Karnataka High Court
Sri R M Manjunath Gowda vs Directorate Of Enforcement on 2 July, 2025
Author: S Vishwajith Shetty
Bench: S Vishwajith Shetty
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NC: 2025:KHC:23613
CRL.P No. 7473 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF JULY, 2025
BEFORE
THE HON'BLE MR. JUSTICE S VISHWAJITH SHETTY
CRIMINAL PETITION No.7473 OF 2025
BETWEEN:
SRI R.M. MANJUNATH GOWDA
S/O RAMAPPA GOWDA
AGED ABOUT 62 YEARS
R/O KARAKUCCHI, SIRIGEREPONT
SHIVAMOGGA - 577 211
CURRENTLY IN JUDICIAL CUSTODY)
...PETITIONER
(BY SRI JAYKUMAR S. PATIL, SR. COUNSEL FOR
SRI VARUN JAYKUMAR PATIL, ADV.)
AND:
DIRECTORATE OF ENFORCEMENT
MINISTRY OF FINANCE AND
DEPARTMENT OF REFENUE
Digitally
III FLOOR, B BLOCK BMTC
signed by K.H. ROAD, SHANTINAGAR
NANDINI M S BANGALORE - 560 027.
Location: ...RESPONDENT
HIGH COURT OF (BY SRI ARAVIND KUMAR, ASG A/W KARNATAKA SRI MODHUKAR DESHPANDE, ADV.) THIS CRL.P IS FILED U/S 439 CR.PC (FILED U/S 483 BNSS) PRAYING TO ENLARGE THE ACCUSED ON BAIL IN ECIR/BGO/05/2021 FOR THE OFFENCE P/U/S 4 OF PREVENTION OF MONEY LAUNDERING ACT 2002 PENDING ON THE FILE OF THE COURT OF PRL.CITY CIVIL AND SESSIONS JUDGE AND SPL.COURT FOR PMLA CASES AT BENGALURU.
THIS PETITION, HAVING BEEN RESEREVED FOR ORDERS ON 27.06.2025, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR CORAM: HON'BLE MR JUSTICE S VISHWAJITH SHETTY CAV ORDER (PER: HON'BLE MR JUSTICE S VISHWAJITH SHETTY)
1. Accused in ECIR/BGO/05/2021 registered for the offence punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (for short, 'the Act') pending before the Court of Prl. City Civil & Sessions Judge, Bengaluru, is before this Court in this petition filed under Section 439 of Cr.PC seeking regular bail.
2. Heard the learned Counsel for the parties.
3. Petitioner was the elected President of Shivamogga District Co-operative Central Bank, Shivamogga (for short, 'SDCC Bank') during the years 1997-1998, 1999-2010, 2011-
2014 and 2015-2020. FIR in Crime No.325/2014 was registered by Doddapete Police Station, Shivamogga, against B.Shobha - Branch Manager of SDCC Bank and others for the offences punishable under Sections 406, 408, 409, 420, 34 of IPC, and in the said case, petitioner was arrayed as accused no.15 in the FIR. Subsequently, the case was transferred to CID for further -3- NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR investigation. After completing investigation in the said case, charge sheet was filed for the offences punishable under Sections 409, 420, 465, 471, 120B, 201 read with 37 of IPC. However, petitioner was dropped in the said charge sheet. Subsequently, FIR in Crime No.16/2021 was registered by Jayanagar Police Station, Shivamogga, against the petitioner for the offences punishable under Sections 120B, 168, 200, 403, 405, 409, 418, 419, 420, 424, 425, 427, 467, 468, 474 read with 34 of IPC and Section 109 of the Karnataka Co- operative Societies Act, 1959. After registration of FIR in Crime No.16/2021, additional charge sheet was filed in Crime No.325/2014 against the petitioner on 30.07.2021 for the offences punishable under Sections 409, 202 read with 36 of IPC.
4. FIR in Crime No.4/2014 was registered against the petitioner for the offences punishable under Sections 13(1)(e) & 13(2) of the Prevention of Corruption Act, 1988 (for short, 'P.C.Act'), and after completing investigation in the said case, charge sheet has been already filed against the petitioner for the aforesaid offences. It is in this background, -4- NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR ECIR/BGO/05/2021 was registered against the petitioner by the respondent alleging that proceeds of crime in the aforesaid criminal cases was utilized directly or indirectly by the petitioner for the purpose of deriving/obtaining property. In the said proceedings, petitioner was arrested on 09.04.2025 and subsequently remanded to judicial custody. His bail application filed before the Special Court in ECIR/BGO/05/2021, was rejected on 20.05.2025. Therefore, petitioner is before this Court.
