PREM PRAKASH versus UNION OF INDIA THROUGH THE DIRECTORATE OF ENFORCEMENT
[2024] 8 S.C.R. 955, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
[2024] 8 S.C.R. 955 : 2024 INSC 637
Prem Prakash 
v. 
Union of India Through The Directorate of Enforcement
(Criminal Appeal No. 3572 of 2024)
28 August 2024
[B.R. Gavai and K.V. Viswanathan,* JJ.]
Issue for Consideration
When a person is in judicial custody/custody in another case 
investigated by the same Investigating Agency, whether the 
statements recorded (in the present case, the statements dated 
03.08.2023, 04.08.2023, 11.08.2023) for a new case in which 
his arrest is not yet shown, and which are claimed to contain 
incriminating material against the maker, would be admissible 
under Section 50, Prevention of Money Laundering Act, 2002.
Headnotes†
Prevention of Money Laundering Act, 2002 – s.50 – Evidence 
Act, 1872 – s.25 – Appellant was in judicial custody from 
25.08.2022 in connection with another ECIR and while he 
was in aforesaid judicial custody his arrest was shown in 
the present ECIR on 11.08.2023 – Statement of the appellant 
recorded while he was in custody, if admissible u/s.50:
Held: No – When an accused is in custody under PMLA  
irrespective of the case for which he is under custody, any statement 
under Section 50 PMLA to the same Investigating Agency is 
inadmissible against the maker – The person in custody pursuant 
to the proceeding investigated by the same Investigating Agency 
is not a person operating with a free mind and it will be extremely 
unsafe to render such statements admissible against the maker – 
Statement of the appellant if to
be considered as incriminating 
against him, will be hit by Section 25 of the Evidence Act since he 
gave the statement whilst in judicial custody, pursuant to another 
proceeding instituted by the same Investigating Agency – As 
the appellant was taken from the judicial custody to record the 
statement, it will be a travesty of justice to render the statement 
admissible against him – Since the words ‘procedure established 
* Author
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by law’ occurring in Article 21 has to be a reasonable and valid 
procedure – The statement of the appellant under Section 50 
cannot be relied upon against him in ECIR No. 5 of 2023 even 
though the appellant was at that point in custody in ECIR No. 4 
of 2022 – Further, statements of the co-accused will not have the 
character of substantive evidence and the law laid down under  
Section 30 of the Evidence Act by this Court while dealing with 
the confession of the co-accused will apply – Statement of 
the co-accused does not prima facie indicate anything about 
the role of the appellant in the forgery of sale deed and other 
documents or being involved in the offence of money laundering – 
Appellant satisfied the twin conditions under Section 45 –  
There are reasonable grounds for believing that the appellant is 
not guilty of the offence of money laundering as alleged under 
Sections 3 and 4 of the PMLA and the appellant is not likely to 
commit any offence, if enlarged on bail – Impugned order quashed 
and set aside – Appellant granted bail. [Paras 27, 32, 34, 37, 45, 49]
Prevention of Money Laundering Act, 2002 – s.45 – Twin 
conditions under, discussed – Scope of enquiry – “reasonable 
grounds for believing” – Meaning: 
Held: Court while dealing with the application for grant of bail in 
PMLA need not delve deep into the merits of the case and only 
a view of the Court based on the available material available 
on
record is required – The words used in Section 45 are  
“reasonable grounds for believing” which means that the Court 
has to see only if there is a genuine case against the accused 
and the prosecution is not required to prove the charge beyond 
reasonable doubt. [Para 13]
Prevention of Money Laundering Act, 2002 – Bail application – 
Counter/response in the original Court – Significance:
Held: In cases where the Public Prosecutor takes a considered 
decision to oppose the bail application, the counter affidavit of the 
Investigating Agency should make out a cogent case specifically 
crystallizing albeit briefly the material sought to be relied upon to 
establish prima facie the three foundational facts in the given case to 
help the Court at the bail application stage to arrive at a conclusion 
within the framework laid down in Vijay Madanlal Choudhary case – 
It is only thereafter the presumption under Section 24 would arise 
and the burden would shift on the accused. [Para 15]
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Prem Prakash v. Union of India Through  
The Directorate of Enforcement
Case Law Cited
Vijay Madanlal Choudhary and Ors. v. Union of India and Ors. 
[2022] 6 SCR 382 : (2022) SCC OnLine SC 929; Ramkripal 
Meena v. Directorate of Enforcement SLP (Crl.) No. 3205; Javed 
Gulam Nabi Shaikh v. State of Maharashtra and Another, 2024 
SCC online 1693; Ranjitsing Brahmajeetsing Sharma v. State 
of Maharashtra and Another [2005] 3 SCR 345 : (2005) 5 SCC 
294; Rajaram Jaiswal v. State of Bihar, AIR 1964 SC 828; Nandini 
Satpathy v. P.L. Dani and Another [1978] 3 SCR 608 : (1978) 2 
SCC 424; Kashmira Singh v. State of Madhya Pradesh [1952] 
SCR 526 – relied on.
In Re Elukuri Seshapani Chetti, ILR 1937 Mad 358; Kodangi v. 
Emperor, AIR 1932 Mad 24 – referred to.
List of Acts
Prevention of Money Laundering Act, 2002; Evidence Act, 1872; 
Penal Code, 1860.
List of Keywords
Section 50 of the Prevention of Money Laundering Act, 2002; 
Section 45 of the Prevention of Money Laundering Act, 2002; 
Section 25 of the Evidence Act, 1872; Article 21 of the Constitution 
of India; Money laundering; Forgery of sale deed; Judicial custody; 
Person in judicial custody/custody in another case investigated 
by the same Investigating Agency; Admissibility of statements 
recorded; Incriminating material against the maker; Confession of 
the co-accused; Statements of the co-accused; Bail; ‘procedure 
established by law’; “reasonable grounds for believing”.
Case Arising From
CRIMINAL
APPELLATE JURISDICTION: Criminal Appeal No. 3572 
of 2024
From the Judgment and Order dated 22.03.2024 of the High Court 
of Jharkhand at Ranchi in BA No. 9863 of 2023
Appearances for Parties
Ranjit Kumar, Siddharth Agarwal, Sr. Advs., Indrajit Sinha, Ms. Sneh 
Singh, Ms. Anusuya Sadhu Sinha, Sowjhanya Shankar, Harsh Yadav, 
Siddharth Naidu, M/s. KSN & Co., Advs. for the Appellant.
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S.V. Raju, ASG, Zoheb Hussain, Annam Venkatesh, Kanu Agrawal, 
Mrigank Pathak, Ms. Aakriti Mishra, Arvind Kumar Sharma, Advs. 
for the Respondent.
Judgment / Order of the Supreme Court
Judgment
K.V. Viswanathan, J.
1.	
Leave granted.
2.	
The present appeal challenges the judgment dated 22.03.2024 of 
the High Court of Jharkhand at Ranchi in B.A. No. 9863 of 2023. 
