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Money Laundering - Case Laws
Showing 81 to 100 of 2064 Records
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2025 (2) TMI 15
Seeking grant of regular bail - Money Laundering - involvement of several accused persons in the procurement, manufacturing and sale of spurious anti-cancer medicines - amount involved falls below Rs. 1 Crore, making the applicant eligible for the benefit of the statutory proviso - twin mandatory conditions under Section 45 of the PMLA - reasonable grounds to believe for guilty of the offence - applicability of statutory presumption of guilt under Section 24 of the PMLA - admissible evidences or not - offences punishable under Sections 274, 275, 276, 420, 468, 471 read with 120B and 34 of the Indian Penal Code, 1860.
HELD THAT:- It is a settled position of law that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon’ble Supreme Court, while emphasizing the legal sanctity of such statements, has time and again observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA. In a recent judgment, the Hon’ble Supreme Court in Abhishek Banerjee v. Enforcement Directorate [2024 (9) TMI 508 - SUPREME COURT] held that 'It has been specifically laid down in the said decision that the statements recorded by the authorities under Section 50 PMLA are not hit by Article 20 (3) or Article 21 of the Constitution, rather such statements recorded by the authority in the course of inquiry are deemed to be the judicial proceedings in terms of Section 50 (4), and are admissible in evidence, whereas the statements made by any person to a police officer in the course of an investigation under Ch. XII of the Code could not be used for any purpose, except for the purpose stated in the proviso to Section 162 of the Code.'
The Hon’ble Supreme Court in the aforementioned judgment underscored that such statements, being recorded in the course of an inquiry rather than an investigation, are not subject to the restrictions under Article 20 (3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50(4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA.
Whether the applicant is exempted from the rigors of the twin conditions of bail, if not, then whether the applicant has satisfied the twin mandatory conditions under Section 45 of the PMLA? - HELD THAT:- The Hon’ble Supreme Court in Nikesh Tarachand Shah v. Union of India, [2017 (11) TMI 1336 - SUPREME COURT] struck down the twin conditions as unconstitutional. However, the legislature subsequently amended the provision to cure the defects, and it has since been upheld in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], reaffirming the strict nature of bail conditions under the PMLA. In Prem Prakash [2024 (8) TMI 1412 - SUPREME COURT], the Hon’ble Supreme Court has also delved into the principles pertaining to bail in PMLA matters.
This Court holds that the applicant cannot claim the benefit of the monetary threshold exemption under the proviso to Section 45 of the PMLA. The entire scheme of laundering illicit funds, as uncovered by the investigation, extends far beyond the threshold of one crore rupees, and the applicant’s role must be assessed in the broader context of the criminal conspiracy in which he actively participated.
This Court finds that the twin conditions prescribed under Section 45 of the PMLA have not been satisfied and the applicant’s contention regarding his bail in the predicate offence holds no weight in the present case. The evidence on record, the ongoing nature of the investigation, and the applicant’s alleged role in the broader financial syndicate indicate that the applicant has failed to satisfy the rigors of Section 45 of the PMLA - this Court does not find any merit in the contention of the applicant that he is exempted from the twin conditions under the proviso to Section 45 of the PMLA or that he satisfies the twin conditions under Section 45 of the PMLA.
Whether the statutory presumption of guilt under Section 24 of the PMLA applies in the present case and whether the applicant has successfully rebutted this presumption? - HELD THAT:- From the bare perusal of Section 24 of the PMLA, it is evident that once a person is charged with the offence of money laundering under Section 3, the law presumes that the proceeds of crime are involved in money laundering unless the contrary is proven by the accused - In the present case, the investigating agency has relied not only on the statement of co-accused under Section 50 of the PMLA but also on financial records, WhatsApp communications, and transactional data, which indicate the applicant's active role in the alleged money laundering activities.
By virtue of Section 24 of the PMLA, the respondent is not required to conclusively establish the applicant's guilt at the pre-trial stage, rather, the applicant must demonstrate that the proceeds of crime attributed to him are not linked to money laundering. In the absence of any rebuttal by the applicant, the presumption under Section 24 of the PMLA stands in favor of the respondent, thereby justifying his continued detention.
In the present case, the respondent has placed on record material indicating that the applicant actively participated in procurement and sale of spurious anti-cancer medicines. The investigation has revealed that the applicant engaged in financial transactions involving the proceeds of crime, including payments made through banking channels and hawala transactions - Applying the legal presumption under Section 24(a) of the PMLA, once the respondent has demonstrated these foundational facts, the onus shifts to the applicant to rebut the presumption that the proceeds of crime were not involved in money laundering. The applicant, however, has failed to provide any credible evidence to rebut this presumption. Mere denial of involvement or assertion of being an investor in the firm without day-to-day operational control is insufficient to discharge the burden imposed by the statute.
Conclusion - i) This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, it is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. ii) The applicant has been unable to put forth any propositions before this Court that are sufficient for grant of bail and thus, the same are rejected.
Application dismissed.
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2025 (2) TMI 14
Money Laundering - challenge to summons issued by the Enforcement Directorate to the petitioners under Section 50(2) of the Prevention of Money Laundering Act, 2002 - petitioners challenge the summons on the ground that they had responded to the earlier summons issued by the Enforcement Directorate, the Enforcement Directorate ought not to have issued the impugned summons.
HELD THAT:- Section 44(1)(d) Explanation (ii) enumerates that “the complaint shall be deemed to include any subsequent complaint in respect of further investigation that may be conducted to bring any further evidence, oral or documentary, against any accused person involved in respect of the offence, for which complaint has already been filed, whether named in the original complaint or not”.
Although the alleged offence occurred prior to the amendment, impugned summons were issued after insertion of Explanation Clause under Section 44(1)(d)(ii). Therefore, there is no impediment for the authorities to issue summons for the purpose of collecting further information, documents, etc.
Courts at no circumstances shall dilute the rigor of investigation in money laundering cases instituted under the provisions of PMLA. Any judicial interference at the summons issuance stage may cause prejudice to an effective investigation. Therefore, the Courts should allow Investigating Agencies to function fairly and freely, enabling them to cull out the truth by collecting all necessary evidence, obtaining statements from the concerned individuals, and initiate all appropriate actions by following the due procedures as contemplated under the provisions of PMLA - Therefore, granting any leniency regarding appearance or otherwise, by the Courts based on misplaced sympathy or taking a lenient view, would undoubtedly hamper the investigation process. This would inevitably result in allowing individuals to escape from the clutches of PMLA proceedings, which is undesirable.
Conclusion - The validity of the summons issued by the Enforcement Directorate affirmed. The petitioners must comply with the summons and provide any additional explanations or documents required.
Petition dismissed.
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2025 (1) TMI 1544
Seeking grant of bail - Money Laundering - scheduled offences - illegal sand/mineral mining operations conducted by the present applicant - HELD THAT:- From the perusal of the grounds of arrest and the reasons to believe appended along with petition as Annexure P-34 and P-35 respectively, it is evident that the Enforcement Directorate had received formal complaints and intelligence inputs indicating illegal sand/mineral mining being done by the applicant in the case at hand. Based on the aforesaid, discreet inquiries were got conducted, details whereof are contained in the panchnama report dated 17.06.2024.
By virtue of an amendment made in the year 2019, proviso in Sub-Section1 of Section 17 of the 2002 Act which required that no search shall be conducted unless in relation to the scheduled offence a report has been forwarded to a Magistrate under Section 157 of the 1973 Code or a complaint has been filed before a Magistrate in regard of such offence stands omitted.
