Back
SUPREME COURT OF INDIA
BELA M. TRIVEDI, PRASANNA B. VARALE, JJ.
The Union of India Through The Assistant Director – Appellant
Versus
Kanhaiya Prasad – Respondent
Criminal Appeal No. 728 of 2025 (@ Special Leave Petition (Crl.) No. 7140 of 2024)
Decided on : 13-02-2025
(A) Prevention of Money Laundering Act, 2002 – Section 45 – Criminal Procedure Code, 1973 – Section 439 [Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 483] – Grant of bail – Challenge as to – Offence of money laundering is a very serious offence which is committed by an individual with a deliberate desire and motive to enhance his gains, disregarding interest of nation and society as a whole – Such offence cannot be regarded as an offence of trivial nature – Section 45 of PMLA has overriding effect on general provisions of Code of Criminal Procedure in case of conflict between them – Conditions enumerated in Section 45 will have to be complied with even in respect of application for bail made under Section 439 of Cr.P.C. – Burden to prove that proceeds of crime are not involved in money laundering would lie on person charged with offence – Consideration of two conditions mentioned in Section 45 is mandatory and while considering bail application, rigours of Section 45 have to be reckoned by court to uphold objectives of PMLA – Non-compliance of mandatory requirement of Section 45 has, on face of it, made impugned order unsustainable and untenable in eye of law. (Paras 10, 12, 13, 16 and 17)
(B) Prevention of Money Laundering Act, 2002 – Section 45 – Criminal Procedure Code, 1973 – Section 439 [Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 483] – Grant of bail – Challenge as to – Offence of money laundering is an independent offence regarding process or activity connected with proceeds of crime, which had been derived or obtained as a result of criminal activity relating to or in relation to a schedule offence – Involvement in any one of such process or activity connected with Proceeds of Crime would constitute offence of money laundering – This offence otherwise has nothing to do with criminal activity relating to a schedule offence, except Proceeds of Crime derived or obtained as a result of that crime – Merely because prosecution complaint had been filed and cognizance was taken by court that itself would not be ground or consideration to release respondent on bail, when mandatory requirements as contemplated in Section 45 have not been complied with – Offence of money laundering has been regarded as an aggravated form of crime world over and offenders involved in activity connected with Proceeds of Crime are treated as a separate class from ordinary criminals – Any casual or cursory approach by Courts while considering bail application of offender involved in offence of money laundering and granting him bail by passing cryptic orders without considering seriousness of crime and without considering rigours of Section 45, cannot be vindicated – Impugned order set aside and matter remanded to High Court for consideration afresh. (Paras 19, 20, 21 and 22)
(C) Constitution of India – Article 20(3) – Right against self-incrimination – Protection afforded to an accused insofar as it is related to phrase “to be a witness” is in respect of testimonial compulsion in court room, and it may also extend to compelled testimony previously obtained from him – It is available to a person against whom a formal accusation relating to commission of an offence has been levelled, which in normal course may result in a prosecution. (Para 18)
Facts of the case:
Appellant-Union of India through Enforcement Directorate has challenged legality of impugned judgment and order dated 06.05.2024 passed by High Court of Judicature at Patna in Criminal Miscellaneous No. 17738/2024, whereby High Court had allowed the said petition and released respondent on bail, in connection with Special Trial (PMLA) Case.
Findings of Court:
Impugned order passed by High Court having been held to be unsustainable and untenable by Court, effect of the same cannot be continued. Respondent shall surrender before the Special Court within one week from today.
Result : Appeal allowed.
JUDGMENT :
BELA M. TRIVEDI, J.
1. Leave granted.
2. The appellant-Union of India through the Enforcement Directorate has challenged the legality of the impugned judgment and order dated 06.05.2024 passed by the High Court of Judicature at Patna in Criminal Miscellaneous No. 17738/2024, whereby the High Court had allowed the said petition and released the respondent Kanhaiya Prasad on bail, in connection with the Special Trial (PMLA) Case No. 8 of 2023 arising out of ECIR No. PTZO/14/2023.
