TaxTMI 
TaxTMI 
2025 (4) TMI 668
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....ber, 2022, under sections 3 and 4 of the PMLA. 2. Since both Applicants raise overlapping legal and factual grounds in support of their applications, a common order is being passed. To the extent their respective pleas differ, the same shall be addressed separately. 3. Briefly, the facts of the case, as per the Enforcement Directorate, are as follows: 3.1 The case pertains to illegal allotment of tender for supply, installation, testing and commissioning of electromagnetic flow meters and corresponding operations. The tender was secured by NKG Infrastructure Limited ["NKGIL"] on the basis of alleged fake performance certificates. 3.2 It is alleged that Mr. Anil Kumar Aggarwal (the Applicant in BAIL APPLN. 4825/2024) not only facilitated the issuance of these forged performance certificates but also benefited directly from the proceeds of crime. Mr. Anil Kumar Aggarwal paid bribe to Mr. Jagdish Kumar Arora (Applicant in BAIL APPLN. 434/2025), who was then serving as Chief Engineer, Delhi Jal Board ["DJB"], to ensure the tender was awarded to NKGIL. 3.3 On the basis of these fraudulent certificates, a contract worth approximately INR 38.02 crores, was awarded to NKGIL ....
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....commence in the near future, as the framing of charges has to be deferred pending the completion of further investigation. [See: Decision dated 8th February, 2023 of the Delhi High Court in Raman Bhuraria vs, Directorate of Enforcement Bail Appln. No. 4330/2021]. 4.3 The Applicants have already undergone over one year and one month in custody. Prolonged incarceration without trial, constitutes a direct infringement of the Applicants' right to life and liberty under Article 21 of Constitution of India, 1950 ["Constitution"] and ought to weigh heavily in the Court's consideration for bail. 4.4 Even if the trial under the PMLA were to conclude, no final judgment can be rendered unless and until the trial in the scheduled offence is also concluded. Considering the evident delay in both proceedings, the Applicants are entitled to bail on the same principles as enunciated by the Supreme Court in similar cases. 4.5 The right of accused under Article 21 of the Constitution for release on bail, in the event, there is delay has been well recognised by the Supreme Court in the cases i.e. Manish Sisodia v. Directorate of Enforcement 2024 SCC Online SC 19; Satender Kumar Antil v. CBI 2....
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....deemed profit by the Applicant; (ii) INR 2.42 crores (approx); and (iii) INR 73.50 lakhs. It is contended that the latter two amounts cannot be classified as "proceeds of crime," since there is no allegation in the CBI chargesheet of any bribe being paid. These amounts, it is argued, were used towards lawful expenses or retained in the ordinary course of business. 5.3 The figure of INR 1.10 crore, identified as deemed profit, is based solely on the Applicant's own statement and is derived from an assumed profit margin of 6% on the project value of INR 18.38 crores. The Applicant, however, had stated that his profit margin ranged between 5% and 6%. 5.4 On a transaction value of Rs.18.38 crores, a 5% margin would amount to INR 91.90 lakhs, which is below the threshold of INR 1 crore stipulated in the proviso to Section 45 (1) of the PMLA. However, the Enforcement Directorate has proceeded on a deemed profit rate of 6%, apparently to bring the figure above INR 1 crore. It is evident that if the profit margin is reasonably assessed on a consistent basis, the alleged proceeds of crime would fall below the statutory threshold. 5.5 Moreover, the amount of INR....
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....re heightened scrutiny before relying upon, especially in a bail proceeding where liberty is at stake. 6.3 Furthermore, there is no independent corroboration of the statements made by Mr. Tajinder Pal Singh. The reliance placed by the ED on certain excel spreadsheets is misconceived. These spreadsheets, in the absence of authentication, authorship, or supporting material, are akin to loose sheets, which cannot be treated as books of account maintained in the ordinary course of business. The settled position in law is that such documents, unless duly proved, are inadmissible and devoid of evidentiary value. Crucially, the excel sheets do not bear the name of the Applicant, contain no identifiable reference to him, nor do they bear any signatures or lead to any recovery from the Applicant. In the absence of such material, no prima facie case is made out against the Applicant. Arguments of Enforcement Directorate relating to delay in Trial 7. Mr. Zoheb Hossain, Counsel for ED, on the other hand, strongly opposes the bail application and submits as follows: 7.1. The Applicants' argument that since they have spent little more than a year in custody, and hence they are ipso f....
