PMLA bail restrictions override general bail power, and investigation may proceed without prior cognizance in the scheduled offence.

The Delhi HC held that regular bail under the Prevention of Money Laundering Act is governed by the Act's special bail regime, which overrides the general power under the Code of Criminal Procedure. Because the allegations involved laundering through accommodation entries, layering and projection of tainted funds as untainted property, the Court found no material basis to conclude that the accused was not guilty or unlikely to reoffend, so bail was not warranted. The Court also rejected the objections that proceedings could not begin before cognizance in the scheduled offence and that earlier placement of the predicate offence in Part B barred application of the bail restrictions.

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Issues: (i) Whether the petitions for regular bail under the Prevention of Money Laundering Act, 2002 were barred by the statutory conditions governing bail under that Act; (ii) Whether the plea that the Enforcement Directorate could not proceed before cognizance in the scheduled offence had been taken, or that the schedule offence being placed in Part B earlier prevented invocation of the bail restrictions, could be accepted.

Issue (i): Whether the petitions for regular bail under the Prevention of Money Laundering Act, 2002 were barred by the statutory conditions governing bail under that Act.

Analysis: The allegations disclosed an economic offence involving laundering of unaccounted funds through accommodation entries, layering of transactions and projection of tainted money as untainted property. The Court held that offences under the Prevention of Money Laundering Act are governed by the special statutory regime, and the conditions in the bail provision override the general power under the Code of Criminal Procedure. In such cases, the Court must be satisfied that there are reasonable grounds for believing that the accused is not guilty and is not likely to commit any offence while on bail. On the material collected, the Court found no basis to record such satisfaction.

Conclusion: The statutory bail restrictions applied, and bail was not warranted.

Issue (ii): Whether the plea that the Enforcement Directorate could not proceed before cognizance in the scheduled offence had been taken, or that the schedule offence being placed in Part B earlier prevented invocation of the bail restrictions, could be accepted.

Analysis: The Court held that initiation of inquiry or investigation under the Prevention of Money Laundering Act did not depend on prior cognizance of the scheduled offence; the filing of the complaint or registration of the predicate case was sufficient to trigger action under the Act. The Court also rejected the submission that the earlier placement of the predicate offences in Part B insulated the petitioners from the rigour of the bail provision, and followed the view that the special statute continued to operate with overriding force. The challenge based on lack of foundation in the scheduled offence therefore failed.

Conclusion: The objections to the initiation and maintainability of the proceedings were rejected.

Final Conclusion: The petitions failed on both statutory maintainability and merits, and the Court declined to grant regular bail in the money-laundering case.

Ratio Decidendi: In a prosecution under the Prevention of Money Laundering Act, the special bail conditions override the general bail power under the Code of Criminal Procedure, and the existence of a registered complaint or other scheduled-offence proceeding is sufficient to set the PMLA process in motion without prior cognizance in the predicate case.

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