TaxTMI 
TaxTMI 
2025 (9) TMI 1089
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....iling application under Section 483 of the BNSS, 2023 and Sections 45 and 65 of the Prevention of Money Laundering Act, 2002. The said application came to be dismissed by order dated 20.06.2025. 3.The applicant was apprehended on 15.01.2025 by the Directorate of Enforcement, Raipur Zonal Office in connection with the ECIR No. RPZO/04/2024 dated 11.04.2024 registered for the alleged contraventions under Section 3 punishable under Section 4 of the PMLA. The applicant is a person of clean antecedents and has never been convicted of any offence prior to the instant case. However, he has been implicated in FIR No. 04/2024 dated 17.01.2024, which is already under investigation. 4.As per the case of the prosecution, a) it is alleged that during the period from 2019 to 2002, a large scale syndicate was operating in the State of Chhattisgarh systematically involved in the manufacture and sale of illegal liquor through licensed government shops, thereby generating unlawful commissions from the distillers. b) It is further alleged that the operations of the said syndicate resulted in the generation of huge amounts of illicit funds, which were distributed amongst its membe....
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....nt of circumventing the order dated 08.04.2024 passed by the Apex Court in WP (Crl.) NO. 153/2023 Yash Tuteja and Another Vs. Union of India and Other an connected matters wherein the Prosecution Complaint filed in ECIR No. RPZO/11/2022 was quashed on the ground that there existed no scheduled offence. 3.No recovery of Direct Evidence: He next contended that there is no recovery of any alleged "proceeds of crime" made from the possession of the applicant. The prosecution case is primarily based on conjectures, surmises and documentary inferences. It is settled law that suspicion, however strong, cannot take the place of proof. 4. Filing of Charge sheet and completion of investigation: It is contended that the charge sheet in the predicate offence (FIR No. 04/2024) has already been filed before the Special Court (PC Act), Raipur on 30.06.2025. Likewise, in the PMLA proceedings, the 3rd Supplementary Prosecution Complaint has also been filed on 12.03.2025. Therefore the investigation is substantially complete and the applicant's further custodial detention serves no fruitful purpose. 5. Bail Jurisprudence and the Right to Liberty - Article 21 of the Constit....
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....perated in the investigation at all stages. All requisite documents and explanations were fully furnished whenever called upon by the Investigating Authorities. There is no apprehension that the applicant will either tamper with the evidence or influence witnesses. The Apex Court has consistently held that arrest is not to be effected in a routine manner, particularly when the accused has cooperated with the investigation. In the matter of Satender Kumar Antil Vs. CBI (2022) 10 SC 51, it has been held that arrest must not be mechanical; bail is the rule and jail is the exception. Similarly, in the matter of Arnesh Kumar Vs. State of Bihar (2014) 8 SCC 273, it has been held that arrest should be made only when absolutely necessary; non-arrest is the norm where the accused is cooperating. In the matter of P. Chidambaram Vs. Directorate of Enforcement (2019) 9 SC 24, it was observed that in economic offences under PMLA, arrest must satisfy the "necessity" test and custodial interrogation is not warranted where cooperation is extended. 8.Settled Principles Governing Bail : The Apex Court in the matter of Sanjay Chandra Vs. CBI (2012) 1 SCC 40 has categorically held th....
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....de by learned counsel for the applicant and submits that the prohibition against a mini-trial does not mean that the court must close its eyes to material that is relevant and necessary to rule on bail. A court may and indeed must consider such material as is necessary to determine whether i) there is prima facie material linking the accused to the offence ii) there is likelihood of the accused fleeing instigation or tampering with evidence and iiii) exception features of the case warrant denial of bail under the statutory scheme. A limited focused perusal of relevant material for these limited purposes is permissible and proper. 7.In the present case, it is submitted that the ED is empowered to investigation Section 3 of the PMLA, 2002. However, insofar as scheduled offences are concerned, the same must necessarily be investigated by the jurisdictions police or other competent agency. This position has been clearly elucidated by the Apex Court in Vijay Madan Lal Chaudahary (supra), wherein it was observed as under: "It is possible that in a given case after the discovery of huge volume of undisclosed property, the 298 authorized officer may be advised to send informati....
