Delhi High Court
Akshay Kumar vs Directorate Of Enforcement on 28 January, 2025
Author: Chandra Dhari Singh
Bench: Chandra Dhari Singh
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of order: 28th January, 2025
+ BAIL APPLN. 3603/2024
AKSHAY KUMAR .....Petitioner
Through: Mr. Amandeep Singh, Mr. Manu
Pratap Singh and Ms. Akanksha
Singh, Advocates
versus
DIRECTORATE OF ENFORCEMENT .....Respondent
Through: Mr. Arkaj Kumar, SC with Ms.
Vaishnavi Bhargava, Mr. Aakash
Mishra and Mr. Ishank Jha,
Advocates
CORAM:
HON'BLE MR. JUSTICE CHANDRA DHARI SINGH
ORDER
CHANDRA DHARI SINGH, J (Oral)
1. The instant bail application has been filed under Section 483 along
with Section 528 of the Bhartiya Nagarik Suraksha Sanhita, 2023
(hereinafter “BNSS”) read with Section 45 of the Prevention of Money
Laundering Act, 2002 (hereinafter “PMLA”) seeking grant of regular bail in
ECIR/DLZO-II/03/2024 dated 22nd April, 2024 registered under Sections 3
and 4 of the PMLA, arising out of FIR No. 59/2024 dated 12 th March, 2024,
registered at Police Station Crime Branch, Delhi for offences punishable
under Sections 274, 275, 276, 420, 468, 471, 120B and 34 of the Indian
Penal Code, 1860 (hereinafter “IPC“).
2. The brief facts that led to the filing of the instant application are that
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on 12th March, 2024, FIR No. 59/2024 was registered at Police Station –
Crime Branch, Delhi under Sections 274, 275, 276, 420, 468, 471 read with
120B and 34 of the IPC, based on a complaint given by SI Gulab Singh. The
complaint alleged the involvement of accused persons in the procurement,
manufacturing and sale of spurious anti-cancer medicines.
3. It was alleged that the primary accused, namely Viphil Jain and Suraj
Shat, in collusion with their associates, were engaged in the illegal
procurement of empty vials and raw materials of anti-cancer drugs such as
Keytruda and Opdyta. These counterfeit drugs were allegedly manufactured
and distributed in the market to unsuspecting cancer patients.
4. Pursuant to the information received, the police formed six teams to
conduct simultaneous raids across Delhi-NCR on 11th March, 2024. During
the raid at Flat No. 1101, Block-2, Eleventh Floor, CSP Units, DLF Capital
Greens, Moti Nagar, New Delhi, the accused were allegedly caught in the
act of filling empty vials with unauthorized substances and packaging them
using specialized machinery. The police seized a substantial quantity of raw
materials, counterfeit vials, packaging equipment.
5. Based on the FIR, the Directorate of Enforcement (hereinafter “ED”)
initiated ECIR/DLZO-II/03/2024 on 16th March, 2024 under Sections 3 and
4 of the PMLA. On 8th May, 2024, the Delhi Police filed a chargesheet
before the learned Chief Metropolitan Magistrate, West, Tis Hazari under
Sections 274, 275, 276, 308, 406, 420, 34 and 120B/34 IPC. Notably, the
applicant was not named in the said chargesheet.
6. Pursuant to the registration of the predicate offence, the applicant was
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not named in the initial chargesheet filed by the Delhi Police. However,
during the course of investigation conducted by the respondent, the
applicant‟s name surfaced in connection with the illicit supply chain and
financial transactions linked to the proceeds of crime. It is alleged that the
applicant, as a proprietor of M/s Cancer Medicine Agency and a partner in
M/s Delhi Medical Hub, facilitated the procurement and distribution of
counterfeit medicines without required approval and requisite invoices.
7. The applicant was summoned by the investigating agency under
Section 50 of the PMLA and in compliance, appeared before the
investigating agency on 5th April, 2024. In his recorded statement, the
applicant allegedly admitted to purchasing anti-cancer medicines from co-
accused Neeraj Chauhan and Tushar Chauhan, without valid tax invoices,
and acknowledged effecting payments through formal banking channels and
unaccounted cash transactions via hawala operators/channels.
8. Subsequently, on 4th May, 2024, the respondent conducted search
operations at the applicant‟s residential premises located in Chandigarh and
the applicant was arrested on 22nd May, 2024 under Section 19 of the PMLA
on the ground of his alleged involvement in the laundering of proceeds of
crime. The applicant has remained in judicial custody since 27th May, 2024.
9. Thereafter, the respondent filed its initial prosecution complaint on 6th
June, 2024, wherein the applicant was not named as an accused. However,
the first supplementary prosecution complaint was filed on 20 th July, 2024,
wherein the applicant was formally added as an accused. It is alleged that the
applicant actively participated in the process of laundering proceeds of crime
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arising from the sale of spurious anti-cancer medicines.
