Shiva Kumar Deora @ Shiva Ratan Deora vs Union Of India

3. Subsequently, the prosecuting agency, i.e., the

Directorate of Enforcement while observing that Sections

420, 467 and 471 of the Indian Penal Code are scheduled

offences under Part-A, Paragraph 1 of the PML Act, 2002

initiated the investigation under PML Act, 2002 by

registering Enforcement Case Information Report having

ECIR bearing No. ECIR/RZNO/18/2024 dated 23.09.2024.

4. As per aforesaid three complaint cases, it is revealed

that a syndicate is operational in Jharkhand, West Bengal,

Delhi and other States of the Country, Syndicate is

indulged in creation, operation and management of fake

companies / firms for passing on ineligible ITC (Input Tax

Credit) by issuing fake GST bills, without actually delivering

2 2025:JHHC:33869

the related goods and services and the persons namely

Shiva Kumar Deora(present petitioner) Sumit Kumar Gupta

and Amit Kumar Gupta are a part of the said syndicate who

are knowingly a party with each other and or directly

involved in illegal activities of creation of fake companies /

firms in the name of various dummy directors/ proprietors

in order to avail and pass on ITC to several end

beneficiaries in lieu of money, which are proceeds of crime.

Further, it has been stated in the complaints that several

bogus GST invoices have been generated in Delhi and have

traveled to Jharkhand via West Bengal in three to four

layers.

5. A portion of these bogus ITCs have also been

transferred to other states such a Tamil Nadu, Telangana,

Andhra Pradesh, Maharashtra and Odisha and bogus ITC

claims have also been taken on the basis of the said fake

invoices.

6. As per aforesaid complaint case Shiva Kumar Deora

(present petitioner) is the mastermind behind the said fraud

committed of availing ITC on the strength of bogus invoices,

by way of creation of multiple companies/firms in the name

of innocent persons. They hired innocent and needy

persons in the name of job at the renumeration of Rs.

10,000/- to 15,000/- per month and they were not required

attend the office daily. They were asked to provide OTP and

3 2025:JHHC:33869

PIN, whenever required by them. Subsequently, fake firms

and companies were floated in the name of those innocent

needy persons after using their identity, documents,

without their knowledge or consent.

7. Further, it is also revealed that Sumit Kumar

Gupta, the accomplice of present petitioner worked as an

office staff member on his instructions for creating DSCs,

rent agreements for various firms and companies for which,

he was initially paid a monthly salary of Rs. 30,000/-.

8. The Petitioner and his accomplices namely Amit

Kumar Gupta and Sumit Kumar Gupta are beneficial

owners of total 135 shell companies/firms which are floated

in names of various dummy directors and by these firms

they availing fake ITC to the tune of Rs. 750 crores (Approx)

and passed them to several end beneficiaries thereby

causing significant loss to the government exchequer.

9. From the analysis of aforesaid complaints as filed

by DGGI, Jamshedpur, it is revealed that an FIR was

registered against Tutui Debnath, Sumi Shaw and Amit

Agarwal @ Vicky Bhalotia.

10. The Co-accused-Amit Agarwal @ Vicky Bhalotia is

also one of the accomplices of main mastermind Shiva

Kumar Deora who also works on similar modus in availing

fake ITC on strength of bogus invoices.

4

2025:JHHC:33869

11. From the contents of the complaints filed by the

DGGL Jamshedpur, it is revealed that the present

petitioner is one of the prominent members of the syndicate

who is the mastermind behind the said fraud of availing

ITC on strength of bogus invoices, by way of creation of

multiple companies/firms in name of innocent persons. It

is revealed that the present petitioner and his accomplices

namely Amit Kumar Gupta and Sumit Kumar Gupta

adopted systematic modus for claiming ineligible ITC by

way of first identifying poor and needy people and then

luring them in name of jobs in their offices. They were hired

at Rs. 10,000 to 15,000 per month and were not required to

attend the office daily. Instead, they were asked to provide

OTP's and PINs, whenever required by Shiva Kumar Deora

(present petitioner) and his two accomplices. Subsequently,

fake firms and companies were floated in their names using

their identity documents, without their knowledge or

consent.

12. Further, it is revealed that Sumit Kumar Gupta, the

accomplices of the petitioner worked as an office staff

member on his instructions for creating DSCs, rent

agreements, and assisting in opening bank accounts and

obtaining lease licenses, for various firms and companies

for which, he was initially paid a monthly salary of Rs

30,000/-.

5

2025:JHHC:33869

13. Further, from the analysis of materials gathered

during investigation, it is revealed that the petitioner and

his accomplice namely Amit Kumar Gupta and Sumit

Kumar Gupta are beneficial owners of total 135 shell

companies/firms which are floated in names of various

dummy directors. Through the network of the said 135 fake

firms/companies floated by Shiva Kumar Deora, Amit

Kumar Gupta and Sumit Kumar Gupta, they availed fake

ITC to the tune of Rs. 750 crores (approx.) and passed them

to various end beneficiaries thereby causing a significant

loss to the government exchequer.

14. That the abovesaid Shiva Kumar Deora is one of the

directors in seven companies through which, he has availed

the fake ITC worth Rs.55.83 crores.

15. During the course of investigation, it has come that

the present petitioner has received direct cash amounting

Rs.74,60,878 in different bank accounts during between

2020 to 2024.

16. The petitioner was arrested on 08.05.2025, from the

residential house at Kolkata, subsequent to the issuance of

summons under section 50 of the PML Act which has been

served at the petitioner's residence requiring the petitioner

to appear in person for the recording of his statement. The

petitioner was provided Memo of arrest, grounds of arrest

and "reasons to believe".

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2025:JHHC:33869

17. The petitioner was produced before the learned

Court of Chief Judicial Magistrate, Calcutta along with

other co-accused, namely, Mohit Deora and Amit Kumar

Gupta at 10:10 PM on the same day by filing Remand

Petition, seeking transit remand of the petitioner and vide

order dated 08.05.2025, the same was allowed by the

learned Chief Judicial Magistrate, Calcutta.

18. Thereafter, the present petitioner preferred Misc.

Cri. Application No. 1243 of 2025 for grant of bail which

was rejected, vide order dated 15.07.2025 by the learned

Spl. Judge, PML Act, Ranchi, hence, the instant bail

application.

19. It needs to refer herein that the prosecuting agency

filed the Prosecution Complaint dated 05.07.2025, before

the learned Trial Court and accordingly cognizance of the

offence has been taken by the Court concerned.

Argument advanced by learned senior counsel for the petitioner:

20. The learned counsel appearing for the petitioner has

argued inter alia on the following grounds:

I. That the petitioner is quite innocent and has

falsely been implicated in this case with oblique

motive and mala fide intention to harass the

petitioner.

7 2025:JHHC:33869

II. The petitioner has duly cooperated with the

investigation agency and further as and when

required he appeared before the concerned agency

despite that he has been arrested in the present

case.

III. It has been contended that no attributability is

available from commission of offence said to be

there attracting ingredient under Sections 3 and 4

of PML Act, 2002.

IV. The basic procedure of arrest as provided under

PML Act, 2002 has not been followed. Further the

arrest of the Petitioner was carried out in violation

of Section 19 of PMLA, without recording proper

reasons to believe, and is therefore illegal. Mere

non-cooperation or evasive replies, even if

assumed, cannot by themselves justify the arrest of

the Petitioner under PMLA.

V. It has been submitted that the alleged predicate

offences under Sections 420, 467 and 471 IPC

have not been validly registered by police under

Chapter XII CrPC, but have merely been appended

to a GST complaint, which is impermissible in law.

The DGGI, Jamshedpur ought not to have

registered prosecution complaint for the offences

punishable under the provisions of IPC.

8 2025:JHHC:33869

VI. Further in the absence of a valid predicate offence,

there can be no "proceeds of crime" within the

meaning of Section 2(1)(u) PMLA and consequently

no offence of money laundering under Section 3

PMLA.

VII. Further all allegations of siphoning of funds or

cash deposits relate at best to alleged GST

violations, which are offences under the CGST Act.

None of these offences are scheduled offences

under PMLA. Hence, even assuming such

allegations, they cannot constitute "proceeds of

crime" under Section 2(1)(u) PMLA.

VIII. Further the presumption under Section 24 of

PMLA is not applicable at the stage of considering

bail. The reverse burden applies only post-framing

of charge after foundational facts are proved by

prosecution.

IX. Further, reliance on statements allegedly recorded

from the Petitioner while in custody under Section

50 of PMLA is impermissible since such statements

cannot be used against him at this stage.

X. The ground has also been taken on behalf of the

petitioner by challenging the issue of arrest that at

the time of arrest the condition stipulated under

Section 19(1) of the PML Act, 2002 has not been

9 2025:JHHC:33869

followed and in order to fortify this limb of

argument reliance has been placed upon the

judgment rendered by Hon'ble Apex Court in the

case of V. Senthil Balaji Vs. State Represented

by Deputy Director & Ors. [(2024) 3 SCC 51;

Prabir Purkayastha Vs. State (NCT of Delhi)

[2024 SCC OnLine 934; and recently in the case

of Arvind Kejriwal Vs. Directorate of

Enforcement [2024 SCC OnLine SC 1703] .

XI. Submission has also been made that the statutory

provision, as contained under Section 19(1) of the

PML Act, has been clarified by the Hon'ble Apex

Court while dealing with PML Act, 2002 in the case

of Vijay Madanlal Choudhary and Ors. Vs.

Union of India and Ors., [(2022) SCC On Line SC

929].

XII. The petitioner has no antecedent and no other

criminal proceeding is pending against him. The

petitioner has been cooperating with the ongoing

investigation inquiries conducted by the

prosecution and undertakes to continue doing so.

XIII. The submission has been made that the statement

recorded under Section 50 of the PML Act of the

co-accused, who were already in custody cannot be

used against the present petitioner as per the

10 2025:JHHC:33869

mandate of judgment rendered by the Hon'ble Apex

Court in the case of Prem Prakash Vs. Union of

India through the directorate of enforcement

2024 INSC 637.

XIV. Further, it has been contended that there is no

allegation said to be committed so as to attract the

offence under Section 3 of the PML Act since there

is no allegation of laundering of money against the

petitioner.

21. Learned senior counsel for the petitioner, based

upon the aforesaid grounds, has submitted as per the

ground agitated hereinabove, it is a fit case where the

petitioner is to be given the benefit of privilege of bail.

Argument advanced by learned counsel for the opposite party-Enforcement Directorate:

22. Per contra, Mr. Amit Kumar Das, the learned

counsel for the opposite party-Enforcement Directorate has

seriously opposed the said submission/ground both based

upon the fact and the law as referred hereinabove, on the

following grounds.

I. The submission has been made that the petitioner

was arrested on 08.05.2025 under Section 19 of PML

Act, 2002, after recording reasons to believe that the

petitioner is guilty of the offence of money laundering

11 2025:JHHC:33869

as defined under Section 3 and punishable under

Section 4 of PML Act, 2002.

II. It has been contended by referring to Section 3 of the

PML Act, 2002 that the process or activity connected

with proceeds of crime is a continuing activity and

continues till such time a person is directly or

indirectly enjoying the proceeds of crime by its

concealment or possession or acquisition or use or

projecting it as untainted property or claiming it as

untainted property in any manner whatsoever.

III. It is incorrect on the part of the petitioner to take a

ground that the mandate of Section 19(1) of the Act

2002 has not followed rather each and every

document has been supplied, i.e., the grounds of

arrest and reason to believe which would be evident

from the documents as appended as Annexure-3

series showing the acknowledgement of receipt of the

petitioner on 08.05.2025 .

IV. It has been argued that the petitioner has been

arrested on 08.05.2025 and immediately after arrest,

he was produced before the learned Chief Judicial

Magistrate, Calcutta on the same day.

V. Further, the petitioner has been represented by the

advocate and the said advocate has contested the

case. The argument has been advanced in presence

12 2025:JHHC:33869

of the learned counsel representing the petitioner on

08.05.2025 before the learned Chief Judicial

Magistrate, Calcutta and in whose presence the

ground of arrest and reason to believe has been

submitted for the same on behalf of the learned

Public Prosecutor appearing for the Enforcement

Directorate.

VI. The learned Court has taken note of the same and

recording in the said order while rejecting the prayer

for bail made on behalf of the petitioner.

VII. It has been contended that the purpose of supply of

grounds of arrest and reason to believe to have the

access to the judicial system so as not to cause

prejudice and miscarriage of justice, but in the

instant case after arrest immediately the petitioner

was produced before the concerned Court of learned

Chief Judicial Magistrate at Kolkata and the

petitioner has engaged his counsel who has argued

the case based upon the ground of arrest and reason

to believe as has been supplied to him by the

Enforcement Directorate and in his presence the

detail order was passed on 08.05.2025, hence, it

cannot be said on behalf of the petitioner that the

ground of arrest and reason to believe has not been

supplied and prejudice has been caused.

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2025:JHHC:33869

VIII. The learned counsel appearing for the O.P-ED has

further submitted that since all the parameters of

arrest, i.e., supply of grounds of arrest and reason to

believe has already been communicated and

thereafter producing the petitioner forthwith before

the learned Chief Judicial Magistrate, Calcutta

seeking for transit remand wherein the prayer for bail

has also been made on behalf of the petitioner being

represented by the learned counsel, hence, in the

facts of the present case, the ratio laid down by the

Hon'ble Apex Court in the case of "Pankaj Kumar

Bansal V. Union of India"(supra) has already been

complied with.

IX. So far as the nature of allegation as has been

committed by the petitioner is concerned, it has been

contended that implication of the petitioner is based

upon the finding mentioned in the prosecution

complaint dated 05.07.2025 and also based upon the

evidences of other persons.

X. Further it has been submitted by the learned counsel

for the ED that substantial portions of the proceeds

of crime remain untraced, unrecovered, and

potentially in circulation within the financial system.

The investigation into the identification of the

complete chain of transactions, the full extent of

14 2025:JHHC:33869

assets acquired from such tainted funds, and the

persons/entities involved in their possession and

concealment is still ongoing, therefore the prayer for

bail of the present petitioner is not fit ton be allowed

at this stage.

XI. It has been contended that the statement, as has

been recorded under Section 50 of the PML Act, 2002

is very much clear of the involvement of the present

petitioner in relation to commission of crime as

alleged in ECIR No. ECIR/RNZO/ 18/2024 dated

23.09.2024.

XII. Submission has been made that ground which has

been advanced that neither the statement of other

co-accused persons is to be taken into consideration

since it is recorded while they were in custody but

the law is otherwise as has been held by Hon'ble

Apex Court in the case of Rohit Tandon vs.

Directorate of Enforcement (2018) 11 SCC 46

wherein the statement if recorded of the co-accused

persons in custody under Section 50 of the PML Act

will also have the impact in implicating a person

under Section 3 of the PML Act and exactly the case

herein.

XIII. It has further been submitted that the contention of

the learned counsel for the petitioner that addition of

15 2025:JHHC:33869

IPC offence in GST complaint is not permissible is not

fit to be accepted reason being that a certain act may

fall within the said special penal statute at the same

time may also have an element of an offence under

IPC.

XIV. It has been submitted that the bail application filed

by the co-accused, namely, Amit Gupta has already

been rejected by this Court vide order dated

08.10.2025 passed in B.A No.7476 of 2025.

XV. Further It has been submitted that the prayer for bail

of the co-accused, namely, Amit Agarwal @ Vicky

Bhalotia had also been rejected by this Court vide

order dated 08.10.2025 passed in B.A No.6030 of

2025 and against the said order, he has approached

the Hon'ble Apex Court but there also his prayer for

bail was rejected vide order dated 17.10.2025 passed

in Special leave to Appeal (Crl.) Nos.16591 of 2025,

as the Hon'ble Apex Court has not inclined to

interfere with the order passed by this Court.

XVI. Further it has been submitted that the arrest of the

Petitioner was lawful, procedurally sound and

necessitated by the facts of the case and the conduct

of the Petitioner. The investigation is at a crucial

stage, and release of the Petitioner at this juncture

would seriously prejudice the ongoing probe,

16 2025:JHHC:33869

considering the nature of transactions, documentary

evidence, and involvement of multiple entities.

23. Learned counsel for the O.P-Enforcement

Directorate, based upon the aforesaid grounds, has

submitted that it is not a fit case where the prayer for bail is

to be allowed taking into consideration the involvement of the

petitioner in directly acquiring the proceeds of crime.

Discussion:

24. This Court has heard the learned counsel for the

parties, gone across the pleading available on record as also

the finding recorded by learned trial court.

25. This Court, before appreciating the argument

advanced on behalf of the parties, deems it fit and proper to

discuss herein some of the provision of law as contained

under the PML Act, 2002 with its object and intent.

26. The Act was enacted to address the urgent need to

have a comprehensive legislation inter alia for preventing

money-laundering, attachment of proceeds of crime,

adjudication and confiscation thereof including vesting of it in

the Central Government, setting up of agencies and

mechanisms for coordinating measures for combating money-

laundering and also to prosecute the persons indulging in the

process or activity connected with the proceeds of crime.

27. It is evident that the PML Act, 2002 was enacted in

order to answer the urgent requirement to have a

17 2025:JHHC:33869

comprehensive legislation inter alia for preventing money-

laundering, attachment of proceeds of crime, adjudication

and confiscation thereof for combating money-laundering and

also to prosecute the persons indulging in the process or

activity connected with the proceeds of crime.

28. It is evident from the definition of "proceeds of

crime" as provided under Section 2(1)(u) of the Act, 2002 that

"proceeds of crime" means any property derived or obtained,

directly or indirectly, by any person as a result of criminal

activity relating to a scheduled offence or the value of any

such property or where such property is taken or held outside

the country, then the property equivalent in value held within

the country or abroad.

29. In the explanation part of the aforesaid section, it

has been referred that for the removal of doubts, it is hereby

clarified that "proceeds of crime" include property not only

derived or obtained from the scheduled offence but also any

property which may directly or indirectly be derived or

obtained as a result of any criminal activity relatable to the

scheduled offence.

