Amit Agarwal @ Vicky Bhalotia, S/o R.L. Agarwal, aged about 40 years, R/o Ram Tekri Road, PO & PS Jugsalai, Ward No.11, Jamshedpur, District East Singhbhum, Jharkhand .... .... Petitioner Versus Directorate of Enforcement, through its Assistant Director, Having it Zonal office, Plot No.1502/B, Airport Road, PO & PS Airport Road, District-Ranchi, Pin-834002, Jharkhand ...... Opp. Party

CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD

For the Petitioner : Mr. Jatin Sehgal, Advocate Mr. Raymon Singh, Advocate Mr. Shailesh Poddar, Advocate Mr. Yash Badkur, Advocate For Opp. Party-E.D. : Mr. Amit Kumar Das, Advocate : Mr. Saurav Kumar, Advocate Mr. Varun Girdhar, Advocate

C.A.V. on 17.09.2025 Pronounced on 08/10/2025 Prayer

1. The instant application has been filed under Sections 483 and 484 of the B.N.S.S., 2023 praying for grant of regular bail in connection with ECIR Case No.05 of 2025 under Section 3 punishable under Section 4 of P.M.L Act, arising out of ECIR/RNZO/18/2024 dated 23.09.2024 alleging commission of offence of money laundering and now pending in the Court of learned Special Judge, CBI- cum-Special Judge under PMLA, Ranchi.

BBl 2025:JHHC:31170 Prosecution case/Facts

2. The brief facts of the case as per the prosecution is that the Directorate General of GST Intelligence (in short DGGI), Jamshedpur filed three complaint cases i.e. Complaint Case No. 678/2024 dt. 29.04.2024 against Shiva Kumar Deora, Complaint Case No. 1280/2024 dt. 04.06.2024 against Sumit Gupta and Complaint Case No. 1281/2024 dt. 04.06.2024 against Amit Gupta u/s 132 of the GST Act r/w section 20 of the Integrated GST Act, 2017 r/w section 34 , 120A , 193 , 195A , 201 , 203 , 204 , 406 , 409 , 420 , 465 , 467 , 468 , 471 of IPC in the court of Economic Office, Jamshedpur. Since u/s 420 , 467 and 471 of the IPC, above stated complaints filed by the DGGI, Jamshedpur are scheduled offence and as per paragraph 1 Part A of the schedule provided under PMLA 2002, the ECIR No. RNZO/18/2004 was recorded on 23.09.2024 for conducting an investigation under PMLA, 2002.

3. As per aforesaid three complaint cases, it is revealed that a syndicate is operational in Jharkhand, West Bengal, Delhi and other States of the Country, Syndicate is indulged in creation, operation and management of fake companies / firms for passing on ineligible ITC (Input Tax Credit) by issuing fake GST bills, without actually delivering the related goods and services and the persons namely Shiva Kumar Deora, Sumit Kumar Gupta and Amit Kumar -2- BBl 2025:JHHC:31170 Gupta are a part of the said syndicate who are knowingly a party with each other and or directly involved in illegal activities of creation of fake companies / firms in the name of various dummy directors/ proprietors in order to avail and pass on ITC to several end beneficiaries in lieu of money, which are proceeds of crime. Further, it has been stated in the complaints that several bogus GST invoices have been generated in Delhi and have traveled to Jharkhand via West Bengal in three to four layers.

4. A portion of these bogus ITCs have also been transferred to other states such a Tamil Nadu, Telangana, Andhra Pradesh, Maharashtra and Odisha and bogus ITC claims have also been taken on the basis of the said fake invoices.

5. As per aforesaid complaint cases Shiva Kumar Deora is the mastermind behind the said fraud committed of availing ITC on the strength of bogus invoices, by way of creation of multiple companies/firms in the name of innocent persons. They hired innocent and needy persons in the name of job at the numeration of Rs. 10,000/- to 15,000/- per month and they were not required attend the office daily. They were asked to provide OTP and PIN, whenever required by them. Subsequently, fake firms and companies were floated in the name of those innocent -3- BBl 2025:JHHC:31170 needy persons after using their identity, documents, without their knowledge or consent.

6. Further, it is also revealed that Sumit Kumar Gupta, the accomplice of Shiva Kumar Deora worked as an office staff member on his instructions for creating DSCs, rent agreements for various firms and companies for which, he was initially paid a monthly salary of Rs. 30,000/-. Shiva Kumar Deora and his accomplices namely Amit Kumar Gupta and Sumit Kumar Gupta are beneficial owners of total 135 shell companies/firms which are floated in names of various dummy directors and by these firms they availing fake ITC to the tune of Rs. 750 crores (Approx) and passed them to several end beneficiaries thereby causing significant loss to the government exchequer.

7. From the analysis of aforesaid complaints as filed by DGGI, Jamshedpur, it is revealed that an FIR was registered against Tutui Debnath, Sumi Shaw and Amit Agarwal @ Vicky Bhalotia (applicant/petitioner herein).

8. Amit Agarwal @ Vicky Bhalotia is also one of the accomplices of main mastermind Shiva Kumar Deora who also works on similar modus in availing fake ITC on strength of bogus invoices.

9. In this regard FIR NO. 98/2022 u/s 420 , 406 , 120B of the IPC registered at Bowbazar Police Station, Kolkata against Amit Agarwal @ Vicky Bhalotia in relation to the -4- BBl 2025:JHHC:31170 matter pertaining to availing fake ITC to the tune of Rs. 5,05,91,296/-.

10. Amit Agarwal is one of the directors of Greentech Steel Private Limited which are indulged in claiming ineligible ITC on strength of bogus invoices without actually delivering the goods and services. Shiva Kumar Deora and Amit Agarwal @ Vicky Bhalotia are also common directors / proprietors of various firms. From the scrutiny of the bank accounts maintained in the name of TE Udhyog Private Ltd., it is revealed that Rs. 76,98,500/- have been debited to Amit Gupta on various occasions. It is further revealed that Amit Gupta is one of the former directors in the said company namely TE Udhyog Pvt. Ltd. Further, several transactions have been identified between the entities beneficially owned by Shiva Kumar Deora and Amit Gupta with the said Amit Agarwal @ Vicky Bhalotia through his ICICI Bank Account.

11. Thus, it is evident that there is a nexus between Shiva Kumar Deora and Amit Gupta with Amit Agarwal alias Vicky Bhalotia in illegal claiming of fake ITCs through fake firms/companies. Form scrutiny of the HDFC Bank Account no. 50100055793602 maintained in the name of petitioner Amit Agarwal @ Vicky Bhalotia, it is revealed that a huge amount of Rs. 16,64,74,760/- has been credited during the period from 28.10.2016 to 02.02.2025, out of -5- BBl 2025:JHHC:31170 which Rs. 3,41,60,151/- have been credited from the bank account of Greentech Steel Enterprises during the period 01.10.2020 to 17.12.2024 and Rs. 4,49,54,750/- have been debited from the said Greentech Steel Enterprises during the period from 03.04.2021 to 16.11.2024. Further, Rs. 3,24,92,300/- and Rs. 2,54,00,000/- have been credited and debited from Greentech Minerals Pvt. Ltd during the period from 28.10.2021 to 21.01.2025 and 06.10.2020 to 15.03.2024 respectively. Rs. 98,10,900/- and Rs. 85,00,000/- have been credited and debited from Bizzare Commercial Pvt. Ltd during the period from 26.11.2021 to 08.05.2023 and 08.10.2021 to 12.01.2022, respectively. Further, the above stated entities have been prosecuted in the above stated complaints filed by the DGGI.

12. Thus, it is established that while the above stated entities are not in business, the bank accounts of the said entities have been used by Amit Agarwal @ Vicky Bhalotia for layering and deriving the proceeds of crime generated out of illegal activities of fraudulently claiming ITC on the strength of bogus invoices. Thus, it is established that the said Amit Agarwal @ Vicky Bhalotia is knowingly indulged in processes and activities of money laundering and has caused a loss of Rs. 15.95 crores to the government exchequer through the aforementioned illegal activities. -6-

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13. On 08.05.2025, a search was conducted at the premises of the petitioner, under Section 17 of the PMLA, 2002 and cash amounting to Rs.3,48, 500/- was seized, and three electronic devices, including two mobile phones and one laptop, were also seized.

14. The petitioner was summoned at the premises under Section 50 of the PMLA, 2002 and thereafter, his statement was recorded and subsequently arrested on conclusion of search.

15. The petitioner was arrested on 08.05.2025 by the ED and was provided arrest order, grounds of arrest and "reasons to believe". The petitioner was produced before the learned Special Court (PMLA), Ranchi on 08.05.2025 and was remanded to the judicial custody.

16. Thereafter, the present petitioner preferred Misc. Cri. Application No. 1005 of 2025 for grant of bail which was rejected, vide order dated 19.06.2025 by the learned Spl. Judge, PML Act, Ranchi, hence, the instant bail application.

Argument advanced by the learned counsel for the petitioner

17. Learned counsel appearing for the petitioner has taken the following grounds in assailing the order impugned that: -

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(vii) Learned counsel for the petitioner, in order to substantiate his aforesaid contentions, has relied upon the ratio rendered by the Hon'ble Apex Court in the cases of Pankaj Kumar Bansal V. Union of India , reported in (2024) 7 SCC 576; V. Senthil Balaji Vs. State Represented by Deputy Director & Ors. , [(2024) 3 SCC 51]; Prabir Purkayastha Vs. State (NCT of Delhi ), [2024 SCC OnLine 934]; and recently in the case of Arvind Kejriwal Vs. Directorate of Enforcement , [2024 SCC OnLine SC 1703] and in addition thereto, the judgment rendered in the case of Vihaan Kumar v. State of Haryana, 2025 SCC OnLine SC 269, has also been relied upon.

(viii) Submission has also been made that the statutory provision, as contained under Section 19(1) of the PML Act, has been clarified by the Hon'ble Apex Court, while dealing with PML Act, 2002 in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. , [(2022) SCC On Line SC 929] and the same has not been followed herein and as such, the arrest of the petitioner is illegal and arbitrary.

(ix) The arrest itself by the respondent agency is arbitrary and illegal, therefore, the rigors of Section 45 PMLA -9- BBl 2025:JHHC:31170 2002 does not apply to the present petitioner and as such, prosecution has miserably failed to establish even prima facie that the applicant has received any proceeds of crime as the claim is entirely based upon the conjecture and surmises.

(x) The submission has been made that the petitioner has been implicated in the present case on the basis of statement recorded under Section 50 of the PML Act of the co-accused, who was in custody, hence, the statement recorded under Section 50 of the PML Act of the co-accused, who were already in custody, cannot be used against the present petitioner as per the mandate of judgment rendered by the Hon'ble Apex Court in the case of Prem Prakash Vs. Union of India through the directorate of enforcement, 2024 INSC 637.

(xi) The petitioner has no prior criminal record. The petitioner has neither committed any fraud/cheating or forged any documents, thus, no offences under the aforementioned sections have been committed by the petitioner.

(xii) There is no assertion that the petitioner attempted to commit any offence delineated under the Prevention of Money Laundering Act , particularly as delineated in Section 3 of the statute.

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(xiii) The petitioner is in custody since 08.05.2025.

18. Learned counsel for the petitioner, based upon the aforesaid grounds, has submitted that the learned court while considering the prayer for bail ought to have taken into consideration all these aspects of the matter both legal and factual but having not done so, serious error has been committed. Hence, it is a fit case where the petitioner is to be given the privilege of bail.

Argument advanced by the learned counsel for the Opp. Party/Directorate of Enforcement:

19. Per contra, Mr. Amit Kumar Das, learned counsel for the Directorate of Enforcement, has vehemently opposed the prayer for bail by taking the following grounds: -

Directorate of Enforcement , (supra) Pankaj Bansal v. Union of India , (supra) are misplaced in the facts of the present case. The said decisions only reinforce the requirement for proper application of mind, existence of reasons, and communication of grounds, all of which were duly complied with in the present case. In fact, these authorities uphold the power of arrest under -12- BBl 2025:JHHC:31170 Section 19 of PMLA where such procedural safeguards are satisfied.

(v) The Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India , (2022) SCC OnLine SC 929, has clearly laid down that once reasons to believe are recorded on the basis of material, the scope of judicial review at the pre-trial stage is limited.

(vi) Further, the arrest of the Petitioner is based on cogent material evidencing his complicity in a syndicate that has caused wrongful loss of more than Rs. 48.19 crores to the public exchequer through generation and transfer of fake ITC.