The argument raised on behalf of the applicant that relevant material has been ignored i.e. out of six FIRs mentioned in the grounds of arrest, four stand cancelled, the 5th does not pertain to the applicant and the 6th FIR does not deal with any scheduled offence, prima facie is of no consequence at this stage. The aforesaid FIRs were only indicative of the fact that there is rampant illegal mining in the area in question. Besides the aforesaid, quashing of the order of stoppage of one of the stone crushers of the National Green Tribunal (NGT) by the Hon’ble High Court is also of no avail to the applicant at this stage.
The facts, in the case at hand, made out from the grounds of arrest and reasons to believe prima facie reflect that the officer, in the case at hand, had material in his possession, on the basis of which in writing reasons to believe were recorded, that the applicant, who is to be arrested is guilty of the offence under the Act. As is the requirement of law, grounds of arrest and reasons to believe were supplied to the applicant upon his arrest. The conclusion drawn prima facie appears to logically flow from the facts. Prima facie neither there exists any error of nor there appears to be any improper exercise of power.
Conclusion - No case for grant of bail has been made out in terms of Section 45 of the PML Act, as there exist reasonable grounds for believing that the applicant is guilty of such offence. Moreover, taking into account the antecedent of the applicant, his propensities, the way and manner in which the applicant is alleged to have committed the offence, the applicant is likely to commit similar offences, if enlarged on bail in the future.
Bail application dismissed.
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2025 (1) TMI 1542
Seeking grant of Regular bail - Money Laundering - scheduled/predicate offence - proceeds of crime - illegally collecting commissions and supplying unaccounted liquor to the government liquor shops - satisfaction of twin test under Section 45 of the PMLA, 2002 or not - HELD THAT:- In the present case, the applicant was involved in the criminal acts of the syndicate and that he received commission from the liquor suppliers. However, no recovery of unaccounted money has been made in this regard and as per the investigating agency, the investigation is pending, hence, a conclusive determination of their role is yet to be made. On perusal of the records, it appears that the co-accused Trilok Singh Dhillon was a liquor.
In the case in hand, considering the fact that the charges levelled against the applicant are grave and a serious threat to societal harmony. On perusal of the aforesaid provisions of law and judgment passed by the Apex Court in the matter of Vijay Madanlal Choudhary Vs. Union of India and Others [2022 (7) TMI 1316 - SUPREME COURT (LB)], it is clear that the offence under PMLA, 2002 is a separate and distinct offence. PMLA 2002 deals with the proceeds of crime which has been obtained by the accused by committing schedule offences. Accused possess, conceals and acquire tainted property or money claiming it to be untainted and use the proceeds of crime. Said act of accused in dealing with ill gotten money or property constitutes separate and distinct offence from earlier offence committed to acquire money.
It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the Court which is not arbitrary or irrational but judicial, guided by the principles of law as provided under Section 45 of the Act, 2002.
What is required is to prima facie, consider the material available on record to satisfy itself and to enable it to reasonably form an opinion, to believe, that the applicant is not guilty of the offence and that he is not likely to commit any offence on bail as enshrined in Section 45 of the PMLA. It is also required to consider the nature and gravity of the accusation, severity of the punishment in the event of conviction, danger of the accused absconding or fleeing, character, behaviour means, position and standing of the accused, the likelihood and reasonable apprehension of the witnesses being influenced and danger, of course, of justice being defeated by grant of bail.
Conclusion - The applicant is in possession of the Proceeds of Crime of about 27.2 crores which was used in creation of various Fixed Deposits of principal amount totalling to Rs. 27.2 crores in the name of his companies ie. M/s. Petrosun Bio Refineries Pvt. Ltd. and M/s. Dhillon City Mall Pvt. Ltd. It is in the aforesaid backdrop, considering the material available on record including the money transactions in the FDR accounts of the applicant and its use by the applicant through his firms/companies, for all the reasons aforesaid, this Court is unable to persuade itself to form a prima facie, satisfaction in terms of Section 45 of the PMLA, at this stage, and further that the prosecution complaint has been filed against the applicant, this Court is not inclined to grant regular bail to the applicant.
The prayer for bail made by the applicant under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 (BNSS) read with Section 45 of the PMLA, 2002 for the offences under Section 3 & 4 of the PMLA, 2002, is hereby rejected - bail application dismissed.
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2025 (1) TMI 1450
Seeking grant of regular bail - Money Laundering - reasons to believe - compliance with the statutory requirements under Section 19 of the PMLA - whether the applicant’s arrest was carried out in adherence to the statutory requirements under Section 19 of the PMLA which mandates that the authorized officer must have ‘reason to believe’ based on material evidence before arresting an individual accused of money laundering? - HELD THAT:- This Court is satisfied that the investigating authority followed due process and substantiated the 'reason to believe' with concrete evidence rather than mere suspicion. Accordingly, the challenge to the legality of the arrest is without merit, and no relief is warranted to the applicant on this ground.
The investigating authority did not rely solely on the statement of any one co-accused, rather it relied upon the statement of the applicant as well as other co-accused persons namely Neeraj Chauhan, Tushar Chauhan and Viphil Jain along with the documentary evidence including the Whatsapp chats etc. which shows the financial trail of the proceeds of crime in the instant matter. The same goes to show that the respondent ED has corroborating evidence on its record to justify the implication of the applicant herein - This Court is satisfied that the respondent ED has considered independent material, including financial records, digital evidence, and the applicant’s own communications, which substantiate the applicant’s involvement in the alleged offence.
Whether the statements recorded under this provision are admissible as evidence and to what extent they can be relied upon to justify the applicant’s arrest and continued detention? - HELD THAT:- The statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon’ble Supreme Court in Rohit Tandon v. Directorate of Enforcement [2017 (11) TMI 779 - SUPREME COURT], while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA - this Court is of the considered view that statements recorded under Section 50 of the PMLA are admissible in evidence and can be relied upon to establish culpability in money laundering cases.
It is observed by this Court that the respondent had sufficient material in its possession, including financial records, digital evidence, and the applicant’s communications, to establish a valid 'reason to believe' that the applicant was guilty of the offence of money laundering. The procedural safeguards under the Act were duly followed, and the challenge to the legality of the arrest is without any merit - the contention that the applicant’s arrest was solely based on the statement of co-accused persons under Section 50 of the PMLA is unfounded.
Compliance with the twin conditions of bail under Section 45 of the PMLA or not - HELD HAT:- Having considered the legislative intent behind Section 45 of the PMLA and the judicial precedents interpreting its application, this Court shall now proceed to apply the established principles to the facts of the present case to assess whether the applicant has successfully satisfied this Court that he falls under the proviso to Section 45 of the PMLA and if not, whether he has discharged the burden of proving that he is not guilty of the alleged offence and is unlikely to commit any offence while on bail - The material on record demonstrates that the accused persons operated in a highly coordinated and systematic manner, with clear understanding and collaboration among them to facilitate the offence.
The applicant has failed to discharge the burden placed upon him under Section 45(1)(ii) of the PMLA which requires him to that there are reasonable grounds for believing that he is not guilty of the offence. The material produced by the respondent, including financial transactions linked to the proceeds of crime and the applicant’s own admissions, points to his direct and active involvement in the offence. Mere assertions that the applicant was a passive investor and was unaware of the illegality of the transactions do not satisfy the threshold required to overcome the presumption under the PMLA - Further, the second limb of Section 45(1)(ii) of the PMLA, which mandates that the applicant must satisfy the Court that he is not likely to commit any offence while on bail, is also not met.