30. It is, thus, evident that the reason for giving

explanation under Section 2(1)(u) is by way of clarification to

the effect that whether as per the substantive provision of

Section 2(1)(u), the property derived or obtained, directly or

indirectly, by any person as a result of criminal activity

18 2025:JHHC:33869

relating to a scheduled offence or the value of any such

property or where such property is taken or held outside the

country but by way of explanation the proceeds of crime has

been given broader implication by including property not only

derived or obtained from the scheduled offence but also any

property which may directly or indirectly be derived or

obtained as a result of any criminal activity relatable to the

scheduled offence.

31. The "property" has been defined under Section

2(1)(v) which means any property or assets of every

description, whether corporeal or incorporeal, movable or

immovable, tangible or intangible and includes deeds and

instruments evidencing title to, or interest in, such property

or assets, wherever located.

32. The schedule has been defined under Section 2(1)(x)

which means schedule to the Prevention of Money

Laundering Act, 2002.

33. It is evident that the "scheduled offence" means the

offences specified under Part A of the Schedule; or the

offences specified under Part B of the Schedule if the total

value involved in such offences is [one crore rupees] or more;

or the offences specified under Part C of the Schedule.

34. The offence of money laundering has been defined

under Section 3 of the PML Act, 2002 wherein it has been

stipulated that whosoever directly or indirectly attempts to

19 2025:JHHC:33869

indulge or knowingly assists or knowingly is a party or is

actually involved in any process or activity connected with the

[proceeds of crime including its concealment, possession,

acquisition or use and projecting or claiming] it as untainted

property shall be guilty of offence of money-laundering.

35. It is further evident from the aforesaid provision

that "offence of money-laundering" means whosoever directly

or indirectly attempts to indulge or knowingly assists or

knowingly is a party or is actually involved in any process or

activity connected with the proceeds of crime including its

concealment, possession, acquisition or use and projecting or

claiming it as untainted property shall be guilty of offence of

money-laundering.

36. It is further evident that the process or activity

connected with proceeds of crime is a continuing activity and

continues till such time a person is directly or indirectly

enjoying the proceeds of crime by its concealment or

possession or acquisition or use or projecting it as untainted

property or claiming it as untainted property in any manner

whatsoever.

37. The punishment for money laundering has been

provided under Section 4 of the PML Act, 2002.

38. Further the specific provision has been made under

the PML Act, 2002 to be followed at the time of arrest i.e., the

ground of arrest is to be informed to the person facing the

20 2025:JHHC:33869

accusation as soon as possible that is the original text of

Section 19(1) of the Act, 2002. For ready reference, Section

19(1) of the PML Act, 2002 is quoted as under:

"19. Power to arrest. (1)If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (that reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

39. Further, Section 50 of the PML Act, 2002 confers

power upon the authorities regarding summons, production

of documents and to give evidence.

40. It needs to refer herein that the various provisions

of the Act, 2002 alongwith interpretation of the definition of

"proceeds of crime" has been dealt with by the Hon'ble Apex

Court in the case of Vijay Madanlal Choudhary and Ors.

Vs. Union of India and Ors., (supra) wherein the Bench

comprising of Three Hon'ble Judges of the Hon'ble Supreme

Court have decided the issue by taking into consideration the

object and intent of the Act, 2002, as would appear from

paragraph 128, 129 and 130. For ready reference, relevant

paragraph is being referred as under:

"128. To put it differently, the section as it stood prior to 2019 had itself incorporated the expression "including", which is indicative of reference made to the different process or activity

21 2025:JHHC:33869

connected with the proceeds of crime. Thus, the principal provision (as also the Explanation) predicates that if a person is found to be directly or indirectly involved in any process or activity connected with the proceeds of crime must be held guilty of offence of money laundering. If the interpretation set forth by the petitioners was to be accepted, it would follow that it is only upon projecting or claiming the property in question as untainted property, the offence would be complete. This would undermine the efficacy of the legislative intent behind Section 3 of the Act and also will be in disregard of the view expressed by the FATF in connection with the occurrence of the word "and" preceding the expression "projecting or claiming" therein.

129.This Court in Pratap Singh v. State of Jharkhand, enunciated that the international treaties, covenants and conventions although may not be a part of municipal law, the same be referred to and followed by the Courts having regard to the fact that India is a party to the said treaties. This Court went on to observe that the Constitution of India and other ongoing statutes have been read consistently with the rules of international law. It is also observed that the Constitution of India and the enactments made by Parliament must necessarily be understood in the context of the present-day scenario and having regard to the international treaties and convention as our constitution takes note of the institutions of the world community which had been created.

130.In Apparel Export Promotion Council v. A.K. Chopra, the Court observed that domestic Courts are under an obligation to give due regard to the international conventions and norms for construing the domestic laws, more so, when there is no inconsistency between them and there is a void in domestic law. This view has been restated in Githa Hariharan, as also in People's Union for Civil Liberties, and National Legal Services Authority v. Union of India."

41. The implication of Section 50 has also been taken

into consideration. Relevant paragraph, i.e., paragraphs-

327 to 332, 338, 339, 342 are quoted as under:

22

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"327. The validity of this provision has been challenged on the ground of being violative of Articles 20(3) and 21 of the Constitution. For, it allows the authorised officer under the 2002 Act to summon any person and record his statement during the course of investigation. Further, the provision mandates that the person should disclose true and correct facts known to his personal knowledge in connection with the subject matter of investigation. The person is also obliged to sign the statement so given with the threat of being punished for the falsity or incorrectness thereof in terms of Section 63 of the 2002 Act. Before we proceed to analyse the matter further, it is apposite to reproduce Section 50 of the 2002 Act, as amended. -----:

330. By this provision, the Director has been empowered to exercise the same powers as are vested in a civil Court under the 1908 Code while trying a suit in respect of matters specified in sub-section (1). This is in reference to Section 13 of the 2002 Act dealing with powers of Director to impose fine in respect of acts of commission and omission by the banking companies, financial institutions and intermediaries. From the setting in which Section 50 has been placed and the expanse of empowering the Director with same powers as are vested in a civil Court for the purposes of imposing fine under Section 13, is obviously very specific and not otherwise.

331. Indeed, sub-section (2) of Section 50 enables the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to issue summon to any person whose attendance he considers necessary for giving evidence or to produce any records during the course of any investigation or proceeding under this Act. We have already highlighted the width of expression "proceeding" in the earlier part of this judgment and held that it applies to proceeding before the Adjudicating Authority or the Special Court, as the case may be. Nevertheless, sub-section (2) empowers the authorised officials to issue summon to any person. We fail to understand as to how Article 20(3) would come into play in respect of process of recording statement pursuant to such summon which is only for the purpose of collecting information or

23 2025:JHHC:33869

evidence in respect of proceeding under this Act. Indeed, the person so summoned, is bound to attend in person or through authorised agent and to state truth upon any subject concerning which he is being examined or is expected to make statement and produce documents as may be required by virtue of sub-section (3) of Section 50 of the 2002 Act. The criticism is essentially because of subsection (4) which provides that every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the IPC. Even so, the fact remains that Article 20(3) or for that matter Section 25 of the Evidence Act, would come into play only when the person so summoned is an accused of any offence at the relevant time and is being compelled to be a witness against himself. This position is well-established.

332.The Constitution Bench of this Court in M.P. Sharma had dealt with a similar challenge wherein warrants to obtain documents required for investigation were issued by the Magistrate being violative of Article 20(3) of the Constitution.

This Court opined that the guarantee in Article 20(3) is against "testimonial compulsion" and is not limited to oral evidence. Not only that, it gets triggered if the person is compelled to be a witness against himself, which may not happen merely because of issuance of summons for giving oral evidence or producing documents. Further, to be a witness is nothing more than to furnish evidence and such evidence can be furnished by different modes. The Court went on to observe as follows:

"Broadly stated the guarantee in article 20(3) is against "testimonial compulsion". It is suggested that this is confined to the oral evidence of a person standing his trial for an offence when called to the witness-stand. We can see no reason to confine the content of the constitutional guarantee to this barely literal import. So to limit it would be to rob the guarantee of its substantial purpose and to miss the substance for the sound as stated in certain American decisions. The phrase used in Article 20(3) is "to be a witness". A person can "be a witness" not merely by giving oral evidence but also by producing documents or making

24 2025:JHHC:33869

intelligible gestures as in the case of a dumb witness (See section 119 of the Evidence Act) or the like. "To be a witness"

is nothing more than "to furnish evidence", and such evidence can be furnished through the lips or by production of a thing or of a document or in other modes. So far as production of documents is concerned, no doubt Section 139 of the Evidence Act says that a person producing a document on summons is not a witness. But that section is meant to regulate the right of cross examination. It is not a guide to the connotation of the word "witness", which must be understood in its natural sense, i.e., as referring to a person who furnishes evidence. Indeed, every positive volitional act which furnishes evidence is testimony, and testimonial compulsion connotes coercion which procures the positive volitional evidentiary acts of the person, as opposed to the negative attitude of silence or submission on his part. Nor is there any reason to think that the protection in respect of the evidence so procured is confined to what transpires at the trial in the court room. The phrase used in article 20(3) is "to be a witness" and not to "appear as a witness". It follows that the protection afforded to an accused in so far as it is related to the phrase "to be a witness" is not merely in respect of testimonial compulsion in the court room but may well extend to compelled testimony previously obtained from him. It is available therefore to a person against whom a formal accusation relating to the commission of an offence has been levelled which in the normal course may result in prosecution. Whether it is available to other persons in other situations does not call for decision in this case." (emphasis supplied)

338. In the context of the 2002 Act, it must be remembered that the summon is issued by the Authority under Section 50 in connection with the inquiry regarding proceeds of crime which may have been attached and pending adjudication before the Adjudicating Authority. In respect of such action, the designated officials have been empowered to summon any person for collection of information and evidence to be presented before the Adjudicating Authority. It is not necessarily for initiating a prosecution against the noticee as

25 2025:JHHC:33869

such. The power entrusted to the designated officials under this Act, though couched as investigation in real sense, is to undertake inquiry to ascertain relevant facts to facilitate initiation of or pursuing with an action regarding proceeds of crime, if the situation so warrants and for being presented before the Adjudicating Authority. It is a different matter that the information and evidence so collated during the inquiry made, may disclose commission of offence of money- laundering and the involvement of the person, who has been summoned for making disclosures pursuant to the summons issued by the Authority. At this stage, there would be no formal document indicative of likelihood of involvement of such person as an accused of offence of money laundering. If the statement made by him reveals the offence of money laundering or the existence of proceeds of crime, that becomes actionable under the Act itself.

339.To put it differently, at the stage of recording of statement for the purpose of inquiring into the relevant facts in connection with the property being proceeds of crime is, in that sense, not an investigation for prosecution as such; and in any case, there would be no formal accusation against the noticee. Such summons can be issued even to witnesses in the inquiry so conducted by the authorised officials. However, after further inquiry on the basis of other material and evidence, the involvement of such person (noticee) is revealed, the authorised officials can certainly proceed against him for his acts of commission or omission. In such a situation, at the stage of issue of summons, the person cannot claim protection under Article 20(3) of the Constitution. However, if his/her statement is recorded after a formal arrest by the ED official, the consequences of Article 20(3) or Section 25 of the Evidence Act may come into play to urge that the same being in the nature of confession, shall not be proved against him. Further, it would not preclude the prosecution from proceeding against such a person including for consequences under Section 63 of the 2002 Act on the basis of other tangible material to indicate the falsity of his claim. That would be a matter of rule of evidence.

26

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342. It is, thus, clear that the power invested in the officials is one for conducting inquiry into the matters relevant for ascertaining existence of proceeds of crime and the involvement of persons in the process or activity connected therewith so as to initiate appropriate action against such person including of seizure, attachment and confiscation of the property eventually vesting in the Central Government."

42. It is evident from the observation so made as above

that the purposes and objects of the 2002 Act for which it

has been enacted, is not limited to punishment for offence

of money-laundering, but also to provide measures for

prevention of money-laundering. It is also to provide for

attachment of proceeds of crime, which are likely to be

concealed, transferred or dealt with in any manner which

may result in frustrating any proceeding relating to

confiscation of such proceeds under the 2002 Act. This Act

is also to compel the banking companies, financial

institutions and intermediaries to maintain records of the

transactions, to furnish information of such transactions

within the prescribed time in terms of Chapter IV of the

2002 Act.

43. The predicate offence has been considered in the

aforesaid judgment wherein by taking into consideration

the explanation as inserted by way of Act 23 of 2019 under

the definition of the "proceeds of crime" as contained under

Section 2(1)(u), whereby and whereunder, it has been

clarified for the purpose of removal of doubts that, the

27 2025:JHHC:33869

"proceeds of crime" include property not only derived or

obtained from the scheduled offence but also any property

which may directly or indirectly be derived or obtained as a

result of any criminal activity relatable to the scheduled

offence, meaning thereby, the words "any property which

may directly or indirectly be derived or obtained as a result

of any criminal activity relatable to the scheduled offence"

will come under the fold of the proceeds of crime.

44. So far as the purport of Section 45(1)(i)(ii) is

concerned, the aforesaid provision starts from the non-

obstante clause that notwithstanding anything contained in

the Code of Criminal Procedure, 1973, 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 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.

45. Sub-section (2) thereof puts limitation on granting

bail specific in subsection (1) in addition to the limitations

under the Code of Criminal Procedure, 1973 or any other

law for the time being in force on granting of bail.

46. The explanation is also there as under sub-section

(2) thereof which is for the purpose of removal of doubts. A

clarification has been inserted that the expression

28 2025:JHHC:33869

"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, and

accordingly the officers authorised under this Act are

empowered to arrest an accused without warrant, subject

to the fulfilment of conditions under section 19 and subject

to the conditions enshrined under this section.

47. The fact about the implication of Section 45 has

been interpreted by the Hon'ble Apex Court in Vijay

Madanlal Choudhary and Ors. Vs. Union of India and

Ors.(supra) at paragraphs-268-270. For ready reference,

the said paragraphs are being referred as under:

"268. Section 45 has been amended vide Act 20 of 2005, Act 13 of 2018 and Finance (No. 2) Act, 2019. The provision as it obtained prior to 23.11.2017 read somewhat differently. The constitutional validity of Sub-section (1) of Section 45, as it stood then, was considered in Nikesh Tarachand Shah. This Court declared Section 45(1) of the 2002 Act, as it stood then, insofar as it imposed two further conditions for release on bail, to be unconstitutional being violative of Articles 14 and 21 of the Constitution. The two conditions which have been mentioned as twin conditions are: (i) that there are reasonable grounds for believing that he is not guilty of such offence; and (ii) that he is not likely to commit any offence while on bail.

269. According to the petitioners, since the twin conditions have been declared to be void and unconstitutional by this Court, the same stood obliterated. To buttress this argument, reliance has been placed on the dictum in State of Manipur.

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270. The first issue to be answered by us is: whether the twin conditions, in law, continued to remain on the statute book post decision of this Court in Nikesh Tarachand Shah and if yes, in view of the amendment effected to Section 45(1) of the 2002 Act vide Act 13 of 2018, the declaration by this Court will be of no consequence. This argument need not detain us for long. We say so because the observation in State of Manipur in paragraph 29 of the judgment that owing to the declaration by a Court that the statute is unconstitutional obliterates the statute entirely as though it had never been passed, is contextual. In this case, the Court was dealing with the efficacy of the repealing Act. While doing so, the Court had adverted to the repealing Act and made the stated observation in the context of lack of legislative power. In the process of reasoning, it did advert to the exposition in BehramKhurshidPesikaka and Deep Chand including American jurisprudence expounded in Cooley on Constitutional Limitations and Norton v. Shelby County."

48. Subsequently, the Hon'ble Apex Court in the case of

Tarun Kumar vs. Assistant Director Directorate of

Enforcement, (2023) SCC OnLine SC 1486 by taking into

consideration the law laid down by the Larger Bench of the

Hon'ble Apex Court in Vijay Madanlal Choudhary and

Ors. Vs. Union of India and Ors.(supra), has laid down

that since the conditions specified under Section 45 are

mandatory, they need to be complied with. The Court is

required to be satisfied that there are reasonable grounds

for believing that the accused is not guilty of such offence

and he is not likely to commit any offence while on bail. It

has further been observed that as per the statutory

presumption permitted under Section 24 of the Act, the

Court or the Authority is entitled to presume unless the

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contrary is proved, that in any proceedings relating to

proceeds of crime under the Act, in the case of a person

charged with the offence of money laundering under Section

3, such proceeds of crime are involved in money laundering.

Such conditions enumerated in Section 45 of PML Act will

have to be complied with even in respect of an application

for bail made under Section 439 Cr. P.C. in view of the

overriding effect given to the PML Act over the other law for

the time being in force, under Section 71 of the PML Act.

49. The Hon'ble Apex Court in the said judgment has

further laid down that the twin conditions as to fulfil the

requirement of Section 45 of the Act, 2002 before granting

the benefit of bail is to be adhered to which has been dealt

with by the Hon'ble Apex Court in Vijay Madanlal

Choudhary and Ors. Vs. Union of India and Ors. (supra)

wherein it has been observed that the accused is not guilty

of the offence and is not likely to commit any offence while

on bail.

50. In the judgment rendered by the Hon'ble Apex Court

in Vijay Madanlal Choudhary and Ors. Vs. Union of

India and Ors.(supra), it has been held that the Authority

under the 2002 Act, is to prosecute a person for offence of

money-laundering only if it has reason to believe, which is

required to be recorded in writing that the person is in

possession of "proceeds of crime". Only if that belief is

31 2025:JHHC:33869

further supported by tangible and credible evidence

indicative of involvement of the person concerned in any

process or activity connected with the proceeds of crime,

action under the Act can be taken to forward for attachment

and confiscation of proceeds of crime and until vesting

thereof in the Central Government, such process initiated

would be a standalone process.

