2025 (11) TMI 441 - HC - Money Laundering

Bail allowed despite prima facie links under s.45(1)(ii) PMLA, due to prolonged custody and speedy trial; subject to s.437(3) CrPC

HC held that prima facie materials indicate the petitioner's involvement in money laundering and receipt of alleged proceeds, so the court was not ... Seeking grant of bail - money laundering - cyber fraud - proceeds of crime - twin conditions of section 45 of PMLA satisfied or not - HELD THAT:- This Court is only required to place its view based on probability on the basis of reasonable materials collected during the investigation. From the perusal of materials collected during investigation, it transpires that this petitioner was found as an associate of Robin Yadav. Petitioner prima facie found involved in commission of money laundering and assisting the accused persons. The analysis of data as collected from the I-Phone of Robin Yadav suggests prima facie that proceed of crime has been credited into the account of the petitioner and his family members, therefore, this Court cannot be said satisfied that there are reasonable ground for believing that petitioner is not guilty of offence and that he is not likely to commit any offence while on bail, the twin conditions as to satisfy in view of section 45(1)(ii) of the PMLA Act, 2002 to grant bail. But, simultaneously, as discussed aforesaid certainly the right qua speedy trial is available to the petitioner having an overriding effect to the rigors of statutory provisions as available under Section 45 of the PMLA Act. As in present case altogether 37 prosecution witnesses, and 59 documents running into 7,801 pages are to be examined during the trial, which is yet to start giving a clear cut projection that trial is not likely to conclude in near future, coupled with the fact as petitioner remains in custody since 21.06.2024 i.e., about one year and four months against maximum sentence of 7 years, accordingly, above named petitioner, is directed to be released on bail subject to fulfilment of the condition as laid down under Section 437(3) Cr.P.C/Section 480(3) of the Bhartiya Nagarik Suraksha Sanhita. Bail application allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether the statutory twin conditions in Section 45(1)(ii) of the Prevention of Money-Laundering Act (PMLA) - (a) reasonable grounds for believing the accused is not guilty and (b) not likely to commit an offence while on bail - are satisfied to permit grant of bail. 2. Whether the absence or pendency of trial in the scheduled offence (predicate offence) affects the proof of 'proceeds of crime' and the course of PMLA proceedings, and how that interplay bears on bail under the PMLA. 3. The relevance of (a) the quantum and nature of material collected during investigation (statements, digital data, seizure, bank credits), (b) number of witnesses and length of documentary evidence, and (c) period of pre-trial custody, in adjudicating a bail application under PMLA, including whether the rigours of Section 45 can be relaxed in light of the right to speedy trial. 4. Whether the material on record affords only prima facie satisfaction of involvement in money-laundering or demonstrative proof negating entitlement to bail, and the appropriate standard of judicial appraisal at the interim stage. 5. If bail is to be granted, what conditions and safeguards are necessary to reconcile statutory prohibitions with liberty interests. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Application of Section 45(1)(ii) PMLA to grant bail Legal framework: Section 45(1) renders PMLA offences cognizable and non-bailable except where (i) the Public Prosecutor is given opportunity to oppose and (ii) where opposed, the court is satisfied on reasonable grounds that accused is not guilty and is not likely to commit an offence while on bail. Precedent treatment: The Court relied upon recent authoritative pronouncements of the apex court interpreting Section 45 and the parameters for considering bail under PMLA, citing decisions that both emphasize the conjunctive twin conditions and recognize limited circumstances where the rigours may be relaxed. Interpretation and reasoning: The Court examined investigative materials (digital analysis, bank credits, seizure of cash, statements) and concluded that they prima facie indicate involvement of the accused as an associate in an alleged call-centre based fraud and receipt/credit of proceeds into accounts of the accused and family. On the twin conditions, the Court found it could not be satisfied prima facie that there are reasonable grounds to believe the accused is not guilty nor that he is unlikely to reoffend. Thus, strictly applying Section 45(1)(ii) would preclude bail. Ratio vs. Obiter: The statement that Section 45(1)(ii) requires court satisfaction on reasonable grounds is ratio. The observation that, on the present material, the court is not satisfied is ratio as applied to these facts. Conclusions: Section 45(1)(ii) is not satisfied on the material; ordinarily bail would be barred. However, this factual non-satisfaction does not end the inquiry because other considerations (see Issue 3) may justify conditional relaxation of Section 45 in exceptional circumstances. Issue 2 - Need for scheduled/predicate offence proof and effect on PMLA trial and bail Legal framework: PMLA defines 'proceeds of crime' in relation to property derived from scheduled offences; the existence of scheduled offence is central to establishing proceeds of crime at trial. Precedent treatment: The Court referred to precedent holding that proof of scheduled offences is a sine qua non for ultimately deciding proceeds of crime and noted authorities recognizing that PMLA trial's fate is linked to the predicate trial; where scheduled offence trial cannot conclude soon, PMLA proceedings are unlikely to reach finality in near