ROHIT TANDON versus THE ENFORCEMENT DIRECTORATE
[2017] 13 S.C.R. 156, Supreme Court of India, 2017
Outcome: Unknown
Segment: Body
A 
B 
[2017] 13 S.C.R. 156 
ROHIT TANDON 
v. 
THE ENFORCEMENT DIRECTORATE 
(Criminal Appeal Nos. 1878-1879 of2017) 
NOVEMBER 10,2017 
[DIPAK MISRA, CJI, A. M. KHANWILKAR AND 
D.Y. CHANDRACHUD, JJ.) 
Code of Criminal Procedure, 1973: s.439 -
Bail application 
C filed under s.439 rlw s.45 of PML Act -
Allegation was that 
appellant-ac¢used conspired with a bank manager and a CA to 
earn huge pKofit by converting black money in the form of old 
currency notes into new currency notes and made illegal earnings 
- Prosecution under s.45 for commission of offence under ss.3 and 
D 
E 
F 
4 of P ML Act as a sequel to FIR which was registered under ss.420, 
406, 409, 46~. 471, 188 and 1208 !PC - Prayer for bail rejected 
by Sessions judge and then by High Court - Second bail application 
filed before High Court - Along with that, appellant filed an 
application seeking direction for his interim release on assertion 
that his mother was seriously ill and required immediate .medical 
attention - The said interim release application was allowed noting; 
that the appellant never evaded the investigation; the period of 7 
months of incarceration; illness of his mother; and absence of 
definite reasqns assigned by counsel to substantiate allegation that 
appellant would tamper with evidence especially when charge sheet 
in the main case had been submitted - However, regular second 
bail application was dismissed as withdrawn - In the instant appeal, 
challenge is to the rejection of first
bail application filed before 
High Court - Plea was that the reasons which weighed while 
directing interim release would apply proprio vigore for considering 
regular bail - Held: The observations made while allowing interim 
G release would have no bearing on merits of the controversy - The 
appellant has not succeeded in persuading about the inapplicability 
of the threshold stipulation under s.45 of the Act - Prosecution 
based its ca$e on the evidence of 26 witnesses - The same made out 
a convincing case about involvement of appellant in commission of 
H 
serious offence of money laundering - Thus, there were reasonable 
grounds for believing that the appellant was guilty of such offence 
156
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
157 
- Also appellant was reluctant in disclosing source from where such 
A 
huge value of demonetized currency and new currency was acquired 
by him - The volume of demonetized currency recovered from the 
office and residential premises of appellant, including the bank 
drafts in favour of fictitious persons and also new currency notes 
for huge amount, leave no manner of doubt that it was the outcome 
B 
of some activity connected with the proceeds of crime projecting 
the property as untainted property - Np case made out for 
interference with the order of High Court rejecting the prayer for 
grant of regular bail to the appellant - Prevention of Money 
Laundering Act, 2002 - ss.3 and 4. 
Dismissing the appeals, the Court 
c 
HELD : 1. The possession of demonetized currency in one 
sense, ostensibly, may appear to be only a facet of unaccounted 
money in reference to the provisions of the Income Tax Act or 
other taxation laws. However, the stated activity allegedly 
indulged into by the accused named in the commission of predicate D 
offence is replete with mens rea. In that, the concealment, 
possession, acquisition or use of the property by projecting or 
claiming it as untainted property and converting the same by bank 
drafts, would certainly come within the sweep of criminal activity 
relating to a scheduled offence. That would come within the 
E 
meaning of Section 3 and punishable under Section 4 of the Act, 
being a
case of money-laundering. [Para 23] [183-E-F] 
Manoranjana Sinh v. Central Bureau of Investigation 
(2017) 5 SCC 218 ; Sanjay Chandra v. Central Bureau 
of Investigation (2012) 1 SCC 40 : [2011 J 13 SCR 309 
- distinguished. 
Gautam Kundu 
v. Directorate of Enforcement 
(Prevention of Money-Laundering Act), Government of 
India (2015) 16 SCC 1 ; Subrata Chattoraj v. Union of 
India (2014) 8 SCC 768 : [2014] 6 SCR 783 ; 
Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 450 ; 
Union of India v. Hassan Ali Khan (2011) 10 SCC 
235 : (2011] 11 SCR 778 ; Ranjitsing Brahmajeetsing 
Sharma v. State of Maharashtra and Anr. (2005) 5 SCC 
294 : [2005] 3 SCR 345 ; State of Maharashtra v. 
F 
G 
H
158 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
A 
Vishwaniath Maranna Shettv (2012) 10 SCC 561 : 
[2012] 9 SCR 873 - referred to. 
B 
c 
D 
E 
F 
G 
H 
Gorav Kmhuria v. Union of India (2016) SCC Online 
P & H 3428 - referred to. 
2. The appellant has not succeeded in persuading about 
the inapplicability of the threshold stipulation under Section 45 
of the Act. The appellant is reluctant in disclosing the source 
from where such huge value of demonetized 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 High Court. These statements 
are admissiblie in evidence, in view of Section 50 of the Act of 
2002. The S'1mc 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 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 hpld that the appellant is not likely to commit any 
offence ascribable to the Act of 2002 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 ofregular bail will be of no avail. In other 
words, the fact that the investigation in the predicate offence or 
that the investigation qua the appellant in the complaint is 
completed; and that the proceeds of crime is already in possession 
of the investigating agency and provisional attachment order in 
relation thereto passed on 13'" February, 2017 has been 
confirmed; or that charge-sheet against the appellant without his 
arrest; that the appellant has been lodged in judicial custody since 
2"' January, 2017 and has not been interrogated or examined by 
the Enforcei;nent Directorate thereafter; all these will be of no 
consequence. [Para 27] [185-G-H; 186-A-E] 
3. The fact that no limit for deposit was specified, would 
not extricate the appellant from explaining the source from where
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
159 
such huge amount has been acquired, possessed or used by him. 
A 
No explanation was offered by the appellant to dispel the legal 
presumption of the property being proceeds of crime. Similarly, 
the fact that the appellant has made declaration in the Income 
Tax Returns and paid tax as per law does not extricate the 
appellant from disclosing the source of its receipt. There is no 
B 
provision in the taxation laws which grants immunity to the 
appellant from prosecution for an offence of money-laundering. 
In other words, the property derived or obtained by the appellant 
was the result of criminal activity relating to a scheduled offence. 
The argument of the appellant that there is no allegation in the 
charge-sheet filed in the scheduled offence case or in the C 
prosecution complaint that the unaccounted cash deposited by 
the appellant is the result of criminal activity, will not come to the 
aid of the appellant. That will have to be negatived in light of the 
materials already on record. The possession of such huge quantum 
of demonetized currency and new currency in the form of D 
Rs.2000/- notes, without disclosing the source from where it is 
received and the purpose for which it is received, the appellant 
has failed to dispel the legal presumption that he was involved in 
money-laundering and the property was proceeds of crime. There 
is no reason to interfere with the well considered opinion of the 
Sessions
Court and the High Court rejecting the prayer for grant 
E 
of regular bail to the appellant. [Paras 28, 29] [187-B-G] 
Case Law Reference 
(2015) 16 sec 1 
referred to 
Para 16 
F 
[2014] 6 SCR 783 
referred to 
Para 17 
(2013) 1 sec 450 
referred to 
Para 17 
[2011) 11 SCR 778 
referred to 
Para 17 
[2005) 3 SCR 345 
referred to 
Para 19 
G 
[2012] 9 SCR 873 
referred to 
Para 19 
(2017) 5 sec 218 
distinguished 
Para 20 
[2011) 13 SCR 309 
distinguished 
Para 20 
H
160 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
A 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal 
B 
c 
Nos. 1878-1879 of2017. 