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....t disputed that a private complaint cannot only be filed but also entertained and proceeded with in accordance with law. Thus the locus standi of the complainant is a concept foreign to criminal jurisprudence, save and except where the statute creating an offence itself prescribes eligibility conditions for the complainant. In such cases, the general principle stands excluded by necessary implication. It is further submitted that the jurisdictional police station or relevant law enforcement authority is obligated to accept information shared with it and initiate the process of registered a First Information Report (FIR) provided there exists reasonable cause to believe that a cognizable offence has occurred. Int his regard reliance is placed on the judgment of the Apex court in Lalita Kumari Vs. Government of Uttar Pradesh (2014) 2 SCC 1, wherein it was held : "Registration of FIR is mandatory in the information given to the police under Section 15491) of Cr.P.C. discloses the commission of a cognizable offence." 12.Next contention of the counsel for the respondent is that the applicant has contended that the recent search conducted at the residential premises, no subst....
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....ant that there existed absolutely no material warranting his arrest in the present case, is emphatically denied as being wholly untenable. i) the arrest of the applicant was based on credible material and evidence collected during investigation, which revealed his active role in the laundering of proceeds of crime emanation from the predicate offence. ii) it is settled law as reiterated by the Apex court in Vijay Madanlal Chaudhary (supra) that the ED is empowered to arrest a person under Section 19 of the PMLA, provided the authorized officer has reason to believe, on the basis of material in his possession that such person is guilty of an offence under the Act and the reasons are recorded in writing. iii) The requirement is not that the investigating agency must have material sufficient for conviction at the stage of arrest; rather, the law only requires that there exists prima facie material inking the accused with the laundering of proceeds of crime. iv) the contention of the applicant thus seeks to import a higher threshold than what is contemplated by the PMLA and therefore deserves outright rejection. 17.It is next submitted that so far....
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....xistence of property/values derived from such criminal activity (proceeds of crime); and c) the applicant's involvement in processes/activities connected with such proceeds. The applicant's bald denial of involvement without engaged with the documentary and testimonial material already relied upon by the responder-cannot carry the day at the bail stage. It is the prosecution case that the incriminating nexus is shown by a combination of materials (statements under Section 50 and other recorded witnesses, financial entries and transaction trials, contemporaneous documents seized during investigation and other corroborative material) that together constitute prima facie evidence of the involvement of the applicant. The investigation into the full extend and location of the residue proceeds of crime is ongoing. There is credible material to indicate that further assets/proceeds remain to be traced. If the applicant is enlarged on bail at this stage, there is a real proximate risk that he may frustrate the investigation by influencing the witnesses, tampering with documents or facilitating dissipation of assets-unless strict and onerous conditions are imposed. 20....
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.... highly likely that the applicant would launder, conceal or alienate the remaining POC thereby frustrating the ongoing investigation and defeating the very object of the PMLA. 23.He submits that the applicant has deliberately concealed residue POC with an intent to shield himself from the due process of law. Such concealment constitutes not only the offence of money-laundering under Section 3 of the PMLA, 2002 but also amounts to continuing criminal activity which directly undermines the effectiveness of the proceedings under the Act. 24.It is next submitted that the applicant is a sitting MLA and former Excise Minister of Chhattisgarh who continues to wield significant political influence and enjoys access to the highest bureaucratic and political circles of the State. These circumstances give rise to a strong and reasonable apprehension that, if enlarged on bail, the applicant would abuse his position to influence witnesses, manipulate official records and tamper with critical evidence. In money laundering cases, where the offence is inherently linked to concealment and projection of tainted money, the apprehension of interference with evidence is far greater. Therefore the....