51. So far as the issue of grant of bail under Section 45

of the Act, 2002 is concerned, at paragraph-412 of the

judgment rendered in Vijay Madanlal Choudhary and

Ors. Vs. Union of India and Ors. (supra) it has been held

therein by making observation that whatever form the relief

is couched including the nature of proceedings, be it under

Section 438 of the 1973 Code or for that matter, by invoking

the jurisdiction of the Constitutional Court, the underlying

principles and rigors of Section 45 of the 2002 must come

into play and without exception ought to be reckoned to

uphold the objectives of the 2002 Act, which is a special

legislation providing for stringent regulatory measures for

combating the menace of money-laundering.

52. The Hon'ble Apex Court in the case of Gautam

Kundu vs. Directorate of Enforcement (Prevention of

Money-Laundering Act), Government of India through

Manoj Kumar, Assistant Director, Eastern Region,

(2015) 16 SCC 1 has been pleased to hold at paragraph -30

32 2025:JHHC:33869

that the conditions specified under Section 45 of PML Act,

2002are mandatory and need to be complied with, which is

further strengthened by the provisions of Section 65 and

also Section 71 of PML Act, 2002. Section 65 requires that

the provisions of Cr.P.C shall apply insofar as they are not

inconsistent with the provisions of this Act and Section 71

provides that the provisions of PML Act, 2002 shall have

overriding effect notwithstanding anything inconsistent

therewith contained in any other law for the time being in

force. PML Act, 2002 has an overriding effect and the

provisions of CrPC would apply only if they are not

inconsistent with the provisions of this Act.

53. Therefore, the conditions enumerated in Section 45

of PML Act, 2002 will have to be complied with even in

respect of an application for bail made under Section 439

CrPC. That coupled with the provisions of Section 24

provides that unless the contrary is proved, the authority or

the Court shall presume that proceeds of crime are involved

in money-laundering and the burden to prove that the

proceeds of crime are not involved, lies on the appellant.

54. It requires to refer herein that the Hon'ble Apex

Court in Satender Kumar Antil vs. CBI and Anr., (2022)

10 SCC 51 has passed the order that if the investigation

has been completed and if there is full cooperation of the

accused persons, there may not be any arrest. The Hon'ble

33 2025:JHHC:33869

Apex Court categorised the offences in different group for

purpose of bail. The reference may be taken from Paragraph

-2 of the aforesaid judgment which reads as under:

"2. After allowing the application for intervention, an appropriate order was passed on 7-10-2021 [Satender Kumar Antil v. CBI, (2021) 10 SCC 773 :

(2022) 1 SCC (Cri) 153] . The same is reproduced as under : (Satender Kumar Antil case [Satender Kumar Antil v. CBI, (2021) 10 SCC 773 : (2022) 1 SCC (Cri) 153] , SCC pp. 774-76, paras 2-11) "2. We have been provided assistance both by Mr S.V. Raju, learned Additional Solicitor General and Mr Sidharth Luthra, learned Senior Counsel and there is broad unanimity in terms of the suggestions made by the learned ASG. In terms of the suggestions, the offences have been categorised and guidelines are sought to be laid down for grant of bail, without fettering the discretion of the courts concerned and keeping in mind the statutory provisions.

3. We are inclined to accept the guidelines and make them a part of the order of the Court for the benefit of the courts below. The guidelines are as under:

'Categories/Types of Offences (A) Offences punishable with imprisonment of 7 years or less not falling in Categories B & D.

(B) Offences punishable with death, imprisonment for life, or imprisonment for more than 7 years. (C) Offences punishable under Special Acts containing stringent provisions for bail like NDPS (Section 37), PMLA (Section 45), UAPA [Section 43-

D(5)], Companies Act, [Section 212(6)], etc. (D) Economic offences not covered by Special Acts. REQUISITE CONDITIONS (1) Not arrested during investigation.

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(2) Cooperated throughout in the investigation including appearing before investigating officer whenever called.

(No need to forward such an accused along with the charge-sheet (Siddharth v. State of U.P. [Siddharth v. State of U.P., (2022) 1 SCC 676 : (2022) 1 SCC (Cri) 423] ) CATEGORY A After filing of charge-sheet/complaint taking of cognizance

(a) Ordinary summons at the 1st instance/including permitting appearance through lawyer.

(b) If such an accused does not appear despite service of summons, then bailable warrant for physical appearance may be issued.

(c) NBW on failure to appear despite issuance of bailable warrant.

(d) NBW may be cancelled or converted into a bailable warrant/summons without insisting physical appearance of the accused, if such an application is moved on behalf of the accused before execution of the NBW on an undertaking of the accused to appear physically on the next date/s of hearing.

(e) Bail applications of such accused on appearance may be decided without the accused being taken in physical custody or by granting interim bail till the bail application is decided.

CATEGORIES B/D On appearance of the accused in court pursuant to process issued bail application to be decided on merits.

CATEGORY C Same as Categories B and D with the additional condition of compliance of the provisions of Bail under NDPS (Section 37), Section 45 of the PMLA, Section 212(6) of the Companies Act, Section 43-D(5) of the UAPA, POSCO, etc.

35 2025:JHHC:33869

55. However, the Hon'ble Apex Court recently in the

case of Gurwinder Singh vs. State of Punjab and Anr.,

2024 SCC OnLine SC 109, in the matter of UAP Act 1967

has observed that the conventional idea in bail

jurisprudence vis-à-vis ordinary penal offences that the

discretion of Courts must tilt in favour of the oft-quoted

phrase - 'bail is the rule, jail is the exception' - unless

circumstances justify otherwise - does not find any place

while dealing with bail applications under UAP Act and the

'exercise' of the general power to grant bail under the UAP

Act is severely restrictive in scope. For ready reference,

relevant paragraph of the said judgment is being referred as

under:

"28. The conventional idea in bail jurisprudence vis-à-vis ordinary penal offences that the discretion of Courts must tilt in favour of the oft-quoted phrase - 'bail is the rule, jail is the exception' - unless circumstances justify otherwise - does not find any place while dealing with bail applications under UAP Act. The 'exercise' of the general power to grant bail under the UAP Act is severely restrictive in scope. The form of the words used in proviso to Section 43D (5)- 'shall not be released' in contrast with the form of the words as found in Section 437(1) CrPC - 'may be released' - suggests the intention of the Legislature to make bail, the exception and jail, the rule."

56. The reason for making reference of this judgment is

that in the Satender Kumar Antil vs. CBI and Anr

(supra)'s judgment, the UAPA has also been brought under

36 2025:JHHC:33869

the purview of category 'c' wherein while laying observing

that in the UAPA Act, it comes under the category 'c' which

also includes money laundering offences wherein the bail

has been directed to be granted if the investigation is

complete but the Hon'ble Apex Court in Gurwinder Singh

vs. State of Punjab and Anr. (supra) has taken the view by

making note that the penal offences as enshrined under the

provision of UAPA are also under category 'c' making

reference that jail is the rule and bail is the exception.

57. In the backdrop of the aforesaid legal provisions and

settled law this court is now adverting to merit of the case.

Issue of legality of Arrest

58. Now coming to the ground as has been raised on

behalf of the petitioner that at the time of arrest the

condition stipulated under Section 19(1) of the PML Act,

2002 has not been followed hence the very arrest of the

petitioner is per se illegal and in that view of the matter the

order of arrest is fit to be quashed and set aside and in

consequence thereof, petitioner may be directed to be

released from judicial custody.

59. Per contra, the learned counsel for the O.P-ED has

submitted that it is incorrect on the part of the petitioner to

take the ground that the mandate of Section 19(1) of the Act

2002 has not been followed, rather the reason for arrest has

been communicated along with the exhaustive grounds, the

37 2025:JHHC:33869

day when the petitioner was arrested, which would be

evident from running annexure -3 series which has been

appended with the instant Bail Application in which the

entire details has been furnished regarding the the reason

to believe for arrest of the present petitioner.

60. In the aforesaid context, it needs to refer herein the

core of the Section 19 the Act 2002, for ready reference the

same is being quoted as under:

19. power to arrest.--(1) if the director, deputy director, assistant director or any other officer authorised in this behalf by the central government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(2) the director, deputy director, assistant director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the adjudicating authority, in a sealed envelope, in the manner as may be prescribed and such adjudicating authority shall keep such order and material for such period, as may be prescribed. (3) every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a 78[special court or] judicial magistrate or a metropolitan magistrate, as the case may be, having jurisdiction:

provided that the period of twenty-four hours shall exclude the time necessary for the journey from the

38 2025:JHHC:33869

place of arrest to the 79[special court or] magistrate's court.

61. It is evident from perusal of the Section 19 of PMLA

which gives the power to arrest if the officer concerned has

"reason to believe" on the basis of material in his

possession, that the person is guilty. As per Section 19 the

arrest has to be on the basis of material in possession with

the ED, there is reason to believe that the accused is guilty

of the offence, with the reason recorded in writing and the

grounds for arrest should be communicated with the

accused.

62. As discussed herein above the entire PML Act, 2002

fell for consideration before the three-Judge Bench of the

Hon'ble Apex Court in the case of Vijay Madanlal

Choudhary & Ors. Vs. Union of India & Ors. (supra)

wherein the provision of Section 19(1) has also been taken

into consideration, which would be evident from

paragraphs, which reads as under:

371. The next issue is : Whether it is necessary to furnish copy of ECIR to the person concerned apprehending arrest or at least after his arrest?

Section 19(1) of the 2002 Act postulates that after arrest, as soon as may be, the person should be informed about the grounds for such arrest. This stipulation is compliant with the mandate of Article 22(1) of the Constitution. Being a special legislation and considering the complexity of the inquiry/investigation both for the purposes of initiating civil action as well as prosecution, non

39 2025:JHHC:33869

supply of ECIR in a given case cannot be faulted. The ECIR may contain details of the material in possession of the authority and recording satisfaction of reason to believe that the person is guilty of money laundering offence, if revealed before the inquiry/investigation required to proceed against the property being proceeds of crime including to the person involved in the process or activity connected therewith, may have deleterious impact on the final outcome of the inquiry/investigation. So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1) of the Constitution. Moreover, the arrested person before being produced before the Special Court within twenty-four hours or for that purposes of remand on each occasion, the court is free to look into the relevant records made available by the authority about the involvement of the arrested person in the offence of money laundering. In any case, upon filing of the complaint before the statutory period provided in the 1973 Code, after arrest, the person would get all relevant materials forming part of the complaint filed by the authority under Section 44(1)(b) of the 2002 Act before the Special Court.

372. Viewed thus, supply of ECIR in every case to the person concerned is not mandatory. From the submissions made across the Bar, it is noticed that in some cases ED has furnished copy of ECIR to the person before filing of the complaint. That does not mean that in every case same procedure must be followed. It is enough, if ED at the time of arrest, contemporaneously discloses the grounds of such arrest to such person. Suffice it to observe that ECIR cannot be equated with an FIR which is mandatorily required to be recorded and supplied to the accused as per the provisions of the 1973 Code. Revealing a copy of an ECIR, if made mandatory, may defeat the purpose sought to be achieved by the 2002 Act

40 2025:JHHC:33869

including frustrating the attachment of property (proceeds of crime). Non-supply of ECIR, which is essentially an internal document of ED, cannot be cited as violation of constitutional right. Concededly, the person arrested, in terms of Section 19 of the 2002 Act, is contemporaneously made aware about the grounds of his arrest. This is compliant with the mandate of Article 22(1) of the Constitution.

63. It is evident from the aforesaid consideration as

referred in the aforesaid judgment that once the person is

informed of the grounds of arrest, that would be sufficient

compliance with the mandate of Article 22(1) of the

Constitution and it is not necessary that a copy of the ECIR

be supplied in every case to the person concerned, as such,

a condition is not mandatory and it is enough if ED

discloses the grounds of arrest to the person concerned at

the time of arrest.

64. It needs to refer herein the judgment which has

come in the case of V. Senthil Balaji Vs. State

Represented by Deputy Director & Ors. (supra) which

was passed on 07.08.2023 wherein consideration has been

given with respect to the issue of Section 19(1) holding

therein that that after forming a reason to believe that the

person has been guilty of an offence punishable under

PMLA, the officer concerned is at liberty to arrest him, while

performing his mandatory duty of recording the reasons,

and that the said exercise has to be followed by way of an

41 2025:JHHC:33869

information being served on the arrestee of the grounds of

arrest.

65. Subsequent thereto, the matter has again come

before the Hon'ble Apex Court in the case of Pankaj Bansal

Vs. Union of India & Ors (supra), wherein the factual

aspect pertaining to the said case was that no written

communication was made and only on the basis of oral

communication of reason of arrest, the said Pankaj Bansal

has taken into custody, which would be evident from

discussion of the factual aspect, which would be evident

from following paragraphs of the judgment, which reads as

under:

"2. The genesis of these appeals is traceable to FIR No. 0006 dated 17-4 2023 registered by the Anti- Corruption Bureau, Panchkula, Haryana, under Sections 7, 8, 11 and 13 of the Prevention of Corruption Act, 1988, read with Section 120-BIPC for the offences of corruption and bribery along with criminal conspiracy. The names of the accused in this FIR are: "(i) Mr Sudhir Parmar (the then Special Judge, CBI and ED, Panchkula); (ii) Mr Ajay Parmar [nephew of Mr Sudhir Parmar and Deputy Manager (Legal) in M3M Group]; (iii) Mr Roop Bansal (promotor of M3M Group); and (iv) other unknown persons."

3. Significantly, prior to this FIR, between the years 2018 and 2020, 13 FIRs were gotten registered by allottees of two residential projects of the IREO Group, alleging illegalities on the part of its management. On the strength of these FIRs, ED recorded Enforcement Case Information Report No. GNZO/10/2021 dated 15-6-2021 (hereinafter "the first ECIR") in connection

42 2025:JHHC:33869

with the money laundering offences allegedly committed by the IREO Group and Lalit Goyal, its Vice-Chairman and Managing Director. Neither in the FIRs nor in the first ECIR were M3M Group or the appellants herein arrayed as the accused. Further, no allegations were levelled against them therein. On 14- 1-2022, ED filed Prosecution Complaint No. 01/2022, titled "Enforcement Directorate v. Lalit Goyal and others", against seven named accused, under Section 200CrPC read with Sections 44 and 45 PMLA. Notably, M3M Group and the appellants did not figure amongst those named accused. The number of FIRs had also increased from 13 to 30, as per this complaint. This case was numbered as COMA/01/2022, titled "Enforcement Directorate v. Lalit Goyal and others", and was pending in the Court of Sudhir Parmar, Special Judge. At that stage, the Anti Corruption Bureau, Panchkula, received information that Sudhir Parmar was showing favouritism to Lalit Goyal, the owner of IREO Group, and also to Roop Bansal and his brother, Basant Bansal, the owners of M3M Group. This led to the registration of FIR No. 0006 dated 17-4-2023. On 12- 5-2023, ED issued summons to M3M India Pvt. Ltd., calling upon it to provide information and documents pertaining to transactions with certain companies. Thereafter, on 1-6-2023, ED raided the properties of M3M Group and effected seizures of assets and bank accounts. Roop Bansal was arrested by ED on 8-6- 2023 apropos the first ECIR. 4. Apprehending that action would be taken against them also in the context of the first ECIR, Pankaj Bansal and Basant Bansal secured [Basant Bansal v. State (NCT of Delhi), (2023) 2 HCC (Del) 700] , [Pankaj Bansal v. State (NCT of Delhi), 2023 SCC OnLine Del 3590] interim protection from the Delhi High Court in Bail Applications Nos. 2030 and 2031 of 2023. By separate orders dated 9-6-2023 [Basant Bansal v. 43

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State (NCT of Delhi), (2023) 2 HCC (Del) 700] passed therein, the Delhi High Court noted that Pankaj Bansal and Basant Bansal had not been named in the first ECIR and that ED had not yet been able to implicate them in any of the scheduled offences under the 2002 Act. Further, the High Court noted that Pankaj Bansal had not even been summoned by ED in that case. The High Court accordingly granted them interim protection by way of anticipatory bail, subject to conditions, till the next date of hearing i.e. 5-7- 2023. Special Leave Petitions (Crl.) Nos. 7384 and 7396 of 2023 were filed by ED assailing the orders dated 9-6 2023 [Basant Bansal v. State (NCT of Delhi), (2023) 2 HCC (Del) 700] , [Pankaj Bansal v. State (NCT of Delhi), 2023 SCC OnLine Del 3590] , [Basant Bansal v. State (NCT of Delhi), (2023) 2 HCC (Del) 700] before this Court and the same are stated to be pending. 5. In the meanwhile, on the basis of FIR No. 0006 dated 17-4-2023, ED recorded another ECIR viz. ECIR/GNZO/17/2023, on 13-6-2023 (hereinafter "the second ECIR") against: (i) Mr Sudhir Parmar; (ii) Mr Ajay Parmar; (iii) Mr Roop Bansal; and

(iv) others who are named in the FIR/unknown persons. 6. However, summons were issued by ED to Pankaj Bansal and Basant Bansal on 13-6-2023 at 6.15 p.m. in relation to the first ECIR, requiring them to appear before ED on 14-6-2023 at 11.00 a.m. Though the copy of the summons placed before this Court pertains to Pankaj Bansal alone, the email dated 13-6-2023 of the Assistant Director of ED, bearing the time 6.15 p.m., was addressed to both Pankaj Bansal and Basant Bansal and required their compliance with the summons on 14-6-2023 at 11 a.m. While Pankaj Bansal and Basant Bansal were at the office of ED at Rajokri, New Delhi, in compliance with these summons, Pankaj Bansal was served with fresh summons at 4.52 p.m. on 14-6-2023, requiring him to be present before another investigating officer

44 2025:JHHC:33869

at 5.00 p.m. on the same day. This summons was in connection with the second ECIR. There is lack of clarity as to when summons in relation to the second ECIR were served on Basant Bansal. According to ED, he was served the summons on 13-6 2023 itself and refused to receive the same. However, it is an admitted fact that Basant Bansal was also present at ED's office at Rajokri, New Delhi, on 14-6-2023 at 11.00 a.m. It is also not in dispute that, while he was there, Basant Bansal was arrested at 6.00 p.m. on 14-6-2023 and Pankaj Bansal was arrested at 10.30 p.m. on the same day. These arrests, made in connection with the second ECIR, were in exercise of power under Section 19(1) PMLA. The arrested persons were then taken to Panchkula, Haryana, and produced before the learned Vacation Judge/Additional Sessions Judge, Panchkula. There, they were served with the remand application filed by ED. 10. It was the specific case of the father and son in their writ petitions before the High Court that their arrest under the provisions of PMLA was a wanton abuse of power/authority and an abuse of process by ED, apart from being blatantly illegal and unconstitutional. They also asserted that ED acted in violation of the safeguards provided in Section 19 PMLA. In this milieu, they made the following prayers:

"In view of the facts and circumstances mentioned above, it is, therefore, respectfully prayed that this Hon'ble Court may kindly be pleased to issue appropriate writ(s), order(s) and/or direction(s) to: A. Read down and/or read into as well as expound, deliberate upon and delineate the ambit, sweep and scope of Section 19(1) PMLA in consonance with the principles, inter alia, enunciated by the Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : 2022 SCC OnLine SC 929 : (2022) 10 Scale 577] and hold that: (i) The expression

45 2025:JHHC:33869

"material in possession" occurring therein must be confined, circumscribed and limited to legally admissible evidence of sterling quality and unimpeachable character on the basis whereof "reasons to believe" could be recorded in writing that the arrestee is "guilty" of the offence under Section 4 PMLA; (ii) The word "guilt" occurring therein would qualify a higher yardstick than a mere suspicion and the learned Court at the stage of remand is required to apply its judicial mind to the grounds as well as necessity for arrest as, inter alia, held in Arnesh Kumar v. State of Bihar [Arnesh Kumar v. State of Bihar, (2014) 8 SCC 273 : (2014) 3 SCC (Cri) 449] and as accorded imprimatur in Satender Kumar Antil v. CBI [Satender Kumar Antil v. CBI, (2022) 10 SCC 51 :

(2023) 1 SCC (Cri) 1] ; (iii) The expression "communicate" occurring therein would definitely entail physical communication and furnishing the grounds of arrest to the arrestee in the context of the obligation for "reason for such belief to be recorded in writing" read with Rules 2(1)(g) and 2(1)(h) of the PMLA Rules, 2005 (the Arrest Rules) which postulates the meaning of the word "order" to include the grounds of such arrest."