From the Ju(lgment and Order dated 05.05.2017 of the High Court 
of Delhi at New Delhi in Bail Application No. 119/2017 and Cr!. M. B. 
No. 121/2017. 
Mukul Roh~tgi, Subramonium Prasad, Sr. Advs, Jayant Mohan, 
Arunabh Chowdhury, Anupam Lal Das, Manu Sharma, Sarvesh Singh 
Baghel, Vaibhav Tomar, Abhir Datt, Ms. Shruti Chaudhry, Karma Dorjee, 
Anirudh Singh, Ac;lvs for the Appellant. 
Tushar Mehta, ASG, Ms. Binu Tamta, Prateek Jalan, B. Krishna 
Prasad, Advs for the Respondent. 
The Judgment of the Court was delivered by 
A. M. KHANWILKAR, J. !. By these appeals the order of 
the High Court of Delhi at New Delhi dated 5th May, 2017, rejecting the 
D 
Bail Application No.119 of2017 and Criminal M.B. No.121 of2017 has 
been assailed. The appellant was arrested on 28th December, 2016 in 
connection with EC!R/l 8/DZ-Il/2016/ AD(RV) registered under Sections 
3 & 4 of the Prevention of Money-Laundering Act, 2002 (hereinafter 
referred to as "the Act of 2002"). The said ECIR was registered on 
E 
F 
26'" December, 2016 as a sequel to FIR No.205/2016 dated 25th 
December, 2016 In relation to the offences punishable under Sections 
420, 406, 409, 468, 471, 188 and 120B of the Indian Penal Code, 1860 
("!PC" for short). The said FIR was registered by the Crime Branch of 
Delhi Police, New Delhi. The ECIR, however, has been registered at 
the instance of
A~sistant Director (PMLA), Directorate of Enforcement, 
empowered to investigate the offences punishable under the Act of2002. 
2. The appellant first approached the Additional Sessions Judge-
02, South East Sake! Court, New Delhi for releasing him on bail by way 
of an application under Section 439 of the Code of Criminal Procedure, 
1973 read with Section 45 of the Act of2002. The said bail application 
G 
came to be rejected vide judgment dated 7th January, 2017 by the said 
Court. The appellant thereafter approached the High Court of Delhi at 
New Delhi by wa:y of Bail Application No.119 of2017 and an interlocutory 
application filed therein, being Criminal M.B. No.121 of2017. The High 
Court independently considered the merits of the arguments but eventually 
rejected the praytr for bail vide impugned judgment dated 5" May, 2017. 
H
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
161 
[A.M. KHANWILKAR, J.] 
3. The ECIR has been registered against Ashish Kumar, Raj 
A 
Kumar Goel and other unknown persons for offences punishable under 
Sections 3/4 of the Act of 2002 on the basis of information/material, as 
evident from the predicate offence registered by P. S. Crime Branch, 
Delhi against the named accused and unknown accused for offences 
punishable under Sections 420,406,409, 467,468, 471, 188and120B of B 
!PC, being FIR No.205/2016 dated 25ili December, 2016. The relevant 
facts noted in the ECIR read thus: 
"A. It is reported that during the course of investigation of 
Case FIR No.242116 uls 420, 467,468,471, 120-B IPC, PS 
C.R. Park, Delhi, it is revealed that Accused Raj Kumar Goel 
along with associates are engaged into earning profits by 
routing money into various accounts by using forged 
documents and thereby receiving commission from the 
prospective clients who either need money by cheque or in 
.. 
cash. In order to obtain large profits, accused Raj Kumar 
c 
Goel and few of his associates have opened many Bank D 
Accounts in Kotak Mahindra and ICICI Bank at Naya Bazar, 
Chandni ·Chowk, Delhi. 
B. On 08.11.2016, the Government if India announced 
demonetization of one thousand- (I 000) and five hundred 
(500) rupee notes. On this accused Raj Kumar Goel conspired 
E 
with the bank manager of Kotak Mahindra Bank, Cannaught 
Place, namely Ashish Kumar rlo A-701, Bestech Park, Sector 
61,
Gurugram, Haryana and one Chartered Accountant, name 
unknown, having mobile number 97 II 329619 to earn huge 
profit by converting black money in the form of old currency 
notes into new currency notes. In this conspiracy, the said F 
CA acted as a mediator and arranged prospective clients who 
intended to convert their black money into legitimate money. 
For the same, alleged CA offered 2% commission to the other 
accused persons on all such transactions. 
C. The accused were having bank accounts in the Naya Bazar 
branch of Kotak Mahindra Bank but the CA and Bank 
. Manager Ashish asked accused Raj Kumar to deposit old 
. . currency notes in Cannaught Place branch of Kotak 
· Mahindra Bank. It is also revealed that the accused opened 
G' 
H
162 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
bank accounts in the name of Quality Trading Company, Swati 
Trading Company, Shree Ganesh Enterprises. R.K. 
International, Mahalxmi Jndustires. Virgo International and 
Sapna International on the basis of forged/false documents 
and deposited approx. Rs.25 Crore after the demonetization. 
As per the preliminary investigation of the said case it is 
transpired that accused Raj Kumar Goel, Bank Manager 
Ashish, CA along with their associates are involved in a deep 
roted conspiracy and were indulged in converting old 
currency which were entrusted to bank/Govt officials and 
were supposed to be delivered to general public/guidelines 
issued by the Reserve Bank of India/Ministry of Finance and 
hand thus cheated the public at large. The accused persons 
have also caused monetary loss to the Govt. of India and 
thereby Committed offences u/s 420, 406, 409. 467, 468, 471, 
188, 120-B !PC." 
It is then noted that the offences under Sections 420, 468, 4 71 and 
l 20B of !PC are scheduled offences under the Act of 2002 and that 
from the available facts, a reasonable inference is drawn that the named 
accused and unl!:nown accused have made illegal earnings arising out of 
the said criminal conspiracy which might have undergone the process of 
laundering and thereby an offence under Section 3 of the Act of 2002 
was made out. It is noted that prima facie case for commission of 
offence under Section 3 punishable
under Section 4 of the Act of2002 
was made out and accordingly the case is being registered and taken up 
for investigation under the Act of 2002 and rules framed thereunder. 
4. The learned Sessions Judge while considering the bail application 
adverted to the velevant materials including the CDR analysis of Mobile 
number of Ashish Kumar, Branch Manager, Kotak Mahindra Bank, K.G. 
Marg Branch, Kamal Jain, CA of Ro hit Tandon (hereinafter referred to 
as "appellant"), Dinesh Bhola, Raj Kumar Goel; the statements of Kamal 
Jain, Dinesh Bhola andAshish Kumar, recorded under Section 50 of the 
Act of 2002; and analysis of bank statements of stated companies. All 
these reveal that Ashish Kumar conspired with other persons to get 
deposited Rs.38.53 Crore in cash of demonetized currency into bank 
accounts of companies and got demand drafts issued in fictitious names 
with intention of getting them cancelled and thereby converting the 
demonetized currency into monetized currency on commission basis.
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
163 
[A.M. KHANWILKAR, J.] 
Further, the investigation also revealed that the entire cash was collected A 
on the instructions of the appellant herein, by Ashish Kumar, Raj Kumar 
Goel and others through Dinesh Bhola, an employee of the appellant. 
