbed unless it is perverse or unsupported by record.

Conclusion: No legal error warranting revisional interference was found in the impugned orders.

Issue (ii): Whether the material collected in investigation disclosed a prima facie case against the accused for offences under the Prevention of Money Laundering Act, 2002.

Analysis: The court held that the prosecution material, including search recoveries, diaries and notes, statements recorded under Section 50 of the Act, and the disclosed commission-sharing modus operandi, showed an organised collection and concealment of proceeds of crime. It held that Section 3 of the Act is an independent and continuing offence and that involvement in concealment, possession, acquisition or use of proceeds of crime is sufficient. The court also held that the prosecution need not establish the entire downstream money trail once foundational material shows generation and handling of proceeds of crime.

Conclusion: A prima facie case for proceeding against the accused was made out.

Issue (iii): Whether the objections based on absence of money trail, non-naming in the predicate offence, and want of prior sanction justified discharge.

Analysis: The court rejected the contention that absence of a complete money trail or absence of the accused's name in the original predicate FIR defeated the prosecution, holding that PMLA liability is not confined to persons named in the scheduled offence and may extend to those knowingly involved in laundering proceeds of crime. It further held that the alleged acts of collecting and concealing commission could not be treated as acts done in discharge of official duty, so the plea of sanction under Section 197 CrPC did not assist the accused at this stage. The court also treated the Section 50 statements as admissible material for the limited purpose of discharge and charge.

Conclusion: The objections did not entitle the accused to discharge.

Final Conclusion: The impugned discharge and charge orders were sustained, and the revision petitions failed, leaving the prosecution to proceed to trial on the money-laundering allegations.

Ratio Decidendi: At the stage of discharge or framing of charge in a PMLA case, the court must proceed on the prosecution material as true, and if that material discloses a prima facie nexus with proceeds of crime and involvement in concealment, possession, acquisition or use, discharge is unwarranted even without proof of the entire money trail or inclusion of the accused in the predicate offence FIR.

PMLA discharge and charge standards: prima facie material on proceeds of crime can sustain prosecution without a complete money trail.
In a PMLA prosecution, revisional interference with orders refusing discharge and framing charge is confined to patent illegality or jurisdictional error, and the court does not conduct a mini trial at that stage. The material relied on by the prosecution, including search recoveries, diaries, notes and Section 50 statements, was treated as sufficient to disclose a prima facie case of concealment and handling of proceeds of crime. The court also stated that money-laundering is an independent and continuing offence, so a complete money trail, naming in the predicate offence, or prior sanction under Section 197 CrPC did not justify discharge on the facts presented.

