Supreme Court of India
PREM PRAKASHversusUNION OF INDIA THROUGH THE DIRECTORATE OF ENFORCEMENT
- Citation
- 2024 INSC 637
- Decided
- 28 August 2024
- Disposal
- Appeal(s) allowed
Holding
A statement recorded under Section 50 of the PMLA from a person who is in judicial custody in another proceeding investigated by the same agency is inadmissible against the maker, and the appellant satisfied the twin conditions of Section 45, warranting bail.
Summary
The appellant Prem Prakash was in judicial custody for a separate ECIR (No. 4 of 2022) when the Enforcement Directorate recorded statements from him under Section 50 of the Prevention of Money Laundering Act (PMLA) for a new ECIR (No. 5 of 2023). The High Court had denied his bail, relying on those statements, but the Supreme Court examined whether such statements, made while the appellant was in custody, could be admitted as substantive evidence. The Court held that a person in custody under the same investigating agency is not a free mind, and any statement recorded under Section 50 is barred by Section 25 of the Evidence Act and thus inadmissible. It also ruled that statements of co‑accused are not substantive evidence unless corroborated by independent material. Applying the twin conditions of Section 45 PMLA, the Court found reasonable grounds to believe the appellant was not guilty and unlikely to commit further offences, and therefore granted bail. The appeal was allowed, the High Court order set aside, and the appellant was released on bail with conditions.
Issues considered
- When a person is in judicial custody for one case investigated by the Enforcement Directorate, are statements recorded under Section 50 of the PMLA for another case admissible as evidence against the maker?
- Do statements of co‑accused under Section 50 have the character of substantive evidence in a PMLA proceeding?
- Whether the appellant satisfied the twin conditions under Section 45 of the PMLA to merit grant of bail.
Legislation cited
- Evidence Act, 1872s. 25, s. 30
- Indian Penal Code, 1860
- Prevention of Money Laundering Act, 2002s. 24, s. 30, s. 45, s. 50
- Transfer of Property Act, 1882
Subjects
Section 50 of the Prevention of Money Laundering Act, 2002Section 45 of the Prevention of Money Laundering Act, 2002Section 25 of the Evidence Act, 1872Article 21 of the Constitution of IndiaMoney launderingForgery of sale deedJudicial custodyAdmissibility of statements recordedIncriminating material against the makerConfession of the co‑accusedStatements of the co‑accusedBailProcedure established by lawReasonable grounds for believing
Judgment
[2024] 8 S.C.R. 955 : 2024 INSC 637
Prem Prakash
v.
Union of India Through The Directorate of Enforcement
(Criminal Appeal No. 3572 of 2024)
28 August 2024
[B.R. Gavai and K.V. Viswanathan,* JJ.]
Issue for Consideration
When a person is in judicial custody/custody in another case
investigated by the same Investigating Agency, whether the
statements recorded (in the present case, the statements dated
03.08.2023, 04.08.2023, 11.08.2023) for a new case in which
his arrest is not yet shown, and which are claimed to contain
incriminating material against the maker, would be admissible
under Section 50, Prevention of Money Laundering Act, 2002.
Headnotes†
Prevention of Money Laundering Act, 2002 – s.50 – Evidence
Act, 1872 – s.25 – Appellant was in judicial custody from
25.08.2022 in connection with another ECIR and while he
was in aforesaid judicial custody his arrest was shown in
the present ECIR on 11.08.2023 – Statement of the appellant
recorded while he was in custody, if admissible u/s.50:
Held: No – When an accused is in custody under PMLA
irrespective of the case for which he is under custody, any statement
under Section 50 PMLA to the same Investigating Agency is
inadmissible against the maker – The person in custody pursuant
to the proceeding investigated by the same Investigating Agency
is not a person operating with a free mind and it will be extremely
unsafe to render such statements admissible against the maker –
Statement of the appellant if to be considered as incriminating
against him, will be hit by Section 25 of the Evidence Act since he
gave the statement whilst in judicial custody, pursuant to another
proceeding instituted by the same Investigating Agency – As
the appellant was taken from the judicial custody to record the
statement, it will be a travesty of justice to render the statement
admissible against him – Since the words ‘procedure established
* Author
956 [2024] 8 S.C.R.
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by law’ occurring in Article 21 has to be a reasonable and valid
procedure – The statement of the appellant under Section 50
cannot be relied upon against him in ECIR No. 5 of 2023 even
though the appellant was at that point in custody in ECIR No. 4
of 2022 – Further, statements of the co-accused will not have the
character of substantive evidence and the law laid down under
Section 30 of the Evidence Act by this Court while dealing with
the confession of the co-accused will apply – Statement of
the co-accused does not prima facie indicate anything about
the role of the appellant in the forgery of sale deed and other
documents or being involved in the offence of money laundering –
Appellant satisfied the twin conditions under Section 45 –
There are reasonable grounds for believing that the appellant is
not guilty of the offence of money laundering as alleged under
Sections 3 and 4 of the PMLA and the appellant is not likely to
commit any offence, if enlarged on bail – Impugned order quashed
and set aside – Appellant granted bail. [Paras 27, 32, 34, 37, 45, 49]
Prevention of Money Laundering Act, 2002 – s.45 – Twin
conditions under, discussed – Scope of enquiry – “reasonable
grounds for believing” – Meaning:
Held: Court while dealing with the application for grant of bail in
PMLA need not delve deep into the merits of the case and only
a view of the Court based on the available material available
on record is required – The words used in Section 45 are
“reasonable grounds for believing” which means that the Court
has to see only if there is a genuine case against the accused
and the prosecution is not required to prove the charge beyond
reasonable doubt. [Para 13]
Prevention of Money Laundering Act, 2002 – Bail application –
Counter/response in the original Court – Significance:
Held: In cases where the Public Prosecutor takes a considered
decision to oppose the bail application, the counter affidavit of the
Investigating Agency should make out a cogent case specifically
crystallizing albeit briefly the material sought to be relied upon to
establish prima facie the three foundational facts in the given case to
help the Court at the bail application stage to arrive at a conclusion
within the framework laid down in Vijay Madanlal Choudhary case –
It is only thereafter the presumption under Section 24 would arise
and the burden would shift on the accused. [Para 15]
[2024] 8 S.C.R. 957
Prem Prakash v. Union of India Through
The Directorate of Enforcement
Case Law Cited
Vijay Madanlal Choudhary and Ors. v. Union of India and Ors.
[2022] 6 SCR 382 : (2022) SCC OnLine SC 929; Ramkripal
Meena v. Directorate of Enforcement SLP (Crl.) No. 3205; Javed
Gulam Nabi Shaikh v. State of Maharashtra and Another, 2024
SCC online 1693; Ranjitsing Brahmajeetsing Sharma v. State
of Maharashtra and Another [2005] 3 SCR 345 : (2005) 5 SCC
294; Rajaram Jaiswal v. State of Bihar, AIR 1964 SC 828; Nandini
Satpathy v. P.L. Dani and Another [1978] 3 SCR 608 : (1978) 2
SCC 424; Kashmira Singh v. State of Madhya Pradesh [1952]
SCR 526 – relied on.
In Re Elukuri Seshapani Chetti, ILR 1937 Mad 358; Kodangi v.
Emperor, AIR 1932 Mad 24 – referred to.
List of Acts
Prevention of Money Laundering Act, 2002; Evidence Act, 1872;
Penal Code, 1860.