According to the prosecution, all the associates of the appellant acted on 
instructions of the appellant for getting issued the demand drafts against 
cash deposit with the help of Ashish Kumar, Branch Manager of Kotak 
Mahindra Bank and others, to the tune of Rs.34.93 Crore from Kotak 
Mahindra Bank, K.G. Marg Branch. It was also noted that the demand 
drafts ofRs.3.60 Crore were issued in fictitious names on the instructions 
B 
of Bank Manager Ashish Kumar in lieu of commission received by him 
in old cash currency. The demand drafts amounting to Rs.38 Crore were 
issued in favour ofDinesh Kumar and Sunil Kumar which were recovered 
from the custody of Kamal Jain who had kept the same on the instructions 
of the appellant. Out of the said amount, the demand drafts of other 
banks, apart from Kotak Mahindra Bank Limited, were also recovered. 
The prosecution suspected that there could be other dubious transactions 
made by the appellant in other banks and that Ashish Kumar, Bank 
Manager and others were acting on the instructions of the appellant for 
executing the crime. 
5. The Sessions Court rejected the argument of the appellant that 
the investigation of the offence registered
against the appellant and others 
under Section 3/4 of the Act of2002 being a sequel to the FIR registered 
by the Crime Branch of Delhi Police, it cannot be investigated by the 
Enforcement Directorate. For, the Enforcement Directorate was not 
concerned with the outcome of the investigation of the predicate offence 
registered by the Delhi Police. It thus opined that the matter on hand 
must be examined only in reference to the registration of ECIR by the 
Enforcement Directorate. The fact that the investigation in FIR registered 
by the Crime Branch of Delhi Police, bearing FIR No.205/2016, had not 
commenced will also be of no avail to the appellant. The Sessions Court 
also found that as per Section 19 of the Act of 2002, the only condition to 
be satisfied for arrest of a person is the reasonable belief of the authority 
gathered on the basis of material in its possession. Further, in the present 
case, the accused was arrested by the competent authority on the basis 
of material in his possession giving rise to a reasonable belief about the 
complicity of the accused in the commission of offence punishable under 
the Act of 2002. As such the arrest of the appellant under the Act of 
2002 cannot be termed as illegal. After having dealt with those 
c 
D 
E 
F 
G 
H
164 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
(2017] 13 S.C.R. 
contentions, the Sessions Court took note of the material pressed into 
service by the prosecution and analysed the same in the following words: 
"21. Pursuant to registration of FIR No.20512016 under 
section 420, 406, 409, 468, 471, 188, 120-B IPC by Crime 
Branch, the matter was taken up by ED and ECIR No.18116 
was opened for investigation. Transaction statements of 
accounts in Kotak Mahindra Bank in FIR No. 205116 in respect 
of companles i.e. Delhi Training Company. Kwality Tading 
Company, Mahalaxmi Industries. R.K. International, Sapna 
Trading Company, Shree Ganesh Enterprises. Swastik 
Trading Company arid Virgo International were sought and 
scrutinized. Huge cash deposits in the said accounts were 
ident!fied during November, 2016, post demonetization 
announcement it was found that demand drafts were issued 
in fictitious names like Dinesh Kumar. Sunil Kumar. Abhilasha 
Dubey. Madan Kumar. Madan Saini, Satya Narain Dagdi and 
Seema Bai. 
22. Statement of Ashish Kumar, accused named in FIR 
No.105116, Branch Manager, Kotak Mahindra Bank, K.G. 
Marg branch was recorded under section 50 of PMLA which 
revealed that Kamal Jain, CA of accused Rohit Tandon 
contacted h,im to get the demonetized currency on behalf of 
accused/applicant, converted into monetized currency on 
commissio~ basis. The commission of Ashish Kumar was 
decided @ 35%, who in turn contacted one Yogesh Mittal 
and Rajesh K11mar
Goel. accused in FIR No.205116 to carry 
out the criminal design of getting the demonetized cash 
converted into monetized 7 valuable form. Demonetized 
currency was deposited in different accounts of companies 
pertaining to Raj Kumar Goel besides others through Raj 
Kumar Goel with the help of Ashish Kumar in different bank 
accounts of Kotak Mahindra Bank and DDs were issued in 
fictitious names. The illegal conversion of demonetized 
currency, getting the same deposited and issuance of demand 
drafts is corroborated through CDR analysis of relevant 
persons for the relevant period. Dinesh Bhola and Kamal 
Jain, in their statements recorded under section 5 0 of P MLA 
have also confirmed and reiterated the facts as stated by
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
165 
[A.M. KHANWILKAR, J.] 
Ashish Kumar, the Branch Manager. The statements of persons 
A 
recorded under section 50 of PMLA, which has evidentiary 
value under section 50(4) of PMLA, have confirmed that the 
old demonetized currency pertains to accused Rohit Tandon 
and the conspiracy was executed on his instructions. 
23. Lastly, ii was submitted by learned senior counsel for 
B 
accused that accused folly cooperated with the investigating 
agency and there was no need to arrest him in this case. He 
further submitted that the actions of Accused persons as 
mentioned in the FIR attract implications and as such the 
correct authority to investigate into the same is the Income 
Tax Department and not the ED. Per contra, learned Special 
C 
Prosecutor for ED submitted that accused only cooperated 
in the investigation in ECIR No.14116 and not in ECIR No. 
18116. He further submitted that as sufficient material 
surfaced on record against the present accused and he did 
not cooperate in the investigation in the present case, therefore, 
D 
accused Rohit Tandon was arrested in this case. He submitted 
that he does not dispute the jurisdiction of Income Tax 
Department so far as other aspects of the matter are 
concerned. 
24. As per section 45 of PMLA, while considering grant of E 
bail to accused, the court has to satisfy that:-
i. There are reasonable grounds for believing that accused 
is not guilty of such offence and that 
ii.
He is not likely to commit any offence, while on bail. 
25. In the present case, accused has failed to satisjy this court 
that he is not guilty of alleged offence punishable under 
section 3 of PMLA. He has not been able to discharge the 
burden as contemplated under section 24 of the Act. 
F 
26. Accused is alleged to have been found involved in a white 
collar crime. The alleged offence was committed by accused G 
in conspiracy with other co-accused persons in a well planned 
and thoughtfal manner. It has been observed in a catena of 
decisions by Hon' ble Superior Courts that economic offences 
constitute a class apart and need to be visited with a different 
approach in the matter of bail. The economic offence having 
H
166 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
deep rooted conspiracies and involving huge loss of' public. 
fimdi needs to be viewed seriously and c:onsidered as grave 
o.flences affecting the economy of the co1111t1:v as a whole 
and thereby posing serious threat to the financial health of 
the coun/ly. " 
(emphasis supplied) 
6. Having fonned that opinion and noticing that the investigation 
was at the initial and crucial stage and that the source offunds of proceeds 
of crime was yet to be ascertained till then and that the recovery of 
balance proceeds of crime was in the process, the question of enlarging 
the appellant on bail does not arise, more so, when there was every 
possibility that he 1111ay tamper with the evidence and influence the material 
prosecution witnesses. Accordingly, the bail application was rejected by 
the Sessions Court vide judgment and order dated 7ili January, 2017. 
7. Aggrieved, the appellant approached the High Court of Delhi 
by way of bail application under Section 439 of the Cr.P.C. read with 
Section 45 of the Act of2002. The High Court independently analysed 
all the contentions raised by the appellant and after adverting to the 
relevant materials, rejected the application for grant ofbail preferred by 
the appellant. The High Court found that the Act of 2002 does not 
prescribe that the Enforcement Directorate is debarred from conducting 
investigation in relation to the offences under Sections 3 & 4 of the
Act 
of2002 unless the Crime Branch concludes its investigation in relation 
to FIR No.205/2016 or was to file charge-sheet for commission of 
scheduled offence. Further, the proceedings under the Act of2002 are 
distinct from the proceedings relating to scheduled offence and both the 
investigations can continue independently. The High Court then noted 
that Section 44 of the Act of2002 is an enabling provision, to have a joint 
trial in such a situation to avoid conflicting and multiple opinions of the 
Courts. But proceeded to hold that the said possibility would arise only 
when the charge-sheet is filed after completion of investigation in relation 
to FIR No.205/2016 and the case is committed to the concerned Court. 