By the said judgment, the High Court dismissed the bail application 
of the appellant. The appellant sought for regular bail in connection 
with ECIR Case No. 5 of 2023 in ECIR-RNZO/10/2023 (hereinafter 
referred to as ECIR Case No. 5 of 2023) registered for the offence 
under Sections 3 and 4 of the Prevention of Money Laundering Act, 
2002 (hereinafter referred to as ‘PMLA’) and pending before the 
Court of Special Judge, PMLA, Ranchi.
Brief Facts
3.	
The predicate offence on the basis of which ECIR No. 5 of 2023 
was recorded on 07.03.2023 is an FIR bearing Sadar P.S. Case 
No. 399 of 2022 registered on 08.09.2022 for offences punishable 
under Sections 406, 420, 467, 468, 447, 504, 506, 341, 323 and 34 
of the Indian Penal Code, 1860 (for short ‘IPC’). The appellant was 
not named as an accused there.
4.	
In view of Section 420 and 467 of IPC, being Scheduled Offences, 
ECIR No. 5 of 2023 was registered and investigation under the PMLA 
was initiated. Even here the appellant was not named though the ECIR 
did mention certain unknown persons being involved. It
is alleged 
that the investigation revealed falsification of the original records 
in the Circle Office, Bargain, Ranchi and the Office of Registrar of 
Assurances, Kolkata respectively and as such custody of the original 
registers were taken in accordance with law.
5.	
The substratum of the allegation leading to the complaint lodged 
under PMLA are as follows:- Umesh Kumar Gope complained that 
Rajesh Rai, Imtiaz Ahmad, Bharat Prasad, Lakhan Singh, Punit 
Bhargava and Bishnu Kumar Agarwal fraudulently acquired one
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The Directorate of Enforcement
acre of land situated at Plot No. 28, Khata No. 37 Village Gari, 
Cheshire Home Road P.S. Sadar, Ranchi. The allegation was that 
accused Rajesh Rai S/o Jagdish Rai illegally and fraudulently made 
a Power of Attorney in the name of Imtiaz Ahmad and accused 
Bharat Prasad and on the basis of said Power of Attorney prepared 
a forged sale deed and sold the above-mentioned parcel of land 
to accused Punit Bhargava, an accomplice of the appellant for an 
amount of Rs. 1,78,55,800/-. It is further alleged that the said land 
was transferred by accused Punit Bhargava to accused Bishnu Kumar 
Agarwal vide two sale deeds dated 01.04.2021 for a total amount of 
Rs. 1,80,00,000/- (Rs.1,02,60,000/- and Rs.77,40,000). According to 
the Enforcement Directorate, accused Bishnu Kumar Agarwal paid 
Rs. 1,78,20,000/- to accused Punit Bhargava in the account of his 
firm Shiva Fabcons (Proprietorship firm of accused Punit Bhargava) 
and out of which Rs. 1,01,57,400/- was transferred to M/s Jamini 
Enterprises, which according to the respondent-Investigating Agency, 
was a firm whose beneficial owner is the appellant. The appellant 
was arrayed as Accused No.8 in the Prosecution Complaint of the 
Investigating Agency. 
6.	
According to the Investigating Agency, it was confirmed by the 
Directorate of Forensic Science that Deed No. 184 of 1948, a 
purported sale deed, by which the property was
transferred by the 
predecessors of Umesh Gope to Jagdish Rai, father of Rajesh Rai 
was forged. A separate FIR bearing No. 137 of 2023 dated 10.05.2023 
for offences under Sections 120-B, 465, 467, 468 and 471 of IPC 
came to be registered at Hare Street Police Station Kolkata on the 
basis of the report of the Fact Finding Committee of the Registrar of 
Assurances, Kolkata. It is stated that the said FIR was also merged 
into ECIR No. 5 of 2023. 
7.	
It is alleged that it was on the directions of the appellant that the sale 
deed was executed in favor of Punit Bhargava by Rajesh Rai for an 
amount of Rs. 1,78,55,800/-; that only Rs. 25 lakhs were transferred 
from Shiva Fabcons (Proprietorship firm of Punit Bhargava) to Rajesh 
Rai although the consideration amount was Rs. 1,78,55,800/- and 
it was shown to have been paid in the sale deed; that out of the 
aforesaid sum of Rs. 25 lakhs, an amount of Rs. 18 lakhs were 
transferred from the Bank account of Rajesh Rai to the Bank account 
of Green Traders (Partnership firm under the control of Md. Saddam
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Hussain); that Rs. 7 lakh cash was withdrawn through cheques by 
Rajesh Rai; that on the directions of the appellant, mutation of the 
property was done in the name of Punit Bhargava, who was an 
accomplice of the appellant; that Punit Bhargava sold the property to 
the Bishnu Kumar Agarwal within a span of two months for Rs. 1.80 
crore; that an amount of Rs.56,62,600/- was paid from the account 
of M/s Chalice Real Estate (Company of Bishnu Kumar Agarwal) 
on 05.04.2021 to Punit Bhargava’s bank account and on 24.06.2021 
an amount of Rs. 1,01,57,400/- was transferred from the account 
of Adarsh Heights Pvt Ltd (Company of Bishnu Agarwal) to Punit 
Bhargav’s bank account; that the entire payment was made in the 
month of April and June, 2021 but the registration was done on 1st 
April, 2021 before the receipt of consideration. Finally, it is alleged that 
an amount of Rs.1,01,57,400/- was transferred to the Bank account 
of M/s Jamini Enterprises, which is alleged to be a firm controlled 
and beneficially owned by appellant - Prem Prakash. 
8.	
It is alleged that the appellant conspired with the other accused 
persons, namely, Afshar Ali @ Afsu Khan, Rajesh Rai, Lakhan Singh, 
Imtiaz Ahmad, Bharat Prasad, Saddam Hussain, Punit Bhargava, 
Chhavi Ranjan and Bishnu Kumar Agarwal in the acquisition of 
proceeds of crime in the form of landed property. It is specifically 
alleged that the appellant being an accomplice of Bishnu
Kumar 
Agarwal used his connections to assist Bishnu Kumar Agarwal in 
acquiring the land and that Bishnu Kumar Agarwal transferred the 
money to Punit Bhargava and the amount was further transferred 
to Jamini Enterprises.
9.	
The appellant was taken into custody on 11.08.2023. He was already 
in custody from 25.08.2022 in ECIR No. 4 of 2022. His application for 
bail was rejected by the Special Judge on 20.09.2023. He preferred 
a bail application before the High Court. The High Court has declined 
bail to the appellant. Aggrieved, the appellant is before us. 
10.	 We have heard Mr. Ranjit Kumar, Learned Senior counsel for the 
appellant, ably assisted by Mr. Indrajit Sinha and Mr. Siddharth Naidu, 
learned advocates. We have also heard Mr. S.V. Raju, Learned 
Additional Solicitor General, ably assisted by Mr. Zoheb Hussain and 
Mr. Kanu Agarwal for the respondents. Learned Senior Counsels on 
both sides have placed their respective contentions and also filed 
detailed written submissions.
