PMLA- Provisions Of Section 45 Shall Be Applicable To Anticipatory Bail Proceedings: Supreme Court

The Supreme Court has observed that the provisions of Section 45 of the Prevention of Money Laundering Act  2002 shall be applicable with respect to the anticipatory bail applications/proceedings under Section 438 Cr.PC.

"...the rigour of Section 45 of the Act, 2002 shall be applicable even with respect to the application under Section 438 Cr.PC.", the Court noted.

In this case, the Bench of Justice MR Shah and Justice C.T. Ravikumar observed that “it is one thing to say that Section 45 of the Act, 2002 to offences under the ordinary law would not get attracted but once the prayer for anticipatory bail is made in connection with offence under the Act, 2002, the underlying principles and rigours of Section 45 of the Act, must get triggered – although the application is under Section 438 Cr.PC...Once the rigour under Section 45 of the Act, 2002 shall be applicable the impugned judgment and order passed by the High Court granting anticipatory bail to respondent No. 1 is unsustainable." 

ASG K.M. Natraj appeared for the Enforcement Directorate (ED)-appellant and Advocate Vijay Agarwal appeared for the respondent no. 1.

The case of the appellant was that some officials of the MPSEDC colluded with the companies entrusted with the maintenance and testing of the Madhya Pradesh e-Procurement Portal and illegally accessed the e-Tender portal and rigged the bidding process to suit a few private bidders for huge amounts of bribe considerations.

FIR for the offence of money laundering under Section 3 of the Prevention of Money Laundering Act, 2002 (Act) punishable under Section 4 of the Act was registered against the respondent by Economic Offences Wing (EOW). As per the EOW chargesheet, the respondent company was the major and direct beneficiary of the e-tender scam.

During investigation into the FIR for the Scheduled offences under the Act, the ED had initiated money laundering investigation and a good number of incriminating documents and digital devices had been seized and were being examined for evidence. Apprehending his arrest, the respondent had preferred the Anticipatory Bail, which was granted by the Telangana High Court. Against the order of the High Court, ED had preferred the appeal before the Apex Court.

The Apex Court noted that from the investigation done by ED it was clear that a systematic conspiracy had been planned and executed by several infrastructure companies based at Hyderabad in collusion with a few Government officials and IT management companies to illegally win e­-tenders and observed that while the anticipatory bail to respondent No. 1 was granted, the High Court had not at all considered the nature of allegations and seriousness of the offences alleged to have been committed under the Act.

“it appears that the High Court has considered the matter, as if, it was dealing with the prayer for anticipatory bail in connection with the ordinary offence under IPC.” said the Apex Court.

It was further contended by the counsel for the respondent that he had not been named in FIR with respect to scheduled offence and that the other accused were discharged or acquitted.

The Apex Court observed that "merely because other accused are acquitted, it cannot be a ground not to continue the investigation against respondent No. 1. An enquiry/investigation is going on against respondent No. 1 with respect to the scheduled offences. Therefore, the enquiry/investigation itself is sufficient at this stage."

Consequently, the Apex Court observed that the rigour of Section 45 of the Act, 2002 would be applicable even with respect to the application under Section 438 Cr.PC and the impugned judgment passed by the High Court was held to be unsustainable.

Accordingly, the appeal was allowed.

Cause Title- The Directorate of Enforcement v. M. Gopal Reddy & Anr. 

Click here to read/download the Judgment