10. It is alleged that the applicant was an important gear in the present
machine of sale of counterfeit medicines, generating proceeds to the tune of
approximately Rs. 3 crores. It is further alleged that a sum of Rs. 2 crores
was routed through banking channels to the accounts of various co-accused,
while an additional amount of Rs. 80 lakhs was transacted through hawala
networks.
11. The applicant previously preferred a regular bail application before
the learned Special Judge on 18th July, 2024, which was dismissed vide
order dated 20th August, 2024. The learned Special Judge noted that the
applicant failed to satisfy the twin conditions prescribed under Section 45 of
the PMLA and that the nature and gravity of the allegations warranted
continued custody to prevent any potential tampering with the evidence.
12. Hence, the present bail application has been preferred before this
Court, seeking the grant of regular bail.
13. Learned counsel appearing on behalf of the applicant submitted that
the applicant has been falsely implicated in the present case and has no
direct involvement in the alleged offence of money laundering under the
PMLA. It is submitted that the applicant has been carrying out his business
in the ordinary course without any mala fide intent.
14. It is submitted that the entire case of the respondent is based on mere
conjectures and surmises, and no concrete evidence has been placed on
record to substantiate the allegations leveled against the applicant. The
prosecution has failed to demonstrate any direct link between the applicant
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and the alleged proceeds of crime.
15. It is submitted that the applicant has fully cooperated with the
investigating agency by appearing when summoned and also by providing
all the necessary documents and explanations sought during the
investigation. It is submitted that the applicant‟s conduct clearly establishes
his bona fide intentions and negates any apprehension of absconding or
tampering with any evidence.
16. It is submitted that the provisions of Section 45 of the PMLA, which
impose stringent conditions for grant of bail, have been met in the present
case as the applicant is not guilty of the offence alleged and is not likely to
commit any offence while on bail. It is also submitted that the applicant has
clean antecedents and no prior criminal record.
17. It is submitted that the investigation in the matter is complete and all
relevant documents have already been seized by the investigating agency.
Thus, there is no possibility of the applicant interfering with the evidence or
hampering the investigation in any manner.
18. It is submitted that the applicant‟s prolonged incarceration would
serve no useful purpose and would amount to pre-trial punishment, which is
against the settled principles of criminal jurisprudence.
19. It is submitted that the prosecution has failed to establish the essential
ingredients of the offence under Section 3 of the PMLA, and the applicant’s
role, if any, is at best peripheral and does not warrant continued
incarceration.
20. Therefore, in view of the foregoing submission, it is prayed that the
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instant application may be allowed and the applicant be released on bail.
21. Per Contra, learned counsel for the respondent submitted that the
present bail application is devoid of merit and liable to be rejected in light of
the gravity of the offence and the material evidence collected during the
course of investigation.
22. It is submitted that the applicant is involved in a grave economic
offence under the PMLA, which has far-reaching ramifications on public
interest and the integrity of the financial system. It is submitted that
economic offences pose a serious threat to the national economy and public
confidence.
23. It is submitted that there exists sufficient material on record, including
documentary evidence and statements of co-accused persons, which prima
facie indicate the applicant‟s active involvement in the process and activities
connected with the proceeds of crime.
24. It is submitted that the applicant has failed to satisfy the twin
conditions prescribed under Section 45 of the PMLA, which mandates that
the accused must demonstrate that he is not guilty of the alleged offence and
that he is not likely to commit any offence while on bail. The applicant has
not discharged this burden satisfactorily.
25. It is submitted that the investigation has revealed the applicant’s role
in laundering substantial amounts of money through complex financial
transactions, including the use of shell entities and undisclosed accounts,
which cannot be ignored at this stage.
26. It is submitted that the applicant’s release on bail at this juncture
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would seriously prejudice the ongoing investigation, as crucial witnesses are
yet to be examined, and the potential for tampering with evidence cannot be
ruled out.
27. It is submitted that the prosecution has made substantial progress in
the investigation, and granting bail to the applicant would obstruct the due
course of law and embolden other similarly placed individuals to engage in
such activities.
28. It is submitted that the applicant has not been able to rebut the
presumption under Section 24 of the PMLA, which places the burden on him
to establish that the alleged proceeds of crime are not tainted and have
legitimate origins.
29. It is submitted that the applicant‟s submission that no incriminating
material was recovered from his premises does not hold merit, as money
laundering offences are primarily documentary in nature and do not
necessarily require physical recovery of illicit assets.
30. It is, therefore, prayed that the present bail application may be
dismissed.
31. Heard learned counsel for the parties and perused the material
available on record.
