# Abbas Ansari v. Directorate of Enforcement, Allahabad Opp. Party

- **Citation:** (2024) 5 ILRA 2155
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-05-09
- **Case number:** Crl. Misc. Bail Application No. 6914 of 2023
- **Bench:** Jaspreet Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/abbas-ansari-v-directorate-of-enforcement-allahabad-opp-party-52053
- **Pages:** 20

## Headnote

Criminal Law - Indian Penal Code, 1860 -
Sections 120-B, 419, 420, 433, 434, 447,
467, 468 & 471 - Prevention of Damages
to public property Act, 1984 - Sections 3
& 4 - The Prevention of money laundering
Act, 2002 - Sections 2(u), 3, 4, 44 & 45 -
Application for Bail u/s 45 of PMLA Act, - three
FIR - the first FIR is against M/s Vikas
Construction Firm through its partners for
alleged encroachment on public property by
falsification of records, in which applicant has
neither directly nor indirectly to do with the daily
affairs of the firm - in second FIR, the present
applicant has neither named nor he has been
charge-sheeted and the allegations are against
co-accused - while in the third FIR, lodged
against applicant along with his other family
members as co-accused - grounds has also
taken that entire case of prosecution revolves
around the theory that the present applicant
received money from his family members
generated from the firm as a beneficiary, -
applicant is completely unaware regarding the
alleged origin of proceeds of crime and
allegations are vague and baseless -allegation
regarding not explaining the transactions from
his account is itself not sufficient to charge the
applicant for the alleged offence of money
laundering - court observed that, - from perusal
of material available on record prima facie it
reflects the involvement of present applicant -
court is also required to consider the nature and
gravity of the accusation, severity of the
punishment in the event of conviction and the
likelihood of the offence being repeated,
reasonable apprehension of the witnesses being
influenced and danger, of course, of justice
defeated by grant of bail - held, the plea
considering the fact that the applicant is a
member of the legislative assembly and a
national level sportsman yet not knowing how
the funds were being given to him including
quantum of the funds given by his relatives to
purse his own sporting and political pursuits
does not inspire confidence - taking an overall
view including the gravity of offence and the
witness of fact are yet to be examined and also
keeping in mind the dictum of the Apex Court
the application for bail is rejected - further,
direction issued to the trial court to expedite the
trial. (Para - 38, 39, 41, 42, 43)

Bail Application Rejected. (E-11)

List of Cases cited:
2156 INDIAN LAW REPORTS ALLAHABAD SERIES

## Text

_Characters 0–39,827 of 69,596. This is a partial read: ask again with offset=39827 for what follows._

5 All. Abbas Ansari Vs. Directorate of Enforcement, Allahabad
2155
The appellant Rajendra is set to liberty on
the sentence already undergone, subject to
observance of Section 437A Cr.P.C.,
provided he is not wanted in any other case.
Criminal Appeal No. 2720 of 2024,
consequently, succeeds and is allowed in
part, to that extent.

23. For the reasons recorded above,
the Criminal Appeal No. 5227 of 2019 of
accused appellant Smt. Kusuma Devi
succeeds and is allowed. The judgment and
order of conviction and sentence dated
5.7.2019, passed in Sessions Trial No. 167
of 2016 (State Vs. Vedram and others),
arising out of Case Crime No.384 of 2015,
against the accused appellant Smt. Kusuma
Devi is set aside. Accused appellant Smt.
Kusuma Devi is reported to be on bail, as
such her bail bonds stands discharged. The
appeal at the instance of accused appellant
Vedram abates and is dismissed.
----------
(2024) 5 ILRA 2155
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 09.05.2024

BEFORE

THE HON'BLE JASPREET SINGH, J.