66. The Hon'ble Apex Court in the aforesaid pretext has

laid down the proposition to communicate the reasons for

arrest in writing by making reference of word 'henceforth'.

The Hon'ble Apex Court while considering the particular

case of said Pankaj Bansal has considered the admitted

position that the investigating officer merely read out or

permitted reading of the grounds of arrest of the appellants

and left it at that, which is also disputed by the appellants

and hence, it has been held that their arrest was not in

46 2025:JHHC:33869

keeping with the provisions of Section 19(1) PMLA, 2002.

Accordingly, the appeals before the Hon'ble Apex Court were

allowed, setting aside the impugned orders passed by High

Court as well as the impugned arrest orders and arrest

memos along with the orders of remand passed by the

learned Vacation Judge/Additional Sessions Judge, and all

orders consequential thereto. Accordingly, the appellants

were directed to be released forthwith. For ready reference,

the relevant paragraph is quoted as under:

39. We may also note that the language of Section 19 PMLA puts it beyond doubt that the authorised officer has to record in writing the reasons for forming the belief that the person proposed to be arrested is guilty of an offence punishable under the 2002 Act. Section 19(2) requires the authorised officer to forward a copy of the arrest order along with the material in his possession, referred to in Section 19(1), to the adjudicating authority in a sealed envelope. Though it is not necessary for the arrested person to be supplied with all the material that is forwarded to the adjudicating authority under Section 19(2), he/she has a constitutional and statutory right to be "informed" of the grounds of arrest, which are compulsorily recorded in writing by the authorised officer in keeping with the mandate of Section 19(1) PMLA. As already noted hereinbefore, it seems that the mode of informing this to the persons arrested is left to the option of ED's authorised officers in different parts of the country i.e. to either furnish such grounds of arrest in writing or to allow such grounds to be read by the arrested person or be read over and explained to such person.

47 2025:JHHC:33869

45. On the above analysis, to give true meaning and purpose to the constitutional and the statutory mandate of Section 19(1) PMLA of informing the arrested person of the grounds of arrest, we hold that it would be necessary, henceforth, that a copy of such written grounds of arrest is furnished to the arrested person as a matter of course and without exception. The decisions of the Delhi High Court in Moin Akhtar Qureshi [Moin Akhtar Qureshi v. Union of India, 2017 SCC OnLine Del 12108] and the Bombay High Court in Chhagan Chandrakant Bhujbal [Chhagan Chandrakant Bhujbal v. Union of India, 2016 SCC OnLine Bom 9938 : (2017) 1 AIR Bom R (Cri) 929] , which hold to the contrary, do not lay down the correct law. In the case on hand, the admitted position is that ED's investigating officer merely read out or permitted reading of the grounds of arrest of the appellants and left it at that, which is also disputed by the appellants. As this form of communication is not found to be adequate to fulfil compliance with the mandate of Article 22(1) of the Constitution and Section 19(1) PMLA, we have no hesitation in holding that their arrest was not in keeping with the provisions of Section 19(1) PMLA. Further, as already noted supra, the clandestine conduct of ED in proceeding against the appellants, by recording the second ECIR immediately after they secured interim protection in relation to the first ECIR, does not commend acceptance as it reeks of arbitrary exercise of power. In effect, the arrest of the appellants and, in consequence, their remand to the custody of ED and, thereafter, to judicial custody, cannot be sustained.

46.The appeals are accordingly allowed, setting aside the impugned orders [Pankaj Bansal v. Union of India, 2023 SCC OnLine P&H 2045] , [Pankaj Bansal v. Union of India, 2023 SCC OnLine P&H 2028] passed by the Division Bench of the Punjab and Haryana

48 2025:JHHC:33869

High Court as well as the impugned arrest orders and arrest memos along with the orders of remand passed by the learned Vacation Judge/Additional Sessions Judge, Panchkula, and all orders consequential thereto.

47. The appellants shall be released forthwith unless their incarceration is validly required in connection with any other case.‖

67. Subsequent to the said judgment, the judgment has

come in the case of Ram Kishor Arora Vs. Directorate of

Enforcement [2023 SCC OnLine SC 1682]. The Hon'ble

Apex Court while taking in to consideration the judgment

passed by Vijay Madanlal Choudhary v. Union of India

(supra) has observed that the law laid down by the three-

Judge Bench in "Vijay Madanlal Choudhary" (supra) that

Section 19(1) PMLA has a reasonable nexus with the

purposes and objects sought to be achieved by the PML Act

and that the said provision is also compliant with the

mandate of Article 22(1) of the Constitution of India, any

observation made or any finding recorded by the Division

Bench of lesser number of Judges contrary to the said ratio

laid down in "Vijay Madanlal Choudhary" (supra) would

be not in consonance with the jurisprudential wisdom

expounded by the Constitution Benches. For ready

reference the relevant paragraph is being quoted as under :

16. In view of the aforestated proposition of law propounded by the Constitution Benches, there remains no shadow of doubt that the law laid down by the three-Judge Bench in Vijay Madanlal

49 2025:JHHC:33869

Choudhary [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : 2022 SCC OnLine SC 929] that Section 19(1) PMLA has a reasonable nexus with the purposes and objects sought to be achieved by the PML Act and that the said provision is also compliant with the mandate of Article 22(1) of the Constitution of India, any observation made or any finding recorded by the Division Bench of lesser number of Judges contrary to the said ratio laid down in Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : 2022 SCC OnLine SC 929] would be not in consonance with the jurisprudential wisdom expounded by the Constitution Benches in cases referred above. The three-Judge Bench in Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v.

Union of India, (2023) 12 SCC 1 : 2022 SCC OnLine SC 929] having already examined in detail the constitutional validity of Section 19 PMLA on the touchstone of Article 22(1) and upheld the same, it holds the field as on the date.

68. Further, The Hon'ble Apex Court in the aforesaid

judgment while taking in to consideration the judgment

passed in the case of Pankaj Bansal Vs. Union of India &

Ors (supra), come out with a view that since by way of

safeguard a duty is cast upon the officer concerned to

forward a copy of the order along with the material in his

possession to the adjudicating authority immediately after

the arrest of the person, and to take the person arrested to

the court concerned within 24 hours of the arrest, in our

opinion, the reasonably convenient or reasonably requisite

time to inform the arrestee about the grounds of his arrest

would be twenty-four hours of the arrest. However, the

50 2025:JHHC:33869

Hon'ble Apex Court refused to invalidate the arrest of said

Ram Kishor Arora. For ready reference, the relevant

paragraph of the judgment is quoted as under:

21. In view of the above, the expression "as soon as may be" contained in Section 19 PMLA is required to be construed as -- "as early as possible without avoidable delay" or "within reasonably convenient" or "reasonably requisite" period of time. Since by way of safeguard a duty is cast upon the officer concerned to forward a copy of the order along with the material in his possession to the adjudicating authority immediately after the arrest of the person, and to take the person arrested to the court concerned within 24 hours of the arrest, in our opinion, the reasonably convenient or reasonably requisite time to inform the arrestee about the grounds of his arrest would be twenty-four hours of the arrest. 22. In Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : 2022 SCC OnLine SC 929] , it has been categorically held that so long as the person has been informed about the grounds of his arrest, that is sufficient compliance with mandate of Article 22(1) of the Constitution. It is also observed that the arrested person before being produced before the Special Court within twenty four hours or for that purposes of remand on each occasion, the Court is free to look into the relevant records made available by the authority about the involvement of the arrested person in the offence of money laundering. Therefore, in our opinion the person arrested, if he is informed or made aware orally about the grounds of arrest at the time of his arrest and is furnished a written communication about the grounds of arrest as soon as may be i.e. as early as possible and within reasonably convenient and requisite time of twenty-

four hours of his arrest, that would be sufficient

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compliance of not only Section 19 PMLA but also of Article 22(1) of the Constitution of India. 23. As discernible from the judgment in Pankaj Bansal case [Pankaj Bansal v. Union of India, (2024) 7 SCC 576] also noticing the inconsistent practice being followed by the officers arresting the persons under Section 19 PMLA, directed to furnish the grounds of arrest in writing as a matter of course, "henceforth", meaning thereby from the date of the pronouncement of the judgment. The very use of the word "henceforth" implied that the said requirement of furnishing grounds of arrest in writing to the arrested person as soon as after his arrest was not mandatory or obligatory till the date of the said judgment. The submission of the learned Senior Counsel Mr Singhvi for the appellant that the said judgment was required to be given effect retrospectively cannot be accepted when the judgment itself states that it would be necessary "henceforth" that a copy of such written grounds of arrest is furnished to the arrested person as a matter of course and without exception. Hence, non-furnishing of grounds of arrest in writing till the date of pronouncement of judgment in Pankaj Bansal case [Pankaj Bansal v. Union of India, (2024) 7 SCC 576] could neither be held to be illegal nor the action of the officer concerned in not furnishing the same in writing could be faulted with. As such, the action of informing the person arrested about the grounds of his arrest is a sufficient compliance of Section 19 PMLA as also Article 22(1) of the Constitution of India, as held in Vijay Madanlal [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : 2022 SCC OnLine SC 929] .

69. Thereafter, the Hon'ble Apex Court has considered

the issue of Section 19(1) in the case of Prabir

Purkayastha Vs. State (NCT of Delhi) (supra) wherein the

52 2025:JHHC:33869

Hon'ble Apex Court has passed the order of release of said

Prabir Purkayastha, the appellant in the said case, on the

ground that no reason said to be in writing was

communicated even though the law has been laid down in

the case of Pankaj Bansal Vs. Union of India & Ors

(supra).

70. So far as the fact of the said case is concerned the

officers of PS Special Cell, Lodhi Colony, New Delhi carried

out extensive raids at the residential and official premises of

the appellant and the company, of which the appellant is

the Director in connection with FIR No. 224 of 2023 dated

17-8-2023 registered at PS Special Cell, Lodhi Colony, New

Delhi for the offences punishable under Sections 13, 16, 17,

18, 22-C of the Unlawful Activities (Prevention) Act, 1967

read with Sections 153-A, 120-B of the Penal Code.

71. The appellant was arrested in connection with the

said FIR on 3-10-2023 vide arrest memo. Thereafter, the

appellant was presented in the court of the learned

Additional Sessions Judge-02, Patiala House Courts, New

Delhi on 4-10-2023, sometime before 6.00 a.m. which fact

is manifested from the remand order and the appellant was

remanded to seven days' police custody vide order dated 4-

10-2023. The proceedings of remand have been seriously

criticised as being manipulated by Shri Kapil Sibal, learned

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Senior Counsel for the appellant and aspersions of

subsequent insertions in the remand order have been made.

72. The appellant promptly questioned his arrest and

the police custody remand granted by the learned Remand

Judge vide order dated 4-10-2023 by preferring Criminal

Miscellaneous Case No. 7278 of 2023 in the High Court of

Delhi which stands rejected by the learned Single Judge of

the High Court of Delhi vide judgment dated 13-10-2023.

The said order is subjected to challenge by special leave

before the Hon"ble Apex Court.

73. The Hon'ble Apex Court has taken into

consideration the ratio of the judgment rendered in the case

of Pankaj Bansal Vs. Union of India & Ors (supra). The

arrest of the said appellant was on 03.10.2023 but the

judgment rendered in the case of Pankaj Bansal Vs.

Union of India & Ors (supra) has been uploaded on

04.10.2023 and as such the ground was taken not to give

any aid of judgment passed in the case of Pankaj Bansal

Vs. Union of India & Ors (supra) even though the written

communication regarding the ground of arrest of the

appellant has not been furnished but the Hon'ble Apex

Court has passed the order that merely because the

judgment in the case of Pankaj Bansal Vs. Union of India

& Ors (supra) has been uploaded on 04.10.2023 but the

said Prabir Purkayastha was arrested on 04.10.2023 while

54 2025:JHHC:33869

the judgment passed in the case of Pankaj Bansal Vs.

Union of India & Ors (supra) was delivered on 03.10.2023

and as such the case of Prabir Purkayastha has come

within the ratio of judgment rendered in the case of Pankaj

Bansal Vs. Union of India & Ors (supra) and since the

written communication was not there, hence, he was

directed to be released on bail, for ready reference the

relevant paragraph is being quoted as under::

29. Hence, we have no hesitation in reiterating that the requirement to communicate the grounds of arrest or the grounds of detention in writing to a person arrested in connection with an offence or a person placed under preventive detention as provided under Articles 22(1) and 22(5) of the Constitution of India is sacrosanct and cannot be breached under any situation. Non-compliance of this constitutional requirement and statutory mandate would lead to the custody or the detention being rendered illegal, as the case may be.

30. Furthermore, the provisions of Article 22(1) have already been interpreted by this Court in Pankaj Bansal [Pankaj Bansal v. Union of India, (2024) 7 SCC 576] laying down beyond the pale of doubt that the grounds of arrest must be communicated in writing to the person arrested of an offence at the earliest. Hence, the fervent plea of the learned ASG that there was no requirement under law to communicate the grounds of arrest in writing to the appellant-accused is noted to be rejected.

74. Again, in the case of Arvind Kejriwal Vs.

Directorate of Enforcement (supra) the view has been

taken for communication of reason of arrest and it has been

55 2025:JHHC:33869

observed by the Hon'ble Apex Court that the written

"grounds of arrest", though a must, does not in itself satisfy

the compliance requirement. The authorized officer's

genuine belief and reasoning based on the evidence that

establishes the arrestee's guilt is also the legal necessity. As

the "reasons to believe" are accorded by the authorised

officer, the onus to establish satisfaction of the said

condition will be on the DoE and not on the arrestee. The

Hon'ble Apex Court while taking in to consideration the

judgment rendered by the Hon'ble Apex Court in Vijay

Madanlal Choudhary (supra) is a decision rendered by a

three Judge Bench, hence after formulating the questions of

law has referred the matter for consideration by a larger

Bench. For ready reference the relevant paragraphs are

being quoted as under:

11. Arrest under Section 19(1) of the PML Act may occur prior to the filing of the prosecution complaint and before the Special Judge takes cognizance.11 Till the prosecution complaint is filed, there is no requirement to provide the accused with a copy of the ECIR.12 The ECIR is not a public document. Thus, to introduce checks and balances, Section 19(1) imposes safeguards to protect the rights and liberty of the arrestee. This is in compliance with the mandate of Article 22(1) of the Constitution of India. V. Senthil Balaji v. State similarly states that the designated officer can only arrest once they record "reasons to believe" in writing, that the person being arrested is guilty of the offence punishable under the PML Act. It is mandatory to record the "reasons to believe" to

56 2025:JHHC:33869

arrive at the opinion that the arrestee is guilty of the offence, and to furnish the reasons to the arrestee.

This ensures an element of fairness and accountability.

16. Recently, in Prabir Purkayastha v. State (NCT of Delhi), this Court reiterated the aforesaid principles expounded in Pankaj Bansal (supra). The said principles were applied to the pari materia provisions of the Unlawful Activities (Prevention) Act, 1967. The Court explained that Section 19(1) of the PML Act is meant to serve a higher purpose, and also to enforce the mandate of Article 22(1) of the Constitution. The right to life and personal liberty is sacrosanct, a fundamental right guaranteed under Article 21 and protected by Articles 20 and 22 of the Constitution.

