2026 (1) TMI 392 - HC - Money Laundering

Prolonged custody in money-laundering case: s.45 PMLA 'twin conditions' treated as met, bail granted with strict terms

The dominant issue was whether the statutory embargo under s.45 PMLA (twin conditions) barred bail despite prolonged custody and lack of trial progress. ... Money Laundering - Bail Application - Applicant submitted that, his fundamental right of speedy trial and he is in custody since 30th August, 2023, i.e. more than two years, without there being any progress in the ECIR, as well as, in the trial of the predicate offence, which is pending adjudication before the CBI Court, Shimla. - Generation, acquisition and concealment of proceeds of crime and also intentionally and dishonestly verified the claims of the PMS Scheme - formation of shell entities - existence of twin conditions as per Section 45 of the PMLA or not HELD THAT:- The Hon’ble Supreme Court in Manish Sisodia versus Directorate of Enforcement, [2023 (11) TMI 63 - SUPREME COURT] has elaborately discussed the provisions of PMLA, viz-a-viz, offences, which are punishable for death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, murder, cases of rape, dacoity, kidnapping for ransom, mass violence, etc. Whether the twin conditions, as per Section 45 of the PMLA, are existing in favour of the applicant, on account of his long custody? - HELD THAT:- A three Judge Bench of the Hon’ble Supreme Court, in Union of India versus K.A. Najeeb [2021 (2) TMI 1212 - SUPREME COURT], has elaborately discussed the statutory restrictions, provided under Section 43-D(5) of the UAPA - In view of the ratio of law, laid down by the Hon’ble Supreme Court, in the aforesaid dictum, this Court is of the view that the twin conditions, as enumerated in Section 45 of the PMLA can be said to be existing in favour of the applicant, on account of his long incarceration, by holding that, at this stage, it can be said that he is not guilty of such offence and while, on bail, he will not commit any offence. Moreover, for the second condition, that he will not commit any offence, reasonable conditions can be imposed on him. In this case, the earlier bail application of the applicant was dismissed by this Court, on the basis of the non-fulfilment of the conditions, as enumerated under Section 45 of the PMLA, however, considering the fact that there is no possibility regarding the commencement and conclusion of the trial, against the applicant, in near future and considering the fact that the trial, arising out of the RC, registered by CBI, has also not yet been commenced, this Court is of the view that the embargo, as created by Section 45 of the PMLA, does not come in the way of releasing the applicant, on bail, as the applicant is in custody for about two years and four months, since, the Hon’ble Supreme Court in Athar Parwez versus Union of India, [2024 (12) TMI 1682 - SUPREME COURT], has held that the constitutional jurisdiction, viz-a-viz, the restrictions, under the statute need to be harmonized. Moreover, at the time of deciding the bail application, the Court should not dwell deep into the merits and de-merits of a case, to ascertain the guilt/innocence of the accused (applicant), as, it is the sole prerogative of the learned trial Court to decide, on the basis of the evidence, so adduced before it, during the trial. The decision of this Court, affecting the merits of the case would cause prejudice to the case of the prosecution, as well as, to the case of the accused (applicant). However, merely because the applicant falls within the definition of ‘government servant’, responsible for the verification of the claims submitted for scholarship, is too short to decline the relief to him, as, the bail is being granted, mainly, on the ground of undue delay, in the conclusion of trial, as, his application for bail, on merit, has already been rejected by this Court. From the pace of the trial, it cannot be concluded, at this stage, that there are chances of commencement and conclusion of the trial, against the applicant, in near future - Moreover, the applicant is permanent resident of District Shimla and in view of the apprehensions expressed by the ED, for securing his presence, during the trial, stringent conditions can be imposed. Even otherwise, the applicant has not misused the liberty, which was granted to him, by way of interim bail, on various occasions. This Court is of the view that the bail application is liable to be allowed, subject to fulfilment of conditions imposed - bail application allowed. Issues: (i) Whether the applicant, accused under Sections 3 and 4 of the PMLA, is entitled to be released on bail during trial on account of prolonged custody and delay in trial, and whether the twin conditions in Section 45 of the PMLA are satisfied so as to permit grant of bail.Analysis: The matter involves statutory bail restrictions under Section 45 of the PMLA which set a higher threshold for grant of bail. The legal framework includes the PMLA provisions concerning offence and punishment, ancillary CrPC provisions concerning supply of documents and custody, and settled principles that constitutional courts may harmonise statutory restrictions with fundamental rights where prolonged pre-trial incarceration renders trial completion unlikely. The facts disclose that charges in the predicate and PMLA proceedings have not been framed or trials not commenced, the prosecution relies on voluminous documentary and digital records with numerous witnesses and pages, and the applicant has been in custody for an extended period. Prior interim reliefs and the absence of material attributing delay to the applicant are relevant. Precedent establishes that where trial is unlikely to conclude within a reasonable time and incarceration has exceeded a substantial part of prescribed sentence or is otherwise prolonged, constitutional considerations (notably the right to speedy trial under Article 21) may justify relaxing statutory embargoes and granting bail subject to appropriate conditions. The assessment at bail stage must avoid deep delving into merits and may impose stringent conditions to secure attendance and prevent tampering or influencing witnesses.Conclusion: The twin conditions under Section 45 of the PMLA are satisfied in favour of the applicant on account of prolonged custody and the unlikelihood of trial concluding in a reasonable time; bail is therefore allowed subject to conditions, including personal bond of Rs. 2,00,000 with two sureties of like amount and specified restrictions and monthly affidavits.