The High Court held that Section 44 of the Act of2002 does not envisage 
a joint investigation but is a provision stipulating that the trial of offence 
under Section 3/4 of the Act of2002 and any scheduled offence connected 
to the offence under that section may be tried only by the Special Court 
constituted for the area in which the offence has been committed. While 
considering the merits of the allegations against the appellant, in particular,
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
167 
[A.M. KHANWILKAR, J.] 
the materials on record, the High Court analysed the same in the following 
A 
words: 
"14. Jn FIR No.20512016 allegations are that Raj Kumar 
Goel; Ashish Kumar, Bank Manager, Kotak Mahindra Bank, 
K. GMarg Branch and others conspired for illegal conversion 
of demonetized currency notes into monetized currency by 
way of depositing cash in various accounts of the firms and 
subsequently getting Demand Drafts issued in fictitious 
names. It is further alleged in the said FIR that accused therein 
opened bank accounts in the name of 'Group of Companies' 
in Kotak Mahindra Bank. In ECJR No.18, transactions 
statements of accounts were collected pertaining to these 
'Group of Companies' from Kotak Mahindra Bank and it 
emerged that from 15.11.2016 to 19.11.2016, there was huge 
cash deposit to the tune of '31.75 crores by Raj Kumar Goel 
and his associates. It was also found that the Demand Drafts 
amounting to '38 crores were issued in fictitious names during 
that period. It cannot be said at this stage that offences 
referred in FIR No.20512016 and the ECIR No.18 have. no 
nexus. 
15. Prosecution rmder Section 45 of PMLA for commission 
B 
c 
D 
of offence under Section 3 punishable under Section 4 of E 
PMLA has already been initiated by ED in the Special Court. 
By an order dated 25.02.2017, learned Addi. Sessions Judge 
I Special Court (P MLA) has taken cognizance against Roh it 
Tandon (present
petitioner), Ashish Kumar and Raj Kumar 
Goel. Dinesh Bhola and Kamal Jain have also been summoned 
to face trial under Section 4 of P MLA. Raj Kumar Goel and 
Ashish Kumar continue to be in custody in the said 
proceedings. 
16. On perusal of the complaint lodged under Section 45 
PMLA, it reveals that serious and grave allegations have been 
leveled against the petitioner and others. The a/legations are 
categorical and specific; definite role has been assigned to 
each accused. It is alleged that during the period from 
15.11.2016 to 19.11.2016, huge cash to the tune of '31.75 
crores was deposited in eight bank accounts in Kotak 
F 
G 
H
168 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
Mahindra Bank in the accounts of the 'Group of Companies'. 
It gives details of Demand Drafts issued during 15.11.2016 
to 19.11.2016 from eight bank accounts in the name of Sunil 
Kumar, Dinesh Kumar, Abhilasha Dubey, Madan Kumar. 
Madan Saini, Satya Narain Dagdi and Seema Bai on various 
dates. Most of the Demand Drafts issued have since been 
recovered. Its detail finds mention in Table No.2 given in the 
complaint. 
17. During arguments, specific query was raised and the 
learned Senior Counsel for the petitioner was asked as to, to 
whom the money deposited in the various accounts belonged 
Learned Senior Counsel for the petitioner was fair enough to 
admit tllat the whole money belonged to the petitioner. When 
enquired as to from which 'source', huge chsh was procured, 
there was no clear response to it. Again, learned Senior 
Counsel for the petitioner was asked as to how the cash 
belongillg to the petitioner happened to be deposited in various 
accounts of the 'Group of Companies' which were not owned 
by the petitioner and what was its purpose. It was further 
enquired as to why the Demand Drafts were got issued in the 
names of the persons referred above and what was its specific 
purpose; Learned Senior Counsel for the petitioner avoided 
to answer these queries stating that the defence of the petitioner 
could not be disclosed at this juncture to impact his case during 
trial. Apparently, no
plausible explanation has been offered 
as to what forced the petitioner to deposit the old currency to 
the tune of '31. 75 crores in eight accounts of the different 
'Group of Companies' in Kotak Mahindra Bank during the 
short period from 15.11.2016 to 19.11.2016. There was no 
explanation as to why the Demand Drafts for the said amount 
were got issued in the name of sham people whose identity 
was not known. The purpose of all this exercise seemingly 
was to deposit the cash (old currency) first, get the Demand 
Drafts issued in fictitious names and obtain monetized 
currency by cancelling them subsequently. The petitioner also 
did not place on record any document whatsoever to show as 
to from which legal source, the cash was procured to deposit 
in the bank accounts of strangers. I find no substance in the
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
169 
[A.M. KHANWILKAR, J.] 
petitioner's plea that petitioner's only liability was to pay A 
income tax on the unaccounted money I income. In my 
considered view. mere payment of tax on the unaccounted 
money fi·om any 'source · whatever would not convert it into 
'legal· money. Needless to say, huge deposit was a sinister 
attempt I strategy by the petitioner and others to convert the 
'old currency· into new one to frustrate the Demonetization 
Policy primarily meant to unearth black money. 
B 
18. Allegations against the petitioner are not without 
substance. The prosecution has recorded statements of the 
petitioner on various dates and that of Dinesh Bhola. Ashish 
Kumar (Branch Manager. Kotak Mahindra Bank). Raj Kumar 
Goel, Kamal Jain (petitioner :s Chartered Accountant), Vimal 
Negi. Jivan Singh and Vanm Tandon under Section 50 PMLA 
c 
on various dates. There statements have evidentiary value 
under Section 50 PMLA. Prima facie, the version given by 
them is in consonance with the prosecution case. The 
D 
prosecution has further relied ll[JOn Call Data Records, CCTV 
footage, Account Trend Analysis. " 
(emphasis supplied) 
8. The High Court opined that keeping in mind the rigors of Section 
45 of the Act of 2002 for the release of the accused charged under Part 
A of the Schedule, on bail, coupled with the antecedents of the appellant 
of being involved in other similar crime registered as FIR No.19712016. 
for offence
under Section 420, 409, 188, 120B of IPC dated 14'h 
December, 2016 by Crime Branch and ECIR No.14/DZ/JI/2016 
registered on l61h December, 2016 by Enforcement Directorate for 
offences under Sections 3/4 of the Act of 2002. Further, during a raid 
conductedjoin!
1 ~· hy the Crime Branch and Income Tax Department on 
JOili December .. 2016 at around 10.00 P.M. at the office premises of the 
appellant, currency of Rs.13.62 Crore was recovered including new 
currency in the denomination ofRs.2000/- amounting to Rs.2.62 Crore. 
In addition, the appellant had surrenc~red Rs.128 Crore during the raid 
conducted by the Income Tax Department on 6/8 October, 2016 in his 
office and residential premises. No reliable and credible documents 
were forthcoming from the appellant about the source from where he 
had obtained such a huge quantity of cash. The possibility of the same 
E 
F 
G 
H
170 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
A 
being proceeds of crime cannot be ruled out. Hence, it noted that the 
question of granting bail did not arise, taking into consideration the serious 
allegations against the appellant and other facts including severity of the 
punishment prescribed by law. Accordingly, the bail application of the 
appellant came lo be rejected. As a consequence, the pending application 
which was considered along with the bail application was also disposed 
B 
of by the impugned judgment and order dated 5th May, 2017 passed by 
the High Court., 
9. We have heard Mr. Mukul Rohatgi, learned senior counsel 
appearing for the appellant and Mr. Tushar Mehta, learned Additional 
Solicitor General for the Union of India. They have also filed written 
C 
submissions. 
