TaxTMI 
TaxTMI 
2026 (5) TMI 273
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...., Advocates. IO/Assistant Director Parveen Yadav in person. COMMON JUDGMENT PRELUDE A. This common judgment must commence taking it on record a deeply disturbing prelude. In the course of arguments on these bail applications, which continued marathon on day to day basis, a series of articles were published in the front page of Indian Express on four consecutive days. Those articles were not confined to reportage of the offences in connection whereof these bail applications were filed. Those articles, rather transgressed all permissible bounds by purporting to anticipate and answer queries which were raised by this court to the counsel for the Directorate of Enforcement (hereinafter referred to as "ED"). More egregiously, those articles laid bare the WhatsApp chats allegedly exchanged between the accused/applicants inter se, without the slightest attempt at redaction or anonymisation. B. Keeping in mind the stage at which those articles were published, contents whereof, more or less answering the questions put by the court to learned counsel for ED, coupled with the fact that the FIR of the alleged predicate offence was registered way back in the month of March 2024 and ....
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.... 2. Broadly speaking, prosecution case as set up in the prosecution complaint of ED is as follows. 2.1 On 09.03.2024, a secret information was received by the Crime Branch, Delhi Police about a syndicate of criminals involved in manufacture and sale of spurious medicines, which are used in treatment of cancer. The secret informer intimated that the accused persons namely Viphil Jain and Suraj Shat were coming to Moti Nagar to supply the spurious medicines and injections; and that the co-accused persons namely Komal Tiwari, Tushar Chauhan, Pravez Khan and Neeraj Chauhan also could be nabbed from different places of Delhi and NCR region, if simultaneously raided. 2.2 On the basis of the said secret information, six teams of Delhi Police were constituted and were assigned specific locations to raid simultaneously. At about 11:00am, one of those police teams reached the Capital Greens, DLF Moti Nagar, Delhi, where after the necessary verification and identification of the place of manufacturing and the suspects, a team of the Drug Inspector was contacted. At about 02:30pm the joint team of Delhi Police and Drug Inspector raided a flat on 11th Floor of the Capital Greens, Moti ....
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....CRIBED 2.8 The role ascribed to the applicant Pravez Khan is that being close associate of the co-accused Viphil Jain, he used to supply empty vials to co-accused Viphil Jain for being filled with spurious Keytruda to be used for cancer treatment; and those vials were used by Viphil Jain and the applicant Suraj Shat for refilling, relabeling and sale in the open market. The applicant Pravez Khan was earning Rs. 500/- to Rs. 700/- per empty vial of Keytruda injection. In this manner, the applicant Pravez Khan received Rs. 2,50,000/-in his ICICI Bank account on 28.09.2023 from the bank account of one co-accused Aditya Krishna, which amount was explained by the applicant Pravez Khan as loan received by him from Aditya Krishna, arranged by Viphil Jain, and paid back according to the applicant Pravez Khan in cash, but without any debit entry in the bank account. 2.9 The role ascribed to the applicant Neeraj Chauhan is that he misused his professional experience in Oncology and Pharmacy, coupled with his involvement with two business entities engaged in the healthcare sector; and he facilitated procurement and distribution of the empty vials. During the year 2023 and till February ....
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....involved in medical business established by his family through two business entities, out of whom one is a leading distributor and seller of anti cancer drugs in Delhi and other parts of the country. The applicant Lovee Narula had an enormous patient base, who needed anti cancer drugs and trusted his family companies. The applicant Lovee Narula also purchased Keytruda injections from the applicant Neeraj Chauhan without bills and made payments in the bank accounts of the applicant Neeraj Chauhan and co-accused Tushar Chauhan. In this process of obtaining spurious medicines worth Rs. 85,99,000/- from the applicant Neeraj Chauhan and selling the same in open market, the applicant Lovee Narula generated for himself the proceeds of crime to the tune of Rs. 7,45,000/-. 2.12 The role ascribed to the applicant Rajesh Kumar is that he obtained the spurious anti cancer medicines, especially Keytruda injections from the applicant Neeraj Chauhan without bills or any supporting documents against payments made in cash and through bank accounts held by the applicant Neeraj Chauhan and the co-accused Tushar Chauhan. The applicant Rajesh Kumar facilitated sale of the spurious anti cancer medici....