Crl. Misc. Bail Application No. 6914 of 2023

Abbas Ansari ...Applicant
Versus
Directorate of Enforcement, Allahabad
 ...Opp. Party

Counsel for the Applicant:
Pranjal
Krishna,
Mirza
Shariq
Aziz,
Purnendu Chakravarty

Counsel for the Opp. Party:
Rohit Tripathi

Criminal Law - Indian Penal Code, 1860 -
Sections 120-B, 419, 420, 433, 434, 447,
467, 468 & 471 - Prevention of Damages
to public property Act, 1984 - Sections 3
& 4 - The Prevention of money laundering
Act, 2002 - Sections 2(u), 3, 4, 44 & 45 -
Application for Bail u/s 45 of PMLA Act, - three
FIR - the first FIR is against M/s Vikas
Construction Firm through its partners for
alleged encroachment on public property by
falsification of records, in which applicant has
neither directly nor indirectly to do with the daily
affairs of the firm - in second FIR, the present
applicant has neither named nor he has been
charge-sheeted and the allegations are against
co-accused - while in the third FIR, lodged
against applicant along with his other family
members as co-accused - grounds has also
taken that entire case of prosecution revolves
around the theory that the present applicant
received money from his family members
generated from the firm as a beneficiary, -
applicant is completely unaware regarding the
alleged origin of proceeds of crime and
allegations are vague and baseless -allegation
regarding not explaining the transactions from
his account is itself not sufficient to charge the
applicant for the alleged offence of money
laundering - court observed that, - from perusal
of material available on record prima facie it
reflects the involvement of present applicant -
court is also required to consider the nature and
gravity of the accusation, severity of the
punishment in the event of conviction and the
likelihood of the offence being repeated,
reasonable apprehension of the witnesses being
influenced and danger, of course, of justice
defeated by grant of bail - held, the plea
considering the fact that the applicant is a
member of the legislative assembly and a
national level sportsman yet not knowing how
the funds were being given to him including
quantum of the funds given by his relatives to
purse his own sporting and political pursuits
does not inspire confidence - taking an overall
view including the gravity of offence and the
witness of fact are yet to be examined and also
keeping in mind the dictum of the Apex Court
the application for bail is rejected - further,
direction issued to the trial court to expedite the
trial. (Para - 38, 39, 41, 42, 43)

Bail Application Rejected. (E-11)

List of Cases cited:
2156 INDIAN LAW REPORTS ALLAHABAD SERIES
1. Rohit Tandon Vs Directorate of Enforcement
(2018) 1 SCC 46,

2. Nikesh Tara Chandra Shah Vs U.O.I. & ors.
(2018) 11 SCC 1,

3. Vijai Madan Lal Chaudhary Vs U.O.I. & ors.
(2022) SCC 929,

4. Saumya - 12 - Chaurasia Vs Directorate of
Enforcement (2023) SCC Online SC 1674,

5. Pavana Dibbur Vs Directorate of Enforcement
2023 SCC Online SC 1586,

6. Rohit Tandon Vs Directorate of Enforcement,
(2018) 11 SCC 46,

7. Tarun Kumar Vs Enforcement Directorate,
2023 SCC OnLine SC 1486,

(Delivered by Hon'ble Jaspreet Singh, J.)

1. The applicant is a sitting MLA from
Mau Assembly Seat No.356 in State of
Uttar Pradesh. He is stated to be a
professional sport person and he has been
arraigned
as
an
accused
in
ECIR/ALSZO/27/2021
[Directorate
of
Enforcement through Assistant Director,
Allahabad, Vs. M/s. Vikas Construction &
others] for the commission of offence
punishable under Section 3 read with
Section 4 of the Prevention of Money
Laundering Act, 2002 (hereinafter referred
to as the PMLA)

2. The instant ECIR has been
lodged based upon an investigation,
initiated on the basis of three FIRs relating
to predicate offences.

(i) In FIR No.129 of 2020
registered under sections 419, 420, 433,
434, 447, 467, 468, 471 IPC and Sections 3
and 4 of Prevention of Damages to Public
Property Act, 1984 against M/s Vikas
Constructions through its partner. In the
instant case, the allegation is that the
partners of M/s Vikas Construction had
encroached
on
public
property
by
falsification of records.

(ii) The other FIR is bearing
No.185 of 2021 registered under Sections
419, 420, 468, 471, 120-B, 467 IPC against
the accused of the said FIR. In the said FIR,
significantly, the present applicant has
neither been named nor he has been
chargesheeted.
Nevertheless,
the
allegations in the said FIR is that one of the
co-accused in the said FIR, namely
Mukhtar Ansari had taken funds from the
MLA fund to build a school though no
school was built and the land is being used
for agricultural purposes.