Rejection of discharge and the subsequent framing of charge for the offence under Sections 3 and 4 - definition of “proceeds of crime” as provided under Section 2(1)(u) - Offence of money-laundering as an independent offence - Admissibility of statements under Section 50 of the PMLA - Requirement of Previous Sanction for prosecution of public servant - lack of evidence demonstrating any link or association between the petitioner and the proceeds of crime and no money trail. Discharge and framing of charge - Prima facie case - HELD THAT: - From perusal of the entire prosecution complaint prima facie it appears that the whole modus operandi regarding collection of commission and later distribution has been illustrated to the respondent ED by the co-accused Veerendra Kumar Ram and Sanjeev Kumar Lal, during their statement’s u/s 50 of PMLA, which are mentioned in Para-10.1 and 10.3 of the prosecution complaint dated 04.07.2024. It is settled connotation of law that at the stage of considering discharge, the duty of the Court is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities and Court should not venture into the merit of the case by analyzing that whether conviction is possible or not. Meaning thereby at this stage the Court has to see the prima facie case only. The three Judge Bench the Hon’ble Apex Court in the case of Rohit Tandon vs. Directorate of Enforcement[2017 (11) TMI 779 - SUPREME COURT], held that the statements of witnesses recorded by Prosecution – ED are admissible in evidence in view of Section 50. Such statements may make out a formidable case about the involvement of the accused in the commission of the offence of money laundering. It is evident that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon’ble Supreme Court, while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA. In the instant case, it has been found that during the course of investigation statement so recorded of the accused persons as also of the statement of various Chief Engineers/Engineers of RWD, JSRRDA and RDSD and the witnesses were recorded u/s 50 of PMLA, who all are consistent in their statement that the commission is 3% of total LOA, for the allotment of tenders. The said 3% commission amount is distributed in share of 1.35% Minister, Alamgir Alam through his PS Sanjeev Kumar Lal and rest 1.65% to Top bureaucrats and other engineers/officials. The investigating agency has relied not only on the statement of co-accused under Section 50 of the PMLA but also other evidences which indicate the applicant’s active role in the alleged money laundering activities. Thus, from the entire discussion it is evident that the petitioner is an influential person being Cabinet Minister in the State of Jharkhand and the evidence collected during investigation by the agency broadly speaks that the co accused Veerandra Kumar Ram used to collect commission in terms of allocation of tender and execution of work and the said commission/fixed share of 1.35% was distributed among his seniors and politicians and the said commission is also collected by co-accused Sanjeev Kumar Lal, P.S. of the present petitioner through certain persons. It has also been submitted that during the investigation, it has been ascertained that the entire collection and distribution of commission was taken care of by the assistant engineers posted at the Rural Development Special Division and RuralWorks Department. Further, it was also found that the share of the petitioner, who was the Minister, was 1.35% of the allocated tender amount and also, in one of the instances, it was found that the petitioner had received his share of commission of Rs. 3 Crore which was sent by one Assistant Engineer in September 2022 which was facilitated by one of his close persons. This Court, based upon the imputation as has been discovered in course of investigation, is of the prima facie view that what has been argued on behalf of the petitioner that he is nowhere related with proceeds of crime is not fit to be acceptable because as would appear from the preceding paragraphs, money which has been alleged to be obtained by the petitioner/accused has been routed through his Private Secretary, Sanjeev Kumar Lal. If there is a prima facie material to show that the amount has been received by misusing the position of the petitioner that by itself will be construed as proceeds of crime and it is not necessary for the respondent to further establish that such proceeds of crime was projected as untainted money subsequently. Applying that test, the Court found that the prosecution complaint contained consistent statements under Section 50 of the PMLA from co-accused and several engineers regarding collection of commission in tender allotments, the petitioner's alleged share through his personal secretary, recovery of large cash amounts from premises linked to his associates, and seized diaries and handwritten notes said to record the accounting and distribution of such commission. The Court further held that the absence of the petitioner's name in the predicate offence or initial complaint did not by itself negate liability under the PMLA, since money-laundering is an independent offence and a person not named in the scheduled offence may still be proceeded against if knowingly involved in processes connected with proceeds of crime. The challenge to the orders refusing discharge and framing charge was rejected, and the petitioner was held liable to face trial. Non-availability of money trail - It has come on the record that a huge cash of Rs.32.20 crore was recovered and seized from the premises of Jahangir Alam an associate of Sanjeev Kumar Lal who was personal Secretary to the Minister i.e. the present petitioner. It is also pertinent to note that several incriminating notes and pages of diaries were also found during search and seizure which was maintained by Sanjeev Kumar Lal recording the share of the minister Alamgir Alam from the total commission collected from the tenders. By way of Section 50 statement Sanjeev Kumar Lal, the personal Secretary to the Minister/petitioner, has admitted the contents of these seized pages and the fact that he was collecting commission on behalf of the applicant/minister as recorded in the “Hisab-Kitab‟ seized by ED corroborates the factum of recovery. He further decoded the code words and clearly mentioned that the applicant/minister was the beneficiary of commission amount. Thus, this Court is of prima facie view that the contention of the petitioner that the prosecution has failed to establish the entire money trail, is without any factual basis and moreover section 3 of PMLA not requires the entire money trail or where the money eventually went. Non-application of Section 5 and 8 of Act 2002 - Notices are crucial for due process and informing concerned individuals/defendants about legal proceedings but their absence doesn’t automatically absolve a petitioner of any connection to the property. In PMLA cases, the focus is on identifying and confiscating proceeds of crime, and attachment of property is a common step. The fact that a notice is not served to one petitioner doesn’t necessarily mean they are not connected to the property in question, even if it is attached. If the petitioner feels they are wrongly implicated or that the property is not theirs, they have legal recourse to challenge the attachment or other actions taken by the ED. The ED’s investigation and the evidence presented in court will determine the ownership and the involvement of each accused, including the petitioner who may not have received a notice. Sanction for prosecution of public servant - Official duty - HELD THAT: - In the Indra Devi v. State of Rajasthan [2021 (7) TMI 1491 - SUPREME COURT], the Hon’ble Apex Court has observed that Section 197 CrPC seeks to protect an officer from unnecessary harassment, who is accused of an offence committed while acting or purporting to act in the discharge of his official duties and, thus, prohibits the court from taking cognizance of such offence except with the previous sanction of the competent authority. Public servants have been treated as a special category in order to protect them from malicious or vexatious prosecution. At the same time, the shield cannot protect corrupt officers and the provisions must be construed in such a manner as to advance the cause of honesty, justice and good governance. In the case of Inspector of Police v. Battenapatla Venkata Ratnam [2015 (4) TMI 1372 - SUPREME COURT], the Hon’ble Apex Court has observed that “the alleged indulgence of the officers in cheating, fabrication of records or misappropriation cannot be said to be in discharge of their official duty. Their official duty is not to fabricate records or permit evasion of payment of duty and cause loss to the Revenue. Unfortunately, the High Court missed these crucial aspects. The learned Magistrate has correctly taken the view that if at all the said view of sanction is to be considered, it could be done at the stage of trial only” Thus, the question of invoking Section 197 of the CrPC does not arise for act(s) which are not a part of the discharge of the official duty. There has to be a reasonable connection between the discharge of official duty and the act committed by the official to invoke Section 197 of the CrPC. Further all the aforesaid view can be well appreciated at the stage of trial by leading the evidence that whether the alleged act has nexus in discharge of duty. In the instant case allegations of the nature described in the prosecution complaint in question, can never be in the discharge of official duties as acts committed by the Petitioner relating to the offences of money laundering were not carried out in discharge of his official duties as a public servant. The plea based on want of sanction was rejected. Final Conclusion: The High Court held that the prosecution materials disclosed a prima facie case of money-laundering against the petitioner and that the Special Judge had rightly rejected the discharge application and framed charge. The revisions were therefore dismissed, with the trial directed to proceed uninfluenced by the prima facie observations made in the order.

