Bail Granted as PMLA Section 3 Needs Proceeds of Crime Under Section 2(u); Section 45(1)(ii) Satisfied

SC held that for an offence under Section 3 PMLA, existence of "proceeds of crime" derived from scheduled offences under Section 2(u) is a condition precedent. On examining the material, the Court found no prima facie indication that the assets allegedly held by the appellant were derived from any predicate offence. The allegations at best related to possession of unaccounted money and illegal acquisition of properties, without linkage to scheduled offences. Both bail conditions under Section 45(1)(ii) were satisfied. The appeal was allowed and the appellant was granted bail.

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Issues: Whether, for the appellant accused under the Prevention of Money Laundering Act, 2002, the requirements of clause (ii) of sub-section (1) of Section 45 of the PMLA Act are satisfied so as to grant bail pending disposal of the complaint.

Analysis: The statutory scheme requires existence of "proceeds of crime" as defined in Section 2(u) and its connection to scheduled offences for an offence under Section 3 to be made out. On prima facie consideration of the material in the complaint, there is no statement or material indicating that the appellant's assets or alleged unaccounted money were derived from or linked to the predicate (scheduled) offences. The absence of a prima facie link between the appellant's assets and the predicate offences means the condition precedent for money-laundering under Section 3 is not satisfied against the appellant at this stage. Clause (ii) of sub-section (1) of Section 45 permits bail where such satisfaction is lacking on the record; hence bail is appropriate pending final disposal. The Special Court may impose appropriate terms and the Enforcement Directorate shall be heard before finalizing conditions.

Conclusion: Prayer for bail under clause (ii) of sub-section (1) of Section 45 of the Prevention of Money Laundering Act, 2002 is allowed in favour of the appellant; the appellant shall be enlarged on bail pending disposal of the complaint subject to terms to be fixed by the Special Court after hearing the Enforcement Directorate.

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