TaxTMI 
TaxTMI 
2025 (2) TMI 15
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....274, 275, 276, 420, 468, 471 read with 120B and 34 of the Indian Penal Code, 1860 (hereinafter "IPC"). 2. The brief facts that led to the filing of the instant application are that on 12th March, 2024, FIR No. 59/2024 was registered at Police Station - Crime Branch, Delhi under Sections 274, 275, 276, 420, 468, 471 read with 120B and 34 of the IPC, based on a complaint by SI Gulab Singh. The complaint alleged the involvement of several accused persons in the procurement, manufacturing and sale of spurious anti-cancer medicines. 3. In the said FIR, it has been alleged that the primary accused, namely Viphil Jain and Suraj Shat, in collusion with their several associates, were engaged in the illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta. These counterfeit drugs were allegedly manufactured and distributed in the market to unsuspecting cancer patients. 4. Pursuant to the information received, the police formed six teams to conduct simultaneous raids across Delhi-NCR on 11th March, 2024. During the raid at Flat No. 1101, Block-2, Eleventh Floor, CSP Units, DLF Capital Greens, Moti Nagar, New Delhi, the accused persons were....
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....ty of the applicant tampering with the evidence or influencing the witnesses is very remote. 12. Subsequently, the applicant sought regular bail before the learned Special Judge, which was rejected vide order dated 18th September, 2024. Hence, the present bail application. 13. Mr. Siddharth Aggarwal, learned senior counsel appearing on behalf of the applicant submitted that the applicant has already been granted bail by the Coordinate Bench of this Court in FIR No. 59/2023. While granting bail, the Court observed that the evidence in the case is primarily documentary in nature and is already in police custody, thereby significantly reducing the possibility of tampering with evidence or influencing witnesses. The applicant submits that since the present case under the PMLA arises from the same predicate offence, the reasoning applied in the previous bail order should be extended to the present matter. 14. It is submitted that no spurious medicines, vials or incriminating materials have been recovered from the applicant. His arrest is based solely on the disclosure statements of co-accused persons, which as per the Hon'ble Supreme Court's decision in Prem Prakash v. Enforcem....
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....urious medicines or end users have been identified or recovered. The respondent's case lacks a complete evidentiary chain to establish the petitioner's involvement in the alleged offence. 19. It is submitted that as per the proviso to Section 45(1) of the PMLA, individuals accused of laundering money below Rs. 1 Crore are entitled to bail at the discretion of the Special Court and fall under the exemption from the applicability of the twin conditions prescribed under Section 45 of the PMLA. In the present case, the alleged amount involved falls below the said threshold, thereby making the applicant eligible for the benefit under the statutory provision. 20. It is submitted that the established principle that bail is the rule and jail is an exception, as reiterated by the Hon'ble Supreme Court in multiple judgments including Manish Sisodia v. Enforcement Directorate, 2024 SCC OnLine SC 1920. The applicant has been in custody for a substantial period and continued detention would amount to pre-trial punishment, violating the applicant's fundamental right under Article 21 of the Constitution of India. 21. It is submitted that considering the voluminous nature of documents and....
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....ed the illicit origin of the funds by engaging in a series of financial transactions, including the procurement of empty vials and related paraphernalia through hawala channels, making it difficult for authorities to trace the source of funds. With regard to integration, it is submitted that the applicant reinvested the laundered funds into the conspiracy by providing financial support for procuring sealing and capping machines, thereby furthering the manufacturing and distribution of counterfeit medicines. The applicant's financial involvement clearly indicates his direct role in the perpetuation of the crime. 28. It is submitted that the learned Special Judge has rightly rejected the applicant's bail application after considering the severity of the allegations and the potential risk of evidence tampering and witness intimidation. It is submitted that the trial court correctly concluded that the applicant failed to satisfy the twin conditions under Section 45 of the PMLA, and that his release would compromise the integrity of the ongoing investigation. It is submitted that the learned Special Judge's order is well-founded and consistent with the legislative intent to curb orga....