3. As per the case of the appellant-ED, some 20 FIRs were registered at the various Police Stations at Patna, Saran and Bhojpur Districts under Sections 38, 120B, 378, 379, 406, 409, 411, 420, 467, 468 and 471 of IPC, and under Section 39(3) of the Bihar Mineral, (Concession, Prevention of Illegal Mining, Transportation & Storage) Rule, 2019. It was alleged inter alia that M/s Broad Son Commodities Private Ltd and its Directors were engaged in illegal mining and selling of sand without using the departmental pre-paid transportation E-challan, issued by the Mining Authority Bihar, and thus had caused revenue loss of Rs.161,15,61,164/- to the Government Exchequer. Since the said FIRs contained Scheduled offences as defined under Section 2(1)(y) of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as the ‘’PMLA’’), an ECIR bearing No. ECIR/PTZO/14/2023 dated 15.03.2023, addendum ECIR No. ECIR/PTZO/14/2023 dated 08.11.2023 and dated 04.05.2024 came to be registered, and the investigation for the offences of Money Laundering was initiated.
4. During the course of investigation and pursuant to the information made available, search operations were carried out under Section 17 of PMLA at the various locations and premises related with the said Company and its Directors, including four premises of Radha Charan Sah, (father of the respondent). During the course of inquiry, the statements of the respondent-Kanhaiya Prasad, being son of the said Radha Charan Sah came to be recorded on 01.09.2023 and 04.09.2023 under Section 50 of the PMLA. It has been alleged by the appellant-ED that thereafter the respondent was issued summons to appear before the Directorate on 11.09.2023, 12.09.2023 and 13.09.2023, however, he failed to appear on the said dates. The respondent thereafter was arrested at the ED, Patna Zonal Office, Bihar on 18.09.2023. On production of the respondent before the concerned court, his custody was handed over to the appellant- ED on 22.09.2023.
5. From the documents seized from the premises of the Radha Charan Sah and from the statements recorded under Section 50 of the Witnesses, of the respondent and of his father, it was found that the respondent-accused was actually involved in the process of concealing and the possession of the proceeds of crime amounting to Rs.17,26,85,809/- which were used for carrying out the renovation work in the resort at Manali and for the construction work of the school owned by his trust. It was also found that the respondent-accused had handled the said proceeds of crime and transferred it by using hawala network for acquisition of the resort at Manali. It was also alleged that the entire work of family-owned LLP’s and of Maa Sharda Devi Buildings and Construction, was handled by the respondent to route the proceeds of crime generated by his father to portray it as untainted money. The respondent thus had allegedly layered and laundered the proceeds of crime generated by his father, being a syndicate member involved in illegal sale of sand using hawala network. The respondent also had allegedly concealed the proceeds of crime by way of purchasing properties, carrying out renovation work and constructions in the family- owned trust property using the said proceeds of crime.
6. The appellant-ED therefore filed Prosecution Complaint against the respondent and other accused on 10.11.2023 for the offences under Section 3 read with Section 4 of the PMLA. The specific role of the respondent-accused ha
(1) Grant of bail – Consideration of two conditions mentioned in Section 45 is mandatory and while considering bail application, rigours of Section 45 have to be reckoned by court to uphold objective....
The right to a speedy trial under Article 21 of the Constitution prevails, allowing bail under Section 436A of the CrPC despite statutory restrictions in the PMLA.
Point of law : The Authorities will release the applicant only if he is not required in connection with any other offence for the time being. If breach of any of the above conditions is committed, th....
The judgment establishes that in cases of money laundering under the PMLA, the conditions for granting anticipatory bail are stringent, requiring the accused to prove their innocence, and that the co....
The court emphasized the right to a speedy trial and liberty, allowing bail under the Prevention of Money Laundering Act after 15 months of custody, citing no likelihood of trial commencement.
The right to personal liberty under Article 21 prevails over prolonged pre-trial incarceration, with bail granted subject to stringent conditions.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
