2026 (2) TMI 131 - HC - Money Laundering

Regular bail under PMLA where proceeds are prima facie unproven and tripletest risks are not established, bail granted with conditions

Under the PMLA framework, the court finds that co-accused statements alone, being contradictory and uncorroborated, do not prima facie establish that the ... Regular bail - Right to speedy trial under Article 21 - twin conditions u/s 45 of the PMLA - proceeds of crime - statutory presumption u/s 24 - Offences under Sections 3 and 4 PMLA - Triple test (flight risk, tampering with evidence, influencing witnesses) - Documentary evidence in custody of prosecution - HELD THAT:- In the present case, the prosecution has primarily relied upon statements of co-accused recorded under Section 50 of the PMLA to attribute the role of a “kingpin” to the applicant. At this stage, the Court prima facie finds merit in the contention of the applicant that such statements, which are contradictory inter se and largely uncorroborated by independent documentary or electronic evidence directly linking the applicant to the alleged foreign remittances, cannot by themselves conclusively establish the existence of “proceeds of crime” in his hands. Significantly, no forged Form 15CA/CB, bank account operated by the applicant for outward remittance, or direct flow of the alleged laundered funds into his accounts has been demonstrated prima facie. The material placed on record further indicates that the transactions involving the applicant’s wife and mother have been explained, at least prima facie, as loans and commission income supported by bank statements, income tax returns, and TDS certificates. At the stage of bail, these explanations cannot be summarily rejected as illusory proceeds of crime without a clear and demonstrable nexus with the scheduled offence. In the absence of such foundational facts, the rigor of Section 45 stands diluted, as held by the Supreme Court in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], when the existence of proceeds of crime itself is seriously in doubt. As regards the triple test, the applicant has deep roots in society, has no criminal antecedents, and there is no material on record to suggest any attempt on his part to influence witnesses or tamper with evidence after his arrest, the apprehension of flight risk or reoffending is purely speculative, particularly when stringent conditions can be imposed to secure his presence during trial. The gravity of the offence, though undeniable, cannot by itself be the sole ground to deny bail, especially when the investigation is complete and the trial is yet to commence. Notably, the prosecution has cited as many as 50 witnesses and 158 RUDs running into over 11,000 pages, and the likelihood of the trial concluding in the near future is remote, in this case continued detention of the applicant is not warranted. Thus, continued incarceration of the applicant with no possibility of trial being completed in near future, restrictions provided under Section 45 of PMLA would not come in the way of ensuring the right of personal liberty and speedy trial under Article 21 of the Constitution. Hence, the continued detention of the applicant is not warranted, and his liberty can be adequately safeguarded by imposing appropriate conditions. Accordingly, the present application is allowed and the applicant is admitted to regular bail, upon furnishing a personal bond alongwith a surety of the like amount to the satisfaction of the Trial Court/Duty MM and subject to the conditions. Thus, the petition alongwith any pending application, if any, stand disposed of. Issues: Whether the applicant is entitled to regular bail in proceedings under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002, having regard to the twin conditions prescribed by Section 45 PMLA and the right to personal liberty including speedy trial under Article 21 of the Constitution.Analysis: The statutory twin conditions require reasonable grounds for believing the applicant guilty and that he is likely to commit an offence while on bail; these must be applied to the available material. Statements of co-accused recorded under Section 50 PMLA are prima facie but shown to be contradictory and largely uncorroborated by independent documentary or electronic evidence directly linking the applicant to alleged outward remittances or demonstrating proceeds of crime in his hands as defined under Section 2(1)(u) PMLA. Explanations for transactions involving the applicant's wife and mother are supported prima facie by bank records, income-tax returns and TDS certificates. Investigation qua the applicant is concluded (third supplementary prosecution complaint filed) and custodial interrogation ordered by the Supreme Court has been completed. Prolonged pre-trial detention, when trial is unlikely to commence soon and documentary evidence is already in possession of investigating agency, engages the right to speedy trial under Article 21 and militates against continued incarceration. The statutory presumption under Section 24 and the gravity of the offence were considered against the totality of evidence, the absence of direct tracing of laundered funds to the applicant, lack of material demonstrating present risk of tampering or flight, and ability to secure attendance by imposing stringent conditions.Conclusion: The applicant is entitled to regular bail. The application is allowed and the applicant is admitted to bail on furnishing a personal bond of Rs. 1,00,000 and a like surety, subject to conditions including regular appearance, surrender of passport, prohibition on contacting prosecution witnesses, providing residential address and operational mobile number to the Investigating Officer, and intimation of any change in address or mobile number.