2026 (2) TMI 185 - HC - Money Laundering

Anticipatory bail under PMLA in complex moneylaundering with layered mule accounts denied to protect custodial interrogation and evidence recovery.

Anticipatory bail applications under PMLA were assessed against the twin test requiring reasonable grounds to believe the accused/applicants are not ... Anticipatory bail u/s 45 PMLA - twin test of Section 45 PMLA (reasonable grounds for believing not guilty and no likelihood of committing offence while on bail) - custodial interrogation and its necessity in complex money-laundering investigations - presumption u/s 24 PMLA regarding proceeds of crime - economic/socio-economic offences constitute a distinct class for bail considerations - balance between Article 21 personal liberty and investigatory needs - layered money-laundering, mule accounts and transnational syndicate - risk of destruction of evidence, tampering and bribing of officials - HELD THAT:- It is not a case of mere dealing in cryptocurrency, which per se is not a crime in this country and liability of the accused persons is confined to paying tax on the crypto transactions. The present cases exhibit a vast intricate mesh of movement of money, fraudulently extracted out of pocket of gullible investors, who appear to be primarily belonging to middle class. It is hard earned money of the victims, whose only fault was that they wanted their money to multiply through investments, and this basic desire (or call it human weakness) of theirs was exploited by some fraudsters, alluring them to invest in various schemes, which were actually fraudulent. It is not a simple case of the accused/applicants investing in cryptocurrency. The DoE has analysed more than 900 HDFC bank accounts to find that same mobile phone numbers were linked to multiple bank accounts which were used to transact on PYYPL platform. In a number of cases, same email IDs were used for multiple bank accounts transacting on PYYPL platform. Almost 68 bank accounts linked to 30 mobile phone numbers transacted in total amount of Rs. 100 crores uploaded to the PYYPL platform. About 10 mobile phone numbers were found connected with 32 bank accounts, which collectively uploaded more than Rs. 78 crores to the PYYPL platform and 7 of those 10 mobile phone numbers belong to the accused/applicants and were found to be linked with HDFC bank and IndusInd bank, through which the accused/ applicants were allegedly operating to launder proceeds of crime. The accused/applicants were allegedly found to have transacted more than Rs. 65 crores on PYYPL platform. Further details have been elaborated in the Prosecution Complaint and for present purposes, the above brief extract has been culled out only to reflect at the expanse of the investigation being carried out presently. As observed by the Supreme Court in the case of P. Chidambaram vs Directorate of Enforcement [2019 (9) TMI 286 - SUPREME COURT], at times, grant of anticipatory bail may hamper investigation, of which arrest is a significant part which intends to secure several purposes including information leading to discovery of relevant information. The court must strike a balance between right of an individual to personal freedom and right of the investigating agency to interrogate the accused as regards the material collected and to obtain more information which could lead to recovery of further information. Therefore, Find substance in the argument advanced on behalf of DoE that it would not be possible for the investigators to effectively interrogate the accused/applicants if they have pre-arrest protection in their pocket. Of course, liberty of an individual is sacrosanct, but the court cannot brush aside the requirement to carry out meaningful interrogation and investigation in the larger interest of economy of the country. Merely because at initial stages when the accused/applicants were not under any judicial protection against arrest the DoE opted not to arrest them, does not mean that the need now expressed by DoE to conduct custodial interrogation is unjustified. As described above, now circumstances have changed, in the sense that fresh complaints have been pouring in; that the accused/applicants allegedly assaulted the investigating officers; that the accused/applicants have been allegedly found bribing the local police to settle cyber fraud complaints; that the accused/applicants have allegedly destroyed the electronic evidence; and that role of the bank officials also has to be unearthed. In the backdrop of these changed circumstances, the DoE cannot be deprived of an opportunity to conduct custodial interrogation. Merely because the investigator does not want to arrest the accused, it cannot be said that the accused is entitled to anticipatory bail. Whether or not to arrest, is in the exclusive domain of the investigator. When it comes to deciding the grant or denial of anticipatory bail, the settled parameters have to operate, which in cases under PMLA would include the twin conditions. There is no material on the basis whereof this court can satisfy itself that there are reasonable grounds for believing that the accused/applicants are not guilty of the offences they are charged with and/or they are not likely to commit any offence while on bail. In fact, even the other regular parameters applicable to the bail applications in conventional crimes would not approve of grant of anticipatory bail to the accused/applicants. Therefore, both these anticipatory bail applications are dismissed. Issues: Whether anticipatory bail under Section 45 of the Prevention of Money-Laundering Act, 2002 can be granted to the accused/applicants in view of the ongoing investigation, the twin test under Section 45 PMLA, and the prosecuting agency's need for custodial interrogation.Analysis: The Court examined the statutory twin test in Section 45 PMLA which requires that when the Public Prosecutor opposes bail the court must be satisfied on reasonable grounds that the accused is not guilty of money laundering and is not likely to commit any offence while on bail. The Court considered the scope of inquiry at bail stage (assessment on probabilities and prima facie material), the distinct treatment of economic/socio-economic offences, and the relevance of custodial interrogation in complex, transnational money-laundering schemes. The prosecution material showed an intricate horizontal and vertical layering of transactions, continued receipt of fresh complaints, alleged destruction of electronic evidence, assaults on investigating officers, bribing of local police, and active involvement of the accused in creating and operating numerous mule accounts and entities used to upload funds to an overseas payment platform. Given these circumstances and the ongoing need to unearth further layers and involvement (including bank officials), the Court found that investigators' requirement for custodial interrogation was reasonable and that the twin conditions of Section 45 PMLA were not satisfied.Conclusion: Anticipatory bail is refused; the applications are dismissed and the decision is in favour of the Respondent.