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....fence. The respondent relies upon on the judgement titled Union of India v. Rattan Malik, (2009) 2 SCC 624, which states that the courts should refrain from conducting a mini trial at the stage of bail and should instead assess whether a prima facie case is made out. 33. In the light of the foregoing submissions, it is prayed that the present bail application may be dismissed. 34. Heard the counsel for the parties at length and perused the material available on record. 35. In light of the submissions made before this Court, it is made out that the grounds contended by the applicant for grant of bail are multi-fold. Firstly, the alleged amount involved falls below Rs. 1 Crore, making the applicant eligible for the benefit of the statutory proviso that allows discretion in granting bail. Secondly, it has been contended that even if it is assumed for the sake of argument that the proviso is not applicable to him, the applicant has satisfied the twin mandatory conditions under Section 45 of the PMLA, i.e., whether there are reasonable grounds to believe that he is not guilty of the offence and whether he is unlikely to commit any offence while on bail. Lastly, the statutory pr....
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....uiry rather than an investigation, are not subject to the restrictions under Article 20 (3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50(4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA. 39. At this stage, it is to be determined whether the applicant is exempted from the rigors of the twin conditions of bail, if not, then whether the applicant has satisfied the twin mandatory conditions under Section 45 of the PMLA. In light of the same, it is imperative to carefully examine the prosecution complaint, statements of the applicant and co-accused persons alongwith the relevant bank statements. 40. Accordingly, this Court has referred to the statement of the co-accused persons, relevant extracts of which are as under: "Statement of Sh. Suraj Shat recorded under Section 50 of the PMLA reads as: iv. He disclosed that he had purchased two Cap Sealing Machine "Vial Cap Sealing Machine" in his name; one for 49 Page 42 of 140 the purpose of re-capping of vials of Keytruda anti-cancer medicines and another for the purpose of re-capping of vials of Opdyta anti-cancer medicine ....
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....ll packs of unsealed anti-cancer medicines to courier boy (whose contact details were already provided by Aditya Krishna) for delivering the same at Blue Dart Courier Centre, Terminal-2, IGI Airport for further supply to various places all over India. He also stated that these small packs of unsealed vials of anti-cancer medicines were further delivered through one Vinod, employee of Blue Dart. For this work, Aditya Krishna used to give him Rs. 500/- per small box (parcel). xi. He received funds in his bank account 016651100004793 from M/s Popular Medicines Specialties on instruction of his employer Viphil Jain. He stated that M/s Popular Medicines Specialty controlled by Aditya Krishna to whom Viphil Jain used to sell unsealed vials of spurious anti-cancer medicines. Sometimes, Viphil Jain used to sell these vials on credit to Aditya Krishna. He further stated that the funds received in his bank accounts from Aditya Krishna is nothing but the sale proceeds of these vials of spurious anti-cancer medicines sold without bill. On instruction of Viphil Jain, he received funds in his bank account and transferred it to the bank account numbers provided to him by Viphil Jain." ....
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....00 from Aditya Krishna and Rs. 5,40,000/- from Sneha Shivaji Kandhare in his bank account against the sale of unsealed vials of anti-cancer medicines without any bill and invoice to Lovee Narula. Further, he disclosed that Lovee Narula used to purchase these unsealed vials of anti-cancer medicines without any bill and invoice in cash from Aditya Krishna, Neeraj Chauhan, Gagan Khurana, Ayonij Jain and himself and used to sell the same to his customers in India as well as abroad. xi. That Viphil Jain received funds to the tune of Rs. 23,00,000/- from M/s Delhi Medicine Hub (Akshay Kumar) in the bank account of his son Sanyam Jain. He used to sell unsealed vials of anti-cancer medicines without any bill and invoice to M/s Delhi Medicine Hub mostly in cash. However, some balance funds were received in his bank account. As such, M/s Kesha Enterprises also paid the balance amount in the bank account of his son Sanyam Jain. xii. He had received funds of Rs. 11.40 lacs from M/s Delhi Medicine Hub (Akshay Kumar) Rs. 95,000/- from M/s Cancer Medicine (Akshay Kumar) in the bank account number 1338104000051484 Rs. 24.46 lacs from Aditya Krishna Rs. 7.55 lacs from M/s Popular ....
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....nes from Viphil Jain, therefore, as per requirement he transferred the aforesaid amount." "The relevant part of the 'Investigation with the Banks' which is a part of Annexure A-2 reads as under: 6.17 On scrutiny of statement of account no-52510901529 in the name of Aditya Krishna maintained with Standard Chartered Bank (RUD-33), it is revealed that Aditya Krishan deposited cash amount Rs. 18,00,000 from 07.12.2023 to 11.12.2023 (i.e. within 5 days and in 4 tranches) details as below: Bank account No. 52510901529 of Aditya Krishna maintained with Standard Chartered Bank TABLE-19 Sr. No. Date Credit as cash 1 07.12.2023 10,00,000/- 2 09.12.2023 2,00,000 3 10.12.2023 4,00,000 4 10.12.2023 2,00,000 Total (A) 18,00,000/- 6.18 Further on scrutiny of account no. 030605010481 in the name of Aditya maintamed ICICI Bank Lmuted (RUD-34), it is revealed that Aditya Krishan deposited cash amount Rs. 25,90,000 from 09.05.2023 to 29.02.2024 details as below: Bank account No. 030605010481 of Aditya Krishna maintained with ICICI Bank Limited TABLE-20 Date Description Credit (Cash) 09-05....
