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Issues: Whether the applicant was entitled to bail in a prosecution under the Prevention of Money-Laundering Act, 2002; whether the Enforcement Directorate could investigate and proceed on the basis of continuing possession and dealing with proceeds of crime even when part of the predicate activity preceded the relevant period; and whether the stringent conditions for bail under the Prevention of Money-Laundering Act, 2002 were satisfied.
Analysis: The material showed that the predicate offences under the Customs Act, 1962 involved smuggling of Red Sanders by misdeclaration and use of forged documents, and that the alleged laundering was traced through corporate and banking transactions to the applicant and his associates. The Court held that the expression "proceeds of crime" covers property derived directly or indirectly from criminal activity relating to a scheduled offence, and that money laundering under Section 3 is a continuing offence. On the principles stated in the governing Supreme Court decisions, the relevant inquiry is whether the accused is in possession of or is dealing with proceeds of crime, and the date of the predicate offence does not by itself bar investigation into continuing laundering activity. The Court further held that the applicant had not satisfied the twin conditions governing bail under Section 45 of the Prevention of Money-Laundering Act, 2002, particularly in view of the material indicating his role, antecedents, and continuing association with the tainted funds.
Conclusion: The bail application was not maintainable on merits and the applicant was not entitled to release on bail.
Final Conclusion: The application failed because the Court found a prima facie case of continuing money-laundering activity linked to proceeds of crime and held that the statutory safeguards against grant of bail were not met.
Ratio Decidendi: Money laundering is a continuing offence, and where credible material shows possession or dealing with proceeds of crime derived from a scheduled offence, the prosecution can proceed notwithstanding the time of the predicate offence, subject to the stringent bail threshold under the special statute.
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