(vii) The submission of the Petitioner that he was never previously summoned is factually incorrect. He was summoned under Section 50 PMLA on 08.05.2025 which would be evident from Annexure-2 appended with the instant petition and his statement was recorded. The statement revealed non-cooperative conduct and evasiveness regarding the origin of huge cash transactions and his involvement in shell entities used for laundering proceeds of crime, thereby, justifying the subsequent arrest.

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(viii) The contention of the Petitioner that the reasons to believe and grounds of arrest are identical, are factually misconceived and legally untenable as both the "Reasons to Believe" and "Grounds of Arrest" were recorded separately, in writing, and were duly communicated to the Petitioner at the time of arrest.

(ix) Reference to Section 41 of Cr.P.C. and its parameters is wholly misplaced in the context of PMLA. The arrest under Section 19(1) of PMLA does not require compliance with Section 41 Cr.P.C., since the later governs police arrests under the Code of Criminal Procedure . PMLA being a special law, the provisions of Section 19(1) of PMLA operate independently, with in-built safeguards including the requirement of written reasons to believe, furnishing of grounds of arrest, and production before the Ld. Special Court within 24 hours and the aforesaid safeguard has fully been complied herein.

(x) The petitioner has failed to explain about the transactions which has been credited in his account in the statement as recorded under Section 50 of PMLA.

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(xi) Further, the petitioner was arrested on 08.05.2025 under Section 19 of PML Act, 2002, after recording reasons to believe that the petitioner is guilty of the offence of money laundering, as defined under Section 3 and punishable under Section 4 of PML Act, 2002.

(xii) It has been contended by referring to Section 3 of the PML Act, 2002 that the process or activity connected with proceeds of crime is a continuing activity and continues till such time, a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.

(xiii) Each and every document has been supplied, i.e., the grounds of arrest and reason to believe which would be evident from the documents as appended as Annexure-3 series showing the acknowledgement of receipt of the petitioner.

(xiv) The learned counsel appearing for the O.P- E.D., in response to the argument that the implication of the petitioner is based upon the statement made by the co-accused while he was in custody, is absolutely incorrect, rather, the -15- BBl 2025:JHHC:31170 statement of the other persons(witnesses) have also been taken as referred in ECIR being ECIR No. RNZO/18/2024 who have disclosed that the petitioner was active member of the syndicate and actively participated in the alleged offence.

(xv) Submission has been made that ground which has been advanced that neither the statement of other co-accused persons is to be taken into consideration since it is recorded while they were in custody but the law is otherwise as has been held by Hon'ble Apex Court in the case of Rohit Tandon vs. Directorate of Enforcement , (2018) 11 SCC 46, wherein, the statement if recorded of the co-accused persons in custody under Section 50 of the PML Act will also have the impact in implicating a person under Section 3 of the PML Act and exactly the case herein.

(xvi) It has also been contended that the petitioner was not cooperating in the investigation. (xvii) The petitioner is a key local operative and master mind based in Jamshedpur, who controlled several shell firms and facilitated the syndicate by providing his own proprieties for the registration of bogus firms. This syndicate, along with a network of other associates, executed a large-scale fraud -16- BBl 2025:JHHC:31170 with operations in Jharkhand, West Bengal and Delhi.

(xviii) The syndicate's criminal activities, as detained in the DGGI complaints, followed a meticulous and multi-layered modus operandi, executed in a series of systematic steps designed to generate and launder massive amounts of fraudulent ITC.

(xix) It has further been contended that the petitioner directly controlled several shell firms, including M/s Aurorus Metal Pvt. Ltd. and M/s Bizzare Commercial Pvt. Ltd. using dummy directions to whom he made monthly payments. He also facilitated the syndicate by providing his own property for the registration of these bogus firms. (xx) The "whats-app" chats recovered during the DGGI investigation indicate his direct involvement in giving operational instructions and managing GST related deceptions. He was linked to fake ITC availment of approximately Rs.48.10 Crores through 9 firms.

20. Learned counsel for the Opp. Party-ED, based upon the aforesaid grounds, has submitted that it is not a fit case for grant of regular bail in favour of the petitioner. -17-

BBl 2025:JHHC:31170 Analysis

21. Heard the learned counsel for the parties and perused the documents available on record.

22. This Court, before appreciating the argument advanced on behalf of the parties, deems it fit and proper to discuss herein some of the provisions of law as contained under the PML Act, 2002 (in short 'Act 2002') with its object and intent as also the legal proposition as settled by the Hon'ble Apex Court in various judgments.

23. The Act 2002 was enacted to address the urgent need to have a comprehensive legislation inter alia for preventing money-laundering, attachment of proceeds of crime, adjudication and confiscation thereof including vesting of it in the Central Government, setting up of agencies and mechanisms for coordinating measures for combating money-laundering and also to prosecute the persons indulging in the process or activity connected with the proceeds of crime.

24. It is evident that the Act 2002 was enacted in order to answer the urgent requirement to have a comprehensive legislation inter alia for preventing money-laundering, attachment of proceeds of crime, adjudication and confiscation thereof for combating money-laundering and also to prosecute the persons indulging in the process or activity connected with the proceeds of crime. -18-

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25. The objective of the PMLA is to prevent money laundering which has posed a serious threat not only to the financial systems of the country but also to its integrity and sovereignty. The offence of money laundering is a very serious offence which is committed by an individual with a deliberate desire and the motive to enhance his gains, disregarding the interest of the nation and the society as a whole, and such offence by no stretch of imagination can be regarded as an offence of trivial nature. The stringent provisions have been made in the Act to combat the menace of money laundering.

26. It needs to refer herein the definition of "proceeds of crime" as provided under Section 2(1)(u) of the Act, 2002 which reads as under:-

27. It is evident from the aforesaid provision by which the "proceeds of crime" means any property derived or -19- BBl 2025:JHHC:31170 obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad.

28. In the explanation, it has been referred that for the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence.

29. It is, thus, evident that the reason for giving explanation under Section 2(1)(u) is by way of clarification to the effect that whether as per the substantive provision of Section 2(1)(u) , the 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 but by way of explanation the proceeds of crime has been given broader implication by including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. -20-

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30. Further, the "property" has been defined under Section 2(1)(v) which means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located.

31. The schedule has been defined under Section 2(1)(x) which means schedule to the Prevention of Money Laundering Act, 2002 .

32. It is evident that the "scheduled offence" means the offences specified under Part A of the Schedule; or the offences specified under Part B of the Schedule if the total value involved in such offences is [one crore rupees] or more; or the offences specified under Part C of the Schedule.

33. The offence of money laundering has been defined under Section 3 of the Act, 2002 which reads as under: -

laundering if such person is found to have directly or -21- BBl 2025:JHHC:31170 indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:--

34. It is evident from the aforesaid provision that "offence of money-laundering" means 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 with the 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.

35. It is further evident that the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as -22- BBl 2025:JHHC:31170 untainted property or claiming it as untainted property in any manner whatsoever.

36. The punishment for money laundering has been provided under Section 4 of the Act, 2002.

37. Further, the specific provision has been made under the PML Act, 2002 to be followed at the time of arrest, i.e., the ground of arrest is to be informed to the person facing the accusation as soon as possible that is the original text of Section 19(1) of the Act, 2002.

38. Section 50 of the Act, 2002 confers power upon the authorities regarding summons, production of documents and to give evidence.

39. The various provisions of the Act, 2002 along with interpretation of the definition of "proceeds of crime" has been dealt with by the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra), wherein, the Bench comprising of three Hon'ble Judges of the Hon'ble Supreme Court have decided the issue by taking into consideration the object and intent of the Act, 2002.

40. The predicate offence has been considered in the aforesaid judgment wherein by taking into consideration the explanation as inserted by way of Act 23 of 2019 under the definition of the "proceeds of crime" as contained under Section 2(1)(u) , whereby and whereunder, it has been -23- BBl 2025:JHHC:31170 clarified for the purpose of removal of doubts that, the "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence, meaning thereby, the words "any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence"

41. It needs to refer herein that the various provisions of the Act, 2002 along with interpretation of the definition of "proceeds of crime" has been dealt with by the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) wherein it has been held at paragraphs-128, 129 and 130 of the said judgment as under:-

42. The implication of Section 50 has also been taken into consideration. Relevant paragraph, i.e., paragraphs- 327 to 332, 338, 339, 342 are quoted as under:

This is in reference to Section 13 of the 2002 Act dealing with powers of Director to impose fine in respect of acts of commission and omission by the banking companies, financial institutions and intermediaries. From the setting in which Section 50 has been placed and the expanse of empowering the Director with same powers as are vested in a civil Court for the purposes of imposing fine under Section 13 , is obviously very specific and not otherwise.

331. Indeed, sub-section (2) of Section 50 enables the Director, Additional Director, Joint Director, Deputy Director or Assistant Director to issue summon to any person whose attendance he considers necessary for giving evidence or to produce any records during the course of any investigation or proceeding under this Act. We have already highlighted the width of expression "proceeding" in the earlier part of this judgment and held that it applies to proceeding before the Adjudicating Authority or the Special Court, as the case may be. Nevertheless, sub-section (2) empowers the authorised officials to issue summon to any person. We fail to understand as to how Article 20(3) would come into play in respect of process of recording statement pursuant to such summon which is only for the purpose of collecting information or evidence in respect of proceeding under this Act. Indeed, the person so summoned, is bound to attend in person or through authorised agent and to state truth upon any subject concerning which he is being examined or is expected to make statement and produce documents as may be required by virtue of sub-section (3) of Section 50 of the 2002 Act. The criticism is essentially because of subsection (4) which provides that every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the IPC. Even so, the fact remains that Article 20(3) or for that matter Section 25 of the Evidence Act, would come into play only when the person so summoned is an accused of any offence at the relevant time and is being compelled to be a witness against himself. This position is well-established. -26-

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332.The Constitution Bench of this Court in M.P. Sharma had dealt with a similar challenge wherein warrants to obtain documents required for investigation were issued by the Magistrate being violative of Article 20(3) of the Constitution. This Court opined that the guarantee in Article 20(3) is against "testimonial compulsion"

and not to "appear as a witness". It follows that the protection -27- BBl 2025:JHHC:31170 afforded to an accused in so far as it is related to the phrase "to be a witness" is not merely in respect of testimonial compulsion in the court room but may well extend to compelled testimony previously obtained from him. It is available therefore to a person against whom a formal accusation relating to the commission of an offence has been levelled which in the normal course may result in prosecution. Whether it is available to other persons in other situations does not call for decision in this case." (emphasis supplied)

338. In the context of the 2002 Act, it must be remembered that the summon is issued by the Authority under Section 50 in connection with the inquiry regarding proceeds of crime which may have been attached and pending adjudication before the Adjudicating Authority. In respect of such action, the designated officials have been empowered to summon any person for collection of information and evidence to be presented before the Adjudicating Authority. It is not necessarily for initiating a prosecution against the noticee as such. The power entrusted to the designated officials under this Act, though couched as investigation in real sense, is to undertake inquiry to ascertain relevant facts to facilitate initiation of or pursuing with an action regarding proceeds of crime, if the situation so warrants and for being presented before the Adjudicating Authority. It is a different matter that the information and evidence so collated during the inquiry made, may disclose commission of offence of money-laundering and the involvement of the person, who has been summoned for making disclosures pursuant to the summons issued by the Authority. At this stage, there would be no formal document indicative of likelihood of involvement of such person as an accused of offence of money laundering. If the statement made by him reveals the offence of money laundering or the existence of proceeds of crime, that becomes actionable under the Act itself.

339.To put it differently, at the stage of recording of statement for the purpose of inquiring into the relevant facts in connection with the property being proceeds of crime is, in that sense, not an investigation for prosecution as such; and in any case, there would be no formal accusation against the noticee. Such summons can be issued even to witnesses in the inquiry so conducted by the authorised officials. However, after further inquiry on the basis of -28- BBl 2025:JHHC:31170 other material and evidence, the involvement of such person (noticee) is revealed, the authorised officials can certainly proceed against him for his acts of commission or omission. In such a situation, at the stage of issue of summons, the person cannot claim protection under Article 20(3) of the Constitution. 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. Further, it would not preclude the prosecution from proceeding against such a person including for consequences under Section 63 of the 2002 Act on the basis of other tangible material to indicate the falsity of his claim. That would be a matter of rule of evidence.

342. It is, thus, clear that the power invested in the officials is one for conducting inquiry into the matters relevant for ascertaining existence of proceeds of crime and the involvement of persons in the process or activity connected therewith so as to initiate appropriate action against such person including of seizure, attachment and confiscation of the property eventually vesting in the Central Government."