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....ious offences under the PMLA. The Supreme Court has denied bail in similarly situated cases involving longer periods of incarceration. To note a few: a. Shahnawz Ahmed Jeelani Vs. Enforcement Directorate, SLP (Crl. 14173/2023. (Applicant had been in custody for over 1 year, 6 months and 14 days. b. Vipin Kumar Sharma v. Directorate of Enforcement, SLP (Crl.) No. 9540/2024. (Applicant had been in custody for over 1 years 3 months and 22 days) c. Bimal Kumar Jain v. Directorate of Enforcement, SLP (Crl) No. 9656/2022. (Applicant has been in custody for over 2 years 5 months and 26 days) 7.6. The grant of bail in predicate offence is an irrelevant factor while considering bail application in PMLA case. As per explanation (i) in Section 44 of the PMLA, the orders passed in respect of the scheduled offence do not extend to the independent proceedings under PMLA. 7.7. The non-arrest of other individuals, such as Mr. Tajinder Pal Singh and Mr. D.K. Mittal, cannot by itself be a ground for grant of bail. Mr. Tajinder Pal Singh has cooperated with the investigation and has not been shown as a direct beneficiary of the proceeds of crime. Mr. D.K. Mittal's rol....
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....y) of the IPC, which have been explicitly invoked in the CBI chargesheet. Thus, even in the absence of a charge of bribery under the PC Act, the offence of money laundering is clearly attracted. 8.3. The investigation has revealed that Mr. Anil Kumar Aggarwal laundered proceeds of crime through fictitious entries in the books of ISI, amounting to INR 18.38 crores in relation to the DJB contract. Bogus purchases were booked in the names of several shell entities, including M/s Xpert Solutions, M/s Modern Enterprises, M/s Shiva Trading Co., and M/s Integrated Hydraulic System. The forensic audit of bank records indicates cash withdrawals and layering amounting to INR 2,42,95,503/-, which constitute proceeds of crime laundered by the Applicant. 8.4. The contention that the threshold of INR 1 crore is not met is factually incorrect. The prosecution complaint specifically quantifies the proceeds of crime in respect of Mr. Anil Kumar Aggarwal at INR 4.26 crores. Out of this, INR 1.63 crores were retained and used by him. Once the proceeds of crime exceed the Rs.1 crore threshold, the proviso to Section 45 (1) does not apply, and the rigours of the twin conditions under the main pro....
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....The entries mentioned in the excel have been directly corroborated by the entries in the bank accounts during the relevant period. 8.9. The contention that GST payments should be excluded from the computation of proceeds of crime has no basis in law. Similar arguments have been rejected by the Supreme Court in Rohit Tandon v. Directorate of Enforcement (2018) 11 SCC 46, as well as Manish Sisodia vs, CBI. 2023 SCC OnLine SC 1393. 8.10 In light of the above, the Applicants have failed to demonstrate any infirmity in the case of the prosecution. The material placed on record sufficiently satisfies the standard required under Section 45 of the PMLA. The statements, electronic evidence, and banking transactions collectively establish a prima facie case for money laundering. Accordingly, the Applicants have not discharged the burden of demonstrating that they are not guilty of the offence and are not likely to commit any offence while on bail. Analysis Whether the Petitioners are entitled to be released on the ground of delay in trial? 9. One of the main planks of the Applicants' case is the delay in conclusion of trial. Both counsels have laid considerable emphasis on thi....
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.... established in the prosecution of the scheduled offence. Therefore, even if the trial of the case under the PMLA proceeds, it cannot be finally decided unless the trial of scheduled offences concludes. In the facts of the case, there is no possibility of the trial of the scheduled offences commencing in the near future. Therefore, we see no possibility of both trials concluding within a few years. ..xx. ..xx xx.. 25. Considering the gravity of the offences in such statutes, expeditious disposal of trials for the crimes under these statutes is contemplated. Moreover, such statutes contain provisions laying down higher threshold for the grant of bail. The expeditious disposal of the trial is also warranted considering the higher threshold set for the grant of bail. Hence, the requirement of expeditious disposal of cases must be read into these statutes. Inordinate delay in the conclusion of the trial and the higher threshold for the grant of bail cannot go together. It is a well-settled principle of our criminal jurisprudence that "bail is the rule, and jail is the exception." These stringent provisions regarding the grant of bail, such as Section 45 (1) (iii) of t....