List of Keywords
Section 50 of the Prevention of Money Laundering Act, 2002;
Section 45 of the Prevention of Money Laundering Act, 2002;
Section 25 of the Evidence Act, 1872; Article 21 of the Constitution
of India; Money laundering; Forgery of sale deed; Judicial custody;
Person in judicial custody/custody in another case investigated
by the same Investigating Agency; Admissibility of statements
recorded; Incriminating material against the maker; Confession of
the co-accused; Statements of the co-accused; Bail; ‘procedure
established by law’; “reasonable grounds for believing”.
Case Arising From
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 3572
of 2024
From the Judgment and Order dated 22.03.2024 of the High Court
of Jharkhand at Ranchi in BA No. 9863 of 2023
Appearances for Parties
Ranjit Kumar, Siddharth Agarwal, Sr. Advs., Indrajit Sinha, Ms. Sneh
Singh, Ms. Anusuya Sadhu Sinha, Sowjhanya Shankar, Harsh Yadav,
Siddharth Naidu, M/s. KSN & Co., Advs. for the Appellant.
958 [2024] 8 S.C.R.
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S.V. Raju, ASG, Zoheb Hussain, Annam Venkatesh, Kanu Agrawal,
Mrigank Pathak, Ms. Aakriti Mishra, Arvind Kumar Sharma, Advs.
for the Respondent.
Judgment / Order of the Supreme Court
Judgment
K.V. Viswanathan, J.
1. Leave granted.
2. The present appeal challenges the judgment dated 22.03.2024 of
the High Court of Jharkhand at Ranchi in B.A. No. 9863 of 2023.
By the said judgment, the High Court dismissed the bail application
of the appellant. The appellant sought for regular bail in connection
with ECIR Case No. 5 of 2023 in ECIR-RNZO/10/2023 (hereinafter
referred to as ECIR Case No. 5 of 2023) registered for the offence
under Sections 3 and 4 of the Prevention of Money Laundering Act,
2002 (hereinafter referred to as ‘PMLA’) and pending before the
Court of Special Judge, PMLA, Ranchi.
Brief Facts
3. The predicate offence on the basis of which ECIR No. 5 of 2023
was recorded on 07.03.2023 is an FIR bearing Sadar P.S. Case
No. 399 of 2022 registered on 08.09.2022 for offences punishable
under Sections 406, 420, 467, 468, 447, 504, 506, 341, 323 and 34
of the Indian Penal Code, 1860 (for short ‘IPC’). The appellant was
not named as an accused there.
4. In view of Section 420 and 467 of IPC, being Scheduled Offences,
ECIR No. 5 of 2023 was registered and investigation under the PMLA
was initiated. Even here the appellant was not named though the ECIR
did mention certain unknown persons being involved. It is alleged
that the investigation revealed falsification of the original records
in the Circle Office, Bargain, Ranchi and the Office of Registrar of
Assurances, Kolkata respectively and as such custody of the original
registers were taken in accordance with law.
5. The substratum of the allegation leading to the complaint lodged
under PMLA are as follows:- Umesh Kumar Gope complained that
Rajesh Rai, Imtiaz Ahmad, Bharat Prasad, Lakhan Singh, Punit
Bhargava and Bishnu Kumar Agarwal fraudulently acquired one
[2024] 8 S.C.R. 959
Prem Prakash v. Union of India Through
The Directorate of Enforcement
acre of land situated at Plot No. 28, Khata No. 37 Village Gari,
Cheshire Home Road P.S. Sadar, Ranchi. The allegation was that
accused Rajesh Rai S/o Jagdish Rai illegally and fraudulently made
a Power of Attorney in the name of Imtiaz Ahmad and accused
Bharat Prasad and on the basis of said Power of Attorney prepared
a forged sale deed and sold the above-mentioned parcel of land
to accused Punit Bhargava, an accomplice of the appellant for an
amount of Rs. 1,78,55,800/-. It is further alleged that the said land
was transferred by accused Punit Bhargava to accused Bishnu Kumar
Agarwal vide two sale deeds dated 01.04.2021 for a total amount of
Rs. 1,80,00,000/- (Rs.1,02,60,000/- and Rs.77,40,000). According to
the Enforcement Directorate, accused Bishnu Kumar Agarwal paid
Rs. 1,78,20,000/- to accused Punit Bhargava in the account of his
firm Shiva Fabcons (Proprietorship firm of accused Punit Bhargava)
and out of which Rs. 1,01,57,400/- was transferred to M/s Jamini
Enterprises, which according to the respondent-Investigating Agency,
was a firm whose beneficial owner is the appellant. The appellant
was arrayed as Accused No.8 in the Prosecution Complaint of the
Investigating Agency.
6. According to the Investigating Agency, it was confirmed by the
Directorate of Forensic Science that Deed No. 184 of 1948, a
purported sale deed, by which the property was transferred by the
predecessors of Umesh Gope to Jagdish Rai, father of Rajesh Rai
was forged. A separate FIR bearing No. 137 of 2023 dated 10.05.2023
for offences under Sections 120-B, 465, 467, 468 and 471 of IPC
came to be registered at Hare Street Police Station Kolkata on the
basis of the report of the Fact Finding Committee of the Registrar of
Assurances, Kolkata. It is stated that the said FIR was also merged
into ECIR No. 5 of 2023.
7. It is alleged that it was on the directions of the appellant that the sale
deed was executed in favor of Punit Bhargava by Rajesh Rai for an
amount of Rs. 1,78,55,800/-; that only Rs. 25 lakhs were transferred
from Shiva Fabcons (Proprietorship firm of Punit Bhargava) to Rajesh
Rai although the consideration amount was Rs. 1,78,55,800/- and
it was shown to have been paid in the sale deed; that out of the
aforesaid sum of Rs. 25 lakhs, an amount of Rs. 18 lakhs were
transferred from the Bank account of Rajesh Rai to the Bank account
of Green Traders (Partnership firm under the control of Md. Saddam
960 [2024] 8 S.C.R.
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Hussain); that Rs. 7 lakh cash was withdrawn through cheques by
Rajesh Rai; that on the directions of the appellant, mutation of the
property was done in the name of Punit Bhargava, who was an
accomplice of the appellant; that Punit Bhargava sold the property to
the Bishnu Kumar Agarwal within a span of two months for Rs. 1.80
crore; that an amount of Rs.56,62,600/- was paid from the account
of M/s Chalice Real Estate (Company of Bishnu Kumar Agarwal)
on 05.04.2021 to Punit Bhargava’s bank account and on 24.06.2021
an amount of Rs. 1,01,57,400/- was transferred from the account
of Adarsh Heights Pvt Ltd (Company of Bishnu Agarwal) to Punit
Bhargav’s bank account; that the entire payment was made in the
month of April and June, 2021 but the registration was done on 1st
April, 2021 before the receipt of consideration. Finally, it is alleged that
an amount of Rs.1,01,57,400/- was transferred to the Bank account
of M/s Jamini Enterprises, which is alleged to be a firm controlled
and beneficially owned by appellant - Prem Prakash.
8. It is alleged that the appellant conspired with the other accused
persons, namely, Afshar Ali @ Afsu Khan, Rajesh Rai, Lakhan Singh,
Imtiaz Ahmad, Bharat Prasad, Saddam Hussain, Punit Bhargava,
Chhavi Ranjan and Bishnu Kumar Agarwal in the acquisition of
proceeds of crime in the form of landed property. It is specifically
alleged that the appellant being an accomplice of Bishnu Kumar
Agarwal used his connections to assist Bishnu Kumar Agarwal in
acquiring the land and that Bishnu Kumar Agarwal transferred the
money to Punit Bhargava and the amount was further transferred
to Jamini Enterprises.
