PMLA bail and twin-conditions test failed where prima facie material linked the accused to proceeds of crime.

Money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 covers direct or indirect involvement in concealment, possession, acquisition, use, or projection of proceeds of crime as untainted property. At the bail stage, the court assesses material on broad probabilities and does not conduct a mini-trial, while applying the limitations under Section 45 of the PMLA and Section 439 of the Code of Criminal Procedure, 1973. On the stated facts, prima facie material linked the petitioner to the policy arrangement, corporate guarantees, distributor appointment, and alleged cartelisation, so the twin conditions were not satisfied and bail was declined.

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Issues: Whether the petitioner was entitled to bail in a prosecution under the Prevention of Money Laundering Act, 2002, having regard to the statutory twin conditions and the material indicating his involvement in processes connected with proceeds of crime.

Analysis: The Court held that the offence of money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 is wide enough to cover any direct or indirect involvement in a process or activity connected with proceeds of crime, including concealment, possession, acquisition, use, or projecting such proceeds as untainted property. It reiterated that, at the bail stage, the Court is not to conduct a mini-trial, but must assess the material on broad probabilities while keeping in view the limitations under Section 45 of the Prevention of Money Laundering Act, 2002 and Section 439 of the Code of Criminal Procedure, 1973. On the facts, the Court found prima facie material that the petitioner was linked to the formulation of the policy arrangement, the granting of corporate guarantees, the appointment of the wholesale distributor, and the alleged cartelisation and generation of proceeds of crime. The Court therefore held that the twin conditions under Section 45 were not satisfied.

Conclusion: Bail was declined because there were no reasonable grounds to believe that the petitioner was not guilty of the offence, and the Court found a prima facie case of involvement in money laundering.

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