TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 114
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 66D of the IT Act. 2. It is alleged that on examination of RC No. 2212023E0036 registered by CBI, it was found that 937 bank accounts maintained with HDFC bank were used for topping up Pyypl Wallet/Virtual Card etcetera. 'Pyypl wallet', is a Dubai based platform, that provides facility of uploading money directly with the help of debit cards, and can be withdrawn through its Point of Sale. 3. On investigation, it was found that out of the 937 bank accounts, 12 bank accounts were managed, operated and controlled by a group of individuals including the applicants - Ajay and Vipin Yadav and other persons being Bhaskar Yadav, Ashok Kumar Sharma, Lalit Goel, Rahul Ujjainwal against whom 16 cyber fraud related complaints were received on National Cyber Crime Reporting Portal. 4. Based on the complaints made to the National Cyber Crime Reporting Portal in respect of the aforesaid 12 bank accounts, it was noticed that the money was initially collected from the complainants/victims in the name of fake investment schemes, false jobs, and the illicit money so generated were received in mule accounts. Thereafter, the funds received in mule accounts were rotated through a web of entities....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ds, M/s A.P. Enterprises, M/s AK Enterprises, M/s Royal Estate Investment and M/s VK Enterprises. These entities were used for laundering proceeds of crime to the tune of approximately Rs. 21 crore. The applicant Ajay is stated to have also received proceeds of crime to the tune of Rs. 50 lacs directly in his bank accounts. 10. The applicants Vipin and Ajay were interrogated by the respondent department and were arrested on 29.11.2024. On completion of investigation, a complaint under Section 44 read with Section 45 of the PMLA was filed. During search of the premises of applicant Vipin, two mobile phones were recovered from his possession. The data in the said phones shows chats between the applicant and co-accused Rohit Aggarwal, which reveal that the applicant had knowledge that the money received in the bank accounts of various business entities was proceeds of crime. 11. A mobile phone was recovered from the possession of applicant Ajay, pursuant to the search of his residence. The data contained copies of fake invoices to give a genuine colour to the illegal transactions. It was found in the investigation that after receiving the proceeds of crime, applicant Ajay rotated th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tted that since the total money laundered is less than 1 crore, the applicants are exempted in view of the proviso to Section 45 of the PMLA. He submitted that the prosecuting agency is solely relying on the statement of the co-accused Rohit Aggarwal to assert that the applicants knew that the money received by the applicants from the said co-accused Rohit Aggarwal was tainted money. 17. He submitted that the prosecuting agency is erroneously relying on the chats of accused Rohit Aggarwal with the applicants and his partners to substantiate that they were arranging mule accounts for transfer of tainted funds. He submitted that the alleged accounts were never used as mule accounts as the account holders either knew the applicants and his partners directly or through their associates and that the alleged accounts were being used for learning the trade of cryptocurrency. He submitted that the alleged accounts had no connection with the total 310 mule accounts being used by the alleged organised criminal syndicate for the purpose of generating the alleged proceeds of crime. 18. He submitted that the investigating agency cannot be allowed to cherry-pick which accused persons to arrest....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts. 22. She submitted that the applicant Rakesh Karwa was arrested on 29.01.2025 and the matter is still at the stage of cognizance. She submitted that the chargesheet has also not been filed in the predicate offence. She consequently submitted that the applicant Rakesh Marwa be enlarged on bail on the ground of delay in trial. 23. Per contra, the learned counsel for the respondent vehemently opposed the grant of any relief to the applicants. He submitted that the accused Rohit Aggarwal extended full cooperation in the investigation by voluntarily disclosing his bank accounts, cryptocurrency wallets, mule entities, modus operandi of laundering, KYCs and other transaction proofs thereby extending full cooperation to the respondent authority to conduct the investigation and trace the flow of proceeds. 24. He submitted that as opposed to this applicant Ajay deliberately evaded queries withheld documents and failed to explain the source of funds uploaded on Pyypl. He submitted that applicant Vipin, despite admitting crypto dealings, concealed agreements and records. He submitted that the applicant Rakesh Karwa showed extreme defiance by fleeing during search, destroying digital evid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of such offence and that he is not likely to commit any offence while on bail" 29. It is settled law that even in offences under PMLA, bail is rule and jail is the exception and Section 45 of PMLA does not rewrite the norm and merely stipulates that bail is to be granted subject to satisfaction of the twin conditions [Ref. Prem Prakash v. Union of India through the Directorate of Enforcement : 2024 INSC 637]. In the case of Vijay Madanlal Choudhary v. Union of India : 2022 SCC OnLine SC 929, the Hon'ble Apex Court had found that although the aforesaid twin conditions restrict the right of the accused to be granted bail, however, the same is reasonable as the bar has direct nexus with the objective of PMLA to combat the menace of money laundering. The Hon'ble Apex Court had also appreciated the gravity of such an offence necessitating stringent provisions under the PMLA. The relevant portion of the judgment is as under: "286...This is not an ordinary offence. To deal with such serious offence, stringent measures are provided in the 2002 Act for prevention