1 REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NOS.1878­1879   OF  2017 (Arising out of SLP (Crl.) No. 6896–6897 of 2017) Rohit Tandon       …Appellant                           :Versus: The Enforcement Directorate        …Respondent J U D G M E N T A.M. Khanwilkar, J. 1. By these appeals the order of the High Court of Delhi at New Delhi dated 5th  May, 2017, rejecting the Bail Application No.119 of 2017 and Criminal M.B. No.121 of 2017 has been assailed. The appellant was arrested on 28th December, 2016 in Signature Not Verified Digitally signed by CHETAN KUMAR Date: 2017.11.10 20:40:13 IST Reason: connection with ECIR/18/DZ­II/2016/AD(RV) registered under Sections   3   &   4   of   the   Prevention   of   Money­Laundering   Act, 2 2002 (hereinafter referred to as “the Act of 2002”).   The said   ECIR  was   registered on 26th  December, 2016 as a sequel to FIR No.205/2016 dated 25th December, 2016 in relation to the offences punishable under Sections 420, 406, 409, 468, 471, 188 and 120B of the Indian Penal Code, 1860 (“IPC” for short). The   said   FIR   was   registered   by   the   Crime   Branch   of   Delhi Police, New Delhi.   The ECIR, however, has been registered at the   instance   of   Assistant   Director   (PMLA),   Directorate   of Enforcement, empowered to investigate the offences punishable under the Act of 2002.  2. The   appellant   first   approached   the   Additional   Sessions Judge­02, South East Saket Court, New Delhi for releasing him on bail by way of an application under Section 439 of the Code of Criminal Procedure, 1973 read with Section 45 of the Act of 2002.     The   said   bail   application   came   to   be   rejected   vide judgment   dated   7th  January,   2017   by   the   said   Court.   The appellant thereafter approached the High Court of Delhi at New Delhi   by   way   of   Bail   Application   No.119   of   2017   and   an interlocutory   application   filed   therein,   being   Criminal   M.B. No.121 of 2017. The High Court independently considered the 3 merits of the arguments but eventually rejected the prayer for bail vide impugned judgment dated 5th May, 2017.   3. The ECIR   has   been   registered   against   Ashish   Kumar, Raj   Kumar   Goel   and   other   unknown   persons   for   offences punishable under Sections 3/4 of the Act of 2002 on the basis of information/material, as evident from the predicate offence registered   by   P.S.   Crime   Branch,   Delhi   against   the   named accused and unknown accused for offences punishable under Sections 420, 406, 409, 467, 468, 471, 188 and 120B of IPC, being   FIR   No.205/2016   dated   25th  December,   2016.     The relevant facts noted in the ECIR read thus: “A. It is reported that during the course of investigation of Case   FIR   No.242/16   u/s   420,   467,468,471,   120­B   IPC,   PS C.R. Park, Delhi, it is revealed that Accused Raj Kumar Goel along   with   associates   are   engaged   into   earning   profits   by routing   money   into   various   accounts   by   using   forged documents   and   thereby   receiving   commission   from   the prospective   clients   who   either   need   money   by   cheque   or   in cash. In order to obtain large profits, accused Raj Kumar Goel and few of his associates have opened many Bank Accounts in Kotak Mahindra and ICICI Bank at Naya Bazar, Chandni Chowk, Delhi.  B. On   08.11.2016,   the   Government   if   India   announced demonetization   of   one   thousand­   (1000)   and   five   hundred (500) rupee notes. On this accused Raj Kumar Goel conspired with the bank manager of Kotak Mahindra Bank, Cannaught Place, namely Ashish Kumar r/o A­701, Bestech Park, Sector 61, Gurugram, Haryana and one Chartered Accountant, name unknown, having mobile number 9711329619 to  earn huge profit by converting black money in the form of old currency 4 notes into new currency notes. In this conspiracy, the said CA acted   as   a   mediator   and   arranged   prospective   clients   who intended to convert their black money into legitimate money. For the same, alleged CA offered 2% commission to the other accused persons on all such transactions.  C. The  accused were  having bank accounts  in the  Naya Bazar branch of Kotak Mahindra Bank but the CA and Bank Manager   Ashish   asked   accused   Raj   Kumar   to   deposit   old currency notes in Cannaught Place branch of Kotak Mahindra Bank.   It   is   also   revealed   that   the   accused   opened   bank accounts   in   the   name   of   Quality   Trading   Company,   Swati Trading   Company,   Shree   Ganesh   Enterprises,   R.K. International,   Mahalxmi   Industires,   Virgo   International   and Sapna International on the basis of forged/false documents and deposited approx. Rs.25 Crore after the demonetization. As   per   the   preliminary   investigation   of   the   said   case   it   is transpired   that   accused   Raj   Kumar   Goel,   Bank   Manager Ashish, CA along with their associates are involved in a deep roted conspiracy and were indulged in converting old currency which   were   entrusted   to   bank/Govt   officials   and   were supposed to be delivered to general public/guidelines issued by the Reserve Bank of India/Ministry of Finance and hand thus cheated the public at large. The accused persons have also caused monetary loss to the Govt. of India and thereby Committed offences u/s 420, 406, 409, 467, 468, 471, 188, 120­B IPC.”   It   is   then   noted   that   the   offences   under   Sections   420, 468, 471 and 120B of IPC are scheduled offences under the Act of   2002   and   that   from   the   available   facts,   a   reasonable inference   is   drawn   that   the   named   accused   and   unknown accused   have   made   illegal   earnings   arising   out   of   the   said criminal conspiracy which might have undergone the process of laundering and thereby an offence under Section 3 of the Act of 2002 was made out.   It is noted that prima facie case for 5 commission   of   offence   under   Section   3   punishable   under Section 4 of the Act of 2002 was made out and accordingly the case is being registered and taken up for investigation under the Act of 2002 and rules framed thereunder.  4. The   learned   Sessions   Judge   while   considering   the   bail application   adverted   to   the   relevant     materials   including   the CDR   analysis   of   Mobile   number   of   Ashish   Kumar,   Branch Manager,   Kotak   Mahindra   Bank,   K.G.   Marg   Branch,   Kamal Jain,   CA   of   Rohit   Tandon   (hereinafter   referred   to   as “appellant”), Dinesh Bhola, Raj Kumar Goel;  the statements of Kamal Jain, Dinesh Bhola and Ashish Kumar, recorded under Section 50 of the Act of 2002; and analysis of bank statements of   stated   companies.   All   these   reveal   that   Ashish   Kumar conspired with other persons to get deposited Rs.38.53 Crore in   cash   of   demonetized   currency     into   bank   accounts   of companies   and   got  demand  drafts  issued in   fictitious   names with intention of getting them cancelled and thereby converting the   demonetized   currency   into   monetized   currency   on commission   basis.     Further,   the   investigation   also   revealed that  the   entire   cash  was  collected  on  the  instructions  of the 6 appellant herein, by Ashish Kumar, Raj Kumar Goel and others through   Dinesh   Bhola,   an   employee   of   the   appellant. According to the prosecution, all the associates of the appellant acted   on   instructions   of   the   appellant   for   getting   issued   the demand   drafts   against   cash   deposit   with   the   help   of   Ashish Kumar, Branch Manager of Kotak Mahindra Bank  and others, to the tune of Rs.34.93 Crore from Kotak Mahindra Bank, K.G. Marg   Branch.   It   was   also   noted   that   the   demand   drafts     of Rs.3.60   Crore   were   issued   in   fictitious   names   on   the instructions   of   Bank   Manager   Ashish   Kumar   in   lieu   of commission received by him in old cash currency. The demand drafts   amounting   to   Rs.38   Crore   were   issued   in   favour   of Dinesh   Kumar   and   Sunil   Kumar   which   were   recovered   from the   custody   of   Kamal   Jain   who   had   kept   the   same   on   the instructions   of   the   appellant.   