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....pplicant Pravez Khan, he deserves to be granted bail. Taking me through records, learned senior counsel for the applicant Pravez Khan elaborated his argument that in order to label the earnings as proceeds of crime, the same should be subsequent to the alleged commission of the scheduled offence, and since in the present case, earnings of the applicant Pravez Khan referred to by the ED came prior to even procurement of capping machines, the same could not be labelled as proceeds of crime. According to the applicant Pravez Khan, he had supplied empty vials to the co-accused Viphil Jain under an impression conveyed to him that clients of Viphil Jain would be able to raise insurance claims on the basis of empty vials. It was also elaborated by learned senior counsel that since co-accused Komal Tiwari and Abhinay, who have been ascribed same role as of the applicant Pravez Khan have not been arrested, the applicant Pravez Khan deserves at least now to be released on bail. It was argued that Section 3 of PMLA stipulates requirement of knowledge with the accused but in the present case, there is nothing to show that the applicant Pravez Khan knew that the vials would be used for making s....
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....qualified with no medical background and was only an employee of co-accused Viphil Jain at a monthly salary of Rs. 30,000/-. Learned counsel submitted that no proceeds of crime were received by the applicant Suraj Shat. 3.6 In response, learned standing counsel for ED argued that in view of seriousness of the charge, none of the accused/applicants deserves to be released on bail. It was contended on behalf of ED that the applicant Pravez Khan is a degree holder in pharmacology and was engaged in collecting empty vials through co-accused Komal and Abhinay from cancer hospitals. It was submitted that co-accused Komal and Abhinay were under mistaken belief that the empty vials were to be used for raising insurance claims. Learned counsel for ED took me through elaborate statements of each of the accused/applicants recorded under Section 50 PMLA, in which each of them admitted the roles played by them respectively. As regards the proviso to Section 45 PMLA, learned counsel argued that it is not just the individual accused, but all the accused/applicants along with all co-accused persons, whose proceeds of crime have to be considered collectively in order to ascertain applicability o....
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....recovered from him, so he deserves bail. It was also argued that Gagan Khurana, against whom the allegations are similar to those against the applicant Lovee Narula and even a sum of Rs.5,00,000/-was recovered from Gagan Khurana, he has not even been named as accused. Similarly, Sheetal Pandey and Ayonij Jain, who also had role similar to the applicant Lovee Narula were not even named as accused. Learned senior counsel made clear that the drug sold at cheaper rates was Opdyta, which was found genuine in all vials after forensic analysis. Learned senior counsel for the applicant Lovee Narula argued that since the SLP against rejection of bail applications of the applicants Lovee Narula and Rajesh Kumar were dismissed in limine, this court can certainly take a contrary view. 3.8 In rebuttal arguments, learned senior counsel for the applicant Pravez Khan contended that the ED should have independently investigated if the drugs in question were actually spurious or not, but that was not done. Learned senior counsel also submitted that despite having received the forensic report on 27.05.2024 regarding analysis of the allegedly recovered drugs, the ED has not placed the same on recor....
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....ters applicable in conventional offences. The provision further stipulates: "unless" the Public Prosecutor has been given opportunity to oppose such release and where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that the person accused of an offence under the Act is not guilty of such offence and he is not likely to commit any offence while on bail. The blanket of those twin conditions is partially lifted by way of the proviso in order to deal with an accused, who is under 16 years of age or is a lady or sick or infirm or has been accused of money laundering for a sum less than one crore rupees. But that proviso is not relevant for present purposes. 4.1 The broad principles to be kept in mind while dealing with an application for grant of anticipatory bail in cases arising out of PMLA, as culled out of plethora of judicial pronouncements are as follows. While considering such applications, the court is not expected to delve deep into merits of the allegation by microscopic analysis of the material collected by the investigator; the court has to satisfy itself only as regards existence of prima facie c....
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....confiscation of proceeds of crime and to prosecute persons involved in the process or activity connected with the proceeds of crime. In view of the gravity of the fallout of money laundering activities having transnational impact, a special procedural law for prevention and regulation, including to prosecute the person involved, has been enacted, grouping the offenders involved in the process or activity connected with the proceeds of crime as a separate class from ordinary criminals. The offence of money-laundering has been regarded as an aggravated form of crime "world over". It is, therefore, a separate class of offence requiring effective and stringent measures to combat the menace of money laundering. xxxxx Thus, it is well settled by the various decisions of this Court and policy of the State as also the view of international community that the offence of money-laundering is committed by an individual with a deliberate design with the motive to enhance his gains, disregarding the interests of nation and society as a whole and which by no stretch of imagination can be termed as offence of trivial nature. Thus, it is in the interest of the State that law enfor....
