Back
SUPREME COURT OF INDIA
B.R. GAVAI, K.V. VISWANATHAN, JJ.
Prem Prakash – Appellant
Versus
Union of India Through The Directorate of Enforcement – Respondent
Criminal Appeal No. 3572 of 2024 (@ SLP (Crl.) No. 5416/2024)
Decided on : 28-08-2024
(A) Prevention of Money Laundering Act, 2002 – Section 45 – Constitution of India – Article 21 – Bail – Predicate offence – While Section 45 of PMLA restricts right of accused to grant of bail, it could not be said that conditions provided under Section 45 impose absolute restraint on the grant of bail – Even under PMLA governing principle is that “Bail is Rule and Jail is Exception” – Principle that, “bail is rule and jail is exception” is only a paraphrasing of Article 21 of Constitution of India, which states that no person shall be deprived of his life or personal liberty except according to procedure established by law – Liberty of individual is always a Rule and deprivation is exception – Deprivation can only be by procedure established by law which has to be a valid and reasonable procedure – Section 45 of PMLA by imposing twin conditions does not re-write this principle to mean that deprivation is norm and liberty is exception – All that Section 45 of PMLA mentions is that certain conditions are to be satisfied. (Para 11)
(B) Prevention of Money Laundering Act, 2002 – Sections 24 and 45 – Bail application – Predicate offence – Counter to bail application should specifically crystallize material sought to be relied upon to establish prima facie three foundational facts – It is after foundational facts are set out that accused will assume burden to convince court within parameters of enquiry at Section 45 stage that for reasons adduced by him there are reasonable grounds to believing that he is not guilty of such offence. (Para 15)
(C) Prevention of Money Laundering Act, 2002 – Sections 24 and 45 read with Section 50 – Indian Evidence Act, 1872 – Section 25 – Constitution of India – Article 20(3) – Bail application – Predicate offence – Statement of appellant, taken as it is, does not prima facie make out a case of money laundering against appellant – It also does not point to involvement of appellant prima facie in forgery – Statement of appellant if to be considered as incriminating against maker, will be hit by Section 25 of Evidence Act since he has given statement whilst in judicial custody, pursuant to another proceeding instituted by same Investigating Agency – Taken as he was from judicial custody to record statement, it will be a travesty of justice to render the statement admissible against appellant – When accused is in custody under PMLA irrespective of case for which he is under custody, any statement under Section 50 PMLA to same Investigating Agency is inadmissible against maker – It will be extremely unsafe to render such statements admissible against maker, as such a course of action would be contrary to all canons of fair play and justice – Appellant cannot be denied bail based on pendency of other matter – Appellant has already been in custody for over one year – Trial is yet to commence – There is no justification for his continued detention – Judgment of High Court of Jharkhand set aside and bail granted to appellant. (Paras 20, 27, 32, 34, 46, 48 and 49)
Facts of the case:
Present appeal challenges Judgment dated 22.03.2024 of High Court of Jharkhand at Ranchi in bail application. By said judgment, High Court dismissed bail application of appellant. Appellant sought for regular bail in connection with ECIR Cases registered for the offence under Sections 3 and 4 of Prevention of Money Laundering Act, 2002.
Findings of Court:
Observations made in this judgment are only for the purpose of disposing of bail application and they shall not influence Trial Court, which would proceed in accordance with law and on the basis of evidence on record.
Result : Appeal allowed. Bail granted.
JUDGMENT :
K.V. Viswanathan, J.
1. Leave granted.
2. The present appeal challenges the judgment dated 22.03.2024 of the High Court of Jharkhand at Ranchi in B.A. No. 9863 of 2023. By the said judgment, the High Court dismissed the bail application of the appellant. The appellant sought for regular bail in connection with ECIR Case No. 5 of 2023 in ECIR-RNZO/10/2023 (hereinafter referred to as ECIR Case No. 5 of 2023) registered for the offence under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as ‘PMLA’) and pending before the Court of Special Judge, PMLA, Ranchi.
Brief Facts
3. The predicate offence on the basis of which ECIR No. 5 of 2023 was recorded on 07.03.2023 is an FIR bearing Sadar P.S. Case No. 399 of 2022 registered on 08.09.2022 for offences punishable under Sections 406, 420, 467, 468, 447, 504, 506, 341, 323 and 34 of the Indian Penal Code, 1860 (for short ‘IPC’). The appellant was not named as an accused there.