Out   of   the   said   amount,   the demand   drafts   of   other   banks,   apart   from   Kotak   Mahindra Bank Limited, were also recovered. The prosecution suspected that   there   could   be   other   dubious   transactions  made   by   the appellant   in   other   banks   and   that   Ashish   Kumar,   Bank Manager   and   others   were   acting   on   the   instructions   of   the appellant for executing the crime.  7 5. The   Sessions   Court   rejected   the   argument   of   the appellant that the investigation of the offence registered against the appellant and others under Section 3/4 of the Act of 2002 being  a  sequel  to  the FIR registered by the Crime Branch of Delhi   Police,   it   cannot   be   investigated   by   the   Enforcement Directorate.   For,   the   Enforcement   Directorate   was   not concerned   with   the   outcome   of   the   investigation   of   the predicate offence registered by the Delhi Police. It thus opined that the matter on hand must be examined only in reference to the registration of ECIR by the Enforcement Directorate.   The fact   that   the   investigation   in   FIR   registered   by   the   Crime Branch   of   Delhi   Police,   bearing   FIR   No.205/2016,   had   not commenced   will   also   be   of   no   avail   to   the   appellant.     The Sessions Court also found that as per Section 19 of the Act of 2002, the only condition to be satisfied for arrest of a person is the reasonable belief of the authority gathered on the basis of material   in   its   possession.   Further,   in   the   present   case,   the accused was arrested by the competent authority on the basis of material in his possession giving rise to a reasonable belief about   the   complicity   of   the   accused   in   the   commission   of 8 offence punishable under the Act of 2002.  As such the arrest of  the   appellant  under  the Act of 2002 cannot be termed as illegal.  After having dealt with those contentions, the Sessions Court   took   note   of   the   material   pressed   into   service   by   the prosecution and analysed the same in the following words: “21. Pursuant   to   registration   of   FIR   No.205/2016   under section 420, 406,  409,  468, 471, 188,  120­B  IPC  by Crime Branch, the matter was taken up by ED and ECIR No.18/16 was   opened   for   investigation.   Transaction   statements   of accounts   in   Kotak   Mahindra   Bank   in   FIR   No.205/16   in respect   of   companies   i.e.   Delhi   Training   Company,   Kwality Tading   Company,   Mahalaxmi   Industries,   R.K.   International, Sapna Trading Company, Shree Ganesh Enterprises, Swastik Trading   Company   arid   Virgo   International   were   sought   and scrutinized,   Huge   cash   deposits   in   the   said   accounts   were identified   during   November,   2016,   post   demonetization announcement it was found that demand drafts were issued in   fictitious   names   like   Dinesh   Kumar,   Sunil   Kumar, Abhilasha Dubey, Madan Kumar, Madan Saini, Satya Narain Dagdi and Seema Bai.  22. Statement   of   Ashish   Kumar,   accused   named   in FIR No.205/16, Branch Manager, Kotak Mahindra Bank, K.G.   Marg   branch   was   recorded   under   section   50   of PMLA which revealed  that Kamal Jain, CA of  accused Rohit   Tandon   contacted   him   to   get   the   demonetized currency on behalf of accused/applicant, converted into monetized   currency   on   commission   basis.  The commission of Ashish Kumar was decided @ 35%, who in turn contacted one Yogesh Mittal and Rajesh Kumar Goel, accused in FIR No.205/16 to carry out the criminal design of getting the   demonetized   cash   converted   into   monetized   7   valuable form.   Demonetized   currency   was   deposited   in   different accounts of companies pertaining to Raj Kumar Goel besides others through Raj Kumar Goel with the help of Ashish Kumar in different bank accounts of Kotak Mahindra Bank and DDs were   issued   in   fictitious   names.   The   illegal   conversion   of demonetized   currency,   getting   the   same   deposited   and issuance   of   demand   drafts   is   corroborated   through   CDR 9 analysis  of  relevant  persons  for the  relevant  period. Dinesh Bhola   and   Kamal   Jain,   in   their   statements   recorded   under section   50   of   PMLA   have   also   confirmed   and   reiterated   the facts as stated by Ashish Kumar, the Branch Manager.  The statements   of   persons   recorded   under   section   50   of PMLA, which has evidentiary value under section 50(4) of   PMLA,   have   confirmed   that   the   old   demonetized currency   pertains   to   accused   Rohit   Tandon   and   the conspiracy was executed on his instructions.  23. Lastly, it was submitted by learned senior counsel for accused that accused fully cooperated with the investigating agency and there was no need to arrest him in this case. He further   submitted   that   the   actions   of   Accused   persons   as mentioned   in   the   FIR   attract   implications   and   as   such   the correct   authority   to   investigate   into   the   same   is   the   Income Tax Department and not the ED. Per contra, learned Special Prosecutor for ED submitted that accused only cooperated in the   investigation   in   ECIR   No.14/16   and   not   in   ECIR   No. 18/16. He further submitted that as sufficient material surfaced on record against the present accused and he did   not   cooperate   in   the   investigation   in   the   present case, therefore, accused Rohit Tandon was arrested in this   case.  He   submitted   that   he   does   not   dispute   the jurisdiction of Income Tax Department so far as other aspects of the matter are concerned.  24. As per section 45 of PMLA, while considering grant of bail to accused, the court has to satisfy that:­ i. There  are  reasonable grounds for believing that accused is not guilty of such offence and that ii. He is not likely to commit any offence, while on bail. 25. In the present case, accused has failed to satisfy this   court   that   he   is   not   guilty   of   alleged   offence punishable  under  section   3  of   PMLA.   He  has   not   been able   to   discharge   the   burden   as   contemplated   under section 24 of the Act.  26. Accused   is   alleged   to   have   been   found   involved   in   a white   collar   crime.   The   alleged   offence   was   committed   by accused in conspiracy with other co­accused persons in a well planned   and   thoughtful   manner.   It   has   been   observed   in  a catena of decisions by Hon’ble Superior Courts that economic 10 offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having   deep   rooted   conspiracies   and   involving   huge   loss   of public, funds needs to be viewed seriously and considered as grave   offences   affecting   the   economy   of   the   country   as   a whole   and   thereby   posing   serious   threat   to   the   financial health of the country.”   (emphasis supplied) 6. Having   formed   that   opinion   and   noticing   that   the investigation was at the initial and crucial stage and that the source of funds of proceeds of crime was yet to be ascertained till then and that the recovery of balance proceeds of crime was in the process, the question of enlarging the appellant on bail does not arise,  more so, when there was every possibility that he   may   tamper  with the evidence and influence the material prosecution   witnesses.   Accordingly,   the   bail   application   was rejected by the Sessions Court vide judgment and order dated 7th January, 2017. 7. Aggrieved,   the   appellant   approached   the   High   Court   of Delhi   by   way   of   bail   application   under   Section   439   of   the Cr.P.C. read with Section 45 of the Act of 2002. The High Court independently   analysed   all   the   contentions   raised   by   the appellant and after adverting to the relevant materials, rejected 11 the application for grant of bail preferred by the appellant.  