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The Directorate of Enforcement
SECTION 45 PMLA-CONTOURS
11.	 Considering that the present is a bail application for the offence under 
Section 45 of PMLA, the twin conditions mentioned thereof become 
relevant. Section 45(1) of PMLA 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 co-accused 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 officer of the Central Government or a State 
Government authorised in writing in this behalf by the 
Central Government by a
general or special order 
made in this behalf by that Government.”
In Vijay Madanlal Choudhary and Ors. Vs Union of India and Ors. 
reported in (2022) SCC OnLine SC 929, this Court categorically held 
that while Section 45 of PMLA restricts the right of the accused to 
grant of bail, it could not be said that the conditions provided under 
Section 45 impose absolute restraint on the grant of bail. Para 131 
is extracted hereinbelow:-
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“131. It is important to note that the twin conditions provided 
under Section 45 of the 2002 Act, though restrict the right 
of the accused to grant of bail, but it cannot be said that 
the conditions provided under Section 45 impose absolute 
restraint on the grant of bail. The discretion vests in the 
court, which is not arbitrary or irrational but judicial, guided 
by the principles of law as provided under Section 45 of 
the 2002 Act. …”
These observations are significant and if read in the context of the 
recent pronouncement of this Court dated 09.08.2024 in Criminal 
Appeal No. 3295 of 2024 [Manish Sisodia (II) Vs. Directorate of 
Enforcement], it will be amply clear that even under PMLA the 
governing principle is that “Bail is the Rule and Jail is the Exception”. 
In para 53 of [Manish Sisodia (II), this Court observed as under:- 
“53…..From our experience, we can say that it appears 
that the trial courts and the High Courts attempt to play 
safe in matters of grant of bail. The principle that bail is 
a rule and refusal is an exception is, at times, followed in 
breach. On account of non-grant of bail even in straight 
forward open and shut cases, this Court is flooded with 
huge number of bail petitions thereby adding to the huge 
pendency. It is high time that the trial courts and the High 
Courts should recognize the principle that “bail is rule and 
jail is exception.”
All that Section 45 of PMLA mentions is
that certain conditions are 
to be satisfied. The principle that, “bail is the rule and jail is the 
exception” is only a paraphrasing of Article 21 of the Constitution 
of India, which states that no person shall be deprived of his life or 
personal liberty except according to the procedure established by 
law. Liberty of the individual is always a Rule and deprivation is the 
exception. Deprivation can only be by the procedure established by 
law, which has to be a valid and reasonable procedure. Section 45 of 
PMLA by imposing twin conditions does not re-write this principle to 
mean that deprivation is the norm and liberty is the exception. As set 
out earlier, all that is required is that in cases where bail is subject to 
the satisfaction of twin conditions, those conditions must be satisfied. 
12.	 Independently and as has been emphatically reiterated in Manish 
Sisodia (II) (supra) relying on Ramkripal Meena Vs Directorate
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of Enforcement (SLP (Crl.) No. 3205 of 2024 dated 30.07.2024) 
and Javed Gulam Nabi Shaikh Vs. State of Maharashtra and 
Another, 2024 SCC online 1693, where the accused has already 
been in custody for a considerable number of months and there being 
no likelihood of conclusion of trial within a short span, the rigours 
of Section 45 of PMLA can be suitably relaxed to afford conditional 
liberty. Further, Manish Sisodia (II) (supra) reiterated the holding in 
Javed Gulam Nabi Sheikh (Supra), that keeping persons behind the 
bars for unlimited periods of time in the hope of speedy completion of 
trial would deprive the fundamental right of persons under Article 21 
of the Constitution of India and that prolonged incarceration before 
being pronounced guilty ought not to be permitted to become the 
punishment without trial. In fact, Manish Sisodia (II) (Supra) reiterated 
the holding in Manish Sisodia (I) Vs. Directorate of Enforcement 
(judgment dated 30.10.2023 in Criminal Appeal No. 3352 of 2023) 
where it was held as under:- 
“28. Detention or jail before being pronounced guilty of 
an offence should not become punishment without trial. 
If the trial gets protracted despite assurances of the 
prosecution, and it is clear that case will not be decided 
within a foreseeable time, the prayer for bail may be 
meritorious. While the prosecution may pertain to an 
economic offence, yet
it may not be proper to equate these 
cases with those punishable with death, imprisonment for 
life, ten years or more like offences under the Narcotic 
Drugs and Psychotropic Substances Act, 1985, murder, 
cases of rape, dacoity, kidnaping for ransom, mass 
violence, etc. Neither is this a case where 100/1000s of 
depositors have been defrauded. The allegations have 
to be established and proven. The right to bail in cases 
of delay, coupled with incarceration for a long period, 
depending on the nature of the allegations, should be read 
into Section 439 of the Code and Section 45 of the PML 
Act. The reason is that the constitutional mandate is the 
higher law, and it is the basic right of the person charged 
of an offence and not convicted, that he be ensured and 
given a speedy trial. When the trial is not proceeding for 
reasons not attributable to the accused, the court, unless 
there are good reasons, may well be guided to exercise
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the power to grant bail. This would be truer where the 
trial would take years.”
It is in this background that Section 45 of PMLA needs to be 
understood and applied. Article 21 being a higher constitutional 
right, statutory provisions should align themselves to the said higher 
constitutional edict. 
Scope of Inquiry under Section 45 of PMLA
13.	 Coming back to the scope of inquiry under Section 45, Vijay Madanlal 
Choudhary (Supra), while reiterating and agreeing with the holding 
in Ranjitsing Brahmajeetsing Sharma vs. State of Maharashtra 
and Another reported in (2005) 5 SCC 294, held that the Court while 
dealing with the application for grant of bail in PMLA need not delve 
deep into the merits of the case and only a view of the Court based 
on the available material available on record is required. It held that 
the Court is only required to place its view based on probability on 
the basis of reasonable material collected during investigation. The 
words used in Section 45 are “reasonable grounds for believing” 
which means that the Court has to see only if there is a genuine case 
against the accused and the prosecution is not required to prove 
the charge beyond reasonable doubt. We deem it fit to extract the 
relevant portion (Para 131) from Vijay Madanlal Choudhary (supra):
“131. It is important to note that the twin conditions provided 
under section 45 of the 2002 Act, though restrict the right 
of the
accused to grant of bail, but it cannot be said that 
the conditions provided under section 45 impose absolute 
restraint on the grant of bail. The discretion vests in the 
court which is not arbitrary or irrational but judicial, guided 
by the principles of law as provided under section  45 
of the 2002 Act. While dealing with a similar provision 
prescribing twin conditions in MCOCA, this court in 
Ranjitsing Brahmajeetsing Sharma (supra), held as under:
“44. The wording of section 21(4), in our opinion, does 
not lead to the conclusion that the court must arrive at a 
positive finding that the applicant for bail has not committed 
an offence under the Act. If such a construction is placed, 
the court intending to grant bail must arrive at a finding that 
the applicant has not committed such an offence. In such
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an event, it will be impossible for the prosecution to obtain 
a judgment of conviction of the applicant. Such cannot 
be the intention of the Legislature. Section 21(4) of the 
MCOCA, therefore, must be construed reasonably. It must 
be so construed that the court is able to maintain a delicate 
balance between a judgment of acquittal and conviction 
and an order granting bail much before commencement of 
trial. Similarly, the court will be required to record a finding 
as to the possibility of his committing a crime after grant 
of bail. However, such an offence in futuro must be an 
offence under the Act and not any other offence. Since 
it is difficult to predict the future conduct of an accused, 
the court must necessarily consider this aspect of the 
matter having regard to the antecedents of the accused, 
his propensities and the nature and manner in which he 
is alleged to have committed the offence.