This Court finds that the twin conditions prescribed under Section 45 of the PMLA have not been satisfied. The evidence on record, the ongoing nature of the investigation, and the applicant’s alleged role in the broader financial and selling of spurious medicines syndicate indicate that the rigors of Section 45 of the PMLA continue to apply.
This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, it is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. These materials suggest an active involvement in laundering proceeds of crime and a pattern of financial transactions that need further investigation.
Conclusion - i) The applicant's arrest complied with the statutory requirements under Section 19 of the PMLA, supported by concrete evidence rather than mere suspicion. ii) Statements recorded under Section 50 of the PMLA are admissible as evidence and can be relied upon to establish culpability in money laundering cases. iii) The applicant was not exempt from the twin conditions of bail under Section 45 of the PMLA, given the organized nature of the offence and the broader context of the criminal conspiracy. iv) The applicant failed to satisfy the twin conditions for bail under Section 45 of the PMLA, as well as the general considerations for bail under Section 439 of the CrPC. v) The Court emphasized the importance of maintaining the integrity of the ongoing investigation and preventing potential misuse of the judicial process.
This Court is not inclined to release the applicant on bail and the instant application, is, hereby, dismissed.
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2025 (1) TMI 1449
Seeking grant of regular bail - Money Laundering - proceeds of crime - reasons to believe - illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta - reasons to believe - whether the applicant’s arrest was carried out in adherence to the statutory requirements under Section 19 of the PMLA which mandates that the authorized officer must have ‘reason to believe’ based on material evidence before arresting an individual accused of money laundering?
HELD THAT:- After thorough examination of the grounds of arrest, it becomes evident that the investigating agency has outlined specific details highlighting the applicant’s involvement in the alleged offence. It is observed that the applicant was duly informed about his firm’s involvement and that the applicant was a partner is M/s Delhi Medicine Hub along with co-accused Akshay Kumar and both mutually took financial and business decisions regarding the procurement and sale of spurious anti-cancer medicines, which is clearly evident from the grounds of arrest - The investigating authority has also relied on statements recorded under Section 50 of the PMLA, which reveal that the applicant was directly involved in sourcing counterfeit medicines without invoices, demanding sealed and unsealed Keytruda injections, and receiving payments through both formal banking channels and illegal hawala transactions.
The financial records cited hereinabove indicate substantial money transfers from M/s Delhi Medicine Hub to the accounts of known associates involved in the counterfeit medicine syndicate. These transactions, along with the applicant’s control over the business operations, substantiate the claim that he was engaged in money laundering activities - This Court is satisfied that the investigating authority followed due process and substantiated the 'reason to believe' with concrete evidence rather than mere suspicion. Accordingly, the challenge to the legality of the arrest is without merit, and no relief is warranted to the applicant on this ground.
A careful reading of the provision reveals that the authorities empowered under Section 50 of the PMLA possess the authority to enforce discovery and inspection, compel the attendance of individuals, examine them on oath, require the production of records, receive evidence through affidavits, and issue commissions for the examination of witnesses and documents - The provision further clarifies that any person summoned under sub-section (2) is legally bound to comply, state the truth regarding matters under inquiry, and produce the requisite documents as directed by the authorities. It is pertinent to note that such proceedings are deemed to be judicial proceedings under Sections 193 and 228 of the IPC.
Whether the statements recorded under this provision are admissible as evidence and to what extent they can be relied upon to justify the applicant’s arrest and continued detention? - HELD THAT:- The Hon’ble Supreme Court in Rohit Tandon v. Directorate of Enforcement, [2017 (11) TMI 779 - SUPREME COURT] made the following observations regarding the admissibility of statements recorded under Section 50 of the PMLA - it is evident that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon’ble Supreme Court, while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA.
Hon’ble Supreme Court also reaffirmed the admissibility of Section 50 of the PMLA distinguishing them from statements recorded under the CrPC. The Court underscored that such statements, being recorded during an inquiry rather than an investigation, are not subject to the restrictions under Article 20(3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50 (4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA. The Hon’ble Court further clarified that the provisions of Section 50 of the PMLA having an overriding effect by virtue of Sections 65 and 71 of the PMLA prevail over the procedural safeguards under the CrPC. - this Court is of the considered view that statements recorded under Section 50 of the PMLA are admissible in evidence and can be relied upon to establish culpability in money laundering cases.
In the present case, the investigating agency has relied not only on the statement of co-accused under Section 50 of the PMLA but also on financial records, WhatsApp communications, and transactional data, which indicate the applicant's active role in the alleged money laundering activities - By virtue of Section 24 of the PMLA, the respondent is not required to conclusively establish the applicant's guilt at the pre-trial stage, rather, the applicant must demonstrate that the proceeds of crime attributed to him are not linked to money laundering. In the absence of any rebuttal by the applicant, the presumption under Section 24 of the PMLA stands in favor of the respondent, thereby, justifying his continued detention.
In light of the principles enunciated by the Hon’ble Supreme Court in Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] and reiterated in Prem Prakash [2024 (8) TMI 1412 - SUPREME COURT] this Court must determine whether the foundational facts necessary to invoke the presumption under Section 24 of the PMLA have been established by the respondent. The Hon’ble Supreme Court has categorically held that the prosecution must satisfy three essential ingredients. First, the commission of a scheduled offence must be established. Second, the property in question must be shown to have been derived or obtained, directly or indirectly, as a result of such criminal activity and third, the accused must be linked, directly or indirectly, to any process or activity connected with the proceeds of crime.
It is observed by this Court that the respondent has presented corroborative material, including financial transactions and records, linking the applicant to the proceeds of crime. Considering the presumption under Section 24 of the PMLA, the burden shifted to the applicant to disprove his involvement in the alleged offence. However, the applicant has failed to provide any credible evidence to rebut the statutory presumption - this Court finds that the applicant’s arrest was conducted in compliance with the statutory mandate of Section 19 of the PMLA.
It is pertinent to mention here that the word used in the proviso to Section 45 of the PMLA is ‘may’ which indicates that it is the discretion of the Court concerned and it is not a mandate. As observed by the Hon’ble Supreme Court in a catena of judgments, it is the discretion of the Court and all the other relevant factors are needed to be weighed in while adjudicating the bail application. The relevant factors include the gravity of the offence, likelihood of reoccurrence, criminal antecedents etc. - this Court holds that the applicant cannot claim the benefit of the monetary threshold exemption under the proviso to Section 45 of the PMLA.
Conclusion - This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, this Court is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. These materials suggest an active involvement in laundering proceeds of crime and a pattern of financial transactions that need further investigation.
The applicant has been unable to put forth any propositions before this Court that are sufficient for grant of bail and thus, the same are rejected. In view of the same, this Court is not inclined to release the applicant on bail and the instant application, is, hereby, dismissed along with the pending applications, if any - Bail application dismissed.
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2025 (1) TMI 1448
Seeking grant of bail - Money laundering - alleged illegal extortion on Coal Transportation, payments collected by the applicant and his associates - twin conditions of Section 45 of the PMLA, 2002 fulfilled or not - HELD THAT:- It is quite vivid that the applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002 and also considering the submission that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is mandatory requirement to get bail.