The High Court found that the Act of 2002  does not prescribe that the   Enforcement   Directorate   is   debarred   from   conducting investigation in relation to the offences under Sections 3 & 4 of the   Act   of   2002   unless   the   Crime   Branch   concludes   its investigation   in   relation   to   FIR   No.205/2016   or   was   to   file charge­sheet   for   commission   of   scheduled   offence.     Further, the   proceedings   under   the  Act   of  2002  are  distinct   from   the proceedings   relating   to   scheduled   offence   and   both   the investigations   can   continue   independently.     The   High   Court then noted that Section 44 of the Act of 2002 is an enabling provision,   to   have   a   joint   trial   in   such   a   situation   to   avoid conflicting and multiple opinions of the Courts. But proceeded to   hold   that   the   said   possibility   would   arise   only   when   the charge­sheet is filed after completion of investigation in relation to   FIR   No.205/2016   and   the   case   is   committed   to   the concerned Court.   The High Court held that Section 44 of the Act   of   2002   does   not   envisage   a   joint   investigation   but   is   a provision stipulating that the trial of offence under Section 3/4 of the Act of 2002 and any scheduled offence connected to the offence   under   that   section   may   be   tried   only   by   the   Special 12 Court constituted for the area in which the offence has been committed.     While   considering   the   merits   of   the   allegations against   the   appellant,   in   particular,   the  materials   on   record, the High Court analysed the same in the following words: “14.  In   FIR   No.205/2016   allegations   are   that   Raj   Kumar Goel; Ashish Kumar, Bank Manager, Kotak Mahindra Bank, K.G.Marg Branch and others conspired for illegal conversion of   demonetized   currency   notes   into   monetized   currency   by way of depositing cash in various accounts of the firms and subsequently   getting   Demand   Drafts   issued   in   fictitious names.   It   is   further   alleged   in   the   said   FIR   that   accused therein   opened   bank   accounts   in   the   name   of   ‘Group   of Companies’   in   Kotak   Mahindra   Bank.   In   ECIR   No.18, transactions statements of accounts were collected pertaining to   these   ‘Group   of   Companies’   from   Kotak   Mahindra   Bank and   it   emerged   that   from   15.11.2016   to   19.11.2016,   there was   huge   cash  deposit   to  the   tune   of   `31.75  crores  by  Raj Kumar Goel  and  his  associates. It  was  also  found  that  the Demand   Drafts   amounting   to   `38   crores   were   issued   in fictitious names during that period. It cannot be said at this stage that offences referred in FIR No.205/2016 and the ECIR No.18 have no nexus.  15.  Prosecution under Section 45 of PMLA for commission of offence under Section 3 punishable under Section 4 of PMLA has already been initiated by ED in the Special Court. By an order   dated   25.02.2017,   learned   Addl.   Sessions   Judge   / Special   Court   (PMLA)   has   taken   cognizance   against   Rohit Tandon   (present   petitioner),   Ashish   Kumar   and   Raj   Kumar Goel.   Dinesh   Bhola   and   Kamal   Jain   have   also   been summoned to face trial under Section 4 of PMLA. Raj Kumar Goel and Ashish Kumar continue to be in custody in the said proceedings.  16.  On   perusal   of   the   complaint   lodged   under   Section   45 PMLA, it reveals that serious and grave allegations have been leveled against the petitioner and others. The allegations are categorical   and   specific;   definite   role   has   been   assigned   to each   accused.   It   is   alleged   that   during   the   period   from 15.11.2016 to 19.11.2016, huge cash to the  tune  of `31.75 crores   was   deposited   in   eight   bank   accounts   in   Kotak 13 Mahindra Bank in the accounts of the ‘Group of Companies’. It gives details of Demand Drafts issued during 15.11.2016 to 19.11.2016   from   eight   bank   accounts   in   the   name   of   Sunil Kumar,   Dinesh   Kumar,   Abhilasha   Dubey,   Madan   Kumar, Madan Saini, Satya Narain Dagdi and Seema Bai on various dates.   Most   of   the   Demand   Drafts   issued   have   since   been recovered. Its detail finds mention in Table No.2 given in the complaint.  17.  During   arguments,  specific  query  was  raised   and  the learned Senior Counsel for the petitioner was asked as to, to whom the money deposited in the various accounts belonged. Learned   Senior   Counsel   for   the   petitioner   was   fair enough to admit that the whole money belonged to the petitioner.   When   enquired   as   to   from   which   ‘source’, huge cash was procured, there was no clear response to it. Again, learned Senior Counsel for the petitioner was asked   as   to   how   the   cash   belonging   to   the   petitioner happened   to   be   deposited   in   various   accounts   of   the ‘Group   of   Companies’   which   were   not   owned   by   the petitioner   and   what   was   its   purpose.   It   was   further enquired as to why the Demand Drafts were got issued in   the   names   of   the   persons   referred   above  and   what was its specific purpose. Learned Senior Counsel for the petitioner avoided to answer these queries stating that the defence of the petitioner could not be disclosed at this   juncture   to   impact   his   case   during   trial. Apparently, no plausible explanation has been offered as   to   what   forced   the   petitioner   to   deposit   the   old currency to the tune of `31.75 crores in eight accounts of   the   different   ‘Group   of   Companies’   in   Kotak Mahindra   Bank   during   the   short   period   from 15.11.2016   to   19.11.2016.   There   was   no   explanation as to why the Demand Drafts for the said amount were got issued in the name of sham people whose identity was not known.  The purpose of all this exercise seemingly was to deposit the cash (old currency) first, get the Demand Drafts   issued   in   fictitious   names   and   obtain   monetized currency   by   cancelling   them   subsequently.  The   petitioner also did not place on record any document whatsoever to   show   as   to   from   which   legal   source,   the   cash   was procured to deposit in the bank accounts of strangers. I find   no   substance   in   the   petitioner’s   plea   that petitioner’s only liability was to pay income tax on the 14 unaccounted money / income. In my considered view, mere payment of tax on the unaccounted money from any ‘source’ whatever would not convert it into ‘legal’ money. Needless to say, huge  deposit  was a sinister attempt / strategy by the petitioner and others to convert the ‘old currency’ into new one to   frustrate   the   Demonetization   Policy   primarily   meant   to unearth black money.  18.  Allegations   against   the   petitioner   are   not   without substance.   The   prosecution   has   recorded   statements   of   the petitioner on various dates and that of Dinesh Bhola, Ashish Kumar (Branch Manager, Kotak Mahindra Bank), Raj Kumar Goel,   Kamal   Jain   (petitioner’s   Chartered   Accountant),   Vimal Negi, Jivan Singh and Varun Tandon under Section 50 PMLA on   various   dates.  There   statements   have   evidentiary value under Section 50 PMLA. Prima facie, the version given   by   them   is   in   consonance   with   the   prosecution case. The prosecution has further relied upon Call Data Records, CCTV footage, Account Trend Analysis.” (emphasis supplied) 8. The High Court opined that keeping in mind the rigors of Section  45   of   the   Act of 2002 for  the release of the  accused charged under Part A of the Schedule, on bail, coupled with the antecedents of the appellant of being involved in other similar crime registered as FIR No.197/2016, for offence under Section 420,   409,   188,   120B   of   IPC   dated   14 th  December,   2016   by Crime Branch and ECIR No.14/DZ/II/2016 registered on 16 th December, 2016 by Enforcement Directorate for offences under Sections   3/4   of   the   Act   of   2002.   