Chhattisgarh High Court Rejects Bail in Major Money Laundering Case

The Chhattisgarh High Court recently rejected a bail application filed by Nikhil Chandrakar , accused in a significant money laundering case involving an alleged coal extortion syndicate. The judgment, MCRC No. 7311 of 2024, delivered on February 20, 2025, hinged on the interpretation and application of Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA).

Case Overview

Nikhil Chandrakar , an employee of Suryakant Tiwari , was arrested on June 20, 2023, in connection with Crime No. ECIR/RPZO/09/2022. The Enforcement Directorate (ED) alleges Chandrakar was a key member of a coal syndicate that illegally extorted approximately ₹540 crore over two years. The syndicate allegedly used a manual verification system for coal delivery orders to extort ₹25 per ton, aided by its connections within the state's administration. Chandrakar 's role, according to the ED, involved collecting and distributing illegal cash, managing syndicate finances, and facilitating the layering and projection of proceeds of crime.

Arguments Presented

Chandrakar 's defense argued that the predicate offence (Section 384 IPC - extortion) no longer held, citing Supreme Court precedents that a PMLA prosecution cannot stand without a viable predicate offence. They also argued that his arrest violated Section 19 of the PMLA, that evidence was obtained through coercion, and that he had provided a legitimate explanation for his assets. They pointed to the bail granted to other co-accused as further justification.

The ED, however, countered that Chandrakar was a central figure in the syndicate, with intimate knowledge of its operations and the flow of illegal funds. They presented evidence from seized diaries and WhatsApp chats and argued that Chandrakar actively participated in money laundering, including the acquisition of properties with proceeds of crime. They highlighted that even if other accused were granted bail, Chandrakar 's pivotal role differentiated his case. The ED emphasized the scale of the operation and the risk of witness tampering.

The Court's Decision

The High Court, citing recent Supreme Court precedents like Directorate of Enforcement v. Aditya Tripathi and Union of India through the Assistant Director v. Kanhaiya Prasad , focused on the stringent requirements of Section 45 of the PMLA. The court found that Chandrakar failed to meet the twin conditions of Section 45: that there are reasonable grounds to believe he is not guilty, and that he is not likely to commit further offences while on bail.

The court specifically noted the large scale of the operation (₹540 crore), Chandrakar 's substantial role in the syndicate, and the provisional attachment of his assets worth approximately ₹221.19 crore. The court rejected the argument that bail should be granted simply because other co-accused received bail, emphasizing Chandrakar 's unique and central role in the alleged crime.

The High Court's decision underlines the high bar set for bail in complex money laundering cases under the PMLA, particularly concerning the crucial role of Section 45 in determining the eligibility for release. The court’s refusal to grant bail reinforces the seriousness with which such economic offences are viewed by the judiciary. The case’s implications are significant for future PMLA cases, emphasizing the need for rigorous scrutiny of evidence and the accused’s role within the alleged criminal activity.