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....4 CAM/54241HRY/CASH DEP-Other 28-02-24/7353, 25000 28-02-2024 CAM/54241HRY/CASH DEP-Other 28-02-24/7355, 26500 28-02-2024 CAM/54241HRY/CASH DEP-Other 28-02-24/7357, 2000 28-02-2024 BY CASH -HYDERABAD - HYDERNAGAR SELF, 7000 29-02-2024 CAM/14291HAR/CASH DEP-Other/29-02-24/971, 59000 Total (B) 25,92,000 6.19 Further on scrutiny of account no. 030601005926 in the name of Aditya Krishna maintained with ICICI Bank Limited (RUD-35) it is revealed that Aditya Krishan deposited cash amount Rs. 7,42,500/- from 10.02.2023 to 22.02.2024 details as below: Bank account No. 030601005926 of Aditya Krishna maintained with ICICI Bank Limited TABLE-21 Date Description Credit (Cash) 10-02-2023 CAM/34361HHR/CASH DEP/10-02-23 9183, 30000 20-03-2023 CAM/62541SRYCASH DEP/20-03-23/3920, 25500 05-05-2023 CAM/02512SRY/CASH DEP-Other 05-05-23/8519, 100000 05-05-2023 CAM/02512SRY/CASH DEP-Other/05-05-23/8521, 76000 05-05-2023 CAM/02512SRY/CASH DEP-Other/05-05-23/8523, 10000 24-05-2023 CAM/02512SRY/CASH DEP-Other/24-05-23/510, 88500 24-05-2023 CAM/02512SRY/CASH DEP-Other....
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....00,000/- 6.22 On scrutiny of account no. 030601005926 in the name of Aditya Kryshna maintained with ICICI Bank Limited, it is revealed that Aditya Krishan further layered the proceeds of crime and transferred Rs. 8,36,000/- from 20.0.5.2023 to 09.03.2024 in 10 tranches to Suraj Shat; details as below: Bank account No. 030601005926 of Aditya Krishna maintained with ICICI Bank Limited TABLE-24 Date Description Debit 20-05-2023 BIL/NEFT/HS92314003133121/NA/SURAJ SHAT/YESB000016,6NEFT OUTWARD 120000 21-11-2023 BIL/NEFT/HS92332523586351/NA/SURAJ SHAT/CBIN028028,7 150000 25-11-2023 BIL/NEFT/HS92332923947036/NA/SURAJ SHAT/CBIN028028,7 60000 07-12-2023 RTGS/ICICR12023120701357987/CBIN0280287/SURAJ SHAT 206000 13-12-2023 UPI/371316288120/UPI/shatsuraj@okici/YesBankLtd./ICI54b66671b8ed4783b2494c5769f154 50000 14-12-2023 UPI/371441539759/UPI/shatsuraj@okaxi/CnetralBank.Of/ICIa479282d1c36433fa01fa32da95of998/ 50000 20-12-2023 UPI/335427327398/UPI/shatsuraj@okaxi/CnetralBank.Of/ICI0c27042d8511484eb99a57ba3219cbd9/ 50000 23-12-2023 UPI/372275903459/UPI/shatsuraj@okaxi/CnetralBank.Of/ICI29f0735ad0bd....
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....ith respect to the issues under consideration. A. First, that the applicant in his statements recorded under Section 50 of the PMLA, admitted to purchasing empty vials of the anti-cancer medicines from co-accused and relabeling them for sale, thereby actively participating in the alleged criminal activity. B. Second, that the applicant's financial transactions demonstrate direct involvement in the sale and distribution of spurious medicines, with multiple transfers to the accounts of co-accused namely Viphil Jain, Deepali Jain and Suraj Shat, all of whom have admitted to their roles in the laundering process. C. Third, that statements of co-accused Suraj Shat and Viphil Jain implicate the applicant as an active participant in the procurement and sale of fake medicines, with specific references to instructions given by the applicant for purchasing sealing machines and repacking vials. 42. This Court shall now peruse the provisions of Section 45 of the PMLA, which lays down the statutory mandate regarding the grant of bail in such cases and establishes the twin conditions that the applicant must fulfill to secure release on bail. "Section 45. Of....
