PMLA regular bail denied where twin statutory conditions were not met on a prima facie appraisal of the record

In a PMLA bail matter, the Delhi HC applied the statutory restrictions governing regular bail and assessed the material on broad probabilities. Allegations of fraudulent export valuation, wrongful duty drawback, conversion of suspected proceeds into cash, and reintroduction through banking channels were supported by documents and witness statements. The Court held that the record did not provide reasonable grounds to believe the applicant was not guilty, and also did not support a finding that he would not reoffend while on bail. Regular bail was therefore rejected for failure to satisfy the twin conditions under the PMLA.

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Issues: Whether the applicant was entitled to regular bail in proceedings under the Prevention of Money Laundering Act, 2002, having regard to the statutory conditions governing bail and the material indicating involvement in the alleged laundering activity.

Analysis: The application was considered in the context of the statutory restrictions on bail under Section 45 of the Prevention of Money Laundering Act, 2002. The Court noted the allegations of fraudulent export valuation, wrongful availing of duty drawback, conversion of alleged proceeds into cash, and reintroduction of funds through banking channels, supported by documentary material and witness statements. It was held that, at the stage of bail, the Court must assess the matter on broad probabilities while also considering the gravity of the offence, the possibility of the accused not being guilty, and the likelihood of further offending on release. The Court found that the material on record did not furnish reasonable grounds for believing that the applicant was not guilty and also did not justify a finding that he would not commit an offence while on bail.

Conclusion: The applicant was not entitled to regular bail, and the bail application was rejected.

Ratio Decidendi: Where the Court finds, on a prima facie appraisal of the material, that the twin statutory requirements governing bail under the Prevention of Money Laundering Act are not satisfied, regular bail cannot be granted in an offence involving alleged proceeds of crime.

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