32. It is the case of the applicant that he has been wrongfully implicated
in the alleged offence under the PMLA without any direct evidence linking
him to the purported crime. The applicant asserts that his business dealings
were conducted in good faith, and that he had no knowledge of any illegal
activities associated with the transactions in question. The applicant
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emphasizes that the investigation is primarily based on conjecture and self-
serving statements of co-accused individuals, and thus, there is no
corroborating evidence produced by the ED. Furthermore, the applicant
argues that no incriminating material was recovered from his premises, and
his continued detention is unjustified, amounting to pre-trial punishment.
33. The applicant further submits that he has fully cooperated with the
investigating authorities at every stage, providing necessary documentation
and explanations. It has also been argued that the applicant has strong roots
in society, with a permanent residence and legitimate business operations,
making him neither a flight risk nor a threat to the ongoing investigation.
The applicant also contends that the charges against him are primarily
documentary in nature, and his continued incarceration serves no meaningful
purpose.
34. The respondent, on the other hand, contends that the applicant is an
integral part of a well-orchestrated money laundering operation involving
substantial financial transactions aimed at disguising illicit funds. It has been
submitted that the applicant’s involvement has been established through
financial records, transactions, and statements of co-accused persons,
demonstrating a clear link to the proceeds of crime. It has been further
argued that the applicant has failed to satisfy the twin conditions under
Section 45 of the PMLA.
35. Additionally, the respondent submits that granting bail at this stage
would severely undermine the investigation and may lead to tampering with
evidence or influencing witnesses. The prosecution has also argued that the
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applicant has not provided a satisfactory explanation for the substantial
financial transactions identified during the investigation.
36. In light of the submissions made before this Court and the material
placed on record, the key issue which arises to adjudicate the present bail
application is whether the twin conditions prescribed under Section 45 of the
PMLA are satisfied in the present case?
37. 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 SCC 22, has reiterated its
earlier decision and made the following observations:
“21. …Section 160 which falls under Ch. XII empowers the
police officer making an investigation under the said chapter to
require any person to attend within the limits of his own or
adjoining station who, from the information given or otherwise
appears to be acquainted with the facts and circumstances of
the case, whereas, the process envisaged by Section 50 PMLA
is in the nature of an inquiry against the proceeds of crime and
is not “investigation” in strict sense of the term for initiating
prosecution; and the authorities referred to in Section 48
PMLA are not the police officers as held in Vijay Madanlal
[Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC
1] .
22. It has been specifically laid down in the said decision that
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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. In
view of such glaring inconsistencies between Section 50 PMLA
and Sections 160/161CrPC, the provisions of Section 50 PMLA
would prevail in terms of Section 71 read with Section 65
thereof.”
38. In the aforesaid judgment, the Hon‟ble Court further 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.
39. Therefore, in order to adjudicate the present bail application and
determine whether the applicant has satisfied the twin mandatory conditions
under Section 45 of the PMLA, it is imperative to carefully examine the
prosecution complaint, statements of the applicant and co-accused persons
and the relevant bank statements available on record.
40. For the sake of convenience, the statement of the applicant recorded
under Section 50 of the PMLA is reproduced herein under:
“Ans. I state that after graduation, I started a medical shop
namely Evergreen Medicos, at Chandigarh in 2012. Thereafter,Signature Not Verified
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in 2018, I started a medicine agency namely Cancer Medicine
Agency at SCO No.16, Back Side Entry, 2nd Floor, Sector 11D,
Chandigarh. In 2023 I started a medical shop namely Delhi
Medical Hub.
Further, I state that Evergreen Medicos Booth No. 942 , Dadu
Majra Colony, Sector-38 West Chandigarh is a sole
proprietorship firm registered in the name of my brother Anil
Sharma. Evergreen Medicos is a retail shop for medicine. I
state that this firm is managed and controlled by my brother
Anil Sharma since 2012.
I state that Cancer Medicine Agency is a sole proprietorship
firm registered in my name. This firm is a retail and wholesale
medicine shop which is specially deals in cancer medicine only.
I state that this firm is managed and controlled by me since
2019. I state that this firm is running by using pharmacy license
of pharmacist Shri Harprit Singh.
Further, I state that in 2023; I and Rajesh Kumar (House
No.1407, DMC, Sector-38 West, VTC Dadu Majra,
Chandigarh- 160014; Mobile No.953088999) started a
partnership firm namely Delhi Medical Hub (Shop at Sector-11,
Booth No.39, Chandigarh) for retail selling of specially cancer
related medicines. I state that this firm is running by using
pharmacy license of pharmacist Shri Pankaj Kumar. I state that
I and my partner Shri Rajesh Kumar took all financial and
business decision mutually; we both have control over on our
business of anti-cancer medicines. ”
***
“……….On being asked I state that Tushar Chauhan and
Neeraj Chauhan were managed to be availed these medicines
without any bill or invoices for me. I further state that I used to
sell these cancer medicines to cancer patients at Sri Guru
Harkishan Hospital, Chandigarh and to various cancer
patients.