of money laundering and combating menace of money laundering, including for attachment and confiscation of proceeds of crime a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plex modus operandi involving multiple layers of technology. After a sufficient corpus was collected, the funds were routed through mule accounts and withdrawn at overseas locations. Investigation into the mule accounts led to the applicants. The role attributed to the applicants is summarised as under: 30.1. Applicant Vipin and Ajay: It is alleged that the said applicants knowingly assisted in the concealment of proceeds of crime of Rs. 21.02 crores by routing the same through his own bank account and the bank accounts of various entitles, and further converting the proceeds into cryptocurrency or through overseas cash transactions. It is further alleged that the said applicants are associates and they assisted the accused Rohit Aggarwal and other members of the syndicate in acquisition of proceeds of crime by providing mule bank accounts for collection of illicit funds related to cyber fraud. Certain incriminating chats between the applicant Vipin and accused Rohit are alleged to have been found. Certain bills were found during the search of the applicant Ajay's house and it is alleged that the said bills were prepared for the purpose of laundering the money, although no such se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mule accounts and exchanging the said funds into crypto currency. Like the applicant Rakesh, the accused Rohit is alleged to be actively involved in the Telegram groups used by members of the syndicate. 33. Prima facie, from the allegations and the material on record, it appears that the applicants Ajay and Vipin are at the penultimate rung of the transaction while the accused Rohit is also alleged to be privy to the collection of proceeds of crime by the organised crime syndicate. Their role cannot be said to be graver than that of the said accused. Insofar as the applicant Rakesh is concerned, it is pertinent to note that as per the case of the respondent department that is borne out from the complaints, the funds received by the applicant Rakesh were transferred to various individuals/ entities, including the accused Rohit, and the crypto currency received from the said individuals used to be further transferred by the applicant Rakesh into private wallets. At best, the role of the applicant Rakesh can be stated to be similar to that of the accused Rohit. Despite the same, while the applicants have been arrested, the prosecution complaint (wherein the co-accused Rohit was arrai....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... note that the Hon'ble Apex Court in the said case had not propounded that the circumstance of another accused not being arrested cannot be considered while considering the question of bail. It appears that in the facts of that particular case, the Hon'ble Apex Court had simply found that the other accused not being arrested was an irrelevant consideration considering the gravity of role of the respondent therein. 38. The said decision cannot be read into the facts of the instant case as, prima facie, the role attributed to the applicants cannot be stated to be graver than that of the accused Rohit Aggarwal as it is the prosecution's case that majority of the funds came from him. Furthermore, as pointed out, even Mr. Vikas Saini, who is extensively referred in the complaint as having assisted the applicant Rakesh in arranging the mule accounts, has neither been made an accused and nor arrested in the present case, which further weighs in favour of the applicants. 39. Recently, in the case of Himansh alias Himanshu Verma v. Directorate of Enforcement : 2024 SCC OnLine SC 4697, the Hon'ble Apex Court had enlarged the accused therein on bail on the sole ground that the mastermind of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Psychotropic Substances Act, 1985 which is analogous to Section 45 of the PMLA, the Hon'ble Apex Court had observed that prolonged incarceration overrides the twin conditions as it mutilates against the fundamental right of an individual under Article 21 of the Constitution of India. 45. Although it is argued that the modus employed by the accused persons is complex which requires time for investigation, however, the prosecution cannot be allowed to endlessly detain the accused persons. In the case of V. Senthil Balaji v. State : 2024 SCC OnLine SC 2626, the Hon'ble Apex Court had observed as under: "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 pri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on record, if the Judges conclude that there is no possibility of a trial concluding in a reasonable time, the power of granting bail can always be exercised 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 exerciseits 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 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der Section 45 of PMLA and override the bar therein. 48. It is not just the period spent in incarceration but also the possibility of delayed trial that is to be seen by the Court. As the trial is yet to commence in the predicate/ scheduled offence and the matters are at a preliminary stage with the investigation still being in process, speedy trial in the present case does not seem to be a possibility. The applicants are stated to have no previous criminal involvements, and they are unlikely to commit any offence whilst on bail. 49. Considering the aforesaid discussion, in the opinion of this Court, the applicants have made out a prima facie case for grant of bail on account of the ground of parity as well as due to there being no possibility of the trial concluding in the near future. 50. However, appropriate conditions ought to be imposed to allay any apprehension of the applicants evading trial or influencing the witnesses. 51. The applicants are therefore directed to be released upon his furnishing a personal bond in the sum of Rs. 1 lakh with two sureties of the like amount each to the satisfaction of learned trial court/Duty Magistrate, subject to following terms and con....