Sri Deepesh Bajoria vs. Union Of INDIA

Held

The Court held that for proceedings under the PMLA to be valid, a predicate offence must exist, as there can be no 'proceeds of crime' without a scheduled offence. The Court noted that the charge-sheet filed in the connected FIR did not establish a predicate offence against the applicant. Therefore, statements recorded under Section 50 of the PMLA, which alleged investments and betting activities, could not serve as evidence of proceeds of crime in the absence of a predicate offence. The Court found that the materials on record did not prima facie suggest any proceeds of crime linked to the applicant's alleged activities. Regarding the bail application, the Court found that the applicant had satisfied the twin conditions under Section 45 of the PMLA. It was satisfied that there were reasonable grounds to believe the applicant was not guilty of the alleged offence of money laundering and was unlikely to commit any offence while on bail. Accordingly, the bail application was allowed, with the applicant directed to be released on bail subject to furnishing a bail bond and sureties, and adhering to specific conditions including appearing before the trial court, surrendering his passport, cooperating with the ED, and not influencing witnesses or tampering with evidence. The Court clarified that its observations were only for the purpose of the bail application and would not prejudice either side at the trial.

Facts

This case involves a bail application filed by Sri Deepesh Bajoria, who was arrested on September 19, 2026, in connection with an Enforcement Case Information Report (ECIR) registered by the Directorate of Enforcement (ED) under the Prevention of Money-Laundering Act, 2002 (PMLA). The ECIR was based on an FIR lodged on October 11, 2021, alleging illegal betting and gambling activities during IPL matches, leading to the siphoning of money. The initial FIR led to a police case under the IPC and the Assam Game and Betting Act, 1970. The ED registered its ECIR on March 30, 2023, based on alleged scheduled offences. A charge-sheet was later filed on May 31, 2024, against the applicant and others, primarily under the Assam Game and Betting Act. The investigation also incorporated other FIRs and revealed substantial financial transactions, including transfers to M/s DRM Coke, which was allegedly not operational. The applicant claimed these were unsecured loans.

Key Issues

1. Whether the proceedings under the Prevention of Money-Laundering Act, 2002 (PMLA) are maintainable in the absence of a predicate offence against the accused applicant? 2. Whether the applicant has satisfied the twin conditions for bail under Section 45 of the PMLA? Petitioner's Arguments: The petitioner argued that the ED's case under the PMLA is unsustainable because the charge-sheet filed by the police in the connected FIR did not establish any predicate offence against the applicant. Consequently, there could be no 'proceeds of crime' as defined under the PMLA. The petitioner contended that statements recorded under Section 50 of the PMLA, which formed the basis for alleging proceeds of crime, lacked evidentiary value without an underlying scheduled offence. The petitioner also argued that the materials on record did not prima facie suggest any proceeds of crime linked to the alleged activities. Respondent's Arguments: The respondent (Union of India through the Directorate of Enforcement) relied on the investigation conducted by the ED, which allegedly disclosed substantial financial transactions and the generation of proceeds of crime. The ED presented statements recorded under Section 50 of the PMLA as evidence of these proceeds. The respondent implicitly argued that the existence of alleged proceeds of crime, irrespective of the final outcome of the predicate offence investigation, was sufficient to sustain proceedings under the PMLA.