43. It is evident from the observation so made as above that the purposes and objects of the 2002 Act, for which, it has been enacted, is not limited to punishment for offence of money-laundering, but also to provide measures for prevention of money- laundering. It is also to provide for attachment of proceeds of crime, which are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceeding relating to confiscation of such proceeds under the 2002 Act. This Act is also to compel the banking companies, financial institutions and intermediaries to maintain records of -29- BBl 2025:JHHC:31170 the transactions, to furnish information of such transactions within the prescribed time in terms of Chapter IV of the 2002 Act.

44. So far as the purport of Section 45(1)(i) & (ii) is concerned, the aforesaid provision starts from the non- obstante clause that notwithstanding anything contained in the Code of Criminal Procedure , 1973, 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.

45. Sub-section (2) thereof puts limitation on granting bail specific in sub-section (1) in addition to the limitations under the Code of Criminal Procedure , 1973 or any other law for the time being in force on granting of bail.

46. The explanation is also there as under sub-section (2) thereof which is for the purpose of removal of doubts, a clarification has been inserted that the expression -30- BBl 2025:JHHC:31170 "Offences to be cognizable and non-bailable" shall mean and shall be deemed to have always meant that all offences under this Act shall be cognizable offences and non-bailable offences notwithstanding anything to the contrary contained in the Code of Criminal Procedure , 1973, and accordingly the officers authorised under this Act are empowered to arrest an accused without warrant, subject to the fulfilment of conditions under section 19 and subject to the conditions enshrined under this section

47. The fact about the implication of Section 45 has been interpreted by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) at paragraphs-285, 286 and 316. For ready reference, the said paragraphs are being referred as under:-

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48. The fact about the implication of Section 45 has further been interpreted by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) at paragraphs-268, 269 & 270 also. For ready reference, the said paragraphs are being referred as under:

49. Subsequently, the Hon'ble Apex Court in the case of Tarun Kumar vs. Assistant Director Directorate of Enforcement , (2023) SCC OnLine SC 1486 by taking into consideration the law laid down by the Larger Bench of the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra), it has been laid down that since the conditions specified under Section 45 are mandatory, they need to be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail.

50. It has further been observed that as per the statutory presumption permitted under Section 24 of the Act, the Court or the Authority is entitled to presume unless the contrary is proved, that in any proceedings relating to proceeds of crime under the Act, in the case of a person charged with the offence of money laundering under Section 3 , such proceeds of crime are involved in money laundering. Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr. P.C. in view of the overriding effect given to the PML Act over the other -34- BBl 2025:JHHC:31170 law for the time being in force, under Section 71 of the PML Act. For ready reference, paragraph-17 of the said judgment reads as under:-

51. The Hon'ble Apex Court in the said judgment has further laid down that the twin conditions as to fulfil the requirement of Section 45 of the Act, 2002 before granting the benefit of bail is to be adhered to which has been dealt with by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) wherein, it has been observed that the accused is not guilty of the offence and is not likely to commit any offence while on bail.

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52. In the judgment rendered by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) it has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of "proceeds of crime". Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process.

53. So far as the issue of grant of bail under Section 45 of the Act, 2002 is concerned, in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) it has been held therein by making observation that whatever form the relief is couched including the nature of proceedings, be it under Section 438 of the 1973 Code or for that matter, by invoking the jurisdiction of the Constitutional Court, the underlying principles and rigors of Section 45 of the 2002 must come into play and without exception ought to be reckoned to uphold the objectives of the 2002 Act, which is a special -36- BBl 2025:JHHC:31170 legislation providing for stringent regulatory measures for combating the menace of money-laundering.

54. The Hon'ble Apex Court in the case of Gautam Kundu vs. Directorate of Enforcement (Prevention of Money-Laundering Act), Government of India through Manoj Kumar, Assistant Director, Eastern Region, reported in (2015) 16 SCC 1 has been pleased to hold at paragraph-30 that the conditions specified under Section 45 of PMLA are mandatory and need to be complied with, which is further strengthened by the provisions of Section 65 and also Section 71 of PMLA.

55. Section 65 requires that the provisions of CrPC shall apply insofar as they are not inconsistent with the provisions of this Act and Section 71 provides that the provisions of PMLA shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. PMLA has an overriding effect and the provisions of CrPC would apply only if they are not inconsistent with the provisions of this Act.

56. Therefore, the conditions enumerated in Section 45 of PMLA will have to be complied with even in respect of an application for bail made under Section 439 CrPC. That coupled with the provisions of Section 24 provides that unless the contrary is proved, the authority or the Court -37- BBl 2025:JHHC:31170 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 petitioner.

57. It requires to refer herein that the Hon'ble Apex Court in the case of Satender Kumar Antil vs. CBI and Anr. , (2022) 10 SCC 51 has passed the order that if the investigation has been completed and if there is full cooperation of the accused persons, there may not be any arrest. The Hon'ble Apex Court categorised the offences in different group for purpose of bail. For ready reference, Paragraph-2 of the aforesaid judgment reads as under:

(No need to forward such an accused along with the charge- sheet ( Siddharth v. State of U.P. [Siddharth v. State of U.P., (2022) 1 SCC 676 : (2022) 1 SCC (Cri) 423] ) CATEGORY A After filing of charge-sheet/complaint taking of cognizance

(a) Ordinary summons at the 1st instance/including permitting appearance through lawyer.

(b) If such an accused does not appear despite service of summons, then bailable warrant for physical appearance may be issued.

(c) NBW on failure to appear despite issuance of bailable warrant.

(d) NBW may be cancelled or converted into a bailable warrant/summons without insisting physical appearance of the accused, if such an application is moved on behalf of the accused before execution of the NBW on an undertaking of the accused to appear physically on the next date/s of hearing.

(e) Bail applications of such accused on appearance may be decided without the accused being taken in physical custody or by granting interim bail till the bail application is decided.

CATEGORIES B/D On appearance of the accused in court pursuant to process issued bail application to be decided on merits.

CATEGORY C Same as Categories B and D with the additional condition of compliance of the provisions of Bail under NDPS ( Section 37 ), Section 45 of the PMLA, Section 212(6) of the Companies Act, Section 43-D(5) of the UAPA, POSCO, etc. -39- BBl 2025:JHHC:31170

58. It needs to refer herein that while dealing with bail applications under UAP Act 1967, the Hon'ble Apex Court recently in the case of Gurwinder Singh Vs. State of Punjab and Anr. , reported in (2024) SCC OnLine SC 109, has observed that the conventional idea in bail jurisprudence vis-à-vis ordinary penal offences that the discretion of Courts must tilt in favour of the oft-quoted phrase - 'bail is the rule, jail is the exception' - unless circumstances justify otherwise - does not find any place while dealing with bail applications under UAP Act and the 'exercise' of the general power to grant bail under the UAP Act is severely restrictive in scope. For ready reference, relevant paragraph of the said judgment is being referred as under:

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59. The reason for making reference of this judgment is that in the case of Satender Kumar Antil vs. CBI and Anr. (supra), the UAPA has also been brought under the purview of category 'c' wherein while observing that in the UAPA Act , it comes under the category 'c' which also includes money laundering offence wherein the bail has been directed to be granted if the investigation is complete but the Hon'ble Apex Court in Gurwinder Singh vs. State of Punjab and Anr. (supra) has taken the view by making note that the penal offences as enshrined under the provision of UAPA are also under category 'c' making reference that jail is the rule and bail is the exception.

60. In the backdrop of the aforesaid legal provisions and settled law, this court is now adverting to merit of the case. Issue of legality of Arrest

61. Now coming to the ground as has been raised on behalf of the petitioner that at the time of arrest the condition stipulated under Section 19(1) of the PML Act, 2002 has not been followed and further, the settled position of law as settled by the Hon'ble Apex Court has also not been followed, hence, the very arrest of the petitioner is per se illegal and in that view of the matter, the order of arrest is fit to be quashed and set aside and in consequence thereof, appellant may be directed to be released from judicial custody.

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62. Per contra, learned counsel for the Opp. Party-ED has submitted that it is incorrect on the part of the petitioner to take the ground that the mandate of Section 19 (1) has not been followed, rather, the mandate of Section 19 has fully been complied with on the day when the petitioner was arrested, which would be evident from Annexure-2 and 3 as the same has been appended with the petition, in which, the entire details has been furnished regarding the ground of arrest and reason to believe for arrest of the present petitioner.

63. In the aforesaid context, it needs to refer herein the core of the Section 19 the Act 2002, for ready reference, the same is being quoted as under:

section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the adjudicating authority, in a sealed envelope, in the manner as may be prescribed and such adjudicating authority shall keep such order and material for such period, as may be prescribed. (3) every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a 78[special court or] judicial -42- BBl 2025:JHHC:31170 magistrate or a metropolitan magistrate, as the case may be, having jurisdiction:

64. It is evident from perusal of the Section 19 of PMLA which gives the power to arrest if the officer concerned has "reason to believe" on the basis of material in his possession, that the person is guilty. As per Section 19 the arrest has to be on the basis of material in possession with the ED, there is reason to believe that the accused is guilty of the offence, with the reason recorded in writing and the grounds for arrest should be communicated with the accused.

65. As discussed herein above the entire PML Act, 2002 fell for consideration before the three-Judge Bench of the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary & Ors. Vs. Union of India & Ors. (supra) wherein the provision of Section 19(1) has also been taken into consideration, which would be evident from the relevant paragraphs, which reads as under:

66. It is evident from the aforesaid consideration as referred in the aforesaid judgment that once the person is informed of the grounds of arrest, that would be sufficient compliance with the mandate of Article 22(1) of the Constitution and it is not necessary that a copy of the ECIR be supplied in every case to the person concerned, as such, a condition is not mandatory and it is enough if ED discloses the grounds of arrest to the person concerned at the time of arrest.

67. It needs to refer herein the judgment which has come in the case of V. Senthil Balaji Vs. State Represented by Deputy Director & Ors. (supra) which was passed on 07.08.2023 wherein consideration has been given with respect to the issue of Section 19(1) holding therein that that after forming a reason to believe that the person has been guilty of an offence punishable under PMLA, the officer concerned is at liberty to arrest him, while performing his mandatory duty of recording the reasons, and that the said exercise has to be followed by way of an information being served on the arrestee of the grounds of arrest.

68. Subsequent thereto, the matter has again come before the Hon'ble Apex Court in the case of Pankaj -45- BBl 2025: JHHC:31170 Bansal Vs. Union of India & Ors (supra), wherein, the factual aspect pertaining to the said case was that no written communication was made and only on the basis of oral communication of reason of arrest, the said Pankaj Bansal has taken into custody, which would be evident from discussion of the factual aspect, which would be evident from following paragraphs of the judgment, which reads as under:

3. Significantly, prior to this FIR, between the years 2018 and 2020, 13 FIRs were gotten registered by allottees of two residential projects of the IREO Group, alleging illegalities on the part of its management. On the strength of these FIRs, ED recorded Enforcement Case Information Report No. GNZO/10/2021 dated 15-6-2021 (hereinafter "the first ECIR") in connection with the money laundering offences allegedly committed by the IREO Group and Lalit Goyal, its Vice- Chairman and Managing Director. Neither in the FIRs nor in the first ECIR were M3M Group or the appellants herein arrayed as the accused. Further, no allegations were levelled against them therein. On 14-1-2022, ED filed Prosecution Complaint No. 01/2022, titled " Enforcement Directorate v. Lalit Goyal and others ", against seven named accused, under Section 200CrPC read with Sections 44 and 45 PMLA. Notably, M3M -46- BBl 2025:JHHC:31170 Group and the appellants did not figure amongst those named accused. The number of FIRs had also increased from 13 to 30, as per this complaint. This case was numbered as COMA/01/2022, titled " Enforcement Directorate v. Lalit Goyal and others ", and was pending in the Court of Sudhir Parmar, Special Judge. At that stage, the Anti Corruption Bureau, Panchkula, received information that Sudhir Parmar was showing favouritism to Lalit Goyal, the owner of IREO Group, and also to Roop Bansal and his brother, Basant Bansal, the owners of M3M Group. This led to the registration of FIR No. 0006 dated 17-4-2023. On 12-5-2023, ED issued summons to M3M India Pvt. Ltd., calling upon it to provide information and documents pertaining to transactions with certain companies. Thereafter, on 1-6-2023, ED raided the properties of M3M Group and effected seizures of assets and bank accounts. Roop Bansal was arrested by ED on 8-6-2023 apropos the first ECIR.