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....by the Constitutional Courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The Constitutional Courts can always exercise its jurisdiction under Article 32 or Article 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45 (1) (ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials under Article 21 of the Constitution of India will be defeated. In a given case, if an undue delay in the disposal of the trial of scheduled offences or disposal of trial under the PMLA can be substantially attributed to the accused, the Constitutional Courts can always decline to exercise jurisdiction to issue prerogative writs. An exception will also be in a case where,....
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....e crime." 52. The Court also reproduced the observations made in Gudikanti Narasimhulu (supra), which read thus: "10. In the aforesaid context, we may remind the trial courts and the High Courts of what came to be observed by this Court in Gudikanti Narasimhulu v. Public Prosecutor, High Court reported in (1978) 1 SCC 240. We quote: "What is often forgotten, and therefore warrants reminder, is the object to keep a person in judicial custody pending trial or disposal of an appeal. Lord Russel, C.J., said [R v. Rose, (1898) 18 Cox]: "I observe that in this case bail was refused for the prisoner. It cannot be too strongly impressed on the, magistracy of the country that bail is not to be withheld as a punishment, but that the requirements as to bail are merely to secure the attendance of the prisoner at trial." 53. The Court further observed that, over a period of time, the trial courts and the High Courts have forgotten a very well-settled principle of law that bail is not to be withheld as a punishment. From our experience, we can say that it appears that the trial courts and the High Courts attempt to play safe in matters of gra....
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....o in the absence of any specific provision. For example, the rigor as provided under Section 37 of the NDPS Act would not come in the way in such a case as we are dealing with the liberty of a person. We do feel that more the rigor, the quicker the adjudication ought to be. After all, in these types of cases number of witnesses would be very less and there may not be any justification for prolonging the trial. Perhaps there is a need to comply with the directions of this Court to expedite the process and also a stricter compliance of Section 309 of the Code." 15. It must also be noted that recently, in Union of India through the Assistant Director v. Kanhaiya Prasad In SLP Crl. No. 7140 of 2024, the Supreme Court has reiterated that the twin conditions under Section 45 of the PMLA are mandatory and must be objectively satisfied while considering a bail application. Emphasising the legislative intent behind the stringent bail provisions under the PMLA, the Court set aside the order of the High Court and cancelled the bail granted to the accused. This ruling reaffirmed the importance of strict adherence to the conditions stipulated in Section 45 while adjudicating bail pleas under....
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....verarching constitutional mandate under Article 21. 19. However, as correctly contended by Mr. Hossain, there exists no universal rule that the passage of one year in custody, in and of itself, confers an automatic right to bail. Delay, to be relevant, must be substantive, unreasonable, and is case-specific. The law does not fix a temporal threshold beyond which statutory rigours are suspended. If it becomes evident that trial is unlikely to reach conclusion within any reasonable span of time, and where such delay is not occasioned by the conduct of the accused, the constitutional imperative of securing personal liberty must assume primacy. The length of custody is undoubtedly a relevant consideration but that by in itself cannot be determinative; the real inquiry lies in whether continued detention serves any legitimate purpose or merely perpetuates incarceration without foreseeable adjudication. The determination must be grounded in context, not abstraction. It requires the Court to engage with the realities of the case - the stage of the proceedings, the stage of prosecution, the conduct of the parties, and the likelihood of meaningful progress in the foreseeable future. In s....
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....ceedings and the trial in the scheduled offence, makes it imperative to take into account the likely trajectory and pace of the trial in predicate offence, for any realistic assessment of progress in the present case. The time estimation of prosecution under the PMLA cannot be meaningfully evaluated in isolation; it must be appreciated in light of the expected duration and complexity of the proceedings in the predicate offence. Therefore, reliance solely on the number of PMLA witnesses or the Special Court's observation that the trial "ought to proceed swiftly" may not be conclusive. 24. Moreover, the scale of the prosecution record in both proceedings is significant. The PMLA complaint alone spans 122 volumes, comprising over 15,750 pages. In parallel, the chargesheet filed by the CBI in the scheduled offence extends across 209 volumes, with 14,385 pages, 101 prosecution witnesses, and a mix of relied-upon and unrelied documents. This sheer volume leaves little doubt that both trials will be document- intensive and procedurally complex. The process of framing charges, issuing summons, examining witnesses, recording statements under Section 313 of the CrPC, and concluding final ....
