Introduction
The Hon’ble Supreme Court recently granted bail in the matter of Laxmikant Tiwari v. Directorate of Enforcement[i],* *where the accused were charged under the Prevention of Money Laundering Act, 2002 ('PMLA'). The Supreme Court observed that the absence of a scheduled offence at the time of filing the complaint or chargesheet was the key reason for granting bail.
Brief Facts
The case arises from the enforcement case information report (ECIR) filed in connection with FIR No. 129 of 2022.
A first information report ('FIR') was registered in Bengaluru, Karnataka, in 2022 under ss. 186, 204, 353, and 120-B of the Indian Penal Code, 1860 (‘IPC’).
Subsequently, s. 384 of the IPC were also added to such FIR, and thereafter, the Enforcement Directorate (‘ED’) proceeded to record the ECIR based on the aforementioned FIR.
The ED then filed a complaint under s. 44 of the PMLA before the Special Court in 2022.
A chargesheet was filed in 2023, wherein it was mentioned that an offence under s. 384 of the IPC may have been committed in Chhattisgarh. The ED was directed to submit a report to the concerned police station in Chhattisgarh.
While filing the chargesheet, the offence under 120-B of the IPC was dropped due to a lack of evidence.
Held
The Supreme Court observed that no scheduled offence existed when the ED filed the complaint under s. 44 of the PMLA. Given this and the fact that the accused had been incarcerated for a significant period, the Court extended the bail period.
Our Analysis
This case reaffirms the established jurisprudence that no action under the PMLA can be initiated unless there is a substratum of a scheduled offence, which must exist clearly and legally in the form of a valid complaint. In the present case, none of the offences alleged in the FIR were scheduled offences. Furthermore, as per the Supreme Court's observations in Pavana Dibbur v. Directorate of Enforcement[ii],* *even s. 120-B of the IPC cannot be treated as a scheduled offence, as the conspiracy to commit a scheduled offence was not alleged.
Over the past few months, bail has been consistently granted in PMLA cases. Though the reasoning behind each bail decision varies, these judgments have collectively refined the jurisprudence on bail, particularly in relation to the PMLA.
End Notes
[i] SLP Crl. No. 11141 of 2024.
[ii] Criminal Appeal No. 2779 of 2023.
Authored by Anshi Bhatia, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions.
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