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of <h1>Anticipatory bail denied in money laundering case for alleged misuse of state funds and concealment under Section 45(1)(ii) PMLA</h1> The HC refused anticipatory bail to the petitioner in a money-laundering prosecution, finding prima facie involvement in acquisition, concealment and ... Money Laundering - seeking grant of anticipatory bail - proceeds of crime - illegal transfer and misuse of the public funds from State Govt. accounts in fraudulent manner for personal gain - acquisition of proceeds of crime by commission of offence punishable under Sections 420, 47, 471, 120B of the Indian Penal Code and Section 13 of Prevention of Corruption Act, 1988 for the charges of corruption, criminal conspiracy, cheating and forgery related to Schedule Offences as defined under P.M.L. Act - HELD THAT:- Taking into consideration the facts and circumstances of the case and also the fact that petitioner is knowingly involved in acquisition, concealment and transfer of proceeds of crime and projection of the same as untainted, pursuant thereto various transactions relating to purchase of immovable properties etc. were recovered and have been mentioned in detail, as referred to hereinabove. Further, Section 45(1)(ii) of the P.M.L. Act provides that notwithstanding anything contained in the Cr.P.C., no person accused of an offence under the P.M.L. Act shall be released on bail unless the Court is satisfied that there are reasonable grounds for believing that he/she is not guilty of such offence and that he/she is not likely to commit any offence while on bail. Taking into consideration the rival submissions of learned counsel for the parties and materials available on record as also in view of section 45 of the P.M.L. Act, this Court is of the opinion that the petitioner has not made out a case for grant of anticipatory bail and as such, his application for grant of anticipatory bail stands rejected. Bail application dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether an application for anticipatory bail under Section 438 Cr.P.C. filed in relation to an offence under the P.M.L. Act is governed by the twin conditions in Section 45(1) of the P.M.L. Act - namely, that the Court must be satisfied that there are reasonable grounds for believing the accused is not guilty and is not likely to commit any offence while on bail. 2. Whether the circumstances of alleged involvement in money-laundering transactions (concealment, possession, acquisition, use and transfer of proceeds of crime and projection as untainted property), together with identified bank transfers and acquisition of immovable property in relatives' names, preclude grant of anticipatory bail under Section 45(1) of the P.M.L. Act. 3. The relevance, if any, of the fact that the accused was not arrested during investigation and the effect of post-investigation procedural posture (chargesheet submitted and statements recorded) on the necessity for custodial interrogation and on the entitlement to anticipatory bail. 4. The applicability and effect of higher-court precedents and legislative amendments on the interpretation and operation of Section 45(1) of the P.M.L. Act in anticipatory bail applications. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Applicability of Section 45(1) P.M.L. Act to anticipatory bail applications Legal framework: Section 45(1) P.M.L. Act (as amended) stipulates that notwithstanding anything contained in the Cr.P.C., no person accused of an offence under the P.M.L. Act shall be released on bail unless the Court is satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and is not likely to commit any offence while on bail. Precedent treatment: Higher-court pronouncements have interpreted the post-amendment Section 45(1) to revive the twin conditions (reasonableness of belief of not guilty and not likely to commit offence) in bail contexts connected to P.M.L. Act offences. The Court referred to (i) a High Court view recognizing legislative revival of the twin conditions and (ii) a Supreme Court direction that Section 45's rigours must be examined when anticipatory bail is sought in connection with P.M.L. Act offences even if the application is under Section 438 Cr.P.C. Interpretation and reasoning: The Court held that when an anticipatory bail plea is filed in connection with offences punishable under the P.M.L. Act, the jurisdictional mandate of Section 45(1) must be applied. The Court treated Section 45(1) as a statutory override of ordinary Cr.P.C. bail principles in P.M.L. Act cases and required satisfaction of the twin conditions before granting relief. Ratio vs. Obiter: Ratio. The Court's application of Section 45(1) to anticipatory bail applications in the P.M.L. Act context is a central legal determination informing the decision to deny anticipatory bail. Conclusion: Section 45(1) governs anticipatory bail applications connected with the P.M.L. Act; the Court must be satisfied of both reasonable grounds to believe non-guilt and low risk of reoffence before bail can be granted. Issue 2 - Sufficiency of factual material (alleged money-laundering transactions and property acquisitions) to deny anticipatory bail Legal framework: Offences under Section 3/4 P.M.L. Act concern proceeds of crime and criminality linked to scheduled offences; Section 45(1) raises the standard for bail in such cases. Precedent treatment: Courts have assessed factual