10. Before we analyse the rival submissions, for the completion 
of record, we must mention that after the impugned judgment, the Crime 
Branch filed th~ charge-sheet before the appropriate Court in relation to 
FIR No.205/2016 on 24'h June, 2017. Similarly, the Enforcement 
D 
Directorate has filed supplementary complaint CC No. 700/2017 in relation 
to ECIR 18/2016, which refers to further material gathered during the 
investigation, indicating the complicity of the concerned accused in the 
crime for offence punishable under Section 3 of the Act of 2002. A 
comprehensive supplementary complaint has been filed before the District 
E 
and Sessions Judge, Saket, New Delhi (Designated
Court under the 
Prevention of Money-Laundering Act, 2002) on 2"" August, 2017. 
11. Before this supplementary complaint was filed, the appellant 
preferred second bail application in the present case before the High 
Court of Delhi at New Delhi, being Bail Application No.136112017. This 
F 
application was filed on 12"' July, 2017. Along with the said bail application 
the appellant filed an application being Criminal M.A. No.1293 of2017 
for directing his interim release in connection with ECIRIDZ/W2016 on 
the assertion !hat his mother was seriously ill and required immediate 
medical attention because of the injuries suffered by her on 2o•h June, 
2017. The said interim release application was allowed on 1 O'" August, 
G 
2017. Notably, the appellant was advised to withdraw the regular (second) 
Bail Application No.1361/2017. The learned Single Judge of the High 
Court by order dated !Olh August, 2017 acceded to the prayer so made 
by the appellant. The order passed by the learned Single Judge of the 
High Court reads thus: 
H
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
171 
[A.M. KHANWILKAR, J.] 
"BAIL APPLN. 136112017 
A 
The petitioner has prayed for bail in connection with ECIR/ 
18/DZil/2016/AD registered under Section 3 & 4 of 
Prevention .of Money Laundering Act, 2002. 
Simultaneously an application has been filed seeking interim 
B 
bail on the ground of illness of the mother ~f the petitioner 
who has recently suffered a fracture in the neck. 
Mr. Mukul Rohatgi, learned Sr. Advocate seeks permission 
to withdraw the regular bail application on the observation of 
the bench that the earlier bail application was rejected only c 
on 5th of May, 2017. However he presses the interim bail 
application. 
Accordingly the regular bail application is dismissed as 
withdrawn. 
Crl.M.A.No.129312017 (application for interim bail) 
D 
It has been submitted on behalf of the petitioner that he is the 
only son of his mother who has suffered a fall and has got a 
fracture in her neck. The sister of the petitioner is stationed 
abroad. The petitioner has a son who is of young age. The 
E 
petitioner has also drawn the attention of this Court to the 
medical report which indicates that a plaster has been put on 
the fracture but she has been suffering from acute pain. 
It has been further submitted that the charge sheet in the main 
case has been submitted and that the petitioner has remained 
in jail for more than seven months by now. 
Opposing the aforesaid prayer for grant of interim bail. Mr. 
Mahajan,
learned Sr. Standing Counsel submits that this is a 
case of serious fiscal impropriety of great magnitude and there 
is a possibility of the petitioner tampering with evidence if he 
comes out from the jail even for a short period. No definite 
reasons, however, have been assigned by Mr.Mahajan, for 
such ii presumption that the petitioner would tamper with the 
evidence specially when charge sheet in the main case has 
already been submitted. 
F 
G 
H
172 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
Mr.Rohtr:igi. learned senior counsel has drawn the attention 
of this Court to the fact that whenever the petitioner was 
summoned to answer to the Queries, he had visited the office 
of the ED and in the past, had never tried to evade the process 
of investigation. 
Taking into account the aforesaid facts. special~v the period 
of incarceration of the petitioner. submission of the charge 
sheet in the main case and the illness of the mother of the 
petitioner. this Court is inclined to grant interim bail to the 
petitioner for a period of 3 weeks. 
Let the petitioner be released on interim bail for the period of 
3 weeks, to be counted from the date of his release, on his 
furnishing a bond in the sum of Rs. 25,0001- with two sureties 
of the like amount to the satisfaction of special court. 
However it is made clear that the petitioner shall not tamper 
with the evidence or commit any act which would be 
prejudicial to the prosecution side. Should anything of that 
kind be reported. this Court would consider the desirability 
of withdrawing/cancelling the interim bail. 
The petitioner shall not. unnecessary, seek extension of the 
interim bail granted to him. It is also specified that the 
petitioner shall not leave the country under any circumstances 
whatsoever. Should the petitioner intend to go out of the 
territorial confines of NCR of Delhi, permission would be 
required to be taken from the
Special Court. The petitioner 
shall also deposit his passport before the Special court while 
furnishing his bonds. 
Application is disposed of accordingly. 
Dasti." 
(emphasis supplied) 
12. It is relevant to note that the aforementioned order for interim 
release of the appellant was confirmed by this Court on 12"' August, 
2017.
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
173 
[A.M. KHANWlLKAR, J.] 
13. The appellant was thereafter advised to file the present appeals 
A 
to assail the judgment and order dated 5ili May, 2017 passed by the High 
Court of Delhi at New Delhi in Bail Application No.119 of 2017 and 
Criminal M.B. No.121 of2017. The special leave petitions were filed on 
l 8lli August, 2017. During the pendency of these special leave petitions, 
the appellant was advised to also file a writ petition under Article 32 of B 
the Constitution of India to challenge the validity of the provisions of the 
Act of2002. The same was filed on 23"' August, 2017, being Writ Petition 
(Civil) No.121 of2017. The reliefs claimed in the said writ petition read 
thus: 
"PRAER 
c 
(i) Issue a writ of mandamus or any other appropriate writ, 
order or direction declaring that the conditions/limitations 
contained in Section 45(1) of Prevention of Money 
Laundering Act. 2002 (Act 15 of 2003) to the extent that it 
imposes rigors/restrictions in the grant of bail in any offence 
punishable upto 7 years under the provisions of Prevention 
D 
of Money Laundering Act. 2002 (Act 15 of 2003) as 
unreasonable, arbitrary and unconstitutional being violative 
of the fundamental rights of the Petitioner guaranteed and 
''''''"prot~i:i/d .;mder Articles 14 and 21 of the Constitution of 
,, 
... 
,• 
.~- .. 
. 
" "1iidia:· ·. . , . 
. 
E 
.;\'·.'i -,,; r. ·,•1:. 
,1 \;,\\().i),Jn-.the plterna/ive to prayer (i) above.
issue a writ of 
'·"'"'· m,and_q111us 1:1r .. a!ly. qt her appropriate writ. order or direction 
, :,;;.\ li,eP4irig cjpwn:the;~·cope and ambit of Section 45(!) of the 
,,,.,""[!.r.eyeri/iow,of Money Laundering Act. 2002 (Act 15 of 2003). 
11., ;,,,s.o.(hqt<!_he rigqrs.in grant ofbai/ are not applicable in the 
F 
case of the Petitioner, where the alleged scheduled offences 
in (C No. 41 of 2017 arising out of charge-sheet No. 1 dated 
''-'\ ''24:o6.2!Jf1'f;led b}'the Crime Branch, New Delhi alleging 
em•·· 'co'ihlitiH'io~ ·ojoffen'des under Sections 42011881109/120BI 
««\ :..']'4'-IPC'and'Settion· 12· of the Prevention of Corruption Act, 
"'''\mil'98B'(nbne of which were under Part A of the Schedule prior 
G 
to the Prevention of Money Laundering (Amendment) Act, 
''"'"2QO•,(Act 2, of 201$) andformed part of Part B of the 
. !$chedule; 
q\ 1 
~ P. :•i\',-, , 
.· ''"' 
.-\'.'. 
