The Chhattisgarh High Court has reaffirmed that actions conducted under the Prevention of Money Laundering Act, 2002 (PMLA) should be considered as an 'investigation' similar to a judicial proceeding.

The court refused to grant bail and emphasized that during such an investigation, statements from individuals, including the accused, could be utilized in the bail proceedings. If these statements contain indications of money laundering as defined in Section 3 of the PMLA, the court has the authority to presume guilt.

Justice Goutam Bhaduri made the following observation: "Upon careful examination of the conclusions established by the Supreme Court in the Vijay Madanlal Choudhary case, it becomes clear that actions taken under the Prevention of Money Laundering Act (PMLA) are categorized as an 'enquiry.' This inquiry resembles a judicial proceeding, as outlined in Section 50 of the PMLA. Furthermore, since the authorities involved are not police officers, the statements of individuals, including the accused, recorded during the inquiry, can be considered during the bail application process. The court can also presume guilt if the recorded statements contain facts that constitute the offense of money laundering, as outlined in Section 3 of the PMLA."

A group consisting of individuals such as Arunpati Tripathi, Anil Tuteja, and Saumya Chaurasia were involved in a conspiracy to accept bribes related to the sale of liquor. They collaborated with Anwar Dhebar and his associates, who helped collect these illicit payments. The Directorate of Enforcement (ED) uncovered evidence of this planned conspiracy, which also revealed the misuse of the Chhattisgarh State Marketing Corporation Limited (CSMCL) to operate a parallel Excise Department. This syndicate included high-ranking bureaucrats, politicians, and officials from the Excise Department.

Arunpati Tripathi had the specific role of maximizing the commission obtained from bribes associated with the procurement of liquor by CSMCL. The syndicate introduced a scheme involving FA-10A licenses to extort bribes, and foreign liquor was sold to Chhattisgarh Government warehouses, resulting in a commission of 10%.

Vidhu Gupta confessed to providing a bribe of ₹90.00 lakhs in exchange for a hologram and was provided with a counterfeit hologram within Chhattisgarh. The applicants approached the Court seeking bail under Section 439 of the Criminal Procedure Code (CrPC). They had been arrested in connection with a complaint filed by the ED under Section 44, read with Section 45, for the offenses defined in Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA).

The court emphasized that when the Public Prosecutor opposes a bail application under Section 45 of the PMLA, bail can only be granted if the court is convinced that the applicant is unlikely to commit further offenses and if there are reasonable grounds to believe in their innocence. However, it's worth noting that in the case of Vijay Madanlal Choudhary & Ors. v Union of India & Ors. [SLP (Cri.) No.4634 of 2014], the Supreme Court expressed dissatisfaction with such a proposition.

Additionally, the Court noted that authorities cannot take action on money laundering allegations unless a case is registered with the police or is pending inquiry before the appropriate authority. It is presumed that interconnected transactions related to money laundering are considered to be part of such transactions, unless proven otherwise.

The Bench highlighted that under Section 23 of the PMLA, there exists a legal presumption. This presumption states that when money laundering involves two or more interconnected transactions, and if one or more of these transactions are proven to be involved in money laundering, then, for the purposes of adjudication or confiscation under Section 8, or for the trial of the money laundering offense, it shall be presumed (unless proven otherwise to the satisfaction of the Adjudicating Authority) that the remaining transactions are part of these interconnected transactions. However, it's important to note that there is a reverse burden of proof under Section 24 of the PMLA. In cases where a person is charged with the offense of money laundering under Section 3, the Authority or Court shall presume (unless proven otherwise) that such proceeds of crime are indeed involved in money laundering.

The Court emphasized that the actions carried out under the PMLA are akin to an 'enquiry' resembling a judicial proceeding. In the course of this enquiry, statements made by individuals, including the accused, can be utilized in the bail proceedings. If these statements contain evidence of money laundering as defined in Section 3 of the PMLA, the Court has the authority to make a presumption of guilt.

The Court observed that since it is an undisputed fact that the complaint has already been filed and considering the statements and material available on record, at this stage, it is adequate to form a prima facie presumption regarding the involvement of the applicants in money laundering and their possession of the proceeds of crime.

As a result, the Court has rejected the application.

Court: Nitesh Purohit and 3 Ors v Directorate Of Enforcement, MCRC No. 4911 of 2023.