9. The appellant was taken into custody on 11.08.2023. He was already
in custody from 25.08.2022 in ECIR No. 4 of 2022. His application for
bail was rejected by the Special Judge on 20.09.2023. He preferred
a bail application before the High Court. The High Court has declined
bail to the appellant. Aggrieved, the appellant is before us.
10. We have heard Mr. Ranjit Kumar, Learned Senior counsel for the
appellant, ably assisted by Mr. Indrajit Sinha and Mr. Siddharth Naidu,
learned advocates. We have also heard Mr. S.V. Raju, Learned
Additional Solicitor General, ably assisted by Mr. Zoheb Hussain and
Mr. Kanu Agarwal for the respondents. Learned Senior Counsels on
both sides have placed their respective contentions and also filed
detailed written submissions.
[2024] 8 S.C.R. 961
Prem Prakash v. Union of India Through
The Directorate of Enforcement
SECTION 45 PMLA-CONTOURS
11. Considering that the present is a bail application for the offence under
Section 45 of PMLA, the twin conditions mentioned thereof become
relevant. Section 45(1) of PMLA reads as under:-
“45. Offences to be cognizable and non-bailable. (1)
Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), no person accused of an
offence [under this Act] shall be released on bail or on his
own bond unless-
(i) the Public Prosecutor has been given an opportunity
to oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application,
the court is satisfied that there are reasonable
grounds for believing that he is not guilty of such
offence and that he is not likely to commit any offence
while on bail:
Provided that a person, who, is under the age of sixteen
years, or is a woman or is sick or infirm or is accused
either on his own or along with other co-accused of money-
laundering a sum of less than one crore rupees, may be
released on bail, if the Special Court so directs:
Provided further that the Special Court shall not take
cognizance of any offence punishable under Section 4
except upon a complaint in writing made by-
(i) the Director; or
(ii) any officer of the Central Government or a State
Government authorised in writing in this behalf by the
Central Government by a general or special order
made in this behalf by that Government.”
In Vijay Madanlal Choudhary and Ors. Vs Union of India and Ors.
reported in (2022) SCC OnLine SC 929, this Court categorically held
that while Section 45 of PMLA restricts the right of the accused to
grant of bail, it could not be said that the conditions provided under
Section 45 impose absolute restraint on the grant of bail. Para 131
is extracted hereinbelow:-
962 [2024] 8 S.C.R.
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“131. It is important to note that the twin conditions provided
under Section 45 of the 2002 Act, though restrict the right
of the accused to grant of bail, but it cannot be said that
the conditions provided under Section 45 impose absolute
restraint on the grant of bail. The discretion vests in the
court, which is not arbitrary or irrational but judicial, guided
by the principles of law as provided under Section 45 of
the 2002 Act. …”
These observations are significant and if read in the context of the
recent pronouncement of this Court dated 09.08.2024 in Criminal
Appeal No. 3295 of 2024 [Manish Sisodia (II) Vs. Directorate of
Enforcement], it will be amply clear that even under PMLA the
governing principle is that “Bail is the Rule and Jail is the Exception”.
In para 53 of [Manish Sisodia (II), this Court observed as under:-
“53…..From our experience, we can say that it appears
that the trial courts and the High Courts attempt to play
safe in matters of grant of bail. The principle that bail is
a rule and refusal is an exception is, at times, followed in
breach. On account of non-grant of bail even in straight
forward open and shut cases, this Court is flooded with
huge number of bail petitions thereby adding to the huge
pendency. It is high time that the trial courts and the High
Courts should recognize the principle that “bail is rule and
jail is exception.”
All that Section 45 of PMLA mentions is that certain conditions are
to be satisfied. The principle that, “bail is the rule and jail is the
exception” is only a paraphrasing of Article 21 of the Constitution
of India, which states that no person shall be deprived of his life or
personal liberty except according to the procedure established by
law. Liberty of the individual is always a Rule and deprivation is the
exception. Deprivation can only be by the procedure established by
law, which has to be a valid and reasonable procedure. Section 45 of
PMLA by imposing twin conditions does not re-write this principle to
mean that deprivation is the norm and liberty is the exception. As set
out earlier, all that is required is that in cases where bail is subject to
the satisfaction of twin conditions, those conditions must be satisfied.
12. Independently and as has been emphatically reiterated in Manish
Sisodia (II) (supra) relying on Ramkripal Meena Vs Directorate
[2024] 8 S.C.R. 963
Prem Prakash v. Union of India Through
The Directorate of Enforcement
of Enforcement (SLP (Crl.) No. 3205 of 2024 dated 30.07.2024)
and Javed Gulam Nabi Shaikh Vs. State of Maharashtra and
Another, 2024 SCC online 1693, where the accused has already
been in custody for a considerable number of months and there being
no likelihood of conclusion of trial within a short span, the rigours
of Section 45 of PMLA can be suitably relaxed to afford conditional
liberty. Further, Manish Sisodia (II) (supra) reiterated the holding in
Javed Gulam Nabi Sheikh (Supra), that keeping persons behind the
bars for unlimited periods of time in the hope of speedy completion of
trial would deprive the fundamental right of persons under Article 21
of the Constitution of India and that prolonged incarceration before
being pronounced guilty ought not to be permitted to become the
punishment without trial. In fact, Manish Sisodia (II) (Supra) reiterated
the holding in Manish Sisodia (I) Vs. Directorate of Enforcement
(judgment dated 30.10.2023 in Criminal Appeal No. 3352 of 2023)
where it was held as under:-
“28. Detention or jail before being pronounced guilty of
an offence should not become punishment without trial.
If the trial gets protracted despite assurances of the
prosecution, and it is clear that case will not be decided
within a foreseeable time, the prayer for bail may be
meritorious. While the prosecution may pertain to an
economic offence, yet it may not be proper to equate these
cases with those punishable with death, imprisonment for
life, ten years or more like offences under the Narcotic
Drugs and Psychotropic Substances Act, 1985, murder,
cases of rape, dacoity, kidnaping for ransom, mass
violence, etc. Neither is this a case where 100/1000s of
depositors have been defrauded. The allegations have
to be established and proven. The right to bail in cases
of delay, coupled with incarceration for a long period,
depending on the nature of the allegations, should be read
into Section 439 of the Code and Section 45 of the PML
Act. The reason is that the constitutional mandate is the
higher law, and it is the basic right of the person charged
of an offence and not convicted, that he be ensured and
given a speedy trial. When the trial is not proceeding for
reasons not attributable to the accused, the court, unless
there are good reasons, may well be guided to exercise
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the power to grant bail. This would be truer where the
trial would take years.”
It is in this background that Section 45 of PMLA needs to be
understood and applied. Article 21 being a higher constitutional
right, statutory provisions should align themselves to the said higher
constitutional edict.