4. Apprehending that action would be taken against them also in the context of the first ECIR, Pankaj Bansal and Basant Bansal secured [ Basant Bansal v. State (NCT of Delhi ), (2023) 2 HCC (Del) 700] , [Pankaj Bansal v. State (NCT of Delhi), 2023 SCC OnLine Del 3590] interim protection from the Delhi High Court in Bail Applications Nos. 2030 and 2031 of 2023. By separate orders dated 9-6-2023 [ Basant Bansal v. State (NCT of Delhi ), (2023) 2 HCC (Del) 700] passed therein, the Delhi High Court noted that Pankaj Bansal and Basant Bansal had not been named in the first ECIR and that ED had not yet been able to implicate them in any of the scheduled offences under the 2002 Act. Further, the High Court noted that Pankaj Bansal had not even been summoned by ED in that case . The High Court accordingly granted them interim protection by way of anticipatory bail, subject to conditions, till the next date of hearing i.e. 5-7-2023. Special Leave Petitions (Crl.) Nos. 7384 and 7396 of 2023 were filed by ED assailing the orders dated 9- 6 2023 [ Basant Bansal v. State (NCT of Delhi ), (2023) 2 HCC (Del) 700] , [Pankaj Bansal v. State (NCT of Delhi), 2023 SCC OnLine Del 3590] , [Basant Bansal v. State (NCT of Delhi), (2023) 2 HCC (Del) 700] before this Court and the same are stated to be pending. 5. In the meanwhile, on the basis of FIR No. 0006 dated 17-4-2023, ED recorded another ECIR viz. -47-

BBl 2025:JHHC:31170 ECIR/GNZO/17/2023, on 13-6-2023 (hereinafter "the second ECIR") against: (i) Mr Sudhir Parmar; (ii) Mr Ajay Parmar;

(iii) Mr Roop Bansal; and (iv) others who are named in the FIR/unknown persons. 6. However, summons were issued by ED to Pankaj Bansal and Basant Bansal on 13-6-2023 at 6.15 p.m. in relation to the first ECIR, requiring them to appear before ED on 14-6-2023 at 11.00 a.m. Though the copy of the summons placed before this Court pertains to Pankaj Bansal alone, the email dated 13-6-2023 of the Assistant Director of ED, bearing the time 6.15 p.m., was addressed to both Pankaj Bansal and Basant Bansal and required their compliance with the summons on 14-6-2023 at 11 a.m. While Pankaj Bansal and Basant Bansal were at the office of ED at Rajokri, New Delhi, in compliance with these summons, Pankaj Bansal was served with fresh summons at 4.52 p.m. on 14-6-2023, requiring him to be present before another investigating officer at 5.00 p.m. on the same day. This summons was in connection with the second ECIR. There is lack of clarity as to when summons in relation to the second ECIR were served on Basant Bansal. According to ED, he was served the summons on 13-6 2023 itself and refused to receive the same. However, it is an admitted fact that Basant Bansal was also present at ED's office at Rajokri, New Delhi, on 14-6-2023 at 11.00 a.m. It is also not in dispute that, while he was there, Basant Bansal was arrested at 6.00 p.m. on 14-6- 2023 and Pankaj Bansal was arrested at 10.30 p.m. on the same day. These arrests, made in connection with the second ECIR, were in exercise of power under Section 19(1) PMLA. The arrested persons were then taken to Panchkula, Haryana, and produced before the learned Vacation Judge/Additional Sessions Judge, Panchkula. There, they were served with the remand application filed by ED. 10. It was the specific case of the father and son in their writ petitions before the High Court that their arrest under the provisions of PMLA was a wanton abuse of power/authority and an abuse of process by ED, apart from being blatantly illegal and unconstitutional. They also asserted that ED acted in violation of the safeguards provided in Section 19 PMLA. In this milieu, they made the following prayers: "In view of the facts and circumstances mentioned above, it is, therefore, respectfully prayed that this Hon'ble -48- BBl 2025:JHHC:31170 Court may kindly be pleased to issue appropriate writ(s), order(s) and/or direction(s) to: A. Read down and/or read into as well as expound, deliberate upon and delineate the ambit, sweep and scope of Section 19(1) PMLA in consonance with the principles, inter alia, enunciated by the Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : 2022 SCC OnLine SC 929 : (2022) 10 Scale 577] and hold that: (i) The expression "material in possession" occurring therein must be confined, circumscribed and limited to legally admissible evidence of sterling quality and unimpeachable character on the basis whereof "reasons to believe" could be recorded in writing that the arrestee is "guilty" of the offence under Section 4 PMLA; (ii) The word "guilt" occurring therein would qualify a higher yardstick than a mere suspicion and the learned Court at the stage of remand is required to apply its judicial mind to the grounds as well as necessity for arrest as, inter alia, held in Arnesh Kumar v. State of Bihar [Arnesh Kumar v. State of Bihar, (2014) 8 SCC 273 : (2014) 3 SCC (Cri) 449] and as accorded imprimatur in Satender Kumar Antil v. CBI [Satender Kumar Antil v. CBI, (2022) 10 SCC 51 : (2023) 1 SCC (Cri) 1] ;

(iii) The expression "communicate" occurring therein would definitely entail physical communication and furnishing the grounds of arrest to the arrestee in the context of the obligation for "reason for such belief to be recorded in writing" read with Rules 2(1)(g) and 2(1)(h) of the PMLA Rules, 2005 (the Arrest Rules) which postulates the meaning of the word "order" to include the grounds of such arrest."

69. The Hon'ble Apex Court in the aforesaid pretext has laid down the proposition to communicate the reasons for arrest in writing by making reference of word 'henceforth'. The Hon'ble Apex Court while considering the particular case of said Pankaj Bansal has considered the admitted position that the investigating officer merely read out or permitted reading of the -49- BBl 2025:JHHC:31170 grounds of arrest of the appellants and left it at that, which is also disputed by the appellants and hence, it has been held that their arrest was not in keeping with the provisions of Section 19(1) PMLA, 2002. Accordingly, the appeals before the Hon'ble Apex Court were allowed, setting aside the impugned orders passed by High Court as well as the impugned arrest orders and arrest memos along with the orders of remand passed by the learned Vacation Judge/Additional Sessions Judge, and all orders consequential thereto. Accordingly, the appellants were directed to be released forthwith. For ready reference, the relevant paragraph is being quoted as under:

70. Subsequent to the said judgment, the judgment has come in the case of Ram Kishor Arora Vs. Directorate of Enforcement , [2023 SCC OnLine SC 1682]. The Hon'ble Apex Court while taking into consideration the judgment passed by Vijay Madanlal Choudhary v. Union of India (supra) has observed that the law laid down by the three- Judges Bench in Vijay Madanlal Choudhary that Section 19(1) PMLA has a reasonable nexus with the purposes and objects sought to be achieved by the PML Act and that the said provision is also compliant with the mandate of Article 22(1) of the Constitution of India, any observation made or any finding recorded by the Division Bench of lesser number of Judges contrary to the said ratio laid down in Vijay Madanlal Choudhary would be not in consonance with the jurisprudential wisdom expounded by the Constitution Benches. For ready reference, the relevant paragraph is being quoted as under :

71. Further, the Hon'ble Apex Court in the aforesaid judgment while taking into consideration the judgment passed in the case of Pankaj Bansal Vs. Union of India & Ors (supra), come out with a view that since by way of safeguard a duty is casted upon the officer concerned to forward a copy of the order along with the material in his possession to the adjudicating authority immediately after the arrest of the person, and to take the person arrested to the court concerned within 24 hours of the arrest, in our opinion, the reasonably convenient or reasonably requisite time to inform the arrestee about the grounds of his arrest would be twenty-four hours of the arrest. However, the Hon'ble Apex Court refused to invalidate the arrest of said Ram Kishor Arora. For ready reference, the relevant paragraph of the judgment is quoted as under: -53-

72. Thereafter, the Hon'ble Apex Court has considered the issue of Section 19(1) in the case of Prabir Purkayastha Vs. State (NCT of Delhi ) (supra) wherein the Hon'ble Apex Court has passed the order of release of said Prabir Purkayastha, the appellant in the said case, on the ground that no reason said to be in writing was communicated even though the law has been laid down in the case of Pankaj Bansal Vs. Union of India & Ors (supra).

73. So far as the fact of the said case is concerned, the officers of PS Special Cell, Lodhi Colony, New Delhi carried out extensive raids at the residential and official premises of the appellant and the company, of which the appellant is the Director in connection with FIR No. 224 of 2023 dated -55- BBl 2025:JHHC:31170 17-8-2023 registered at PS Special Cell, Lodhi Colony, New Delhi for the offences punishable under Sections 13 , 16 , 17 , 18 , 22-C of the Unlawful Activities (Prevention) Act, 1967 read with Sections 153-A, 120-B of the Penal Code.

74. The appellant was arrested in connection with the said FIR on 3-10-2023 vide arrest memo. Thereafter, the appellant was presented in the court of the learned Additional Sessions Judge-02, Patiala House Courts, New Delhi on 4-10-2023, sometime before 6.00 a.m. which fact is manifested from the remand order and the appellant was remanded to seven days' police custody vide order dated 4- 10-2023. The proceedings of remand have been seriously criticized as being manipulated by Shri Kapil Sibal, learned Senior Counsel for the appellant and aspersions of subsequent insertions in the remand order have been made.

75. The appellant promptly questioned his arrest and the police custody remand granted by the learned Remand Judge vide order dated 4-10-2023 by preferring Criminal Miscellaneous Case No. 7278 of 2023 in the High Court of Delhi which stands rejected by the learned Single Judge of the High Court of Delhi vide judgment dated 13-10-2023. The said order is subjected to challenge by special leave before the Hon'ble Apex Court.

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76. The Hon'ble Apex Court has taken into consideration the ratio of the judgment rendered in the case of Pankaj Bansal Vs. Union of India & Ors (supra). The arrest of the said appellant was on 03.10.2023 but the judgment rendered in the case of Pankaj Bansal Vs. Union of India & Ors (supra) has been uploaded on 04.10.2023 and as such, the ground was taken not to give any aid of judgment passed in the case of Pankaj Bansal Vs. Union of India & Ors. (supra), even though, the written communication regarding the ground of arrest of the appellant has not been furnished but the Hon'ble Apex Court has passed the order that merely because the judgment in the case of Pankaj Bansal Vs. Union of India & Ors (supra) has been uploaded on 04.10.2023 but the said Prabir Purkayastha was arrested on 04.10.2023 while the judgment passed in the case of Pankaj Bansal Vs. Union of India & Ors (supra) was delivered on 03.10.2023 and as such the case of Prabir Purkayastha has come within the ratio of judgment rendered in the case of Pankaj Bansal Vs. Union of India & Ors (supra) and since, the written communication was not there, hence, he was directed to be released on bail, for ready reference, the relevant paragraph is being quoted as under::

77. Again, in the case of Arvind Kejriwal Vs. Directorate of Enforcement (supra) the view has been taken for communication of reason of arrest and it has been observed by the Hon'ble Apex Court that the written "grounds of arrest", though a must, does not in itself satisfy the compliance requirement. The authorized officer's genuine belief and reasoning based on the evidence that establishes the arrestee's guilt is also the legal necessity. As the "reasons to believe" are accorded by the authorised officer, the onus to establish satisfaction of the said condition will be on the DoE and not on the arrestee. The Hon'ble Apex Court while taking in to consideration the judgment rendered by the Hon'ble Apex Court in Vijay Madanlal Choudhary (supra) is a decision rendered by a three Judge Bench, hence, after formulating the questions -58- BBl 2025:JHHC:31170 of law has referred the matter for consideration by a larger Bench. For ready reference, the relevant paragraphs are being quoted as under:

78. Further, the Hon'ble Apex Court in the case of V. Senthil Balaji v. Director , 2024 SCC OnLine SC 2626 has again considered the issue of Section 19(1) of the Act 2002. The factual aspect of the case is like that between 2011 and 2016; the appellant was holding the post of Transport Minister in the Government of Tamil Nadu. Broadly, the allegation against the appellant is that while discharging his duties as a Minister, in connivance with his personal assistant and his brother, he collected large amounts by promising job opportunities to several persons in various positions in the Transport Department. This led to the registering of three First Information Reports against the appellant and others. The said First Information Reports are FIR no. 441 of 2015 dated 29th October 2015 (CC Nos. 22 and 24 of 2021), FIR No. 298 of 2017 registered on 9th September 2017 (CC No. 19 of 2020) and FIR no. 344 dated 13th August 2018 (CC No. 25 of 2020). -60-

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79. In the first FIR, six charge sheets have been filed. More than 2000 accused have been named in the charge sheets. 550 witnesses have been named. In the case of the second FIR, there are 14 accused named in the chargesheet. In connection with this FIR, 24 witnesses have been cited. In the third FIR, 24 accused have been named in the charge sheet and 50 prosecution witnesses have been cited. The offences alleged in the aforementioned crimes are mainly under Sections 120B, 419, 420, 467 and 471 of the Penal Code, 1860 and Sections 7 , 12 , 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. Section 34 of the Penal Code, 1860 has been invoked.

