2025 (5) TMI 1694 - SCH - Money Laundering

Bail Granted in PMLA Case: Investigative Probe Continues with Conditional Release Despite Lack of Direct Evidence under Section 45

SURESH KUMAR Versus DIRECTORATE OF ENFORCEMENT

The SC granted bail to the appellant in a PMLA case involving an alleged question paper leak and money laundering. Despite the ED's opposition, the Court ... Seeking prayer for release on bail - scheduled offence - allegation of conspiracy - possession of a copy of the paper - search and seizure - HELD THAT:- The appellant, as per the allegations contained in the complaint, is alleged to have conspired with the other accused for the purpose of leaking of question paper in exchange for monetary consideration. The matter is still being investigated by the ED wherein, although some close relatives of the appellant have been found to be directly involved, the ED case against the appellant as of now hinges upon the allegation of conspiracy. However, we need not comment on this aspect, given that the matter is still under investigation. Taking into consideration all the attenuating circumstances and without expressing any opinion on merits of the case, we are satisfied that the rigors of Section 45 of the PMLA, 2002 can be relaxed at this stage and the appellant can be released on bail subject to his furnishing bail bonds to the satisfaction of the Special Judge and subject to such terms and conditions as may be imposed by that Court. It goes without saying that if the ED is able to lay its hands on some more incriminating material against the appellant which prima facie establishes his direct involvement, the prosecution shall be at liberty to seek modification/recall of this order. With liberty aforementioned, the instant appeal is allowed in the above terms. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered by the Court in this judgment include:Whether the appellant, accused in a case involving the leaking of a competitive examination question paper and subsequent money exchange, is entitled to bail under the stringent provisions of the Prevention of Money Laundering Act, 2002 (PMLA), particularly Section 45 thereof.The applicability and scope of Section 45 of the PMLA in cases where the investigation is ongoing and the accused's direct involvement is not conclusively established.The interplay between the predicate offence under the Indian Penal Code and other statutes, and the attached Enforcement Directorate (ED) proceedings concerning proceeds of crime.The conditions and safeguards appropriate to be imposed while granting bail in such cases to ensure the ends of justice and effective investigation.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Entitlement to Bail under Section 45 of the PMLA in the Context of Alleged Money Laundering Related to Question Paper LeakRelevant Legal Framework and Precedents: Section 45 of the PMLA imposes stringent conditions for grant of bail in money laundering cases, generally requiring the accused to demonstrate that they are not guilty of the offence and are unlikely to commit any offence while on bail. The provision is designed to prevent abuse of bail in cases involving proceeds of crime. Precedents have emphasized the need to balance the rigors of the statute with fundamental rights and the facts of each case.Court's Interpretation and Reasoning: The Court acknowledged the gravity of the allegations against the appellant, including conspiracy to leak examination papers and receipt of monetary consideration, which form the predicate offence for the money laundering investigation. However, the Court noted that the investigation by the ED is ongoing and that the appellant's direct involvement in the money laundering aspect is yet to be conclusively established. The Court observed that close relatives were found to be directly involved, but the appellant's role was primarily alleged conspiracy.The Court emphasized that at this stage, without expressing any opinion on the merits, the rigors of Section 45 could be relaxed. It reasoned that the appellant could be released on bail subject to furnishing bail bonds and conditions imposed by the Special Judge, thereby ensuring a balance between the rights of the accused and the interests of the investigation.Key Evidence and Findings: The appellant was found tutoring approximately 36 candidates with a leaked question paper on a bus, leading to FIRs under various IPC sections and the Rajasthan Public Examination Act. The ED registered a separate case for proceeds of crime. The High Court had earlier granted bail to the appellant in the predicate offence, which was considered relevant in the current bail application under the PMLA.Application of Law to Facts: The Court applied the statutory framework of Section 45 of the PMLA by considering the stage of investigation and the nature of the appellant's involvement. It found that the appellant's case did not warrant strict denial of bail at this stage, given the absence of direct incriminating material against him in the money laundering case.Treatment of Competing Arguments: The ED opposed bail, arguing the seriousness of the offence and the need for custodial interrogation. The appellant's counsel relied on the earlier bail granted in the predicate offence and the ongoing nature of the investigation. The Court balanced these arguments by allowing bail with conditions and liberty for the prosecution to seek modification if further incriminating evidence emerges.Conclusions: The Court concluded that bail under Section 45 of the PMLA could be granted in the appellant's favor at this stage, subject to appropriate bail bonds and conditions, without prejudice to the prosecution's right to seek modification upon discovery of further evidence.Issue 2: Interrelation Between Predicate Offence Proceedings and Money Laundering InvestigationRelevant Legal Framework and Precedents: The PMLA investigation is predicated upon the existence of a scheduled offence. The predicate offences here include cheating, forgery, criminal conspiracy, and offences under the Rajasthan Public Examination Act. The procedural and substantive nexus between the predicate offence and the money laundering case is critical for the Court's assessment of bail.Court's Interpretation and Reasoning: The Court recognized that the appellant had already been granted bail in the predicate offence by the High Court, which factored into its decision to relax the rigors of Section 45 in the PMLA case. The Court noted that the ED's case was based on proceeds of crime linked to the predicate offence and that the investigation was ongoing.Key Evidence and Findings: The appellant's arrest in the predicate offences and subsequent transit custody to the ED, along with the supplementary prosecution complaint filed by the ED, were crucial factual elements. The fact that the appellant was tutoring candidates with the leaked paper was central to the predicate offence.Application of Law to Facts: The Court applied the principle that bail in the predicate offence is a relevant consideration but not determinative for bail under the PMLA. It held that the ongoing investigation and absence of direct incriminating evidence in the money laundering case justified a cautious but liberal approach.Treatment of Competing Arguments: The prosecution emphasized the seriousness of the predicate offence and the need to prevent tampering with evidence or influencing witnesses. The defense highlighted the bail already granted and the lack of direct evidence in the money laundering case. The Court struck a balance by allowing bail with conditions and liberty for recall.Conclusions: The Court concluded that the bail granted in the predicate offence supported the appellant's bail application under the PMLA, but the matter remains subject to further investigation and potential revision of bail conditions.3. SIGNIFICANT HOLDINGSThe Court held:'We are satisfied that the rigors of Section 45 of the PMLA, 2002 can be relaxed at this stage and the appellant can be released on bail subject to his furnishing bail bonds to the satisfaction of the Special Judge and subject to such terms and conditions as may be imposed by that Court.''If the ED is able to lay its hands on some more incriminating material against the appellant which prima facie establishes his direct involvement, the prosecution shall be at liberty to seek modification/recall of this order.'Core principles established include the recognition that bail under the PMLA, while stringent, is not absolute and may be relaxed in appropriate cases where the investigation is ongoing and direct involvement is not conclusively established. The Court emphasized the need for a balanced approach that safeguards the rights of the accused without prejudicing the investigation.Final determinations:The appellant is entitled to bail under Section 45 of the PMLA at this stage, subject to bail bonds and conditions imposed by the Special Judge.The prosecution retains the right to seek modification or recall of bail if further incriminating evidence emerges.The bail granted in the predicate offence is a relevant factor supporting the grant of bail in the money laundering case.