PMLA bail twin conditions failed where accommodation entries and Section 50 statements prima facie showed proceeds-of-crime involvement.

In a PMLA bail matter, the Delhi HC held that money laundering is an independent and continuing offence involving concealment, possession, acquisition, use, or projection of proceeds of crime as untainted property. It found that the wide definition of proceeds of crime, together with surrounding circumstances such as shareholding pattern, conduct, accommodation entries, and statements recorded under Section 50, may establish beneficial ownership and effective control, and that such statements have evidentiary weight at the bail stage. Applying broad probabilities rather than a mini trial, the Court held that the material prima facie showed involvement in handling proceeds of crime and that the petitioners had not satisfied the twin conditions under Section 45. Bail was refused.

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Issues: Whether the petitioners were entitled to bail in a prosecution under the Prevention of Money Laundering Act, 2002, and whether the material on record satisfied the twin conditions under Section 45 of that Act.

Analysis: The Court held that the offence of money laundering is an independent and continuing offence connected with the concealment, possession, acquisition, use, projecting, or claiming of proceeds of crime as untainted property. It noted that the statutory definition of proceeds of crime is wide and that beneficial ownership and effective control over closely held companies may be inferred from the surrounding circumstances, including shareholding pattern, conduct, and statements recorded under Section 50 of the Act. The Court accepted that statements under Section 50 carry evidentiary weight at the bail stage and that in cases involving clandestine cash dealings and accommodation entries, the Court must assess broad probabilities rather than conduct a mini trial. On the materials before it, including the accommodation entries, the linkage with the predicate offence, and the statements relied upon by the prosecution, the Court found that the petitioners had not shown reasonable grounds to believe that they were not guilty of the offence or that they would not commit an offence while on bail.

Conclusion: The petitioners were not entitled to bail and the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 were not satisfied.

Ratio Decidendi: For bail under Section 45 of the Prevention of Money Laundering Act, 2002, the Court must find substantial probable grounds on broad probabilities that the accused is not guilty and is not likely to reoffend, and where the record prima facie shows involvement in handling proceeds of crime through accommodation entries and related concealment, bail must be refused.

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