PMLA bail and proceeds of crime: strict section 45 conditions do not apply without a linked scheduled offence.

Under the Prevention of Money Laundering Act, 2002, the stricter bail conditions in section 45 apply only where the alleged money-laundering conduct is linked to a scheduled offence and the property can prima facie be treated as proceeds of crime. The note states that, on the material before the Court, no scheduled offence was made out against the applicant, and alleged gains from illegal betting could not be treated as proceeds of crime for section 3. On that basis, the section 45 embargo was treated as inapplicable, and bail was to be considered under the ordinary principles of the Code of Criminal Procedure, 1973.

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Issues: Whether the applicant was entitled to bail under the Prevention of Money Laundering Act, 2002 when the alleged conduct was not shown to be linked to any scheduled offence and, consequently, whether the rigours of section 45 applied.

Analysis: The application for bail was considered in the context of the statutory scheme of the Prevention of Money Laundering Act, 2002. Offence of money-laundering under section 3 is linked to involvement in process or activity connected with proceeds of crime, and proceeds of crime under section 2(u) means property derived from criminal activity relating to a scheduled offence. The scheduled offence contemplated by section 2(y) was not made out against the applicant on the materials placed before the Court. The Court found that, although there were allegations of illegal betting, the applicant was not charged with any scheduled offence and the alleged income could not, prima facie, be treated as proceeds of crime for the purpose of section 3. In that situation, the restrictions under section 45 were held not to be attracted, and the bail request was to be considered under the Code of Criminal Procedure, 1973. Considering the stage of investigation, the absence of antecedents, and the limited link shown against the applicant, the Court found the case fit for bail on conditions.

Conclusion: The applicant was held entitled to bail, and the section 45 embargo was held inapplicable on the facts.

Ratio Decidendi: Where the accused is not shown to be involved in a scheduled offence, alleged gains cannot prima facie be treated as proceeds of crime for invoking the stricter bail conditions under section 45 of the Prevention of Money Laundering Act, 2002, and bail must then be considered under the ordinary principles of the Code of Criminal Procedure, 1973.

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