45. It is, furthermore, trite that for the purpose of considering 
an application for grant of bail, although detailed reasons 
are not necessary to be assigned, the order granting bail 
must demonstrate application of mind at least in serious 
cases as to why the applicant has been granted or denied 
the privilege of bail.
46. 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. However,
while dealing with a 
special statute like MCOCA having regard to the provisions 
contained in sub-section (4) of section 21 of the Act, the 
court may have to probe into the matter deeper so as to 
enable it to arrive at a finding that the materials collected 
against the accused during the investigation may not justify 
a judgment of conviction. The findings recorded by the 
court while granting or refusing bail undoubtedly would be 
tentative in nature, which may not have any bearing on the 
merit of the case and the trial court would, thus, be free 
to decide the case on the basis of evidence adduced at 
the trial, without in any manner being prejudiced thereby”
We are in agreement with the observation made by the 
court in Ranjitsing Brahmajeetsing Sharma (supra). The
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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 
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 (supra), 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 genuine case against the accused and the prosecution is 
not required to prove the charge beyond reasonable doubt.”
(emphasis supplied)
Importance of the foundational facts-under Section 24 PMLA
14.	 In Vijay Madanlal Choudhary (supra) dealing with Section 24 of 
the PMLA, the three-Judge Bench held as under:-
“97. 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
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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 process or activity 
connected therewith, by producing evidence in that regard, 
the legal presumption would stand rebutted.
99. Be it noted that the legal presumption under 
section 24(a) of the 2002 Act, 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. 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.
100. 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 
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
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connected with the proceeds of crime. In any case, in 
terms of section 114 of the Evidence Act, it is open to 
the court to presume the existence of any fact which it 
thinks likely to have happened, regard being had to the 
common course of natural events, human conduct, and 
public and private business, in their relation to the facts of 
the particular case. Considering the above, the provision 
under consideration [section 24(a)] by no standards can 
be said to be unreasonable much less manifestly arbitrary 
and unconstitutional.”
(Emphasis supplied)
Importance of the counter to the bail application – filed in the 
original Court
15.	 In view of the importance of the three basic foundational facts that 
the prosecution needs to establish, the counter/response to the 
bail application in the original Court is very significant in PMLA bail 
matters. In cases where the Public Prosecutor takes a considered 
decision to oppose the bail application, the counter affidavit of the 
Investigating Agency should make out a cogent case as to how 
the three foundational facts set out hereinabove are prima facie 
established in the given case to help the Court at the bail application 
stage to arrive at a conclusion within the framework laid down 
in Vijay Madanlal Choudhary (supra). It is only thereafter the 
presumption under Section 24 would arise and the burden would 
shift on the accused. The counter to the bail application should
specifically crystallize albeit briefly the material sought to be relied 
upon to establish prima facie the three foundational facts. It is after 
the foundational facts are set out that the accused will assume the 
burden to convince the court within the parameters of the enquiry at 
the Section 45 stage that for the reasons adduced by him there are 
reasonable grounds to believing that he is not guilty of such offence. 
Analysis and Reasons
16.	 The contention of the prosecution is that (i) the appellant connived 
with accused persons, namely, Afshar Ali, Saddam Hussain and 
others who created a forged Sale Deed No. 184 of 1948, and on 
the strength of the sale deed the property was sold by Rajesh Rai 
(associate of Afshar Ali) to Punit Bhargava a close associate of
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Prem Prakash v. Union of India Through  
The Directorate of Enforcement
the appellant; (ii) that Rs. 25 lakhs were transferred to the bank 
account of Rajesh Rai and later Rs. 18 lakh (out of the 25 lakhs) 
was transferred to the bank account of M/s Green Traders, a firm 
controlled by Md. Saddam Hussain even though the sale consideration 
was Rs. 1,78,55,800/-; (iii) that the appellant is aware of the forgery 
committed by Afshar Ali & others and intentionally acquired the 
property in the name of Punit Bhargava, who later sold the property 
within 2 months to Bishnu Agarwal for Rs. 1.80 crore and out of the 
said amount, Rs. 1,01,57,400/- was transferred by Punit Bhargava 
to M/s Jamini Enterprises, a firm controlled and beneficially owned 
by the appellant; (iv) that the accused persons had full knowledge of 
the transaction, inasmuch as though the sale deed was executed in 
favor of Punit Bhargava through accused Rajesh Rai on 06.02.2021, 
payment was made on 12.02.2021 and that only 25 lakh was paid 
to Rajesh Rai and mutation was done and thereafter sold to Bishnu 
Agarwal and all payments were received by Punit Bhargava; (v) that 
no subsequent payments were to be made further, as according to 
the prosecution, all concerned knew that the deeds were fake, and 
(vi) that Bishnu Agarwal made the payment in the month of April and 
June 2021, but the registration was done on 1st April, 2021 and as 
such the registration was done before consideration.
(Emphasis supplied)
17.	 The prosecution relies on the statements under Section 50 of the 
PMLA of Afshar Ali, Rajdeep Kumar, Md. Saddam Hussain, Punit 
Bhargava and of the appellant himself. They also rely on the call 
detail records of the other accused, namely, Afshar Ali and Rajdeep 
Kumar. They also alleged that the appellant, with the help of another 
accused person Chhavi Ranjan, by influencing the circle officials got 
the land mutated and hence, according to the prosecution, the role 
of the appellant is pivotal.
18.	 Learned ASG for the respondent has taken us through summary of 
the statements of the persons mentioned hereinabove, as adverted 
to in the complaint, filed by the Enforcement Directorate.
Admissibility of the Statement of the Appellant
19.	 In the oral submissions and also as elaborated in the detailed written 
submissions by the respondent-Enforcement Directorate, reliance is 
sought to be placed on the statements of the appellant. This is stoutly
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resisted on the side of the appellant by contending that the appellant 
was in custody from 25th August 2022 in ECIR No. 4/2022; that his 
arrest was shown in the present case on 11th August 2023 and it 
is submitted that statements recorded while in custody (although in 
ECIR No.4/2022) will not be admissible and will be hit by Section 25. 