(iii) The third FIR is bearing
No.236 of 2020 registered under Sections
120-B, 420, 467, 468, 471 IPC read with
Section 3 of Prevention of Damages to
Public Property Act, 1984 against the
applicant, his brother Umar Ansari and his
father Mukhtar Ansari. In the said FIR, it
has been stated that the accused alongwith
the other two co-accused knowing that the
property in question is owned and vested with
the government but by using their influence
usurped the said land, got a map prepared and
constructed an illegal house thereby causing
loss to the government. It is stated that in so
far as the present case under Section 3 and 4
of the PMLA is concerned, the investigating
agency has not alleged that any proceeds of
crime have been generated from the predicate
offence emanating from the FIR bearing
No.236 of 2020.

3. Primarily, for the offences under
Sections 3 and 4 of the PMLA, the proceeds of
crime, have been generated from the scheduled
offence of FIR bearing No.129 of 2020.

4. The applicant was arrested by the
investigating agency on 04.11.2022 in
5 All. Abbas Ansari Vs. Directorate of Enforcement, Allahabad
2157
context with the instant ECIR. The
statement of the applicant was recorded. A
supplementary complaint was also filed by
the investigating agency. The special court
has taken cognizance. In the aforesaid
backdrop, the present applicant filed his
first bail application under Sections 44/45
of the PMLA.

5. Mr. Kapil Sibal, learned Senior
Counsel,
assisted
by
Mr.
Purnendu
Chakravarty and Mr. Pranjal Krishna, has
primarily
submitted
that
the
instant
proceedings under PMLA have been
initiated by the investigating agency
primarily from the FIR relating to the
predicate offences bearing Case Crime
No.129 of 2020 and Case Crime No. 236 of
2020. It has been submitted that the
investigating agency alleged that it is the
firm M/s. Vikas Construction which is
allegedly directly involved in the offence of
money laundering. It is the firm M/s Vikas
Construction which has usurped the land
upon which constructions of go-downs was
made which in turn was given on rent to the
Food Corporation of India and the rentals
received in excess of 15 crores and odd has
been show as proceeds of crime. It is also
alleged
that
the
firm
M/s.
Vikas
Construction obtained a subsidy of 2.25
crores from NABARD which is also shown
as proceeds of crime.

6. The investigating agency further
alleged that several high value transactions
were both credited and debited into and
from the account of the applicant who could
not explain the same. It has been taken note
of that the major share holders in the firm
M/s. Vikas Construction are Ms. Afshar
Ansari (mother of the applicant) and Mr.
Atif
Raza
(maternal
uncle-Mamaji)
amongst others. However, the present
applicant could not explain source of
income especially in respect of the
transactions made from and into the
account of the applicant.

7. Mr. Sibal has submitted that the
present applicant is in no way connected to
the firm M/s. Vikas Construction nor the
present applicant had anything directly or
indirectly to do with the daily affairs of the
said firm M/s. Vikas Construction. The said
firm operates its own business through its
partner and the present applicant is neither
a partner nor an authorized signatory nor he
has any authority or control to deal with the
funds belonging to the said partnership
firm. There is no material to indicate that
the applicant had any connection with the
properties acquired by the said firm or in
respect of the money/funds of the said firm.
Merely because some partners in the firm
M/s. Vikas Construction are related to the
applicant, it does not mean that he too is a
partner in crime. Hence, the applicant has
been falsely implicated and even though in
the investigation the trail of money has not
been
satisfactorily
connected
to
the
applicant yet he has been apprehended and
is languishing in jail since 04.11.2022.

8. It is further submitted that the entire
case of the prosecution revolves around the
theory that the present applicant received
money from his family members generated
from the firm M/s. Vikas Construction and
since the applicant is a beneficiary of the
said funds which allegedly according to the
investigating agency are proceeds of crime,
hence the applicant is alleged to have
committed the said offence under the
PMLA .

9. Mr. Sibal has further submitted
that the applicant is completely unaware
regarding the alleged origin of proceeds of
crime. The allegations against the applicant
2158 INDIAN LAW REPORTS ALLAHABAD SERIES
are vague and baseless and apparently no
specific role has been attributed to the
applicant in the predicate offence nor the
trial of tainted money has been tracked to
the doorstep of the applicant.

10. It is further urged that it is one
thing to say that the applicant may not have
been able to explain the transactions from
his account which at best may be a case of
unaccounted money in the hands of the
applicant but that in itself is not sufficient
to charge the applicant for the alleged
offence of money laundering.