Further,   during   a   raid conducted   jointly   by   the   Crime   Branch   and   Income   Tax 15 Department on 10th  December, 2016 at around 10.00 P.M. at the office premises of the appellant, currency of Rs.13.62 Crore was recovered  including new currency in the denomination of Rs.2000/­   amounting   to   Rs.2.62   Crore.   In   addition,   the appellant   had   surrendered   Rs.128   Crore   during   the   raid conducted   by   the   Income   Tax   Department   on   6/8     October, 2016   in   his   office   and   residential  premises.    No  reliable  and credible documents were  forthcoming from the appellant about the source from where he had obtained such a huge quantity of cash.   The   possibility   of   the   same   being   proceeds   of   crime cannot   be   ruled   out.   Hence,   it   noted   that   the   question   of granting   bail   did   not   arise,   taking   into   consideration   the serious   allegations   against   the   appellant   and   other   facts including   severity   of   the   punishment   prescribed   by   law. Accordingly,   the   bail  application  of  the  appellant   came  to  be rejected.  As a consequence, the pending application which was considered along with the bail application was also disposed of by   the   impugned   judgment   and   order   dated   5th  May,   2017 passed by the High Court. 16 9. We   have   heard   Mr.   Mukul   Rohatgi,   learned   senior counsel   appearing   for   the   appellant   and   Mr.   Tushar   Mehta, learned   Additional   Solicitor   General   for   the   Union   of   India. They have also filed written submissions.    10. Before   we   analyse   the   rival   submissions,   for   the completion   of   record,     we   must   mention   that   after   the impugned judgment, the Crime Branch filed the charge­sheet before the appropriate Court in relation to FIR No.205/2016 on 24th  June,   2017.   Similarly,   the   Enforcement   Directorate   has filed supplementary complaint  CC No.700/2017 in relation to ECIR   18/2016,   which   refers   to   further   material   gathered during   the   investigation,   indicating   the   complicity   of   the concerned accused in the crime for offence punishable under Section 3 of the Act of 2002.  A comprehensive supplementary complaint   has   been   filed   before   the   District   and   Sessions Judge,   Saket,   New   Delhi   (Designated   Court   under   the Prevention   of   Money­Laundering   Act,   2002)   on   2 nd  August, 2017.   11. Before   this   supplementary   complaint   was   filed,   the appellant preferred second bail application in the present case 17 before   the   High   Court   of   Delhi   at   New   Delhi,   being   Bail Application No.1361/2017.   This application was filed on 12 th July, 2017.  Along with the said bail application the appellant filed an application being Criminal M.A. No.1293 of 2017 for directing   his   interim   release   in   connection   with ECIR/DZ/II/2016   on   the   assertion   that   his   mother   was seriously ill and required immediate medical attention because of the injuries suffered by her on 20 th  June, 2017.   The said interim release application was allowed on 10 th  August, 2017. Notably,   the   appellant   was   advised   to   withdraw   the   regular (second)   Bail   Application   No.1361/2017.   The   learned   Single Judge   of   the   High   Court   by   order   dated   10 th  August,   2017 acceded   to   the   prayer   so   made   by   the   appellant.     The   order passed   by   the   learned Single  Judge  of  the  High  Court  reads thus:  “BAIL APPLN. 1361/2017  The   petitioner   has   prayed   for   bail   in   connection   with ECIR/18/DZII/2016/AD   registered   under   Section   3   &   4   of Prevention of Money Laundering Act, 2002.  Simultaneously   an   application   has   been   filed   seeking interim   bail   on   the   ground   of   illness   of   the   mother   of   the petitioner who has recently suffered a fracture in the neck.  Mr.   Mukul   Rohatgi,   learned   Sr.   Advocate   seeks permission to withdraw the regular bail application on 18 the   observation   of   the   bench   that   the   earlier   bail application   was   rejected   only   on   5th   of   May,   2017. However he presses the interim bail application.  Accordingly   the   regular   bail   application   is dismissed as withdrawn. Crl.M.A.No.1293/2017 (application for interim bail)  It has been submitted on behalf of the petitioner that he is the only son of his mother who has suffered a fall and has got   a   fracture   in   her   neck.   The   sister   of   the   petitioner   is stationed abroad. The petitioner has a son who is of young age. The petitioner has also drawn the attention of this Court to the medical report which indicates that a plaster has been put   on   the   fracture   but   she   has   been   suffering   from   acute pain.  It has been further submitted that the charge sheet in the main case has been submitted and that the petitioner has remained in jail for more than seven months by now.  Opposing the aforesaid prayer for grant of interim bail, Mr. Mahajan, learned Sr. Standing Counsel submits that this is a case of serious fiscal impropriety of great magnitude and there is a possibility of the petitioner tampering with evidence if   he   comes   out   from   the   jail   even   for   a   short   period.   No definite   reasons,   however,   have   been   assigned   by Mr.Mahajan, for such a presumption that the petitioner would tamper with the evidence specially when charge sheet in the main case has already been submitted.  Mr.Rohtagi,   learned   senior   counsel   has   drawn   the attention of this Court to the fact that whenever the petitioner was summoned to answer to the Queries, he had visited the office of the ED and in the past, had never tried to evade the process of investigation.  Taking   into   account   the   aforesaid   facts,   specially   the period   of   incarceration   of   the   petitioner,   submission   of   the charge sheet in the main case and the illness of the mother of the petitioner, this Court is inclined to grant interim bail to the petitioner for a period of 3 weeks.  Let   the   petitioner   be   released   on   interim   bail   for   the period of 3 weeks, to be counted from the date of his release, 19 on his furnishing a bond in the sum of Rs. 25,000/­ with two sureties of the like amount to the satisfaction of special court.  However it  is  made  clear that  the petitioner shall  not tamper with the evidence or commit any act which would be prejudicial   to   the   prosecution   side.   Should   anything   of   that kind be reported, this Court would consider the desirability of withdrawing/cancelling the interim bail.  The petitioner shall not, unnecessary, seek extension of the  interim bail granted to him. It is also specified  that  the petitioner shall not leave the country under any circumstances whatsoever.   Should   the   petitioner   intend   to   go   out   of   the territorial   confines   of   NCR   of   Delhi,   permission   would   be required   to   be   taken   from   the   Special   Court.   The   petitioner shall also deposit his passport before the Special court while furnishing his bonds.  Application is disposed of accordingly. Dasti.” (emphasis supplied) 12. It  is   relevant  to  note  that  the  aforementioned order  for interim release of the appellant was confirmed by this Court on 12th August, 2017.   