Reference was made to the observations of this Court in Roy V.D. v. State of Kerala17 that the right to be informed about the grounds of arrest flows from Article 22(1) of the Constitution and any infringement of this fundamental right vitiates the process of arrest and remand. The fact that the chargesheet has been filed in the matter would not validate the otherwise illegality and unconstitutionality committed at the time of arrest and grant of remand custody of the accused. Reference is also made to the principle behind Article 22(5) of the Constitution. Thus, this Court held that not complying with the constitutional mandate under Article 22(1) and the statutory mandate of the UAPA, on the requirement to communicate grounds of arrest or grounds of detention, would lead to the custody or detention being rendered illegal.

28. Providing the written "grounds of arrest", though a must, does not in itself satisfy the compliance requirement. The authorized officer's genuine belief and reasoning based on the evidence that establishes the arrestee's guilt is also the legal necessity. As the "reasons to believe" are accorded by the authorised

57 2025:JHHC:33869

officer, the onus to establish satisfaction of the said condition will be on the DoE and not on the arrestee.

75. Further the Hon'ble Apex Court in the case of V.

Senthil Balaji v. Director, 2024 SCC OnLine SC 2626

has again considered the issue of Section 19(1) of the Act

2002. The factual aspect of the case is like that between

2011 and 2016; the appellant was holding the post of

Transport Minister in the Government of Tamil Nadu.

Broadly, the allegation against the appellant is that while

discharging his duties as a Minister, in connivance with his

personal assistant and his brother, he collected large

amounts by promising job opportunities to several persons

in various positions in the Transport Department. This led

to the registering of three First Information Reports against

the appellant and others. The said First Information Reports

are FIR no. 441 of 2015 dated 29th October 2015 (CC Nos.

22 and 24 of 2021), FIR No. 298 of 2017 registered on 9 th

September 2017 (CC No. 19 of 2020) and FIR no. 344 dated

13th August 2018 (CC No. 25 of 2020).

76. In the first FIR, six charge sheets have been filed.

More than 2000 accused have been named in the charge

sheets. 550 witnesses have been named. In the case of the

second FIR, there are 14 accused named in the

chargesheet. In connection with this FIR, 24 witnesses have

been cited. In the third FIR, 24 accused have been named in

58 2025:JHHC:33869

the charge sheet and 50 prosecution witnesses have been

cited. The offences alleged in the aforementioned crimes are

mainly under Sections 120B, 419, 420, 467 and 471 of the

Penal Code, 1860 and Sections 7, 12, 13(2) read with

Section 13(1)(d) of the Prevention of Corruption Act, 1988.

Section 34 of the Penal Code, 1860 has been invoked.

77. These offences are scheduled offences within the

meaning of Section 2(y) of the PMLA. Therefore, relying on

the final reports filed in aforementioned scheduled offences,

for an offence of money laundering under Section 3 of the

PMLA punishable under Section 4, the Enforcement

Directorate (ED) registered an Enforcement Case

Information Report (for short-ECIR‖) bearing ECIR No.

MDSZO/21/2021 on 29th July 2021.

78. Consequently, the appellant was arrested on 14th

June 2023 in connection with the said ECIR and was

remanded to judicial custody. A complaint was filed for the

offence under Section 3 of the PMLA Act, which is

punishable under Section 4, on 12th August 2023. The

appellant is the only accused named in the complaint.

Cognizance has been taken based on the complaint by the

Special Court under the PMLA. The scheduled offences

cases have been transferred to the learned Assistant

Sessions Judge, Additional Special Court for Trial of

Criminal Cases related to Elected Members of Parliament

59 2025:JHHC:33869

and Members of Legislative Assembly of Tamil Nadu (Special

MPMLA Court), Chennai.

79. The Hon'ble Apex Court while taking note of the

settled principle that the stringent provisions regarding the

grant of bail, such as Section 45(1)(iii) of the PMLA, cannot

become a tool which can be used to incarcerate the accused

without trial for an unreasonably long time has allowed the

appeal and direction has been passed that the appellant

shall be enlarged on bail till the final disposal of the case.

80. Consequent to the aforesaid judgments recently the

Hon'ble Apex Court has expressed its view in the case of

Vihaan Kumar v. State of Haryana 2025 SCC OnLine

SC 269, wherein the judgment and order dated 30th August

2024 passed by the learned Single Judge of Punjab and

Haryana High Court has been assailed. The appellant of the

said case was arrested in connection with first information

report no. 121 of 2023 dated 25th March 2023 registered for

the offences under Sections 409, 420, 467, 468 and 471

read with Section 120 B of the Penal Code, 1860 (for short,

"IPC"). According to the appellant's case, he was arrested on

10th June 2024 at about 10.30 a.m. at his office premises

on the 3rd-5th floor of HUDA City Centre, Gurugram,

Haryana. He was taken to DLF Police Station, Section 29,

Gurugram. He was produced before the learned Judicial

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Magistrate (in charge) at Gurgaon on 11th June 2024 at

3.30 PM.

81. It had been contended that there was a violation of

Article 22(2) of the Constitution and Section 57 of the Code

of Criminal Procedure Code, 1973 (for short, "CrPC"). The

allegation is that neither in the remand report nor in the

order dated 11th June 2024 passed by the learned

Magistrate was the time of arrest mentioned. The FIR was

registered at the instance of the 2nd respondent.

82. Further, in the aforesaid case a vital issue was

emerged when the learned counsel appearing for the

appellant produced photographs which showed that while

he was admitted to the hospital, he was handcuffed and

chained to the hospital bed. Therefore, a notice was issued

on 4th October 2024 to the Medical Superintendent of

PGIMS, calling upon him to file an affidavit stating whether

the appellant was handcuffed and chained to the hospital

bed. The order dated 21st October 2024 records the

admission of the Medical Superintendent of PGIMS that

when the appellant was admitted to the hospital, he was

handcuffed and chained to the bed.

83. The Hon'ble Apex Court while taking in to

consideration the mandate of Article 22 of the Constitution

of India has held that the requirement of informing the

person arrested of the grounds of arrest is not a formality

61 2025:JHHC:33869

but a mandatory constitutional requirement. Article 22 is

included in Part III of the Constitution under the heading of

Fundamental Rights. Thus, it is the fundamental right of

every person arrested and detained in custody to be

informed of the grounds of arrest as soon as possible. The

Hon'ble Apex Court has further observed as under:

15. We have already referred to what is held in paragraphs 42 and 43 of the decision in the case of Pankaj Bansal1. This Court has suggested that the proper and ideal course of communicating the grounds of arrest is to provide grounds of arrest in writing. Obviously, before a police officer communicates the grounds of arrest, the grounds of arrest have to be formulated. Therefore, there is no harm if the grounds of arrest are communicated in writing. Although there is no requirement to communicate the grounds of arrest in writing, what is stated in paragraphs 42 and 43 of the decision in the case of Pankaj Bansal1 are suggestions that merit consideration. We are aware that in every case, it may not be practicable to implement what is suggested. If the course, as suggested, is followed, the controversy about the non-compliance will not arise at all. The police have to balance the rights of a person arrested with the interests of the society.

Therefore, the police should always scrupulously comply with the requirements of Article 22.

84. It is, thus, evident that in all these judgments the

issue at the time of arrest was the primary factor, which

was questioned before the Hon'ble Apex Court and the same

has been dealt with by the Hon'ble Apex Court in those

judgments.

62

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85. It is, thus, evident from the cumulative

consideration of the judgment rendered by Hon'ble Apex

Court, as referred above, that the law under statutory

provision as contained under Section 19(1) of the PML Act,

2002 is that the reason is to be communicated to the

person concerned then only the arrest would be said to be

valid.

86. We are conscious that in any nature of arrest the

mandatory requirement is to be fulfilled. Herein, the

mandatory requirement as per Article 19(1) of the PML Act,

2002 coupled with the judgment as referred hereinabove by

laying down the ratio to communicate the reason for arrest

in writing and as such we have to consider as to whether

the said statutory command in the facts and circumstances

of the present case has been followed or not, if yes, then the

arrest cannot be held to be invalid and if no, then certainly

the arrest would be held to be invalid.

87. Now, adverting to the factual aspect of the present

case and on consideration of the submissions advanced on

behalf of petitioner, we have gone through the record

particularly annexure-3 series appended with the instant

petition/application wherefrom it is evident that petitioner

was arrested on 08.05.2025 and thereafter as per the

admitted fact, he has been produced forthwith before the

learned C.J.M, Calcutta for transit remand. From annexure

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-3 it appears that arrest of the petitioner was made on

08.05.2025 under Section 19 of the Act 2002 after

recording detail "reasons to believe" based on material

which indicates the petitioner's involvement in the alleged

crime.

88. It is further evident that the contemporaneous

record including arrest memo, and the grounds of arrest

documents bear the signature of the petitioner which

stands as irrefutable proof of service and acknowledgement

at the time of arrest and the arrest of the petitioner was

communicated to Ms. Manjari Deora (daughter-in-law). It is

further evident that the present petitioner was arrested on

08.05.2025 at 7.15 P.M. and the ground of the arrest and

"reason to believe" was handed over to him which was

acknowledged by him.

89. Further, as per the submission of the learned

counsel for the ED, the petitioner was produced before the

learned CJM, Calcutta within statutory 24-hour period and

the learned Court of CJM after due consideration found the

arrest to be proper and granted the transit remand.

90. Thus from the aforesaid it is evident that in the

instant case after arrest immediately the petitioner was

produced before the concerned court of learned Chief

Judicial Magistrate at Calcutta and the ground of arrest

and reason to believe as has been supplied to him by the

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Enforcement Directorate and in his presence the detail

order was passed on 08.05.2025, hence, it cannot be said

on behalf of the petitioner that the mandate as stipulated

under Section 19(1) has not been followed.

91. Thus, it is evident from the record that the

petitioner was arrested on 08.05.2025 and admittedly he

was produced before the learned Chief Judicial Magistrate,

Calcutta on the same day for seeking transit remand for his

production in the Court of PMLA, Ranchi in the State of

Jharkhand.

92. On the basis of discussion made herein above, it is

evident from the record that the petitioner was informed

about the ground of arrest immediately by the Enforcement

Directorate with his acknowledgement. Further, it is also an

admitted position that within 24 hours of the arrest, the

arrestee was produced before the learned CJM Court for

transit remand therefore the legal requirement of informing

the grounds of arrested "as soon as may be" also stood

fulfilled as per the statutory requirement under S. 19(1) of

the PMLA as well as the constitutional mandate under

Article 22(1) of the Constitution of India. Thus, as per the of

mandate of Hon'ble Supreme Court rendered in the case of

Pankaj Bansal (supra) has been complied with by the

respondent. So far the "reason to believe" is concerned the

same has also been complied with and the acknowledgment

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to this effect was obtained. Hence, the law as it prevailed

on the date of arrest was complied with.

93. This Court is conscious with the fact that the

moment a person is being arrested that infringes the

fundamental right of personal liberty as provided under

Article 21 of the Constitution of India and as such without

any valid reason the personal liberty of the person cannot

be infringed.

94. This Court, in view of the discussions made

hereinabove and taking into consideration the aforesaid fact

is of the view that the mandatory provision as contained

under Section 19(1) of the PML Act, 2002, and the ratio laid

down in the case of Vijay Madanlal Choudhary & Ors.

Vs. Union of India & Ors. (supra), and other judgments of

the Hon'ble Apex Court which has been referred herein in

preceding paragraphs, has been followed by the O.P-ED.

95. From the perusal of annexure-3 it is evident that

the Arrest Memo dated 08.05.2025, duly signed by the

petitioner, clearly records the time, place, and manner of

arrest. The written Grounds of Arrest were served upon the

petitioner at the time of arrest, in strict compliance with

Section 19 of the PMLA, 2002, and the law laid down by the

Hon'ble Apex Court in the case of Pankaj Bansal v. Union

of India (supra) and further "the reason to believe" has also

been acknowledged. The petitioner's signatures on the

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Arrest Memo, Grounds of Arrest, and "reason to believe"

stand as of service and contemporaneous documentary

proof acknowledgment therefore, this Court is of the view

that the argument which has been advanced on behalf of

the learned counsel for the petitioner is not tenable based

upon the discussion made hereinabove.

Issue of culpability of the present petitioner:

96. It is evident from the record that the Directorate

General of GST Intelligence (in short DGGI), Jamshedpur

filed three complaint cases i.e. Complaint Case No.

678/2024 dt. 29.04.2024 against Shiva Kumar Deora

(present petitioner), Complaint Case No. 1280/2024 dt.

04.06.2024 against Sumit Gupta and Complaint Case No.

1281/2024 dt. 04.06.2024 against Amit Gupta u/s 132 of

the GST Act r/w section 20 of the Integrated GST Act, 2017

r/w section 34, 120A, 193, 195A, 201, 203, 204, 406, 409,

420, 465, 467, 468, 471 of IPC in the court of Economic

Offices, Jamshedpur. Since u/s 420, 467 and 471 of the

IPC, above stated complaints filed by the DGGI,

Jamshedpur are scheduled offences as per paragraph 1 Part

A of the schedule provided under PMLA 2002, the ECIR No.

RNZO/18/2024 was recorded on 23.09.2024 for conducting

an investigation under PMLA, 2002.

97. As per aforesaid three complaints cases it is

revealed that a syndicate is operational in Jharkhand, West

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Bengal, Delhi and other states of the country. Syndicate is

indulged in creation, operation and management of fake

companies / firms for passing on ineligible ITC (Input Tax

Credit) by issuing fake GST bills, without actually delivering

the related goods and services and the persons namely

Shiva Kumar Deora, Sumit Kumar Gupta and Amit Kumar

Gupta are a part of the said syndicate who are knowingly a

party with each other and or directly involved in illegal

activities of creation of fake companies / firms in the name

of various dummy directors/ proprietors in order to avail

and pass on ITC to several end beneficiaries in lieu of

money, which are proceeds of crime. Further, it has been

stated in the complaints that several bogus GST invoices

have been generated in Delhi and have traveled to

Jharkhand via West Bengal in three to four layers. A

portion of these bogus ITCs have also been transferred to

other State such as Tamil Nadu, Telangana, Andhra

Pradesh, Maharashtra and Odisha and bogus ITC claims

have also been taken on the basis of the said fake invoices.

As per aforesaid complaint cases Shiva Kumar Deora

(present petitioner) is the mastermind behind the said fraud

committed of availing ITC on the strength of bogus invoices,

by way of creation of multiple companies/firms in the name

of innocent persons. They hired innocent and needy persons

in the name of job at the remuneration of Rs. 10,000/- to

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15,000/- per month and they were not required to attend

the office daily. Instead, they were asked to provide OTP and

PIN, whenever required by them. Subsequently, fake firms

and companies were floated in the name of those innocent

needy persons after using their identity, documents,

without their knowledge or consent. Further it is also

revealed that Sumit Kumar Gupta, the accomplice of Shiva

Kumar Deora worked as an office staff member on his

instructions for creating DSCs, rent agreements for various

firms and companies for which, he was initially paid a

monthly salary of Rs. 30,000/-. Shiva Kumar Deora and his

accomplices namely Amit Kumar Gupta and Sumit Kumar

Gupta are beneficial owners of total 135 shell

companies/firms which are floated in names of various

dummy directors and by these firms they availing fake ITC

to the tune of Rs. 750 crores (Approx) and passed them to

several end beneficiaries thereby causing significant loss to

the government exchequer.

98. It has been alleged that the petitioner Amit Gupta a

close associate and financial handler of main accomplice

Shiv Kumar Deora (present petitioner) in the ongoing money

laundering operations while Shiv Kumar Deora orchestrated

creation of shell firms, Amit Gupta manages the financial

layer of the syndicate including transaction, laundering of

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proceeds of crime and routing illicit funds through

numerous bank accounts and entities under his control.

99. It has further been alleged that the petitioner is

also Director of fake shell companies and along with them

deliberately generating and availing fake Input Tax Credit

(ITC) by issuing bogus invoices and all of them are a party

with each other in acquisition, possession, use and

concealment of proceeds of crime as well as claiming the

said proceeds of crime as untainted property and they have

deliberately generated proceeds of crime to acquire and use

it for personal gains. He has been arrested for the offence

u/s 3 PML Act punishable u/s 4 of the PML Act on

08.05.2025, hence this petition.

100. Now adverting to the contention of the learned

counsel for the parties on the point of culpability of the

petitioner.

101. The learned senior counsel for the petitioner has

submitted that the allegation leveled against the present

petitioner cannot be said to attract the ingredient of Section

3 of PML Act, 2002.

102. While on the other hand, the learned counsel

appearing for the ED has submitted by referring to various

paragraphs of prosecution complaint that the offence is very

much available attracting the offence under provisions of

PML Act, 2002.

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103. This Court, in order to appreciate the rival

submission, is of the view that various paragraphs of

prosecution complaint upon which the reliance has been

placed on behalf of both the parties, needs to be referred

herein so as to come to the conclusion as to whether the

parameter as fixed under Section 45 of the Act 2002, is

being fulfilled in order to reach to the conclusion that it is a

fit case where regular bail is to be granted or not.

104. For ready reference the relevant paragraphs of the

prosecution complaint are being quoted as under:

The DGGI complaints (Prosecution Complaint no. 678/2024 against Shiva Kumar Deora) provides a comprehensive list of the 135 shell firms involved in this syndicate, detailing the fraudulent ITC availed by each entity, which collectively amounts to 734.57 Crores.

A. Statements of the Accused Persons (Masterminds)

9.1 Statement of Shri Shiva Kumar Deora (Accused-1) (RUD-8 and RUD- 19):

In his statements recorded on 08.05.2025, 21.05.2025, 22.05.2025, and 23.05.2025, the

accused Shiva Kumar Deora confessed to being the principal architect of the entire fraudulent scneme. He admitted to incorporating over 25 shell companies with fictitious directors, which were then sold to other operators like Amit Gupta for nominal amounts (48,000 to ₹20,000 each). He provided a detailed explanation of the syndicate's modus operandi, admitting to the generation of fake invoices without any corresponding supply of goods or services. He

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confessed to earning commission for his role, which he deceptively understated as 0.15% but which was in reality a substantial share of the fraudulent ITC. He further admitted to using a network of 'Angadias (hawala operators) for rotating cash and distributing the illicitly earned commissions. When confronted with substantial cash deposits of over 797 lakhs in his personal bank accounts, he failed to provide any legitimate source, offering a flimsy explanation of them being re-deposits of his own withdrawals. He also admitted to using the proceeds of crime to acquire assets, including high-value flats in Kolkata and Lucknow, and funding the repayment of loans for these properties from the same illicit earnings. His statements amount to a direct confession to his role in the generation, acquisition, layering, and use of proceeds of crime.