11. The offence of money laundering
as defined in Section 3 of the PMLA is not
made
out
against
the
applicant.
It
necessarily, must be established that a
person accused of an offence under Section
3 and 4 of the PMLA must be shown to
have been involved in a process or activity
connected with the proceeds of crime. Once
the investigating agency on their own
showing comes to the conclusion that the
applicant was not concerned or connected
with the firm M/s Vikas Construction and
for the said reason he cannot be held as an
accused
in
the
predicate
offence,
consequently,
no
case
for
money
laundering in terms of Sections 3 and 4 of
the Act of 2002 can be driven home against
the applicant.

12. It is further submitted by Mr. Sibal
that the applicant is a sports person and a
national level rifle shooter having won
accolades in the sporting arena for the
country. He is also a representative of the
public in capacity of a member of the
Legislative Assembly and having his own
source of income. It may be that some
amount was transacted through the account
of the applicant which has come from his
mother and/or uncle (mamaji) but that in
itself is not sufficient to allege that the
applicant is involved in money laundering.

13. As far as the present applicant is
concerned, certain money credited into the
account of the applicant from his mother or
uncle and utilized for import of fire arms for
competitive purposes cannot be treated as
proceeds of crime in the hands of the
applicant.

14. 'Unaccounted money' cannot be
taken as a synonym for 'proceeds of crime'
as both are distinct and separate concepts.
Any amount which may be unaccounted
but acquired from legitimate means cannot
be treated as proceeds of crime unless it is
established that it has been generated from
a scheduled offence. On the aforesaid touch
stone the investigating agency has not been
able to make out a case against the
applicant, hence the bail applications
deserves to be allowed.

15. It has further been argued by Mr.
Sibal that Section 45 of the PMLA provides
for a twin condition to be satisfied while
considering an application for bail (i) the
public prosecutor is given an opportunity to
oppose the application for bail; (ii) where
the bail application is opposed, the court
must be satisfied that there are reasonable
grounds to believe that the applicant is not
guilty of an offence and that he is not likely
to commit any offence while on bail.

16. In the instant case, in so far as the
first condition is concerned, the same
stands complied with as prosecution is duly
represented and they have filed their
counter-affidavit opposing bail application.
In so far as the second condition is
concerned, it is for the court to form its
satisfaction, however, the contents and the
material available on record would clearly
5 All. Abbas Ansari Vs. Directorate of Enforcement, Allahabad
2159
establish that, in so far as the present
applicant is concerned, the allegation
against him is to the extent that he has
received money from his mother and
maternal uncle which has been utilized by
the applicant for his personal use. However,
there is nothing to indicate that the
applicant
knowingly
committed
any
offence as provided in Section 3 of the
PMLA nor the applicant was in any way
involved in the commissioning of the
predicate offence and in case if the
predicate offence is not made out against
the applicant then proceeding under the
PMLA will also fall.

17. Moreover, the statement of the
applicant was recorded on several dates and
he
cooperated
during
the
entire
investigation. ECIR has been filed before
the special court of which cognizance has
been
taken
and
in
the
aforesaid
circumstances, neither the applicant can
tamper with the evidence which is mostly
documented and submitted before the court
nor he can influence any witness. The
applicant has deep root in the society, being
a representative of the public and a
national level rifle shooter too, all of this
indicate that he is firmly entrenched in the
society, hence not at flight risk and the
applicant
has
been
in
jail
since
04.11.2022 coupled with the fact that the
minimum sentence as attracted upon
commissioning of an offence under the
PMLA is three years and it may extend up
to seven years. Hence, in this backdrop,
the applicant has already served for one
and half years as an under trial and
looking into the list of the witnesses filed
alongwith the complaint before the
special court which specifically mentions
14 witnesses, while not a single witness
has been examined and there are
voluminous
records
as
evidence,
accordingly, the trial is not likely to
conclude soon, hence the bail application
be allowed.

18. Mr. Rohit Tripathi, learned
counsel appearing for the investigating
agency has submitted that there is a
distinction between the predicate offence
and the offence under sections 3 and 4 of
the PMLA. It is submitted that the learned
Senior Counsel for the applicant has
primarily based his submission on the
premise that though the proceedings were
initiated in context with three FIRs
relating to predicate offence and as per
the learned Senior Counsel for the
applicant, no case is made out against the
applicant in the predicate offence,
accordingly the proceedings against the
applicant for the offence under the PMLA
will also falter, is not quite correct.