2026 (8) TMI 1222 - TELANGANA HIGH COURT Money Laundering

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Mandatory PMLA bail conditions cannot be bypassed through parity or investigation cooperation, making unsupported bail unsustainable.
Bail for money-laundering offences requires recorded satisfaction of the mandatory twin conditions under Section 45 of the Prevention of Money-Laundering Act, 2002: reasonable grounds to believe that the accused is not guilty and is unlikely to commit an offence while on bail. Parity with anticipatory bail granted for non-PMLA offences is inapplicable, and cooperation with investigation alone cannot meet these statutory requirements. Bail granted without applying and recording satisfaction of the twin conditions is unsustainable and liable to be cancelled.

2026 (5) TMI 440 - DELHI HIGH COURT Money Laundering

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Issues: (i) Whether a woman accused of offences under the Prevention of Money Laundering Act, 2002 is entitled to the benefit of the proviso to Section 45 without being subjected to the twin conditions; (ii) Whether the petitioner was entitled to release under Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 on account of custody already undergone and the nature of pending proceedings; (iii) Whether parity with similarly placed co-accused supported grant of bail.

Issue (i): Whether a woman accused of offences under the Prevention of Money Laundering Act, 2002 is entitled to the benefit of the proviso to Section 45 without being subjected to the twin conditions.

Analysis: The proviso to Section 45 expressly extends a special bail treatment to a woman accused. The statutory benefit is not confined to a narrowly defined category of vulnerable women, and the Court noted that the precedent relied upon by the enforcement agency did not limit the proviso in that manner. The mere seriousness of the allegations or the quantum of proceeds allegedly handled was held insufficient to deny the statutory benefit in the absence of exceptional circumstances.

Conclusion: The petitioner was entitled to the benefit of the proviso to Section 45, and the twin conditions were not treated as an absolute bar.

Issue (ii): Whether the petitioner was entitled to release under Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 on account of custody already undergone and the nature of pending proceedings.

Analysis: Section 479 was construed as a liberty-protective provision intended to prevent prolonged pre-trial incarceration. The Court held that the custody threshold had been crossed, and that delay attributable to the accused could not defeat relief where the petitioner had already remained in custody for more than half of the maximum sentence. It further held that multiplicity of proceedings under sub-section (2) is a relevant factor, but not an absolute bar that eclipses the discretion under sub-section (1). Given the length of custody, the stage of the case, and the likelihood of trial delay, the petitioner was found entitled to the statutory benefit.

Conclusion: The petitioner was entitled to release under Section 479.

Issue (iii): Whether parity with similarly placed co-accused supported grant of bail.

Analysis: Several co-accused, including persons attributed roles in handling, layering, moving, or benefiting from the proceeds of crime, had already been granted bail. The Court held that the petitioner's alleged role did not stand on a graver footing than those co-accused and that parity was relevant, especially where the allegations against her were confined to handling and enjoying the proceeds of crime.

Conclusion: Parity favoured the petitioner.

Final Conclusion: Bail was granted on a combined consideration of the statutory bail protections, the custody already undergone, the stage and likely duration of trial, and parity with co-accused.

Ratio Decidendi: A woman accused under the Prevention of Money Laundering Act, 2002 is not automatically subjected to the twin conditions of Section 45, and prolonged pre-trial custody beyond the statutory threshold under Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 may justify bail even where multiple proceedings are pending, if no exceptional reason to deny relief is shown.

