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Issues: (i) Whether the absence or quashing of one predicate complaint extinguished the basis for the PMLA prosecution and bail denial, and whether the applicant had to be an accused in the scheduled offence; (ii) whether the applicant could be granted bail under the first proviso to Section 45 of the Prevention of Money-Laundering Act, 2002 on the plea that the alleged proceeds of crime were below one crore rupees; (iii) whether the arrest complied with Section 19 of the Prevention of Money-Laundering Act, 2002 and Article 22(1) of the Constitution of India.
Issue (i): Whether the absence or quashing of one predicate complaint extinguished the basis for the PMLA prosecution and bail denial, and whether the applicant had to be an accused in the scheduled offence?
Analysis: The complaint under the Environment (Protection) Act, 1986 was held not to survive as a predicate offence after the revisional order quashing process, but FIR No. 177 of 2022 remained alive and contained scheduled offences. The scheme of the PMLA treats money-laundering as dependent on the existence of proceeds of crime arising from a scheduled offence, yet it is not necessary that the person proceeded against under Section 3 must also be shown as an accused in the scheduled offence. The Court applied the principle that an accused in a PMLA case may be proceeded against if he is alleged to have assisted in concealment, use, acquisition, possession, or projection of proceeds of crime, even if he was not an accused in the predicate case.
Conclusion: The applicant could still be proceeded against under the PMLA on the basis of the surviving scheduled offence, and the absence of his name as an accused in the predicate offence did not bar the prosecution.
Issue (ii): Whether the applicant could be granted bail under the first proviso to Section 45 of the Prevention of Money-Laundering Act, 2002 on the plea that the alleged proceeds of crime were below one crore rupees?
Analysis: The Court examined the complaint's valuation and estimation of proceeds of crime and held that accepting the applicant's plea would require a detailed fact-finding exercise not suitable at the bail stage. The allegations and materials prima facie showed an estimated value far in excess of one crore rupees. Applying the mandatory twin conditions under Section 45, the Court held that it had to be satisfied that there were reasonable grounds for believing that the applicant was not guilty and was unlikely to commit an offence on bail, and those conditions were not met on the material before it.
Conclusion: The applicant was not entitled to bail under the first proviso to Section 45, and the statutory twin conditions were not satisfied.
Issue (iii): Whether the arrest complied with Section 19 of the Prevention of Money-Laundering Act, 2002 and Article 22(1) of the Constitution of India?
Analysis: The arrest memo and the related materials showed that the grounds of arrest were read and explained to the applicant, his acknowledgment appeared on the memo, and his son also noted that the grounds were read over and explained. The Court found prima facie compliance with the statutory requirement to record reasons to believe and to inform the arrestee of the grounds of arrest.
Conclusion: The arrest was held to be in compliance with Section 19 of the PMLA and Article 22(1) of the Constitution of India.
Final Conclusion: The PMLA prosecution was found maintainable on the surviving scheduled offence and the material on record did not justify release on bail.
Ratio Decidendi: For an offence under Section 3 of the PMLA, the existence of a scheduled offence and proceeds of crime is essential, but the accused need not himself be charged in the predicate offence if he is alleged to have knowingly assisted in the process connected with the proceeds of crime; bail remains subject to the mandatory twin conditions under Section 45, and compliance with Section 19 is met where the grounds of arrest are duly communicated in substance.
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