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2025 Supreme(Online)(Jhk) 3528
HIGH COURT OF JHARKHAND
Sujit Narayan Prasad, J
SHIVA KUMAR DEORA ALIAS SHIVA RATAN DEORA – Appellant
Versus
THE UNION OF INDIA THROUGH DIRECTORATE OF ENFORCEMENT – Respondent
B.A. 8570 / 2025
For the Appellants/Petitioners:Mr. Vinay Prakash, Advocate
For the Respondents:Mr. Amit Kumar Das, Advocate
Mr. Saurav Kumar, Advocate
Mr. Varun Girdhar, Advocate
Mr. Manmohit Bhalla, Advocate
The twin conditions under Section 45 of PMLA are mandatory; arrest under Section 19(1) is valid if grounds of arrest and reasons to believe are furnished in writing and acknowledged; statements under Section 50 are admissible; presumption under Section 24 applies. Bail rejected.
Headnote:(A) Prevention of Money Laundering Act, 2002 - Sections 3, 4, 19(1), 45, 50 and 24 - Constitutional validity and scope of twin conditions for bail - Arrest procedure under Section 19(1) - Requirement to furnish grounds of arrest in writing - Mandate of Article 22(1) of Constitution - The court held that the twin conditions under Section 45 are mandatory and must be complied with; the accused must satisfy the court that there are reasonable grounds for believing he is not guilty and not likely to commit any offence on bail. The arrest was valid as the grounds of arrest and reasons to believe were furnished in writing and acknowledged by the petitioner at the time of arrest, and he was produced before the magistrate within 24 hours. Statements recorded under Section 50 are admissible and can be relied upon at the bail stage. The presumption of involvement of proceeds of crime under Section 24 arises once foundational facts are established; the accused must rebut it.
(B) Scheduled offence - The alleged predicate offences under Sections 420, 467 and 471 IPC are scheduled offences under Part A of the Schedule to PMLA. The prosecution complaint can include IPC offences along with special statute offences as they are distinct and can coexist; the bar under a special Act does not preclude prosecution under IPC for the same act.
(C) Economic offences - Grave nature - The court emphasized that economic offences constitute a class apart and require a different approach in bail matters; they affect the economy and financial health of the nation. Bail applications under PMLA are to be decided with strict rigors, and the principle 'bail is the rule, jail is the exception' does not apply.
Facts of the case:
The petitioner was arrested on 08.05.2025 under Section 19 of PMLA in connection with ECIR No. RNZO/18/2024 based on three complaint cases filed by DGGI for GST fraud involving creation of 135 shell companies and passing of fake ITC of about Rs. 750 crores. The petitioner alleged that the arrest was illegal for non-compliance of Section 19(1) as grounds of arrest were not furnished in writing, and that no offence under Section 3 PMLA is made out. The ED opposed bail citing the gravity of offence, ongoing investigation, and that grounds of arrest and reasons to believe were furnished and acknowledged.
Findings of Court:
The court found that the arrest complied with Section 19(1) as the grounds of arrest and 'reasons to believe' were furnished in writing and acknowledged by the petitioner; production before CJM within 24 hours was also complied. The court examined the prosecution complaint and found substantial material prima facie showing the petitioner's involvement in money laundering, including generation, concealment, possession, use, and projection of proceeds of crime as untainted property. The statements of co-accused and witnesses recorded under Section 50 are admissible. The twin conditions under Section 45 are not satisfied by the petitioner.
Issues: (1) Whether the arrest of the petitioner was illegal for non-compliance of Section 19(1) PMLA? (2) Whether the petitioner has made out a case for bail considering the twin conditions under Section 45 PMLA?
Ratio Decidendi: The court reiterated the mandatory nature of Section 45 twin conditions and the requirement to communicate grounds of arrest in writing as per Pankaj Bansal and subsequent cases. It held that once foundational facts of existence of proceeds of crime and involvement are established, the presumption under Section 24 applies and the accused must rebut it. The court found prima facie involvement of the petitioner and rejected bail.
Result: Bail application dismissed.