On being specifically asked, I state that payments for the
purchase of these fake and spurious cancer medicines to Tushar
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Chauhan and Neeraj Chauhan; we used Hawala Channel.
Maximum funds were transferred to Neeraj Chauhan and
Tush’ar Chauhan through Hawala Channel in cash; however,
on request of Neeraj Chauhan I transferred some funds in the
account of Deepali Jain W/o Viphil Jain, Sanyam Jain S/o
Viphil Jain, Viphil Jain, Tushar Chauhan and Neeraj Chauhan
from bank account of Delhi Medicine Hub maintained with
ICICI Bank Limited.
On being asked specially I state that I and my partner Shri
Rajesh Kumar used to promote these cancer medicines in Sri
Guru Harkishan Hospital, Paras Hospital, Fortis Hospital,
Max Hospital, IVY Hospital all located in Chandigarh.
However, all the said hospitals except Sri Guru Harkishan
Hospital denied facilitating these cancer medicines to their
patients as we are not registered to sell these medicines
legally.”
***
“……However, we purchased these unsealed cancer medicine
which were spurious from Neeraj Cahuhan and Tushar
Chauhan without any bill or tax invoices.
Further, on being specifically asked, I state that we had sold
these spurious fake cancer medicines to Sri Guru Harkishan
Sahib, Chandigarh to the tune of 3 crores approx.
On being specifically asked, I state that approximately funds
Rs. 2 Crores were transferred to Neeraj Chauhan through
banking channel and approximately Rs.80 Lakhs were
transferred to Neeraj Chauhan through Hawala Channel in
Cash in respect of sale proceeds of aforesaid fake and spurious
cancer medicine. In this connection, I submit statement of bank
accounts no. 632201515747 (A/c of Rajesh Kumar),
078205001511 (A/c of Delhi Medicine Hub) and
50100384376302 (Saving A/c of Akshay Kumar). Further I
submit details of payment made to Deepali Jain, Sanyam Jain
and Viphil Jain.”
***
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“Ans. I state that I do not meet with Suraj Shat till date.
However, Neeraj Chauhan provided me account details of
Suraj Shat and instructed me to deposit sale proceeds of
aforesaid fake and spurious cancer medicines in the account of
Suraj Shat. In addition to above, I state that Neeraj Chauhan
also provided me account details of one Neeraj Yadav and
asked me to deposit sale proceeds of fake and spurious cancer
medicines in that account and I deposited as instructed by
Neeraj Chauhan.
Q.9. Do you have WhatsApp Chat in your mobile with Neeraj
Chauhan regarding sale proceeds of fake and spurious cancer
medicines provided by Neeraj Chauhan and Tushar
Chauhan?
Ans. I state that Yes; I have WhatApp Chat in my mobile with
Neeraj Chauhan in respect of sale proceeds of fake and
spurious cancer medicines. However, I have deleted all these
WhatsApp chats before coming to this office.”
41. For the sake of convenience, the statement of the Rajesh Kumar (co-
accused recorded under Section 50 of the PMLA is reproduced herein under:
“v. He further stated that he used to make payment of Credit
Cards and bill payments from the bank account of M/s Delhi
Medicine Hub. He added that as per instruction of his partner
Akshay Kumar, he used to make payment to various entities and
that Akshay Kumar and him both were signatory for the bank
accounts of M/s Delhi Medicine Hub.
vi. He stated that on instruction of Akshay Kumar, he
transferred funds to the bank account of Deepali Jain and
Neeraj Chauhan from the bank accounts of M/s Delhi Medicine
Hub for purchase of medicines.
vii. Rajesh Kumar further stated that Cash deposits in and
withdrawals from the accounts of M/s Delhi Medicine Hub
were handled by Akshay Kumar. He stated that Akshay KumarSignature Not Verified
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told him that bills/ invoices from Neeraj Chauhan and Deepali
Jain had been received.
viii. He further admitted that through WhatsApp, on
07.10.2023, Neeraj Chauhan sent him calculation of anti-
cancer medicines including Keytruda Injection sold to M/s
Delhi Medicine Hub and pending balance amount which were
yet to be received by Neeraj Chauhan from Akshay Kumar and
him.”
