2026 (1) TMI 957 - HC - Money Laundering

Money-laundering prosecution for continuing proceeds not barred by Article 20(2); twin-condition s.45 bail denied

Whether Article 20(2) bars the present prosecution: Court reasoned double jeopardy attaches only after conclusion of a prior trial resulting in conviction ... Seeking grant of bail - Money Laundering - proceeds of crime - prosecution is hit by the bar of Article 20(2) of the Constitution or not - protection of double jeopardy (nemo debet bis vexari pro una et eadem causa) - applicability of twin conditions u/s 45 of PMLA - HELD THAT:- The primary thrust of the petitioners' challenge—that the present prosecution is hit by the bar of Article 20(2)—is legally fragile. The protection against Double Jeopardy (nemo debet bis vexari pro una et eadem causa) is triggered only upon the conclusion of a prior trial resulting in conviction or acquittal. Since the trial of the prior ECIR is still pending, the threshold for a constitutional bar remains unmet. Furthermore, it is required to distinguish between a static criminal act and a “continuing offense.” As elucidated in Vijay Madanlal Choudhary v. Union of India [2022 (7) TMI 1316 - SUPREME COURT (LB)], the offense of money laundering under Section 3 of the PMLA is not a frozen event but a persistent process. It continues as long as the accused is involved in any activity connected with the “Proceeds of Crime.” If the petitioners utilized their previous liberty to generate fresh illicit funds post-2016, such acts constitute a distinct cause of action. Article 20(2) is a shield for the innocent; it is not a license for prospective criminality nor does it provide an umbrella of immunity for subsequent illegalities committed during the pendency of a prior investigation. The “Twin Conditions” under Section 45 of the PMLA are not mere formal hurdles but a statutory command. As held in Gautam Kundu v. Enforcement Directorate [2015 (12) TMI 1133 - SUPREME COURT], these conditions override the general provisions of the Cr.P.C. In the face of an unaccounted deficit of nearly ₹1,906 Crore and evidence of fresh layering post-2017, we are unable to record a satisfaction that there are “reasonable grounds” to believe the accused are not guilty. It is a settled principle that economic offenses involving public money constitute a “class apart.” As held in Y.S. Jagan Mohan Reddy, that “The economic offences having deep-rooted conspiracies and involving loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole, “the economic such offenses need to be viewed seriously as they affect the economy of the country as a whole. In summation, the liberty of an individual cannot be viewed in isolation from the collective interests of thousands of defrauded investors. The petitioners' failure to discharge the “Twin Conditions,” coupled with their conduct as Proclaimed Offenders, creates a formidable legal barrier to their release. There are no merit in the petition. This is not a fit case for the grant of regular bail - the prayer for bail is rejected. Issues: (i) Whether the prosecution is barred by Article 20(2) of the Constitution as constituting double jeopardy; (ii) Whether regular bail should be granted to the petitioners under Section 439 of the Cr.P.C. (now Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023) in view of the statutory 'Twin Conditions' of Section 45 of the PMLA and the surrounding facts.Issue (i): Whether the prosecution is barred by Article 20(2) of the Constitution as constituting double jeopardy.Analysis: The protection under Article 20(2) applies only after conclusion of a prior trial resulting in conviction or acquittal. The offence of money laundering is capable of being a continuing offence; fresh acts postdating a prior investigation can give rise to distinct criminal liability. The existence of a pending prior ECIR does not ipso facto trigger the constitutional bar where fresh proceeds and layering are alleged.Conclusion: Article 20(2) does not bar the present prosecution.Issue (ii): Whether regular bail should be granted to the petitioners under the relevant provisions, having regard to the 'Twin Conditions' in Section 45 of the PMLA, the magnitude of the alleged offence, and the petitioners' conduct.Analysis: Section 45 imposes mandatory conditions which must be satisfied before bail can be granted in PMLA matters. The record discloses an untraced deficit of substantial magnitude and allegations of fresh layering after 2016. The petitioners were declared Proclaimed Offenders and are found to have evaded process, engaging the Tripod Test considerations of flight risk, tampering with evidence, and influencing witnesses. The court may exercise discretion in favour of elderly or infirm accused under the first proviso to Section 45(1), but such discretion is not automatic and must account for risk to the investigation and protection of public interest. Given the facts and the failure to discharge the statutory conditions, custodial presence was held necessary to protect the integrity of the investigation and trace proceeds.Conclusion: The petition for regular bail is rejected; the statutory 'Twin Conditions' are not satisfied and bail is denied.Final Conclusion: The decision upholds the continuation of prosecution and refuses regular bail, reflecting that allegations of fresh proceeds and the petitioners' conduct outweigh the petitioners' liberty claims under the circumstances of the case.Ratio Decidendi: Where money laundering involves alleged fresh proceeds and continuing acts separate from an earlier pending investigation, Article 20(2) does not bar subsequent prosecution, and the mandatory 'Twin Conditions' of Section 45 of the PMLA must be satisfied before regular bail can be granted; absence of such satisfaction and factors like proclaimed offender status and risks to investigation justify refusal of bail.