IN THE HIGH COURT OF JHARKHAND AT RANCHI B.A. No. 8570 of 2025 ------
Shiva Kumar Deora @ Shiva Ratan Deora, aged about 52 years S/o Late Nand Kishore Deora, resident of Swarnamani Complex, Tower Zarina, 2nd Floor, Flat 2ZB, 33, Canal Circular Road, Near Bengal Chemical Metro, P.O.-Maniktala, P.S.-Kankurgachi, District-Kolkata, West Bengal-700054. … … Petitioner Versus Union of India, through Directorate of Enforcement, Ranchi Zonal Office, Plot No.1502/B, Airport Road, Hinoo, Ranchi, P.O. + P.S. Doranda, Dist. – Ranchi.
… … Opposite Party -------
CORAM: HON’BLE MR. JUSTICE SUJIT NARAYAN PRASAD -------
For the Petitioner : Mr. Vinay Prakash, Advocate For the Opp. Party : Mr. Amit Kumar Das, Advocate Mr. Saurav Kumar, Advocate Mr. Varun Girdhar, Advocate Mr. Manmohit Bhalla, Advocate ------
C.A.V. on 29/10/2025 Pronounced on 12/11/2025 Prayer:
1. The instant application has been filed under Sections 483 and 484 of the Bhartiya Nagrik Suraksha Sanhita, 2023 read with Section 45 of Prevention of Money Laundering Act, 2002 praying for grant of regular bail in connection with ECIR Case No. 05 of 2025 arising out of ECIR No. ECIR/RNZO/18/2024 dated 23.09.2024 for the offence under Sections 3 of the Prevention of Money Laundering Act, 2002 [hereinafter referred to as PML Act, 2002] punishable under Section 4 of the Prevention of Money Laundering Act, 2002, based on the Complaint Case Nos.678 of 2024, 1280 of 2024 and 1281 of 2024 before the learned Court of Economic Offences, Jamshedpur under section 132 of the CGST Act, 2017 read with Sections 20 of the IGST, read with Sections 34, 120A, 193, 195A, 201, 203, 204, 406, 409, 420, 465, 467, 468 and 471 of the Indian Penal Code, pending in the court of learned Special Judge, P.M.L. Act, Ranchi.
Factual Matrix of the Case
2. An ECIR bearing No. ECIR/RZNO/18/2024 was recorded on 23.09.2024 based on the Complaint Case Nos.678 of 2024, 1280 of 2024 and 1281 of 2024 before the learned Court of Economic Offences, Jamshedpur against the petitioner and other persons.
3. Subsequently, the prosecuting agency, i.e., the Directorate of Enforcement while observing that Sections 420, 467 and 471 of the Indian Penal Code are scheduled offences under Part-A, Paragraph 1 of the PML Act, 2002 initiated the investigation under PML Act, 2002 by registering Enforcement Case Information Report having ECIR bearing No. ECIR/RZNO/18/2024 dated 23.09.2024. 4. As per aforesaid three complaint cases, it is revealed that a syndicate is operational in Jharkhand, West Bengal, Delhi and other States of the Country, Syndicate is indulged in creation, operation and management of fake companies / firms for passing on ineligible ITC (Input Tax Credit) by issuing fake GST bills, without actually delivering the related goods and services and the persons namely Shiva Kumar Deora(present petitioner) Sumit Kumar Gupta and Amit Kumar Gupta are a part of the said syndicate who are knowingly a party with each other and or directly involved in illegal activities of creation of fake companies / firms in the name of various dummy directors/ proprietors in order to avail and pass on ITC to several end beneficiaries in lieu of money, which are proceeds of crime. Further, it has been stated in the complaints that several bogus GST invoices have been generated in Delhi and have traveled to Jharkhand via West Bengal in three to four layers.
5. A portion of these bogus ITCs have also been transferred to other states such a Tamil Nadu, Telangana, Andhra Pradesh, Maharashtra and Odisha and bogus ITC claims have also been taken on the basis of the said fake invoices.
6. As per aforesaid complaint case Shiva Kumar Deora (present petitioner) is the mastermind behind the said fraud committed of availing ITC on the strength of bogus invoices, by way of creation of multiple companies/firms in the name of innocent persons. They hired innocent and needy persons in the name of job at the renumeration of Rs. 10,000/- to 15,000/- per month and they were not requ