5. Learned Senior Counsel appearing for the petitioner submits that in Crime No.325/2014 which was registered for the schedule offences, after investigation, no charge sheet was filed initially against the petitioner. On the very same allegations, FIR in Crime No.16/2021 was registered by Jayanagar Police Station, Shivamogga, and the said FIR was quashed by this Court in W.P.No.8294/2021 on the ground that the allegations made in Crime No.325/2014 and Crime No.16/2021 and the period during which the alleged offences were committed were one and the same. Though additional charge sheet has been filed in Crime No.325/2014 against the -5- NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR petitioner, in the additional charge sheet, schedule offences are not invoked against the petitioner. Further, proceedings in Crime No.4/2014 registered against the petitioner for the offences punishable under Sections 13(1)(e) & 13(2) of the P.C.Act, has been stayed by the coordinate bench of this Court in W.P.No.10108/2024. He submits that investigation of the present case is completed and complaint is already filed before the Trial Court. Referring to Section 45 of the Act, he submits that there is no absolute bar for granting bail to an accused in a case registered for the offences punishable under the Act. Unless the foundational facts are made out against the accused, the burden does not shift on the petitioner. He submits that except the confession statement of the co- accused, in cases registered for predicate offences, there is no material collected against the petitioner which would prima facie make out a case against him for the offences punishable under the Act. In support of his arguments, he has placed reliance on the judgment of the Hon'ble Supreme Court in the case of VIJAY MADANLAL CHOUDHARY & OTHERS VS UNION OF INDIA & OTHERS - (2023)12 SCC 1.
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6. Per contra, learned Additional Solicitor General who has appeared on behalf of the respondent, has opposed the petition. He submits that petitioner had filed W.P.No.11786/2025 questioning the grounds of arrest, order of arrest, arrest memo, etc., before this Court and in the said petition, he has raised all the grounds urged in this petition. W.P.No.11786/2025 was dismissed by this Court on 17.04.2025 and assailing the same, petitioner has approached the Hon'ble Supreme Court. Therefore, it is not open for the petitioner to urge the very same grounds before this Court. He submits that there is a presumption under Section 24 of the Act against the petitioner, which he needs to rebut, otherwise he is liable to be punished for the alleged offences. He submits that even a person as against whom a criminal case for committing the schedule offences is not registered, can be prosecuted for the offences punishable under the Act, if it is found that the proceeds of the crime of schedule offences has been directly or indirectly utilized by him or if he is in any manner connected for utilization of the proceeds of crime. He submits that in view of the twin conditions found in Section 45 of the Act, the prayer made by the petitioner as against whom there is a prima facie -7- NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR case for the alleged offences for grant of regular bail needs to be rejected. In support of his arguments, he has placed reliance on the judgment of the Hon'ble Supreme Court in the case of Y.S.JAGAN MOHAN REDDY VS CENTRAL BUREAU OF INVESTIGATION - (2013)7 SCC 439, and in the case of THE UNION OF INDIA THROUGH THE ASSISTANT DIRECTOR VS KANHAIYA PRASAD - 2025 INSC 210.
7. In reply, learned Senior Counsel appearing for the petitioner submits that trial in the case registered for predicate offences has not yet commenced. In the present case, after completing investigation, complaint has been already filed before the Trial Court. Except the confession statement of the co-accused, there is no other strong material collected by the prosecution which would prima facie make out the alleged offences against the petitioner. He submits that confession of co-accused alone cannot be based to hold accused guilty of the offences committed under the Act. In support of his arguments, he has placed reliance on the judgment of the Hon'ble Supreme Court in the case of PREM PRAKASH VS UNION OF INDIA -8- NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR THROUGH THE DIRECTORATE OF ENFORCEMENT - (2024)9 SCC 787.
8. The offence of money laundering is defined under Section 3 of the Act, which reads as under:
"3. Offence of money-laundering.--Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering.
[Explanation.--For the removal of doubts, it is hereby clarified that,--
(i) a person shall be guilty of offence of money-
laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:--
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property, -9- NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR in any manner whatsoever;
(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever."
9. Punishment for money laundering is provided under Section 4 of the Act, which reads as under:
"4. Punishment for money-laundering.-- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine ***:
Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted."