19. It is urged that Section 3 of the
PMLA operates in a different sphere. From
the statement recorded by the investigating
agency and looking into the Bank details,
balance sheet and other documents, it
clearly indicates the commissioning of the
predicate offence. The proceeds generated
from the predicate offence have clearly
been traced to and for the benefit of the
present applicant which is enough to
establish complicity of the applicant to the
offence of money laundering in terms of
Section 3 of the Act 2002 and then it is the
applicant who has to establish his
innocence regarding non commissioning of
an offence under the PMLA.

20. Mr. Tripathi has further argued
that language used in Section 3 of the
PMLA is very wide and inclusive. From the
record it can clearly been seen that the
proceeds of crime have been generated
from the firm M/s Vikas Construction
2160 INDIAN LAW REPORTS ALLAHABAD SERIES
which is clearly connected to another firm
M/s. Aaghaaz which is also a family firm
which is controlled by the maternal grand
father of the applicant amongst others. It is
thus urged that in light of the investigation
and the material collected, there is ample
evidence to establish the complicity of the
applicant in the commissioning of the
offence under the PMLA.

21. It is further urged that the
chargesheets have been filed by the police
in FIR Nos.129 of 2020 and 236 of 2022.
The investigation done under the PMLA
clearly established that the applicant is not
only the beneficiary of the proceeds of
crime but he has actively participated in the
offence of money laundering. The two
family
firms,
namely
M/s.
Vikas
Construction has Ms. Afsan Ansari (mother
of the applicant) and Mr. Atif Raza (uncle
Mamaji) as partners amongst others and
which has been used as vehicle for
generating the proceeds of crime and the
funds so generated have been transferred to
and from M/s. Aaghaaz Project and
Engineering Ltd., again a family owned
company, and routing of funds through the
aforesaid two firms and thereafter the end
proceeds being debited and credited
through the account of the present applicant
is nothing but a clear case of layering the
proceeds of crime which in turn has been
utilized by the applicant and it has been
attempted to show that the funds are
untainted.

22. Mr. Tripathi has further urged that
the present applicant did not cooperate
during
investigation
and
he
was
apprehended under Section 19 of the Act of
2002 on 04.11.2022. A lookout notice had
to be issued against the applicant and it is
only thereafter that the applicant was
apprehended and then statements have been
recorded. Merely denials that the applicant
is no way connected with the firm M/s.
Vikas Construction or M/s. Aaghaaz has to
be considered noting the fact that the
applicant has clearly given statements
wherein he stated that as and when he
required funds, the same was arranged by
his mother Ms. Afsan Ansari and Mr. Atif
Raza. He further stated that his maternal
grand father (Nana), who controlled and is
also a director and signatory in the Pvt. Ltd.
Company M/s. Aaghaaz, hence, whenever
the applicant required funds then the same
was catared by the maternal grand father of
the applicant and beyond this he was not
aware of the various other transactions. In
light of the said statement and the funds in
the account of the applicant which was
utilized by the applicant for his personal
expenses, his foreign trips as well as for
importing arms for his participation in the
sport
on
rifle
shooting
in
such
circumstances it cannot be said that the
applicant has not been a direct beneficiary
nor it can be said that he was not aware
from where the funds were sourced or their
origin.

23. In the aforesaid circumstances
where the applicant knowingly has been a
user of the proceeds of crime, hence he is
prima facie, liable for the offence coupled
with the fact that the status of the applicant
as a sitting member of the Legislative
Assembly, the influence yielded by his
family including his deceased father, who
had more than fifty criminal cases to his
credit is enough to create a bonafide
assumption that the applicant can very well
influence any witness and this can also be
corroborated from the fact that while the
applicant was incarcerated in Chitrakoot
Jail in connection with other cases against
the applicant yet he was using the jail
premise as his personal fiefdom with active
5 All. Abbas Ansari Vs. Directorate of Enforcement, Allahabad
2161
connivance of the police and the Jail
Authority, hence for all the aforesaid
reasons the bail application deserves to be
rejected.