future. Interpretation and reasoning: Given the multiplicity of witnesses and voluminous documents, the Court found no realistic prospect of both trials concluding in the near term. This temporal reality bears on custody length and the accused's right to speedy trial, weakening the argument for continued detention when trial delay is attributable to investigative and prosecutorial processes. Ratio vs. Obiter: The proposition that proceeds of crime can be finally determined only after establishment of the scheduled offence is ratio as applied generally. The observation that concurrency of lengthy proceedings may justify bail despite Section 45 is applied ratio in this factual context (subject to judicial safeguards). Conclusions: The pendency and anticipated duration of scheduled offence proceedings materially affect the fairness of continued detention; inability to conclude trial in reasonable time is a relevant factor that can weigh in favor of conditional bail even in PMLA cases. Issue 3 - Weight of investigative material, custody duration, and the right to speedy trial as grounds for relaxation of Section 45 Legal framework: Bail decisions under PMLA require assessment of materials on record and consideration of statutory limits, but courts may balance these against fundamental rights (including speedy trial) and controlling precedents that permit conditional relaxation of Section 45 in exceptional cases. Precedent treatment: The Court relied on recent decisions of the apex court where bail was granted in PMLA matters when prolonged custody, expected protracted trial, and other factors made continued detention disproportionate, while imposing conditions to address risks of flight or reoffending. Interpretation and reasoning: On facts - seizure of cash, bank credits into accounts of accused/family, digital links from an associate's device, admission of managerial role in a call centre (recorded in investigation) - the Court found prima facie involvement. Yet, the accused had been in custody about one year and four months against a maximum sentence of seven years, and the prosecution proposed 37 witnesses and 59 documents totaling thousands of pages, indicating protracted trial. Balancing the lack of satisfaction under Section 45 against the constitutional right to speedy trial and the real prospect of long detention before trial completion, the Court concluded the rigours of Section 45 could be suitably relaxed with conditions to secure appearance and prevent reoffending. Ratio vs. Obiter: The balancing approach - that prolonged detention and inability to conclude trial can justify conditional bail in PMLA cases despite prima facie material - is applied as ratio in the circumstances of this decision and aligns with precedents cited. Observations on facts specific to this case (e.g., sums seized and specific bank entries) are case-specific ratio statements supporting the order. Conclusions: Prolonged custody and the real likelihood of extended trial duration are compelling grounds for conditional bail even where Section 45(1)(ii) is not strictly satisfied, provided effective safeguards are imposed. Issue 4 - Standard of judicial appraisal of 'prima facie' involvement at bail stage in PMLA matters Legal framework: At the bail stage courts are to form a view based on probability from reasonable materials collected during investigation; detailed trial adjudication is not required. The standard is not proof beyond reasonable doubt but an assessment of reasonable grounds and probabilities. Precedent treatment: The Court followed authorities emphasizing the limited role of a bail court to examine whether materials disclose a prima facie case or reasonable grounds, and that admissibility and weight of evidence are matters for trial. Interpretation and reasoning: The Court applied this limited standard: investigative material showed links (digital data, banking credits, seizure, admissions) sufficient to establish prima facie involvement, but that prima facie finding did not preclude bail when balanced against other relevant considerations (see Issue 3). Ratio vs. Obiter: The articulation of the prima facie standard and its application here is ratio; observations about evidentiary sufficiency for trial are incidental but necessary to the decision. Conclusions: The prima facie material supports prosecution case to warrant continuation of proceedings, but does not automatically preclude conditional bail where other factors (lengthy custody, trial delay) outweigh statutory strictures. Issue 5 - Conditions and safeguards attached to bail under PMLA when Section 45 is relaxed Legal framework: When bail is granted notwithstanding Section 45 constraints, courts must impose conditions consistent with statutory protections and the Code to ensure attendance, prevent tampering or reoffending, and protect investigation. Precedent treatment: The Court applied the approach in recent decisions granting bail on furnishing bond/sureties and subject to conditions under criminal procedure statutes, including provisions equivalent to Section 437(3) Cr.P.C. / Section 480(3) of the Bhartiya Nagarik Suraksha Sanhita. Interpretation and reasoning: To reconcile liberty with investigatory and public interest, the Court directed bail on specified monetary bond and two sureties, and compliance with conditions under applicable procedural provisions to monitor and control the accused while trial proceeds. Ratio vs. Obiter: The imposition of bail conditions as a means to balance interests is ratio in this context; the particular amounts and procedural route are factual implementations of that principle. Conclusions: Bail was ordered on furnishing bond of Rs.10,000 with two sureties of like amount, to the satisfaction of the trial court, subject to statutory conditions to secure presence and prevent interference with the investigation and trial.