42. The bank transactions between Viphil Jain and Akshay Kumar are
reproduced herein under:
43. The bank transactions between Neeraj Chauhan and Akshay Kumar
are reproduced herein under:
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44. The bank transactions between Suraj Shat and Akshay Kumar are
reproduced herein under:
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45. The bank transactions between Tushar Chauhan and Akshay Kumar
are reproduced herein under:
46. The relevant extracts of the First Supplementary Prosecution
Complaint under the heading of „Investigation with Banks‟ reads as under:
“..In his statement recorded under section 50 of PMLA, 2002,
Akshay stated that he purchased spurious anti-cancer
medicines from Neeraj Chauhan and Tushar Chauhan at the
below mentioned rates and sold the same to Sri Guru
Harkrishansahib C Eye Hospital Trust.
Further, Akshay Kumar stated that he used to earn profit by
selling filled vials of spurious anti-cancer medicines having
details as under:-
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Further, Purchase Manager of Sri Guru Harkrishan sahib C
Eye Hospital Trust during their statement recorded under
section 50 of PMLA, 2002 provided the details of purchase
price of the said anti-cancer medicines from M/s Delhi
Medicine Hub (DMH) and M/s Cancer Medicine Agency
(CMA) as mentioned below:
Further, M/s Delhi medicine Hub is the partnership firm of Sh.
Akshay Kumar and Sh. Rajesh Kumar. The profit earned by Mis
Delhi Medicine Hub by selling the spurious anti-cancer
medicines purchased from Neeraj and Tushar is Rs. 8,81,000/-.
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The said profit is nothing but proceeds of crime generated out
of the scheduled offence.
Further, M/s Cancer Medicine Agency is the proprietorship
firm of Sh. Akshay Kumar. The profit earned by M/s Cancer
Medicine Agency by selling the spurious anti-cancer medicines
purchased from Neeraj and Tushar is Rs. 7,39,000/-. The said
profit is nothing but the proceeds of crime generated out of the
scheduled offence…”
47. The respondent has also filed a detailed representation of the money
trail in which the applicant is involved and the same is as under:
48. Upon the perusal of the aforesaid, including the statements of the
applicant, co-accused and the relevant bank statements, the following
inferences can be drawn with respect to the issues under consideration.
49. It is observed by this Court that the applicant herein was actively
engaged in the procurement and sale of anti-cancer medicines through his
proprietorship firm, M/s Cancer Medicine Agency, and partnership firm,
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M/s Delhi Medicine Hub.
50. The applicant‟s statement under Section 50 of the PMLA
acknowledges that he acquired spurious and unsealed cancer medicines from
co-accused persons namely Neeraj Chauhan and Tushar Chauhan without
valid invoices. Furthermore, it is apparent from the records that the applicant
made numerous transactions through banking channels as well as Hawala
networks, thereby creating a financial trail of laundering proceeds or
proceeds of crime. His admission regarding the deletion of WhatsApp
conversations concerning these transactions further strengthens the
interference of culpability.
51. It is further observed by this Court that the corroborative testimony of
co-accused Rajesh Kumar, his business associate, reinforces the applicant‟s
role in managing the financial affairs of M/s Delhi Medicine Hub. He stated
that he executed bank transfers and cash withdrawals on the express
instructions of the applicant, including payments made to co-accused
persons namely Deepali Jain and Neeraj Chauhan. Furthermore, evidence
derived from the supplementary prosecution complaint indicate that the
profit generated from these transactions, amounting to Rs. 8,81,000/- from
M/s Delhi Medicine Hub and Rs. 7,39,000/- from M/s Cancer Medicine
Agency, constitutes proceeds of crime as defined under the PMLA. These
financial gains, acquired through the sale of counterfeit medicines prima
facie indicate the commission of offence of money laundering.
52. Moreover, the investigation findings also indicate that the applicant’s
illicit dealings were not limited to a single entity but extended to multiple
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hospitals, most of which declined to facilitate these spurious medicines
except for Sri Guru Harkrishan Sahib Hospital, where transactions worth
approximately Rs. 3 crores took place. The documentary trail, encompassing
bank statements, and the testimonies of co-accused, establishes a clear nexus
between the applicant and the proceeds of crime. The nature of these
offences, coupled with the quantum of funds involved and the calculated
means employed to mask illicit gains, negates any presumption of innocence
at this stage. The weight of the evidence firmly supports the contention that
the applicant was an integral part of a structured and deliberate scheme
aimed at financial enrichment through unlawful means.
53. This Court shall now peruse the provisions of Section 45 of the
PMLA, which lays down the statutory mandate regarding the grant of bail in
such cases. The said provision reads as under:
“Section 45. Offences to be cognizable and non-bailable.
