PMLA bail turns on prima facie scheduled offence and proceeds of crime before Section 45 twin conditions apply

Section 45 of the Prevention of Money Laundering Act, 2002 was applied to a bail request where the alleged money-laundering case depended on whether any scheduled offence was prima facie made out. The Court found that Section 72 of the Information Technology Act, 2000 did not apply on the stated facts, and that the ingredients of Sections 120B, 409 and 420 IPC and Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 were not prima facie established. As no scheduled offence was shown at the bail stage, the foundation for proceeds of crime and Section 3 PMLA was not established, and bail was granted on broad probabilities.

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Issues: Whether the applicant was entitled to regular bail under the Prevention of Money Laundering Act, 2002 on the ground that no scheduled offence was prima facie made out and, consequently, no proceeds of crime existed.

Analysis: The bail application turned on the applicability of the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002. The Court examined the allegation that the applicant, through the concerned company, had illegally intercepted and recorded telephone calls of NSE employees and whether such conduct disclosed the scheduled offences relied upon by the prosecution. It held that Section 72 of the Information Technology Act, 2000 was not attracted because the provision applies to a person acting in pursuance of powers conferred under that Act or the rules and regulations made thereunder, which was not the applicant's position. The Court also found that, on the broad material before it, the ingredients of Sections 120B, 409 and 420 of the Indian Penal Code, 1860 and Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 were not prima facie established. As no scheduled offence was prima facie made out, the foundation for alleging proceeds of crime and money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 was not shown. The Court further observed that the matter had to be assessed at the bail stage on broad probabilities, not by finally determining guilt.

Conclusion: The applicant satisfied the requirements of Section 45 of the Prevention of Money Laundering Act, 2002 and was entitled to bail.

Ratio Decidendi: Where the alleged scheduled offences are not prima facie made out, the prosecution cannot establish proceeds of crime for the purposes of Section 3 of the Prevention of Money Laundering Act, 2002, and bail may be granted if the Court is satisfied on broad probabilities that the accused is not guilty and is not likely to reoffend.

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