'\i• . •' 
·y·. 
H
174 
A 
B 
c 
D 
E 
F 
SUPREME COURT REPORTS 
[2017) 13 S.C.R. 
(iii) bsue a writ of mandamus or any other appropriate writ, 
order or direction declaring the continued incarceration of 
the Petitioner since 28.12.2016 in ECIR/18/DZ-1112016/AD 
dated 26.I 2.2016 under Section 314 of the Prevention of 
Money Laundering Act, 2002 is illegal, unconstitutional and 
in violation of the fundamental right of the Petitioner 
guaranteed and protected under Article 21 of the 
Constitution of India; 
(iv) issue a writ of mandamus or any other appropriate writ, 
order or direction in the nature of mandamus declaring that 
the offences under the Prevention of Money Laundering Act, 
2002 (Act 15 of 2003) pursuant to the Prevention of Money 
Laundenlng (Amendment) Act, 2005 (Act 20 of 2005) which 
came int@ force w.ef 01.07.2005 are non-cognizable offences 
and ther~fore, it is mandatory to comply with the provisions 
of Sections I 55, I 77(1) and 172 of the Code of Criminal 
Procedure, 1973 and declare that the law laid down by the 
Division Bench of the Hon 'ble Delhi High Court in its 
judgment dated 27.4.2016 (reported in 2016 SCC Online 
Delhi 2493) and by the Hon 'ble Gujarat High Court in Rakesh 
Manekchand Kothari vs. Union of India [Special Criminal 
Application (Habeas Corpus) No. 424712015] decided on 
03.08.2015 holding that the offences under Section 3 of the 
Prevention of Money Laudnering Act, 2002 punishable 
under Section 4 thereof is a non-cognizable offence is good 
law
and the contrary view taken by the Hon 'ble Bombay High 
Court in its judgment dated 14.12.20 I 6 in Ch hag an 
Chandrakant Bhujbal vs. Union of India & Ors. is bad in 
la111; 
(v) lay down guidelines for compliance by all Courts for 
grant of bail in proceedings arising out of and concerning 
the Prevention of Money Laundering Act, 2002 by 
G 
expounding the scope of Section 439 of the Code of Criminal 
Procedure, 1973; 
H 
(vi) Issue rule nisi in terms of Prayers (i) to (v) above; and 
(vii) And/or puss any other or further orders which Your 
Lordships muy deem .fit and proper in the interest of justice.
• 
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
175 
[A.M. KHANWILKAR, J.] 
14. The aforementioned writ petition was listed together with the 
A 
appeals on 30"' October, 2017. During oral arguments, however, the 
counsel appearing for the appellant, in all fairness, stated that the grounds 
urged 1n the said writ petition need not be considered at this stage and 
that the appeals preferred against the impugned judgment and order 
dated S" May, 2017 be examined on the basis of the prevailing statutory 
B 
provisions, including the rigors of Section 45 of the Act of2002. In other 
words, the challenge to the impugned judgment will have to be considered 
as per the prevailing-provisions and not with reference to the challenge 
regarding the validity thereof. 
15. Reverting to the first contention of the appellant, that the 
reasons which weighed with the learned Single Judge of the High Court 
C 
while directing interim release of the appellant, would apply proprio 
vigore for considering the regular bail. In that, the learned Single Judge 
vi de order dated 1 O" August, 2017 noted the following circumstances: 
i) Petitioner never tried to evade the investigation; 
D 
ii) The period of incarceration (7 y, months); 
iii) Submission of charge-sheet in the main case on 24/6/17; 
iv) Illness of the mother of the Petitioner; 
v) No definite reasons assigned by the Counsel for the 
E 
Respondent to substantiate allegation that Petitioner would 
tamper with evidence especially when
charge-sheet in the 
main case has been submitted. 
16. The argument though attractive at the first blush deserves to 
be rejected. In our opinion, the order dated 10th August, 2017 passed by 
the High Court directing interim release of the appellant was primarily 
on account of the illness of his mother. No more and no less. The other 
observations in the said order will have no bearing on the merits of the 
controversy and required to be reckoned whilst considering the prayer 
F 
for grant of regular bail. For that, the appellant must succeed in 
overcoming the threshold of the rigors of Section 45 of the Act of2002. 
G 
Indubitably, the appellant having withdrawn the regular (second) bail 
application, the consideration of prayer for grant ofinterim release could 
not have been taken forward. Besides, in the backdrop of the opinion 
recorded by the Co-ordinate Bench of the High Court (in its decision 
dated 5"' May, 2017) whilst considering the application for grant ofregular 
H
176 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
bail, which was affter filing of the initial complaint CC No. 700/2017 (on 
23'" February, 2017), was binding until reversed or a different view could 
be taken because of changed circumstances. Suffice it to observe that 
indulgence shown to the appellant in terms of order dated l O'h August, 
2017 will be of no avail. In that, the facts such as the appellant never 
tried to evade the investigation or that he has suffered incarceration for 
over 7Yz months or that the charge-sheet has been filed in the predicate 
offence registered under FIR No.205/2016 or the factum of illness of 
the mother of the appellant or the observation that no definite reason has 
been assigned by the respondents for substantiating the allegation that 
the appellant would tamper with the evidence, may become relevant 
only ifthe threshold stipulation envisaged under Section 45 of the Act of 
2002 was to be fulfilled. The said provision reads thus: 
"45. Offences to be cognizable and non-bailable.-(1) 
Notwithstanding anything contained in the Code of Criminal 
Procedure, 1973 (2of1974), no person accused of an offence 
punishable for a term of imprisonment of more than three 
years under Part A of the Schedule shall be released on bail 
or on his ojVn bond unless-
(i) the Pu/J,/ic 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, may be released on bail, if 
the Special Court so directs: 
Provided fi1rther 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 a special order made in this behalf 
by that Government.
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
177 
[A.M. KHANWILKAR, J.) 
(I A) Notwithstanding anything contained in the Code of A 
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 limitations under the Code of Criminal 
Procedure, 1973 (2 of 1974) or any other law for the time 
being in force on granting of bail. " 
B 
(emphasis supplied) 
c 
The sweep of Section 45 of the Act of 2002 is no more res 
intergra. In a recent decision of this Court in the case of Gautam Kundu 
Vs. Directorate of Enforcement (Prevention of Money-Laundering 
Act), Government of India, 1 this Court has had an occasion to examine 
it in paragraphs 28-30. It will be useful to advert to paragraphs 28 to 30 
D 
of this decision which read thus: 
"28. Before dealing with the application for bail on merit, it 
is to be considered whether the provisions of Section 45 of 
the PMLA are binding on the High Court while considering 
the application for bail under Section 439 of the Code of E 
Criminal Procedure. There is no doubt that P MLA deals with 
the offence of money laundering and the Parliament has 
enacted this law as per commitment of the country to the 
United Nations
General Assembly. PMLA is a special statute 
enacted by the Parliament for dealing with money-laundering. 
Section 5 of the Code of Criminal Procedure, 197 3 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 the PMLA starts with a non obstante clause 
which indicates that the provisions laid down in Section 45 
of the P MLA will have overriding effect on the general 
provisions of the Code of Criminal Procedure. in case of 
1(201s) 16 sec l 
F 
G 
H
178 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
A 
conflict between them. Section 45 of the PMLA imposes 
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 the PMLA: 
(i) 
That the prosecutor must be given an opportunity to 
B 
oppose the application for bail; and 
c 
D 
E 
F 
G 
H 
(ii) That the Court must be satisfied that there are reasonable 
grounds for believing that the accused person is not guilty of 
such offtnce and that he is not .likely to commit any offence 
while on bail. 