Scope of Inquiry under Section 45 of PMLA
13. Coming back to the scope of inquiry under Section 45, Vijay Madanlal
Choudhary (Supra), while reiterating and agreeing with the holding
in Ranjitsing Brahmajeetsing Sharma vs. State of Maharashtra
and Another reported in (2005) 5 SCC 294, held that the Court while
dealing with the application for grant of bail in PMLA need not delve
deep into the merits of the case and only a view of the Court based
on the available material available on record is required. It held that
the Court is only required to place its view based on probability on
the basis of reasonable material collected during investigation. The
words used in Section 45 are “reasonable grounds for believing”
which means that the Court has to see only if there is a genuine case
against the accused and the prosecution is not required to prove
the charge beyond reasonable doubt. We deem it fit to extract the
relevant portion (Para 131) from Vijay Madanlal Choudhary (supra):
“131. It is important to note that the twin conditions provided
under section 45 of the 2002 Act, though restrict the right
of the accused to grant of bail, but it cannot be said that
the conditions provided under section 45 impose absolute
restraint on the grant of bail. The discretion vests in the
court which is not arbitrary or irrational but judicial, guided
by the principles of law as provided under section 45
of the 2002 Act. While dealing with a similar provision
prescribing twin conditions in MCOCA, this court in
Ranjitsing Brahmajeetsing Sharma (supra), held as under:
“44. The wording of section 21(4), in our opinion, does
not lead to the conclusion that the court must arrive at a
positive finding that the applicant for bail has not committed
an offence under the Act. If such a construction is placed,
the court intending to grant bail must arrive at a finding that
the applicant has not committed such an offence. In such
[2024] 8 S.C.R. 965
Prem Prakash v. Union of India Through
The Directorate of Enforcement
an event, it will be impossible for the prosecution to obtain
a judgment of conviction of the applicant. Such cannot
be the intention of the Legislature. Section 21(4) of the
MCOCA, therefore, must be construed reasonably. It must
be so construed that the court is able to maintain a delicate
balance between a judgment of acquittal and conviction
and an order granting bail much before commencement of
trial. Similarly, the court will be required to record a finding
as to the possibility of his committing a crime after grant
of bail. However, such an offence in futuro must be an
offence under the Act and not any other offence. Since
it is difficult to predict the future conduct of an accused,
the court must necessarily consider this aspect of the
matter having regard to the antecedents of the accused,
his propensities and the nature and manner in which he
is alleged to have committed the offence.
45. It is, furthermore, trite that for the purpose of considering
an application for grant of bail, although detailed reasons
are not necessary to be assigned, the order granting bail
must demonstrate application of mind at least in serious
cases as to why the applicant has been granted or denied
the privilege of bail.
46. The duty of the court at this stage is not to weigh the
evidence meticulously but to arrive at a finding on the
basis of broad probabilities. However, while dealing with a
special statute like MCOCA having regard to the provisions
contained in sub-section (4) of section 21 of the Act, the
court may have to probe into the matter deeper so as to
enable it to arrive at a finding that the materials collected
against the accused during the investigation may not justify
a judgment of conviction. The findings recorded by the
court while granting or refusing bail undoubtedly would be
tentative in nature, which may not have any bearing on the
merit of the case and the trial court would, thus, be free
to decide the case on the basis of evidence adduced at
the trial, without in any manner being prejudiced thereby”
We are in agreement with the observation made by the
court in Ranjitsing Brahmajeetsing Sharma (supra). The
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court while dealing with the application for grant of bail
need not delve deep into the merits of the case and only
a view of the court based on available material on record
is required. The court will not weigh the evidence to find
the guilt of the accused which is, of course, the work of
Trial Court. The court is only required to place its view
based on probability on the basis of reasonable material
collected during investigation and the said view will not be
taken into consideration by the Trial court in recording its
finding of the guilt or acquittal during trial which is based
on the evidence adduced during the trial. As explained by
this court in Nimmagadda Prasad (supra), the words used
in section 45 of the 2002 Act are “reasonable grounds for
believing” which means the court has to see only if there is
a genuine case against the accused and the prosecution is
not required to prove the charge beyond reasonable doubt.”
(emphasis supplied)
Importance of the foundational facts-under Section 24 PMLA
14. In Vijay Madanlal Choudhary (supra) dealing with Section 24 of
the PMLA, the three-Judge Bench held as under:-
“97. Be that as it may, we may now proceed to decipher
the purport of section 24 of the 2002 Act. In the first
place, it must be noticed that the legal presumption in
either case is about the involvement of proceeds of crime
in money-laundering. This fact becomes relevant, only
if, the prosecution or the authorities have succeeded in
establishing at least three basic or foundational facts.
First, that the criminal activity relating to a scheduled
offence has been committed. Second, that the property
in question has been derived or obtained, directly or
indirectly, by any person as a result of that criminal
activity. Third, the person concerned is, directly or
indirectly, involved in any process or activity connected
with the said property being proceeds of crime. On
establishing the fact that there existed proceeds of
crime and the person concerned was involved in
any process or activity connected therewith, itself,
constitutes offence of money-laundering. The nature
[2024] 8 S.C.R. 967
Prem Prakash v. Union of India Through
The Directorate of Enforcement
of process or activity has now been elaborated in the form
of Explanation inserted vide Finance (No. 2) Act, 2019. On
establishing these foundational facts in terms of section 24
of the 2002 Act, a legal presumption would arise that such
proceeds of crime are involved in money-laundering. The
fact that the person concerned had no causal connection
with such proceeds of crime and he is able to disprove
the fact about his involvement in any process or activity
connected therewith, by producing evidence in that regard,
the legal presumption would stand rebutted.
99. Be it noted that the legal presumption under
section 24(a) of the 2002 Act, would apply when the person
is charged with the offence of money-laundering and his
direct or indirect involvement in any process or activity
connected with the proceeds of crime, is established. The
existence of proceeds of crime is, therefore, a foundational
fact, to be established by the prosecution, including the
involvement of the person in any process or activity
connected therewith. Once these foundational facts are
established by the prosecution, the onus must then shift on
the person facing charge of offence of money-laundering-to
rebut the legal presumption that the proceeds of crime are
not involved in money-laundering, by producing evidence
which is within his personal knowledge. In other words, the
expression “presume” is not conclusive. It also does not
follow that the legal presumption that the proceeds of crime
are involved in money-laundering is to be invoked by the
Authority or the court, without providing an opportunity to
the person to rebut the same by leading evidence within
his personal knowledge.
100. Such onus also flows from the purport of section 106
of the Evidence Act. Whereby, he must rebut the legal
presumption in the manner he chooses to do and as is
permissible in law, including by replying under section 313
of the 1973 Code or even by cross-examining prosecution
witnesses. The person would get enough opportunity in
the proceeding before the Authority or the court, as the
case may be. He may be able to discharge his burden by
showing that he is not involved in any process or activity
968 [2024] 8 S.C.R.
Digital Supreme Court Reports
connected with the proceeds of crime. In any case, in
terms of section 114 of the Evidence Act, it is open to
the court to presume the existence of any fact which it
thinks likely to have happened, regard being had to the
common course of natural events, human conduct, and
public and private business, in their relation to the facts of
the particular case. Considering the above, the provision
under consideration [section 24(a)] by no standards can
be said to be unreasonable much less manifestly arbitrary
and unconstitutional.”
(Emphasis supplied)
Importance of the counter to the bail application – filed in the
original Court
15. In view of the importance of the three basic foundational facts that
the prosecution needs to establish, the counter/response to the
bail application in the original Court is very significant in PMLA bail
matters. In cases where the Public Prosecutor takes a considered
decision to oppose the bail application, the counter affidavit of the
Investigating Agency should make out a cogent case as to how
the three foundational facts set out hereinabove are prima facie
established in the given case to help the Court at the bail application
stage to arrive at a conclusion within the framework laid down
in Vijay Madanlal Choudhary (supra). It is only thereafter the
presumption under Section 24 would arise and the burden would
shift on the accused. The counter to the bail application should
specifically crystallize albeit briefly the material sought to be relied
upon to establish prima facie the three foundational facts. It is after
the foundational facts are set out that the accused will assume the
burden to convince the court within the parameters of the enquiry at
the Section 45 stage that for the reasons adduced by him there are
reasonable grounds to believing that he is not guilty of such offence.