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....cant Anil Kumar Aggarwal amount to INR 4.26 crores, of which INR1.63 crores were allegedly retained and utilised by him. These figures have not been shown to be incorrect on the face of the record. Further, the court finds merit in the contention of ED that as per the plain language of proviso to Section 45 (1) of PMLA, reads as "...is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees.." and thus it is not the individual role that is determinative of what is total sum of money laundering. It is the total sum of money laundering in the offence which is to be seen for the purpose of the proviso, which in the present case is to the tune of INR. 8.80 Crores. 29. In view of the above, the Applicant cannot avail the benefit of the monetary threshold under the proviso to Section 45 of the PMLA. The entire scheme, as unearthed during the course of investigation, involves multiple layers of laundering and routing of funds well above the statutory limit of INR 1 crore. Scope of the Court's Jurisdiction and the Twin Conditions under Section 45 (1) (ii) of the PMLA 30. Before addressing the grounds of challenge on the meri....
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....ust be construed reasonably. It must be so construed that the court is able to maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail much before commencement of trial. Similarly, the court will be required to record a finding as to the possibility of his committing a crime after grant of bail. However, such an offence in future must be an offence under the Act and not any other offence. Since it is difficult to predict the future conduct of an accused, the court must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence. "45. It is, furthermore, trite that for the purpose of considering an application for grant of bail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail. "46. The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probab....
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....aterial collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad, the words used in Section 45 of the 2002 Act are "reasonable grounds for believing" which means 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. (emphasis supplied) 40.3 Mohd. Muslim alias Hussain v. State (NCT of Delhi) "19. The conditions which courts have to be cognizant of are that there are reasonable grounds for believing that the accused is "not guilty of such offence" and that he is not likely to commit any offence while on bail. What is meant by "not guilty" when all the evidence is not before the court? It can only be a prima facie determination. That places the court's discretion within a very narrow margin. Given the mandate of the general law on bails (Sections 436, 437 and 439 CrPC) which classify offences based on their gravity, and instruct that certain serio....
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....expected to record, i.e., that the accused may not be guilty, is only prima facie, based on a reasonable reading, which does not call for meticulous examination of the materials collected during investigation (as held in Union of India v. Rattan Malik). Grant of bail on ground of undue delay in trial, cannot be said to be fettered by Section 37 of the Act, given the imperative of Section 436A which is applicable to offences under the NDPS Act too (ref. Satender Kumar Antil (supra). Having regard to these factors the court is of the opinion that in the facts of this case, the appellant deserves to be enlarged on bail." (emphasis supplied) 32. The legal principles laid down in Mohd. Muslim v. State (NCT of Delhi 2023 LiveLaw (SC) 260 further clarify that even in the context of special legislations with stringent bail clauses such as the NDPS Act or PMLA, the Court's assessment must remain confined to a prima facie view of the material. Accordingly, unless the material before the Court raises serious doubts as to the legitimacy of the prosecution's case, bail may be declined; however, such a conclusion must be reached with circumspection and based on concrete materia....
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....ted that his testimony, being that of an accomplice, is inherently tainted and incapable of forming the sole basis for denial of bail without independent corroboration. On a prima facie view of the material placed before this Court, there appears to be some merit in the submission. The law in this regard is well-settled. In Haricharan Kurmi v. State of Bihar 1964 SCC OnLine SC 28, the Supreme Court held that while the confession of a co-accused under Section 30 of the Evidence Act may be taken into consideration, it is not substantive evidence and cannot be the foundation of conviction in the absence of other evidence. The Court observed that such confessions are "evidence of a very weak type" and must only serve to lend "assurance" to otherwise satisfactory evidence. The judgment reiterates the principle that a confession cannot substitute the primary burden of proof and must be corroborated with material evidence. 37. Further, reliance is also placed in Somasundaram v. State (2020) 7 SCC 722, relevant portion of which reads as follows: "Accomplice evidence 71. Section 133 of the Evidence Act declares that an accomplice is a competent witness and further that ....