30 . The conditions specified under Section 45 of the PMLA 
are mandatory and needs to be complied with which is further 
strengthened by the provisions of Section 65 and also Section 
71 of the PMLA. Section 65 requires that the provisions of 
Cr.P. C. shall apply in sofaras they are not inconsistent with 
the provisions of this Act and Section 71 provides that the 
provisions of the PMLA shall have overriding effect 
notwithstanding anything inconsistent therewith contained in 
any other law for the time being in force. P MLA has an 
overriding effect and the provisions of Cr.P. C. 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 of Cr.P.C. 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) 
17. In paragraph 34, this Court reiterated as follows: 
34. "xxi: xi:x xxx We have noted that Section 45 of the 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 the P MLA imposes two 
conditions for grant of bail, specified under the said Act. We
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
[A.M. KHANWILKAR, J.] 
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 a sick or infirm. 
Therefore, there is no doubt that the conditions laid down 
under Section 45-A of the 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 Proce-
dure for grant of bail to any person accused of committing 
offence punishable under Section 4 of the P MLA, even when. 
the applicalion for bail is considered under Section 439 of 
the Code of Criminal Procedure. " 
The decisions of this Court in the case of Subrata Chattoraj Vs. 
Union of India, 1 Y.S. Jagan Mohan Reddy Vs. CBI 3, and Union of 
India Vs. Hassan Ali Khan ' have been noticed in the aforesaid 
decision. 
18. 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 Act of 2002. 
179 
A 
B 
c 
D 
E 
19. It is not necessary to multiply the authorities on the sweep of F 
Section 45 of the Act of 2002 which, as aforementioned, is no more res 
integra. The decision in the case of Ranjitsing Brahmajeetsing 
Sharma Vs. State of Maharashtra and Anr . .' and State of 
Maharashtra Vs. Vishwanath Maranna Shelly, 6 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 
G 
'(2014) s sec 768 
'(2013) 1sec439 
'(2011) 10 sec 235 
'(2005) 5 sec 294 
'(2012) lO sec 561 
H
180 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
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 committe\l 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 ofbroad probabilities. Further, the Court 
is required to record a finding as to the possibility of the accused 
committing a crime which is an offence under the Act after grant ofbail. 
In Ranjitsing B~ahmajeetsing Sharma (supra), in paragraphs 44 to 
46 of the said decision, this Court observed thus: 
"44. The wording of Section 21(4), in our opinion. does not 
lead lo 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 afinding that the applicant 
has not committed such an offence. Jn such an event, ii 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 MCOCA. therefore. must be 
construed
teasonably. 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 hail. 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 ji.1ture conduct of an accused. the court 
must necessarily consider this aspect of the matter having 
regard ro the antecedents of the accused, his propensities and 
the nature and manner in which he is alleged to have committed 
the offence. 
45. Jr is, fimhermore. 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 
hail.
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
181 
[A.M. KHANWILKAR, J.] 
46. The duty of the court at this stage is not to weigh the A 
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. " 
20. Reverting to the decision in the case of Manoranjana Sinh 
Vs. Central Bureau of Investigation,' we hold that the same is on the 
facts of that case. Even in the said decision, the Court has noted that 
B 
c 
the grant or denial of bail is regulated to a large extent by the facts and 
D 
circumstances of each case. In the case of Sanjay Chandra Vs. Central 
Bureau of Investigation, 8 the Court was not called upon to consider 
the efficacy of Section 45 of the Act of2002 which is a special enactment. 
21. Keeping in mind the dictum in the aforesaid decisions, we find 
no
difficulty in upholding the opinion recorded by the Sessions Court as 
well as the High Court in this regard. In our opinion, both the Courts 
have carefully analysed the allegations and the materials on record 
indicating the complicity of the appellant in the commission of crime 
punishable under Section 3/4 of the Act of 2002. The Courts have 
maintained the delicate balance between the judgment of acquittal and 
conviction and order granting bail before commencement of trial. The 
material on record does not commend us to take a contrary view. 
22. Realizing this position, the learned counsel appearing for the 
appellant would contend that even ifthe allegations against the appellant 
are taken at its face value, the incriminating material recovered from the 
appellant or referred to in the complaint, by no stretch of imagination, 
· would take the colour of proceeds of crime. In fact, there is no allegation 
in the charge-sheet filed in the scheduled offence case or in the 
prosecution complaint that the unaccounted cash deposited by the 
7(2017)5 SCC218 
'(2012) 1 sec 40 
E 
F 
G 
H
182 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
(2017] 13 S.C.R. 
appellant is as a result of criminal activity. Absent this basic ingredient, 
the property derived or obtained by the appellant would not become 
proceeds of crime. To examine this contention, it would be useful to 
advert to Sections 3 and 4 of the Act of2002. The same read thus: 
"3. Offen(:e of money-laundering.- 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. 
4. Punishment for money-laundering.- Whoever commits the 
offence of money-laundering shall be punishable with 
rigorous imprisonment for a term which shall not be less than 
three year$ but which may extend to seven years and shall 
also be liable to fine. 
Provided that where the proceeds of crime involved in 
money-laundering relates to any offence specified under 
paragraph 2 of Part A of the Schedule, the provisions of this 
section shaft have effect as iffor the words "which may extend 
to seven years", the words "which may extend to ten years" 
had been substituted." 
23. As the fulcrum of Section 3 quoted above, is expression 
'proceeds ofcrimf, the dictionary clause in the form of Section 2(1 )(u) 
is of some relevance. The same reads thus: 
"2(l)(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; " 
It will be useful to advert to the meaning of expression "property" 
as predicated in S¢ction 2(l)(v). The same reads thus: 
"2(l)(v) "property" means any property or assets of every 
description, whether corporeal or incorporeal, movable or
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
183 
[A.M. KHANWILKAR, J.] 
immovable, tangible or intangible and includes deeds and A 
instruments evidencing title to, or interest in, such property . 
or assets, wherever located; 
The expression 'scheduled offence' has been defined in Section 
2(1)(y) of the Act of2002. The same reads thus: 
B 
"2(1 )(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 
C 
more; or 
(iii) the offences specified under Part C of the Schedule;" 
Indisputably, the predicate offence is included in Part A in 
paragraph 1 of the Schedule in the Act of 2002, in particular Sections 
D 
420, 467, 471 and 120B ofIPC. Indeed, the expression "criminal activity" 
has not been defined. By its very nature the alleged activities of the 
accused referred to in the predicate offence are criminal activities. The 
possession of demonetized currency in one sense, ostensibly, may appear 
. to be only a facet of unaccounted money in reference to the provisions 
of the Income Tax Act or other taxation laws. However, the stated 
activity allegedly indulged into by the accused named in the commission 
of predicate offence is replete with mens rea. In that, the concealment, 
possession, acquisition or use of the property by projecting or claiming it 
E 
as untainted property and converting the same by bank
drafts, would 
certainly come within the sweep of criminal activity relating to a scheduled 
F 
offence. That would come within the meaning of Section 3 and punishable 
under Section 4 of the Act, being a case of money-laundering. The 
expression 'money-laundering' is defined thus: 
"2(1)(p) "money-laundering" has the meaning assigned to ii 
~SK~n~ 
G 
24. The appellant then relies upon the decision in the case of 
Gorav Kathuria Vs. Union of India,' of the Punjab and Haryana High 
Court which has taken the view that Section 45(1) of the Act of2002 
'(2016 sec Online P & H 3428) 
H
184 
A 
B 
c 
SUPREME COURT REPORTS 
(2017] 13 S.C.R. 
requires to be nead down to apply only to those scheduled offences 
which were incl)lded prior to the amendment in 2013 in the Schedule. It 
is contended tbllt the offence, in particular, under Sections 420, 467 and 
471 of!PC, may not be treated as having been included in the scheduled 
offences for the purpose of the Act of2002. Further, if any other view 
was to be taken, the provision would be rendered ultra vires. We are in 
agreement with the stand taken by the respondents that the appellant 
cannot be permitted to raise the grounds urged in the writ petition, hearing 
whereof has be¢n deferred on the request of the appellant. In other 
words, the appellant should be in a position to persuade the Court that 
the allegations illl the complaint and the materials on record taken at its 
face value do not constitute the offence under Section 3 read with the 
schedul(' of the Act of 2002 as in force. 