The statement of the appellant-Prem Prakash, the summary of which, 
as given in the complaint, reads as under:- 
“8.23 Prem Prakash - In his statement dated 04.08.2023 
(RUD No.41) recorded in judicial custody at Birsa Munda 
Central Jail, Hotwar, Ranchi, he stated that he knows 
Bishnu Kumar Agarwal as a businessman and sometimes, 
he has met him during marriage events. He further stated 
that Punit Bhargava is like his younger brother and he is 
from his native place, so he knows him since childhood.
From his statement dated 03.08.2023, (RUD No.40) it 
reveals those three persons including Afshar Ali used to visit 
him for the Cheshire Home Road property. He introduced 
them with Rajdeep Kumar and got the property verified. 
After some time, with the consent of Punit Bhargava, he 
got the property registered in the name of Punit Bhargava 
and later this property was sold to Bishnu Kumar Agarwal 
at a consideration price of Rs. 1.78 crores. His statement 
also reveals that Rajdeep used to visit Chhavi Ranjan 
on his instructions for the landed properties. However, in 
his statement
dated 15.08.2023, he started concealing 
facts regarding meeting between Afshar Ali, Md. Saddam 
Hussain and others with Chhavi Ranjan.
It may be mentioned that Rajdeep is a person who worked 
under Prem Prakash as his employee and had visited 
the office of the accused Chhavi Ranjan on directions of 
Prem Prakash with the accused persons Afshar All and 
Md. Saddam Hussain. This fact has also been admitted 
by Rajdeep Kumar in his statement under section 50 
of PMLA, 2002 recorded on 24.04.2023. (RUD No. 76) 
Further, several calls have also been identified to have 
taken place during the scrutiny of the CDR which have 
also been mentioned below in the relevant para.”
(Emphasis supplied)
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Prem Prakash v. Union of India Through  
The Directorate of Enforcement
20.	 In his statement of 04.08.2023, he stated that he knew Bishnu 
Kumar Agarwal and has met him during Marriage Events; that Punit 
Bhargava was like his younger brother who hailed from his native 
place, and he had known him since childhood. That in his statement 
of 03.08.2023, he stated that persons including Afshar Ali used to 
visit him for the Cheshire Home property and that he introduced 
him to Rajdeep Kumar and got the property verified. That with the 
consent of Punit Bhargava, he got the property registered in the 
name of Punit Bhargava and later the property was sold to Bishnu 
Kumar Agarwal at a consideration of Rs. 1.78 crore. The statement, 
as summarized, taken as it is does not prima facie make out a case 
of money laundering against the appellant. It also does not point to 
the involvement of the appellant prima facie in the forgery. 
21.	 Independent of the above, there is one important issue which arises 
in this case. It has to be pointed out that the appellant has been in 
judicial custody from 25.08.2022 in connection with another ECIR, 
namely, ECIR No. 4 of 2022 and while in judicial custody his arrest was 
shown in the current ECIR, namely, ECIR No. 5 on 11.08.2023. The 
statements of the appellant were recorded on 03.08.2023, 04.08.2023, 
11.08.2023, 12.08.2023, 14.08.2023, 15.08.2023 and 30.08.2023. 
22.	 The question that arises is when a person is in
judicial custody/custody 
in another case investigated by the same Investigating Agency, 
whether the statements recorded (in this case the statements dated 
03.08.2023, 04.08.2023, 11.08.2023) for a new case in which his 
arrest is not yet shown, and which are claimed to contain incriminating 
material against the maker, would be admissible under Section 50? 
23.	 In Vijay Madanlal Choudhary (supra), addressing the scope of 
Section 50, following has been held:-
“159….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.’
(Emphasis supplied)
The three-judge Bench in Vijay Madanlal Choudhary (supra) has 
apart from Article 20(3) also adverted to Section 25 of the Evidence 
Act. Section 25 of the Evidence Act reads as under:-
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“25. Confession to police officer not to be proved.- No 
confession made to a police officer shall be proved as 
against a person accused of any offence.
24.	  Vijay Madanlal Choudhary (supra) though held that the authorities 
under the PMLA are not police officers, did anticipate a scenario 
where in a given case, the protection of Section 25 of the Evidence 
Act may have to be made available to the accused. The Court 
observed that such situations will have to be examined on a case-
to-case basis. We deem it appropriate to extract Para 172 of Vijay 
Madanlal Choudhary (supra). 
“172. In other words, there is stark distinction between 
the scheme of the NDPS Act dealt with by this court in 
Tofan Singh (supra) and that in the provisions of the 2002 
Act under consideration. Thus, it must follow that the 
authorities under the 2002 Act are not police officers. 
Ex-consequenti, the statements recorded by the authorities 
under the 2002 Act, of persons involved in the commission 
of the offence of money-laundering or the witnesses for the 
purposes of inquiry/investigation, cannot be hit by the vice 
of article 20(3) of the Constitution or for that matter, article 
21 being procedure established by law. In a given case, 
whether the protection given to the accused who is 
being prosecuted for the offence of money-laundering, 
of section 25 of the Evidence Act is available or not, 
may have to be considered on case-to-case
basis 
being rule of evidence.” 
(Emphasis supplied)
25.	 This Court in Vijay Madanlal Choudhary (supra) anticipated the 
myriad situations that may arise in the recording of the Section 50 
statement and discussed the parameters for dealing with them. In 
Rajaram Jaiswal vs. State of Bihar, AIR 1964 SC 828, a judgment 
quoted in extenso in Vijay Madanlal Choudhary (supra), this Court 
observed that the expression “police officer “ in Section 25 of the 
Evidence Act is not confined to persons who are members of the 
regularly constituted police force. Further, setting out the test for 
determining whether an officer is a “police officer “ for the purpose of 
Section 25 of the Evidence Act, this Court in Rajaram Jaiswal (supra) 
held (quoted from para 165 of Vijay Madanlal Choudhary (supra)
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Prem Prakash v. Union of India Through  
The Directorate of Enforcement
“165(ii) It may well be that a statute confers powers and 
imposes duties on a public servant, some of which are 
analogous to those of a police officer. But by reason of the 
nature of other duties which he is required to perform he 
may be exercising various other powers also. It is argued 
on behalf of the State that where such is the case the mere 
conferral of some only of the powers of a police officer on 
such a person would not make him a police officer and, 
therefore, what must be borne in mind is the sum total 
of the powers which he enjoys by virtue of his office as 
also the dominant purpose for which he is appointed. The 
contention thus is that when an officer has to perform a wide 
range of duties and exercise correspondingly a wide range 
of powers, the mere fact that some of the powers which 
the statute confers upon him are analogous to or even 
identical with those of a police officer would not make him 
a police officer and, therefore, if such an officer records a 
confession it would not be hit by S. 25 of the Evidence Act. 