9.2 Statement of Shri Mohit Deora (Accused-2) (RUD-8 and RUD- 20):

In his statements recorded on 08.05.2025, 17.05.2025, 18.05.2025, and, 19.05.2025, the accused. Mohit Deora admitted to receiving huge unexplained credits amounting to over 10.31 crores in his personal and business bank accounts from various shell entities of the syndicate including M/s Poojashi Enterprises Pvt. Ltd. and M/s Green High Distributors Pvt. Ltd, He confessed that these funds were transferred on the specific instructions of his father. Shiva Kumar Deora (Accused-

1). He also admitted that he personally managed and controlled several bank accounts, for which he was the authorized signatory, Including HDFC Bank A/c No. 50100354469224, Yes Bank A/c No. 1753100002997, SBI A/c. No. 33571647894, Kotak Bank A/c No. 1349711657, and the account of his proprietorship M/s OmHari Textile with HDFC Bank (A/c No. 50200078468347). Не further admitted to knowingly using these proceeds of crime for acquiring immovable properties, such as a flat in "The Merlin The Fourth project in Kolkata, and for infusing capital into his personal business, M/s Om Hari Textile. He also admitted to receiving approximately 49 lakhs from the

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sale proceeds of his father's tainted properties, even after having knowledge of the origuing investigation against his father since February 2024. His evasive replies, his failure to explain the legitimate source of these massive funds, and his obstructive conduct during the investigation prove his active and knowing role in the concealment, possession, acquisition, and use of proceeds of crime.

9.3 Statement of Shri Amit Kumar Gupta (Accused-3) (RUD-9 and RUD-21):

In his statements recorded on 08.05.2025, 03.06.2025, 04.06.2025, and 05.06.2025, the accused Amit Kumar Gupta confessed to his role as a key mastermind and the primary financial manager of the syndicate. He admitted to establishing and controlling key entities like M/s Tirumala Enterprise and M/s Tirubala Manufacturing & Marketing Pvt.

Ltd. He confessed that 30-40% of his business involved generating bogus invoices without any actual supply of goolis. He specifically admitted to providing fake invoices worth crores to other beneficiaries, including Amit Agarwal@ Vicky Bhalotia (Accused-4) (23-5 crores) and Vivek Narsaria (15-7 crores). He detailed his use of various Angadias' for cash transfers and admitted to investing the commission earned from the fake invoicing scam into acquiring multiple immovable properties valued at over ₹14.35 crores. He failed to provide any legitimate explanation for credits of over 14.99 crores in his bank accounts, thereby confirming his role in laundering the proceeds of crime. He also implicated Shiva Kumar Deora in witness tampering stating that Shiva kumar deora directed dummy directors to file false affidavits and complaints against GST officials.

B. Statements of Dummy Directors/ Employees & Other Persons:

9.5 Statement of Shri Dipesh Kejriwal (RUD- 23):

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In his statements recorded on 02.06.2025 and 11.06.2025, Shri Dipesh Kejriwal, an accountant for the syndicate, provided a detailed insider account of the entire conspiracy. He confirmed being hired by Shiva Kumar Deora (Accused-1) and Amit Kumar Gupta (Accused-3) and being made a director in shell companies like M/s Lambodar Traders Pvt. Ltd. and M/s Lambodar Iron Pvt. Ltd. He confessed to investing approximately 240 lakhs with the syndicate on the romise of high returns. Crucially, he stated that after the arrest of Shiva Kumar Deora, Amit Gupta instructed him to destroy his phone and abscond for a few days to evade investigation. He further revealed that Shiva Kumar Deora later pressured and threatened him to sign a false affidavit contradicting his statement given to DGGI. His testimony corroborates the modus operandi, the roles of the masterminds, and their attempts to tamper with evidence and witnesses.

9.6 Statement of Smt. Anindita Banerjee (recorded on 04.06.2025) (RUD-27)

Smt. Anindita Banerjee, a graduate, stated that following her husband's death in 2017, she was in a precarious financial situation. She was recruited by Shiva Kumar Deora (Accused-1) and Amit Gupta (Accused-3) for a purported work-from-home job with a monthly salary of $12,500. She stated that she was made a director in shell companies like M/s RNR Metal and Steel Private Limited and M/s SBAG Metal and Iron Private Limited entirely without her knowledge, a fact she only discovered after Shiva Kumar Deora's arrest by DGGI in February 2024. She categorically stated that the accused misused her personal KYC documents, along with those of het children (Panchadeep Nag Choudhury and Nijhum Nag Chowdhury), to create this web of entities. She vehemently denied any knowledge of the fraudulent

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activities, including the generation of fake invoices or the illegal passing of ITC. Upon discovering the fraud, she filed a formal complaint with the Kolkata Police, corroborating her claim of being a victim of identity theft.

9.7 Statement of Ms. Nijhum Nag Chowdhury (recorded on 54.06.2025) (RUD-24):

Ms. Nijhum Nag Chowdhury stated that she was introduced to Shiva Kumar Deora (Accused-1) and Amit Gupta (Accused-3) in 2019 for a part-time job with a salary of 15,000 per month. She was unaware that she had been made a Director/Proprietor in entities like M/s Sweko Enterprise (OPC) Pvt. Ltd. and M/s Modicum Enterprise (OPC) Pvt. Ltd. until she received summons from tax authorities. She asserted that the accused misused her personal documents and those of her family members. She confessed that Sumi supta frequently contacted her for OTPs for "office related work," which she provided in good faith Crucially, she stated that Shiva Kumar Deora (Accursed-1) threatened her, warning her not to cooperate with the DGGI investigation, which establishes his role in witness intimidation.

12 SPECIFIC ROLE OF THE ACCUSED PERSONS IN OFFENCE OF MONEY LAUNDERING -

12.1 SHRI SHIVA KUMAR DEORA (ACCUSED NO. 1): -

Investigation has conclusively established that Shri Shiva Kumar Deora is the principal conspirator and prime mastermind of the entire GST fraud syndicate. He was not merely a participant but the chief architect who, in connivance with his associates, orchestrated a sophisticated and large-scale criminal operation to defraud the Government Exchequer. His actions and admissions demonstrate a clear and deliberate involvement in every stage of the money laundering process, fulfilling all the constituent elements of the offence as defined under Section of the Prevention of Money Laundering Act, 2002.

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A. Commission of Offence of Money Laundering under Section 3 of PMLA, 2002 Shri Shiva Kumar Deora, directly and indirectly, indulged, knowingly assisted, and was knowingly a party to and actually involved in the following processes and activities connected with the proceeds of crime.

1. Generation, Acquisition, and Possession of Proceeds of Crime:

Generation & Acquisition: As the mastermind, he orchestrated the creation. of a complex web of 135 shell entities. He admitted to incorporating over 25 such companies himself, which were used to generate bogus invoices without any actual supply of goods. This criminal activity related to the scheduled offence directly resulted in the generation of fraudulent ITC, leading to the acquisition of proceeds of crime amounting to at least 201 Crores, which includes the syndicate's commission of approximately 67 Crores.

Possession: He held these illicit funds in a web of bank accounts, including those of the shell entities he controlled, his personal accounts, and the accounts of his family members, including his son Mohit Deora (Accused No.2) and wife Sashi Deora. His control over these accounts establishes his direct and indirect possession of the proceeds of crime.

2. Concealment and Layering: |

To conceal the illicit arigin of the funds, he employed sophisticated layering techniques. The proceeds of crime were routed through multiple shell companies in a series of complex transactions designed to obscure the money trail.

Furthermore, he admitted to using a network of 'Angadias' (hawala operators) to move cash and settle transactions, a classic method for concealing financial trails from regulatory scrutiny. The large, unexplained cash deposits into his and his family's accounts are further evidence of his attempts to conceal the tainted nature of the funds.

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3. Use and Integration:

Shri Shiva Kumar Deora actively used the proceeds of crime for his personal enrichment and to integrate the illicit money into the legitimate economy,

He utilized these tainted funds to acquire high-value immovable properties in Kolkata and Lucknow, in his own name and in the names of his wife and son. The said properties have been attached and are liable for confiscation. The investigation has established that the repayment of loans taken for these properties was also made from funds derived from the GST fraud, thereby tainting the assets themselves.

4. Projecting as Untainted Property:

He made deliberate attempts to project the proceeds of crime as legitimate earnings. During his statements, he gave contradictory and unsubstantiated explanations for his income, claiming it was from "GST liasoning commission" or "textile commission" without providing any documentary proof.

He falsely claimed that the substantial cash deposits in his accounts were mere re-deposits of his own withdrawals, an assertion that fails to explain the origin of the initial cash. By doing so, he was actively trying to claim and project tainted property as untainted.

B. Conclusion of Role and Liability for Punishment under Section 4 of PMLA

The investigation has established beyond doubt that Shri Shiva Kumar Deora was knowingly and actively involved in all processes and activities connected with the proceeds of crime, from its generation to its laundering. His acts of witness intimidation and attempts to destroy evidence further cement his culpability. Furthermore, as per the Explanation to Section 3 of the PMLA, the offence of money laundering is a continuing activity, and Shri Shiva Kumar Deora continued to possess, use, and enjoy the proceeds of crime through the assets he acquired and the funds he controlled. 1

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In view of the foregoing, as Shri Shiva Kumar Deora has directly indulged, knowingly was a party, and was actually involved in the processes and activities of generation, concealment, possession, acquisition, layering, use, and projection of proceeds of crime as untainted property, he is guilty of the offence of money laundering as defined under Section 3 of the PMLA, 2002, and is liable to be prosecuted and punished with rigorous Imprisonment and a fine under Section 4 of the said Act.

12.2 Shri Mohit Deora (Accused No.2):

Shri Mohit Deora, son of the principal conspirator Shiva Kumar Deora, was not a passive bystander but an active and knowing participant in the offence of money Laundering. He knowingly assisted his father in laundering the proceeds of crime by providing his personal and business bank accounts as conduits for illicit funds and was a direct beneficiary of the criminal enterprise. His actions squarely fall within the definition of money laundering under Section 3 of the P'MLA, 2002. A. Commission of Offence of Money Laundering under Section 3 of FMLA, 2002 Shri Mohit Deora knowingly assisted and was knowingly a party to and actually involved in the following processes and activities connected with the proceeds of crime,

1. Acquisition, Possession, and Concealment of Proceeds of Crime:

Acquisition and Possession: Mohit Deora allowed his personal and business bank accounts to be used for acquiring and holding proceeds of crime. Investigation has traced unexplained credits of over 110.31 crores into his accounts, including substantial funds transferred directly from the syndicate's shell entities, such as M/s Poojashi Enterprises (OPC) Pvt. Ltd. and M/s Green High Distributors Pvt. Ltd. This demonstrates his knowing involvement in the possession and acquisition of tainted funds, far exceeding his declared, income of 10-12 lakhs per annum.

Concealment: He actively concealed the illicit nature of these funds. During his examination under Section 50 of

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the PMLA, he was evasive, failed to provide any plausible explanation for the source of these massive credits and cash deposits, and claimed ignorance of his father's business dealings. This deliberate non- cooperation and concealment constitute an act of money laundering.

2. Use and Integration of Proceeds of Crime:

Shri Mohit Deora was instrumental in the use and integration of the proceeds of crime into the legitimate financial system. He admitted to using 219.54 lakhs, received from the shell entity M/s Green High Distributors Pvt. Ltd., to make payments for the purchase of a property in "The Merlin The Fourth project.

He further admitted to receiving 249 lakhs (in two tranches of 235 lakhs and 14 lakhs) into his personal and business (M/s Omhari Textiles) accounts, which were part of the sale proceeds of a tainted property previously acquired by his father using proceeds of crime.

He utilized these tainted funds to acquire high-value immovable properties in Kolkata in his own name. The said properties have been attached and are liable for confiscation.

By channeling these illicit funds into real estate and his own proprietorship firm, he knowingly assisted in projecting the proceeds of crime as untainted property. B. Evidence of "Knowing Involvement

Mohit Deora's claim of being unaware of his father's criminal activities is contradicted by the evidence. He continued to receive and utilize funds from the syndicate even after his father's arrest by DGGI in February 2024, at which point he was admittedly aware of the ongoing investigation into the fake GST fraud. His actions, including his admitted attempt to create chaos and obstruct the investigation at his father's behest, further prove his conscious and willing participation in the criminal conspiracy.

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C Conclusion of Role and Liability for Punishment under Section 4 of PMLA In view of the foregoing, it is established that Shri Mohit Deora knowingly assisted in, and was knowingly a party to, the processes of acquisition, possession, concealment, and use of proceeds of crime. By allowing his bank accounts to be used for layering illicit funds and by using those funds to acquire assets, he played a crucial role in the laundering of criminal proceeds. Therefore, he has committed the offence of money laundering as defined under Section 3 of the PMLA, 2002 and is liable to be prosecuted and punished under Section 4 of the said Act. Further, in total, more than 10.31 crores were credited to the Mohit's accounts (including SBI A/c No. 33571647894 and Yes Bank A/c No. 1753100002997), with cash deposits exceeding 238 lakhs, reflecting clear indicators of illicit fund flow and layering. He also received Rs. 39.29 lakhs from M/s Green High Distributors Pvt. Ltd., an entity deeply embedded in the fraudulent network, with a portion of these finds (Rs. 19.54 lakhs) being subsequently invested in a property in acquisition of properties.

SHRI AMIT KUMAR GUPTA (ACCUSED NO. 3):

Investigation has established that Shri Amit Kumar Gupta was a central ligam and mastermind in the criminal syndicate, operating as its primary financial manager. In collaboration with Shiva Kumar Deora, he orchestrated the laundering of vast sums of criminal proceeds. He was directly involved in the crestion and operation of numerous shell companies, managed the complex web of illicit financial transactions, and was a principal beneficiary of the fraud. His actions demonstrate a clear and deliberate commission of the offence of money laundering under Section 3 of the PMLA, 2002.

A Commission of Offence of Money Laundering under Section 3 of PMLA

Shri Amit Kumar Gupta, directly and indirectly, indulged, knowingly assisted, and was knowingly a party to and actually involved in the following

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processes and activities connected with the proceeds of crime.

1. Generation, Acquisition, and Possession of Proceeds of Crimes

Generation & Acquisition:

He was directly involved in the generation of proceeds of crime by establishing and controlling key shell entities, including M/s Tirumala Enterprise and Tiruhala Manufacturing & Marketing Private Limited. He admitted in his statement that 30-40% of his business involved generating bogus invoices without arry actual supply of goods and specifically confessed to providing fake invoices worth crores to other entities.

Possession

He was found in possession of proceeds of crime as evidenced by unexplained credits of over 714.99 crores in his Indusind Bank accounts between 2821 and 2025, for which he could not provide any legitimate source of income

2. Concealment and Layering:

His primary role was to manage and layer the illicit funda. He controlled the movement of criminal proceeds, transferring them across the various arik accounts of the shell firus to obscure their origin.

He admitted to using a network of 'Angadias' (hawala operators) to channel funds and convert illicit electronic transfers into cash, a deliberate act to conceal the money trail and break the chain of evidence

3. Use and Integration:

Amit Gupta used the proceeds of crime for significant personal enricdument, thereby integrating the tainted

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money into the legitimate economy including payments of his personal expenses/purposes from the credit cards maintained in the name of shell entities.

He had admitted to investing the commission earned from the fake invoking scam into acquiring multiple high-value immovable properties worth ceг 14.35 crores. He also acquired luxury vehicles, including an Audi, a Volvo, and a Jeep Compass, using the illicit gains from the fraud.

B. Conclusion of Role and Liability for Punishment under Section 4 of PMLA

Shri Amit Kumar Gupta was a key mastermind who managed the financial lifeblood of the criminal syndicate. His role was not limited to financial management, he was also actively involved in creating the fraudulent infrastructure, and he personally benefited from it. His attempts to destroy evidence and influence witnesses by instructing them to file false FIRs against officials further demonstrate his culpability. In view of the foregoing, as Shri Amit Kumar Gupta has directly indulged, knowingly was a party, and was actually involved in the processes and activities of preparation, concealment, possession, acquisition, layering, use, and projection of proceeds of crime as untainted property, he is guilty of the offence of money laundering as defined under Section 3 of the PMLA, 2002. He is therefore liable to be prosecuted and punished with rigorous imprisonment and a fine under Section 4 of the said Act.

105. From the various paragraphs of the prosecution

complaint as mentioned hereinabove it is evident that the

allegation against the petitioner that he is part of organized

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syndicate operating through 135 shell companies for

issuance of bogus GST invoices involving ITC exceeding

more than Rs. 700 crores. These invoices were used to

illegally avail and pass on Input Tax Credit (ITC) to various

entities causing wrongful loss to the government exchequer.

The proceeds of crime were layered through several accounts

to project them as legitimate.

106. It has been revealed that the present petitioner is

the principal conspirator and prime mastermind of the entire

GST fraud syndicate. He was not merely a participant but

the chief architect who, in connivance with his associates,

orchestrated a sophisticated and large-scale criminal

operation to defraud the Government Exchequer. His actions

and admissions demonstrate a clear and deliberate

involvement in every stage of the money laundering process,

fulfilling all the constituent elements of the offence as

defined under Section of the Prevention of Money

Laundering Act, 2002.

