2026 (2) TMI 1213 - HC - Money Laundering

PMLA regular bail: twin-condition prima facie test applied and bail granted subject to protective conditions.

Entitlement to regular bail under Section 45 PMLA was examined by applying the statutory twin conditions: reasonable grounds to believe the accused is not ... Twin conditions for bail u/s 45 - definition of 'proceeds of crime' - presumption u/s 24(b) - predicate offence requirement for PMLA proceedings - prima facie assessment on broad probabilities at bail stage - disclosure u/s 66 - HELD THAT:- It is evident that any property being derived or obtained directly or indirectly as a result of criminal activity which is a scheduled offence, would be termed as proceeds of crime, under PMLA. In other words, for any property to be termed as proceeds of crime, it must be obtained from the commission of a scheduled offence. In Pavana Dibbur [2023 (12) TMI 49 - SUPREME COURT] it was explained that on plain reading of Section 3, an offence under this Section can be committed after a scheduled offence is committed. In case of a person who is unconnected with the scheduled offence, knowingly assists the concealment of proceeds of crime or knowingly assists the use of proceeds of crime, would be guilty under Section 3 of PMLA. It was thus, concluded that it is not necessary that a person against whom the offence under Section 3 of PMLA is alleged, must have been shown as an accused in the scheduled offence. “The condition precedent for attracting offence Section 3 PMLA are that there must be a scheduled offence and that there must be proceeds of crime in relation to the scheduled offence as defined in Clause (u) of sub-section (1) of Section 3 of the PMLA.” In the present case, the Prosecution has relied upon a figure of approximately Rs. 311 crores as the alleged proceeds of crime routed through M/s Ranjan Moneycorp Pvt. Ltd. and M/s KDS Forex Pvt. Ltd. However, the material placed on record prima facie indicates that this figure represents the cumulative gross transactions in certain Accounts over a period of time and not the specific amount directly traceable to the scheduled offence in question. This figure is also a culmination of more than 200 Complaints with allegations of cyber fraud through similar as well as different modus operandi. The Complaint in the predicate offence pertains to an alleged cheating of Rs. 1.16 lakhs, which stands compromised. Even assuming that similar Complaints were clubbed, the ED is required to prima facie demonstrate the nexus between the alleged proceeds of crime and the Applicant. As already noted, the Applicant is not named in the FIRs. Moreover, the figure of money arrived at, is by adding the Accounts of all other accused, when there is prima facie no case against the Applicant, showing his complicity, except Statements of co-accused persons. There is nothing to show that he is likely to commit the offence in future. Thus, it is significant to note that ED has already supplied all the relevant material to the predicate Agency, in compliance with Section 66(2) of PMLA. However, despite sharing and communicating all the information with the agency, no coercive steps have been taken against the Applicant by the Hyderabad Police. Infact, at the cost of reiterating, the FIR in the predicate offence, has been quashed on the ground of compromise between the parties. The Respondent/ED had filed an Application placing on record the subsequent developments arising from Order dated 16.02.2026, passed by Ld. Special Judge (PC Act) (CBI), taking on record the Application for bringing additional facts relating to 24 New FIRs and the addendum incorporating the said FIRs. It is well settled that at the stage of consideration of bail, the Court is not required to conduct a mini-trial or render findings on the evidence. The inquiry is confined to a prima facie assessment on broad probabilities. The addition of 24 new FIRs, none of which name the Applicant, does not strengthen the ED’s case against grant of Bail. The conclusion arrived at by this Court in the preceding paragraphs, therefore, remains unaffected. It is made clear that any observations made hereinabove, are not an expression on the merits of the case. It is further clarified that these observations shall not, in any manner, influence the trial before the learned Trial Court, as they have been made solely for the purpose of examining the Bail Application of the Applicant. Accordingly, the present Bail Application is allowed. Issues: (i) Whether the applicant, charged under Section 3 read with Section 4 of the Prevention of Money Laundering Act, 2002, is entitled to regular bail under Section 45 of PMLA.Analysis: The issue was examined by assessing whether the mandatory twin conditions under Section 45 of PMLA - (i) reasonable grounds to believe that the accused is not guilty and (ii) that the accused is not likely to commit an offence while on bail - are satisfied on broad prima facie probabilities. Relevant legal framework considered includes the definition of 'proceeds of crime' and the statutory presumptions under Section 24(b) of PMLA, the role of a predicate/scheduled offence for PMLA proceedings, the effect of sharing information under Section 66(2) PMLA, and the safeguards of Section 19 PMLA regarding arrest and remand. Material facts weighed included that the applicant was not named in the FIR or chargesheet in the primary predicate police case, the predicate FIR was quashed by the High Court of Telangana on compromise, the primary witnesses initially did not name the applicant and gave materially varying statements later, absence of direct material linking the applicant to receipt or possession of proceeds of crime, the documentary nature of material already with the prosecution, and that subsequent addendum FIRs did not name the applicant. The Court applied the standard that at the bail stage it must make a prima facie assessment on broad probabilities and not conduct a mini trial, while also addressing the prosecution's contentions on interlinked transactions, alleged beneficial ownership of certain companies, and prior adverse administrative actions including an earlier FEO designation.Conclusion: Bail under Section 45 PMLA is granted to the applicant. The applicant is to be released on regular bail subject to specified conditions (execution of personal bond with surety, surrender of passport or permission before leaving the country, furnishing contact and address details, compliance with court appearances, and non-interference with prosecution witnesses or evidence).