In our judgment what is pertinent to bear in mind for 
the purpose of determining as to who can be regarded 
a ‘police officer’ for the purpose of this provision is 
not the totality of the powers which an officer enjoys 
but the kind of powers which the law enables him to 
exercise. The test for determining whether such a person 
is a
“police officer” for the purpose of S. 25 of the Evidence 
Act would, in our judgment, be whether the powers of a 
police officer which are conferred on him or which are 
exercisable by him because he is deemed to be an officer 
in charge of police station establish a direct or substantial 
relationship with the prohibition enacted by S. 25, that is, 
the recording of a confession. In other words, the test 
would be whether the powers are such as would tend 
to facilitate the obtaining by him of a confession from a 
suspect or delinquent. If they do, then it is unnecessary 
to consider the dominant purpose for which he is 
appointed or the question as to what other powers he 
enjoys. These questions may perhaps be relevant for 
consideration where the powers of the police officer 
conferred upon him are of a very limited character
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and are not by themselves sufficient to facilitate the 
obtaining by him of a confession.”
(Emphasis supplied)
26.	 Four decades ago, V.R. Krishna Iyer, J. in his inimitable style, 
speaking for this Court in Nandini Satpathy Vs P.L. Dani and 
Another (1978) 2 SCC 424 observed as under:-
“50. We, however, underscore the importance of the 
specific setting of a given case for judging the tendency 
towards guilt. Equally emphatically, we stress the 
need for regard to the impact of the plurality of other 
investigations in the offing or prosecutions pending on 
the amplitude of the immunity. “To be witness against 
oneself” is not confined to particular offence regarding 
which the questioning is made but extends to other 
offences about which the accused has reasonable 
apprehension of implication from his answer. This 
conclusion also flows from “tendency to be exposed 
to a criminal charge”. “A criminal charge” covers any 
criminal charge then under investigation or trial or 
which imminently threatens the accused.”
(Emphasis supplied)
“57. We hold that Section 161 enables the police to 
examine the accused during investigation. The prohibitive 
sweep of Article 20(3) goes back to the stage of police 
interrogation- not, as contended, commencing in court 
only. In our judgment, the provisions of Article 20(3) and 
Section 161(1) substantially cover the same area, so 
far as police investigations are concerned. The ban on
self-accusation and the right to silence, while one 
investigation or trial is under way, goes beyond that 
case and protects the accused in regard to other 
offences pending or imminent, which may deter him 
from voluntary disclosure of criminatory matter. 
We are disposed to read ‘compelled testimony’ as 
evidence procured not merely by physical threats or 
violence but by psychic torture, atmospheric pressure, 
environmental coercion tiring interrogative prolixity,
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Prem Prakash v. Union of India Through  
The Directorate of Enforcement
overbearing and intimidatory methods and the like – 
not legal penalty for violation. So, the legal perils following 
upon refusal to answer, or answer truthfully, cannot be 
regarded as compulsion within the meaning of Article 20(3). 
The prospect of prosecution may lead to legal tension in 
the exercise of a constitutional right, but then, a stance of 
silence is running a calculated risk. On the other hand, 
if there is any mode of pressure, subtle or crude, 
mental or physical, direct or indirect, but sufficiently 
substantial, applied by the policeman for obtaining 
information from an accused strongly suggestive of 
guilt, it becomes ‘compelled testimony’, violative of 
Article 20(3).”
(Emphasis supplied)
27.	 In the facts of the present case, we hold that the statement of the 
appellant if to be considered as incriminating against the maker, 
will be hit by Section 25 of the Evidence Act since he has given the 
statement whilst in judicial custody, pursuant to another proceeding 
instituted by the same Investigating Agency. Taken as he was from 
the judicial custody to record the statement, it will be a travesty of 
justice to render the statement admissible against the appellant. 
28.	 The appellant accused cannot be told that after all while giving this 
statement:- “you were wearing a hat captioned ‘ECIR 5/2023’ and 
not the hat captioned ‘ECIR 4/2022’ ”.
29.	 A complete
reading of Vijay Madanlal Choudhary (supra), 
particularly, paragraphs 159, 165 and 172 mandate us to ask ourselves 
the query: Is a reasonable inference legitimately possible that, due 
to the vulnerable position in which the appellant was placed and the 
dominating position in which the Investigating Agency was situated, 
in view of the arrest in the other proceeding that, there obtained a 
conducive atmosphere to obtain a confession? We certainly think 
so. The question is not whether it actually happened. The question 
is could it have been possible.
30.	 We are supported in this view by two old judgments of the Madras 
High Court. In Re Elukuri Seshapani Chetti (ILR 1937 Mad 358) 
Justice Mockett following the judgment of Justice Jackson In Kodangi 
V. Emperor (AIR 1932 Mad 24.) held as under:-
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“In my judgment this is clearly a confession, as I 
have already said, and, as has been pointed out by 
Jackson J. In Kodangi V. Emperor (AIR 1932 Mad 24.) 
a confession made to the Police in the course of 
investigating crime A, although it relates to another 
crime B, is equally inadmissible. The whole spirit of 
section 25 of the Indian Evidence Act is to exclude 
confessions to the police and, the moment a statement 
is found to amount to a confession, I do not think it 
matters in the slightest of what crime it is said to be 
a confession.”
(Emphasis supplied)
31.	 We feel that the principle laid down there on is applicable. In fact, 
the three-Judge Bench in Vijay Madanlal Choudhary (supra), in 
the para extracted hereinabove, expressly refers to Section 25 of 
the Evidence Act while dealing with statements recorded when the 
person is in custody.
32.	 We have no hesitation in holding that when an accused is in custody 
under PMLA irrespective of the case for which he is under custody, 
any statement under Section 50 PMLA to the same Investigating 
Agency is inadmissible against the maker. The reason being that 
the person in custody pursuant to the proceeding investigated 
by the same Investigating Agency is not a person who can be 
considered as one operating with a free mind. It will be extremely 
unsafe to render such statements admissible against the maker, 
as such a course of action would be contrary to all
canons of fair 
play and justice. 
33.	 We also draw support from the way Section 50 is structured. Section 
50 reads as under:-
“Section 50. Powers of authorities regarding summons, 
production of documents and to give evidence, etc.
(1) The Director shall, for the purposes of section 13, have 
the same powers as are vested in a civil court under the 
Code of Civil Procedure, 1908 (5 of 1908) while trying a 
suit in respect of the following matters, namely:--
(a) discovery and inspection;
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Prem Prakash v. Union of India Through  
The Directorate of Enforcement
(b) enforcing the attendance of any person, including any 
officer of a reporting entity and examining him on oath;
(c) compelling the production of records;
(d) receiving evidence on affidavits;
(e) issuing commissions for examination of witnesses and 
documents; and
(f) any other matter which may be prescribed.