24. In support of his submissions Mr.
Tripathi has relied upon the decision of the
Apex
Court
in
Rohit
Tandon
Vs.
Directorate of Enforcement (2018) 1 SCC
46, Nikesh Tara Chandra Shah Vs. Union
of India & others (2018) 11 SCC 1, Vijai
Madan Lal Chaudhary Vs. Union of India
& others (2022) SCC 929, Saumya
Chaurasia
Vs.
Directorate
of
Enforcement (2023) SCC Online SC 1674
and Pavana Dibbur Vs. Directorate of
Enforcement 2023 SCC Online SC 1586.

25. The Court has heard the
learned counsel for the parties and also
perused the material on record.

26. Before dealing with the respective
submissions of the learned counsel for the
parties, it will be appropriate to take a
glance at the certain relevant provisions
relating to PMLA.

Section 2(u) of the PMLA defines
'proceeds of crime' as under:-

(u) "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]

[Explanation- For the removal of
doubts, it is hereby clarified that 'proceeds
of crime' 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]

27. Scheduled offence has been
defined in Section 2(y) which reads as
under:

(y) "scheduled offence" means

(i) the offences specified under
Part A of the Schedule; or

(ii) the offences specified under
Part-B of the Schedule if the total value
involved in such offences is [one crore
rupees] or more; or

(iii) the offences specified under
Part C of the Schedule;]

28. The offence of money laundering
has been defined in Section 3 while the
punishment for money laundering has been
provided in Section 4 which reads as
under:-

3.
Offence
of
moneylaundering-
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 [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.

[Explanation- For the removal of
doubts, it is hereby clarified that -

(i) a person shall be guilty of
offence of money-laundering if such person
is found to have directly or indirectly
attempted to indulge or knowingly assisted
or knowingly is a party or is actually
involved in one or more of the following
processes or activities connected with
proceeds of crime, namely:-

(a) concealment, or

(b) possession; or
2162 INDIAN LAW REPORTS ALLAHABAD SERIES

(c) acquisition; or

(d) use; or

(e)
projecting
as
untainted
property; or

(f)
claiming
as
untainted
property,

in any manner whatsoever;

(ii) 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]

4.
Punishment
for
moneylaundering:- Whoever commits the offence
of money-laundering shall be punishable
with rigorous imprisonment for a terms
which shall not be less than three years but
which may extend to seven years and shall
also be liable to fine

Provided that where the proceeds
of crime inolve in money-laundering relates
to any offence specified under paragraph 2
of Part A of the Schedule, the provisions of
this section shall have effect as if for the
words "which may extend to seven years",
the words "which may extend to ten years"
had been substituted.

29. In so far as the issue regarding
consideration of an application for bail is
concerned, the same is provided under
Section 45 which reads as under:-

45. Offences to be cognizable and
non-bailable:-
(1)
[Notwithstanding
anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), no person
accused of an offence [under this Act] shall
be released on bail or on his own bond
unless-}

(i) the Public Prosecutor has
been given an opportunity to oppose the
application for such release; and

(ii) where the Public Prosecutor
opposes the application, the court is
satisfied that there are reasonable grounds
for believing that he is not guilty of such
offence and that he is not likely to commit
any offence while on bail.

Provided that a person who is
under the age of sixteen years or is a
woman or is sick or infirm [ or is accused
either on his own or along with other coaccused of money laundering a sum of less
than one crore rupees], may be released on
bail, if the special court so directs:

Provided further that the Special
Court shall not take cognizance of any
offence punishable under section 4 except
upon a complaint in writing made by-

(i) the Director; or

(ii) any office of the Central
Government
or
State
Government
authorised in writing in this behlaf by the
Central Government by a general or a
special order made in this behalf by that
Government.

[(1A) Notwithstanding anything
contained in the Code of Criminal
Procedure, 1973 (2 of 1974), or any other
provision of this Act, no police officer shall
investigate into an offence under this Act
unless specifically authorised, by the
Central Government by a general or
special order, and, subject to such
conditions as may be prescribed.]

(2) The limitation on granting of
bail specified in sub-section (1) is in
addition to the limitation under the Code of
Criminal Procedure, 1973 (2 of 1974) or
any other law for the time being in force on
granting of bail.