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....ection 19 and subject to the conditions enshrined under this section.]" 43. Section 45 of the PMLA governs the grant of bail in cases of money laundering and it imposes stringent conditions on the grant of bail. A careful reading of the provision reveals the following essential ingredients that must be satisfied before bail can be granted. 44. Firstly, Section 45(1) of the PMLA mandates that no person accused of an offence under the PMLA shall be released on bail or on his own bond unless two cumulative conditions are satisfied i.e., (i) the Public Prosecutor must be given an opportunity to oppose the bail application; and (ii) if the Public Prosecutor opposes the application, the Court must be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence and is not likely to commit any offence while on bail. 45. Secondly, Section 45(2) of the PMLA provides that the limitations on the grant of bail under sub-section (1) are in addition to the limitations imposed under the CrPC, or any other law applicable at the time. This makes it clear that the provisions of the PMLA are to be applied over and above the general principles of bail....
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.... of less than one crore rupees, may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by- (i) the Director; or (ii) any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government." 11. In Vijay Madanlal Choudhary v. Union of India [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1], this Court categorically held that while Section 45 PMLA restricts the right of the accused to grant of bail, it could not be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. Para 302 is extracted hereinbelow : (SCC p. 259) "302. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the court....
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....ng Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : 2005 SCC (Cri) 1057], held that the court while dealing with the application for grant of bail in PMLA need not delve deep into the merits of the case and only a view of the court based on the available material available on record is required. It held that the court is only required to place its view based on probability on the basis of reasonable material collected during investigation. The words used in Section 45 are "reasonable grounds for believing" which means that the court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt..." 49. Having considered the legislative intent behind Section 45 and the judicial precedents interpreting its application, this Court shall now proceed to apply the established principles to the facts of the present case to assess as to whether the applicant can claim benefit of proviso to Section 45 of the PMLA. 50. The material on record demonstrates that the accused persons operated in a highly coordinated and systematic manner, with clear understanding and collaboration among them to ....
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....hen multiple State agencies fell in place and everyone supported the illegal acts of Suryakant Tiwari. This was made possible by Saumya Chaurasia so that pliant officers were posted in the coal mining districts who would listen to Suryakant Tiwari. Also, it was an unwritten rule that instructions of Suryakant Tiwari meant the voice of Saumya Chaurasia and the powers to be. The fact that Suryakant Tiwari had personal and close official dealings with her and was carrying her instructions to the officers, made it possible for Suryakant Tiwari to also command senior district level officers. This illegal authority was essential for him to run his empire of illegal extortion from coal & iron pellet transportation. Without his concurrence, no NOC was issued by the district machinery. All this was made possible by the fact that he was in the good books of Mrs Saumya Chaurasia. Therefore, she has directly indulged in the offence of money laundering as defined under Section 3 PMLA, 2002 being actually involved in the process of money laundering by way of possession, concealment, use, acquisition and projecting the proceeds of crime as untainted property. As per the findings of the i....
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....lective nature of the operations, the financial interlinks between the accused persons and the fraudulent intent evidenced through sustained unlawful activity, leave no doubt that the applicant was an integral part of the broader scheme to launder proceeds of crime. 54. The respondent has indicated that the applicant actively participated in multiple stages of the laundering process, including the placement, layering and integration of illicit funds into the legitimate economy. The applicant's financial transactions, his association with co-accused individuals, and his admitted involvement in acquiring equipment for repackaging counterfeit medicines, indicate a deeper level of complicity beyond mere business dealings. 55. In the same judgement, the Hon'ble Supreme Court has also emphasized that although the proviso to Section 45 of the PMLA confers discretion on the Court to grant bail where the accused falls within the conditions of the proviso, it does not mean that the person specified in the said proviso should necessarily be released on bail. The relevant part of Saumya Chaurasia (Supra) is reproduced herein below: "23. The use of the expression "may be" in the ....