(2) The Director, Additional Director, Joint Director, Deputy 
Director or Assistant Director shall have power to summon 
any person whose attendance he considers necessary 
whether to give evidence or to produce any records during 
the course of any investigation or proceeding under this Act.
(3) All the persons so summoned shall be bound to 
attend in person or through authorised agents, as such 
officer may direct, and shall be bound to state the truth 
upon any subject respecting which they are examined or 
make statements, and produce such documents as may 
be required.
(4) Every proceeding under sub-sections (2) and (3) shall 
be deemed to be a judicial proceeding within the meaning 
of section 193 and section 228 of the Indian Penal Code 
(45 of 1860).
(5) Subject to any rules made in this behalf by the Central 
Government, any officer referred to in sub-section (2) 
may impound and retain in his custody for such period, 
as he thinks fit, any records produced before him in any 
proceedings under this Act:
Provided that an Assistant Director or a Deputy Director
shall not--
(a) impound any records without recording his reasons 
for so doing; or
(b) retain in his custody any such records for a period 
exceeding three months, without obtaining the previous 
approval of the Joint Director.”
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Section 50 (1)(b) speaks of enforcing the attendance of any person, 
Section 50 (2) speaks of the authorized officials having the power 
to summon any person whose attendance they consider necessary 
whether to give evidence or to produce any records during the course 
of any investigation or proceeding under the Act. Section 50 (3) states 
that all persons so summoned shall be bound to attend in person or 
through authorized agents, as such officer may direct, and shall be 
bound to state the truth upon any subject respecting which they are 
examined or make statements, and produce such documents and 
Section 50(4) states that every proceeding under sub-Sections (2) 
and (3) shall be deemed to be in judicial proceeding. A person in 
judicial custody being not a free person cannot be summoned and 
any statement to be recorded will be after obtaining the permission 
of the Court which has remanded him to the judicial custody in the 
other case. 
34.	 In view of the above and keeping the salutary principle of Article 21 
in mind, we hold that since the words ‘procedure established by law’ 
occurring in Article 21 has to be a reasonable and valid procedure, 
the statement of the appellant under Section 50 cannot be relied 
upon against the appellant in ECIR No. 5 of 2023 even though the 
appellant was at that point in custody in ECIR No. 4 of 2022. 
Statement of Afshar Ali - Co-accused
35.	 The appellant was not named in FIR
No. 399 of 2023. It appears 
from the complaint of the respondent-Enforcement Directorate at 
para 6 that Afshar Ali, Saddam Hussain, Imtiaz Ahmad were arrested 
on 14.04.2023 in ECIR/RNZO/18/2022 though in the summary of the 
statements at para 8.12 it is mentioned that Afshar Ali was arrested 
on 14.04.2023 read with prayer (c) of the complaint it appears that 
the arrest that is referred to in para 8.12 is the arrest in ECIR/
RNZO/18/2022.
36.	 Accused Afshar Ali was arrested on 14.04.2023 in ECIR/RNZO/18/2022 
(a different ECIR) and his statement was recorded on 17.04.2023 in 
the present ECIR. Afshar Ali is supposed to have stated that since 
he came to know that the land was under vigilance by the Police 
and the land had certain disputes. He met with the appellant and 
the appellant was informed about the disputes and the vigilance of 
the Police. According to the statement of Afshar Ali, the appellant 
took stock of the status of the land and called the then Deputy 
Commissioner - Chhavi Ranjan and told him that the registry of
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Prem Prakash v. Union of India Through  
The Directorate of Enforcement
the Cheshire Home property was to be done after removing the 
vigilance observed by the Police. Thereafter, the appellant fixed the 
consideration of Rs. 1.5 crores and after accepting the consideration 
as fixed, he requested the appellant to arrange for unblocking the 
two plots of land, which were blocked by the Deputy Commissioner 
Office. That the appellant demanded Rs. 1 crore for the above work 
and the amount was adjusted in the said consideration and that it 
was appellant who asked to do the registration in the name of Punit 
Bhargava. He also stated that it was the appellant who fixed the deal 
with Bishnu Kumar Agarwal. 
37.	 Being a co-accused with the appellant, his statement against the 
appellant assuming there is anything incriminating against the present 
appellant will not have the character of substantive evidence. The 
prosecution cannot start with such a statement to establish its case. 
We hold that, in such a situation, the law laid down under Section 30 
of the Evidence Act by this Court while dealing with the confession of 
the co-accused will continue to apply. In Kashmira Singh vs. State 
of Madhya Pradesh [1952] SCR 526, this Court neatly summarized 
the principle as under:-
“…. The proper way to approach a case of this kind is, first, 
to marshal the evidence against the accused excluding the 
confession altogether from consideration and see whether,
if it is believed, a conviction could safely be based on it. 
If it is capable of belief independently of the confession, 
then of course it is not necessary to call the confession in 
aid. But cases may arise where the judge is not prepared 
to act on the other evidence as it stands even though, if 
believed, it would be sufficient to sustain a conviction. In 
such an event the judge may call in aid the confession 
and use it to lend assurance to the other evidence and 
thus fortify himself in believing what without the aid of the 
confession he would not be prepared to accept.”
Hence, insofar as Afshar Ali’s statement is concerned, the Investigating 
Agency will have to first marshal the other evidence and can at best 
look at the statement for lending assurance. 
Independently, the statement of Afshar Ali does not prima facie 
indicate anything about the role of the appellant in the forgery of 
sale deed and other documents or being involved in the offence of 
money laundering.
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Statement of Rajdeep Kumar
38.	 We have perused the statement, as summarized in the complaint, of 
Rajdeep Kumar. Rajdeep Kumar merely states that he worked for the 
appellant and has met Afshar Ali after the appellant introduced him 
at the house of the appellant regarding dealing of a land situated at 
Cheshire Home. He further states that he has met Saddam Hussain 
at the house of the appellant on the above stated land. He further 
adds that he has also seen Imtiaz Ahmed and Bharat Prasad, close 
associates of Afshar Ali and Saddam Hussain. Prima facie, we 
conclude that there is hardly any evidence to implicate the appellant 
for the offence under Section 3 and 4 of PMLA. 
Statement of Md. Saddam Hussain – Co-accused
39.	 Md. Saddam Hussain was arrested on 14.04.2023 also in ECIR/
RNZO/18/2022 (a different ECIR), in his statement of 26.04.2023, 
in the present ECIR he only speaks of knowing Rajdeep Kumar 
and meeting him for the purpose of unblocking a piece of land 
measuring 3.81 acres and about Rajdeep Kumar arranging a meeting 
with the then Deputy Commissioner - Chhavi Ranjan. His statement 
like that of Afshar Ali will not have the status of being a substantive 
evidence and will be of the same character as Afshar’s insofar as 
the co-accused are concerned. In the complaint, the prosecution 
infers that it was Rajdeep Kumar who was the link between the 
Deputy Commissioner, Chhavi Ranjan and Prem Prakash and 
who
acted on the instructions of the appellant - Prem Prakash 
and helped Saddam Hussain for unblocking the land. Prima facie, 
in our opinion, this statement carries the case of the prosecution 
no further. The corroboration drawn from his further statement 
of 29.08.2023 recorded in judicial custody of the above statement 
adds nothing further to support the prosecution apart from the fact 
that the statement of 29.08.2023 lacked the character of substantive 
evidence. 
