Summary
A former Additional Chief Secretary of the Madhya Pradesh Water Resources Department, summoned by the Enforcement Directorate in a money laundering investigation arising from the Madhya Pradesh e-tender rigging case, obtained anticipatory bail from the Telangana High Court, which held on the authority of Nikesh Tarachand Shah that Section 45 of the Prevention of Money Laundering Act, 2002 does not apply to proceedings under Section 438 CrPC. The Supreme Court allowed the Directorate's appeal: as clarified in Dr. V.C. Mohan, the rigours of Section 45 are triggered once anticipatory bail is sought for an offence under the 2002 Act, the High Court ignored the seriousness of the allegations and treated the matter like an ordinary IPC offence, and acquittal or discharge of other accused in the scheduled offence is no ground to halt the investigation against him.
Issues
- Whether the twin conditions of Section 45 of the Prevention of Money Laundering Act, 2002 apply to an application for anticipatory bail under Section 438 CrPC in connection with an offence of money laundering.
- Whether anticipatory bail could be granted without considering the seriousness of the allegations merely because the applicant was not named in the FIR for the scheduled offence and other accused had been acquitted or discharged.
Provisions considered
- Section 45 read with Sections 3 and 4, Prevention of Money Laundering Act, 2002Once an enquiry or investigation is pending against a person for an offence under the Act, no bail can be granted unless the Public Prosecutor is heard and the court is satisfied there are reasonable grounds to believe he is not guilty and unlikely to offend on bail; Dr. V.C. Mohan holds that these principles and rigours apply even though the application is under Section 438 CrPC, and the High Court's contrary reading of Nikesh Tarachand Shah was a misunderstanding. (¶¶ 5, 5.1, 7)
- Section 438, Code of Criminal Procedure, 1973In economic offences having an impact on society the court must be very slow in exercising the discretion to grant anticipatory bail, as held in P. Chidambaram; the High Court considered only the applicant's age, residence and the seizure of documents, not the nature of the allegations. (¶¶ 6, 6.2, 6.3)
Held
- The investigating agency claims material showing that the respondent took undue advantage from the promoter of the suspected beneficiary group, including free trips on his aircraft and hawala-sponsored foreign exchange for his son, and that he was evasive when examined under Section 50; these are serious allegations of money laundering requiring thorough investigation, and the fact that other accused were acquitted or discharged in the predicate offence cannot be a ground not to continue the enquiry against him. (¶¶ 3.3, 3.4, 3.5, 6, 6.1)
Result
Appeal allowed without costs; Telangana High Court judgment dated 02.03.2021 in Criminal Petition No. 1148 of 2021 granting anticipatory bail in F. No. ECIR/HYZO/36/2020 quashed and set aside; respondent to be dealt with in accordance with law, and any regular bail application filed after arrest to be considered on its own merits in light of the material collected.