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....ffort to disguise the proceeds of crime. 58. Now this Court shall decide as to the applicant has successfully discharged the burden of proving that he is not guilty of the alleged offence and is unlikely to commit any offence while on bail. 59. It is well settled, as reiterated by the Hon'ble Supreme Court in Vijay Madanlal Choudhary (Supra) and Manish Sisodia (Supra), that while the stringent twin conditions under Section 45 restrict the right to bail, they do not impose an absolute bar. The discretion of the court in granting bail remains judicial and must be exercised in accordance with the settled legal principles. The governing principle that "bail is the rule, and jail is the exception" must be harmonized with the legislative mandate that requires satisfaction of the conditions laid down under Section 45 before bail can be granted. 60. The bank records in the instant matter reveal significant cash deposits and fund transfers that align with the proceeds of counterfeit medicines, further establishing a prima facie case of money laundering. 61. The contradiction in the statements of co-accused Suraj Shat, regarding the source and purpose of funds introduces some inc....
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....cheduled offence is necessary only for registration of an offence under PMLA and thereafter whatever may happen to predicate/scheduled offence, is totally irrelevant. It was urged that PMLA is a self-contain statute and the offence registered under it standalone, independent of predicate offence. The learned Single Judge appreciated the said arguments in the backdrop of the scheme of the special enactment, which was connected with the specific object to track and investigate cases of money laundering. We must quote the most pertinent observations of the learned Single Judge, which reads thus: "Hypothetically, 'an accused' in a predicate/scheduled offence is highly influential either monetarily or by muscle power and by use of his influence gets the base offence, compromised or compounded to avoid further investigation by ED i.e. money laundering or the trail of proceeds of crime by him, either in the predicate/scheduled offence or any of the activities revealed therefrom. And, if the aforestated contention of the learned counsel for the applicants is accepted, it will put to an end to the independent investigation of ED i.e. certainly not the intention of....
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....ing nature of the investigation, and the applicant's alleged role in the broader financial syndicate indicate that the applicant has failed to satisfy the rigors of Section 45 of the PMLA. 71. It is held that the applicant has failed to establish reasonable grounds to believe that he is not guilty of the offence, nor has he demonstrated that he is unlikely to commit any offence while on bail. 72. Thus, this Court does not find any merit in the contention of the applicant that he is exempted from the twin conditions under the proviso to Section 45 of the PMLA or that he satisfies the twin conditions under Section 45 of the PMLA. Accordingly, the said argument stands rejected. 73. Now adverting to the other ground contended on behalf of the applicant for grant of bail which is whether the statutory presumption of guilt under Section 24 of the PMLA applies in the present case and whether the applicant has successfully rebutted this presumption? 74. At this stage, this Court deems it necessary to analyze the statutory framework governing the burden of proof in proceedings related to proceeds of crime. Section 24 of the PMLA reads as under: "24. Burden of proof. --I....
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..... Third, the person concerned is, directly or indirectly, involved in any process or activity connected with the said property being proceeds of crime. On establishing the fact that there existed proceeds of crime and the person concerned was involved in any process or activity connected therewith, itself, constitutes offence of money-laundering. The nature of process or activity has now been elaborated in the form of Explanation inserted vide Finance (No. 2) Act, 2019. On establishing these foundational facts in terms of Section 24 of the 2002 Act, a legal presumption would arise that such proceeds of crime are involved in money-laundering. The fact that the person concerned had no causal connection with such proceeds of crime and he is able to disprove the fact about his involvement in any process or activity connected therewith, by producing evidence in that regard, the legal presumption would stand rebutted. *** 239. Be it noted that the legal presumption under Section 24(a) of the 2002 Act, would apply when the person is charged with the offence of money-laundering and his direct or indirect involvement in any process or activity connected with the proceeds o....
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.... the commission of a scheduled offence must be established. Second, the property in question must be shown to have been derived or obtained, directly or indirectly, as a result of such criminal activity and third, the accused must be linked, directly or indirectly, to any process or activity connected with the proceeds of crime. 80. In the present case, the respondent has placed on record material indicating that the applicant actively participated in procurement and sale of spurious anti-cancer medicines. The investigation has revealed that the applicant engaged in financial transactions involving the proceeds of crime, including payments made through banking channels and hawala transactions. 81. Applying the legal presumption under Section 24(a) of the PMLA, once the respondent has demonstrated these foundational facts, the onus shifts to the applicant to rebut the presumption that the proceeds of crime were not involved in money laundering. The applicant, however, has failed to provide any credible evidence to rebut this presumption. Mere denial of involvement or assertion of being an investor in the firm without day-to-day operational control is insufficient to discharge ....