PMLA Bail Requires Delicate Balance, Not Final Verdict On Guilt Or Innocence: Delhi High Court

The Delhi High Court has ruled that under the PMLA, a delicate balance has to be maintained between the final judgment of acquittal or conviction and an order granting or denying bail.

Justice Girish Kathpalia said that the Court is not required to return a positive finding that the accused did not commit the alleged offence at the stage of bail.

“While considering such applications, the court is not expected to delve deep into merits of the allegation by microscopic analysis of the material collected by the investigator; the court has to satisfy itself only as regards existence of prima facie case, based on broad probabilities discernible from the material collected by the investigator; and the question has to be as to whether on the basis of such material, there are reasonable grounds for believing that the accused is not guilty of the offence alleged,” the Court said.

“To add a piece of caution, the court is not required to return a positive finding that the accused did not commit the alleged offence. A delicate balance has to be maintained between the final judgment of acquittal or conviction and an order granting or denying bail,” it added.

The Court observed that the twin conditions stipulated under Section 45 of the PMLA would apply to anticipatory bail application also, in addition to the regular parameters like nature of accusation, severity of punishment, nature of material collected by investigator, reasonable apprehension of tampering with the witnesses, reasonable possibility of securing presence of the accused at the time of trial, character of the accused and larger interest of public or State, etc.

The judge reiterated that anticipatory bail in money laundering cases cannot be granted routinely, particularly where the Enforcement Directorate (ED) seeks custodial interrogation to unravel complex and multi-layered financial crimes.

Justice Kathpalia made the observations while denying anticipatory bails to Bhaskar Yadav and Ashok Kumar Sharma, accused in a money laundering case linked to CBI FIRs concerning large-scale cyber frauds involving cheating of the public through fake investment and part-time job schemes.

According to the prosecution, an organised syndicate with foreign operators defrauded Indian citizens using online platforms such as WhatsApp and Telegram. The proceeds of crime were routed through hundreds of mule bank accounts opened across India.

The laundered money was allegedly layered through multiple bank accounts and ultimately transferred abroad, primarily through the UAE-based fintech platform PYYPL, and converted into cryptocurrency or withdrawn via overseas ATMs, mainly in Dubai.

The ED alleged that the accused played an active role in opening fictitious entities, operating mule accounts, routing proceeds of crime, destroying electronic evidence, assaulting ED officials, and bribing local police to settle cyber fraud complaints.

The accused sought anticipatory bail, arguing that cryptocurrency dealings are not illegal per se, that they had cooperated with the investigation, and that co-accused had been granted bail.

Dismissing their petitions, Justice Kathpalia said that it was not a case of mere dealing in cryptocurrency which per se is not a crime but exhibits a vast “intricate mesh of movement of money”, fraudulently extracted out of pocket of gullible investors, who belonged to middle class.

The Court said that the investigation to unfold the further vertical and horizontal layers of money laundering was ongoing and that fresh complaints of cheating acts connected with the syndicate, of which the accused were significant part, continued to pour in.

It added that the court must strike a balance between right of an individual to personal freedom and right of the investigating agency to interrogate the accused as regards the material collected and to obtain more information which could lead to recovery of further information.

“Therefore, I find substance in the argument advanced on behalf of DoE that it would not be possible for the investigators to effectively interrogate the accused/applicants if they have pre-arrest protection in their pocket. Of course, liberty of an individual is sacrosanct, but the court cannot brush aside the requirement to carry out meaningful interrogation and investigation in the larger interest of economy of the country,” the judge said.

The Court further said that merely because at initial stages when the accused were not under any judicial protection against arrest the ED opted not to arrest them, does not mean that the need now expressed by the agency to conduct custodial interrogation was unjustified.

“Whether or not to arrest, is in the exclusive domain of the investigator. When it comes to deciding the grant or denial of anticipatory bail, the settled parameters have to operate, which in cases under PMLA would include the twin conditions,” the Court concluded.

Title: BHASKAR YADAV v. ED & Other Connected Matter

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