Bombay High Court Dismisses Bail Application in PMLA Case Due to Prima Facie Evidence of Money Laundering and Non-Compliance with Section 45 Twin Conditions. Petitioner, a co-accused in a predicate offence of cheating and criminal conspiracy, failed to demonstrate that he was not guilty of the offence under the Prevention of Money Laundering Act, 2002.

Criminal writ petition seeking bail under the Prevention of Money Laundering Act, 2002.

The petitioner sought bail in connection with a PMLA case registered by the Directorate of Enforcement.

The petitioner was arrested by the ED in connection with a money laundering case arising from a predicate offence of cheating and criminal conspiracy involving the Bank of Maharashtra.

The petitioner had previously filed a bail application before the Special Court (PMLA) which was dismissed. The present petition is a fresh application before the High Court.

Whether the petitioner is entitled to bail under the PMLA considering the twin conditions under Section 45 of the PMLA. Whether the petitioner is entitled to default bail under Section 167(2) CrPC. Whether the petitioner is entitled to bail on the ground of prolonged incarceration under Section 436A CrPC.

The petitioner argued that he was not a public servant and had no role in the sanctioning of loans, and that the proceeds of crime were not attributable to him. He also argued that the investigation was not completed within 60 days, entitling him to default bail under Section 167(2) CrPC, and that his prolonged incarceration of 1 year and 8 months violated his right to a speedy trial under Section 436A CrPC. The respondent-ED argued that there was prima facie evidence of the petitioner's involvement in money laundering, including his role as a director in companies used to layer proceeds of crime. They contended that the twin conditions under Section 45 PMLA were not satisfied, and that Section 167(2) CrPC does not apply to PMLA cases. They also argued that the period of custody was not sufficient to grant bail given the seriousness of the offence.

The ratio decidendi is that for grant of bail under the PMLA, the twin conditions under Section 45 must be satisfied: the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail. The court found that the petitioner failed to satisfy these conditions. Additionally, Section 167(2) CrPC default bail is not applicable to PMLA cases, and Section 436A CrPC, while applicable, does not automatically entitle an accused to bail merely based on the period of custody; the court must consider the seriousness of the offence and the stage of trial.

The twin conditions under Section 45 of the PMLA must be satisfied, i.e., the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail. The provisions of Section 167(2) CrPC are not applicable to offences under the PMLA, as the PMLA is a special statute with its own procedure. Section 436A CrPC applies to all offences, including those under the PMLA, but the period of custody must be considered in the context of the seriousness of the offence and the stage of trial.

The petitioner was arrested by the ED in connection with a PMLA case. He filed a bail application before the Special Court (PMLA) which was dismissed. Thereafter, he filed the present criminal writ petition before the High Court of Bombay seeking bail. The petition was heard and reserved on 6th March 2024, and the judgment was delivered on 15th April 2024.

• Prevention of Money Laundering Act, 2002: Section 45, Section 3, Section 4
• Code of Criminal Procedure, 1973: Section 167(2), Section 436A, Section 482
• Indian Penal Code, 1860: Section 420, Section 409, Section 406, Section 120B
• Prevention of Corruption Act, 1988: Section 13(1)(d), Section 13(2)