Hon'ble the Supreme Court in case of DIRECTORATE OF ENFORCEMENT VERSUS ADITYA TRIPATHI [2023 (5) TMI 527 - SUPREME COURT] has held that 'the High Court has neither considered the rigour of Section 45 of the PML Act, 2002 nor has considered the seriousness of the offences alleged against accused for the scheduled offences under the PML Act, 2002 and the High Court has not at all considered the fact that the investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is still going on and therefore, the impugned orders passed by the High Court enlarging respective respondent No. 1 on bail are unsustainable and the matters are required to be remitted back to the High Court for afresh decision on the bail applications after taking into consideration the observations made hereinabove.'
Considering the ECIR and other material placed on record, which prima facie shows involvement of the applicant in crime in question and also considering the law laid down by Hon’ble the Supreme Court, it is quite vivid that the applicant is unable to fulfill the twin conditions for grant of bail as provided under Section 45 of the PMLA, 2002. Thus, the Point is answered against the applicant.
Conclusion - Applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002. The bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 is liable to be and is hereby rejected.
Bail application rejected.
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2025 (1) TMI 1447
Maintainability of proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) in the absence of a scheduled offence - applicant's arrest and subsequent detention - lack of necessary sanction and procedural irregularities - Sufficiency of statements under Section 50 of the PMLA to establish a prima facie case of money laundering against the applicant - HELD THAT:- The crux of the allegation against the applicant is that he was involved in running an extortion racket by way of Rs. 20+20=Rs. 40/- per quintal of custom milled rice out of the special incentive price of Rs. 120/- payable by the State of Chhattisgarh to the custom rice millers. Hence the offence under Section 383/384 of the IPC has been levelled against the applicant. Similarly, the allegation of cheating under Section 420 IPC has been made against the applicant. Though it has been submitted by the counsel for the applicant that there is no direct or specific evidence against the applicant to suggest that he was involved in any of the offence as alleged in the subject ECIR or the prosecution complaint.
From the investigation of the ED, it has been revealed that the applicant was one of the key conspirator and main beneficiary of the POC extorted from the rice millers. It has also been revealed that the rice milers were forced for payment of the same under threat that their incentive bills would not be cleared from the MARKFED. As per Section 50(4) of the PML Act, the statements recorded under Section 50 of the PMLA has evidentiary value as the proceedings under Section 50(2) and (3) are deemed to be a judicial proceeding within the meaning of Section 193 and 228 of the IPC, 1860.
The applicant is closely connected with POC as he had deputed some persons at certain place and the cash was not physically taken by him but it was initially demanded by the applicant and payment, he conveyed it to the rice millers over phone. It has come in the statements of some of the rice millers who have personally handed over the extortion amount as demanded by the applicant - the application for bail of the Appellant should be seen at this stage while the Appellant is involved in the economic offence, in general, and for the offence punishable Under Section 4 of the PMLA, in particular.
In the present case, it is not acceptable that the applicant was not involved in the offence of money laundering. In fact, the applicant was assisting the co-accused Roshan Chandrakar in running an alleged extortion racket wherein an amount of Rs. 40/- (Rs. 20+20/-) per quintal was extorted from the custom milled rice out of the special incentive price of Rs. 120/- payable by the State Government to the custom rice millers Denial by the applicant itself is not sufficient to consider prima facie that there is no mens rea of the applicant in the said offences. Although the statements of the witnesses are required to be tested at the time of trial, but for the purpose of consideration of bail application, the statements of the witnesses are relevant for consideration of bail application of the applicant.
It cannot be said that there is no involvement of the applicant in the offence in question. The Court after examining the entire documents found substantial material indicating a strong nexus between the applicant and the other accused persons in the commission of the crime. There were documents and evidences that reflected the involvement of the applicant and he is the key conspirator and beneficiary from the said scam. The investigation have revealed that the applicant was involved in the extortion of money from the rice millers which was allegedly used for constituting proceeds of crime.
The applicant’s medical record indicates manageable conditions and it has been found that there is no compelling medical reason for granting bail to the applicant. The Court has found substantial material indicating a strong nexus between the applicant and the crime, thereby failing to satisfy the conditions of bail under Section 45 of the PMLA.
The guilt of the accused in the offence of money laundering has been gathered and since, the allegations against the applicant were extremely serious and taking into account, the nature and gravity of the offence and from perusal of the record and in view of the fact that looking to the special and stringent provision under Section 45(1) of the PMLA for grant of bail, in the considered opinion of this Court, prima facie the money trail has been established by the prosecution and therefore, it is not proper to order release of present applicant on regular bail for the reasons.
Conclusion - Considering the role of the applicant in obtaining the money through illegal source, which is the proceeds of crime and that there is sufficient evidence collected by the ED to prima facie show the involvement of the applicant in the alleged offences. It is an organized crime having various facets of its complexion, therefore, further considering the nature of offence and material collected during the investigation, this Court is satisfied that there is prima facie evidence for believing that the applicant is involved in the offence, therefore, it is not required to release the applicant on bail.
The prayer for bail made by the applicant under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 (BNSS) read with Section 45 of the PMLA, 2002 for the offences under Section 3 & 4 of the PMLA, 2002, deserves to be and is hereby rejected.
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2025 (1) TMI 1265
Seeking grant of Regular Bail after prolonged incarceration - Money Laundering - twin conditions as contemplated under Section 45 of the PMLA or not - Section 439 of the Code of Criminal Procedure, 1973, read with Sections 45 and 65 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Supreme Court in the case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)], considered the applicability of Section 436A of the Cr. P. C. which is concerning the maximum punishment for which an under trial prisoner can be detained, held that Section 436A of the Cr. P .C. has come into effect on 23.06.2006 and the said provision is the subsequent law enacted by the Parliament and the same will prevail and will apply in spite of rigors of Section 45 of the PMLA Act.
As per the settled legal position whereas at commencement of proceedings, the courts are expected to appreciate the legislative policy against grant of bail as enacted under Section 45 of the PMLA Act, but the rigours of such provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence - Thus, inspite of restrictive statutory provisions like Section 45 of the PMLA Act, the right of the accused undertrial under Article 21 of the Constitution of India cannot be allowed to be infringed. In such a situation, statutory restrictions will not come in the way of the Court to grant bail to protect the fundamental right of the accused under Article 21 of the Constitution of India.
It is an admitted position that both the cases will be tried simultaneously and trial has not yet commenced. Thus, this is a case where the trial is unlikely to conclude any time soon and is likely to take a considerably long time. As noted hereinabove, the Applicant has completed more than half of the punishment. The maximum punishment which can be imposed on the Applicant is 7 years and the Applicant has completed about 3 years and 10 months of imprisonment i.e. more than half of the punishment - the Applicant is entitled to the benefit of Section 436A of the CrPC.
Conclusion - i) The applicant is granted bail with a personal bond of Rs. 10,00,000/- and sureties. ii) The applicant is restricted from entering District Pune except for trial-related purposes. iii) The applicant must report to the Enforcement Directorate's Mumbai office twice a month. iv) The applicant must not tamper with evidence or influence witnesses. v) The applicant must surrender his passport and attend the trial regularly.
