Regular bail under PMLA granted where predicate offences were unproven and twin conditions for release were satisfied.

Regular bail under section 45 of the Prevention of Money Laundering Act, 2002 was granted because the Court found reasonable grounds to believe that the accused was not guilty and was unlikely to reoffend. The predicate offences, mainly under sections 420 and 421 of the Indian Penal Code, 1860, had not been independently established, and cheating under section 420 requires dishonest or fraudulent intention from the inception. The statutory presumption under section 24 of the PMLA did not create a presumption of guilt for the predicate offences, and the materials relied on were insufficient to justify denial of bail at that stage. The accused's age, prolonged custody, attachment of properties, surrender of passport, and low risk of repetition also supported bail.

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Issues: Whether the petitioner was entitled to regular bail under section 45 of the Prevention of Money Laundering Act, 2002 on the ground that there were reasonable grounds to believe that he was not guilty of the alleged offence and would not commit any similar offence while on bail.

Analysis: The allegations arose from a money laundering investigation in which the predicate offences were still under investigation and no final report had been filed for more than three years. The Court held that section 45 of the Prevention of Money Laundering Act, 2002 imposed twin conditions, and the Court had to first assess whether there were reasonable grounds to believe that the accused was not guilty. It found that the predicate offences, principally under sections 420 and 421 of the Indian Penal Code, 1860, had not been independently established, and that cheating under section 420 required dishonest or fraudulent intention from the inception. The Court also noted that the statutory presumption under section 24 of the Prevention of Money Laundering Act, 2002 did not create a presumption of guilt for the predicate offences, and that the materials relied upon did not justify a conclusion of guilt at the bail stage. The Court further considered the petitioner's age, the prolonged custody already undergone, the attachment of properties, surrender of passport, and the absence of any likelihood of repetition of similar offences.

Conclusion: The twin conditions under section 45 of the Prevention of Money Laundering Act, 2002 were satisfied, and the petitioner was entitled to regular bail.

Ratio Decidendi: For grant of bail under section 45 of the Prevention of Money Laundering Act, 2002, the Court must be satisfied on reasonable grounds that the accused is not guilty and is unlikely to reoffend, and where the predicate offence itself is not established at the bail stage, the statutory threshold for refusal of bail is not met.

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