(1) [Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974), no person accused of an
offence 2[under this Act] shall be released on bail or on his
own bond unless–]
(i) the Public Prosecutor has been given a opportunity to
oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application, the
court is satisfied that there are reasonable grounds for
believing that he is not guilty of such offence and that he is not
likely to commit any offence while on bail:
Provided that a person, who, is under the age of sixteen years,
or is a woman or is sick or infirm, 3[or is accused either on his
own or along with other co-accused of money-laundering a sum
of less than one crore rupees] may be released on bail, if the
Special Court so directs:
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Provided further that the Special Court shall not take
cognizance of any offence punishable under section 4 except
upon a complaint in writing made by–
(i) the Director; or
(ii) any officer of the Central Government or a State
Government authorised in writing in this behalf by the Central
Government by a general or special order made in this behalf
by that Government.
[(1A) Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974), or any other provision
of this Act, no police officer shall investigate into an offence
under this Act unless specifically authorised, by the Central
Government by a general or special order, and, subject to such
conditions as may be prescribed.]
(2) The limitation on granting of bail specified in sub-section
(1) is in addition to the limitations under the Code of Criminal
Procedure, 1973 (2 of 1974) or any other law for the time being
in force on granting of bail.
[Explanation.–For the removal of doubts, it is clarified that the
expression “Offences to be cognizable and non-bailable” shall
mean and shall be deemed to have always meant that all
offences under this Act shall be cognizable offences and non-
bailable offences notwithstanding anything to the contrary
contained in the Code of Criminal Procedure, 1973 (2 of 1974),
and accordingly the officers authorised under this Act are
empowered to arrest an accused without warrant, subject to the
fulfillment of conditions under section 19 and subject to the
conditions enshrined under this section.]”
54. This Court shall now proceed to analyze the statutory framework
under Section 45 of the PMLA which governs the grant of bail in cases of
money laundering. Section 45 of the PMLA imposes stringent conditions on
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the grant of bail. A careful reading of the provision reveals the following
essential ingredients that must be satisfied before bail is granted.
55. Firstly, Section 45(1) of the PMLA mandates that no person accused
of an offence under the PMLA shall be released on bail or on his own bond
unless two cumulative conditions are satisfied, i.e., (i) the Public Prosecutor
must be given an opportunity to oppose the bail application; and (ii) if the
Public Prosecutor opposes the application, the Court must be satisfied that
there are reasonable grounds for believing that the accused is not guilty of
the offence and is not likely to commit any offence while on bail.
56. Secondly, Section 45(2) of the PMLA provides that the limitations on
the grant of bail under sub-section (1) are in addition to the limitations
imposed under the Code of Criminal Procedure, 1973 (hereinafter “CrPC“),
or any other law applicable at the time. This makes it clear that the
provisions of the PMLA are to be applied over and above the general
principles of bail applicable to criminal offences under the CrPC, thereby
reinforcing the stringent approach adopted by the legislature in dealing with
money laundering offences.
57. Thirdly, the proviso to Section 45(1) of the PMLA carves out an
exception to the rigorous twin conditions by allowing bail to be granted, at
the discretion of the Special Court, to specific categories of persons, namely:
(i) individuals below the age of sixteen years, (ii) women, (iii) persons who
are sick or infirm, and (iv) those accused, either alone or with others, of
money laundering involving a sum of less than rupees one Crore.
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58. Following a perusal of the statutory provision, it becomes imperative
to examine the judicial pronouncements that have interpreted and applied
Section 45 of the PMLA in various factual contexts.
59. The Hon‟ble Supreme Court in Nikesh Tarachand Shah v. Union of
India, (2018) 11 SCC 1 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 v.
Union of India, (2023) 12 SCC 1, reaffirming the strict nature of bail
conditions under the PMLA. In Prem Prakash v. Directorate of
Enforcement, (2024) 9 SCC 787, the Hon‟ble Supreme Court has also
delved into the principles pertaining to bail under PMLA offences. The
relevant paragraphs are as under:
“Section 45 PMLA — Contours
10. Considering that the present is a bail application for the
offence under Section 45 PMLA, the twin conditions mentioned
thereof become relevant. Section 45(1) PMLA reads as under:
“45. Offences to be cognizable and non-bailable. — (1)
Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), no person accused of an offence
[under this Act] shall be released on bail or on his own bond
unless–
(i) the Public Prosecutor has been given an opportunity to
oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application, the
court is satisfied that there are reasonable grounds for
believing that he is not guilty of such offence and that he is not
likely to commit any offence while on bail:
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own or along with other co-accused of money-laundering a sum
of less than one crore rupees, may be released on bail, if the
Special Court so directs:
Provided further that the Special Court shall not take
cognizance of any offence punishable under Section 4 except
upon a complaint in writing made by–
(i) the Director; or
(ii) any officer of the Central Government or a State
Government authorised in writing in this behalf by the Central
Government by a general or special order made in this behalf
by that Government.”