The Applicant – Anil Shivajirao Bhosale be released on bail in connection with ECIR No. ECIR/MBZO-II/20/2020 registered with the Enforcement Directorate on his furnishing P. R. Bond of Rs. 10,00,000/- with one or two solvent sureties in the like amount and subject to fulfilment of conditions imposed - bail application allowed.
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2025 (1) TMI 1264
Money Laundering - challenge to provisional attachment order - large scale illegal extortion punishable under section 384 read with 120 B of IPC - Non application of mind by the Adjudicating Authority - Absence of predicate offence - No nexus between the appellant and alleged proceeds of crime - appellants are bonafide purchaser of the property attached by the respondents - Absence of reasons to believe in the SCN.
Absence of predicate offence - HELD THAT:- The Apex Court in Sunil Kumar Agarwal [2024 (5) TMI 1346 - SC ORDER] found that the petitioner has already undergone incarceration for a period of 1 year and 7 months and was otherwise not named in the FIR, but without expressing any opinion on the issue, the interim bail was granted. The efforts of the appellant is to mis-lead the Tribunal by giving an impression of an order of the Apex Court to hold that the predicate offence does not exist and thus the proceedings under PMLA is not tenable. The written arguments also make a reference of it.
The perusal of the order for grant of the bail to the accused would reveal it to be on the ground of long period of incarceration in violation of Article 21 of the Constitution. The bail was granted on that ground. It was with the clarification that observation made in the order is for the purpose of grant of bail and not to have any effect on the merit of the complaint. There are no judgement of the Apex Court in favour of the appellant rather detailed judgement of the Supreme Court in the case of Saumya Chaurasia [2023 (12) TMI 685 - SUPREME COURT] holds it to be a case of schedule offence.
No nexus between the appellant and the alleged proceeds of crime - HELD THAT:- In the instant case, the syndicate of Suryakant Tiwari has not extorted money overnight but during the period of its operation which was started much prior to the registration of the FIR. It is otherwise settled law of the land that the properties acquired prior to the commission of the crime can also be made subject matter of the attachment if the proceeds are not available or vanished - The appellant may have acquired the property prior to the registration of the FIR but period of operation of crime started much prior to the registration of the FIR and otherwise if the proceeds has been vanished or siphoned off, the property of the equivalent value can be attached. It is otherwise submitted that appellants have been named for commission of the offence under the Act of 2002.
Appellants are bonafide purchaser of the property - HELD THAT:- The appellants have failed to disclose the source to acquire the cash used for acquisition of the properties and illustratively we may refer to 52 properties acquired by M/s. Indermani Minerals (India Pvt. Ltd.),showing it to be through bank channels and based on their financial condition - The statement recorded under section 50 of the Act of 2002 coupled with the documents seized from the custody of Suryakant Tiwari are sufficient to show layering of proceeds of crime and to channelize the same, immovable properties were purchased. The appellant Company has not purchased one or two properties, rather purchased as many as 52 properties without showing the source and document to prove it. In the appeal filed by them, even the Income Tax Return for financial year 2022-2023 was not enclosed. It was submitted later without showing its relevance for purchase of properties prior to it.
It is found that merely using the banking channel for purchase of the property by layering the money with deposit of cash in the Bank without disclosing the source with the material and proof, the source would not stand proved.
Absence of reason to believe - HELD THAT:- The appellants submits that no reasons to believe was given by the Adjudicating Authority while issuing show cause notice. It should have been for each appellant separately - There are no contest on the aforesaid before the Adjudicating Authority, otherwise it has given reasons to believe for issuance of notice. It is not necessary that for the show cause notice, it should be against the person committing the offence under section 3 of the Act of 2002, but can be against the person in possession of crime proceeds. It is not necessary to give reasons to believe separately but can be for the noticee together. The appellants are either the accused or in possession of proceeds of crime and has been indicated in the show cause notice.
The appellants are victims of extortion - HELD THAT:- The appellants are victims of extortion because they were involved in transportation of the coal and thereby had to pay Rs. 25/- per ton to the main accused. The argument aforesaid has been raised specifically in the appeal preferred by M/s. Indermani Minerals (India Pvt. Ltd.),. This argument endorsed the case of the respondents where serious allegations have been made against syndicate headed by Suryakant Tiwari for extortion of money and if the appellant was also victim, it could not be clarified as to why it did not register an FIR against the accused.
Conclusion - The appellants failed to provide credible evidence to substantiate their claims of bona fide acquisition and the absence of a nexus with the proceeds of crime. The existence of a predicate offence and the nexus between the appellants and the proceeds of crime is reaffirmed. The confirmation of the provisional attachment order upheld.
Appeal dismissed.
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2025 (1) TMI 1097
Seeking direction to the Enforcement Department (ED) to produce all the records as regards purported inquiry being conducted under the Foreign Exchange Management Act, 1999 - challenge to search and seizure proceedings - quashing of the illegal act of freezing of the bank account of the petitioner company - reasons to believe - HELD THAT:- Though the jurisdiction under Article 226 of the Constitution of India is plenary, however, there are self imposed limitations which are required to be followed before exercising the power of judicial review. Ordinarily, interference at the stage of investigation carried out by the law enforcement agencies is not advisable because the law enforcement investigation techniques include coercive as well as covert techniques.
The method of search and seizure is coercive as it is used to carry out the investigation/inquiry into the affairs if violation of a statutory provision is suspected. The search and seizure is a well known tool in the investigation which enables the law enforcement agencies to come to a conclusion. Though the Constitutional Courts are the sentinels of justice, however, this power is required to be exercised with due care and caution and interference at the stage of investigation is made in rare and exceptional cases.
It is evident that while carrying out search, proper information was supplied to the petitioner. Moreover, the petitioner has not attached the ECIR. The petitioner has attached the search and seizure memos and freezing orders sent by the ED to the various banks. In the freezing orders, it has been stated that the Assistant Director, Unit-III (2) ED has reasons to believe from the documents in his possession that the proceeds of crime might have been diverted to the above said bank account maintained with that particular bank. Moreover, as already noticed, these orders were passed on 26.11.2024, whereas on the date when the arguments are heard, 30 days are yet to be completed.
Section 5 (5) of the 2002 Act mandates the ED to file a complaint stating the facts of such attachment before the Adjudicating Authority within a period of 30 days. The Adjudicating Authority is entitled to adjudicate the matter on receipt of a complaint. Before the Adjudicating Authority all the stakeholders are entitled to participate and explain their position. The Adjudicating Authority is required to decide the matter in a time bound manner. Against the final order of confirmation of attachment, the appeal is maintainable before the Appellate Tribunal. Once the 2002 Act itself provides for sufficient safeguards, it is not found appropriate for this Court to interfere at this stage.
Conclusion - The legal authority of the ED to conduct search and seizure operations and freeze bank accounts without prior notice affirmed. The petitioners are provided with the opportunity to present their case before the Adjudicating Authority under the 1999 Act and the 2002 Act.
Petition disposed off.
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2025 (1) TMI 1096
Money laundering - proceeds of crime - provisional attachment of properties - applicability of Section 5 (1) of the PMLA - issuance of SCN without application of mind - HELD THAT:- As there is nothing on record that appellants are in possession of any proceeds of crime. Moreover, there is nothing on record that such proceeds of crime are likely to be conceive, transfer or dealt with in any manner by the appellants. Appellant M/s Emaar Hills Township Pvt. Ltd. took the specific plea that even prior to the passing of PAO, the appellant was unable to transfer or deal with the properties in terms of the order dated 21.12.2010 passed by Hon'ble Company Law Board Chennai Bench in CP No.608/2010 without the consent of the Conciliation Board.