Analysis and Reasons
16. The contention of the prosecution is that (i) the appellant connived
with accused persons, namely, Afshar Ali, Saddam Hussain and
others who created a forged Sale Deed No. 184 of 1948, and on
the strength of the sale deed the property was sold by Rajesh Rai
(associate of Afshar Ali) to Punit Bhargava a close associate of
[2024] 8 S.C.R. 969
Prem Prakash v. Union of India Through
The Directorate of Enforcement
the appellant; (ii) that Rs. 25 lakhs were transferred to the bank
account of Rajesh Rai and later Rs. 18 lakh (out of the 25 lakhs)
was transferred to the bank account of M/s Green Traders, a firm
controlled by Md. Saddam Hussain even though the sale consideration
was Rs. 1,78,55,800/-; (iii) that the appellant is aware of the forgery
committed by Afshar Ali & others and intentionally acquired the
property in the name of Punit Bhargava, who later sold the property
within 2 months to Bishnu Agarwal for Rs. 1.80 crore and out of the
said amount, Rs. 1,01,57,400/- was transferred by Punit Bhargava
to M/s Jamini Enterprises, a firm controlled and beneficially owned
by the appellant; (iv) that the accused persons had full knowledge of
the transaction, inasmuch as though the sale deed was executed in
favor of Punit Bhargava through accused Rajesh Rai on 06.02.2021,
payment was made on 12.02.2021 and that only 25 lakh was paid
to Rajesh Rai and mutation was done and thereafter sold to Bishnu
Agarwal and all payments were received by Punit Bhargava; (v) that
no subsequent payments were to be made further, as according to
the prosecution, all concerned knew that the deeds were fake, and
(vi) that Bishnu Agarwal made the payment in the month of April and
June 2021, but the registration was done on 1st April, 2021 and as
such the registration was done before consideration.
(Emphasis supplied)
17. The prosecution relies on the statements under Section 50 of the
PMLA of Afshar Ali, Rajdeep Kumar, Md. Saddam Hussain, Punit
Bhargava and of the appellant himself. They also rely on the call
detail records of the other accused, namely, Afshar Ali and Rajdeep
Kumar. They also alleged that the appellant, with the help of another
accused person Chhavi Ranjan, by influencing the circle officials got
the land mutated and hence, according to the prosecution, the role
of the appellant is pivotal.
18. Learned ASG for the respondent has taken us through summary of
the statements of the persons mentioned hereinabove, as adverted
to in the complaint, filed by the Enforcement Directorate.
Admissibility of the Statement of the Appellant
19. In the oral submissions and also as elaborated in the detailed written
submissions by the respondent-Enforcement Directorate, reliance is
sought to be placed on the statements of the appellant. This is stoutly
970 [2024] 8 S.C.R.
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resisted on the side of the appellant by contending that the appellant
was in custody from 25th August 2022 in ECIR No. 4/2022; that his
arrest was shown in the present case on 11th August 2023 and it
is submitted that statements recorded while in custody (although in
ECIR No.4/2022) will not be admissible and will be hit by Section 25.
The statement of the appellant-Prem Prakash, the summary of which,
as given in the complaint, reads as under:-
“8.23 Prem Prakash - In his statement dated 04.08.2023
(RUD No.41) recorded in judicial custody at Birsa Munda
Central Jail, Hotwar, Ranchi, he stated that he knows
Bishnu Kumar Agarwal as a businessman and sometimes,
he has met him during marriage events. He further stated
that Punit Bhargava is like his younger brother and he is
from his native place, so he knows him since childhood.
From his statement dated 03.08.2023, (RUD No.40) it
reveals those three persons including Afshar Ali used to visit
him for the Cheshire Home Road property. He introduced
them with Rajdeep Kumar and got the property verified.
After some time, with the consent of Punit Bhargava, he
got the property registered in the name of Punit Bhargava
and later this property was sold to Bishnu Kumar Agarwal
at a consideration price of Rs. 1.78 crores. His statement
also reveals that Rajdeep used to visit Chhavi Ranjan
on his instructions for the landed properties. However, in
his statement dated 15.08.2023, he started concealing
facts regarding meeting between Afshar Ali, Md. Saddam
Hussain and others with Chhavi Ranjan.
It may be mentioned that Rajdeep is a person who worked
under Prem Prakash as his employee and had visited
the office of the accused Chhavi Ranjan on directions of
Prem Prakash with the accused persons Afshar All and
Md. Saddam Hussain. This fact has also been admitted
by Rajdeep Kumar in his statement under section 50
of PMLA, 2002 recorded on 24.04.2023. (RUD No. 76)
Further, several calls have also been identified to have
taken place during the scrutiny of the CDR which have
also been mentioned below in the relevant para.”
(Emphasis supplied)
[2024] 8 S.C.R. 971
Prem Prakash v. Union of India Through
The Directorate of Enforcement
20. In his statement of 04.08.2023, he stated that he knew Bishnu
Kumar Agarwal and has met him during Marriage Events; that Punit
Bhargava was like his younger brother who hailed from his native
place, and he had known him since childhood. That in his statement
of 03.08.2023, he stated that persons including Afshar Ali used to
visit him for the Cheshire Home property and that he introduced
him to Rajdeep Kumar and got the property verified. That with the
consent of Punit Bhargava, he got the property registered in the
name of Punit Bhargava and later the property was sold to Bishnu
Kumar Agarwal at a consideration of Rs. 1.78 crore. The statement,
as summarized, taken as it is does not prima facie make out a case
of money laundering against the appellant. It also does not point to
the involvement of the appellant prima facie in the forgery.
21. Independent of the above, there is one important issue which arises
in this case. It has to be pointed out that the appellant has been in
judicial custody from 25.08.2022 in connection with another ECIR,
namely, ECIR No. 4 of 2022 and while in judicial custody his arrest was
shown in the current ECIR, namely, ECIR No. 5 on 11.08.2023. The
statements of the appellant were recorded on 03.08.2023, 04.08.2023,
11.08.2023, 12.08.2023, 14.08.2023, 15.08.2023 and 30.08.2023.
22. The question that arises is when a person is in judicial custody/custody
in another case investigated by the same Investigating Agency,
whether the statements recorded (in this case the statements dated
03.08.2023, 04.08.2023, 11.08.2023) for a new case in which his
arrest is not yet shown, and which are claimed to contain incriminating
material against the maker, would be admissible under Section 50?
23. In Vijay Madanlal Choudhary (supra), addressing the scope of
Section 50, following has been held:-
“159….However, if his/her statement is recorded after
a formal arrest by the ED official, the consequences
of Article 20(3) or Section 25 of the Evidence Act may
come into play to urge that the same being in the
nature of confession, shall not be proved against him.’
(Emphasis supplied)
The three-judge Bench in Vijay Madanlal Choudhary (supra) has
apart from Article 20(3) also adverted to Section 25 of the Evidence
Act. Section 25 of the Evidence Act reads as under:-
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“25. Confession to police officer not to be proved.- No
confession made to a police officer shall be proved as
against a person accused of any offence.