80. These offences are scheduled offences within the meaning of Section 2(y) of the PMLA. Therefore, relying on the final reports filed in aforementioned scheduled offences, for an offence of money laundering under Section 3 of the PMLA punishable under Section 4 , the Enforcement Directorate (ED) registered an Enforcement Case Information Report (for short ―ECIR‖) bearing ECIR No. MDSZO/21/2021 on 29th July 2021.

81. Consequently, the appellant was arrested on 14th June 2023 in connection with the said ECIR and was remanded to judicial custody. A complaint was filed for the offence under Section 3 of the PMLA Act, which is -61- BBl 2025:JHHC:31170 punishable under Section 4 , on 12th August 2023. The appellant is the only accused named in the complaint. Cognizance has been taken based on the complaint by the Special Court under the PMLA. The scheduled offences cases have been transferred to the learned Assistant Sessions Judge, Additional Special Court for Trial of Criminal Cases related to Elected Members of Parliament and Members of Legislative Assembly of Tamil Nadu (Special MPMLA Court), Chennai.

82. The Hon'ble Apex Court while taking note of the settled principle that the stringent provisions regarding the grant of bail, such as Section 45(1)(iii) of the PMLA, cannot become a tool which can be used to incarcerate the accused without trial for an unreasonably long time has allowed the appeal and direction has been passed that the appellant shall be enlarged on bail till the final disposal of the case.

83. Consequent to the aforesaid judgments, recently the Hon'ble Apex Court has expressed its view in the case of Vihaan Kumar v. State of Haryana (supra) wherein the judgment and order dated 30th August 2024 passed by the learned Single Judge of Punjab and Haryana High Court has been assailed. The appellant of the said case was arrested in connection with first information report no. 121 of 2023 dated 25th March 2023 registered for the offences under Sections 409, 420, 467, 468 and 471 read with -62- BBl 2025:JHHC:31170 Section 120 B of the Indian Penal Code, 1860 (in short ' IPC '). According to the appellant's case, he was arrested on 10th June 2024 at about 10.30 a.m. at his office premises on the 3rd-5th floor of HUDA City Centre, Gurugram, Haryana. He was taken to DLF Police Station, Section 29 , Gurugram. He was produced before the learned Judicial Magistrate (in charge) at Gurgaon on 11th June 2024 at 3.30 p.m.

84. It had been contended that there was a violation of Article 22(2) of the Constitution and Section 57 of the Code of Criminal Procedure Code, 1973 (for short, Cr.P.C .'). The allegation is that neither in the remand report nor in the order dated 11th June 2024 passed by the learned Magistrate was the time of arrest mentioned. The FIR was registered at the instance of the 2nd respondent.

85. Further, in the aforesaid case a vital issue was emerged when the learned counsel appearing for the appellant produced photographs which showed that while he was admitted to the hospital, he was handcuffed and chained to the hospital bed. Therefore, a notice was issued on 4th October 2024 to the Medical Superintendent of PGIMS, calling upon him to file an affidavit stating whether the appellant was handcuffed and chained to the hospital bed. The order dated 21st October 2024 records the admission of the Medical Superintendent of PGIMS that -63- BBl 2025:JHHC:31170 when the appellant was admitted to the hospital, he was handcuffed and chained to the bed.

86. The Hon'ble Apex Court while taking in to consideration the mandate of Article 22 of the Constitution of India has held that the requirement of informing the person arrested of the grounds of arrest is not a formality but a mandatory constitutional requirement. Article 22 is included in Part III of the Constitution under the heading of Fundamental Rights. Thus, it is the fundamental right of every person arrested and detained in custody to be informed of the grounds of arrest as soon as possible. The Hon'ble Apex Court has further observed as under:

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87. It is, thus, evident that in all these judgments the issue at the time of arrest was the primary factor, which was questioned before the Hon'ble Apex Court and the same has been dealt with by the Hon'ble Apex Court in those judgments.

88. It is, thus, evident from the cumulative consideration of the judgment rendered by the Hon'ble Apex Court, as referred above, that the law under statutory provision as contained under Section 19(1) of the PML Act, 2002 is that the reason/ground is to be communicated to the person concerned then only the arrest would be said to be valid.

89. This Court is conscious that in any nature of arrest, the mandatory requirement is to be fulfilled. Herein, the mandatory requirement as per Article 19(1) of the PML Act, 2002 coupled with the judgment as referred hereinabove by laying down the ratio to communicate the "grounds for arrest" and "reason to believe" in writing and as such this Court has to consider as to whether the statutory command in the facts and circumstances of the present case has been followed or not, if yes, then the arrest cannot be held to be invalid and if no, then certainly the arrest would be held to be invalid.

90. Now, adverting to the factual aspect of the present case and on consideration of the submissions advanced on -65- BBl 2025:JHHC:31170 behalf of petitioner, this Court has gone through the record, particularly, Annexure-2 and 3 appended with the instant petition/application, wherefrom, it is evident that petitioner was arrested on 08.05.2025 and thereafter, he has been produced forthwith before the Court within 24 hours for remand. From Annexure-3, it appears that arrest of the petitioner was made on 08.05.2025 under Section 19 of the Act 2002 after recording detail "reasons to believe" based on material which indicates the petitioner's involvement in the alleged crime.

91. It is evident from Annexure-2 that the search conducted on 08.05.2025 under Section 17 of the PMLA at the premises of the Petitioner led to the recovery of incriminating material including unaccounted cash and digital evidence in the form of electronic devices. The search was duly recorded in a Panchnama, and the Petitioner was also summoned under Section 50 of PMLA, during which his statement was recorded.

92. It is further evident from Annexure-3 that the Petitioner was arrested on the same day after the Authorized Officer recorded detailed "Reasons to Believe"

93. So far as the contention of the petitioner that the ground of arrest and reason to believe were similar or vague, which appears to be misplaced because from perusal of Annexure-3 wherein both the documents have been annexed, wherefrom, it is evident that a clear distinction was maintained between the "Reasons to Believe" and the "grounds of arrest" and both were supplied to the petitioner satisfying the statutory mandate and the safeguards envisaged under article 22(1) of the Constitution of India. Further, at paragraph-15 of the instant petition, the petitioner himself admitted the supply of all documents like grounds of arrest and reasons to believe.

94. Further, the Petitioner was promptly produced before the Ld. Special Court, PMLA, Ranchi within 24 hours, as mandated under Section 19(3) of the Act. Subsequently, a well-reasoned remand order was passed and even custody was granted upon an application made by the Opposite Party, demonstrating full judicial application of mind and negating the plea of arbitrariness.

95. Thus, from the aforesaid, it is evident that the mandate as rendered by the Hon'ble Apex Court in the case of Arvind Kejriwal v. Directorate of Enforcement , (supra) and Pankaj Bansal v. Union of India, (supra) is fully complied with in the facts of the present case. The said decisions reinforce the requirement for proper application -67- BBl 2025:JHHC:31170 of mind, existence of reasons, and communication of grounds, all of which were duly complied with in the present case. Further, the Hon'ble Supreme Court in Vijay Madanlal Choudhary v. Union of India , (supra) has clearly laid down that once reasons to believe are recorded on the basis of material, the scope of judicial review at the pre-trial stage, is limited.

96. Further, the submission of the Petitioner that he was never previously summoned is factually incorrect. He was summoned under Section 50 PMLA on 08.05.2025 and his statement was recorded, which would be evident from Annexure-2 of the petition. Further, the contention of the Petitioner that the reasons to believe and grounds of arrest are identical, is factually misconceived and legally untenable as both the "Reasons to Believe" and "Grounds of Arrest" were recorded separately, in writing, and were duly communicated to the Petitioner at the time of arrest, which would be evident from Annexure-3 of the petition.

97. It requires to refer herein that the arrest under Section 19(1) of PMLA does not require compliance with Section 41 Cr.P.C., since, later governs police arrests under the Code of Criminal Procedure . PMLA being a special law, the provisions of Section 19(1) of PMLA operate independently, with in-built safeguards including the requirement of written reasons to believe, furnishing of -68- BBl 2025:JHHC:31170 grounds of arrest and production before the Ld. Special Court within 24 hours.

98. Thus, on the basis of the discussion made hereinabove, this Court is of the view that contention of the petitioner that his arrest was made without any substantive material, is wholly untenable and contrary to the facts and record of the case. The procedural and substantive requirements for arrest have been fully complied with. The judicial remand granted by the Ld. Special Court further confirms the legality and necessity of the arrest.

99. Further, the arrest of the Petitioner was made by an officer duly authorised under the provisions of the PMLA and in accordance with the statutory requirements laid down under Section 19 of the said Act. As per the averment made in the counter affidavit, the officer effecting the arrest, namely, Shri Rajendra Singh, Assistant Director, is a designated and empowered officer under Section 19(1) PMLA, hence, the arrest is not vitiated on this ground.

100. It appears from the record that the Arresting Officer, in the present case, did in fact form reasons to believe in writing based on the material in his possession, and such reasons were separately recorded and communicated to the Petitioner at the time of arrest, along with a copy of the Grounds of Arrest. This procedure fully complied with the mandate of V. Senthil Balaji (supra) wherein the Hon'ble -69- BBl 2025:JHHC:31170 Supreme Court reiterated that the authorised officer must assess material, form a belief and communicate the grounds of arrest which was done in the instant case.

101. Further, the Petitioner's contention that the Arresting Officer must himself have physically participated in the search proceedings or have personally gathered all material is not a legal requirement under PMLA.

102. It requires to refer herein that Section 19(1) of PMLA only mandates that the authorised officer must form a reason to believe, on the basis of material in his possession, which may include material collected by subordinate officers during search and investigation and placed before him for consideration. This does not mean the arresting officer must be physically present at every preceding investigative step. Such a literal and restrictive interpretation finds no support in law and is contrary to the operational realities of multi-agency investigations. Further, there is no requirement under Section 19(1) of PMLA or the relevant rules that the authorisation to arrest in a particular ECIR must be separately annexed or filed before the Court. The arrest cannot be declared invalid merely because the Petitioner seeks production of a document that has no bearing on the substantive legality of arrest.

103. In Vijay Madanlal Choudhary v. Union of India , (supra), the Hon'ble Supreme Court held that high-ranking -70- BBl 2025:JHHC:31170 officers such as Assistant Directors are empowered to arrest under Section 19(1) , provided they form the required belief on the basis of material in their possession. There is no statutory requirement that such material must be collected only by them personally.

104. It is evident from record that at the time of arrest, the Petitioner/Accused was not only informed of the grounds for his arrest but was also provided with the detailed "Reasons to Believe", the "Grounds of Arrest", and the "Arrest Order" in writing which is conclusively evidenced by the Petitioner's own sign, handwritten acknowledgment on the document itself, confirming he received the 'Reasons to Believe' and other arrest documents in writing and in original at the time of his arrest. A true copy of the "Reasons to believe" u/s 19(1) of the PMLA for arrest of present petitioner and "Grounds of Arrest" is also being annexed herewith by the respondent by filing interlocutory application. True Copies of the said 'Reasons to Believe' and 'Grounds of Arrest' are annexed herewith as Annexure R-2 and R-3 respectively, wherefrom, it is evident that the Petitioner/Accused, Amit Agarwal, had personally acknowledged the receipt of the said documents in his own handwriting on the last page of the 'Reasons to Believe document itself. The handwritten acknowledgment by the Petitioner reads as follows:

105. Thus, the aforesaid acknowledgment by the Petitioner himself irrefutably established that there has been complete compliance with the settled principles of law laid down by the Hon'ble Apex Court.