A perusal of this definition would show that the “proceeds of crime” includes the property derived or obtained directly or indirectly out of criminal activity, but that is not end of the definition of Proceeds of Crime. It can be for “value of any such property’’. The aforesaid words used in the definition of “Proceeds of Crime” is to cover those properties which are not derived or obtained directly or indirectly out of the criminal activity, but attached for value equivalent to the Proceeds of Crime, if money acquired has been vanished. The Act of 2002 was enacted pursuant to the International Convention to address the offence of money laundering. If the definition of “Proceeds of Crime” is given restricted meaning to hold that it shall include only the properties obtained or derived directly or indirectly from the criminal activity then it would nullify the very objects of the enactment and the consequence of it would be serious. It would result to a situation where the accused would immediately try to vanish or siphon off the proceeds, so that the properties may not be attached.
Any property of equivalent value can be attached when the proceeds directly or indirectly obtained out of the crime has been vanished or siphoned off. Here, the significance would be to the property acquired even prior to commission of crime. It is for the reason that any property acquired subsequent to the commission of crime would be directly or indirectly proceeds of crime and then, it would fall in the first limb of the definition of proceeds of crime. In the second limb, which refers to “the value of any such property” would indicate any other property which was acquired prior to the commission of crime and it would be attached only when the proceeds directly or indirectly obtained or derived out of the criminal activity is not available.
Conclusion - The definition of 'proceeds of crime' is wide enough to not only refer to the property derived or obtained as a result of criminal activity relating to a scheduled offence, but also of the value of any such property.
Appeal dismissed.
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2025 (1) TMI 1042
Money Laundering - seeking to set aside the order, principally on the ground that prima facie no offence whatsoever is made out under Sections 406, 418, 420 read with 120B Indian Penal Code, 1860 - HELD THAT:- In the present case, it is seen that case of the Enforcement Directorate (ED) is that Applicant No. 1 on behalf of M/s. Kamala Developers received an amount of Rs. 4,27,16,900/- as ‘proceeds of crime’ from M/s. Sadguru Enterprises. The second charge of ED to attribute this amount to ‘proceeds of crime’ is that M/s. Sadguru Enterprises has not delivered any of its services / obligations to the Complainant (Respondent No. 2) under the Renovation Agreement and therefore the amount received from him and routed to M/s. Kamala Developers is alleged as ‘proceeds of crime’. Apart from the above two charges there is no other case made out by ED. To understand levy of this charge, one needs to understand what ‘proceeds of crime’ means under the PMLA. As delineated herein above, Section 2 (1)(u) of PMLA refers to ‘proceeds of crime’ as “any property derived or obtained directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence”. The explanation to this definition provides that such property would include any property relatable to the scheduled offence mentioned in the PMLA.
The fallacy in ED’s charge / claim is that after receiving the above amount M/s. Sadguru Enterprises has not provided any services to Respondent No. 2. This charge of ED clearly falls flat because Respondent No. 2 has himself clearly acknowledged that M/s. Sadguru Enterprises having delivered its obligations under the said Agreement dated 16.04.2007 for which Respondent No. 2 agreed to pay the amount of Rs. 4,57,84,400/- in three installments on fulfillment of the additional amenities to be specifically provided under its various conditions as agreed between them. Evidence on record acknowledged by Respondent No. 2 clearly shows that save and except an amount of Rs. 30,67,500/- Respondent No. 2 has paid the entire above amount to M/s. Sadguru Enterprises intermittently in three installments for having delivered under the very Agreement as per the schedule of installments when the works under the Renovation Agreement were accomplished and completed by M/s. Sadguru Enterprises. Works to the extent of Rs. 30,67,500/- having remained incomplete, Respondent No. 2 has specifically acknowledged it in his own correspondence and he has withheld this amount under the original Agreement to be given to M/s. Sadguru Enterprises after which a No-claim Certificate is issued to him.
In the present case, it is clearly seen that there is no case made out by Respondent No. 2 against M/s. Sadguru Enterprises for non-compliance and breach of the Renovation Agreement except for some works for which he did not pay the balance amount, which was accepted by M/s. Sadguru Enterprises and a No-claim Certificate was issued. It is not his case that there was never any intention since inception not to carry out the Renovation / additional amenities works agreed under the various conditions of the Agreement. Once that is the case, ingredients of cheating are completely non-existent - Rather this is a case of the Complainant himself acknowledging the works done by M/s. Sadguru Enterprises under the said Agreement and only on being satisfied he paid the second and the third truncated installments to complete the payment schedule. According to Complainant’s own letter dated 09.07.2007 appended at page No. 407, he has himself admitted that the subject premises were almost ready.
This is a fit case for imposition of exemplary costs on the Complainant and ED for invoking criminal action in the present facts and harassing the Developer with criminal action.
Conclusion - The civil disputes should not be converted into criminal cases and emphasized the need for clear evidence of criminal intent for IPC and PMLA charges. The criminal proceedings are quashed.
Application dismissed.
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2025 (1) TMI 992
Confirmation of provisional attachment order - proceeds of crime - lapse of 180 days as stipulated under Section 5(3) of the Prevention of Money Laundering Act, 2002 (PMLA) - reasons to believe - HELD THAT:- The period intervening was largely effected by Covid-19 started after issuance of PAO on 16.01.2020. The period of Covid-19 from 15.03.2020 till 28.02.2022 and has been eliminated by the Apex Court in COGNIZANCE FOR EXTENSION OF LIMITATION [2022 (1) TMI 385 - SC ORDER] for termination of the proceedings under any statute. In the light of the exclusion of the period of Covid-19 for termination of the proceedings, the impugned order would not lapse. The issue aforesaid has been dealt with by this Tribunal in many cases where the judgment of the Apex Court not only in the Suo Motto Petition No. 03/20 decided by the order dated 10.01.2022 but also in the judgment in the case of Prakash Corporates vs. Dee Vee Projects Limited [2022 (2) TMI 1268 - SUPREME COURT] has been considered. An elaborate judgment was given by Telangana High Court which has been referred by this Tribunal in its order in Bhuneshwar Prasad Verma vs. The Deputy Director, Directorate of Enforcement, Bhubaneswar [2024 (10) TMI 227 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI].
It was held in the case that 'Since the period of Covid19 from 15.03.2020 till 28.02.2022 has been excluded by the Apex Court for termination of proceedings, the Telangana High Court took notice to it and held that if period of 180 days was falling during the period eliminated by the Apex Court for termination of proceeding, then the provisional attachment would not lapse.'
It is not necessary that attachment of the property can be only of the person who is accused in the FIR or ECIR. It can be even of a person who is not an accused but holding the property out of proceeds of crime. In that case there cannot be an investigation against the person, who is not made an accused. Prosecution complaint is filed against the accused while property can be attached if someone is in possession of proceeds on its transfer, settlement or adjustment by the accused in favour of such person. In that case though the person occupying or holding the property may not be accused, the property can yet be attached and if such person is not an accused there would be no question of filing prosecution complaint against such a person.
