Protection in predicate offence doesn't automatically extend to PMLA case: Delhi High Court

The Delhi High Court has ruled that protection granted in a predicate offence does not automatically extend to proceedings under the Prevention of Money Laundering Act (PMLA). The decision came after the court denied anticipatory bail to Ram Singh, a businessman associated with the Babaji Finance Group, who faces prosecution in a PMLA case. In its August 18 order, the court rejected Singh’s argument that the protection afforded to him by the Supreme Court in a related predicate offence FIR should apply to the current money laundering case. Justice Madhu Jain emphasized that the protection granted in the predicate offence applies specifically to the context of that FIR and cannot be extended to the separate and independent proceedings under the PMLA. She stated that the petitioner could not claim pre-arrest protection in the present case simply because such protection had been granted in the predicate offence. The court highlighted that economic offences require a distinct approach when evaluating bail applications due to their potential impact on societal and national financial interests. The court noted that economic crimes often involve complex conspiracies and significant financial stakes, necessitating a cautious stance when considering bail. It referenced the Supreme Court’s consistent emphasis on adopting a serious approach in cases involving such offenses. Singh, represented by his legal counsel, argued that the allegations in the scheduled offense mainly pertain to cheating, inducement, forged documents, and transactions involving SARFAESI properties. His counsel claimed that the primary accusations were directed at other co-accused individuals and that there was no direct allegation that Singh had induced anyone to part with money, forged documents, or participated in the alleged property transactions. The Enforcement Directorate (ED), representing the prosecution, opposed the anticipatory bail application, stating that Singh should have first sought relief from the sessions court. They argued that Singh had not cooperated with the investigation despite multiple summonses. The ED’s counsel stressed that the case involves serious allegations of money laundering and requires thorough investigation into the trail of alleged proceeds of crime. They asserted that Singh’s personal presence was essential for collecting evidence, confronting documentary and digital materials, and obtaining information exclusively known to him. Granting anticipatory bail at this stage, they contended, would significantly hinder the investigation. In dismissing the anticipatory bail plea, the court pointed out that the material presented so far indicates that proceeds of crime amounting to approximately ₹26.18 crore can be traced to Singh. The court observed that despite several summonses requiring Singh’s personal appearance, neither he nor any authorized representative attended the ED hearings. Instead, a written response was submitted through his counsel, which the court viewed as an effort to evade the investigative process initiated by the probe agency. Justice Jain concluded that the conditions required under the PMLA were not met, and Singh had not demonstrated reasonable grounds to believe he was not guilty of the alleged offense. The court found that the evidence presented, along with Singh’s conduct, did not justify granting anticipatory bail. The ruling underscores the importance of cooperation with ongoing investigations in cases involving economic crimes and highlights the judiciary’s commitment to ensuring thorough and effective probes into financial misconduct.