Statement of Punit Bhargava
40.	 Insofar as the statement of Punit Bhargava is concerned, it was 
recorded on 09.12.2022. He is supposed to have stated that he 
knew Bishnu Agarwal since March, 2021 when on the directions of 
appellant, he sold 1 acre of land to Bishnu Agarwal. He is supposed 
to have further stated that he had bought the piece of land under
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Prem Prakash v. Union of India Through  
The Directorate of Enforcement
the supervision of Prem Prakash and that under the instructions of 
Prem Prakash, he acquired a land in his name and accordingly on 
the instructions of the appellant, he sold it to Bishnu Kumar Agarwal. 
He stated that on the directions of the appellant, he gave Rs. 25 
lakhs to Rajesh Rai through cheque after which the registration and 
mutation of the property was done but, further added that six post-
dated cheques were given for encashing the balance amount later. 
He is supposed to have stated further that he was not aware as to 
why rest of the payment was not made even after the registration 
and mutation and that appellant could perhaps, give a reply. On being 
asked as to why the property was purchased in his name when it 
was sold within two months to Bishnu Agarwal, he stated that it was 
only done on the instructions of Prem Prakash.
41.	 The statement mentions that apart from 25 lakhs, six post-dated 
cheques were also given. Thereafter, it only speaks of the appellant 
advising the purchase and sale of the land. Prima facie, they do 
not detract from the reasonable grounds of belief that we entertain 
to the effect that the appellant is not guilty of the offence under 
Section 3 and 4. 
Bishnu Kumar Agarwal (A9) on bail – Order has attained finality
42.	 We, prima facie, find that from the statements of the appellant and 
also from the other statements and other
material relied upon by the 
investigating agency, there is nothing to indicate that the petitioner was 
involved in the creation of the forged deed nor had any knowledge of 
the forged sale deed of 1948. In the order enlarging Bishnu Kumar 
Agarwal on bail it was observed that-it was a plausible view to hold 
that Bishnu Kumar Agarwal was a bonafide purchaser of the property 
concerned in the present matter. It has also been held therein that no 
criminality could have been found against Bishnu Kumar Agarwal in 
the making of the sale consideration later and registration of the sale 
earlier. Support has been drawn from Section 54 of the Transfer of 
Property Act. The same order also makes a reference to para 10.6.6 
of the complaint filed by the ED where it has been mentioned that 
the investigation of the Enforcement Directorate has revealed that 
complainant in FIR No. 399 of 2022, Umesh Kumar Gope was 
himself frivolously exerting his claim over the said property. Be that 
as it may, the order of bail granted to Bishnu Kumar Agarwal has 
attained finality.
982
[2024] 8 S.C.R.
Digital Supreme Court Reports
43.	 Moreover, there is no material placed on record to show as to on 
what basis it is claimed that the beneficial interest in M/s Jamini 
Enterprises lies with the appellant. Hence, the statements relied upon 
do not prima facie make out a case of money laundering against 
the appellant.
44.	 The complaint also adverts to two other transactions with which 
Bishnu Kumar Agarwal is being investigated. Nothing can be elicited 
from the record about the involvement of the appellant and as to 
the initiation of any proceeding against him with regard to the other 
transactions with which Bishnu Kumar Agarwal is involved.
45.	 In this scenario, we hold that the appellant has satisfied the twin 
conditions under Section 45. Inasmuch as from the material on 
record, this Court is satisfied that there are reasonable grounds 
for believing that the appellant is not guilty of the offence of Money 
Laundering as alleged under Sections 3 and 4 of the PMLA and the 
Court is further satisfied that the appellant is not likely to commit any 
offence, if enlarged on bail.
Arguments about criminal antecedents.
46.	 The Investigating Agency have also referred to ECIR No. 4 as a 
criminal antecedent. A reference was made to ECIR No. 4 of 2022 
pertaining to illegal Stone Mining and related activities in Saheb 
Ganj, Jharkhand, where the petitioner was arrested on 25.08.2022 
and the prosecution complaint was filed on 16.09.2022. Insofar as 
the
bail pertaining to ECIR No. 4 of 2022, which is pending in this 
Court in SLP (Criminal) No. 691 of 2023, at the after notice stage, 
the merits of the bail in that case will be independently examined. 
Having examined the facts of the present case arising out of ECIR 
No. 5 of 2023 and in view of the findings recorded hereinabove, 
we do not think that the appellant can be denied bail based on 
the pendency of the other matter. We say so in the facts and 
circumstances of the present case as we do not find any justification 
for his continued detention. The appellant has already been in 
custody for over one year. The Trial is yet to commence. There 
is a reference to one more ECIR which the Investigating Agency 
refers to in their counter, namely, ECIR/RNZO/18/2022 but nothing 
is available from the record as to whether any proceedings have 
been taken against the appellant.
[2024] 8 S.C.R. 
983
Prem Prakash v. Union of India Through  
The Directorate of Enforcement
Allegation of misuse of Jail facilities by the Appellant
47.	 Elaborate contentions have been made on the conduct of the 
appellant about certain facilities having been extended to him in jail. 
We do not comment on them and if at all there is any violation of 
the prison Rules, the Investigating Agency ought to take up with the 
higher officials of the Jail. On the facts of the present case, they are 
not reasons enough to deny the appellant his liberty. 
48.	 For the reasons stated above, while allowing the appeal, we set aside 
the judgment dated 22.03.2024 of the High Court of Jharkhand at 
Ranchi in B.A. No. 9863 of 2023. We clarify that the observations 
made in this judgment are only for the purpose of disposing of the 
bail application and they shall not influence the Trial Court, which 
would proceed in accordance with law and on the basis of the 
evidence on record.
Conclusion
49.	 In the result, we pass the following order:-
(i)	
The appeal is allowed and impugned order dated 22.03.2024 
is quashed and set aside. 
(ii)	
The Trial Court is directed to release the appellant on bail in 
connection with ED Case No. ECIR No. 5 of 2023 on furnishing 
bail bonds for a sum of Rs. 5 lakh with 2 sureties of the like 
amount. 
(iii)	 The appellant shall surrender his passport with the Trial Court 
and the appellant shall report to the Investigating Officer on 
every Monday and
Thursday between 10 and 11 A.M. 
(iv)	 The appellant shall not make any attempt to influence the 
witnesses and tamper with the evidence. 
Pending applications shall stand disposed of.
Result of the case: Appeal allowed.
†Headnotes prepared by: Divya Pandey