'Not A Minor Offence, Part Of Crime Syndicate': Delhi HC Denies Bail To PMLA Accused Booked For Supplying Spurious Anti-Cancer Medicines

The Delhi High Court has recently denied bail to an accused/applicant booked under the Prevention of Money Laundering Act, 2002 (PMLA) for his alleged involvement in the illegal procurement of empty vials and raw materials of anti-cancer drugs.Justice Chandra Dhari Singh in his order said, "In the present case, the applicant has not been charged for some minor offence that has simple economic ramifications, rather he has been charged for supplying and selling of spurious life saving anti-cancer medicines and that he is part of an established crime syndicate. This factual position does not satisfy the consciousness of this Court and there are considerable reasons to believe that there is likelihood that the applicant might commit offence while on bail as the applicant does not have clean criminal antecedents. Thus, the said argument stands rejected". It also rejected the applicant's contention that he was exempt from the rigors of Section 45 of the PMLA as the proceeds of crime attributed to him was less than Rs. 1 crore.The Court noted that the applicant cannot claim the benefit of the monetary threshold exemption under the proviso to Section 45 of the PMLA even if the proceeds of crime alleged against him was Rs. 7.45 lakh. It stated, “The entire scheme of laundering illicit funds, as uncovered by the investigation, extends far beyond the threshold of one crore rupees, and the applicant's role must be assessed in the broader context of the criminal conspiracy in which he actively participated.”The brief facts of the case are that the Directorate of Enforcement (ED) alleged that counterfeit drugs were manufactured and distributed in the market by several accused including the applicant to unsuspecting cancer patients.It was alleged that the applicant was in contact with the primary accused for purchasing spurious anti-cancer injections. The ED submitted the applicant also knowingly facilitated the sale of these counterfeit drugs, generating proceeds of crime of Rs. 7.45 lakh.The applicant raised several grounds for grant of bail. Firstly, he contended that his arrest was conducted in compliance with the provisions of Section 19 of the PMLA which requires 'reasons to believe' before making an arrest. The High Court referred to Senthil Balaji vs. The State Represented By Deputy Director & Ors. (2023 LiveLaw (SC) 611), where the Supreme Court observed that as per Section 19 PMLA the arresting authority must assess and evaluate the materials and from the material if there is a reason to believe that a person is guilty of an offence, they are at liberty to arrest. It noted, “The inference drawn from the above judicial pronouncements is that Section 19 of the PMLA imposes procedural safeguards on the arresting authority, thereby, ensuring that arrests are not made arbitrarily but are based on well-founded reasons which are also recorded in writing.” Here, the Court noted that the ED's complaint outlined specific details about applicant's involvement in the offence. It noted that the ED's investigation revealed that the application was close associate of the prime accused and that the applicant played a major role in transferring proceeds of crime. It noted that the ED followed followed due process and substantiated the 'reason to believe' with concrete evidence that the applicant was involved in the crime. The Court thus observed that the Section 19 PMLA was not violated in the case. Secondly, the applicant contended that the statements made by co-accused under Section 50 PMLA formed the sole basis of his arrest and thus, there was no justification to arrest him. The Court relied on Abhishek Banerjee & Anr. vs. ED (2024 LiveLaw (SC) 674), where the Supreme Court referring to Vijay Madanlal Choudhary vs. UOI (2022 LiveLaw (SC) 633), observed that statements recorded by the authorities under Section 50 PMLA in the course of inquiry are deemed to be the judicial proceedings and admissible in evidence. It remarked, “In light of the foregoing judicial pronouncements, it is evident that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon'ble Supreme Court, while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA.” Here, the Court while observing that Section 50 statements hold evidentiary value, noted thatthe applicant's arrest was not solely based on the statement of the co-accused. It noted that the ED's case is not only based on the statement of the co-accused under Section PMLA but also on financial records, WhatsApp chats and other materials, which indicate applicant's role in the offence. The Court then referred to Section 24 PMLA, which states that the burden of proof that the proceeds of crime are untainted lies on the accused. It placed reliance on Supreme Court's decision in Prem Prakash v. UOI (2024 LiveLaw (SC)...

'Not A Minor Offence, Part Of Crime Syndicate': Delhi HC Denies Bail To PMLA Accused Booked For Supplying Spurious Anti-Cancer Medicines

Sanjana Dadmi

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