13. The appellant was thereafter advised to file the present appeals to assail the judgment and order dated 5 th  May, 2017 passed   by   the   High   Court   of   Delhi   at   New   Delhi   in   Bail Application No.119 of 2017 and Criminal M.B. No.121 of 2017. The   special   leave   petitions   were   filed   on   18 th  August,   2017. During   the   pendency   of   these   special   leave   petitions,   the 20 appellant was advised to also file a writ petition under Article 32 of the Constitution of India to challenge the validity of the provisions   of   the   Act   of   2002.   The   same   was   filed   on   23 rd August, 2017, being Writ Petition (Civil) No.121 of 2017.   The reliefs claimed in the said writ petition read thus: “PRAER (i) (ii) (iii) Issue a writ of mandamus or any other appropriate writ,   order   or   direction   declaring   that   the conditions/limitations contained in Section 45(1) of Prevention of Money Laundering Act, 2002 (Act 15 of 2003) to the extent that it imposes rigors/restrictions in the grant of bail in any offence punishable upto 7 years under the provisions  of Prevention of Money Laundering   Act,   2002   (Act   15   of   2003)   as unreasonable, arbitrary and  unconstitutional  being violative of the fundamental rights of the Petitioner guaranteed and protected under Articles 14 and 21 of the Constitution of India; In the alternative to prayer (i) above, issue a writ of mandamus  or any other appropriate writ, order or direction   reading   down   the   scope   and   ambit   of Section 45(1) of the Prevention of Money Laundering Act, 2002 (Act 15 of 2003), so that the rigors in grant of   bail   are   not   applicable   in   the   case   of   the Petitioner, where the alleged scheduled offences in CC No. 41 of 2017 arising out of charge­sheet No. 1 dated 24.06.2017 filed by the Crime Branch, New Delhi alleging commission of offences under Sections 420/188/109/120B/34 IPC and Section 12 of the Prevention   of   Corruption   Act,   1988   (none   of   which were   under   Part   A   of   the   Schedule   prior   to   the Prevention   of   Money  Laundering   (Amendment)   Act, 2012 (Act 2 of 2013) and formed part of Part B of the Schedule; Issue a writ of mandamus or any other appropriate writ,   order   or   direction   declaring   the   continued incarceration   of   the   Petitioner   since   28.12.2016   in 21 (iv) (v) (vi) (vii) 14. ECIR/18/DZ­II/2016/AD   dated   26.12.2016   under Section 3/4  of the Prevention of Money Laundering Act, 2002 is illegal, unconstitutional and in violation of the fundamental right of the Petitioner guaranteed and protected under Article 21 of the Constitution of India; Issue a writ of mandamus or any other appropriate writ, order or direction in the nature of mandamus declaring that the offences under the Prevention of Money   Laundering   Act,   2002   (Act   15   of   2003) pursuant   to   the   Prevention   of   Money   Laundering (Amendment) Act, 2005 (Act 20 of 2005) which came into   force   w.e.f.   01.07.2005   are   non­cognizable offences   and   therefore,   it   is   mandatory   to   comply with the provisions of Sections 155, 177(1) and 172 of the Code of Criminal Procedure, 1973 and declare that the law laid down by the Division Bench of the Hon’ble   Delhi   High   Court   in   its   judgment   dated 27.4.2016 (reported in 2016 SCC Online Delhi 2493) and by the  Hon’ble Gujarat  High Court  in Rakesh Manekchand   Kothari   vs.   Union   of   India   [Special Criminal   Application   (Habeas   Corpus)   No. 4247/2015] decided on 03.08.2015 holding that the offences under Section 3 of the Prevention of Money Laudnering   Act,   2002   punishable   under   Section   4 thereof is a non­cognizable offence is good law and the   contrary   view   taken   by   the   Hon’ble   Bombay High   Court   in   its   judgment   dated   14.12.2016   in Chhagan Chandrakant Bhujbal vs. Union of India & Ors. is bad in law;  lay down guidelines for compliance by all Courts for grant   of   bail   in   proceedings   arising   out   of   and concerning the Prevention of Money Laundering Act, 2002 by expounding the scope of Section 439 of the Code of Criminal Procedure, 1973; Issue  rule nisi in terms of  Prayers (i) to  (v) above; and And/or pass any other or further orders which Your Lordships may deem fit and proper in the interest of justice.  The aforementioned writ petition was listed together with the   appeals   on   30th  October,   2017.     During   oral   arguments, 22 however,   the   counsel   appearing   for   the   appellant,   in   all fairness, stated that the grounds urged in the said writ petition need   not   be   considered   at   this   stage   and   that   the   appeals preferred against the impugned judgment and order dated 5 th May, 2017 be examined on the basis of the prevailing statutory provisions,   including   the   rigors   of   Section   45   of   the   Act   of 2002. In other words, the challenge to the impugned judgment will have to be considered as per the prevailing provisions and not   with   reference   to   the   challenge   regarding   the   validity thereof.  15.   Reverting   to  the first contention of the appellant, that the reasons which weighed with the learned Single Judge of the High   Court   while   directing   interim   release   of   the   appellant, would apply  proprio vigore  for considering the regular bail.  In that,   the   learned   Single   Judge   vide   order  dated   10th  August, 2017 noted the following circumstances: i) ii) iii) Petitioner never tried to evade the investigation; The period of incarceration (7 ½ months); Submission   of   charge­sheet   in   the   main   case   on iv) 24/6/17; Illness of the mother of the Petitioner; 23 v) No definite reasons assigned by the Counsel for the Respondent   to   substantiate   allegation   that Petitioner   would   tamper   with   evidence   especially when   charge­sheet   in   the   main   case   has   been submitted. 16. The   argument   though   attractive   at   the   first   blush deserves   to   be   rejected.   In   our   opinion,   the   order   dated   10 th August,   2017   passed   by   the   High   Court   directing   interim release of the appellant was primarily on account of the illness of his mother. No more and no less. The other observations in the   said   order   will   have   no   bearing   on   the   merits   of   the controversy and required to be reckoned whilst considering the prayer for grant of regular bail.   For that, the appellant must succeed in overcoming the threshold of the rigors of Section 45 of the Act of 2002. Indubitably, the appellant having withdrawn the   regular   (second)   bail   application,   the   consideration   of prayer for grant of interim release could not have been taken forward. Besides, in the backdrop of the opinion recorded by the Co­ordinate Bench of the High Court (in its decision dated 5th  May, 2017) whilst considering the application for grant of regular bail, which was after filing of the initial complaint CC 24 No.700/2017   (on   23rd  February,   2017),   was   binding   until reversed or a different view could be taken because of changed circumstances. Suffice it to observe that indulgence shown to the appellant in terms of order dated 10 th August, 2017 will be of no avail.  In that, the facts such as the appellant never tried to evade the investigation or that he has suffered incarceration for over 7½ months or that the charge­sheet has been filed in the predicate offence registered under FIR No.205/2016 or the factum   of   illness   of   the   mother   of   the   appellant   or   the observation that no definite reason has been assigned by the respondents for substantiating the allegation that the appellant would tamper with the evidence, may become relevant only if the threshold stipulation envisaged under Section 45 of the Act of 2002 was to be fulfilled. The said provision reads thus: “45.  Offences to be cognizable and non­bailable.