10. The word 'proceeds of crime' is defined under Section 2(1)(u) of the Act, which reads as under:
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR "2(1)(u) "proceeds of crime" means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad;
Explanation.--For the removal of doubts, it is hereby clarified that "proceeds of crime" include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence."
11. Under Section 45 of the Act, the offences under the Act are classified as cognizable and non-bailable offences. Section 45(1)(ii) of the Act provides that in the event the Public Prosecutor opposes the bail application of an accused, it is only if the court is satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail, the person accused of committing the offence under the provisions of the Act, can be released on bail.
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12. The Hon'ble Supreme Court in Vijay Madanlal Choudhary's case supra, having reiterated the law laid down by the Hon'ble Supreme Court in the case of RANJITSING BRAHMAJEETSING SHARMA VS STATE OF MAHARASHTRA - (2005)5 SCC 294, in paragraphs 302 & 303, has observed as under:
"302. 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 held as under :
(SCC pp. 318-19, paras 44-46) "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 an
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR 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 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
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR 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."
(emphasis supplied)
303. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR 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 the 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, 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."
13. From the aforesaid, it is clear that the Court while dealing with the application for bail, need not give a finding on the merits of the case, and on the other hand, based on the material placed before the Court, a finding is required to be recorded why bail has been granted to the accused demonstrating the application of mind by the Court.
14. So far as the presumption that arises under Section 24 of the Act is concerned, the Hon'ble Supreme Court in Vijay Madanlal Choudhary's case supra, has held that prosecution is
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR required to primarily establish the basic foundational facts and it is only then a legal presumption would arise against the accused that he is involved in money laundering. In paragraphs 237, 239 & 240 of the judgment in Vijay Madanlal Choudhary's case supra, the Hon'ble Supreme Court has observed as under:
"237. 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 of process or activity has now been elaborated in the form of the 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
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR 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.
239. 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.
240. Such onus also flows from the purport of Section 106 of the Evidence Act. Whereby, he must
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR 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 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."
15. FIR in Crime No.325/2014 was registered by Doddapete Police Station, Shivamogga, for the offences punishable under Sections 406, 408, 409, 420, 34 of IPC, and though in the said case petitioner was arrayed as accused no.15 in the FIR, in the charge sheet that was filed by the CID who had taken over further investigation of the case, petitioner was not arrayed as an accused. Subsequently, on 26.02.2025, Jayanagar Police Station, Shivamogga, had registered FIR in Crime No.16/2021
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR against the petitioner for the offences punishable under Sections 120B, 168, 200, 403, 405, 409, 418, 419, 420, 424, 425, 427, 467, 468, 474 read with 34 of IPC and Section 109 of the Karnataka Co-operative Societies Act, 1959. FIR in Crime No.16/2021 was quashed by the coordinate bench of this Court in W.P.No.8294/2021 disposed of on 31.08.2021 on the ground that the allegations made against the petitioner in Crime No.325/2014 and in Crime No.16/2021 are one and same and they do not make out a separate and distinct offence. In paragraphs 16 & 17 of the order passed in W.P.No.8294/2021, the coordinate bench of this Court has observed as under:
"16. Now on comparing the two FIRs, it becomes amply clear that FIR No.16/2021 is not in respect of offences committed subsequent to 15.07.2014. Both the FIRs relate to the same period. Though Sri Ashok Haranahalli has made an attempt to point out from Annexure-C that the transactions, in respect of which FIR 16/2021 has been registered, are subsequent to the transactions mentioned in FIR 325/2014, it is not possible to accept his argument.
17. Annexure-C is an order passed by the Joint Registrar on 16.02.2021 for initiating prosecution against the petitioner and C.Rajanna Reddy for their failure to comply with the deficiencies noticed during
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR inspection and not complying with the order dated 29.02.2016 made under Section 68 of the Act. Writ Petitions, WP Nos.20188-192/2016 was filed challenging the order dated 29.02.2016 and as the order in the said writ petition indicates, the Additional Advocate General made a submission before the Court that Annexure 'C' was actually not an order made under Section 68 of the Act, but it was in fact exercise of power under Section 65(3) of the Act. This aspect has no relevancy, however on going through Annexure-C what can be made out is that it came to be passed in relation to irregularities in sanctioning loans and obtaining securities thereof during the period 2004-05 to 15.07.2014. Annexure-C is the basis for 4th respondent to lodge an FIR at Jayanagar Police Station Shivamogga and therefore it is to be stated that certainly FIR No.16/2021 does not indicate a separate and distinct offence being committed subsequent to 15.07.2014. As rightly argued by Sri Jayakumar S Patil, FIR No.16/2021 is the second FIR for the offences under IPC, and in this FIR, some offences under IPC which were not included in FIR No.325/2014, may have been included; but when the name of the petitioner was dropped from the charge sheet filed pursuant to FIR No.325/2014, he should not have been implicated for any of the offences under IPC in FIR No.16/2021. What was required was to initiate action only for the offences under the Act for their failure to take action pursuant to the report under section 68 of the Act."