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.... the integrity and sovereignty of a nation. The international Monetary Fund estimates that laundered money generates about $590 billion to $ 1.5 trillion per year which constitutes approximately two to five percent of the world's gross domestic product. The Supreme Court of India has consistently held that economic offences are sui generis in nature as they stifle the delicate economic fabric of a society. These offences permeate to human consciousness posing numerous questions on the very integrity of the business world. The offenes, such as this, are committed with a deliberate design with an eye on personal profit and often shown to be given scant regard for a sordid residuum eft behind to be borne by the unfortunate 'starry eyed' petty investors. The perpetrators of such deviant' schemes' including the petitioner herein, who promise utopia to their unsuspecting investors seem to have entered in a proverbial 'Faustian bargain' and are grossly unmindful of untold miseries of the faceless multitude who are left high and dry and consigned to the flames of suffering." 28.Furthermore, the reliance placed by the applicant on the judgment of the Apex Court in Sanjay Chandra Vs. CBI ....
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....e Delhi High Court in Deepak Talwar V. Enforcement Directorate, AIR Online 2019 Del 1573 and further reinforced by the observations in Tarun Kumar (supra). 33.It is further submitted that while Section 436 A of the Code of Criminal Procedure 1973 provides for default bail in certain circumstances, the Court is required to exercise its discretion on a case- to-case basis. The proviso to Section 436A expressly recognized that in appropriate cases, the detention of an accused may be continued beyond one half of the specific period, provided the reasons are recorded in writing and suitable terms and conditions are imposed to ensure that the accused remains available for expeditious completion of the trial. 34.Economic offences constitute a distinct category of offenes which require a different approach while considering bail. Such offences, often arising from deep rooted conspiracies and involving substantial loss of public funds, have serious repercussions on the financial health and economic stability of the country. The Apex Court has repeatedly emphasized the gravity of economic offences in judgments including ; Y.S.Jagan Mohan Reddy Vs. CBI (2013) 7 SCC 439; Nimmagadda Prasa....
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....isprudential recognition of the gravity and societal impact of such offences. CONSIDERATION : 38.Upon careful perusal of the records, including the prosecution complaints dated 12.03.2025, ECIRs and material on record, the following observations are made: i) The seriousness and gravity of the offence is extremely high. The applicant is alleged to have been deeply involved in laundering proceeds of crime amounting to over 100 crores, a figure indicative of large sale economic wrongdoing affecting the Stat's revenue and public interest. ii) The offences under Sections 3 & 4 of PMLA constitute scheduled offences, and the applicant has not satisfied the twin conditions under Section 45 of the PMLA, namely: a) Prima facie demonstrating that he is not guilty of the alleged offence: and b) Demonstrating that he is not likely to commit any offence while on bail. iii) The applicant holds a position of significant political influence and access to powerful bureaucratic circles, creating a strong likelihood of tampering with evidence or influencing witnesses if released. iv) The investigation though advanced is still ongoing, to trac....
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....iled both the twin conditions and the triple test for grant of bail in economic offences. Custodial detention is necessary for protection of investigation of witnesses and public interest. 43.At this stage, the Court cannot close its eyes to the gravity of the allegations, the depth of the conspiracy and the deleterious impact of such economic offences on the moral fabric and financial integrity of the society. The applicant, by virtue of his position, wields considerable influence in the administrative and political machinery. His release on bail at this juncture poses a real and substantial risk of interference with the course of justice by way of tampering with evidence, influencing witnesses and frustrating the ongoing investigation which is yet to culminate in the filing of further supplementary complaints. 44.The right to personal liberty guaranteed under Article 21 of the Constitution of India is indeed sacrosanct, but it is not absolute. It is subject to the larger and compelling public interest in ensuring a fair, unhampered and effective investigation into serious economic offences. In balancing the competing claims of individual liberty and societal interest, this ....