106. Thus, on the basis of the discussions made hereinabove, it is the considered view of this Court that herein the arrest of the Petitioner is valid both procedurally and substantively and the officer effecting arrest was authorised, possessed material in his custody, formed a reasoned belief based on that material, recorded the same in writing, informed the Petitioner of the grounds of arrest, and forwarded all material to the Adjudicating Authority, thereby satisfying all legal requirements under the PMLA and the binding judgments of the Hon'ble Supreme Court, therefore, the contention of the learned counsel for the petitioner about legality of the arrest, is hereby negated. Issue of culpability of the present petitioner:

107. It is evident from the record that the Directorate General of GST Intelligence (in short DGGI), Jamshedpur filed three complaint cases i.e. Complaint Case No. 678/2024 dt. 29.04.2024 against Shiva Kumar Deora, Complaint Case No. 1280/2024 dt. 04.06.2024 against -72- BBl 2025: JHHC:31170 Sumit Gupta and Complaint Case No. 1281/2024 dt. 04.06.2024 against Amit Gupta u/s 132 of the GST Act r/w section 20 of the Integrated GST Act, 2017 r/w section 34 , 120A , 193 , 195A , 201 , 203 , 204 , 406 , 409 , 420 , 465 , 467 , 468 , 471 of IPC in the court of Economic Offices, Jamshedpur. Since u/s 420 , 467 and 471 of the IPC, above stated complaints filed by the DGGI, Jamshedpur are scheduled offences as per paragraph 1 Part A of the schedule provided under PMLA 2002, the ECIR No. RNZO/18/2024 was recorded on 23.09.2024 for conducting an investigation under PMLA, 2002.

108. As per aforesaid three complaint cases, it is revealed that a syndicate is operational in Jharkhand, West Bengal, Delhi and other states of the country. Syndicate is indulged in creation, operation and management of fake companies / firms for passing on ineligible ITC (Input Tax Credit) by issuing fake GST bills, without actually delivering the related goods and services, and the persons namely Shiva Kumar Deora, Sumit Kumar Gupta and Amit Kumar Gupta were a part of the said syndicate who were knowingly a party with each other and or directly involved in illegal activities of creation of fake companies / firms in the name of various dummy directors/ proprietors in order to avail and pass on ITC to several end beneficiaries in lieu of money, which are proceeds of crime.

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109. Further, it has been transpired from the complaints that several bogus GST invoices have been generated in Delhi and have traveled to Jharkhand via West Bengal in three to four layers. A portion of these bogus ITCs have also been transferred to other States such a Tamil Nadu, Telangana, Andhra Pradesh, Maharashtra and Odisha and bogus ITC claims have also been taken on the basis of the said fake invoices.

110. As per aforesaid complaint cases, accused Shiva Kumar Deora is the mastermind behind the said fraud committed of availing ITC on the strength of bogus invoices, by way of creation of multiple companies/firms in the name of innocent persons. They hired innocent and needy persons in the name of job at the numeration of Rs. 10,000/- to 15,000/- per month and they were not required attend the office daily. Instead, they were asked to provide OTP and PIN, whenever required by them. Subsequently, fake firms and companies were floated in the name of those innocent needy persons after using their identity, documents, without their knowledge or consent.

111. Further, it is also revealed that Sumit Kumar Gupta, the accomplice of Shiva Kumar Deora worked as an office staff member on his instructions for creating DSCs, rent agreements for various firms and companies for which, he was initially paid a monthly salary of Rs. 30,000/-. -74-

BBl 2025:JHHC:31170 Shiva Kumar Deora and his accomplices, namely, Amit Kumar Gupta and Sumit Kumar Gupta are beneficial owners of total 135 shell companies/firms which are floated in names of various dummy directors and by these firms they availing fake ITC to the tune of Rs. 750 crores (Approx) and passed them to several end beneficiaries thereby causing significant loss to the government exchequer.

112. It has further been alleged in the aforesaid complaints as filed by DGGI, Jamshedpur, that an FIR was registered against Tutui Debnath, Sumi Shaw and present petitioner Amit Agarwal @ Vicky Bhalotia.

113. It has been alleged that the present petitioner is also one of the accomplices of main mastermind Shiva Kumar Deora who also works on similar modus in availing fake ITC on strength of bogus invoices. In this regard FIR NO. 98/2022 u/s 420 , 406 , 120BV of the IPC registered at Bowbazar Police Station, Kolkata against petitioner in relation to the matter pertaining to availing fake ITC to the tune of Rs. 5,05,91,296/-.

114. It has been stated that Petitioner is one of the directors of Greentech Steel Private Limited which are indulged in claiming ineligible ITC on strength of bogus invoices without actually delivering the goods and services. Shiva Kumar Deora and present petitioner are also common directors / proprietors of various firms. -75-

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115. From the scrutiny of the bank accounts maintained in the name of TE Udhyog Private Ltd., it is revealed that Rs. 76,98,500/- have been debited to accused Amit Gupta on various occasions. It is further revealed that Amit Gupta is one of the former directors in the said company namely TE Udhyog Pvt. Ltd. Further, several transactions have been identified between the entities beneficially owned by Shiva Kumar Deora and Amit Gupta with the present petitioner through his ICICI Bank Account.

116. Thus, it has been stated that there is a nexus between Shiva Kumar Deora and Amit Gupta with present petitioner in illegal claiming of fake ITCs through fake firms/companies.

117. Form scrutiny of the HDFC Bank Account no. 50100055793602 maintained in the name of petitioner, it is revealed that a huge amount of Rs. 16,64,74,760/- has been credited during the period from 28.10.2016 to 02.02.2025, out of which Rs. 3,41,60,151/- have been credited from the bank account of Greentech Steel Enterprises during the period 01.10.2020 to 17.12.2024 and Rs. 4,49,54,750/- have been debited from the said Greentech Steel Enterprises during the period from 03.04.2021 to 16.11.2024.

118. Further, Rs. 3,24,92,300/- and Rs. 2,54,00,000/- have been credited and debited from Greentech Minerals -76- BBl 2025:JHHC:31170 Pvt. Ltd during the period from 28.10.2021 to 21.01.2025 and 06.10.2020 to 15.03.2024 respectively.

119. Sum of Rs. 98,10,900/- and Rs. 85,00,000/- have been credited and debited from Bizzare Commercial Pvt. Ltd during the period from 26.11.2021 to 08.05.2023 and 08.10.2021 to 12.01.2022, respectively. Further, the above stated entities have been prosecuted in the above stated complaints filed by the DGGI.

120. Thus, it is established that while the above stated entities are not in business, the bank accounts of the said entities have been used by petitioner for layering and deriving the proceeds of crime generated out of illegal activities of fraudulently claiming ITC on the strength of bogus invoices. Thus, it is established that the petitioner was knowingly indulged in processes and activities of money laundering and has caused a loss of Rs. 15.95 crores to the government exchequer through the aforementioned illegal activities.

121. The Petitioner has been arrested for the offence u/s 3 PML Act punishable u/s 4 of the PML Act on 08.05.2025, hence this petition.

122. Learned counsel for the petitioner has submitted that the allegation leveled against the present petitioner cannot be said to attract the ingredient of Section 3 of PML Act, 2002.

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123. While on the other hand, the learned counsel appearing for the Opp. Party-ED has submitted by referring to various paragraphs of prosecution complaint that the offence is very much available attracting the offence under provisions of PML Act, 2002 .

124. This Court, in order to appreciate the rival submission, is of the view that various paragraphs of prosecution complaint upon which the reliance has been placed on behalf of both the parties, needs to be referred herein so as to come to the conclusion, "as to whether the parameter as fixed under Section 45 (i) and (ii) of the Act 2002, is being fulfilled in order to reach to the conclusion that it is a fit case where regular bail is to be granted or not".

125. For ready reference, the relevant paragraphs of the prosecution complaint are being quoted as under:

He admitted to establishing and controlling multiple shell firms, using individuals like Ritesh Kumar as dummy directors on a monthly salary. He gave a -79- BBl 2025:JHHC:31170 detailed confession of the two primary modes of the fraud: generating fake bills for goods sourced from unregistered vendors and generating entirely bogus bills where funds were returned via hawala networks after deducting commission. He explicitly named the 'Angadias' used by the syndicate. He admitted to receiving bogus bills on a commission basis from entities controlled by Shiva Kumar Deora and Amit Gupta. He was unable to explain huge credits of over 115.40 crores in his HDFC bank account from various shell entities, thus admitting to his role in the laundering of proceeds of crime.

B. Statement of dummy directors / employees and other persons 9.5 Statement of Shri Dipesh Kejriwal (RUD- 23):

His criminal antecedents are evidenced by multiple cases, including an FIR by the Durgapur CID and a separate complaint (No. 5760 of 2023) by the DGGI, Jamshedpur. Furthermore, an FIR (No. 98/2022) was registered against him at PS Bowbazar Kolkata under sections 420 / 406 / 120B of the IPC, for availing fraudulent ITC to the tune of Rs. 5,05,91,296/- This pattern of behaviour establishes his expertise and intent in committing large-scale financial fraud. B. In the present case, Amit Agarwal operated a parallel sub-syndicate based in Jamshedpur. He personally managed and controlled at least nine shell companies, through which he fraudulently generated and availed irregular and inadmissible GST ITC amounting to Rs.48.19 crores on the strength of bogus invoices, without any corresponding delivery of goods or services.

C. While running his own operation, this sub- syndicate was deeply intertwined with the main syndicate controlled by Shiva Kumar Deora and Amit Kumar Gupta. The nexus is established through clear operational and financial linkages;

Operational Nexus: The syndicates share a common pool of dummy directors. For instance, individuals like Sumi Shaw were found to be common directors in firms controlled by both Shiva Kumar Deora and Amit Agarwal, proving a coordinated strategy and shared control over the fraudulent network.

BBl 2025:JHHC:31170 Financial Nexus: A two-way flow of illicit funds has been identified.

Funds Flowing from Agarwal's Entity: The bank account of M/s TE Udhyog Private Ltd. (IndusInd Bank A/C No.250023121980), a company where Amit Agarwal was a director, reveals fund transfers totaling Rs.76,98,500/- to Amit Kumar Gupta, the main syndicate's financial manager.

Funds Flowing into Agarwal's Account: Scrutiny of Amit Agarwal's personal HDFC Bank Account (No.50100055793602) shows it was used as a primary conduit for laundering proceeds of crime, receiving staggering credits of Rs.16,64,74,760/- between 2016 and 2025. A significant portion of these funds originated from shell entities controlled by the main syndicate, including M/s Greentech Steel Enterprises, M/s Greentech Minerals Pvt Ltd, and M/s Bizzare Commercial Pvt Ltd.

The circular movement of funds from known shell companies through his personal account, as detailed in the table below, irrefutably proves that Amit Agarwal @ Vicky Bhalotia was not an independent operator but a key player in the larger conspiracy, laundering funds and availing fraudulent ITC from the entities controlled by Shiva Kumar Deora and others.

11.7 evidence from unexplained cash deposits D. Shri Amit Agarwal @ Vicky Bhalotia: - The accused Amit Agarwal Vicky Bhalotia also had deposits amounting to Rs. 40.20 Lakhs made in four separate bank accounts held in ICICI Bank, Punjab National Bank and HDFC Bank between the period of 2010 to 2021.

12 SPECIFIC ROLE OF THE ACCUSED PERSONS IN OFFENCE OF MONEY LAUNDERING-

BBl 2025:JHHC:31170 SHRI AMIT AGARWAL ALIAS VICKY BHALOTIA (ACCUSED NO. 4):

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133. In his statement also, he had confessed to the detailed modus operandi, which involved creating bogus bills and using a network of 'Angadias (hawala operators) to return funds in cash after deducting commission. This was a deliberate mechanism to layer transactions and conceal their criminal origin. His, personal bank account was actively used as a conduit to receive and layer illicit funds from the broader syndicate, demonstrating his role in concealing the proceeds of their joint criminal enterprise.

134. The investigation revealed that the present petitioner was a significant beneficiary of the fraud. The illicit funds were used to make substantial investments in real estate and his business activities, thereby integrating the proceeds of crime into the legitimate economy and projecting them as untainted assets.

135. At this juncture it requires to refer herein that the Hon'ble Apex Court in the case of Rohit Tandon vs. Directorate of Enforcement (supra) while referring the ratio of Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra & Ors. , (2005) 5 SCC 294 has categorically held that 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 -88- BBl 2025:JHHC:31170 evidence meticulously but to arrive at a finding on the basis of broad probabilities.

136. Further, the Hon'ble Apex Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) has reiterated the same view and has observed that the Court while dealing with the application for grant of bail need not to delve deep into the merits of the case and only a view of the court based on available material on record is required. For ready reference, the relevant paragraph is being quoted as under:

which means the court has to see only if there is a genuine case against the accused and the prosecution is -89- BBl 2025:JHHC:31170 not required to prove the charge beyond reasonable doubt."

137. Thus, prima-facie on the basis of the material available in prosecution complaint the role of the present petitioner in the alleged money laundering cannot be negated.