Statutory bail protections for women and prolonged custody can justify bail despite pending money laundering proceedings.
A woman accused under the Prevention of Money Laundering Act, 2002 was held entitled to the proviso to Section 45, so the twin bail conditions were not treated as an automatic bar. Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 was read as a liberty-protective provision against prolonged pre-trial detention, and custody beyond the statutory threshold supported release even where multiple proceedings were pending. Parity also favoured bail because co-accused with comparable roles had already been enlarged on bail. On a combined assessment of statutory protection, custody undergone, trial delay, and parity, bail was granted.

Entitlement to the benefit of the proviso to section 45 - Twin conditions - Woman accused of offences under Money Laundering - Benefit of Statutory Bail - Prolonged incarceration of undertrial - Interpretation of section 479 of the BNSS - Bail on parity with co-accused who had already been granted bail in the same ECIR - Seeking to release under Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 on account of custody already undergone and the nature of pending proceedings. Proviso to section 45 of the PMLA - Bail to woman accused - HELD THAT: - The Court held that the proviso to section 45 vests discretion in the Court to release a woman accused on bail without insisting on the twin conditions, though such benefit is not automatic in every case. The controlling principle, as explained in K. Kavitha after considering Saumya Chaurasia [2023 (12) TMI 685 - SUPREME COURT] is that the benefit extends to women as a class and is not confined to only "vulnerable" women; if such benefit is denied, specific reasons must exist. The allegations regarding the petitioner's role and the quantum of proceeds of crime were held insufficient to displace the statutory protection, and no special circumstances were shown to justify withholding it. [Paras 8, 9, 10] The stringent twin conditions under section 45 of the PMLA were held inapplicable to the petitioner. Interpretation of section 479 of the BNSS - Prolonged incarceration of undertrial - Multiple pending cases - HELD THAT: - As noted by the Supreme Court, in Satinder Kumar Antil [2022 (8) TMI 152 - SUPREME COURT] and V. Senthil Balaji [2024 (9) TMI 1497 - SUPREME COURT] [in the context of Section 436A of the CrPC], the statute provides a safeguard against prolonged incarceration pending trial. While an exception can be made under the first proviso to Section 436A CrPC [now the second proviso to Section 479(1) of the BNSS], that exception must be sparingly invoked to further the constitutional guarantee of liberty. In BNSS, a further provision was made, which entitles a first-time offender to the benefit of Section 479(1), upon completion of a lesser proportion of the maximum sentence [1/3rd]. It would, in my view, be inconsistent in this approach to hold that Section 479(2) entirely eclipses Section 479(1), even if the accused is facing trial in more than one offence in the same FIR, or more than one criminal case. Instead, a harmonious reading of the various provisions contained in Section 479 of the BNSS requires the Court to take into account multiplicity of offences or pending proceedings as a significant factor, but does not altogether deprive the Court of its discretion to grant bail once the accused has crossed the custody threshold of Section 479(1) of the BNSS. The Court found that the petitioner had crossed one-half of the maximum sentence of seven years prescribed for the offence under the PMLA. On the explanation to section 479(1), the Court held that even if the period after the prosecution concluded its arguments on charge were excluded as delay attributable to the accused, the petitioner had already completed more than half of the maximum sentence by then, and could not therefore be denied the statutory benefit on that ground. On section 479(2), the Court adopted a holistic and harmonious construction: multiplicity of offences or pending cases is a significant factor, but does not wholly eclipse section 479(1) or eliminate judicial discretion once the custody threshold is crossed. Having regard to the duration of custody, the fact that the case was still at the stage of charge, the large number of witnesses and documents, the improbability of an early conclusion of trial, and the fact that the petitioner was already on bail in the other cases except the predicate offence, the Court held that section 479 operated in her favour. The Court also declined to invoke the second proviso to continue detention, finding no compelling reason for such exceptional course. [Paras 15, 18, 25, 26, 27] The petitioner was held entitled to bail on the strength of section 479 of the BNSS, and no exceptional ground was found to deny that relief. Parity in bail - Similarly placed co-accused - HELD THAT: - The Court noted that a substantial number of co-accused had already been enlarged on bail, including persons alleged to have directly handled, layered, or facilitated movement of the proceeds of crime, as well as a co-accused alleged to have enjoyed those proceeds. While the allegations against the petitioner concerned handling, utilisation, and enjoyment of the proceeds of crime through her concerns and assets, the Court held that her case could not be regarded as graver than those co-accused who had already obtained bail. In that view, parity operated in her favour. [Paras 29, 30, 31, 32, 34] Parity with similarly placed co-accused was held to support grant of bail to the petitioner. Final Conclusion: The Court allowed the bail application and directed release of the petitioner in the PMLA case, holding that the proviso to section 45 protected her as a woman accused, section 479 of the BNSS operated in her favour on account of prolonged custody, and parity with co-accused also supported the grant of bail. Bail was made subject to the conditions imposed by the Special Court.

