Court’s Decision
The Delhi High Court, by judgment dated 9 June 2025, rejected both the regular and interim bail applications filed by the accused under Section 45 read with Section 65 of the Prevention of Money Laundering Act, 2002 (PMLA) and Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. Justice Girish Kathpalia held that the accused failed to satisfy the “twin conditions” of Section 45 of the PMLA and was not entitled to bail on medical grounds either. The court noted that “this is not a fit case to release the accused on bail” given the gravity of the offence, the magnitude of the proceeds of crime quantified at ₹78.14 crore, and the alleged role of the accused as the kingpin.
Facts
The case pertains to large-scale illegal and unscientific mining carried out by the firm Goverdhan Mines and Minerals (GMM), where the accused was allegedly an unofficial shareholder and key decision-maker. The Haryana State Pollution Control Board (HSPCB) had filed a complaint under Sections 15, 16, and 19 of the Environment Protection Act (EP Act), following findings by an eight-member committee constituted by the National Green Tribunal (NGT) in OA No. 169/2020. The NGT held GMM guilty of illegal mining beyond permissible limits and recorded that the unregulated activity caused “serious damage to air, water and land.” The illegal mining also reportedly led to landslides resulting in fatalities and injuries.
On the basis of these findings, the local police at PS Tosham registered FIR No. 449/2023 under Sections 420, 463, 471, and 120B IPC. The Directorate of Enforcement (DoE) thereafter registered an ECIR dated 16.06.2023 and arrested the accused on 30.05.2024. The DoE filed a Prosecution Complaint under the PMLA alleging that the proceeds of crime amounted to ₹78.14 crore, of which ₹22.81 crore was attributable to the accused.
Issues
- Whether the accused satisfied the twin conditions under Section 45 of the PMLA for grant of bail?
- Whether the accused was entitled to bail on the ground of medical condition?
- Whether the predicate offence existed after the delisting of EP Act from the PMLA Schedule?
Petitioner’s Arguments
The accused argued that:
- No predicate offence existed as the EP Act had been removed from the Schedule to the PMLA by legislative amendment on 02.08.2023, and the ECIR was lodged on 16.06.2023 while the Bill was pending.
- The HSPCB’s complaint under the EP Act did not name the accused.
- Without a predicate offence, no offence under Section 3 PMLA could survive.
- The quantification of proceeds of crime was merely a reproduction of the HSPCB’s findings and lacked independent assessment.
- FIR 449/2023, being a predicate offence, was pending quashing before the Punjab and Haryana High Court, with no chargesheet filed yet.
- The accused was also entitled to bail on the ground of parity, as no other accused was arrested, and further on the basis of medical condition supported by AIIMS reports.
Respondent’s Arguments
The DoE opposed bail on the grounds that:
- The accused was the kingpin who orchestrated the entire illegal mining operation through benami channels and held unofficial control of GMM to evade prior debarment.
- FIR 449/2023 under IPC sections continued to form part of predicate offences; merely removing EP Act from the PMLA Schedule does not nullify prior acts committed when it was in force.
- Investigation was ongoing, and release on bail posed a risk of flight and tampering with evidence.
- Proceeds of crime were independently quantified at ₹78.14 crore with ₹22.81 crore directly attributable to the accused.
- Medical reports from AIIMS and Jail authorities showed the accused was stable and receiving proper treatment; his activities during interim bail reflected no grave medical impairment.
Analysis of the Law
The Court referred extensively to Section 45 of the PMLA, which requires:
- Reasonable grounds to believe that the accused is not guilty of the offence.
- That the accused is not likely to commit any offence while on bail.
The Court reaffirmed the stringent nature of economic offences and relied on the Supreme Court’s decision in Vijay Madanlal Chaudhary v. Union of India, 2022 SCC OnLine SC 929, where it was held that PMLA crimes are “aggravated forms of crime” demanding “effective and stringent measures.” The accused bears the burden to prove the absence of proceeds of crime as per Section 24 of the PMLA.
Precedent Analysis
The Court relied on multiple judgments, including:
- Vijay Madanlal Chaudhary v. Union of India: Reiterated the twin condition test and nature of money laundering offences as distinct and grave.
- State of Bihar v. Amit Kumar (2017) 13 SCC 751: Socio-economic offences deserve stricter scrutiny in bail matters.
- Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439: Emphasized serious treatment of economic offences involving conspiracy and public loss.
- Jayant v. State of M.P. (2021) 2 SCC 670: Affirmed that the same acts can constitute multiple offences including under EP Act and IPC.
Court’s Reasoning
The Court held:
- The accused had a central role in orchestrating a criminal scheme to bypass debarment norms and engage in illegal mining.
- The quantum of proceeds of crime and material collected during investigation established a strong case of money laundering.
- Arguments based on the repeal of the EP Act as a scheduled offence were rejected, since the offences were committed while it was still part of the Schedule.
- No satisfactory explanation was offered to rebut the presumption under Section 24 of the PMLA.
- The accused failed to satisfy either limb of the twin conditions under Section 45.
- Medical records confirmed the accused’s condition was stable and manageable in custody.
Conclusion
The Court concluded that the allegations against the accused represented a deep-rooted conspiracy involving serious economic offences with a substantial impact on public resources and the environment. The accused failed both on merits and on medical grounds. Therefore, the applications for regular and interim bail were dismissed.
Implications
This judgment reinforces the rigorous standard for bail under the PMLA, especially in socio-economic offences involving environmental damage, forgery, and large-scale monetary gain. It highlights that removal of predicate offences from the PMLA Schedule does not retroactively nullify proceedings if the offence was committed while it was still in force. The decision also illustrates the courts’ inclination to deny bail where the accused appears to be the main conspirator and the scale of the offence is significant.