Stringent PMLA bail restrictions led to refusal of release where funds were allegedly diverted through shell entities and paper transactions.

Bail under the Prevention of Money Laundering Act, 2002 was declined because the allegations disclosed routing of bank funds through controlled companies, creation of shell entities, and diversion through paper transactions. The Court treated money laundering under Section 3 as covering concealment, possession, acquisition, use, or projection of proceeds of crime as untainted property, and applied the stringent bail restrictions in Section 45, which prevail over the general power under Section 439 CrPC where inconsistent. Given the alleged scale and continuing nature of the activity, together with apprehension of witness influence, the petitioner was not enlarged on bail.

---

---

Issues: Whether bail should be granted to an under the Prevention of Money Laundering Act, 2002, in view of the seriousness of the alleged money-laundering activity and the statutory restrictions governing bail.

Analysis: The petitioner was alleged to have routed bank funds through companies controlled by him, created shell companies, and used paper transactions to divert large sums. The statutory offence of money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 was treated as involving concealment, possession, acquisition, use, or projecting proceeds of crime as untainted property. The Court also applied the settled position that Section 45 of the Prevention of Money Laundering Act, 2002 imposes stringent conditions for grant of bail and overrides the general bail power under Section 439 of the Code of Criminal Procedure, 1973 in case of conflict. In light of the magnitude of the alleged loss, the continuing nature of the alleged activity, and the apprehension of influence over witnesses, the Court found no ground to enlarge the petitioner on bail.

Conclusion: Bail was refused and the petitioner's request for release was rejected.

Ratio Decidendi: In a prosecution under the Prevention of Money Laundering Act, 2002, bail must satisfy the stringent statutory restrictions under Section 45, and where the allegations disclose a serious pattern of diversion of funds through shell entities and there is apprehension of witness influence, bail can be declined.

---