2026 (5) TMI 273 - DELHI HIGH COURT Money Laundering

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PMLA bail principles: Section 45 twin conditions, Section 24 presumption, and Article 21 delay favoured release.
Regular bail under the Prevention of Money-laundering Act is controlled by Section 45's twin conditions, requiring reasonable grounds to believe the accused is not guilty and will not reoffend on bail. Section 24's presumption applies only after the prosecution establishes foundational facts showing a scheduled offence, property derived from it, and the accused's involvement with that property. Section 50 statements recorded in custody were treated as unsafe to rely on as voluntary, and WhatsApp material was found insufficient to outweigh liberty at the bail stage. Prolonged incarceration and no clear prospect of early trial also engaged Article 21, supporting release on bail.

Seeking regular bail - syndicate of criminals involved in manufacture and sale of spurious medicines, which are used in treatment of cancer - failed to produce any drug license - proceeds of crime so generated through sale of spurious medicines by the co-accused persons were transferred through Hawala transactions - Admissibility of statements recorded under Section 50 PMLA - Foundational facts for proceeds of crime - monetary transactions to the predicate offence - Prolonged pre-trial incarceration - Presumption of Proceeds of Crime - Self-Incriminating Statement - Reasonable Grounds to Believe - statutory twin conditions for bail under PMLA - Right to Speedy Trial - Selective Arrest - Economic Offence. Successive bail after dismissal of SLP in limine - Judicial propriety in subsequent bail consideration - HELD THAT: - The Court held that dismissal of a special leave petition in limine neither affirms the order under challenge nor attracts subsequent bail court must, however, examine the reasons for the earlier rejection and record the fresh grounds that justify a different view. On that basis, the Court considered itself competent to re-examine the bail claims of the applicants whose earlier bail applications had been rejected, particularly since the earlier orders had not examined the strength of the predicate offence from the standpoint of foundational facts. [Paras 5] The earlier rejection of bail and dismissal of the SLPs in limine did not preclude the Court from taking a fresh view on legally sustainable new grounds. Admissibility of statements under Section 50 PMLA - Self-incriminatory statements in custody - Section 25 of the Evidence Act - HELD THAT: - Relying on the law explained in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] and Prem Prakash [2024 (8) TMI 1412 - SUPREME COURT], the Court held that when an accused is in custody and the same investigating agency records a self-incriminatory statement under Section 50 PMLA, such statement is hit by the principle underlying Section 25 of the Evidence Act because the maker cannot be regarded as operating with a free mind. Examining the record, the Court found that the statements of all the applicants were recorded after their arrest by the ED and appeared substantially uniform. The Court therefore held that the self-implicating portions of those statements could not be relied upon, and declined to follow the earlier coordinate bench view insofar as it had proceeded on those statements. [Paras 5] The statements under Section 50 PMLA, being self-incriminatory statements recorded in custody, were discarded against the applicants. Foundational facts for proceeds of crime - Presumption under Sections 23 and 24 PMLA - Predicate offence linkage - absence of prima facie establishment of foundational facts connecting the alleged monetary transactions with the predicate offence and the alleged proceeds of crime. - HELD THAT: - The Court held that the presumption under Sections 23 and 24 PMLA arises only after the prosecution prima facie establishes the foundational facts that a scheduled offence was committed, that the property was derived or obtained as a result of that criminal activity, and that the person concerned was involved in a process or activity connected with such property. On scrutiny of the material, the Court found the ED's case deficient on these foundational requirements. The investigation had not sufficiently addressed the source chain of empty vials, the role of hospital personnel, the end users of the allegedly spurious drugs, or the question whether the contents were in fact spurious in a manner connecting the applicants' transactions to the predicate offence. The Court also found the WhatsApp chats to be, prima facie, ordinary business communications and not of such significance as to justify continued deprivation of liberty. [Paras 5, 6, 7, 10] The Court found the material on foundational facts to be hazy and insufficient, making it difficult at the bail stage to clearly identify any proceeds of crime attributable to the applicants. Selective arrest - Fairness in curtailment of liberty - HELD THAT: - The Court held that although arrest is within the investigating officer's prerogative, selective treatment assumes significance when liberty is curtailed. It noted that several persons alleged to have played roles similar to or graver than those ascribed to the applicants had not been arrested, and some had not even been named as accused. The explanation that such persons were not arrested because they furnished information was rejected, since acceptance of that rationale would imperil the protection against self-incrimination. In the context of an offence punishable up to seven years, the Court regarded such differential treatment as a factor militating against continued detention of the applicants. [Paras 8] The Court treated the selective arrest pattern as a circumstance undermining the fairness of continued incarceration of the applicants. Prolonged pre-trial incarceration - Right to speedy trial - Article 21 - HELD THAT: - The Court held that the constitutional guarantee of speedy trial under Article 21 can override continued pre-trial detention even in prosecutions under PMLA. It noted that the applicants had remained in custody for more than two years, the ED itself stated that further investigation would require at least six more months, and there was no likelihood of the trial commencing, much less concluding, in the foreseeable future. In such circumstances, pre-trial detention could not be permitted to assume the character of punishment. [Paras 9] The long incarceration and absence of any realistic timeline for trial strongly favoured grant of bail. Twin conditions for bail under PMLA - Reasonable grounds for believing not guilty - HELD THAT: - Having found that the self-incriminatory custodial statements under Section 50 PMLA were unusable against the makers, and that the ED had not clearly established the foundational facts necessary to connect the applicants' transactions with identifiable proceeds of crime, the Court held that there were reasonable grounds for believing that the applicants were not guilty of the offence alleged. As regards the second condition, the Court found no material showing antecedents or propensities indicating likelihood of commission of any offence while on bail. The fact that some applicants were already on bail in the predicate offence and the others were not even charge-sheeted there also weighed with the Court. [Paras 10] The Court held that the applicants satisfied both limbs of Section 45 PMLA and were entitled to regular bail. Final Conclusion: The Court held that the applicants' custodial statements under Section 50 PMLA could not be relied upon against them, that the ED had failed to clearly establish the foundational facts necessary to connect the alleged transactions with proceeds of crime, and that prolonged incarceration without any reasonable prospect of trial militated against continued detention. All five applicants were therefore granted regular bail, subject to conditions.