107. Further it has come in the investigation that as the

mastermind, the petitioner orchestrated the creation of a

complex web of 135 shell entities. He admitted to

incorporating over 25 such companies himself, which were

used to generate bogus invoices without any actual supply of

goods. This criminal activity related to the scheduled offence

directly resulted in the generation of fraudulent ITC, leading

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to the acquisition of proceeds of crime amounting to at least

201 Crores, which includes the syndicate's commission of

approximately 67 Crores.

108. Further it has come during investigation that the

present petitioner held these illicit funds in a web of bank

accounts, including those of the shell entities he controlled,

his personal accounts, and the accounts of his family

members, including his son Mohit Deora (Accused No.2) and

wife Sashi Deora. His control over these accounts

establishes his direct and indirect possession of the

proceeds of crime and to conceal the illicit origin of the

funds, he employed sophisticated layering techniques. The

proceeds of crime were routed through multiple shell

companies in a series of complex transactions designed to

obscure the money trail. Furthermore, he admitted to using

a network of 'Angadias' (hawala operators) to move cash and

settle transactions, a classic method for concealing financial

trails from regulatory scrutiny. The large, unexplained cash

deposits into his and his family's accounts are further

evidence of his attempts to conceal the tainted nature of the

funds.

109. Further the petitioner made deliberate attempts to

project the proceeds of crime as legitimate earnings. During

his statements, he gave contradictory and unsubstantiated

explanations for his income, claiming it was from "GST

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liasoning commission" or "textile commission" without

providing any documentary proof. He falsely claimed that

the substantial cash deposits in his accounts were mere re-

deposits of his own withdrawals, an assertion that fails to

explain the origin of the initial cash. By doing so, he was

actively trying to claim and project tainted property as

untainted.

110. Thus, the investigation has prima facie indicates

that Shri Shiva Kumar Deora was knowingly and actively

involved in all processes and activities connected with the

proceeds of crime, from its generation to its laundering. His

acts of witness intimidation and attempts to destroy

evidence further cement his culpability. Furthermore, as per

the Explanation to Section 3 of the PMLA, the offence of

money laundering is a continuing activity, and Shri Shiva

Kumar Deora continued to possess, use, and enjoy the

proceeds of crime through the assets he acquired and the

funds he controlled.

111. At this juncture it requires to refer herein that the

Hon'ble Apex Court in the case of Rohit Tandon v.

Directorate of Enforcement (supra) while referring the ratio

of Ranjitsing Brahmajeetsing Sharma v. State of

Maharashtra & Ors., (2005) 5 SCC 294 has categorically

held that the Court ought to maintain a delicate balance

between a judgment of acquittal and conviction and an order

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granting bail much before commencement of trial. The duty

of the Court at this stage is not to weigh the evidence

meticulously but to arrive at a finding on the basis of broad

probabilities.

112. Further the Hon'ble Apex Court in the case of Vijay

Madanlal Choudhary and Ors. Vs. Union of India and

Ors(supra) has reiterated the same view and has observed

that the Court while dealing with the application for grant of

bail need not to delve deep into the merits of the case and

only a view of the court based on available material on

record is required. For ready reference the relevant

paragraph is being quoted as under:

303. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma [Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : 2005 SCC (Cri) 1057] . The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the court based on available material on record is required. The court will not weigh the evidence to find the guilt of the accused which is, of course, the work of the trial court. The court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the trial court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad [Nimmagadda Prasad v. CBI, (2013) 7 SCC 466 : (2013) 3 SCC (Cri) 575] , the words used in Section 45 of the 2002 Act are "reasonable grounds for believing" which means the court has to see only if there is a

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genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt.

113. Thus, prima-facie on the basis of the material

available in prosecution complaint the role and involvement

of the present petitioner in the alleged money laundering

cannot be negated.

114. It needs to refer herein that the Hon'ble Apex Court

in the case of Rana Ayyub v. Directorate of Enforcement)

(2023) 4 SCC 357 observed as follows:

"19. The word "money-laundering" is defined in Section 2(1)(p) of the Act to have the same meaning as assigned to it in Section

3. Section 3 of the Act makes a person guilty of the offence of money laundering, if he (1) directly or indirectly attempts to indulge, or (n) knowingly assists or, (im) knowingly is a party, or (iv) is actually involved in any process or activity. Such process or activity should be connected to "proceeds of crime "

including its concealment or possession or acquisition or use. In addition, a person involved in such process or activity connected to proceeds of crime, should be projecting or claiming it as untainted property. The Explanation under Section 3 makes it clear that even if the involvement is in one or more of the following activities or processes, namely: (i) concealment; (ii) possession; (im) acquisition; (iv) use; (o) projecting it as untainted property, or (vi) claiming it as untainted property, the offence of money-laundering will be made out.

20. Thus, Section 3 comprises of two essential limbs, namely: (i) involvement in any process or activity, and (ii) connection of such process or activity to the proceeds of crime. The expression "proceeds of crime" is defined in Section 2(1)(u) to mean any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad."

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115. In the light of the aforesaid statutory definitions, it

can safely be inferred that it is enough if the prosecution

establishes that there was generation of proceeds of crime

and the accused was involved in any process or activity in

connection with the proceeds of crime.

116. Hence, it from the various paragraphs of the

prosecution complaint it is evident that the petitioner is

directly indulged and is actually involved in all the activities

connected with the offence of money laundering, i.e., use or

acquisition, possession, concealment, and projecting or

claiming as untainted property, as defined u/s 3 of PML Act,

2002.

117. It is pertinent to mention here that the provisions of

the PML Act, 2002 is an independent offence and the

investigation conducted by the Enforcement Directorate

under the PML Act, 2002 is triggered after committing, the

commission of a scheduled offence, out of which proceeds

have been generated. During the investigation, there is the

active involvement of the petitioner in the layering, transfer

and use as well as the petitioner entering into transactions

to launder the proceeds of crime generated out of such

scheduled offence.

118. Further the offence of money laundering as

contemplated in Section 3 of the PML Act, 2002 has been

elaborately dealt with by the three Judge Bench in Vijay

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Madanlal Choudhary (supra), in which it has been

observed that Section 3 has a wider reach. The offence as

defined captures every process and activity in dealing with

the proceeds of crime, directly or indirectly, and is not

limited to the happening of the final act of integration of

tainted property in the formal economy to constitute an act

of money laundering. Of course, the authority of the

Authorised Officer under the Act to prosecute any person for

the offence of money laundering gets triggered only if there

exist proceeds of crime within the meaning of Section 2(1)(u)

of the Act and further it is involved in any process or

activity. Not even in case of existence of undisclosed income

and irrespective of its volume, the definition of "Proceeds of

Crime" under Section 2(1)(u) will get attracted, unless the

property has been derived or obtained as a result of criminal

activity relating to a scheduled offence. The property must

qualify the definition of "Proceeds of Crime" under Section

2(1)(u) of the Act. As observed, in all or whole of the crime

property linked to scheduled offence need not be regarded as

proceeds of crime, but all properties qualifying the definition

of "Proceeds of Crime" under Section 2(1)(u) will necessarily

be the crime properties.

119. To constitute any property as proceeds of crime, it

must be derived or obtained directly or indirectly by any

person as a result of criminal activity relating to a scheduled

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offence. The explanation clarifies that the proceeds of crime

include property, not only derived or obtained from

scheduled offence but also any property which may directly

or indirectly be derived or obtained as a result of any

criminal activity relatable to the scheduled offence. Clause

(u) also clarifies that even the value of any such property will

also be the proceeds of crime.

120. Thus, prima-facie, it appears that the petitioner has

involved himself in accumulating proceeds of crime and the

plea of the learned counsel for the petitioner that the

petitioner has no role in the alleged commission of crime,

does not hold water.

121. Further it has been contended by the learned

counsel for the petitioner that the DGGI, Jamshedpur ought

not to have registered prosecution complaint for the offences

punishable under the provisions of IPC which have merely

been appended to a GST complaint, which is impermissible

in law.

122. In the aforesaid context it requires to refer herein

that Section 132 of CGST Act is a penal provision providing

punishment for certain offences. Sub-Section (1) of Section

132 prescribes several acts and omissions which are made

punishable with different sentences depending on the nature

of the offence. Sub-Section (4) of Section 132 provides that

notwithstanding anything contained in the Code of Criminal

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Procedure, all Commissioner. offences under the said Act,

except those referred to in sub-Section (5) shall be non-

cognizable and bailable. However, sub-Section (5) of Section

132 makes certain offences cognizable and non-bailable.

Sub-Section (6) of Section 132 provides that a person shall

not be prosecuted for any offence under the said Section

except with the previous sanction of the commissioner.

123. As noted, Section 132 of CGST Act provides

punishment for certain offences related to the Goods and

Service Tax related acts and omissions. However, it is not

unknown that a certain act may fall within the said special

penal statute at the same time may also have an element of

an offence under IPC.

124. The question whether the accused in such a

situation can be made answerable only for the special statue

offence or general offence also, has been examined by the

Hon'ble Supreme Court earlier.

125. In case of Jayant and others vs. State of Madhya

Pradesh, reported in (2021) 2 SCC 670, facts were that on

a surprise inspection, the Mining Inspector found that the

accused was indulging in illegal mining and transportation

of minor minerals. He made a report suggesting that the

offences can be compounded. This was accepted by the

authorities and the accused also. Subsequently, it was

reported that there were large scale illegal excavation and

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transportation of minerals without payment of royalty. The

Magistrate passed and order taking note of such

information. He was of the view that offences under the IPC

were distinct from those punishable under Mines and

Minerals (Development and Regulation) Act. He, therefore,

directed registration of a criminal case against the accused

and for investigation under Section 156(3) of Cr.P.C. The

accused challenged the FIR under Section 482 of Cr.P.C.

contending that in view of the bar under Section 22 of

MMRD Act, the order passed by the Magistrate was

unsustainable.

126. The issue ultimately reached to the Hon'ble

Supreme Court. One of the questions considered by the

Hon'ble Supreme Court was whether in case of illegal mining

and transportation of minor minerals action by police for

offence of theft under Section 378 of IPC was permissible in

view of the provisions contained in MMRD Act. In this

respect, it was held that -

"17.3. Therefore, as in the present case, the Mining Inspectors prepared the cases under Rule 53 of the 1996 Rules and submitted them before the Mining Officers with the proposals of compounding the same for the amount calculated according to the Rules concerned and the Collector approved the said proposal and thereafter the private appellant violators accepted the decision and deposited the amount of penalty determined by the Collector for compounding the cases in view of sub- section (2) of Section 23-A of the MMDR Act and the 1996

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Rules and even the 2006 Rules are framed in exercise of the powers under Section 15 of the MMDR Act, criminal complaints/proceedings for the offences under Sections 4/21 of the MMDR Act are not permissible and are not required to be proceeded further in view of the bar contained in sub-section (2) of Section 23-A of the MMDR Act. At the same time, as observed hereinabove, the criminal complaints/proceedings for the offences under IPC -- Sections 379/414 IPC which are held to be distinct and different can be proceeded further, subject to the observations made hereinabove."

127. In case of State (NCT of Delhi) vs. Sanjay,

reported in (2014) 9 SCC 772, also similar question came

up for consideration. It was held by the Hon'ble Apex Court

which reads as under:

72. From a close reading of the provisions of the MMDR Act and the offence defined under Section 378 IPC, it is manifest that the ingredients constituting the offence are different. The contravention of terms and conditions of mining lease or doing mining activity in violation of Section 4 of the Act is an offence punishable under Section 21 of the MMDR Act, whereas dishonestly removing sand, gravel and other minerals from the river, which is the property of the State, out of the State‟s possession without the consent, constitute an offence of theft.

Hence, merely because initiation of proceeding for commission of an offence under the MMDR Act on the basis of complaint cannot and shall not debar the police from taking action against persons for committing theft of sand and minerals in the manner mentioned above by exercising power under the Code of Criminal Procedure and submit a report before the Magistrate for taking cognizance against such persons. In other words, in a case where there is a theft of sand and gravel from the government land, the police can register a case, investigate the same and submit a final report under Section 173 CrPC before a Magistrate having

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jurisdiction for the purpose of taking cognizance as provided in Section 190(1)(d) of the Code of Criminal Procedure.

73. After giving our thoughtful consideration in the matter, in the light of the relevant provisions of the Act vis-à-vis the Code of Criminal Procedure and the Penal Code, we are of the definite opinion that the ingredients constituting the offence under the MMDR Act and the ingredients of dishonestly removing sand and gravel from the riverbeds without consent, which is the property of the State, is a distinct offence under IPC. Hence, for the commission of offence under Section 378 IPC, on receipt of the police report, the Magistrate having jurisdiction can take cognizance of the said offence without awaiting the receipt of complaint that may be filed by the authorised officer for taking cognizance in respect of violation of various provisions of the MMDR Act. Consequently, the contrary view taken by the different High Courts cannot be sustained in law and, therefore, overruled. Consequently, these criminal appeals are disposed of with a direction to the Magistrates concerned to proceed accordingly." (emphasis supplied)

128. Thus, if an act or offence which constitute an

offence under IPC, then the provision of Special Act shall not

stand in a way to stop the applicability of the IPC and such

offence can be prosecuted under IPC.

129. Further as per the aim and objective of the Act 2002

which has already referred herein the preceding paragraph

wherefrom it is evident that the Act 2002 aims to prevent

illegal financial activities by monitoring businesses to ensure

they're not laundering money, which involves making

illegally obtained funds appear legal to evade legal

consequences. This money might be earned from illegal

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activities like smuggling, fraud, creation of shell companies,

and fake invoicing, amongst other sources.

130. Further it needs to refer herein that this Court is

conscious with the fact that at this juncture this Court has

to consider the application of Section 45 of the Act 2002 in

order to see that whether the petitioner is eligible for bail or

not, therefore the said contention of the petitioner is not fit

to be appreciated herein at this stage.

131. Further herein it is evident from the various

paragraphs of the prosecution complaint filed which have

been referred hereinabove, is supported by substantial

evidence gathered during the investigation and culpability

against the petitioner is not based solely upon on the

statements of his accomplices. Furthermore, prima facie

there is ample evidence establishing the petitioner's

involvement in the offence of money laundering, which is

further corroborated by statements of others.

132. It needs to refer herein that the three Judge Bench

the Hon'ble Apex Court in the case of "Rohit Tandon vs.

Directorate of Enforcement" (supra) held that the

statements of witnesses recorded by Prosecution - ED are

admissible in evidence in view of Section 50. Such

statements may make out a formidable case about the

involvement of the accused in the commission of the offence

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of money laundering. For ready reference the relevant

paragraph is being quoted as under:

31. Suffice it to observe that the appellant has not succeeded in persuading us about the inapplicability of the threshold stipulation under Section 45 of the Act. In the facts of the present case, we are in agreement with the view taken by the Sessions Court and by the High Court. We have independently examined the materials relied upon by the prosecution and also noted the inexplicable silence or reluctance of the appellant in disclosing the source from where such huge value of demonetised currency and also new currency has been acquired by him. The prosecution is relying on statements of 26 witnesses/accused already recorded, out of which 7 were considered by the Delhi High Court. These statements are admissible in evidence, in view of Section 50 of the 2002 Act. The same makes out a formidable case about the involvement of the appellant in commission of a serious offence of money laundering. It is, therefore, not possible for us to record satisfaction that there are reasonable grounds for believing that the appellant is not guilty of such offence. Further, the courts below have justly adverted to the antecedents of the appellant for considering the prayer for bail and concluded that it is not possible to hold that the appellant is not likely to commit any offence ascribable to the 2002 Act while on bail. Since the threshold stipulation predicated in Section 45 has not been overcome, the question of considering the efficacy of other points urged by the appellant to persuade the Court to favour the appellant with the relief of regular bail will be of no avail. In other words, the fact that the investigation in the predicate offence instituted in terms of FIR No. 205/2016 or that the investigation qua the appellant in the complaint CC No. 700 of 2017 is completed; and that the proceeds of crime are already in possession of the investigating agency and provisional attachment order in relation thereto passed on 13-2-2017 has been confirmed;

or that charge-sheet has been filed in FIR No. 205/2016 against the appellant without his arrest; that the appellant has been lodged in judicial custody since 2-1-2017 and has not been

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interrogated or examined by the Enforcement Directorate thereafter; all these will be of no consequence.

133. In a recent judgment, the Hon'ble Supreme Court

in "Abhishek Banerjee & Anr. v. Directorate of

Enforcement", (2024) 9 SCC 22 has again made similar

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 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. 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."

134. In light of the foregoing judicial pronouncements, it

is evident that statements recorded under Section 50 of the

PML Act, 2002 hold evidentiary value and are admissible in

legal proceedings. The Hon'ble Supreme Court, while

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emphasizing the legal sanctity of such statements, observed

that they constitute valid material upon which reliance can

be placed to sustain allegations under the PML Act, 2002.

135. In the aforesaid judgment, the Hon'ble Supreme

Court also reaffirmed the admissibility of Section 50 of the

PML Act, 2002 distinguishing them from statements

recorded under the Cr.PC. 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

PML Act, 2002 and, therefore, admissible as evidence in

proceedings under the PML Act, 2002. The Hon'ble Apex

Court further clarified that the provisions of Section 50 of

the PML Act, 2002 having an overriding effect by virtue

of Sections 65 and 71 of the PML Act, 2002 prevail over the

procedural safeguards under the CrPC.

136. In the instant case, it has been found that during

the course of investigation statement so recorded of the

accused persons as also of the statement of various others

persons.

137. Thus, the petitioner knowingly is as the party and is

actually involved in all the activities connected with the

offence of money laundering, i.e., use or acquisition,

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possession, concealment, and projecting or claiming as

untainted property.

138. This Court is now proceeding to analyze the

statutory framework governing the burden of proof under

Section 24 in proceedings related to proceeds of crime.

"24. Burden of proof. --In any proceeding relating to proceeds of crime under this Act, -- (a) in the case of a person charged with the offence of money-laundering under section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering; and

(b) in the case of any other person the Authority or Court, may presume that such proceeds of crime are involved in money-

laundering."