24. Vijay Madanlal Choudhary (supra) though held that the authorities
under the PMLA are not police officers, did anticipate a scenario
where in a given case, the protection of Section 25 of the Evidence
Act may have to be made available to the accused. The Court
observed that such situations will have to be examined on a case-
to-case basis. We deem it appropriate to extract Para 172 of Vijay
Madanlal Choudhary (supra).
“172. In other words, there is stark distinction between
the scheme of the NDPS Act dealt with by this court in
Tofan Singh (supra) and that in the provisions of the 2002
Act under consideration. Thus, it must follow that the
authorities under the 2002 Act are not police officers.
Ex-consequenti, the statements recorded by the authorities
under the 2002 Act, of persons involved in the commission
of the offence of money-laundering or the witnesses for the
purposes of inquiry/investigation, cannot be hit by the vice
of article 20(3) of the Constitution or for that matter, article
21 being procedure established by law. In a given case,
whether the protection given to the accused who is
being prosecuted for the offence of money-laundering,
of section 25 of the Evidence Act is available or not,
may have to be considered on case-to-case basis
being rule of evidence.”
(Emphasis supplied)
25. This Court in Vijay Madanlal Choudhary (supra) anticipated the
myriad situations that may arise in the recording of the Section 50
statement and discussed the parameters for dealing with them. In
Rajaram Jaiswal vs. State of Bihar, AIR 1964 SC 828, a judgment
quoted in extenso in Vijay Madanlal Choudhary (supra), this Court
observed that the expression “police officer “ in Section 25 of the
Evidence Act is not confined to persons who are members of the
regularly constituted police force. Further, setting out the test for
determining whether an officer is a “police officer “ for the purpose of
Section 25 of the Evidence Act, this Court in Rajaram Jaiswal (supra)
held (quoted from para 165 of Vijay Madanlal Choudhary (supra)
[2024] 8 S.C.R. 973
Prem Prakash v. Union of India Through
The Directorate of Enforcement
“165(ii) It may well be that a statute confers powers and
imposes duties on a public servant, some of which are
analogous to those of a police officer. But by reason of the
nature of other duties which he is required to perform he
may be exercising various other powers also. It is argued
on behalf of the State that where such is the case the mere
conferral of some only of the powers of a police officer on
such a person would not make him a police officer and,
therefore, what must be borne in mind is the sum total
of the powers which he enjoys by virtue of his office as
also the dominant purpose for which he is appointed. The
contention thus is that when an officer has to perform a wide
range of duties and exercise correspondingly a wide range
of powers, the mere fact that some of the powers which
the statute confers upon him are analogous to or even
identical with those of a police officer would not make him
a police officer and, therefore, if such an officer records a
confession it would not be hit by S. 25 of the Evidence Act.
In our judgment what is pertinent to bear in mind for
the purpose of determining as to who can be regarded
a ‘police officer’ for the purpose of this provision is
not the totality of the powers which an officer enjoys
but the kind of powers which the law enables him to
exercise. The test for determining whether such a person
is a “police officer” for the purpose of S. 25 of the Evidence
Act would, in our judgment, be whether the powers of a
police officer which are conferred on him or which are
exercisable by him because he is deemed to be an officer
in charge of police station establish a direct or substantial
relationship with the prohibition enacted by S. 25, that is,
the recording of a confession. In other words, the test
would be whether the powers are such as would tend
to facilitate the obtaining by him of a confession from a
suspect or delinquent. If they do, then it is unnecessary
to consider the dominant purpose for which he is
appointed or the question as to what other powers he
enjoys. These questions may perhaps be relevant for
consideration where the powers of the police officer
conferred upon him are of a very limited character
974 [2024] 8 S.C.R.
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and are not by themselves sufficient to facilitate the
obtaining by him of a confession.”
(Emphasis supplied)
26. Four decades ago, V.R. Krishna Iyer, J. in his inimitable style,
speaking for this Court in Nandini Satpathy Vs P.L. Dani and
Another (1978) 2 SCC 424 observed as under:-
“50. We, however, underscore the importance of the
specific setting of a given case for judging the tendency
towards guilt. Equally emphatically, we stress the
need for regard to the impact of the plurality of other
investigations in the offing or prosecutions pending on
the amplitude of the immunity. “To be witness against
oneself” is not confined to particular offence regarding
which the questioning is made but extends to other
offences about which the accused has reasonable
apprehension of implication from his answer. This
conclusion also flows from “tendency to be exposed
to a criminal charge”. “A criminal charge” covers any
criminal charge then under investigation or trial or
which imminently threatens the accused.”
(Emphasis supplied)
“57. We hold that Section 161 enables the police to
examine the accused during investigation. The prohibitive
sweep of Article 20(3) goes back to the stage of police
interrogation- not, as contended, commencing in court
only. In our judgment, the provisions of Article 20(3) and
Section 161(1) substantially cover the same area, so
far as police investigations are concerned. The ban on
self-accusation and the right to silence, while one
investigation or trial is under way, goes beyond that
case and protects the accused in regard to other
offences pending or imminent, which may deter him
from voluntary disclosure of criminatory matter.
We are disposed to read ‘compelled testimony’ as
evidence procured not merely by physical threats or
violence but by psychic torture, atmospheric pressure,
environmental coercion tiring interrogative prolixity,
[2024] 8 S.C.R. 975
Prem Prakash v. Union of India Through
The Directorate of Enforcement
overbearing and intimidatory methods and the like –
not legal penalty for violation. So, the legal perils following
upon refusal to answer, or answer truthfully, cannot be
regarded as compulsion within the meaning of Article 20(3).
The prospect of prosecution may lead to legal tension in
the exercise of a constitutional right, but then, a stance of
silence is running a calculated risk. On the other hand,
if there is any mode of pressure, subtle or crude,
mental or physical, direct or indirect, but sufficiently
substantial, applied by the policeman for obtaining
information from an accused strongly suggestive of
guilt, it becomes ‘compelled testimony’, violative of
Article 20(3).”
(Emphasis supplied)
27. In the facts of the present case, we hold that the statement of the
appellant if to be considered as incriminating against the maker,
will be hit by Section 25 of the Evidence Act since he has given the
statement whilst in judicial custody, pursuant to another proceeding
instituted by the same Investigating Agency. Taken as he was from
the judicial custody to record the statement, it will be a travesty of
justice to render the statement admissible against the appellant.
28. The appellant accused cannot be told that after all while giving this
statement:- “you were wearing a hat captioned ‘ECIR 5/2023’ and
not the hat captioned ‘ECIR 4/2022’ ”.
29. A complete reading of Vijay Madanlal Choudhary (supra),
particularly, paragraphs 159, 165 and 172 mandate us to ask ourselves
the query: Is a reasonable inference legitimately possible that, due
to the vulnerable position in which the appellant was placed and the
dominating position in which the Investigating Agency was situated,
in view of the arrest in the other proceeding that, there obtained a
conducive atmosphere to obtain a confession? We certainly think
so. The question is not whether it actually happened. The question
is could it have been possible.
30. We are supported in this view by two old judgments of the Madras
High Court. In Re Elukuri Seshapani Chetti (ILR 1937 Mad 358)
Justice Mockett following the judgment of Justice Jackson In Kodangi
V. Emperor (AIR 1932 Mad 24.) held as under:-
976 [2024] 8 S.C.R.
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“In my judgment this is clearly a confession, as I
have already said, and, as has been pointed out by
Jackson J. In Kodangi V. Emperor (AIR 1932 Mad 24.)
a confession made to the Police in the course of
investigating crime A, although it relates to another
crime B, is equally inadmissible. The whole spirit of
section 25 of the Indian Evidence Act is to exclude
confessions to the police and, the moment a statement
is found to amount to a confession, I do not think it
matters in the slightest of what crime it is said to be
a confession.”