2026 (5) TMI 205 - BOMBAY HIGH COURT Money Laundering

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Prior sanction for public servants is mandatory before cognizance under money-laundering proceedings; absence of sanction invalidates the process.
Prior sanction under Section 197(1) of the Code of Criminal Procedure is a condition precedent to taking cognizance against a public servant for acts done or purportedly done in discharge of official duty. In proceedings under the Prevention of Money Laundering Act, that requirement continues to apply through Section 65 and is not displaced by the overriding clause in Section 71. As the accused were public servants and sanction had not been obtained when cognizance was taken, the cognizance order and process were unsustainable and were set aside.

2026 (5) TMI 1672 - ALLAHABAD HIGH COURT Money Laundering

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Bank account freezing requires lawful authority; suspicious transaction reporting alone does not permit unilateral restrictions.
A bank cannot freeze a customer's current account merely on an alleged suspicious transaction or on the basis of a suspicious transaction report. Section 12 of the Prevention of Money Laundering Act, 2002 imposes record-keeping, confidentiality and reporting duties on a reporting entity, but does not authorise unilateral account freezing, and the RBI circular on suspicious transaction reporting likewise does not permit restrictions on account operations. Freezing is justified only when backed by lawful authority, such as action by an investigating agency or a valid lien. The Allahabad HC held the freeze illegal and unsustainable, and directed that the account be de-frozen so the customers could continue operating it.

Bank account freezing by bank on its own volition - Suspicious transaction reporting under anti-money laundering law - Absence of authority to freeze account without complaint or competent order - Principles of natural justice - Right to livelihood - Right to carry on trade and business - Trustee relationship between bank and customer - Manifest arbitrariness. Bank account freezing by bank on its own volition - Absence of complaint or competent authority order - Right to operate current account - HELD THAT: - The Court held that the respondent-bank had assumed to itself an investigative role without any legal foundation. Mere receipt of funds inconsistent with the income declared at the time of account opening did not furnish any lawful basis to brand the account as suspicious, particularly when no complaint, criminal proceeding, recovery action, or order of any competent authority existed either against the petitioner or the remitter. The alleged request of another bank, itself unsupported by any formal proceeding, could not justify freezing the petitioner's account. The Court further held that a banker holds deposits in a trustee-like capacity and can deny operation of the account only in circumstances recognised by law, such as action backed by competent authority or a lawful lien. Freezing the account without notice or communication of reasons was held arbitrary and violative of the petitioner's right to carry on business and livelihood. [Paras 26, 27, 29, 31, 33] The freezing of the petitioner's current account by the respondent-bank was held illegal, arbitrary and unsustainable, and the account was directed to be de-frozen forthwith without imposing any withdrawal restriction. Suspicious transaction reporting under anti-money laundering law - Scope of reporting entity's powers - Specified transaction under enhanced due diligence - HELD THAT: - The Court rejected the bank's reliance on Section 12(2) of the Prevention of Money Laundering Act, 2002, holding that Section 12 concerns maintenance and confidentiality of records and does not confer any power to freeze an account. On examining the statute, the Court observed that the bank was in substance attempting to invoke Section 12AA(2), but that provision also only enables non-permittance of a particular specified transaction upon failure of enhanced due diligence requirements and does not authorise freezing of the entire account. The Court further noted that freezing under the Act is referable to Section 17 and must be by the competent authority upon satisfaction of statutory conditions. The RBI circular on Suspicious Transaction Reports was also read to mean that even where an STR is made, banks should not impose restrictions on operation of the account. Hence, the anti-money laundering framework did not support the impugned action. [Paras 16, 17, 18, 19, 21] The statutory scheme of the Prevention of Money Laundering Act, 2002 and the RBI instructions on suspicious transaction reporting were held not to empower the respondent-bank to freeze the petitioner's account. Final Conclusion: The writ petition was allowed. The respondent-bank was directed to de-freeze the petitioner's current account forthwith, and costs were imposed on the bank for the unlawful and arbitrary freezing of the account.

