Proceeds of crime require a proven link to a completed scheduled offence before money-laundering bail restrictions apply.

Money-laundering liability requires funds to be prima facie derived or obtained from an accomplished scheduled offence; mere receipt, dominion or control over funds does not establish that foundational requirement. The notes distinguish remuneration received before an association was declared unlawful or a predicate FIR was registered from proceeds of crime, particularly where no material links the sums to an identified scheduled offence. They also state that post-arrest statements under Section 50 may raise self-incrimination and confessional-statement concerns. For regular bail, the discussion identifies parity with bailed co-accused, prolonged pre-trial custody, delayed trial, and satisfaction of the triple test as relevant considerations despite statutory restrictions.

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Issues: (i) Whether the payments credited to the applicants for physical-education training prima facie constituted proceeds of crime so as to attract the offence of money-laundering and the bail rigours under the Prevention of Money Laundering Act, 2002; (ii) Whether post-arrest statements recorded under Section 50 could support the prosecution case; (iii) Whether parity, prolonged incarceration, delayed trial and the triple test justified regular bail.

Issue (i): Whether the payments credited to the applicants for physical-education training prima facie constituted proceeds of crime so as to attract the offence of money-laundering and the bail rigours under the Prevention of Money Laundering Act, 2002.

Analysis: Property can qualify as proceeds of crime only where it is derived or obtained as a result of an already accomplished scheduled offence. The payments relied upon were stated to be remuneration for training services, substantially received before the association was declared unlawful and before the predicate FIR. Neither applicant was charge-sheeted in the predicate offence, and no material prima facie established that the credited sums were derived from an identified and accomplished scheduled offence. Personal receipt of money may raise a question of dominion or control only after the money is first shown to be proceeds of crime; it cannot itself establish that foundational requirement. The amounts attributed to the applicants were also below the monetary threshold referred to in the proviso to Section 45.

Conclusion: The alleged payments were not prima facie shown to be proceeds of crime, and the applicants satisfied the applicable bail threshold under Section 45, in favour of the applicants.

Issue (ii): Whether post-arrest statements recorded under Section 50 could support the prosecution case.

Analysis: Statements recorded by the investigating agency after the applicants' formal arrest were prima facie affected by the protection against compelled self-incrimination and the bar relating to confessional statements. The remaining pre-arrest statements describing payments as honorarium established only receipt of money, not that the money was derived from a scheduled offence.

Conclusion: The post-arrest statements could not prima facie be relied upon against the applicants, and the pre-arrest statements did not establish proceeds of crime, in favour of the applicants.

Issue (iii): Whether parity, prolonged incarceration, delayed trial and the triple test justified regular bail.

Analysis: The applicants had remained in custody for over two years and three months; charges were yet to be framed against them, and the extensive prosecution material and large number of witnesses made an early trial unlikely. Continued pre-trial detention in those circumstances would offend personal liberty. Their role was not prima facie graver than that of co-accused already granted bail. They were not shown to be flight risks, the principal evidence was seized documentary and digital material, and no substantial risk of witness influence was established.

Conclusion: The applicants were entitled to regular bail on grounds of parity, prolonged incarceration, likely delay in trial and satisfaction of the triple test, in favour of the applicants.

Final Conclusion: The applicants obtained release on regular bail, while the merits of the pending trial remain open for independent determination.

Ratio Decidendi: For a money-laundering prosecution, dominion or control over funds is legally relevant only after the funds are prima facie shown to be derived from an accomplished scheduled offence; prolonged pre-trial incarceration and an unlikely early trial can independently justify bail despite statutory restrictions.

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