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....n exception", matters of bail in cases involving socio-economic offences have to be visited with a different approach, as held in State of Bihar & Anr. vs Amit Kumar (2017) 13 SCC 751. 9.4 As held by the Supreme Court in the case of Y.S. Jagan Mohan Reddy vs CBI, (2013) 7 SCC 439: "15) Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. 16) While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations." 9.5 O....
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....ticed the requirement to look for foundational facts. It is from that angle, I have examined the issue in detail afresh. 5.2 I am conscious that in the SLPs, the Supreme Court did not interfere with the rejection of bail applications of the applicants Lovee Narula and Rajesh Kumar. But since the decision of the Supreme Court was dismissal of SLP in limine, in my considered view, the said rejection of bail was neither affirmed, nor the principle of res judicata would come into play. The significant observations of the Supreme Court in the case of Kusal Toppo (supra) are extracted below: "4. In the present case there were as many as five accused. A-5 was acquitted by the trial court itself. The other two accused A-2 and A-3 had filed Special Leave Petitions (Criminal) Nos. 2572-73 of 2009 against the judgment and order of the High Court, which were dismissed [Mahendra Prasad v. State of Jharkhand, 2009 SCC OnLine SC 13, wherein it was directed: "Heard the learned counsel for the petitioner. No merits. The special leave petition is dismissed."] by this Court at the time of admission itself. In criminal cases, it is well settled that a dismissal of an SLP in limine....
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....iterate the principle that successive applications for bail can be brought, but where the court comes to a decision different from the decision taken by the courts in the previous bail applications, the court concerned must deal with the view taken by the other courts in the previous bail applications. 5.6 The major plank for rejection of bail applications of the applicants Lovee Narula and Rajesh Kumar by the coordinate bench was the statements of the accused/applicants recorded under Section 50 PMLA, therefore, it would be apposite to examine the legal position as regards admissibility of such statements, in the guiding light of the successive decisions of the Supreme Court. 5.7 In the case of Vijay Madanlal Choudhary vs Union of India, 2022 SCC OnLine SC 929, the Supreme Court held that where statement of an accused is recorded after formal arrest by the ED officials, the consequences contemplated under Article 20(3) of the Constitution of India and Section 25 of the Evidence Act may come into play to urge that the same being in the nature of confession, shall not be proved against the maker thereof. The Supreme Court observed that the authorities under PMLA are not police....
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.... not think it matters in the slightest of what crime it is said to be a confession." (emphasis supplied) 31. We feel that the principle laid down there on is applicable. In fact, the three-Judge Bench in Vijay Madanlal Chaudhary (supra), in the para extracted hereinabove, expressly refers to Section 25 of the Evidence Act while dealing with statements recorded when the person is in custody. 32. We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker. The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind. It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice." (emphasis supplied) 5.9 Thus, the legal position as regards statements of the accused persons recorded under Section 50 PMLA is that where such statements are recor....
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....ndividual roles. Each statement flows as smoothly as a hot knife on butter. It is a bit unbelievable, to say the least that a person would voluntarily make such self incriminating statement to the investigating agency, unless coerced in custody. Such self incriminating statements when recorded under Section 50 PMLA while the maker of the statement is in custody of ED, cannot be considered voluntary statements and must be discarded. 5.13 Therefore, with utmost humility at my command, I am unable to agree with the decision of the learned coordinate bench, whereby placing reliance on statements under Section 50 PMLA, bail applications of the applicants Lovee Narula and Rajesh Kumar were rejected. 5.14 Another factor kept in consideration by the learned coordinate bench while rejecting the bail applications of the applicants Lovee Narula and Rajesh Kumar was reliance of ED on WhatsApp chats allegedly exchanged between some of the accused persons, which according to ED "shows financial trail of the proceeds of crime". I have examined those WhatsApp chats also. The same are prima facie a usual business chats between the persons trading in medicines. The accused/applicants, admitted....