The fact on record shows that acquisition of property under attachment was during the check-period from 2007 to 2014 and the respondent have given complete money trail to show purchase of immovable properties out of the proceeds. It was generated after taking loan from the Punjab National Bank apart from other Banks and Financial Institutions by M/s BPSL and thereupon diverted the amount and thereby account of the company was declared to be forged/fraud by the banks after holding it to be Non-Performing Asset. In the light of the aforesaid and looking to the serious allegations against the appellants and others we do not find any reason to cause interference in the impugned order.
It is a fact on record that the attachment of the property is pending consideration before the Apex Court in the appeal where an interim orders said to have been passed. Looking the fact, aforesaid, couple with the facts that subsequent attachment order was passed by the respondent to attach the property which was directly or indirectly the proceeds out of criminal activity related to schedule offence. The appellant’s Company purchased the property in question on 09.11.2012 for a consideration of Rs.74,35,00,000/-. It was much subsequent to the year 2007 and between the year 2014. The period of commission of crime cannot be taken from the date the account of BPSL were declared NPA or registration of FIR, rather, checkperiod involved in this case is from the year 2007 to 2014 when BPSL had taken the loan and started committing default in making the repayment. The amount was diverted to other entities / companies, therefore, even the case of moneylaundering was found.
Conclusion - The period from 15.03.2020 till 28.02.2022 is eliminated for termination of proceedings. The attachment of property can be if any person is in possession of the property as given under Section 5(1)(a) and as per Section 8(3)(a), the continuation of the attachment during the period of investigation for a period of 365 days or pendency of the proceedings relating to any offence under the Act.
The attachment orders were upheld - Appeal dismissed.
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2025 (1) TMI 991
Money Laundering - attachment of properties - legitimate claims to the properties that were attached as part of the proceedings under PMLA - HELD THAT:- On the basis of the sale deeds referred by the appellants the schedule B properties are part and parcel of the floors purchased by the appellants in the first two appeals and hence the same can not be segregated for alienation, transfer, attachment or auction in separation of the ownership rights of the floors VI and VII and III to V purchased by the appellants respectively. The owners, tenants, leases, transferees, occupants etc. of the said premises can not effectively enjoy their respective properties in absence of the enjoyment of the common areas as mentioned in the schedule B of the respective sale deeds. The said common area and parking space etc. will go with an ownership right of the main property situated at different floors.
Seeing the fact that some of the allotees have already claimed relief and obtained conditional order in their favor from Hon’ble High Court of Karnataka in Company Application no. 153/2020, 165/2020 & 253/2020 in Company Petition no. 162/2013, they may also file their claim applications before the Hon’ble High Court, as this Appellate Tribunal can not entertain their claim, as the said company is under liquidation. Hence, these two appeals need to be disposed of with liberty to the appellants.
Appeal allowed.
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2025 (1) TMI 946
Seeking modification of the bail conditions imposed by this Court - HELD THAT:- The condition no.4 (i) is modified and substituted to the extent that the respondent/ applicant shall not leave the limits of the NCR Region without the permission of the concerned Special PMLA Court at Patiala House.
Rest of the bail conditions imposed by this Court vide the Order dated 04.08.2023 passed in SLP(Crl.) No. 7409 of 2023, shall remain unchanged.
Application disposed off.
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2025 (1) TMI 945
Money Laundering - first anticipatory bail application under Section 482 of the Bhartiya Nagarik Suraksha Sanhita, 2023 - applicability of Section 45 of the PMLA - HELD THAT:- The Hon’ble Supreme Court in the matter of Siddharth vs. State of U.P. [2021 (8) TMI 977 - SUPREME COURT] held that 'There is no force in argument advanced by the learned Special Counsel for the respondent that the applicants before grant of bail required to pass test of 45 of PMLA. The position would have been different, had the applicants arrested during investigation. The investigating agency as mentioned hereinabove consciously preferred not to arrest the applicants during investigation or post filing of charge sheet.'
It is not in dispute that the FIR was registered on 19.02.2010 whereas the respondent filed a complaint arraying the applicants as accused in ECIR on 04.01.2021 i.e. after 11 years. The judgments relied on by learned counsel for the respondent state that the twin conditions of Section 45 of the PMLA Act are to be satisfied but at the same time, the judgment passed by the Hon’ble Supreme Court in the matter of Satender Kumar Antil [2022 (8) TMI 152 - SUPREME COURT] cannot be lost sight of and other co-accused persons against whom similar allegations were levelled, have already been granted anticipatory bail by the Hon’ble Supreme Court and by this Court, therefore, in the opinion of this Court, the present is a fit case to extend the benefit under Section 482 of the Bhartiya Nagarik Suraksha Sanhita, 2023, to the applicants.
It is directed that in the event of arrest of the applicants in connection with the aforesaid offence, they shall be released on anticipatory bail on their furnishing a personal bond for a sum of Rs. 50,000/- with one surety in the like sum to the satisfaction of the arresting officer and they shall abide by the conditions imposed.
Conclusion - The circumstances and legal precedents justified such relief despite the stringent conditions of Section 45 of the PMLA.
The anticipatory bail application is allowed.
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2025 (1) TMI 944
Money Laundering - Provisional Attachment Order - condonation of delay of 132 days in approaching this Court after the Appellant withdrew its Appeal from the Gujarat High Court - Section 42 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal on any question of law or fact arising out of such order. The proviso to Section 42, and which is important for our purposes, stipulates that the High Court may, if it is satisfied that the Appellant was prevented by sufficient cause from filing the appeal within the initial period of sixty days, may allow it to be filed within a further period not exceeding sixty days. What can be discerned from these provisions is that an appeal has to be filed within sixty days [the initial period], and if not done so, then, on sufficient cause being shown, the High Court can condone the delay up to a further period of sixty days. The question that arises in the present case, is whether by virtue of the said proviso, the applicability of Section 5 of the Limitation Act, 1963 is excluded.
This Court, in the case of MUNICIPAL CORPORATION OF GREATER MUMBAI VERSUS ANUSAYA SITARAM DEVRUKHKAR & ORS. [2025 (1) TMI 783 - BOMBAY HIGH COURT], after reviewing the law laid down by the Supreme Court in Union of India Vs. Popular Construction Company [2001 (10) TMI 1044 - SUPREME COURT], Chhattisgarh State Electricity Board Vs. Central Electricity Regulatory Commission and others [2010 (4) TMI 1031 - SUPREME COURT], Oil and Natural Gas Corporation Ltd. Vs. Gujrat Energy Transmission Corporation Ltd. and others [2017 (3) TMI 1628 - SUPREME COURT] and Bengal Chemist and Druggists Association Vs. Kalyan Chowdhary [2018 (2) TMI 487 - SUPREME COURT], came to the conclusion that beyond the stipulated period of 120 days, this Court would have no power to condone the delay.
The decision rendered by this Court in Municipal Corporation of Greater Mumbai would apply with full force to the facts of the present case. There are no hesitation in holding that after the total period of 120 days as stipulated in Section 42 of the PMLA, 2002, read with its proviso, the High Court would have no power to condone the delay in preferring the Appeal.
There are no hesitation in holding that beyond the total period of 120 days as stipulated in Section 42 [read with its proviso] of the PMLA, 2002, this Court has no power to condone the delay. Since admittedly, in the facts of the present case, the application seeking a condonation of delay is beyond the total period of 120 days.
Application seeking condonation of delay is hereby dismissed.
