Summary
The Supreme Court granted bail to the appellant in a PMLA case over a land transaction based on a forged deed. It held that 'bail is the rule' applies even under Section 45 PMLA, and that statements recorded under Section 50 while the accused was in custody in another case of the same agency are inadmissible against him. Co-accused statements are not substantive evidence, and the material did not prima facie show his involvement, so the twin conditions were satisfied.
Issues
- How the twin conditions for bail in Section 45 PMLA are to be applied, and whether the principle that bail is the rule and jail the exception applies to PMLA offences.
- What the prosecution must show at the bail stage, by its counter affidavit, to raise the presumption under Section 24 PMLA.
- Whether statements under Section 50 PMLA recorded while the accused was in judicial custody in another case investigated by the same agency are admissible against him.
- What evidentiary value the Section 50 statements of co-accused carry against the appellant.
- Whether the appellant satisfied the twin conditions and should be released despite another pending ECIR and allegations about his conduct in jail.
Provisions considered
- Section 45(1), Prevention of Money Laundering Act, 2002The twin conditions restrict but do not bar bail. They must be read with Article 21, so liberty remains the rule; the court only forms a view on broad probabilities from the material, and on the material here both conditions were held satisfied. (¶¶ 11, 12, 13, 45)
- Section 24, Prevention of Money Laundering Act, 2002The presumption arises only after the prosecution prima facie establishes three foundational facts: a scheduled offence, property derived from it, and the accused's involvement in a process or activity connected with that property. (¶¶ 14, 15)
- Section 50, Prevention of Money Laundering Act, 2002Statements recorded from an accused in custody in another case of the same agency are inadmissible against him; a person in judicial custody is not free to be summoned, and recording requires the remanding court's permission. (¶¶ 21, 22, 32, 33, 34)
- Sections 3 and 4, Prevention of Money Laundering Act, 2002The material did not prima facie show the appellant's role in the forgery, his knowledge of it, or his beneficial ownership of the firm that received the funds, so reasonable grounds existed to believe he was not guilty of money laundering. (¶¶ 2, 41, 42, 43, 45)
- Section 25, Indian Evidence Act, 1872Relying on Vijay Madanlal Choudhary's recognition that its protection may apply case by case, the Court held incriminating statements given in custody under the same agency to be hit by Section 25. (¶¶ 23, 24, 25, 27, 30, 31)
- Section 30, Indian Evidence Act, 1872Statements of co-accused under Section 50 PMLA are not substantive evidence. The agency must first marshal other evidence and may use them at best to lend assurance, as Kashmira Singh holds for confessions of co-accused. (¶¶ 37, 39)
- Articles 20(3) and 21, Constitution of India'Bail is the rule' paraphrases Article 21, which statutory provisions must align with, and prolonged pre-trial custody justifies relaxing Section 45. Article 21's demand for a fair procedure, with Article 20(3) and Nandini Satpathy, supported excluding custodial statements. (¶¶ 11, 12, 26, 34, 46)
Held
- Section 45 PMLA restricts but does not absolutely bar bail; the principle that bail is the rule and jail the exception, a paraphrase of Article 21, governs PMLA cases too, and the twin conditions do not make deprivation of liberty the norm. Where an accused has spent a long time in custody and the trial is unlikely to end soon, the rigours of Section 45 may be suitably relaxed. (¶¶ 11, 12)
- At the bail stage the court does not weigh evidence meticulously; it forms a view on broad probabilities from the material collected, asking only whether there is a genuine case against the accused. (¶ 13)
- Where the prosecutor opposes bail, the agency's counter affidavit should briefly but specifically set out the material that prima facie establishes the three foundational facts; only then does the Section 24 presumption arise and the burden shift to the accused. (¶¶ 14, 15)
- When an accused is in custody under PMLA, whatever the case for which he is held, any statement under Section 50 to the same agency is inadmissible against him. He cannot be regarded as acting with a free mind, the setting is conducive to obtaining a confession, and admitting such statements would offend fair play and the requirement of a reasonable procedure under Article 21. (¶¶ 27, 28, 29, 32, 34)
- A person in judicial custody is not free and cannot be summoned under Section 50; any statement from him can be recorded only with the permission of the court that remanded him. (¶ 33)
- Section 50 statements of co-accused are not substantive evidence against the appellant and the prosecution cannot start with them; following Kashmira Singh, the agency must first marshal other evidence and may use them only for assurance. On their own they did not prima facie show his role in the forgery or in money laundering. (¶¶ 37, 38, 39, 40, 41)
- On the material, nothing showed the appellant's involvement in or knowledge of the forged deed, and nothing supported the claim that he was the beneficial owner of the firm that received the funds. There were reasonable grounds to believe he was not guilty and not likely to offend on bail. (¶¶ 42, 43, 45)
- The pendency of another ECIR, where his bail would be examined separately, did not justify continued detention given his custody of over a year with trial yet to begin; complaints about jail facilities are for the jail authorities and were not grounds to deny liberty. (¶¶ 46, 47)
Result
Appeal allowed; High Court order of 22.03.2024 set aside; appellant to be released on bail in ECIR No. 5 of 2023 on a bond of Rs. 5 lakh with two sureties, surrender of passport, reporting to the Investigating Officer every Monday and Thursday, and no attempt to influence witnesses or tamper with evidence; observations confined to bail.