Section 45 PMLA twin conditions govern regular bail where proceeds of crime and unexplained funds support a prima facie laundering case

The special bail regime under the Prevention of Money Laundering Act, 2002 prevails over the general power under CrPC Section 439, so regular bail requires satisfaction of the mandatory twin conditions under Section 45 that the accused is not guilty and will not commit an offence while on bail. The Court also treated the reverse burden under Section 24 as relevant to the bail inquiry. On the material, alleged cash deposits, demand drafts in fictitious names, lack of a credible source explanation, and Section 50 statements supported a prima facie case that property linked to a scheduled offence constituted proceeds of crime, justifying denial of regular bail.

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Issues: (i) Whether the rigours of Section 45 of the Prevention of Money Laundering Act, 2002 governed the prayer for regular bail and required satisfaction that the accused was not guilty and would not commit any offence while on bail; (ii) Whether the material on record disclosed a prima facie case of money laundering based on proceeds of crime so as to justify of regular bail.

Issue (i): Whether the rigours of Section 45 of the Prevention of Money Laundering Act, 2002 governed the prayer for regular bail and required satisfaction that the accused was not guilty and would not commit any offence while on bail.

Analysis: The special bail regime under Section 45 operates with overriding force over the general bail power under Section 439 of the Code of Criminal Procedure, 1973. The Court held that the statutory conditions are mandatory and must be satisfied even in a bail application under the Code. The mere fact that interim relief had been granted on humanitarian grounds did not dilute the separate and stricter test for regular bail. The reverse burden under Section 24 also informs the bail inquiry in cases under the Act.

Conclusion: The rigours of Section 45 applied, and the appellant was required to satisfy the statutory twin conditions for grant of regular bail.

Issue (ii): Whether the material on record disclosed a prima facie case of money laundering based on proceeds of crime so as to justify of regular bail.

Analysis: The Court found that the alleged cash deposits, issuance of demand drafts in fictitious names, the absence of any credible explanation for the source of funds, and the statements recorded under Section 50 constituted material supporting the prosecution case. It held that property derived from or connected with criminal activity relating to a scheduled offence falls within the meaning of proceeds of crime under Section 2(1)(u), and that projecting such property as untainted attracts Section 3 and punishment under Section 4. The Court also reiterated that economic offences involving deep-rooted conspiracies require a strict approach at the bail stage.

Conclusion: The material on record disclosed a prima facie case of money laundering and the appellant failed to satisfy the court that he was not guilty or was unlikely to commit an offence while on bail.

Final Conclusion: The refusal of regular bail was upheld and the appeals were dismissed, while the trial court was requested to proceed expeditiously.

Ratio Decidendi: In prosecutions under the Prevention of Money Laundering Act, 2002, regular bail cannot be granted unless the accused satisfies the mandatory twin conditions of Section 45, and unexplained possession or movement of funds linked to a scheduled offence may justify a prima facie inference of proceeds of crime for the purposes of Section 3.

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