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16. During the pendency of W.P.No.8294/2021, additional charge sheet was filed against the petitioner in Crime No.325/2014 and perusal of the said charge sheet would go to show that schedule offences are not invoked against the petitioner in the additional charge sheet. It is brought to the notice of this Court that though the said additional charge sheet was filed on 30.07.2021, till date, cognizance of the alleged offences against the petitioner in the additional charge sheet is not taken by the Trial Court.
17. FIR in Crime No.4/2014 was registered against the petitioner for the offences punishable under Sections 13(1)(e) & 13(2) of the P.C.Act. The allegation against the petitioner in the said case is that petitioner possessed assets disproportionate to his known sources of income to the tune of 115.83%, during the check period from 11.01.1997 to 30.05.2014. It is not in dispute that further proceedings in Crime No.4/2014 has been stayed by the coordinate bench of this Court in W.P.No.10108/2024, wherein challenge is made by the petitioner against the order of sanction issued by the competent authority to prosecute him.
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18. Learned Counsel for the respondent has put forward a contention that since the petitioner had challenged the grounds of arrest, order of arrest, arrest memo, etc., before the coordinate bench of this Court in W.P.No.11786/2025 raising all the grounds urged in the petition, it is not open to the petitioner to once again urge the very same grounds in this bail petition. In the case of ARVIND KEJRIWAL VS DIRECTORATE OF ENFORCEMENT - (2025)2 SCC 248, in paragraph 50, the Hon'ble Supreme Court has observed as under:
"50. In our opinion, the key distinction between Section 19(1) and Section 45 is the authority undertaking the exercise, in each case. Under Section 19(1), it is the designated/authorised officer who records in writing, their "reasons to believe" that the arrestee is "guilty" of an offence under the PML Act. Thus, the arrest is based on the opinion of such officer, which opinion is open to judicial review, however not merits review, in terms of the well-settled principles of law. Contrastingly, under Section 45, it is the Special Court which undertakes the exercise. The Special Court independently examines pleas and contentions of both the accused and DoE, and arrives at an objective opinion. The Special Court is not bound by the opinion of the designated/authorised officer recorded in the "reasons to believe". A court's opinion is different and
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR cannot be equated to an officer's opinion. While the Special Court's opinion is determinative, and is only subject to appeal before the higher courts, DoE's opinion is not in the same category as it is open to judicial review."
19. In Arvind Kejriwal's case supra, writ petition was filed before the High Court of Delhi challenging the arrest by the Directorate of Enforcement on the ground of violation of Section 19 of the Act and the proceedings pursuant thereto including the order of remand passed by the Special Judge. In other words, the validity of arrest under Section 19 of the Act was questioned before the High Court. As against the dismissal of writ petition, the petitioner therein had approached the Hon'ble Supreme Court. While confirming the judgment of the High Court, the Hon'ble Supreme Court, in the operative portion of the order, has observed that the application for regular bail if pending consideration or required to be decided, shall be decided on its own merits.
20. The criminal cases registered against the petitioner for predicate offences, according to the prosecution, are pending in Crime No.325/2014 and Crime No.4/2014. So far as Crime
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR No.325/2014 is concerned, though petitioner was arrayed as accused no.15 in the FIR, in the charge sheet which was filed after investigation, he was not initially arrayed as an accused. Subsequently, a fresh FIR was registered against him in Crime No.16/2021 which has been quashed by the coordinate bench of this Court in W.P.No.8294/2021 on the ground that allegations made against the petitioner in Crime No.325/2014 and Crime No.16/2021 are one and the same and they relate to the same period. The said order has attained finality. During the pendency of W.P.No.8294/2021, additional charge sheet was filed for the offences punishable under Sections 409, 202 read with 34 of IPC which does not include any schedule offence, and the Trial Court has not yet taken cognizance of the additional charge sheet filed against the petitioner.