—(1) Notwithstanding anything contained in the Code of Criminal   Procedure,   1973   (2   of   1974),   no   person accused   of   an   offence   punishable   for   a   term   of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless­  (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and  25 (ii)   where   the   Public   Prosecutor   opposes   the   application, the   court   is   satisfied   that   there   are   reasonable grounds   for  believing  that   he  is  not   guilty  of  such offence   and   that   he   is   not   likely   to   commit   any offence while on bail:  Provided  that  a person  who  is  under  the  age  of  sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs:  Provided   further   that   the   Special   Court   shall   not   take cognizance   of   any   offence   punishable   under   section   4 except upon a complaint in writing made by—  (i) the Director; or  (ii)   any   officer   of   the   Central   Government   or   a   State Government   authorised   in   writing   in   this   behalf   by   the Central Government by a general or a special order made in this behalf by that Government.   (1A)   Notwithstanding   anything   contained   in   the   Code   of Criminal   Procedure,   1973   (2   of   1974),   or   any   other provision of this Act, no police officer shall investigate into an offence under this Act unless  specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.   (2)  The   limitation   on   granting   of   bail   specified   in sub­section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail.” (emphasis supplied)       The sweep of Section 45 of the Act of 2002 is no more res intergra.   In   a   recent   decision   of   this   Court   in   the   case   of Gautam   Kundu     Vs.   Directorate   of   Enforcement (Prevention   of   Money­Laundering   Act),   Government   of 26 India,1    this   Court   has   had   an   occasion   to   examine   it   in paragraphs 28­30.  It will be useful to advert to paragraphs 28 to 30 of this decision which read thus: “28.  Before dealing with the application for bail on merit, it is to be considered whether the provisions of Section 45 of the PMLA   are   binding   on   the   High   Court   while   considering   the application for bail under Section 439 of the Code of Criminal Procedure. There is no doubt that PMLA deals with the offence of money laundering and the Parliament has enacted this law as   per   commitment   of   the   country   to   the   United   Nations General Assembly. PMLA is a special statute enacted by the Parliament   for   dealing   with   money­laundering.   Section   5   of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will not affect any   special   statute   or   any   local   law.   In   other   words,   the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any conflict.  29 .  Section   45   of   the   PMLA   starts   with   a   non   obstante clause   which   indicates   that   the   provisions   laid   down   in Section   45   of   the   PMLA   will   have   overriding   effect   on   the general provisions of the Code of Criminal Procedure in case of conflict between them. Section 45 of the PMLA imposes following two conditions for grant of bail to any person accused   of   an   offence   punishable   for   a   term   of imprisonment of more than three years under Part­A of the Schedule of the PMLA:  (i) That the prosecutor must be given an opportunity to oppose the application for bail; and  (ii) That   the   Court   must   be   satisfied   that   there   are reasonable   grounds   for   believing   that   the   accused person is not guilty of such offence and that he is not likely to commit any offence while on bail.  30 .  The conditions specified under Section 45 of the PMLA are   mandatory   and   needs   to   be   complied   with   which   is further strengthened by the provisions of Section 65 and also 1 (2015) 16 SCC 1 27 Section   71   of   the   PMLA.   Section   65   requires   that   the provisions   of   Cr.P.C.   shall   apply   in   sofaras   they   are   not inconsistent   with   the   provisions   of   this   Act   and   Section   71 provides that the provisions of the PMLA shall have overriding effect   notwithstanding   anything   inconsistent   therewith contained in any other law for the time being in force. PMLA has an overriding effect and the provisions of Cr.P.C. would apply only if they are not inconsistent with the provisions of this Act. Therefore, the conditions enumerated in Section 45 of PMLA   will   have   to   be   complied   with   even   in   respect   of   an application for bail made under Section 439 of Cr.P.C.  That coupled with the provisions of Section 24 provides that unless   the   contrary   is   proved,   the   Authority   or   the Court shall presume that proceeds of crime are involved in money laundering and the burden to prove that the proceeds   of   crime   are   not   involved,   lies   on   the appellant.”         (emphasis supplied) 17. In paragraph 34, this Court reiterated as follows:    34. “xxx   xxx xxx    We have noted that Section 45 of the PMLA will have overriding effect on the general provisions of the   Code   of   Criminal   Procedure   in   case   of   conflict   between them. As mentioned earlier, Section 45 of the PMLA imposes two conditions for grant of bail, specified under the said Act. We have not missed the proviso to Section 45 of the said Act which   indicates   that   the   legislature   has   carved   out   an exception for grant of bail by a Special Court when any person is under the age of 16 years or is a woman or is a sick or infirm.   Therefore,   there   is   no   doubt   that   the   conditions   laid down under Section 45­A of the PMLA, would bind the High Court as the provisions of special law having overriding effect on   the   provisions   of   Section   439   of   the   Code   of   Criminal Procedure   for   grant   of   bail   to   any   person   accused   of committing offence punishable under Section 4 of the PMLA, even when the application for bail is considered under Section 439 of the Code of Criminal Procedure.” 28 The decisions of this Court in the case of  Subrata Chattoraj Vs. Union of India,2  Y.S. Jagan Mohan Reddy Vs. CBI 3, and Union of India Vs. Hassan Ali Khan 4   have been noticed in the aforesaid decision.  18. The consistent view taken by this Court is that economic offences   having   deep­rooted   conspiracies   and   involving   huge loss of public funds need to be viewed seriously and considered as   grave   offences   affecting   the   economy   of   the   country   as   a whole and thereby posing serious threat to the financial health of the country.   Further, when attempt is made to project the proceeds   of   crime   as   untainted   money   and   also   that   the allegations may not ultimately be established,  but having been made,   the   burden   of   proof   that   the   monies   were   not   the proceeds of crime and were not, therefore, tainted shifts  on the accused persons under Section 24 of the Act of 2002. 19. It   is   not   necessary   to   multiply   the   authorities   on   the sweep   of   Section   45   of   the   Act   of   2002   which,   as aforementioned,   is   no   more  res   integra.   The   decision   in   the 2 (2014) 8 SCC 768 3 (2013) 7 SCC 439 4 (2011) 10 SCC 235 29 case   of  Ranjitsing   Brahmajeetsing   Sharma   Vs.   State   of Maharashtra   and   Anr.,5  and  State   of   Maharashtra   Vs. Vishwanath   Maranna   Shetty,6  dealt   with   an   analogous provision in the Maharashtra Control of Organised Crime Act, 1999.   It   has   been   expounded   that   the   Court   at   the   stage   of considering the application for grant of bail, shall consider the question   from   the   angle   as   to   whether   the   accused   was possessed of the requisite mens rea.  The Court is not required to record a positive finding that the accused had not committed an   offence   under   the   Act.   The   Court   ought   to   maintain   a delicate   balance   between   a   judgment   of   acquittal   and conviction   and   an   order   granting   bail   much   before commencement of trial. 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.  Further, the Court is   required   to   record   a   finding   as   to   the   possibility   of   the accused committing a crime which is an offence under the Act after   grant  of   bail.    