11. In Vijay Madanlal Choudhary v. Union of India [Vijay
Madanlal Choudhary v. Union of India, (2023) 12 SCC 1] , this
Court categorically held that while Section 45 PMLA restricts
the right of the accused to grant of bail, it could not be said that
the conditions provided under Section 45 impose absolute
restraint on the grant of bail. Para 302 is extracted
hereinbelow : (SCC p. 259)
“302. 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 2002 Act.”
These observations are significant and if read in the context of
the recent pronouncement of this Court dated 9-8-2024 in
Manish Sisodia v. Enforcement Directorate [Manish Sisodia v.
Enforcement Directorate, (2024) 12 SCC 660 : 2024 SCC
OnLine SC 1920] , it will be amply clear that even under PMLA
the governing principle is that “Bail is the Rule and Jail is the
Exception”. In para 52 of Manish Sisodia [Manish Sisodia v.
Enforcement Directorate, (2024) 12 SCC 660 : 2024 SCC
OnLine SC 1920] , this Court observed as under:
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“52. … From our experience, we can say that it appears that
the trial courts and the High Courts attempt to play safe in
matters of grant of bail. The principle that bail is a rule and
refusal is an exception is, at times, followed in breach. On
account of non-grant of bail even in straightforward open-and-
shut cases, this Court is flooded with huge number of bail
petitions thereby adding to the huge pendency. It is high time
that the trial courts and the High Courts should recognise the
principle that “bail is rule and jail is exception.”
12. All that Section 45 PMLA mentions is that certain
conditions are to be satisfied. The principle that, “bail is the
rule and jail is the exception” is only a paraphrasing of Article
21 of the Constitution of India, which states that no person
shall be deprived of his life or personal liberty except
according to the procedure established by law. Liberty of the
individual is always a Rule and deprivation is the exception.
Deprivation can only be by the procedure established by law,
which has to be a valid and reasonable procedure. Section 45
PMLA by imposing twin conditions does not re-write this
principle to mean that deprivation is the norm and liberty is the
exception. As set out earlier, all that is required is that in cases
where bail is subject to the satisfaction of twin conditions, those
conditions must be satisfied.
***
Scope of inquiry under Section 45 PMLA
16. Coming back to the scope of inquiry under Section 45, Vijay
Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of
India, (2023) 12 SCC 1] , while reiterating and agreeing with
the holding in Ranjitsing Brahmajeetsing Sharma v. State of
Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State of
Maharashtra, (2005) 5 SCC 294 : 2005 SCC (Cri) 1057] , held
that the court while dealing with the application for grant of
bail in PMLA need not delve deep into the merits of the case
and only a view of the court based on the available material
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available on record is required. It held that the court is only
required to place its view based on probability on the basis of
reasonable material collected during investigation. The words
used in Section 45 are “reasonable grounds for believing”
which means that the court has to see only if there is a genuine
case against the accused and the prosecution is not required to
prove the charge beyond reasonable doubt.”
60. 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 discharged the
burden of proving that he is not guilty of the alleged offence and is unlikely
to commit any offence while on bail.
61. It is well settled, as reiterated by the Hon‟ble Supreme Court in Vijay
Madanlal Choudhary (Supra) and Manish Sisodia v. Enforcement
Directorate, 2024 SCC OnLine SC 2274, that while the stringent twin
conditions under Section 45 of the PMLA restrict the right to bail, they do
not impose an absolute bar. The discretion of the court in granting bail
remains judicial and must be exercised in accordance with the settled legal
principles. The governing principle that “bail is the rule, and jail is the
exception” must be harmonized with the legislative mandate that requires
satisfaction of the conditions laid down under Section 45 of the PMLA
before bail can be granted.
62. Now, coming back to the issue at hand, the statement of the applicant,
co-accused persons and the bank records reveal significant cash deposits and
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fund transfers that align with the proceeds of counterfeit medicines, further
indicating a prima facie case of money laundering.
63. For the second condition of Section 45 of the PMLA, the pattern of
transactions and extensive network established for the distribution of
spurious medicines suggests that the applicant had a well-structured setup.
The involvement of multiple bank accounts, cash transactions and hawala
channels indicate a high risk of continued engagement in similar activities if
released.
64. The applicant‟s admission of using hawala channels to facilitate
unaccounted transactions raises concerns about potential interference with
the investigation and further commission of the offence while on bail.
65. Secondly, 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
evidence shows deliberate concealment of the origin of funds and the
layering of transactions to evade detection by regulatory authorities. The
sheer scale of operations, involving the movement of funds across multiple
jurisdictions, use of hawala channels, and sale of counterfeit medicines to
unsuspecting patients and hospitals, underscores the organized and
syndicated nature of the offence.
66. The respondent has provided a detailed representation of the modus
operandi of the accused persons in the form of a graphic illustration.