21. FIR in Crime No.4/2014 is filed against the petitioner alleging that for the check period from 11.01.1997 to 30.05.2014, he had amassed property disproportionate to his known sources of income. Further proceedings in the said case has been stayed by this Court in W.P.No.10108/2024. The allegations found in Crime No.4/2014 registered against the
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR petitioner for the offences punishable under the provisions of the P.C.Act, is primarily required to be proved based on documentary evidence. It is trite that the presumption, if any, arising against the petitioner can be rebutted by producing necessary rebuttal evidence. Therefore, solely on the basis of the material made available to the Court by the prosecution, at this stage, there cannot be any conclusion that the petitioner is guilty of the alleged offence punishable under Section 4 of the Act.
22. The FIRs for the predicate offences has been registered against the petitioner in the year 2014 and it is not the case of the prosecution that thereafter petitioner has indulged in committing any other crime. Therefore, there is no reason for this Court to believe that petitioner is likely to commit similar crime in the event he is enlarged on bail.
23. Learned Counsel for the petitioner has submitted that the Investigation Officer has not collected any independent material against the petitioner, and on the other hand, the complaint has been filed before the Special Court based on the statement
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR of the co-accused in the criminal cases registered for predicate offences.
24. In Prem Prakash's case supra, in paragraph 44, the Hon'ble Supreme Court has observed as under:
"44. 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."
25. The Hon'ble Supreme Court in the case of P.KRISHNA MOHAN REDDY VS STATE OF ANDHRA PRADESH - 2025 SCC OnLine SC 1157, placing reliance on the judgment in the case of KASHMIRA SINGH VS STATE OF M.P. - (1952)1 SCC 275, has observed that assuming for a moment that confession of a co-accused can be looked at the stage of anticipatory bail or even regular bail, as per the judgment in Kashmira Singh's case supra, since such a confession can only be pressed into consideration by the court as a rule of prudence to lend assurance to the other evidence against such co-accused. Thus, there must exist other evidence on record before the court looks into such confession. Therefore, the court while
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR considering the bail application is required to record a prima facie finding and cannot hold a mini trial delving into the merits of the case.
26. The Hon'ble Supreme Court in the case of ANWAR DHEBAR VS DIRECTORATE OF ENFORCEMENT- (CRL.A.NO.(S) 2669 OF 2025) following the law laid down in the case of V SENTHIL BALAJI v. DEPUTY DIRECTOR, DIRECTORATE OF ENFORCEMENT - (2024) SCC ONLINE SC 2626, taking into consideration the maximum punishment for the alleged offences and that there is no possibility of trial commencing in the near future, has granted bail to the accused. Similar view has been taken by the Hon'ble Supreme Court in the case of ANIL TUTEJA V. DIRECTORATE OF ENFORCEMENT - (SLP (CRL.) NO.3148/2025.
27. Petitioner is aged about 62 years and is in custody in the present case from 09.04.2025. The material on record would go to show that he is also suffering from certain medical conditions and he has been advised to undergo cataract surgery. Investigation of the case is completed and complaint is already filed before the Trial Court. The trial in the cases registered for
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR predicate offences and also in the present case is yet to commence. The chances of trial being completed and case being disposed of on merits in the near soon is remote.
28. Considering all the aforesaid aspects of the matter, I am of the opinion that petitioner's prayer for grant of regular bail is required to be answered affirmatively. Accordingly, the following order:
29. The petition is allowed. The petitioner is directed to be enlarged on bail in ECIR/BGO/05/2021 registered for the offence punishable under Section 4 of the Prevention of Money Laundering Act, 2002, pending before the Court of Prl. City Civil & Sessions Judge, Bengaluru, subject to the following conditions:
a) Petitioner shall execute personal bond for a sum of Rs.1,00,000/- with two sureties for the likesum, to the satisfaction of the jurisdictional Court;
b) The petitioner shall appear regularly on all the dates of hearing before the Trial Court unless the Trial Court exempts his appearance for valid reasons;
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NC: 2025:KHC:23613 CRL.P No. 7473 of 2025 HC-KAR
c) The petitioner shall not directly or indirectly threaten or tamper with the prosecution witnesses;
d) The petitioner shall not involve in similar offences in future.
Sd/-
(S VISHWAJITH SHETTY) JUDGE KK