In  Ranjitsing  Brahmajeetsing Sharma 5 (2005) 5 SCC 294 6  (2012) 10 SCC 561 30 (supra),  in paragraphs 44 to 46 of the said decision, this Court observed thus: “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 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 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 Sub­section (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 31 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.” 20. Reverting   to   the   decision   in   the   case   of  Manoranjana Sinh Vs. Central Bureau of Investigation,7  we hold that the same is on the facts of that case.   Even in the said decision, the Court has noted that the grant or denial of bail is regulated to a large extent by the facts and circumstances of each case. In   the   case   of  Sanjay   Chandra   Vs.   Central   Bureau   of Investigation,8   the Court was not called upon to consider the efficacy   of   Section   45   of   the   Act   of   2002   which   is   a   special enactment.  21. Keeping in  mind the dictum  in the aforesaid decisions, we find no difficulty in upholding the opinion recorded by the Sessions Court as well as the High Court in this regard.  In our opinion,   both   the   Courts   have   carefully   analysed   the allegations   and   the   materials   on   record   indicating   the complicity   of   the   appellant   in   the   commission   of   crime punishable under Section 3/4  of the Act of 2002. The Courts 7  (2017) 5 SCC 218 8  (2012) 1 SCC 40 32 have maintained the  delicate balance between the judgment of acquittal   and   conviction   and   order   granting   bail   before commencement   of   trial.   The   material   on   record   does   not commend us to take a contrary view.   22. Realizing this position, the learned counsel appearing for the appellant would contend that even if the allegations against the   appellant   are   taken   at   its   face   value,   the   incriminating material   recovered   from   the   appellant   or   referred   to   in   the complaint, by no stretch of imagination, would take the colour of   proceeds   of   crime.     In   fact,   there   is   no   allegation   in   the charge­sheet   filed   in   the   scheduled   offence   case   or   in   the prosecution   complaint   that   the   unaccounted   cash   deposited by the appellant is as a result of criminal activity.  Absent this basic   ingredient,   the   property   derived   or   obtained   by   the appellant would not become proceeds of crime. To examine this contention, it would be useful to advert to Sections 3 and 4 of the Act of 2002.  The same read thus:  “3.   Offence   of   money­laundering.­  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 proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming  it as 33 untainted   property   shall   be   guilty   of   offence   of   money­ laundering. 4.   Punishment   for   money­laundering.­  Whoever   commits the   offence   of   money­laundering   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 money­laundering   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.” 23. As the fulcrum of Section 3 quoted above, is expression ‘proceeds of crime’, the dictionary clause in the form of Section 2(1)(u) is of some relevance. The same reads thus:     “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;” It   will   be   useful   to   advert   to   the   meaning   of   expression “property”   as   predicated   in   Section   2(1)(v).   The   same   reads thus: “2(1)(v)  “property”   means   any   property   or   assets   of   every description,   whether   corporeal   or   incorporeal,   movable   or immovable,   tangible   or   intangible   and   includes   deeds   and 34 instruments evidencing title to, or interest in, such property or assets, wherever located; The expression ‘scheduled offence’ has been defined in Section 2(1)(y) of the Act of 2002. The same reads thus: “2(1)(y) ‘scheduled offence’  means­ (i) the offences specified under Part A of the Schedule; or  (ii) the offences specified under Part B of the Schedule if the total value involved in such offences is  one crore rupees or more; or (iii) the offences specified under Part C of the Schedule;” Indisputably,   the   predicate   offence   is   included   in   Part   A   in paragraph 1 of the Schedule in the Act of 2002, in particular Sections   420,   467,   471   and   120B   of   IPC.   Indeed,   the expression “criminal activity”  has not been defined. By its very nature the alleged activities of the accused referred to in the predicate   offence   are   criminal   activities.   The   possession   of demonetized currency in one sense, ostensibly, may appear to be   only   a   facet   of   unaccounted   money   in   reference   to   the provisions   of   the   Income   Tax   Act   or   other   taxation   laws. However,   the   stated   activity   allegedly   indulged   into   by   the accused   named   in   the   commission   of   predicate   offence   is replete with mens rea. In that, the concealment, possession, 35 acquisition or use  of the property by projecting or claiming it as untainted property and converting the same by bank drafts, would   certainly   come   within   the   sweep   of   criminal   activity relating to a scheduled offence. That would come within the meaning of Section 3 and punishable under Section 4 of the Act, being a case of money­laundering. The expression ‘money­ laundering’  is defined thus: “2(1)(p)  “money­laundering” has the meaning assigned to it in section 3; 24. The appellant then relies upon the decision in the case of Gorav   Kathuria   Vs.   Union   of   India,9  of   the   Punjab   and Haryana   High   Court   which   has   taken   the   view   that   Section 45(1) of the Act of 2002 requires to be read down to apply only to those scheduled offences which were included prior to the amendment in 2013 in the Schedule. It is contended that the offence, in particular, under Sections 420, 467 and 471 of IPC, may not be treated as having been included in the scheduled offences  for   the  purpose of the Act of 2002.   Further, if any other view was to be taken, the provision would be rendered ultra vires. We are in agreement with the stand taken by the 9 (2016 SCC Online P & H 3428 36 respondents that the appellant cannot be permitted to raise the grounds urged in the writ petition, hearing whereof has been deferred on the request of the appellant.   In other words, the appellant should be in a position to persuade the Court that the   allegations   in  the  complaint  and the materials on record taken   at   its   face   value   do   not   constitute   the   offence   under Section 3 read with the schedule of the Act of 2002 as in force. 25. It   has   been   brought   to   our   notice   that   the   decision   in Gorav  Kathuria  (supra) was challenged before this Court by way   of   Criminal   Appeal   No.737   of   2016,   which   has   already been   dismissed   on   12th  August,   2016.     The   order   originally passed on the said criminal appeal reads thus:  “Though the High Court has granted certificate to appeal, after arguing the matter for some time, learned counsel for the petitioner concedes that the impugned judgment of the High Court is correct.  This appeal is, accordingly, dismissed.” However,   that   order   has   been   subsequently   revised   which reads thus: “Though the High Court has granted certificate to appeal, we have heard the learned counsel for some time and are of the opinion that the impugned judgment of the High Court is correct. 37  This appeal is, accordingly, dismissed.” At the same time the respondents have drawn our attention to a  chart  contained   in their   written submissions   pointing  out that   other   High   Courts   have   disagreed   with   the   principle expounded   in  Gorav   Kathuria’s  case.   