(Emphasis supplied)
31. We feel that the principle laid down there on is applicable. In fact,
the three-Judge Bench in Vijay Madanlal Choudhary (supra), in
the para extracted hereinabove, expressly refers to Section 25 of
the Evidence Act while dealing with statements recorded when the
person is in custody.
32. We have no hesitation in holding that when an accused is in custody
under PMLA irrespective of the case for which he is under custody,
any statement under Section 50 PMLA to the same Investigating
Agency is inadmissible against the maker. The reason being that
the person in custody pursuant to the proceeding investigated
by the same Investigating Agency is not a person who can be
considered as one operating with a free mind. It will be extremely
unsafe to render such statements admissible against the maker,
as such a course of action would be contrary to all canons of fair
play and justice.
33. We also draw support from the way Section 50 is structured. Section
50 reads as under:-
“Section 50. Powers of authorities regarding summons,
production of documents and to give evidence, etc.
(1) The Director shall, for the purposes of section 13, have
the same powers as are vested in a civil court under the
Code of Civil Procedure, 1908 (5 of 1908) while trying a
suit in respect of the following matters, namely:--
(a) discovery and inspection;
[2024] 8 S.C.R. 977
Prem Prakash v. Union of India Through
The Directorate of Enforcement
(b) enforcing the attendance of any person, including any
officer of a reporting entity and examining him on oath;
(c) compelling the production of records;
(d) receiving evidence on affidavits;
(e) issuing commissions for examination of witnesses and
documents; and
(f) any other matter which may be prescribed.
(2) The Director, Additional Director, Joint Director, Deputy
Director or Assistant Director shall have power to summon
any person whose attendance he considers necessary
whether to give evidence or to produce any records during
the course of any investigation or proceeding under this Act.
(3) All the persons so summoned shall be bound to
attend in person or through authorised agents, as such
officer may direct, and shall be bound to state the truth
upon any subject respecting which they are examined or
make statements, and produce such documents as may
be required.
(4) Every proceeding under sub-sections (2) and (3) shall
be deemed to be a judicial proceeding within the meaning
of section 193 and section 228 of the Indian Penal Code
(45 of 1860).
(5) Subject to any rules made in this behalf by the Central
Government, any officer referred to in sub-section (2)
may impound and retain in his custody for such period,
as he thinks fit, any records produced before him in any
proceedings under this Act:
Provided that an Assistant Director or a Deputy Director
shall not--
(a) impound any records without recording his reasons
for so doing; or
(b) retain in his custody any such records for a period
exceeding three months, without obtaining the previous
approval of the Joint Director.”
978 [2024] 8 S.C.R.
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Section 50 (1)(b) speaks of enforcing the attendance of any person,
Section 50 (2) speaks of the authorized officials having the power
to summon any person whose attendance they consider necessary
whether to give evidence or to produce any records during the course
of any investigation or proceeding under the Act. Section 50 (3) states
that all persons so summoned shall be bound to attend in person or
through authorized agents, as such officer may direct, and shall be
bound to state the truth upon any subject respecting which they are
examined or make statements, and produce such documents and
Section 50(4) states that every proceeding under sub-Sections (2)
and (3) shall be deemed to be in judicial proceeding. A person in
judicial custody being not a free person cannot be summoned and
any statement to be recorded will be after obtaining the permission
of the Court which has remanded him to the judicial custody in the
other case.
34. In view of the above and keeping the salutary principle of Article 21
in mind, we hold that since the words ‘procedure established by law’
occurring in Article 21 has to be a reasonable and valid procedure,
the statement of the appellant under Section 50 cannot be relied
upon against the appellant in ECIR No. 5 of 2023 even though the
appellant was at that point in custody in ECIR No. 4 of 2022.
Statement of Afshar Ali - Co-accused
35. The appellant was not named in FIR No. 399 of 2023. It appears
from the complaint of the respondent-Enforcement Directorate at
para 6 that Afshar Ali, Saddam Hussain, Imtiaz Ahmad were arrested
on 14.04.2023 in ECIR/RNZO/18/2022 though in the summary of the
statements at para 8.12 it is mentioned that Afshar Ali was arrested
on 14.04.2023 read with prayer (c) of the complaint it appears that
the arrest that is referred to in para 8.12 is the arrest in ECIR/
RNZO/18/2022.
36. Accused Afshar Ali was arrested on 14.04.2023 in ECIR/RNZO/18/2022
(a different ECIR) and his statement was recorded on 17.04.2023 in
the present ECIR. Afshar Ali is supposed to have stated that since
he came to know that the land was under vigilance by the Police
and the land had certain disputes. He met with the appellant and
the appellant was informed about the disputes and the vigilance of
the Police. According to the statement of Afshar Ali, the appellant
took stock of the status of the land and called the then Deputy
Commissioner - Chhavi Ranjan and told him that the registry of
[2024] 8 S.C.R. 979
Prem Prakash v. Union of India Through
The Directorate of Enforcement
the Cheshire Home property was to be done after removing the
vigilance observed by the Police. Thereafter, the appellant fixed the
consideration of Rs. 1.5 crores and after accepting the consideration
as fixed, he requested the appellant to arrange for unblocking the
two plots of land, which were blocked by the Deputy Commissioner
Office. That the appellant demanded Rs. 1 crore for the above work
and the amount was adjusted in the said consideration and that it
was appellant who asked to do the registration in the name of Punit
Bhargava. He also stated that it was the appellant who fixed the deal
with Bishnu Kumar Agarwal.
37. Being a co-accused with the appellant, his statement against the
appellant assuming there is anything incriminating against the present
appellant will not have the character of substantive evidence. The
prosecution cannot start with such a statement to establish its case.
We hold that, in such a situation, the law laid down under Section 30
of the Evidence Act by this Court while dealing with the confession of
the co-accused will continue to apply. In Kashmira Singh vs. State
of Madhya Pradesh [1952] SCR 526, this Court neatly summarized
the principle as under:-
“…. The proper way to approach a case of this kind is, first,
to marshal the evidence against the accused excluding the
confession altogether from consideration and see whether,
if it is believed, a conviction could safely be based on it.
If it is capable of belief independently of the confession,
then of course it is not necessary to call the confession in
aid. But cases may arise where the judge is not prepared
to act on the other evidence as it stands even though, if
believed, it would be sufficient to sustain a conviction. In
such an event the judge may call in aid the confession
and use it to lend assurance to the other evidence and
thus fortify himself in believing what without the aid of the
confession he would not be prepared to accept.”
Hence, insofar as Afshar Ali’s statement is concerned, the Investigating
Agency will have to first marshal the other evidence and can at best
look at the statement for lending assurance.
Independently, the statement of Afshar Ali does not prima facie
indicate anything about the role of the appellant in the forgery of
sale deed and other documents or being involved in the offence of
money laundering.
980 [2024] 8 S.C.R.
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Statement of Rajdeep Kumar
38. We have perused the statement, as summarized in the complaint, of
Rajdeep Kumar. Rajdeep Kumar merely states that he worked for the
appellant and has met Afshar Ali after the appellant introduced him
at the house of the appellant regarding dealing of a land situated at
Cheshire Home. He further states that he has met Saddam Hussain
at the house of the appellant on the above stated land. He further
adds that he has also seen Imtiaz Ahmed and Bharat Prasad, close
associates of Afshar Ali and Saddam Hussain. Prima facie, we
conclude that there is hardly any evidence to implicate the appellant
for the offence under Section 3 and 4 of PMLA.