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2025 (1) TMI 943
Seeking grant of bail - offences of drug trafficking and money laundering - applicant has already been tried and convicted by the US authorities for the offence - can applicant be prosecuted in India again? - HELD THAT:- In the case of PRABODH K. MEHTA VERSUS CHARUBEN K. MEHTA [2018 (3) TMI 2049 - BOMBAY HIGH COURT], the Full Bench of the Hon’ble Bombay High Court had considered the principles of law, as laid down by the Hon’ble Supreme Court in the case of Jitendra Panchal [2009 (2) TMI 912 - SUPREME COURT] and answered the reference which has already been quoted hereinabove. According to the settled law now that judgment and order of conviction of a foreign court for the offence committed in that country can be noticed/looked into and recognized by judicial and quasi judicial authorities in India. But, it has been held in the case of Prabodh that if the judgment of the foreign court is held binding on the courts and authorities in India, it would amount to directly or indirectly enforcing the judgment of the foreign courts. It was held that the effect of such order of conviction would depend upon variety of facts. In the instant case also at some later stage those factors would fall for consideration in the trial of the applicant.
It is positive case of the ED that the applicant under Section 50 of the Act has stated that in the year 2017, he and his brother Parvinder Singh did split as they stopped the said business. In the said split Parvinder Singh got 4250 Bitcoins. Those Bitcoins according to the ED are still in the block chain, but they could not be accessed for the want of passwords or key phrases. Search has already been made to recover those passwords and key phrases - What is being argued is that the proffer and statement under Section 50 of the Act is not a substantive piece of evidence. There admissibility is not in dispute, but their evidentiary value depends on as to whether such statement finds independent corroboration or not?
Admittedly, the applicant had entered into a plea agreement in the United States. The BTC were surrendered and the applicant received the reduced sentence. The money was transmitted in the Indian accounts during that period only. In the request for assistance sought by the United States Department of Justice, the United States authorities have informed the Indian authorities that during investigation, the US authorities identified several Pay Pal, Money Gram and Western Union accounts (Collectively, the funnel accounts) used by the Singh DTO to receive proceeds on drug trafficking. The money was transferred accordingly in the India accounts. It is also true that under Section 60 (2) of the Act, such account have not been freezed.
Conclusion - Foreign convictions do not preclude domestic prosecution for distinct offenses. It also highlighted the need for corroborative evidence when relying on statements made under coercion.
This Court is of the view that there is no ground to enlarge the applicant on bail - bail application is rejected.
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2025 (1) TMI 942
Money Laundering - proceeds of crime - no reasons to believe - scheduled offences - acquisition of property in a public auction conducted by the SBI - validity of notice - legality of provisional attachment of the property under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA).
The first contention of the appellant in the appeal is that there was no reason to believe on the basis of information in possession that the appellant is in possession of proceeds of crime - HELD THAT:- In view of the detailed and very specific reasons which have been discussed in detail in the Provisional Attachment Order, and also considering the discussions in paragraphs 48-51 of the impugned order by the Ld. AA before whom this very issue had been raised by the defendants therein, there are no merit in the contention that there was no material in the possession of the officer passing the order to have reason to believe that the appellant was in possession of proceeds of crime. Accordingly, this contention of the appellant is hereby rejected.
It is next contended that the subject property was purchased by the appellant on 19.02.2009 and at that time, the relevant provision of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988 (PC Act) were not scheduled offences and the Legislature has not given retrospective effect to the amendment to the Schedule which came into force w.e.f. 01.06.2009 - HELD THAT:- It is by now well-settled that the issue of retrospectivity or otherwise in so far as offence of money laundering is concerned has to be examined with reference to the act which constitutes „money laundering‟ under Act, regardless of the time of occurrence of the scheduled offence. Further, the offence of money laundering is a continuing offence. A continuing offence is one which is susceptible of continuance and is distinguishable from one which is committed once and for all. A continuing offence occurs and re-occurs, and each time, an offence is committed. It was so held by the Hon‟ble Supreme Court in State of Bihar Vs. Deokaran Nenshi [1972 (8) TMI 133 - SUPREME COURT]. In Dyani Antony Paul and Ors. Vs. Union of India and Ors. [2020 (12) TMI 1296 - KARNATAKA HIGH COURT], the Hon‟ble Karnataka High Court has held that money laundering is a continuing offence and, as such, the issue of retrospective effect does not arise.
The decision of the Hon‟ble Delhi High Court in Prakash Industries Limited [2022 (7) TMI 877 - DELHI HIGH COURT] may also be referred to in this context, wherein, it was held that it is well settled relating to retroactive application of penal previous that merely because requisite or facet for initiation of action pertains to a period prior to the enforcement of the statute, that would not be sufficient to characterize statute as being retrospective. It must be borne in mind that the Act with which are concerned penalizes acts of money laundering. It does not create a separate punishment for a crime prescribed under the Penal Code. The Act does not penalize the predicate offence. That offence merely constitutes the substratum on which charge of money laundering is being raised.
The next contention of the appellant is that the appellant company had acquired the property in a public auction conducted by the SBI which was a perfectly legal activity and the consideration paid by the appellant for the same has absolutely no linkage to the alleged criminal activity - HELD THAT:- There is no merit in the appellant‟s contention that there is no linkage between the alleged „proceeds of crime‟ and the acquisition of the assets by the appellant company. It is to be noted that the definition of proceeds of crime under Section 2(1)(u) includes not only property derived or obtained directly as a result of criminal activity, but also property derived indirectly as a result criminal activity. Furthermore, it is also includes the „value of such property‟. In this regard, the Hon‟ble Supreme Court in its landmark judgment in the case of Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] has held that the definition of „proceeds of crime‟ is vide enough to not only refer to property derived or obtained as a result of criminal activity relating to a scheduled offence, but also the value of such property. The definition of “property” as in Section 2(1)(v) is equality vide enough to encompass the value of property of proceeds of crime. The Hon‟ble Apex Court held that such interpretation of the term would further the legislative intent in recovery of the proceeds of crime and vesting it in the Central Government for effective prevention of money-laundering.
It is next contended that the notice issued by the Adjudicating Authority under Section 8(1) was not valid because the same is dependent on the requirement of the property being proceeds of crime - HELD THAT:- There was more than sufficient evidence to come to the conclusion at this stage of the proceedings that the subject property constituted „proceeds of crime‟ so as to place it under attachment until the outcome of criminal proceedings under the Act. It may be mentioned in this context that the legal position is well-settled that attachment of property is a balancing arrangement to secure the interests of the person, as also ensure that the proceeds of crime remain available to be dealt with in the manner provided by the Act. Mere attachment of property does not alter the position with regard to the ownership to even possession/use of the properties which are the subject matter of such attachment. The Hon‟ble Supreme Court has held in the aforesaid case of Vijay Mandanlal Choudhary, [2022 (7) TMI 1316 - SUPREME COURT (LB)] and further clarified in the case of Ganpati Dealcom Pvt. Ltd. [2022 (8) TMI 1047 - SUPREME COURT] that possession of properties attached under the PMLA, 2002 can only be taken under exceptional circumstances, such as crimes involving terrorist activities, drug cartels or organized criminal activities. Therefore, at this stage, when the criminal trial of the appellants herein is still pending before a court of competent jurisdiction, even the balance of interests lies in favour of continued attachment of the subject properties.
Conclusion - Money laundering is a continuing offence and that the procedural and substantive requirements of the PMLA must be strictly adhered to. The provisional attachment is upheld. The procedural validity of the actions taken under the PMLA confirmed.
The present appeal is hereby dismissed.
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