4. In view of Section 420 and 467 of IPC, being Scheduled Offences, ECIR No. 5 of 2023 was registered and investigation under the PMLA was initiated. Even here the appellant was not named though the ECIR did mention certain unknown persons being involved. It is alleged that the investigation revealed falsification of the original records in the Circle Office, Bargain, Ranchi and the Office of Registrar of Assurances, Kolkata respectively and as such custody of the original registers were taken in accordance with law.
5. The substratum of the allegation leading to the complaint lodged under PMLA are as follows:- Umesh Kumar Gope complained that Rajesh Rai, Imtiaz Ahmad, Bharat Prasad, Lakhan Singh, Punit Bhargava and Bishnu Kumar Agarwal fraudulently acquired one acre of land situated at Plot No. 28, Khata No. 37 Village Gari, Cheshire Home Road P.S. Sadar, Ranchi. The allegation was that accused Rajesh Rai S/o Jagdish Rai illegally and fraudulently made a Power of Attorney in the name of Imtiaz Ahmad and accused Bharat Prasad and on the basis of said Power of Attorney prepared a forged sale deed and sold the above-mentioned parcel of land to accused Punit Bhargava, an accomplice of the appellant for an amount of Rs. 1,78,55,800/-. It is further alleged that the said land was transferred by accused Punit Bhargava to accused Bishnu Kumar Agarwal vide two sale deeds dated 01.04.2021 for a total amount of Rs. 1,80,00,000/- (Rs.1,02,60,000/- and Rs.77,40,000). According to the Enforcement Directorate, accused Bishnu Kumar Agarwal paid Rs. 1,78,20,000/- to accused Punit Bhargava in the account of his firm Shiva Fabcons (Proprietorship firm of accused Punit Bhargava) and out of which Rs. 1,01,57,400/- was transferred to M/s Jamini Enterprises, which according to the respondent-Investigating Agency, was a firm whose beneficial owner is the appellant. The appellant was arrayed as Accused No.8 in the Prosecution Complaint of the Investigating Agency.
6. According to the Investigating Agency, it was confirmed by the Directorate of Forensic Science that Deed No. 184 of 1948, a purported sale deed, by which the property was transferred by the predecessors of Umesh Gope to Jagdish Rai, father of Rajesh Rai was forged. A separate FIR bearing No. 137 of 2023 dated 10.05.2023 for offences under Sections 120-B, 465, 467, 468 and 471 of IPC came to be registered at Hare Street Police Station Kolkata on the basis of the report of the Fact Finding Committee of the Registrar of Assurances, Kolkata. It is stated that the said FIR was also merged into ECIR No. 5 of 2023.
7. It is alleged that it was on the directions of the appellant that the sale deed was executed in favor of Punit Bhargava by Rajesh Rai for an amount of Rs. 1,78,55,800/-; that only Rs. 25 lakhs were transferred from Shiva Fabcons (Proprietorship firm of Punit Bhargava) to Rajesh Rai although the consideration amount was Rs. 1,78,55,800/- and it was shown to have been paid in the sale deed; that out of the aforesaid sum of Rs
(1) Bail – Predicate offence – Even under PMLA governing principle is that “Bail is Rule and Jail is Exception”.(2) When accused is in custody under PMLA irrespective of case for which he is under cu....
The court emphasized that for bail under PMLA, satisfaction of twin conditions is mandatory, confirming the need for reasonable grounds against guilt and potential for re-offense. Balancing the sever....
The main legal point established in the judgment is that the twin conditions under Section 45 of PMLA must be satisfied before granting bail in a money laundering case, and the accused's involvement ....
(1) Money Laundering – Right to life and personal liberty enshrined under Article 21 of Constitution is overarching and sacrosanct – Constitutional Court cannot be restrained from granting bail to ac....
The main legal point established is the constitutional validity of Section 45(1) of the PML Act and the principle of granting bail in economic offences when the investigation is complete and the tria....
The existence of proceeds of crime is a prerequisite for prosecution under the PMLA, and the strict conditions for bail must be satisfied in cases involving money laundering.
(1) Economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting economy of country as a whole and ....
Bail is a rule, but denial is justified when serious allegations and criminal history indicate a likelihood of re-offending and tampering with evidence.
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