2026 (5) TMI 204 - GUJARAT HIGH COURT Money Laundering

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Issues: (i) Whether the restrictions under Section 45 of the Prevention of Money Laundering Act, 2002 barred grant of regular bail in the facts of the case. (ii) Whether the applicant was entitled to regular bail having regard to the alleged role, the link with the scheduled offence, and the prolonged custody.

Issue (i): Whether the restrictions under Section 45 of the Prevention of Money Laundering Act, 2002 barred grant of regular bail in the facts of the case.

Analysis: The conditions under Section 45 require opportunity to the prosecution to oppose bail and a prima facie conclusion that the accused is not guilty and is not likely to commit an offence while on bail. The Court considered the nature of money-laundering as dependent on proceeds of crime arising from a scheduled offence and noted that the provision does not create an absolute restraint on bail. The Court also treated the bail inquiry as one guided by judicial discretion on the available material, not by a final determination on merits.

Conclusion: The statutory bar did not operate as an absolute prohibition, and bail could be considered on the facts.

Issue (ii): Whether the applicant was entitled to regular bail having regard to the alleged role, the link with the scheduled offence, and the prolonged custody.

Analysis: The alleged role was limited to conversion of proceeds of crime into cryptocurrency for commission, and the applicant was not shown to be the principal offender in the scheduled offence. The Court noted that the alleged activity was dependent on the principal offence and that the applicant was not attributed concealment, possession, acquisition, use, or projection of tainted property in a broader sense. The Court further considered the length of custody, the stage of the proceedings, the large number of witnesses, and the absence of any immediate prospect of trial completion, and held that continued detention would impinge upon the right to speedy trial under Article 21.

Conclusion: The applicant was entitled to regular bail.

Final Conclusion: The application succeeded and the applicant was ordered to be released on regular bail on conditions.

Ratio Decidendi: In a money-laundering bail application, Section 45 of the Prevention of Money Laundering Act, 2002 does not impose an absolute bar; where the alleged role is derivative of the scheduled offence, the prosecution material is only prima facie, and custody has become unduly prolonged with no near prospect of trial completion, bail may be granted consistently with Article 21.

Money-laundering bail under Section 45 is not an absolute bar where custody is prolonged and the role is derivative.
Section 45 of the Prevention of Money Laundering Act does not create an absolute bar to regular bail; bail remains a judicial discretion exercised on the available material, subject to the prosecution's right to oppose and a prima facie assessment of guilt and future conduct. Where the alleged role is only derivative of the scheduled offence, such as conversion of proceeds of crime into cryptocurrency for commission, and the accused is not shown to be the principal offender or broadly involved in concealment, possession, acquisition, use or projection of tainted property, bail may be justified. Prolonged custody, a large witness list, and no near prospect of trial completion support release under Article 21.