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....approver's evidence has to satisfy a double Find test. His evidence must show that he is a reliable witness and that is a test which is common to all witnesses. If this test is satisfied the second test which still remains to be applied is that the approver's evidence must receive sufficient corroboration. This test is special to the cases of weak or tainted evidence like that of the approver." (emphasis supplied) 74. We may profitably also refer to the views expressed in Haroon Haji Abdulla v. State of Maharashtra: AIR. 835-36, para 8) "8... The law as to accomplice evidence is well settled. The Evidence Act in Section 133 provides that an accomplice is a competent witness against an accused person and that a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice. The effect of this provision is that the court trying an accused may legally convict him on the single evidence, of an accomplice. To this there is a rider in Illustration (b) to Section 114 of the Act which provides that the court may presume that an accomplice is unworthy of credit unless he is corroborated in material particulars. This cau....
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.... the accused and he stole the sheep and he put the skins in a certain place, the discovery of the sad and would not corroborate the evidence of the witness as against the accused. But if the skins were found in the accused's house, this would corroborate because it would tend to confirm the statement that the accused had some hand in the theft." (emphasis supplied) 76. We may finally advert to a recent pronouncement of this Court In K. Hashim v. State of T.: (SCC 250-51, paras 38-42) "38. First, it is not necessary that there should be independent confirmation of every material circumstance in the sense that the independent evidence in the case, apart from the testimony of the complainant or the accomplice, should in itself be sufficient to sustain conviction. As Lord Reading says: "Indeed, if it were required that the accomplice should be confirmed in every detail of the crime, his evidence would not be essential to the case; it would be merely confirmatory of other and Independent testimony. (Baskerville case, KB p. 664 : All ER p. 42 B-C) 39. All that is required is that there must be some additional evidence rendering it probable....
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....equirement that it would be unsafe to convict an accused solely based on uncorroborated testimony of an accomplice. The corroboration must be in relation to the material particulars of the testimony of an accomplice. It is clear that an accomplice would be familiar with the general outline of the crime as he would be one who has participated in the same and therefore, Indeed, be familiar with the matter in general terms. The connecting link between a particular accused and the crime, is where corroboration of the testimony of an accomplice would assume crucial significance. The evidence of an accomplice must point to the involvement of a particular accused. It would, no doubt, be sufficient, if his testimony in conjunction with other relevant evidence unmistakably makes out the case for convicting an accused. 78. As laid down by this Court, every material circumstance against the accused need not be independently confirmed. Corroboration must be such that it renders the testimony of the approver believable in the facts and circumstances of each case. The testimony of one accomplice cannot be, ordinarily, be supported by the testimony of another approver. We have used the w....
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....ccused to the offence, not merely confirm the narrative generally. 39. The general proposition advanced by ED relying upon Laxmipat Choraria v. State of Maharashtra 1967 SCC OnLine SC 30 that the testimony of an accomplice can form part of the evidentiary basis, is legally correct. However, it must be viewed in context. At this stage the Court is not to evaluate guilt or innocence, nor to weigh evidence with exactitude. The inquiry is limited to whether, on a prima facie and reasonable appraisal of the material, the prosecution has made out a case of sufficient gravity to justify continued pre-trial detention. 40. In the present case, the core of the ED's case against the Applicants appears to be grounded in the statements of the approver and a set of Excel sheets recovered from a pen drive. These sheets are unsigned, do not bear the Applicants' names, and were not recovered from their possession. Further, the prosecution complaint does not disclose any direct financial flow of alleged bribe money to Applicant Mr. Jagdish Kumar Arora. It is rather the case that such funds were allegedly collected by Mr. Tajinder Pal Singh, now an approver. In these circumstances, while the ev....
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....e report, or corroborative material placed on record by the approver to support his version. It is also not the case that he reported these threats to the ED or any other authority at the earliest available opportunity. His allegations were disclosed belatedly to the Respondent i.e., six months after his initial statement, which significantly weakens their reliability. Moreover, there is no material to suggest that the Applicant attempted to interfere with the investigation during his time in custody or that he possesses the capacity to subvert the course of justice, especially now that the ED's investigation is substantially complete, and the prosecution complaint has been filed. 46. In the considered view of this Court, the mere assertion of an apprehension of interference-absent credible corroboration-cannot form the basis for denying bail. The prosecution's concern in this regard can be adequately addressed by imposing stringent conditions on the Applicant to prevent any misuse of liberty or contact with witnesses during the pendency of trial. 47. In light of the foregoing, this Court is satisfied that the Applicants have made a sufficient case for the grant of regular ba....