Statement of Md. Saddam Hussain – Co-accused
39. Md. Saddam Hussain was arrested on 14.04.2023 also in ECIR/
RNZO/18/2022 (a different ECIR), in his statement of 26.04.2023,
in the present ECIR he only speaks of knowing Rajdeep Kumar
and meeting him for the purpose of unblocking a piece of land
measuring 3.81 acres and about Rajdeep Kumar arranging a meeting
with the then Deputy Commissioner - Chhavi Ranjan. His statement
like that of Afshar Ali will not have the status of being a substantive
evidence and will be of the same character as Afshar’s insofar as
the co-accused are concerned. In the complaint, the prosecution
infers that it was Rajdeep Kumar who was the link between the
Deputy Commissioner, Chhavi Ranjan and Prem Prakash and
who acted on the instructions of the appellant - Prem Prakash
and helped Saddam Hussain for unblocking the land. Prima facie,
in our opinion, this statement carries the case of the prosecution
no further. The corroboration drawn from his further statement
of 29.08.2023 recorded in judicial custody of the above statement
adds nothing further to support the prosecution apart from the fact
that the statement of 29.08.2023 lacked the character of substantive
evidence.
Statement of Punit Bhargava
40. Insofar as the statement of Punit Bhargava is concerned, it was
recorded on 09.12.2022. He is supposed to have stated that he
knew Bishnu Agarwal since March, 2021 when on the directions of
appellant, he sold 1 acre of land to Bishnu Agarwal. He is supposed
to have further stated that he had bought the piece of land under
[2024] 8 S.C.R. 981
Prem Prakash v. Union of India Through
The Directorate of Enforcement
the supervision of Prem Prakash and that under the instructions of
Prem Prakash, he acquired a land in his name and accordingly on
the instructions of the appellant, he sold it to Bishnu Kumar Agarwal.
He stated that on the directions of the appellant, he gave Rs. 25
lakhs to Rajesh Rai through cheque after which the registration and
mutation of the property was done but, further added that six post-
dated cheques were given for encashing the balance amount later.
He is supposed to have stated further that he was not aware as to
why rest of the payment was not made even after the registration
and mutation and that appellant could perhaps, give a reply. On being
asked as to why the property was purchased in his name when it
was sold within two months to Bishnu Agarwal, he stated that it was
only done on the instructions of Prem Prakash.
41. The statement mentions that apart from 25 lakhs, six post-dated
cheques were also given. Thereafter, it only speaks of the appellant
advising the purchase and sale of the land. Prima facie, they do
not detract from the reasonable grounds of belief that we entertain
to the effect that the appellant is not guilty of the offence under
Section 3 and 4.
Bishnu Kumar Agarwal (A9) on bail – Order has attained finality
42. We, prima facie, find that from the statements of the appellant and
also from the other statements and other material relied upon by the
investigating agency, there is nothing to indicate that the petitioner was
involved in the creation of the forged deed nor had any knowledge of
the forged sale deed of 1948. In the order enlarging Bishnu Kumar
Agarwal on bail it was observed that-it was a plausible view to hold
that Bishnu Kumar Agarwal was a bonafide purchaser of the property
concerned in the present matter. It has also been held therein that no
criminality could have been found against Bishnu Kumar Agarwal in
the making of the sale consideration later and registration of the sale
earlier. Support has been drawn from Section 54 of the Transfer of
Property Act. The same order also makes a reference to para 10.6.6
of the complaint filed by the ED where it has been mentioned that
the investigation of the Enforcement Directorate has revealed that
complainant in FIR No. 399 of 2022, Umesh Kumar Gope was
himself frivolously exerting his claim over the said property. Be that
as it may, the order of bail granted to Bishnu Kumar Agarwal has
attained finality.
982 [2024] 8 S.C.R.
Digital Supreme Court Reports
43. Moreover, there is no material placed on record to show as to on
what basis it is claimed that the beneficial interest in M/s Jamini
Enterprises lies with the appellant. Hence, the statements relied upon
do not prima facie make out a case of money laundering against
the appellant.
44. The complaint also adverts to two other transactions with which
Bishnu Kumar Agarwal is being investigated. Nothing can be elicited
from the record about the involvement of the appellant and as to
the initiation of any proceeding against him with regard to the other
transactions with which Bishnu Kumar Agarwal is involved.
45. In this scenario, we hold that the appellant has satisfied the twin
conditions under Section 45. Inasmuch as from the material on
record, this Court is satisfied that there are reasonable grounds
for believing that the appellant is not guilty of the offence of Money
Laundering as alleged under Sections 3 and 4 of the PMLA and the
Court is further satisfied that the appellant is not likely to commit any
offence, if enlarged on bail.
Arguments about criminal antecedents.
46. The Investigating Agency have also referred to ECIR No. 4 as a
criminal antecedent. A reference was made to ECIR No. 4 of 2022
pertaining to illegal Stone Mining and related activities in Saheb
Ganj, Jharkhand, where the petitioner was arrested on 25.08.2022
and the prosecution complaint was filed on 16.09.2022. Insofar as
the bail pertaining to ECIR No. 4 of 2022, which is pending in this
Court in SLP (Criminal) No. 691 of 2023, at the after notice stage,
the merits of the bail in that case will be independently examined.
Having examined the facts of the present case arising out of ECIR
No. 5 of 2023 and in view of the findings recorded hereinabove,
we do not think that the appellant can be denied bail based on
the pendency of the other matter. We say so in the facts and
circumstances of the present case as we do not find any justification
for his continued detention. The appellant has already been in
custody for over one year. The Trial is yet to commence. There
is a reference to one more ECIR which the Investigating Agency
refers to in their counter, namely, ECIR/RNZO/18/2022 but nothing
is available from the record as to whether any proceedings have
been taken against the appellant.
[2024] 8 S.C.R. 983
Prem Prakash v. Union of India Through
The Directorate of Enforcement
Allegation of misuse of Jail facilities by the Appellant
47. Elaborate contentions have been made on the conduct of the
appellant about certain facilities having been extended to him in jail.
We do not comment on them and if at all there is any violation of
the prison Rules, the Investigating Agency ought to take up with the
higher officials of the Jail. On the facts of the present case, they are
not reasons enough to deny the appellant his liberty.
48. For the reasons stated above, while allowing the appeal, we set aside
the judgment dated 22.03.2024 of the High Court of Jharkhand at
Ranchi in B.A. No. 9863 of 2023. We clarify that the observations
made in this judgment are only for the purpose of disposing of the
bail application and they shall not influence the Trial Court, which
would proceed in accordance with law and on the basis of the
evidence on record.
Conclusion
49. In the result, we pass the following order:-
(i) The appeal is allowed and impugned order dated 22.03.2024
is quashed and set aside.
(ii) The Trial Court is directed to release the appellant on bail in
connection with ED Case No. ECIR No. 5 of 2023 on furnishing
bail bonds for a sum of Rs. 5 lakh with 2 sureties of the like
amount.
(iii) The appellant shall surrender his passport with the Trial Court
and the appellant shall report to the Investigating Officer on
every Monday and Thursday between 10 and 11 A.M.
(iv) The appellant shall not make any attempt to influence the
witnesses and tamper with the evidence.
Pending applications shall stand disposed of.
Result of the case: Appeal allowed.
†
Headnotes prepared by: Divya Pandey
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