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67. In the present case, the respondent has placed on record material
indicating the applicant‟s active involvement in the procurement and sale of
spurious anti-cancer medicines, the proceeds of which were funneled
through various channels, including formal banking and hawala transactions.
The applicant‟s role in the laundering of illicit proceeds through his firms
namely, M/s Delhi Medicine Hub and M/s Cancer Medicine Agency, stands
corroborated by the investigative findings, including statements under
Section 50 of the PMLA and independent documentary evidence.
68. In view of the facts and circumstances, the court finds that the twin
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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 syndicate indicate that the
rigors of Section 45 of the PMLA continue to apply.
69. The present bail application has been filed under Section 483 of the
BNSS (earlier Section 439 of the CrPC), therefore, this Court, while
considering the plea for bail, deems it necessary to evaluate the applicant‟s
case through well-established principles governing the grant of bail under
the said provision. Notwithstanding the rigors of Section 45 of the PMLA,
the courts have consistently applied the „triple test‟ as a guiding framework
while considering bail applications under special statutes, including the
PMLA.
70. The triple test, derived from Section 439 of the CrPC, consists of the
various parameters. First, whether the accused is likely to abscond or evade
the process of law if released on bail. Given the nature of offences under the
PMLA, which often involve complex financial transactions and cross-border
elements, the potential for absconding is a significant concern. Second,
whether the accused, if released, is likely to influence witnesses or tamper
with evidence. In money laundering cases, where the trail of proceeds of
crime is intricate and dependent on multiple records and statements, the
possibility of interference with ongoing investigations remains high, and
third, whether there is a reasonable apprehension that the accused may
indulge in similar offences if granted bail, thereby prejudicing the ongoing
investigation and endangering public interest.
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71. In Satender Kumar Antil v. CBI, (2022) 10 SCC 51, the Hon‟ble
Supreme Court has held that while granting bail, the gravity of the
allegations must be taken into account.
72. Applying the aforesaid principle to the present case, this Court finds
that the gravity of the allegations against the applicant is of a serious nature,
involving the alleged laundering of proceeds derived from the sale of
spurious anti-cancer medicines. The offence not only entails significant
financial implications but also poses a grave risk to public health and safety.
73. As observed in the foregoing paragraphs, but not being repeated for
the sake of brevity, the applicant in the present case is alleged to have played
an active role in the procurement, distribution, and financial management of
the illicit business.
74. The evidence on record, including financial transactions and digital
communications, suggests a well-orchestrated operation which demands a
higher threshold of scrutiny before granting bail. The investigating agency
has highlighted the potential risk of the applicant tampering with evidence
and influencing witnesses, thereby, affecting the integrity of the ongoing
investigation.
75. In the present case, the applicant has failed to demonstrate that his
release would not pose a risk to the investigative process. The applicant‟s
financial dealings, the intricate network of the accused persons, and the
continuing investigation reinforce the respondent‟s concerns regarding the
potential for tampering with evidence and influence of witnesses.
76. Thus, in addition to failing to satisfy the twin conditions under Section
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45(1) of the PMLA, the applicant also fails to meet the general
considerations under the triple test for the grant of bail. Consequently, the
applicant‟s continued detention is warranted to ensure the integrity of the
investigation and prevent any potential misuse of the judicial process.
77. Having dealt with all the grounds raised by the applicant for grant of
bail, this Court is of the view that considering the filing of the
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 the PMLA. The respondent has
presented sufficient material to warrant further judicial scrutiny, 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 evaluation at trial.
78. The ongoing investigation is an extensive and meticulous effort by the
investigating agency to unearth a broader nexus of financial misconduct and
uncover deeper layers of the alleged offence. As new evidence continues to
emerge, it may further solidify the allegations against the applicant. The
complexity of the financial trail and its potential societal and national
ramifications require continued custodial interrogation.
79. Therefore, in view of the seriousness of the allegations and the need to
ensure the integrity of the investigation, this Court is not inclined to enlarge
the applicant on bail.
80. In light of the above discussions on facts and law, it is held that the
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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.
81. The applicant, if on interim bail, is directed to surrender before the
Court concerned within a period of seven days from today and the
sureties/bail bond, if any shall stand discharged. If the applicant fails to
surrender as directed, the investigating agency shall take appropriate steps to
take the applicant in custody to secure his presence.
82. It is made clear that any observations made herein are only for the
purpose of deciding the present petition and shall not be construed as an
expression on the merits of the case. The learned Trial Court shall proceed
with the matter uninfluenced by any observations made by this Court and
shall decide the case strictly in accordance with law.
83. The order will be uploaded on the website forthwith.
CHANDRA DHARI SINGH, J
JANUARY 28, 2025
rk/ryp/mk
Click here to check corrigendum, if any
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