138. It needs to refer herein that the Hon'ble Apex Court in the case of Rana Ayyub v. Directorate of Enforcement , (2023) 4 SCC 357 observed as follows:

139. In the light of the aforesaid statutory definitions, it can safely be inferred that it is enough if the prosecution establishes that there was generation of proceeds of crime and the accused was involved in any process or activity in connection with the proceeds of crime.

140. Hence, it appears that the petitioner is directly indulged and is actually involved in all the activities connected with the offence of money laundering, i.e., use or acquisition, possession, concealment, and projecting or claiming as untainted property, as defined u/s 3 of PML Act, 2002.

141. Further, the offence of money laundering as contemplated in Section 3 of the PML Act, 2002 has been elaborately dealt with by the three Judge Bench in Vijay Madanlal Choudhary (supra), in which it has been observed that Section 3 has a wider reach. The offence as defined captures every process and activity in dealing with the proceeds of crime, directly or indirectly, and is not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money laundering. Of course, the authority of the Authorised Officer under the Act to prosecute any person -91- BBl 2025:JHHC:31170 for the offence of money laundering gets triggered only if there exist proceeds of crime within the meaning of Section 2(1)(u) of the Act and further it is involved in any process or activity. Not even in case of existence of undisclosed income and irrespective of its volume, the definition of "Proceeds of Crime" under Section 2(1)(u) will get attracted, unless the property has been derived or obtained as a result of criminal activity relating to a scheduled offence. The property must qualify the definition of "Proceeds of Crime"

142. To constitute any property as proceeds of crime, it must be derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence. The explanation clarifies that the proceeds of crime include property, not only derived or obtained from scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence. Clause (u) also clarifies that even the value of any such property will also be the proceeds of crime. -92-

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143. Now coming to the contentions as raised by the learned counsel for the petitioner, wherein, he has taken the ground that the petitioner is not accused in the predicate offence, hence, cannot be made liable for money laundering offence. But the contention of the learned counsel appears to be misplaced reason being that it is settled proposition of law that the offence of money Laundering is independent of the scheduled offence, particularly in matters related to the proceeds of crime.

144. It is evident that as per Section 3 , there are six processes or activities identified therein. They are, (i) concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting as untainted property; and (vi) claiming as untainted property. Even if a person does not retain the money generated as proceeds of crime but "uses" it, he will be guilty of the offence of money-laundering, since "use" is one of the six activities mentioned in Section 3 .

145. Further, it needs to refer herein that the Hon'ble Supreme Court has consistently held, including in Pavana Dibbur v. Directorate of Enforcement , 2023 SCC OnLine SC 1586, as well as in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. , 2022 SCC OnLine SC 929, that the offence of money laundering under Section 3 of the PMLA is an independent offence. The Hon'ble Apex Court has categorically laid down that it is not necessary -93- BBl 2025:JHHC:31170 for a person to be shown as an accused in the scheduled offence for him to be prosecuted under the PMLA, provided there exist proceeds of crime derived from a scheduled offence and the person has indulged in or facilitated any process or activity connected with such proceeds of crime.

146. In the aforesaid case, i.e., Pawana Dibbur (supra) it has further been observed by referring the decision rendered by the Hon'ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (supra) that the condition precedent for the existence of proceeds of crime is the existence of a scheduled offence. At paragraph- 15 the finding has been given therein that on plain reading of Section 3 of the Act, 2002, an offence under Section 3 can be committed after a scheduled offence is committed. By giving an example, it has been clarified that if a person who is unconnected with the scheduled offence, knowingly assists the concealment of the proceeds of crime or knowingly assists the use of proceeds of crime , in that case , he can be held guilty of committing an offence under Section 3 of the PMLA. Therefore, it is not necessary that a person against whom the offence under Section 3 of the PMLA is alleged must have been shown as the accused in the scheduled offence.

147. Keeping in mind these essential elements that make up the molecular structure of Section 3 , this Court adverts -94- BBl 2025:JHHC:31170 in to facts of the instant case as discussed in preceding paragraph is of view that the contention of the learned counsel for the petitioner has no substance.

148. Further, the burden of proof is on the Petitioner until the contrary is proved, the same is observed in various judicial pronouncements and upheld in the case of Vijay Madanlal Choudhary (supra). Further, in Rohit Tandon v. Directorate of Enforcement , (2018) 11 SCC 46, the Hon'ble Supreme Court has also observed that the provisions of section 24 of the PMLA provide 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.

149. Further, the contention of the learned counsel for the petitioner that the Directorate has merely relied upon the information from the predicate agency (DGGI) to justify the arrest is incorrect and misleading. The Directorate has independently collected, analyzed, and evaluated the material forming the basis for the arrest. The Petitioner's conduct, as revealed during the investigation including his financial linkages, involvement in key entities like TE Udhyog Pvt. Ltd. and Greentech Traders, handling of large- scale ITC flows, and statements of dummy persons coerced by him demonstrate not only his active role in laundering -95- BBl 2025:JHHC:31170 the proceeds of crime but also his tendency to interfere with the investigation and key witnesses

150. The involvement of the Petitioner in directing dummy persons, creating forged documents, and misusing control over shell firms is not only substantiated but has been corroborated by statements under Section 50 of the PMLA and materials recovered during search.

151. Further, the grant of bail to the Petitioner in BA No. 569 of 2024 by this Court in connection with a predicate offence has no bearing on the present bail application under PMLA. It is a settled principle that the offence of money laundering is a standalone and continuing offence, as recognized in Vijay Madanlal Choudhary (supra), and grant of bail in the predicate offence does not create any presumption in favour of bail.

152. It requires to refer herein that the Petitioner was on regular bail in the predicate offence or that no complaint has been filed by the DGGI does not dilute or nullify the independent action taken under the PMLA since both are the parallel proceedings.

153. The learned counsel for the petitioner has further contended that the petitioner has been implicated in the present case on the basis of statement recorded under Section 50 of the PML Act of the co-accused, who was -96- BBl 2025:JHHC:31170 already in custody, hence, the statement recorded under Section 50 of the PML Act of the co-accused, who were already in custody cannot be used against the present petitioner as per the mandate of judgment rendered by the Hon'ble Apex Court in the case of Prem Prakash Vs. Union of India through the Directorate of Enforcement (supra).

154. In the aforesaid context, it needs to refer herein that there is no dispute regarding the settled proposition of law that the statements recorded which are merely confessional in nature ought to be ignored while adjudicating upon a case as confessional statement of co-accused cannot be treated as substantive evidence and such statements can only be pressed into service when the Hon'ble Courts are inclined to accept other evidences. Thus, instead of placing reliance solely upon the statements of the petitioner and the other co-accused persons recorded under Section 50 of PMLA, the opposite party ought to have collected and relied upon other evidence in order to prosecute the petitioner.

155. Herein, the argument is that the imputation of the petitioner is based upon the statement recorded under section 50 of the PML Act, 2002 of the co-accused person, namely, Shiva Kumar Deora while he was in custody but this Court after going through the prosecution report has found that other witnesses who have not been arrayed as -97- BBl 2025:JHHC:31170 an accused in their statements recorded under section 50 of the PML Act have made specific imputation against the petitioner.

156. Further herein, it is evident from the various paragraphs of the prosecution complaint filed which have been referred hereinabove, is supported by substantial evidence gathered during the investigation and culpability against the petitioner is not based solely upon on the statements of the petitioner and his accomplices. Furthermore, prima facie there is ample evidence establishing the petitioner's involvement in the offence of money laundering, which is further corroborated by statements of other witnesses who were not arraigned as accused in the instant case. Further, the petitioner's role has already been discussed herein in detail in the preceding paragraphs, therefore, the averments of the petitioner are unfounded and liable to be dismissed.

157. It needs to refer herein that the three Judge Bench the Hon'ble Apex Court in the case of Rohit Tandon vs. Directorate of Enforcement " (supra) held that the statements of witnesses recorded by Prosecution - ED are admissible in evidence in view of Section 50 . Such statements may make out a formidable case about the involvement of the accused in the commission of the offence -98- BBl 2025:JHHC:31170 of money laundering. For ready reference the relevant paragraph is being quoted as under:

158. In a recent judgment, the Hon'ble Supreme Court in " Abhishek Banerjee & Anr. v. Directorate of Enforcement ", (2024) 9 SCC 22 has again made similar observations:

22. It has been specifically laid down in the said decision that the statements recorded by the authorities under Section 50 PMLA are not hit by Article 20(3) or Article 21 of the Constitution, rather such statements recorded by the authority in the course of inquiry are deemed to be the judicial proceedings in terms of Section 50(4) , and are admissible in evidence, whereas the statements made by any person to a police officer in the course of an investigation under Ch. XII of the Code could not be used for any purpose, except for the purpose stated in the proviso to Section 162 of the Code. In view of such glaring inconsistencies -100- BBl 2025:JHHC:31170 between Section 50 PMLA and Sections 160/161CrPC, the provisions of Section 50 PMLA would prevail in terms of Section 71 read with Section 65 thereof."

159. In light of the foregoing judicial pronouncements, it is evident that statements recorded under Section 50 of the PML Act, 2002 hold evidentiary value and are admissible in legal proceedings. The Hon'ble Supreme Court, while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PML Act, 2002 .

160. In the aforesaid judgment, the Hon'ble Supreme Court also reaffirmed the admissibility of Section 50 of the PML Act, 2002 distinguishing them from statements recorded under the Cr.PC . The Court underscored that such statements, being recorded during an inquiry rather than an investigation, are not subject to the restrictions under Article 20(3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50(4) of the PML Act, 2002 and, therefore, admissible as evidence in proceedings under the PML Act, 2002 . The Hon'ble Apex Court further clarified that the provisions of Section 50 of the PML Act, 2002 having an overriding effect by virtue of Sections 65 and 71 of the PML Act, 2002 prevail over the procedural safeguards under the CrPC .

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161. In the instant case, it has been found that during the course of investigation, statement recorded of the accused persons as also the statement of various other witnesses.

162. Hence, the contention is that no independent corroborative material exists is patently false. As already elaborated in the "Brief Facts" and "Role of the Accused"

163. The reliance placed on Prem Prakash v. Union of India (supra) is misplaced. The observations therein pertain to co-accused statements under Section 30 of the Evidence Act and are not intended to override the admissibility of statements under Section 50 of PMLA in the unique statutory scheme of the PMLA. In fact, the Hon'ble Supreme Court has recognized the evidentiary sanctity of Section 50 in Vijay Madanlal Choudhary v. Union of India , 2022 SCC OnLine SC 929, affirming that such -102- BBl 2025:JHHC:31170 statements are legally distinct from statements to police under the Evidence Act .

164. Thus, the petitioner knowingly is as party and is actually involved in all the activities connected with the offence of money laundering, i.e., use or acquisition, possession, concealment, and projecting or claiming as untainted property.

165. Having examined the admissibility of statements recorded under Section 50 of the PML Act, 2002, this Court shall now proceed to analyze the statutory framework governing the burden of proof under Section 24 in proceedings related to proceeds of crime.

166. From the bare perusal of Section 24 of the PML Act, 2002, it is evident that once a person is charged with the offence of money laundering under Section 3 of the PML Act, 2002, the law presumes that the proceeds of crime are involved in money laundering unless the contrary is proven by the accused.

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167. In the present case, the investigating agency has relied not only on the statement of co-accused under Section 50 of the PML Act, 2002 but also other evidences which indicate the applicant's active role in the alleged money laundering activities.

168. By virtue of Section 24 of the PML Act, 2002, the respondent-ED is not required to conclusively establish the applicant's guilt at the pre-trial stage, rather, the applicant must demonstrate that the proceeds of crime attributed to him are not linked to money laundering. In the absence of any rebuttal by the applicant, the presumption under Section 24 of the PML Act, 2002 stands in favor of the respondent, thereby, justifying his continued detention.

169. With regard to the above, this Court has referred to the judgment of the Hon'ble Supreme Court in Prem Prakash v. Union of India through Directorate of Enforcement , (supra) wherein, the following observations were made:

170. Be it noted that the legal presumption under Section 24(a) of the Act 2002, 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 -105- BBl 2025:JHHC:31170 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 of the accused.

171. 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.

172. 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 connected with the proceeds of crime.