The   said   chart   reads thus:    (i) Crl. Misc. Application (for Regular Bail)  No.7970/17 Jignesh Kishorebhai Bajiawala vs. State of Gujarat & Ors. Manu/GJ/1035/2017 High Court of  Gujarat (ii) Crl. Petition No.366/2017 SC Jayachandra vs Enforcement  Directorate, Bangalore 2017 (349) ELT 392 KAR High Court of  Karnataka at  Bengaluru (iii)  WP[Crl.] No.333 of 2015 Kishin S. Loungani vs. UOI & ors. (2017) 1 KHC 355 High Court of  Kerala at  Ernakulam (iv) Crl. Mic. Application (for Regular Bail)  No.30674/16 Pradeep Nirankarnath Sharma vs  Directorate of Enforcement 2017 (350) ELT 449 (GUJ) High Court  Gujarat at  Ahmedabad (v)  Crl. Writ Petition No.3931/2016 Chhagan Chandrakant Bhujbal vs Union  of India & Ors. 2016 SCC Online Bom 9983 High Court  of  Bombay 38 26. For the time being,  it is not necessary for us to examine the issues arising from the decision of the Punjab and Haryana High   Court   or   the   rejection   of   criminal  appeal   by   this   Court against that decision. The constitutional validity of Section 45 of the Act of 2002   will have to be examined by this Court in the writ petition on its own merits. The summary dismissal of criminal   appeal   will   not   come   in   the   way   of   considering   the correctness   of   the   decision   of   the   Punjab   and   Haryana   High Court   in   view   of   the   conflict   of   opinion   with   the   other   High Courts. 27. Suffice it to observe that the appellant has not succeeded in   persuading   us   about   the   inapplicability   of   the   threshold stipulation   under   Section   45   of   the   Act.     In   the   facts   of   the present case, we are in agreement with the view taken by the Sessions Court and by the High Court. We have independently examined   the   materials   relied   upon   by   the   prosecution   and also   noted     the   inexplicable   silence   or   reluctance   of   the appellant in disclosing the source from where such huge value of   demonetized   currency   and   also   new   currency   has   been acquired by him.   The prosecution is relying on statements of 39 26   witnesses/accused  already  recorded, out  of  which   7 were considered   by   the   Delhi   High   Court.     These   statements   are admissible in evidence, in view of Section 50 of the Act of 2002. The same makes out a formidable case about the involvement of the appellant in commission of a serious offence of money­ laundering.   It   is,   therefore,   not   possible   for   us   to   record satisfaction that there are reasonable grounds for believing that the appellant is not guilty of such offence.  Further, the Courts below have justly adverted to the antecedents of the appellant for considering the prayer for bail and concluded that it is not possible to hold that the appellant is not likely to commit any offence ascribable to the Act of 2002 while on bail.  Since the threshold   stipulation   predicated   in   Section   45   has   not   been overcome,   the   question   of   considering   the   efficacy   of   other points urged by the appellant to persuade the Court to favour the appellant with the relief of regular bail will be of no avail. In other   words,   the   fact   that   the   investigation   in   the   predicate offence   instituted   in   terms   of   FIR   No.205/2016     or   that   the investigation   qua   the   appellant   in   the   complaint   CC No.700/2017 is completed; and that the proceeds of crime is already   in   possession   of   the   investigating   agency   and 40 provisional attachment order in relation thereto passed on 13 th February, 2017 has been confirmed; or that charge­sheet has been  filed  in  FIR  No.205/2016 against the appellant without his   arrest;   that   the   appellant   has   been   lodged   in   judicial custody since 2nd January, 2017 and has not been interrogated or   examined   by   the   Enforcement   Directorate   thereafter;   all these will be of no consequence.  28. It   was   urged   on   behalf   of   the   appellant   that Demonetization Notification dated 8th November, 2016 imposes no limit in KYC compliant  accounts on the quantum of deposit and   no   restrictions   on   non­cash   transactions.     The   relevant portion of the said notification reads thus:    “(iii) there shall not be any limit on the quantity or value of specified bank notes to be credited to the account maintained with the bank by a person, where the specified bank notes are tendered; however, where compliance with extant Know Your Customer (KYC) norms is not complete in an account, the maximum value of specified bank notes as may be deposited shall be Rs. 50,000/­; (vii)  there shall be no restriction on the use of any non­cash method   of   operating   the   account   of   a   person   including cheques, demand drafts, credit or debit cards, mobile wallets and electronic fund transfer mechanisms or the like;”  41 We   fail   to   understand   as   to   how   this   argument   can   be countenanced.  The fact that no limit for deposit was specified, would   not   extricate  the   appellant  from  explaining   the   source from where such huge amount has been acquired, possessed or used by him. The volume of demonetized currency recovered from   the   office   and   residential   premises   of   the   appellant, including   the   bank  drafts  in   favour   of   fictitious  persons  and also the new currency notes for huge amount, leave no manner of doubt that it was the outcome of some process or activity connected with the proceeds of crime projecting the property as untainted   property.   No   explanation   has   been   offered   by   the appellant to dispel the legal presumption of the property being proceeds of crime.   Similarly, the fact that the appellant has made declaration in the Income Tax Returns and paid tax as per   law   does   not   extricate   the   appellant   from   disclosing   the source of its receipt. No provision in the taxation laws has been brought   to     our     notice     which   grants     immunity   to   the appellant from prosecution for an offence of money­laundering. In   other   words,   the   property   derived   or   obtained   by   the appellant   was   the   result   of   criminal   activity   relating   to   a scheduled offence. The argument of the appellant that there is 42 no allegation in the charge­sheet filed in the scheduled offence case   or   in   the   prosecution   complaint   that   the   unaccounted cash   deposited   by   the   appellant   is   the   result   of   criminal activity, will not come to the aid of the appellant. That will have to be negatived in light of the materials already on record.  The possession   of   such   huge   quantum   of   demonetized   currency and   new   currency   in   the   form   of   Rs.2000/­   notes,   without disclosing   the   source   from   where   it     is   received   and   the purpose   for   which it is received, the appellant    has  failed to dispel the  legal presumption that he was involved in money­ laundering and the property was proceeds of crime.  29. Taking overall view of the matter, therefore, we are not inclined   to   interfere   with   the   well   considered   opinion   of   the Sessions   Court   and   the   High   Court   rejecting   the   prayer   for grant of regular bail to the appellant.  However, considering the fact that the appellant is in custody since 28 th December, 2016 and   the   offence   is   punishable   with   imprisonment   for   a   term extending to seven years only, but not less than three years, the Trial Court will be well advised to proceed with the trial on day­to­day basis expeditiously. We clarify that the Trial Court 43 must  examine the evidence/material brought on record during the   trial   on   its   own   merit   and   not   be   influenced   by   the observations in this decision which are limited for considering the prayer for grant of regular bail.  30. Accordingly,   the   appeals   are   dismissed   in   the   above terms.     …………………………….CJI.       (Dipak Misra)       …………………………..….J.        (A.M. Khanwilkar) …………………………..….J.        (D.Y. Chandrachud) New Delhi, Dated: 10th November, 2017.