25. It has been brought to our notice that the decision in Gorav 
Kathuria (supra) was challenged before this Court by way of Criminal 
Appeal No.737of2016, which has already been dismissed on 12~ August, 
D 
2016. The order originally passed on the said criminal appeal reads thus: 
E 
F 
"Though the High Court has granted certificate to appeal, 
after arguing the matter for some time, learned counsel for 
the petitfoner concedes that the impugned judgment of the 
High Court is correct. 
This appeal is, accordingly,
dismissed " 
However, that order has been subsequently revised which reads 
thus: 
"Though the High Court has granted certificate to appeal, 
we have heard the learned counsel for some time and are of 
the opinion that the impugned judgment of the High Court is 
correct. 
G 
This appeal is, accordingly, dismissed." 
H 
At the same time the respondents have drawn our attention to a 
chart contained in their written submissions pointing out that other High 
Courts have disagreed with the principle expounded in Gorav Kathuria '.Y 
case. The said chart reads thus:
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
185 
[A.M. KHANWILKAR, J.] 
(i) 
- - T - ..... - - - --
.. - - - - - - - - -
.. --- -
-
.. - - --
- .... 
Cr!. Misc. Application (for Regular Bail) 
High Court of 
No.7970117 
Gujarat 
Jignesh Kishorebhai Baj iawa/a vs. State of 
1 
Gujarat & Ors. 
I Manu/GJ/103512017 
I 
(ii) 
· Cr/. Petition No.36612017 
High Court of 
I 
' 
' 
' SC Jayachandra vs Enforcement 
Karnataka at 
I 
' I 
Directorate, Bangalore 
Benga/uru 
I 
I 
I 
: 2017 (349) ELT 392 KAR 
' 
', 
' I 
. (iii) 
WP[Crl.} No.333 of 2015 
High Court of 
Kish in S. Loungani vs. UOI & ors. 
Kera la at 
' 
(2017) 1 KHC 355 
Ernakulam 
; 
' 
' (iv) 
Cr!. Mic. Application (for Regular Bail) 
High Court 
/ No.30674116 
Gujarat at 
' 
Ahmedabad 
! 
i Pradeep Nirankarnath Sharma vs 
! 
: Directorate of Enforcement 
' 
: 2017(350)ELT449(GUJ) 
I 
' 
I ..... ---l-- ... -- --- -- " --·. 
-. -- -
-. --- -
--------------
I (v) 
I Cr/. Writ Petition No.393/12016 
High Court of 
I 
: Chhagan Chandrakant Bhujha/ vs Union of 
Bombay 
! 
i India & Ors. 
' 
I 2016 sec Online Born 9983 
' 
26. For the time being, it is not necessary for us to examine the 
issues arising from the decision of the Punjab and Haryana High Court 
or the rejection of criminal appeal by this Court against that decision. 
The constitutional validity of Section 45 of the Act of2002 will have to 
A 
B 
c 
D 
E 
be examined by this Court in the writ petition on its own merits. The 
summary dismissal of criminal appeal
will not come in the way of F 
considering the correctness of the decision of the Punjab and Haryana 
High Court in view of the conflict of opinion with the other High Courts. 
27. 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 
demonetized currency and also new currency has been acquired by him. 
G 
H
186 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
The prosecution is relying on statements of26 witnesses/accused already 
recorded, out of which 7 were considered by the Delhi High Court. 
These statement~ are admissible in evidence, in view of Section 50 of 
the Act of 2004. The same makes out a formidable case about the 
involvement oftl)e appellant in commission ofa serious offence ofmoney-
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 Act of 2002 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. 700/2017 is completed; and that the proceeds of crime is already in 
possession of the investigating agency and provisional attachment order 
in relation thereto passed on 13'' February, 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 January, 2017 and has not been interrogated or examined by 
the Enforcement Directorate thereafter; all these will be of no 
consequence. 
28. It was urged on behalf of the appellant that Demonetization 
Notification dated 8ili November, 2016 imposes no limit in KYC compliant 
accounts on the quantum of deposit and no restrictions on non-cash 
transactions. The relevant portion of the said notification reads thus: 
"(iii) there shall not be any limit on the quantity or value of 
specified bank notes to be credited to the account maintained 
with the bank by a person, where the specified bank notes 
are tendered; however. where compliance with extant Know 
Your Customer (KYC) norms is not complete in an account. 
the maximum value of specified bank notes as may he depos-
ited shall be Rs. 50. 000/-; 
(vii) there shall be no restriction on the use of any non-cash 
method of operating the account of a person including
ROHIT TANDON v. THE ENFORCEMENT DIRECTORATE 
187 
(A.M. KHANWILKAR, J.] 
cheques, demand drafts, credit or debit cards, mobile wallets 
A 
and electronic fund transfer mechanisms or the like;" 
We fail to understand as to how this argument can be 
countenanced. The fact that no limit for deposit was specified, would 
not extricate the appellant from explaining the source from where such 
huge amount has been acquired, possessed or used by him. The volume 
B 
of demonetized currency recovered from the office and residential 
premises of the appellant, including the bank drafts in favour of fictitious 
persons and also the new currency notes for huge amount, leave no 
manner of doubt that it was the outcome of some process or activity 
connected with the proceeds of crime projecting the property as untainted 
property. No explanation has been offered by the appellant to dispel the 
C 
legal presumption of the property being proceeds of crime. Similarly, 
the fact that the appellant has made declaration in the Income Tax Returns 
and paid tax as per law does not extricate the appellant from disclosing 
the source of its receipt. No provision in the taxation laws has been 
brought to our notice which grants immunity to the appellant from 
D 
prosecution for an offence of money-laundering. In other words, the 
property derived or obtained by the appellant was the result of criminal 
activity relating to a scheduled offence. The argument of the appellant 
that there is no
allegation in the charge-sheet filed in the scheduled offence 
case or in the prosecution complaint that the unaccounted cash deposited 
by the appellant is the result of criminal activity, will not come to the aid 
E 
of the appellant. That will have to be negatived in light of the materials 
already on record. The possession of such huge quantum of demonetized 
currency and new currency in the form of Rs.2000/- notes, without 
disclosing the source from where it is received and the purpose for 
which it is received, the appellant has failed to dispel the legal presumptiorr 
F 
that he was involved in money-laundering and the property was proceeds 
of crime. 
29. Taking overall view of the matter, therefore, we are not inclined 
to interfere with the well considered opinion of the Sessions Court and 
the High Court rejecting the prayer for grant of regular bail to the 
G 
appellant. However, considering the fact that the appellant is in custody 
since 28'h December, 2016 and the offence is punishable with 
imprisonment for a term extending to seven years only, but not less than 
three years, the Trial Court will be well advised to proceed with the trial 
on day-to-day basis expeditiously. We clarify that the Trial Court must 
H
188 
SUPREME COURT REPORTS 
[2017) 13 S.C.R. 
A 
examine the evi~ence/material brought on record during the trial on its 
own merit and not be influenced by the observations in this decision 
which are limited for considering the prayer for grant of regular bail. 
30. Accordingly, the appeals are dismissed in the above terms. 
B 
Devika Gujral 
Appeals dismissed.