matrices - transfers, cash deposits, properties in relatives' names, and direct transfers from accused entities - to determine whether the twin conditions are satisfied. Interpretation and reasoning: The Court examined the investigative material as presented: allegations of conspiracy to siphon public funds, RTGS/cash/cheque movements from the implicated entity to family-member accounts, substantial cash deposits, direct transfers totaling identified sums to the accused's family-member accounts, and acquisition/booking of immovable properties in close relatives' names. The Court concluded that these materials, taken at the threshold stage of bail consideration, indicate knowing involvement in concealment, possession, acquisition and projection of proceeds of crime. Given the statutory standard in Section 45(1), the Court found the petitioner had not established reasonable grounds for believing he was not guilty nor demonstrated that he would not reoffend if released on bail. Ratio vs. Obiter: Ratio. The conclusion that the particular factual matrix (bank transfers from the implicated entity to family accounts, significant cash deposits, and acquisition of flats) justified refusal of anticipatory bail under Section 45(1) is determinative for the present application. Conclusion: The transactional and property-related materials relied upon by the investigating agency were sufficient, at the anticipatory-bail threshold and applying Section 45(1), to deny the privilege of anticipatory bail. Issue 3 - Effect of non-arrest during investigation and post-investigation proceedings on custodial interrogation and anticipatory bail Legal framework: General principles require courts to consider the necessity of custodial interrogation, but Section 45(1) imposes statutory conditions for bail in P.M.L. Act matters; procedural posture (chargesheet filed, statements recorded) can influence but does not nullify Section 45's requirements. Precedent treatment: There are authorities suggesting that if an accused has not been arrested during investigation and the chargesheet has been filed, custodial interrogation may not be necessary; however, when anticipatory bail is connected to P.M.L. Act offences, Section 45(1)'s requirements must still be considered by the Court regardless of arrest history. Interpretation and reasoning: The petitioner relied on the absence of arrest during investigation and on a decision suggesting lack of necessity for custodial interrogation post-chargesheet. The Court acknowledged those submissions but emphasized that the statutory mandate of Section 45(1) is a distinct criterion for release. The Court treated the absence of arrest and cooperation with investigation as relevant but insufficient to displace the Section 45(1) requirement in the presence of the incriminating transactional evidence. Ratio vs. Obiter: Mixed - the observation that non-arrest/ cooperation does not automatically justify anticipatory bail in P.M.L. Act cases is a ratio for decision; ancillary comments about custodial interrogation needs relative to factual matrices are explanatory. Conclusion: Non-arrest during investigation and cooperation do not relieve an applicant from meeting the heightened Section 45(1) standard; such procedural facts were insufficient to secure anticipatory bail in this matter. Issue 4 - Treatment of precedents and legislative amendment affecting Section 45(1) Legal framework: Legislative amendment reintroducing the twin conditions into Section 45(1) and higher-court rulings interpreting the scope and application of that provision. Precedent treatment: The Court followed higher-court pronouncements that Section 45(1)'s twin conditions operate in anticipatory-bail scenarios linked to P.M.L. Act offences. The Court referenced a High Court view emphasizing legislative revival of the twin conditions and a Supreme Court ruling directing that Section 45's rigours must be examined when anticipatory bail is sought for P.M.L. Act offences. Interpretation and reasoning: The Court placed reliance on the binding direction that statutory provisions of the P.M.L. Act (post-amendment) must be applied. It rejected the proposition that Section 45(1) can be sidelined merely because an application is made under Section 438 Cr.P.C. The Court treated the legislative amendment and the Supreme Court's interpretation as authoritative constraints on the exercise of bail jurisdiction in P.M.L. Act cases. Ratio vs. Obiter: Ratio. The confirmation that Section 45(1) governs anticipatory bail applications in P.M.L. Act matters and must be applied as interpreted by higher courts is central to the decision. Conclusion: Binding precedents and the legislative amendment require application of Section 45(1)'s twin conditions in anticipatory-bail adjudication for P.M.L. Act offences; courts must examine those jurisdictional facts irrespective of the procedural provision invoked. Final Disposition Applying the statutory standard of Section 45(1) of the P.M.L. Act to the factual matrix (alleged conspiracy, bank transfers from the implicated entity to family-member accounts, substantial cash deposits, and purchase/booking of flats in family members' names), and having regard to applicable precedent, the Court concluded that the petitioner failed to satisfy the twin conditions required for release. The application for grant of anticipatory bail is therefore rejected.
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