[Explanation- For the removal of
doubts, it is clarified that the expression
"Offences to be cognizable and non-
5 All. Abbas Ansari Vs. Directorate of Enforcement, Allahabad
2163
bailable" shall mean and shall be deemed
to have always meant that all offences
under this Act shall be cognizable offences
and non-bailable offences notwithstanding
anything to the contrary contained in the
Code of Criminal Procedure, 1973 (2 of
1974), and accordingly
the
officers
authorised under this Act are empowered to
arrest an accused without warrant, subject
to the fulfillment of conditions under
Section 19 and subject to the conditions
enshrined under this section.]

30. Having taken a glance at the
aforesaid statutory provisions it now will be
worthwhile to notice certain decisions of
the Apex Court on the issue of the offence
of money laundering and the approach of
courts while dealing with an application for
bail.

31. The Apex Court in Rohit Tandon
v. Directorate of Enforcement, (2018) 11
SCC 46 has held as under:-

"19. The sweep of Section 45 of
the 2002 Act is no more res intergra. In a
recent decision of this Court in Gautam
Kundu v. Directorate of Enforcement
(2015) 16 SCC 1, this Court has had an
occasion to examine it in paras 28-30. It
will be useful to advert to paras 28 to 30 of
this decision which read thus : (SCC pp. 1415)

"28. Before dealing with the
application for bail on merit, it is to be
considered whether the provisions of
Section 45 of PMLA are binding on the
High
Court
while
considering
the
application for bail under Section 439 of
the Code of Criminal Procedure. There is
no doubt that PMLA deals with the offence
of money laundering and Parliament has
enacted this law as per commitment of the
country to the United Nations General
Assembly. PMLA is a special statute
enacted by Parliament for dealing with
money laundering. Section 5 of the Code of
Criminal Procedure, 1973 clearly lays
down that the provisions of the Code of
Criminal Procedure will not affect any
special statute or any local law. In other
words, the provisions of any special statute
will prevail over the general provisions of
the Code of Criminal Procedure in case of
any conflict.

29. Section 45 of PMLA starts
with a non obstante clause which indicates
that the provisions laid down in Section 45
of PMLA will have overriding effect on the
general provisions of the Code of Criminal
Procedure in case of conflict between them.
Section 45 of PMLA imposes the following
two conditions for grant of bail to any
person accused of an offence punishable
for a term of imprisonment of more than
three years under Part A of the Schedule of
PMLA:

(i) That the prosecutor must be
given an opportunity to oppose the
application for bail; and

(ii) That the court must be
satisfied that there are reasonable grounds
for believing that the accused person is not
guilty of such offence and that he is not
likely to commit any offence while on bail.

30. The conditions specified
under Section 45 of PMLA are mandatory
and needs to be complied with, which is
further strengthened by the provisions of
Section 65 and also Section 71 of PMLA.
Section 65 requires that the provisions of
CrPC shall apply insofar as they are not
inconsistent with the provisions of this Act
and Section 71 provides that the provisions
of PMLA shall have overriding effect
notwithstanding
anything
inconsistent
therewith contained in any other law for the
time being in force. PMLA has an
overriding effect and the provisions of
2164 INDIAN LAW REPORTS ALLAHABAD SERIES
CrPC would apply only if they are not
inconsistent with the provisions of this Act.
Therefore, the conditions enumerated in
Section 45 of PMLA 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." (emphasis supplied)

20. In para 34, this Court
reiterated as follows : (Gautam Kundu
case, SCC p. 16)

"34. ... We have noted that
Section 45 of PMLA will have overriding
effect on the general provisions of the Code
of Criminal Procedure in case of conflict
between them. As mentioned earlier,
Section
45
of PMLA
imposes
two
conditions for grant of bail, specified under
the said Act. We have not missed the
proviso to Section 45 of the said Act which
indicates that the legislature has carved out
an exception for grant of bail by a Special
Court when any person is under the age of
16 years or is a woman or is sick or infirm.
Therefore, there is no doubt that the
conditions laid down under Section 45-A of
PMLA, would bind the High Court as the
provisions of special law having overriding
effect on the provisions of Section 439 of the
Code of Criminal Procedure for grant of
bail to any person accused of committing
offence punishable under Section 4 of
PMLA, even when the application for bail
is considered under Section 439 of the Code
of Criminal Procedure."

The decisions of this Court in
Subrata Chattoraj v. Union of India (2014)
8 SCC 768, Y.S. Jagan Mohan Reddy v. CBI
(2013) 7 SCC 439 and Union of India v.
Hassan Ali Khan (2011) 10 SCC 235 have
been noticed in the aforesaid decision.

