Anti-money-laundering framework upheld: broad offence definition, stringent bail conditions, and special powers sustained under the statute.

The Supreme Court upheld the core framework of the anti-money-laundering statute, construing "proceeds of crime," "investigation" and "proceedings" broadly and treating projecting or claiming tainted property as untainted as part of the Section 3 offence. It sustained provisional attachment, search, arrest, the burden-of-proof rule, summons powers and false-information penalties as a self-contained regime with safeguards. The amended twin bail conditions under Section 45 were upheld and applied even at the anticipatory bail stage, subject to Section 436A in appropriate cases. ECIR was not treated as an FIR, the authorities were not held to be police officers, and the Schedule was upheld as a matter of legislative policy.

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Issues: (i) Whether the expressions "proceeds of crime", "investigation" and "proceedings" under the Act were to be given a broad construction, and whether the offence of money-laundering under Section 3 required only projecting or claiming proceeds of crime as untainted property. (ii) Whether the provisions concerning provisional attachment, search and seizure, search of persons, arrest, burden of proof, summons, and penal consequence for false information were constitutionally valid. (iii) Whether the special trial mechanism and bail regime, including the twin conditions under Section 45, were valid and applicable even at the anticipatory bail stage. (iv) Whether ECIR had to be treated as an FIR and supplied to the person concerned, and whether the authorities under the Act were police officers or the statements recorded under Section 50 offended Article 20(3). (v) Whether the Schedule, including inclusion or exclusion of offences, suffered from arbitrariness or lack of nexus with the object of the Act.

Issue (i): Whether the expressions "proceeds of crime", "investigation" and "proceedings" under the Act were to be given a broad construction, and whether the offence of money-laundering under Section 3 required only projecting or claiming proceeds of crime as untainted property.

Analysis: The statutory scheme treats money-laundering as an independent offence connected with the process or activity relating to proceeds of crime. The expression "proceedings" is wide enough to include the inquiry undertaken by the authorities, the Adjudicating Authority and the Special Court. The expression "investigation" under the Act is not coextensive with police investigation under the criminal procedure code but is used in the sense of inquiry for collection of evidence. The offence under Section 3 is not confined to the final act of integration into the formal economy. The Explanation inserted in 2019 was treated as clarificatory, and the act of projecting or claiming proceeds of crime as untainted property was held to be encompassed within the offence.

Conclusion: The broad interpretation of the statutory expressions was upheld, and the challenge to the scope of Section 3 failed.

Issue (ii): Whether the provisions concerning provisional attachment, search and seizure, search of persons, arrest, burden of proof, summons, and penal consequence for false information were constitutionally valid.

Analysis: The Act was held to be a special, self-contained code with inbuilt safeguards. Provisional attachment was treated as a balancing measure to preserve proceeds of crime. Search, seizure, search of persons and arrest were upheld because they are preceded by recorded reasons, involve senior authorised officers, and are followed by prompt forwarding of material to the Adjudicating Authority. Section 24 was sustained as a rule of evidence creating a rebuttable presumption after foundational facts are established. Section 50 was treated as an inquiry provision rather than a police interrogation provision, and Section 63 was regarded as a consequential enforcement measure to ensure cooperation and truthful disclosure.

Conclusion: The challenges to Sections 5, 8(4), 17, 18, 19, 24, 50 and 63 were rejected.

Issue (iii): Whether the special trial mechanism and bail regime, including the twin conditions under Section 45, were valid and applicable even at the anticipatory bail stage.

Analysis: The Court held that the 2018 amendment removed the basis on which the earlier invalidation of Section 45 had been made, and the twin conditions stood revived. Money-laundering was treated as a grave economic offence with transnational impact, justifying a stringent bail standard. The conditions were held to be reasonable and consistent with the object of the Act. The same rigour was held applicable even where relief is sought in the form of anticipatory bail. At the same time, Section 436A of the criminal procedure code was recognised as available to a person arrested under the Act in an appropriate case.

Conclusion: Section 45, as amended, was upheld, and the rigour of the twin conditions was held applicable even in anticipatory bail proceedings, subject to Section 436A.

Issue (iv): Whether ECIR had to be treated as an FIR and supplied to the person concerned, and whether the authorities under the Act were police officers or the statements recorded under Section 50 offended Article 20(3).

Analysis: ECIR was held to be an internal document and not the statutory equivalent of an FIR. The Act does not require its compulsory supply in every case, provided the grounds of arrest are communicated. The authorities under the Act were not treated as police officers, because their powers are directed to inquiry and collection of material for attachment, confiscation and prosecution under the special statute. Statements recorded under Section 50 were not held to suffer from testimonial compulsion merely because the proceedings are deemed judicial for limited purposes. Article 20(3) and the privilege against self-incrimination were held inapplicable at the stage of inquiry before formal accusation, subject to ordinary evidentiary rules in a given case.

Conclusion: ECIR was not equated with an FIR, mandatory supply was declined, and Section 50 was upheld against the constitutional challenge.

Issue (v): Whether the Schedule, including inclusion or exclusion of offences, suffered from arbitrariness or lack of nexus with the object of the Act.

Analysis: The Schedule was treated as a matter of legislative policy. The inclusion of offences, even where some are non-cognizable, compoundable or comparatively minor under the parent statute, was upheld because the relevant consideration under the Act is the relationship of the criminal activity to proceeds of crime and the threat posed to the financial system. The Court declined to second-guess the legislative choice in classifying scheduled offences.

Conclusion: The challenge to the Schedule failed.

Final Conclusion: The special regime under the Act was substantially upheld in its entirety, with only limited interpretive read-downs and clarifications, while the core constitutional challenges to the statutory framework were rejected.

Ratio Decidendi: A special anti-money-laundering statute may validly create a self-contained inquiry, attachment, trial and bail framework with rebuttable presumptions and stringent procedural safeguards, because money-laundering is an independent grave economic offence and the legislature may adopt measures reasonably connected to preventing, detecting and confiscating proceeds of crime.

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