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....on 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 of crime, is established. The existence of proceeds of crime is, therefore, a foundational fact, to be established by the prosecution, including the involvement of the person in any process or activity connected therewith. Once these foundational facts are established by the prosecution, the onus must then shift on the person facing charge of offence of money laundering - to rebut the legal presumption that the proceeds of crime are not involved in money laundering, by producing evidence which is within his personal knowledge." (emphasis supplied) 6.1 The same was reiterated by the Supreme Court in the case of Prem Prakash (supra) thus: "15. In view of the importance of the three basic foundational facts that the prosecution needs to establish, the counter/response to the bail application in the original Court is very significant in PMLA bail matters. In cases where the Public Prosecutor takes a considered decision to oppose the bail application, the counter affidavit ....
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....he supportive evidence/material collected by the investigator. With that principle in mind, I have scrutinized the record, also at the same time being careful not to minutely analyse the material keeping in mind the broad principles of consideration of bail. 6.4 In nutshell, the allegation against the accused/applicants is that they are part of a syndicate involved in preparation and sale of spurious anti cancer drugs, which led to generation and acquisition of tainted money, labelled by ED as the proceeds of crime. It would also be relevant to keep in mind that the applicants namely Pravez Khan, Neeraj Chauhan and Suraj Shat have already been admitted to bail in the predicate offence of preparation and sale of the spurious drugs, while the remaining two applicants namely Rajesh Kumar and Lovee Narula were not even charge-sheeted for the predicate offence. 6.5 The ED has ascribed specific role to each of the accused/applicants in the following manner. The applicants Pravez Khan and Neeraj Chauhan supplied empty vials of injections to co-accused Viphil Jain and the applicant Suraj Shat, both of whom prepared spurious anti cancer drugs by using those empty vials. The applicant ....
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....y, in the predicate offence the accused/applicants are acquitted. 6.8 The quantum of money involved in itself also presents an interesting picture. Admittedly, on individual level, none of the accused/applicants transacted to the extent of more than a few lakhs of rupees, but certainly much lesser than one crore rupees. Even according to ED, the threshold of one crore rupees requisite to apply the twin conditions under Section 45 PMLA in the present case has to be the collective transactions of all the accused/applicants. Of course, it is not to say that for invoking twin conditions under Section 45 PMLA, each of the accused/applicants must be shown to have transacted to the tune of one crore rupees. What one observes in this case is only to the extent of role allegedly played by the individual accused/applicant. There are numerous offences registered, investigated and even charge-sheeted, which involve crores of rupees, but despite their being the Scheduled offences, no proceedings under PMLA are initiated. Certainly it is the prerogative of ED and not a matter of parity that some of the cases would be picked for such harsh law enforcement. But certainly, it is a relevant consi....
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.... applicant Neeraj Chauhan, seven vials through processes of spot sampling and court sampling and analysed by the manufactures or the drug inspectors were found to contain genuine drugs Keytruda, Opdyta, Perjeta and Darzalex; and only two vials through processes of spot sampling and court sampling were found to contain anti-fungal drugs. As regards applicant Pravez Khan, two vials of Keytruda and one vial of Opdivo through process of court sampling and analysed by the manufacturer were found spurious. The single vial of Opdyta recovered from co-accused Viphil Jain and applicant Suraj Shat and sampled through spot sampling was found to contain spurious drug according to the drug inspector. In view of clear stand of the accused/applicants that they were unaware that contents of those vials were spurious, ED should have conducted further investigation. 7.2 No investigation was conducted by ED to rule out the complicity of manufacturer or to rule out some manufacturing error in contents of those vials. Should the accused/applicants be denied liberty in this scenario only because they purchased the drugs at a price lesser than market price? The answer has to be resounding No. 8. Fu....
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....o arrest only those who do not succumb to pressures and self incriminate. 9. Lastly, I have also examined the issue of delay in trial, which is one of the important grounds raised by the accused/applicants seeking bail. It is trite that the fundamental right to life and liberty under Article 21 of the Constitution of India is a potent provision capable of making inroads into even the requirement of twin conditions under Section 45 PMLA for grant of bail. This aspect was examined by the Supreme Court in a number of judicial pronouncements, the latest one being in the case of Arvind Dham vs Directorate of Enforcement, 2026 INSC 12, in which after detailed discussion, it was held thus: "15. We have given our thoughtful consideration to the rival submissions and have carefully perused the record. The court while dealing with the prayer for grant of bail has to consider gravity of offence, which has to be ascertained in the facts and circumstances of each case. One of the circumstances to consider the gravity of offences is also the term of sentence that is prescribed for the offence, the accused is alleged to have committed. The court has also to take into account the objec....