21. The consistent view taken by
this Court is that 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. Further,
when attempt is made to project the
proceeds of crime as untainted money and
also that the allegations may not ultimately
be established, but having been made, the
burden of proof that the monies were not
the proceeds of crime and were not,
therefore, tainted shifts on the accused
persons under Section 24 of the 2002 Act.

22. It is not necessary to multiply
the authorities on the sweep of Section 45
of the 2002 Act which, as aforementioned,
is no more res integra. The decision in
Ranjitsing Brahmajeetsing Sharma v. State
of Maharashtra (2005) 5 SCC 294 and
State of Maharashtra v. Vishwanath
Maranna Shetty, (2012) 10 SCC 561 , dealt
with an analogous provision in the
Maharashtra Control of Organised Crime
Act, 1999. It has been expounded that the
Court at the stage of considering the
application for grant of bail, shall consider
the question from the angle as to whether
the accused was possessed of the requisite
mens rea. The Court is not required to
record a positive finding that the accused
had not committed an offence under the
Act. The Court ought to maintain a delicate
balance between a judgment of acquittal
and conviction and an order 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.
Further,
the
Court
is
required to record a finding as to the
5 All. Abbas Ansari Vs. Directorate of Enforcement, Allahabad
2165
possibility of the accused committing a
crime which is an offence under the Act
after grant of bail.

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

32. Similarly, the Apex Court in
Nikesh Tarachand Shah v. Union of
India, (2018) 11 SCC 1 has held as under:-
]

"11. Having heard the learned
counsel for both sides, it is important to
first understand what constitutes the
offence of money laundering. Under
Section 3 of the Act, the kind of persons
responsible for money laundering is
extremely
wide.
Words
such
as
"whosoever", "directly or indirectly" and
"attempts to indulge" would show that all
persons who are even remotely involved in
this offence are sought to be roped in. An
important ingredient of the offence is that
these persons must be knowingly or
actually involved in any process or activity
connected with proceeds of crime and
"proceeds of crime" is defined under the
Act, by Section 2(1)(u) thereof, to mean any
property derived or obtained directly or
indirectly, by any person as a result of
criminal activity relating to a scheduled
offence (which is referred to in our
judgment as the predicate offence). Thus,
whosever is involved as aforesaid, in a
process
or
activity
connected
with
"proceeds of crime" as defined, which
would include concealing, possessing,
2166 INDIAN LAW REPORTS ALLAHABAD SERIES
acquiring or using such property, would be
guilty of the offence, provided such persons
also project or claim such property as
untainted property. Section 3, therefore,
contains all the aforesaid ingredients, and
before somebody can be adjudged as guilty
under the said provision, the said person
must not only be involved in any process or
activity connected with proceeds of crime,
but must also project or claim it as being
untainted property."

33. In Vijay Madanlal Choudhary v.
Union of India, 2022 SCC OnLine SC 929
the Apex Court has held as under:-

"269. From the bare language of
Section 3 of the 2002 Act, it is amply clear
that the offence of money-laundering is an
independent offence regarding the process
or activity connected with the proceeds of
crime which had been derived or obtained
as a result of criminal activity relating to or
in relation to a scheduled offence. The
process or activity can be in any form - be
it
one
of
concealment,
possession,
acquisition, use of proceeds of crime as
much as projecting it as untainted property
or claiming it to be so. Thus, involvement in
any one of such process or activity
connected with the proceeds of crime would
constitute offence of money-laundering.
This offence otherwise has nothing to do
with the criminal activity relating to a
scheduled offence - except the proceeds of
crime derived or obtained as a result of that
crime.
---------******--------******------******

295.
As
aforesaid,
in
this
backdrop the amendment Act 2 of 2013
came into being. Considering the purport of
the amended provisions and the experience
of
implementing/enforcement
agencies,
further changes became necessary to
strengthen
the
mechanism
regarding
prevention of money-laundering. It is not
right in assuming that the attachment of
property (provisional) under the second
proviso, as amended, has no link with the
scheduled offence. Inasmuch as Section
5(1) envisages that such an action can be
initiated only on the basis of material in
possession of the authorised officer
indicative
of
any
person
being
in
possession of proceeds of crime.