139. From the bare perusal of Section 24 of the PML Act,

2002, it is evident that once a person is charged with the

offence of money laundering under Section 3 of the PML Act,

2002, the law presumes that the proceeds of crime are

involved in money laundering unless the contrary is proven

by the accused.

140. In the present case, the investigating agency has

relied on the evidences which indicate the applicant's active

role in the alleged money laundering activities.

141. By virtue of Section 24 of the PML Act, 2002, the

O.P- ED is not required to conclusively establish the

applicant's guilt at the pre-trial stage, rather,

the applicant/petitioner must demonstrate that the proceeds

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of crime attributed to him are not linked to money

laundering.

142. With regard to the above, this Court has referred to

the judgment of the Hon'ble Supreme Court in Prem

Prakash v. Union of India through Directorate of

Enforcement, (supra) wherein, the following observations

were made:

"18.In Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1] dealing with Section 24 PMLA, the three-Judge Bench held as under : (SCC pp. 229-31, paras 237 & 239-40) "237. Be that as it may, we may now proceed to decipher the purport of Section 24 of the 2002 Act. In the first place, it must be noticed that the legal presumption in either case is about the involvement of proceeds of crime in money-laundering. This fact becomes relevant, only if, the prosecution or the authorities have succeeded in establishing at least three basic or foundational facts. First, that the criminal activity relating to a scheduled offence has been committed. Second, that the property in question has been derived or obtained, directly or indirectly, by any person as a result of that criminal activity. Third, the person concerned is, directly or indirectly, involved in any process or activity connected with the said property being proceeds of crime. On establishing the fact that there existed proceeds of crime and the person concerned was involved in any process or activity connected therewith, itself, constitutes offence of money-laundering. The nature of process or activity has now been elaborated in the form of Explanation inserted vide Finance (No. 2) Act, 2019. On establishing these foundational facts in terms of Section 24 of the 2002 Act, a legal presumption would arise that such proceeds of crime are involved in money-laundering. The fact that the person concerned had no causal connection with such proceeds of crime and he is able to disprove the fact about his involvement in any

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process or activity connected therewith, by producing evidence in that regard, the legal presumption would stand rebutted.

143. Be it noted that the legal presumption under

Section 24(a) of the Act 2002, would apply when the person

is charged with the offence of money-laundering and his

direct or indirect involvement in any process or activity

connected with the proceeds of crime, is established. The

existence of proceeds of crime is, therefore, a foundational

fact, to be established by the prosecution, including the

involvement of the person in any process or activity

connected therewith. Once these foundational facts are

established by the prosecution, the onus must then shift on

the person facing charge of offence of money- laundering to

rebut the legal presumption that the proceeds of crime are

not involved in money-laundering, by producing evidence

which is within his personal knowledge of the accused.

144. In other words, the expression "presume" is not

conclusive. It also does not follow that the legal presumption

that the proceeds of crime are involved in money-laundering

is to be invoked by the authority or the court, without

providing an opportunity to the person to rebut the same by

leading evidence within his personal knowledge.

145. Such onus also flows from the purport of Section

106 of the Evidence Act. Whereby, he must rebut the legal

presumption in the manner he chooses to do and as is

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permissible in law, including by replying under Section 313

of the 1973 Code or even by cross-examining prosecution

witnesses. The person would get enough opportunity in the

proceeding before the authority or the court, as the case may

be. He may be able to discharge his burden by showing that

he is not involved in any process or activity connected with

the proceeds of crime.

146. In the case of "Collector of Customs, Madras &

Ors. v. D. Bhoormall", (1974) 2 SCC 544 proceedings

were initiated under Section 167(8)(c) of the Customs Act for

confiscation of contraband or smuggled goods and it was

observed by the Hon'ble Apex Court that on the principle

underlying Section 106, Evidence Act, the burden to

establish those facts is cast on the person concerned; and, if

he fails to establish or explain those facts, an adverse

inference of facts may arise against him. The relevant

paragraph of the aforesaid Judgment is being quoted as

under:

"Since it is exceedingly difficult, if not absolutely impossible, for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden.

... On the principle underlying Section 106, Evidence Act, the burden to establish those facts is cast on the person concerned; and, if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or the

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Department would rebut the initial presumption of innocence in favour of that person, and in the result, prove him guilty."

147. Thus, in light of the aforesaid principles and the law

enunciated by the Hon'ble Supreme Court in Vijay

Madanlal Choudhary (Supra), this Court must determine

whether the foundational facts necessary to invoke the

presumption under Section 24 of the PML Act, 2002 have

been established by the O.P-ED.

148. 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.

149. Herein on the basis of the discussion made

hereinabove in the preceding paragraphs it is evident that

the present petitioner along with the other accused persons,

had parked the illicit funds in a web of bank accounts,

including those of the shell entities he controlled, his

personal accounts, and the accounts of his family members,

including his petitioners control over these accounts

establishes his direct and indirect possession of the

proceeds of crime as such there is sufficient evidence in

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order top presume the role of the petitioner in alleged offence

of Money laundering.

150. Now in the light of the aforesaid discussion, at this

juncture, this Court thinks it fit to revisit the scope of

Section 45 of the PML Act, 2002. As discussed in preceding

paragraphs that Section 45 of the PML Act, 2002 provides

twin test. First 'reason to believe' is to be there for the

purpose of reaching to the conclusion that there is no prima

facie case and second condition is that the accused is not

likely to commit any offence while on bail.

151. Sub-section (1)(ii) of Section 45 of the PML Act,

2002, provides that if 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,

meaning thereby, the parameter which is to be followed by

the concerned court that satisfaction is required to be there

for believing that such accused person is not guilty of such

offence and is not likely to commit offence while on bail.

152. Section 45(2) of the Act 2002 provides to consider

the limitation for grant of bail which is in addition to the

limitation under the Code of Criminal Procedure, 1973, i.e.,

limitation which is to be considered while granting the

benefit either in exercise of jurisdiction conferred to this

Court under BNSS, 2023 is to be taken into consideration.

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153. It is, thus, evident by taking into consideration the

provision of Sections 19(1), 45(1) and 45(2) of PML Act, 2002

that the conditions provided therein are required to be

considered while granting the benefit of regular bail in

exercise of power conferred under statute apart from the

twin conditions which has been provided under Section

45(1) of the Act, 2002.

154. Thus, Section 45 of the PML Act, 2002 turns the

principle of bail is the rule and jail is the exception on its

head. The power of the Court to grant bail is further

conditioned upon the satisfaction of the twin conditions

prescribed under Section 45(1) (i) and (ii) PML Act, 2002.

While undertaking this exercise, the Court is required to

take a prima facie view on the basis of materials collected

during investigation. The expression used in Section 45 of

PML Act, 2002 are "reasonable grounds for believing" which

means that the Court has to find, from a prima facie view of

the materials collected during investigation that there are

reasonable grounds to believe that the accused has not

committed the offence and that there is no likelihood of him

committing an offence while on bail. Recently, in Tarun

Kumar v Assistant Directorate of Enforcement, (supra)

the Hon'ble Supreme Court has held as under:

"17.As well settled by now, the conditions specified under Section 45 are mandatory. They need to be complied with. The

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Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail. It is needless to say that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the offence of money laundering under Section 3, such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act."

155. Further, at the stage of recording statements during

enquiry, it cannot be construed as an investigation for

prosecution. The process envisaged under Section 50 of

PML Act, 2002 is in the nature of an inquiry against the

proceeds of crime and it is not an investigation and the

authorities who are recording the statements are not police

officers and therefore, these statements can be relied upon

as admissible piece of evidence before the Court. The

summons proceedings and recording of statements under

PML Act, 2002 are given the status of judicial proceedings

under Section 50(4) of PML Act, 2002.

156. From the various paragraphs of the prosecution

complaint including the statements of the other persons

which were recorded and surfaced during the investigation

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clearly implicate the petitioner and establishes the offence

of money laundering against the present petitioner.

157. Thus, on the basis of the discussion made

hereinabove, the contention of the learned counsel for the

petitioner that even if the entire ECIR will be taken into

consideration, no offence will be said to be committed so as

to attract the ingredients of Sections 3 & 4 of the PML Act,

2002, is totally misplaced in the light of accusation as

mentioned in prosecution complaint.

158. Thus, this Court, after taking note of the settled

legal proposition, is of view that the aforesaid contention is

not tenable in the eye of law.

159. This Court is conscious with the fact that personal

liberty is utmost requirement to maintain the individuality

of the person concerned but at the same time it is equally

settled that the balance between personal liberty and

societal impact of the alleged offence should be taken care

of by the Court concerned.

160. Further it has been submitted by the learned

counsel for the ED that substantial portions of the

proceeds of crime remain untraced, unrecovered, and

potentially in circulation within the financial system. The

investigation into the identification of the complete chain

of transactions, the full extent of assets acquired from

such tainted funds, and the persons/entities involved in

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their possession and concealment is still ongoing.

161. It is revealed during the investigation that the

petitioner intentionally transferred/tried to transfer the

said properties, acquired out of the proceeds of crime, to

his associates purposefully to frustrate the proceedings

under the law therefore, releasing the petitioner at this

crucial stage would not only impede and prejudice the

ongoing investigation but would also frustrate the

statutory objective of tracing, attaching, and ultimately

confiscating the property derived from or involved in

money laundering.

162. Thus, on the basis of the aforesaid discussion and

taking into consideration the grave nature of the

allegations, the sophisticated modus operandi employed to

project tainted property as untainted, and the strict

statutory framework governing bail under the PML Act,

2002, it is considered view of this Court that no ground

exists for the petitioner to claim the benefit of bail on

merits. The gravity of the offence, and the serious

allegations of facilitating the laundering of proceeds of

crime continue to justify the petitioner's custody under the

strict rigors of Section 45 of the Act 2002.

163. This Court while considering the prayer for regular

bail has taken into consideration that though this Court is

not sitting in appeal on the order passed by learned Trial

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Court but only for the purpose of considering the view

which has been taken by learned Court while rejecting the

prayer for bail, this Court is also in agreement with the said

view based upon the material surfaced in course of

investigation, as referred hereinabove.

164. This Court is conscious of this fact that while

deciding the issue of granting bail in grave economic

offences it is the utmost duty of the Court that the nature

and gravity of the alleged offence should have been kept in

mind because corruption poses a serious threat to our

society should be dealt with by iron hand.

165. Further, it is required to refer herein that the Money

Laundering is an economic offence and economic offences

comes under the of grave offences hence needs to be visited

with a different approach in the matter of bail as held by the

Hon'ble Apex court in the case of "Y. S Jagan Mohan

Reddy v/s Central Bureau of Investigation", reported in

(2013) 7 SCC 439. For ready reference, the relevant

paragraphs of the aforesaid judgments are being quoted as

under:

"34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country."

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166. Similarly, the Hon'ble Apex Court in case of

"Nimmagadda Prasad Vs. Central Bureau of

Investigation", reported in (2013) 7 SCC 466 has

reiterated the same view in paragraphs-23 to 25 which

reads as under:

"23. Unfortunately, in the last few years, the country has been seeing an alarming rise in white-collar crimes, which has affected the fibre of the country's economic structure. Incontrovertibly, economic offences have serious repercussions on the development of the country as a whole. In State of Gujarat v. Mohanlal Jitamalji Porwal [(1987) 2 SCC 364 : 1987 SCC (Cri) 364] this Court, while considering a request of the prosecution for adducing additional evidence, inter alia, observed as under: (SCC p. 371, para 5) "5. ... The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white-collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest."

24. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of

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the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.

25. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep-rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country."

167. The Hon'ble Apex Court in the case of "Central

Bureau of Investigation Vs Santosh Karnani and

Another", 2023 SCC OnLine SC 427 has observed that

corruption poses a serious threat to our society and must

be dealt with iron hands. The relevant paragraph of the

aforesaid judgment is being referred as under:-

"31. The nature and gravity of the alleged offence should have been kept in mind by the High Court. Corruption poses a serious threat to our society and must be dealt with iron hands. It not only leads to abysmal loss to the public exchequer but also tramples good governance. The common man stands deprived of the benefits percolating under social welfare schemes and is the worst hit. It is aptly said, "Corruption is a tree whose branches are of an unmeasurable length; they spread everywhere; and the dew that drops from thence, Hath infected some chairs and stools of authority."

Hence, the need to be extra conscious."

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168. It requires to refer herein that the Hon'ble Apex

Court in catena of judgments has held that the economic

offences constitute a class apart and need to be visited with

a different approach in the matter of bail. The economic

offences having deep-rooted conspiracies and involving huge

loss of public funds need to be viewed seriously and

considered as grave offences affecting the economy of the

country as a whole and thereby posing serious threat to the

financial health of the country.

169. The Hon'ble Apex Court has further observed that

with the advancement of technology and Artificial

Intelligence, the economic offences like money laundering

have become a real threat to the functioning of the financial

system of the country and have become a great challenge

for the investigating agencies to detect and comprehend the

intricate nature of transactions, as also the role of the

persons involved therein. Reference in this regard be made

to the judgment rendered by the Hon'ble Apex Court in the

case of "Tarun Kumar vs. Assistant Director Directorate

of Enforcement" (supra). The relevant paragraphs of the

aforesaid Judgment are being quoted as under:

"22. Lastly, it may be noted that as held in catena of decisions, the economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed

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seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Undoubtedly, economic offences have serious repercussions on the development of the country as a whole. To cite a few judgments in this regard are Y.S. Jagan Mohan Reddy v. Central Bureau of Investigation, Nimmagadda Prasad v. Central Bureau of Investigation, Gautam Kundu v. Directorate of Enforcement (supra), State of Bihar v. Amit Kumar alias Bachcha Rai. This court taking a serious note with regard to the economic offences had observed as back as in 1987 in case of State of Gujarat v. Mohanlal Jitamalji Porwal as under:--

"5... The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest..."

23. With the advancement of technology and Artificial Intelligence, the economic offences like money laundering have become a real threat to the functioning of the financial system of the country and have become a great challenge for the investigating agencies to detect and comprehend the intricate nature of transactions, as also the role of the persons involved therein. Lot of minute exercise is expected to be undertaken by the Investigating Agency to see that no innocent person is wrongly booked and that no culprit escapes from the clutches of the law. When the detention of the accused is continued by

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the Court, the courts are also expected to conclude the trials within a reasonable time, further ensuring the right of speedy trial guaranteed by Article 21 of the Constitution.

24. With the afore-stated observations, the appeal is dismissed."

170. This Court, considering the aforesaid material

available against the petitioner in such a grave nature of

offence and applying the principle of grant of bail wherein

the principle of having prima facie case is to be followed, is

of the view that it is not a fit case of grant of bail.

171. Having regard to the entirety of the facts and

circumstances of the case, this Court is of the opinion that

the petitioner has miserably failed to satisfy this Court that

there are reasonable grounds for believing that he is not

guilty of the alleged offences. On the contrary, there is

sufficient material collected by the O.P-ED to show that he

is prima facie guilty of the alleged offences.

172. For the foregoing reasons, having regard to facts

and circumstances, as have been analyzed hereinabove,

since the petitioner has failed to make out a special case to

exercise the power to grant bail and considering the facts

and parameters, necessary to be considered for adjudication

of bail, this Court does not find any exceptional ground to

exercise its discretionary jurisdiction to grant bail.

173. Further it needs to refer herein that after detailed

investigation, the Directorate of Enforcement has filed a

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Prosecution Complaint dated 05.07.2025 before the Special

Judge, PMLA, Ranchi, against the present petitioner.

174. It is evident from the various paragraphs of the

prosecution report dated 05.07.2025 which have been

quoted and refer hereinabove that the allegations levelled

against the petitioner are of an extremely grave and serious

nature, striking at the very foundation of the country's

economic and financial system. They pertain to fraudulent

transactions running into hundreds of crores of rupees,

executed through a complex and deliberate layering of illicit

funds, and culminating in the acquisition and projection of

properties derived from such tainted sources as untainted

assets. The petitioner's activities have been found to be

indispensable to the layering and integration stages of the

laundering process, involving multiple shell companies and

bank accounts under his de facto control.

175. Thus, the magnitude of the fraud, its organized

nature, and the systematic siphoning of funds, the present

case strikes at the core of the country's economic and

financial fabric. The fraudulent availment and passing of

fake ITC not only caused direct financial loss to the

Government but also undermined the sanctity of the GST

regime, which is based on self-declaration and trust.

176. It needs to refer herein that the bail application filed

by the co-accused, namely, Amit Gupta has already been

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rejected by this Court vide order dated 08.10.2025 passed

in B.A No.7476 of 2025.

177. Further the prayer for bail of the co-accused,

namely, Amit Agarwal @ Vicky Bhalotia against whom there

is almost similar allegation, had also been rejected by this

Court vide order dated 08.10.2025 passed in B.A No.6030

of 2025 and against the said order, he has approached the

Hon'ble Apex Court but there also his prayer for bail was

rejected vide order dated 17.10.2025 passed in Special leave

to Appeal (Crl.) Nos.16591 of 2025, as the Hon'ble Apex

Court has not inclined to interfere with the order passed by

this Court.

178. On the basis of discussion made hereinabove it is

considered view of this Court that granting bail to the

petitioner would send a wrong signal to society and

embolden economic offenders, thereby undermining public

confidence in the justice delivery system. The offence in

question is not a mere fiscal offence but a crime against the

economic health of the nation, with a cascading effect on

honest taxpayers, market integrity, and state revenue,

therefore, this Court is of the view that it is not a case

where the prayer for bail is to be granted, as such the

instant application stands dismissed.

179. It is made clear that any observations made herein

are prima-facie for consideration of matter of bail only and

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the view expressed herein shall not be construed as an

expression on the merits of the case.

180. 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.

(Sujit Narayan Prasad, J.)

Dated:_12/11/2025 Jharkhand High Court, Ranchi Birendra /A.F.R.

Uploaded on 14.11.2025.

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