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173. In the case of " Collector of Customs, Madras & Ors. v. D. Bhoormall ", (1974) 2 SCC 544 proceedings were initiated under Section 167(8)(c) of the Customs Act for confiscation of contraband or smuggled goods and it was observed by the Hon'ble Apex Court that on the principle underlying Section 106 , Evidence Act, the burden to establish those facts is cast on the person concerned; and, if he fails to establish or explain those facts, an adverse inference of facts may arise against him. The relevant paragraph of the aforesaid Judgment is being quoted as under:

174. Thus, in light of the aforesaid principles and the law enunciated by the Hon'ble Supreme Court in Vijay Madanlal Choudhary (Supra), this Court must determine whether the foundational facts necessary to invoke the presumption under Section -107- BBl 2025:JHHC:31170 24 of the PML Act, 2002 have been established by the respondent/ED.

175. Herein as per the prosecution complaint which has been annexed herein as annexure, it is evident that there is ample evidence has been led by the prosecuting agency in order to fix the culpability of the present petitioner, therefore the scope of section 24 of Act 2002 has pivotal role at this stage.

176. Now in the light of aforesaid discussion at this juncture, this Court thinks it fit to revisit the scope of Section 45 of the PML Act, 2002. As discussed in preceding paragraphs that Section 45 of the PML Act, 2002 provides twin test. First 'reason to believe' is to be there for the purpose of reaching to the conclusion that there is no prima facie case and second condition is that the accused is not likely to commit any offence while on bail.

177. Sub-section (1)(ii) of Section 45 of the PML Act, 2002, provides that if 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, meaning thereby, the parameter which is to be followed by the concerned court that satisfaction is required to be there for believing that -108- BBl 2025:JHHC:31170 such accused person is not guilty of such offence and is not likely to commit offence while on bail.

178. Section 45(2) of the Act 2002 provides to consider the limitation for grant of bail which is in addition to the limitation under the Code of Criminal Procedure , 1973, i.e., limitation which is to be considered while granting the benefit either in exercise of jurisdiction conferred to this Court under BNSS, 2023 is to be taken into consideration.

179. It is, thus, evident by taking into consideration the provision of Sections 19(1) , 45(1) and 45(2) of PML Act, 2002 that the conditions provided therein are required to be considered while granting the benefit of regular bail in exercise of power conferred under statute apart from the twin conditions which has been provided under Section 45(1) of the Act, 2002.

180. Thus, Section 45 of the PML Act, 2002 turns the principle of bail is the rule and jail is the exception on its head. The power of the Court to grant bail is further conditioned upon the satisfaction of the twin conditions prescribed under Section 45(1) (i) and (ii) PML Act, 2002 . While undertaking this exercise, the Court is required to take a prima facie view on the basis of materials collected during investigation. The expression used in Section 45 of PML Act, 2002 are -109- BBl 2025:JHHC:31170 "reasonable grounds for believing" which means that the Court has to find, from a prima facie view of the materials collected during investigation that there are reasonable grounds to believe that the accused has not committed the offence and that there is no likelihood of him committing an offence while on bail. Recently, in Tarun Kumar v Assistant Directorate of Enforcement , (supra) the Hon'ble Supreme Court has held as under:

181. Further, at the stage of recording statements during enquiry, it cannot be construed as an investigation for prosecution. The process envisaged -110- BBl 2025:JHHC:31170 under Section 50 of PML Act, 2002 is in the nature of an inquiry against the proceeds of crime and it is not an investigation and the authorities who are recording the statements are not police officers and therefore, these statements can be relied upon as admissible piece of evidence before the Court. The summons proceedings and recording of statements under PML Act, 2002 are given the status of judicial proceedings under Section 50(4) of PML Act, 2002.

182. The statements that were recorded from the witnesses during the investigation have been dealt with in prosecution complaint and many of the statements clearly implicate the petitioner. Therefore, the statements that have been recorded from the witnesses and which has been relied upon, is also a strong material that prima facie establishes the offence of money laundering against the present petitioner.

183. Thus, on the basis of the discussion made hereinabove, the contention of the learned counsel for the petitioner that even if the entire ECIR will be taken into consideration, no offence will be said to be committed so as to attract the ingredients of Sections 3 & 4 of the PML Act, 2002, is totally misplaced in the light of accusation as mentioned in prosecution complaint.

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184. Thus, this Court, after taking note of the settled legal proposition, is of view that the aforesaid contention is not tenable in the eye of law.

185. So far as the issue of period of custody as agitated by learned counsel for the petitioner is concerned, it is settled proposition of law which has been settled by the Hon'ble Apex Court that the period of incarceration (herein about 05 month) or delay in trial alone cannot be ground to release the petitioner on bail, rather in case of scheduled offences/special offences the seriousness of the matter and the societal impact should be taken in to consideration by the Court concerned while enlarging the petitioner on bail.

186. Further, this Court is conscious with the fact that personal liberty is utmost requirement to maintain the individuality of the person concerned but at the same time it is equally settled that the balance between personal liberty and societal impact of the alleged offence should be taken care of by the Court concerned.

187. Further, the Hon'ble Apex Court while dealing with the offences under UAP Act 1967, in the case of Gurwinder Singh v. State of Punjab (supra) and taking in to consideration the ratio of judgment of Union of India vs. K.A. Najeeb , (2021) 3 SCC 713 has observed that mere delay in trial pertaining to -112- BBl 2025:JHHC:31170 grave offences as one involved in the instant case cannot be used as a ground to grant bail, for ready reference the relevant paragraph is being quoted as under:

188. Thus, on the basis of the aforesaid settled position of law it is evident that mere proposed delay in trial pertaining to grave offences as one involved in the instant case cannot be used as a ground to grant bail.

189. Admittedly, the petitioner has been in judicial custody since May 2025 but delay, under the aforesaid circumstances, does not entitle the petitioner to bail. The Hon'ble Supreme Court in Tarun Kumar v. Directorate of Enforcement , 2023 SCC OnLine SC 1486, has authoritatively held that while the period of custody may be a relevant factor, it cannot by itself override the gravity of the offence, the seriousness of -113- BBl 2025:JHHC:31170 allegations or the statutory twin conditions under Section 45 of the Act 2002.

190. Similarly, in Satyendar Kumar Jain v. Directorate of Enforcement , 2024 SCC OnLine SC 306, the Hon'ble Apex Court refused bail despite protracted proceedings, noting that the complexity inherent in economic offences often necessitates lengthy trials.

191. Thus, on the basis of the aforesaid discussions and taking into consideration the grave nature of the allegations, the sophisticated modus operandi employed to project tainted property as untainted, and the strict statutory framework governing bail under the PML Act, 2002 , it is the considered view of this Court that no ground exists for the petitioner to claim the benefit of bail on merits. The gravity of the offence, and the serious allegations of facilitating the laundering of proceeds of crime continue to justify the petitioner's custody under the strict rigours of Section 45 of the Act 2002.

192. This Court while considering the prayer for regular bail has taken into consideration that though this Court is not sitting in appeal on the order passed by learned trial court but only for the purpose of considering the view which has been taken by learned -114- BBl 2025:JHHC:31170 court while rejecting the prayer for bail, this Court is also in agreement with the said view based upon the material surfaced in course of investigation, as referred hereinabove.

193. This Court is conscious of this fact that while deciding the issue of granting bail in grave economic offences it is the utmost duty of the Court that the nature and gravity of the alleged offence should have been kept in mind because corruption poses a serious threat to our society should be dealt with by iron hand.

194. Further, it is required to refer herein that the Money Laundering is an economic offence and economic offences comes under the of grave offences hence needs to be visited with a different approach in the matter of bail as held by the Hon'ble Apex court in the case of " Y. S Jagan Mohan Reddy v/s Central Bureau of Investigation ", reported in (2013) 7 SCC

439. For ready reference, the relevant paragraphs of the aforesaid judgments are being quoted as under:

195. Similarly, the Hon'ble Apex Court in case of " Nimmagadda Prasad Vs. Central Bureau of -115- BBl 2025:JHHC:31170 Investigation", reported in (2013) 7 SCC 466 has reiterated the same view in paragraphs-23 to 25 which reads as under:

24. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. It has -116- BBl 2025:JHHC:31170 also to be kept in mind that for the purpose of granting bail, the legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.

25. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep-rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country."

196. The Hon'ble Apex Court in the case of " Central Bureau of Investigation Vs Santosh Karnani and Another ", 2023 SCC OnLine SC 427 has observed that corruption poses a serious threat to our society and must be dealt with iron hands. The relevant paragraph of the aforesaid judgment is being referred as under:-

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197. It requires to refer herein that the Hon'ble Apex Court in catena of judgments has held that the economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The 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.

198. The Hon'ble Apex Court has further observed that with the advancement of technology and Artificial Intelligence, the economic offences like money laundering have become a real threat to the functioning of the financial system of the country and have become a great challenge for the investigating agencies to detect and comprehend the intricate nature of transactions, as also the role of the persons involved therein. Reference in this regard may be made to the judgment rendered by the Hon'ble Apex Court in the case of " Tarun Kumar vs. Assistant Director Directorate of Enforcement "

23. With the advancement of technology and Artificial Intelligence, the economic offences like money laundering have become a real threat to the functioning of the financial system of the country and have become a great challenge for the investigating agencies to detect and comprehend the intricate nature of transactions, as also the -119- BBl 2025:JHHC:31170 role of the persons involved therein. Lot of minute exercise is expected to be undertaken by the Investigating Agency to see that no innocent person is wrongly booked and that no culprit escapes from the clutches of the law. When the detention of the accused is continued by the Court, the courts are also expected to conclude the trials within a reasonable time, further ensuring the right of speedy trial guaranteed by Article 21 of the Constitution.

24. With the afore-stated observations, the appeal is dismissed."

199. This Court, considering the aforesaid material available against the petitioner quoted and referred hereinabove in such a grave nature of offence and applying the principle of grant of bail wherein the principle of having prima facie case is to be followed, is of the view that it is not a fit case of grant of bail.

200. Having regard to the entirety of the facts and circumstances of the case, this Court is of the view that the petitioner has miserably failed to satisfy this Court that there are reasonable grounds for believing that he is not guilty of the alleged offences. On the contrary, there is sufficient material collected by the respondent-ED to show that he is prima facie guilty of the alleged offences.

201. For the foregoing reasons, having regard to facts and circumstances, as have been analyzed hereinabove, since the petitioner has failed to make out a special case to exercise the power to grant bail and considering the facts and parameters, necessary to be considered for -120- BBl 2025:JHHC:31170 adjudication of bail, this Court does not find any exceptional ground to exercise its discretionary jurisdiction to grant bail.

202. It is evident from the various paragraphs of the prosecution report dated 05.07.2025 which have been quoted and referred hereinabove that the allegations levelled against the Petitioner are of an extremely grave and serious in nature, striking at the very foundation of the country's economic and financial system. The same pertains to fraudulent transactions running into hundreds of crores of rupees, executed through a complex and deliberate layering of illicit funds, and culminating in the acquisition and projection of properties derived from such tainted sources as untainted assets. The Petitioner's activities have been found to be indispensable to the layering and integration stages of the laundering process, involving multiple shell companies and bank accounts under his de facto control.

203. It is also pertinent that delays frequently arise from procedural applications and thus, given the grave nature of the allegations, the sophisticated modus operandi employed to project tainted property as untainted, and the strict statutory framework governing bail under the PMLA, no ground exists for the petitioner to claim the benefit of bail either on merits or on account -121- BBl 2025:JHHC:31170 of delay. The gravity of the offence, and the serious allegations of facilitating the laundering of proceeds of crime continue to justify the petitioner's custody under the strict rigours of Section 45 of the Act 2002.

204. Thus, the magnitude of the fraud, its organized nature, and the systematic siphoning of funds, the present case strikes at the core of the country's economic and financial fabric. The fraudulent availment and passing of fake ITC not only caused direct financial loss to the Government but also undermined the sanctity of the GST regime, which is based on self-declaration and trust.

205. On the basis of discussions made hereinabove it is the considered view of this Court that granting bail to the Petitioner would send a wrong signal to society and embolden economic offenders, thereby, undermining public confidence in the justice delivery system. The offence in question is not a mere fiscal offence but a crime against the economic health of the nation, with a cascading effect on honest taxpayers, market integrity, and state revenue, therefore, this Court is of the view that it is not a case where the prayer for bail is to be granted.

206. In the result, the instant bail application stands dismissed.

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207. It is made clear that any observations made herein are prima-facie for consideration of matter of bail only and the view expressed herein shall not be construed as an expression on the merits of the case.

208. The learned Trial Court shall proceed with the matter uninfluenced by any observations made by this Court and shall decide the case strictly in accordance with law.

209. Pending interlocutory application(s), if any, also stands disposed of.

(Sujit Narayan Prasad, J.) 08/10/2025 A.F.R. Rohit/-

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