PMLA custody statements and bail standards: Supreme Court found Section 50 statements inadmissible and granted bail under Section 45.

Statements recorded under Section 50 of the Prevention of Money Laundering Act from a person already in judicial custody in another case investigated by the same agency were held inadmissible against the maker, as such statements were not made with a free mind and could not safely be treated as voluntary. Co-accused statements were treated as non-substantive evidence usable only for corroboration. On bail under Section 45, the Court reaffirmed that the provision imposes a twin-condition inquiry, not an absolute bar, and found the prosecution material insufficient to show reasonable grounds of guilt or a likelihood of reoffending. Bail was therefore warranted.

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Issues: (i) Whether statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002 from a person already in judicial custody in another proceeding before the same investigating agency were admissible against the maker in the present prosecution. (ii) Whether the material placed by the prosecution satisfied the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 for denial of bail.

Issue (i): Whether statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002 from a person already in judicial custody in another proceeding before the same investigating agency were admissible against the maker in the present prosecution.

Analysis: The statutory scheme of Section 50 was read with the constitutional protection against compelled self-incrimination and the evidentiary bar against confessions to a police officer. The person was already in judicial custody in another case investigated by the same agency when the statements in the present matter were recorded. In that setting, the Court held that the maker was not acting with a free mind and that it would be unsafe and contrary to fair play to treat such statements as admissible against him. The Court also distinguished co-accused statements, holding that they do not constitute substantive evidence and can at best be used only for corroboration or assurance.

Conclusion: The statements recorded from the appellant while in judicial custody in another case were held inadmissible against him, and the co-accused statements were held insufficient by themselves to implicate him.

Issue (ii): Whether the material placed by the prosecution satisfied the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 for denial of bail.

Analysis: The Court reiterated that Section 45 does not create an absolute bar to bail and that the inquiry at the bail stage is limited to reasonable grounds for believing that the accused is not guilty and is not likely to commit an offence while on bail. Applying that standard, the Court found that the material did not prima facie show the appellant's involvement in the forged deed, knowledge of the forgery, or a sufficient nexus with alleged proceeds of crime. The Court further noted the absence of reliable material to establish beneficial ownership or control of the relevant firm by the appellant, and held that the pendency of another case and jail-related allegations did not justify continued detention on the facts of this case.

Conclusion: The twin conditions under Section 45 were held to be satisfied in favour of the appellant, and bail was warranted.

Final Conclusion: The appeal succeeded and the appellant was directed to be released on bail, with the impugned refusal of bail set aside.

Ratio Decidendi: A statement under Section 50 of the Prevention of Money Laundering Act, 2002 recorded from a person already in judicial custody in another case investigated by the same agency is inadmissible against the maker, and bail under Section 45 must be granted where the prosecution material does not furnish reasonable grounds to believe that the accused is guilty or likely to reoffend.

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