2025 (8) TMI 1211 - SCH - Money Laundering

Appeal allowed; bail granted in PMLA and corresponding predicate offences as trials prolonged and accused had lesser roles

NITIN TIBREWAL Versus DIRECTORATE OF ENFORCEMENT

SC allowed the appeal, set aside the HC orders and granted bail to the appellants/petitioners in the PMLA and, where applicable, the predicate offences. ... Seeking grant of bail - Money Laundering - predicate offence - offences punishable under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Some of the co-accused in these matters have already been granted bail. The roles which have been attributed to the appellants/petitioners who are before us, are less serious when compared to that of those who have already been granted bail. This Court has taken note of the fact that the trial is going to be prolonged due to the voluminous documents filed by the Investigating Agencies and the huge number of witnesses named. The appellants/petitioners have been under incarceration for more than one year. For some of them, bail has neither been granted in the predicate offence nor in the PMLA offence and in cases where bail has already been granted in the PMLA offence, they are entitled to bail in the predicate offence as well. The impugned order(s) passed by the High Court will have to be set aside - Appeal allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether accused charged under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA) are entitled to bail where (a) co-accused have been granted bail, (b) attributed roles are less serious, and (c) trial is likely to be prolonged with substantial pre-trial incarceration. 2. Whether the 'rigour' of Section 45 of the PMLA (and related statutory approach to bail in predicate and money-laundering offences) precludes grant of bail in such circumstances or is to be tempered by the court's duty to ensure trial within a reasonable time. 3. What conditions are appropriate and lawful when bail is granted in PMLA offences, including custodial-release conditions, undertakings against repetition, reporting requirements and passport impoundment, and what remedies are available to the prosecution for breach. 4. Whether ongoing investigation by central agencies justifies adjournment of certain petitions/Special Leave Petitions for a limited further period and restraint on immediate disposal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Bail entitlement in PMLA offences where co-accused granted bail, roles less serious and trial delay exists Legal framework: The PMLA criminalizes money-laundering (Sections 3 and 4) and sets out statutory procedure for custody and trial; general principles of bail in criminal jurisprudence (consideration of gravity of offence, role of accused, period of incarceration, likelihood of trial completion) apply unless displaced by specific statutory bar. Precedent treatment: The Court relied on a recent decision emphasizing the court's and prosecution's duty to ensure trial conclusion within a reasonable time and limiting automatic application of statutory 'rigour'. That decision was applied to resist a blanket application of PMLA bail-rigour. Interpretation and reasoning: The Court examined comparative culpability among co-accused (parity principle) and found that where co-accused with more serious roles have been granted bail, similarly placed accused with lesser roles and prolonged pre-trial incarceration warrant bail. The Court took judicial notice of practical delay factors - voluminous documents and large witness lists - making trial completion within a reasonable period unlikely. These mitigating considerations outweigh the prosecutorial contention of seriousness where main accused remain at large, subject to appropriate conditions aimed at preventing repetition or interference. Ratio vs. Obiter: The conclusion that bail can be granted to accused in PMLA offences on the stated factual matrix (lesser role, prolonged incarceration, likelihood of trial delay, parity with co-accused) is ratio and binding as decided in these matters. Observations about the need to temper Section 45 rigour in similar fact situations following the cited precedent are also ratio insofar as they determine bail entitlement here. Conclusion: Bail granted to appellants on PMLA counts subject to conditions to be imposed by the Trial Court; High Court orders denying bail set aside to this extent. Issue 2 - Applicability and limits of statutory 'rigour' (Section 45 approach) in PMLA bail matters Legal framework: Section 45 and the statutory scheme of PMLA reflect legislative intent to treat money-laundering as serious with procedural safeguards; however, constitutional and common-law bail principles and the court's duty to prevent oppressive incarceration remain relevant. Precedent treatment: The Court relied on the prior ruling that placed an obligation on both courts and prosecution to ensure trial within a reasonable time and indicated that mechanical application of statutory rigour is inappropriate where such duty and facts warrant mitigation. Interpretation and reasoning: The Court held that the 'rigour' associated with PMLA bail should not operate as an absolute bar in every case; instead, courts must balance statutory aim with individual circumstances - seriousness, role, period of custody, risk of absconding or tampering, and prospects of concluding trial. Where prolonged delay is shown and other safeguards can mitigate risk, Section 45 rigour does not preclude bail. Ratio vs. Obiter: The ruling that Section 45's strict approach must yield to reasoned balancing in appropriate circumstances is ratio in relation to these appeals; general commentary about future cases is persuasive guidance but not an exhaustive test. Conclusion: Section 45's 'rigour' is not absolute; courts must assess bail applications in PMLA cases contextually, with emphasis on timely trial and proportionality. Issue 3 - Appropriate conditions of bail in PMLA matters and remedy for breaches Legal framework: Bail is discretionary and may be granted subject to conditions necessary to secure attendance, prevent obstruction, and protect public interest; courts commonly impose undertakings, reporting obligations, passport impoundment and other restrictions. Prosecutorial remedy for breach includes cancellation of bail. Precedent treatment: The Court followed established practice of imposing conditional bail to manage risk while protecting liberty; no departure from standard remedial mechanisms (cancellation on breach) was made. Interpretation and reasoning: To reconcile liberty interest with investigative/trial integrity, the Court directed that Trial Courts impose: (a) an undertaking by appellants not to engage, directly or indirectly, in similar offences in future; (b) weekly reporting to the Trial Court; and (c) impoundment of passports. The Court afforded prosecuting agencies liberty to seek cancellation of bail upon breach. These conditions aim to mitigate risks of absconding, tampering, or recurrence while recognizing extended pre-trial custody and parity considerations. Ratio vs. Obiter: The specific conditions ordered in these appeals are part of the operative relief (ratio) for these appellants; the general proposition that such conditions are appropriate in PMLA bail is binding as applied here and persuasive for similar cases. Conclusion: Conditional bail with undertakings, reporting and passport impoundment was directed; prosecuting agencies retain the statutory right to seek cancellation upon violation of conditions. Issue 4 - Adjournment of appeals where investigation remains ongoing Legal framework: Courts may adjourn matters where ongoing investigation necessitates further time, balancing the accused's liberty against public interest in effective investigation and prosecution. Precedent treatment: The Court accepted prosecutorial submissions for limited adjournment in matters where central agencies seek further time, consistent with practice to allow additional investigation when grounded in affidavit/specific reasons. Interpretation and reasoning: Where the CBI indicated further investigation and sought a two-month period, the Court exercised judicial restraint and adjourned specified petitions to permit continued inquiry. This procedural adjournment was segregated from decisions on bail in other consolidated matters. Ratio vs. Obiter: The adjournment order is procedural in nature and not a precedent on merits; it is an operative interlocutory direction (ratio for scheduling) but does not affect substantive bail jurisprudence beyond demonstrating deference to ongoing investigation when justified. Conclusion: Certain petitions were adjourned for further investigation; other appeals involving PMLA offences were heard and bail granted as described.