Entitlement to regular bail - Twin conditions under Section 45 for bail - Scheduled offence as foundation of money laundering - Right to speedy trial - Prima facie non-guilt - HELD THAT: - The Court held that, while bail under the PMLA is controlled by the statutory twin conditions, those conditions do not impose an absolute bar and have to be applied on a prima facie assessment of the material. On the material placed, the applicant was not alleged to be involved in the predicate offence itself, and the role attributed to him was confined to conversion of the proceeds of crime into cryptocurrency for commission after the principal offence had already been committed. The Court further noted that, beyond such conversion, there was no allegation of concealment, possession, acquisition, use, or projection of the tainted property as untainted money by the applicant. Proceeding on that basis, and bearing in mind that the money-laundering allegation was dependent on the scheduled offence, the Court formed a prima facie view that continued custody was not warranted. [Paras 7, 8, 9] Regular bail was held to be grantable, the Court being prima facie satisfied that the statutory threshold stood met in light of the limited and derivative role attributed to the applicant. Right to speedy trial - Prolonged pre-trial detention - HELD THAT: - This Court is inclined to enlarge the present applicant on regular bail. This Court has taken into consideration the law laid down by the Hon’ble Apex Court in the case of Sanjay Chandra v. Central Bureau of Investigation [2011 (11) TMI 537 - SUPREME COURT]. The Court considered that the applicant had remained in custody for a substantial period, that the enforcement agency had itself taken time to arrest him after registration of the ECIR, and that the trial had not yet commenced. It also recorded that the scheduled offence had not been transferred to the Special Court and that there were numerous witnesses in both the scheduled offence and the PMLA case, making early conclusion of trial unlikely. In that situation, the Court held that further detention would impair the applicant's right to a speedy trial under Article 21. [Paras 10, 11] The applicant was ordered to be released on regular bail, prolonged custody in the face of unlikely early trial being held inconsistent with the requirement of speedy trial. Final Conclusion: The application for regular bail was allowed. The Court held that, having regard to the applicant's limited alleged role, the dependence of the money-laundering allegation on the scheduled offence, and the likelihood of prolonged delay in trial, continued custody was not justified.

2026 (6) TMI 1302 - DELHI HIGH COURT Money Laundering

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Provisional attachment under PMLA yields to a Supreme Court restitution scheme for PACL assets, with matters remitted to the Lodha Committee.
Where the Supreme Court had created a special restitution mechanism under Article 142 for PACL assets, the Delhi HC treated that scheme as distinct from the Prevention of Money-Laundering Act, 2002 attachment process and held that the statutory provisional attachment could be displaced once it had served its purpose. The Court noted that restoration under Section 8(8) and Rule 3A is a limited route under the Special Court, that the Enforcement Directorate had earlier acted in aid of the Lodha Committee mechanism, and that the petitions had remained pending for years with an undertaking against alienation. The provisional attachment orders were set aside and the matter was remitted to the Lodha Committee, while the properties were kept protected from alienation or encumbrance until final determination.

Conflict between PMLA attachment mechanism and Supreme Court Article 142 scheme for PACL assets - Provisional attachment of PACL-linked properties without consultation with Lodha Committee - PMLA provisional attachment - Lodha Committee mechanism - Continuance of the provisional attachment orders over PACL-linked properties under the PMLA, without consultation with the Lodha Committee constituted under the Supreme Court's Article 142 orders - HELD THAT: - The Court held that, though statutory powers of the Enforcement Directorate are not extinguished by judicial orders, the special mechanism created by the Supreme Court for PACL assets required a modified application of those powers. The scheme under the PMLA contemplates attachment and eventual vesting of property in the Central Government, whereas the Supreme Court's Article 142 framework was devised to secure restitution to investors through the Lodha Committee. The Court found that the Enforcement Directorate had itself earlier acted consistently with that framework by supplying its investigative inputs to the Lodha Committee, which led to recovery and attachment action through that mechanism, thereby acknowledging that PACL-linked assets were to be addressed through the Supreme Court-created process. It further held that the route of restoration under Section 8(8) of the PMLA is only an exception dependent on the Special Court's satisfaction and cannot justify continuation of the impugned attachment orders. Since the impugned orders had already served any preservative purpose, the petitioners had undertaken not to alienate or encumber the properties, and prolonged pendency without adjudication was prejudicing investor interests, the matter was directed to be dealt with under the Lodha Committee framework rather than within the PMLA's complete code. [Paras 29, 30, 31, 32, 33] The impugned provisional attachment orders were set aside and the matter was relegated to the Lodha Committee for decision in accordance with law, with the petitioners bound not to dissipate, alienate or encumber the properties until final adjudication by the Committee. Final Conclusion: The Court held that, in the peculiar context of PACL assets already governed by the Supreme Court's Article 142 mechanism, the impugned PMLA attachment orders could not be continued. They were set aside, the dispute was relegated to the Lodha Committee, and the petitioners were restrained from dealing with the properties pending that adjudication.

2026 (5) TMI 203 - DELHI HIGH COURT Money Laundering

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Writ jurisdiction and statutory appeal under PMLA: interim orders do not automatically bar review, and reasons for relegation must be clear.
Availability of an efficacious statutory appeal under Section 26 of the Prevention of Money Laundering Act is a relevant factor in deciding whether writ jurisdiction under Article 226 should be exercised, but it does not automatically bar judicial review. An earlier interim order does not compel final adjudication in every case, although action made subject to the writ will ordinarily invite examination of legality. The Delhi High Court found that the impugned order did not disclose a clear basis for declining writ jurisdiction or for relegating the party to the appellate remedy. The order was set aside and the writ petition restored for fresh consideration, with all issues left open.

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