Protection in predicate offence doesn't automatically extend to PMLA case says Delhi HC

The Delhi High Court has ruled that protection granted to an accused in a predicate offence does not automatically extend to separate proceedings under the Prevention of Money Laundering Act.

Justice Madhu Jain made the observation while denying anticipatory bail to businessman Ram Singh of Babaji Finance Group in a money laundering case filed by the Enforcement Directorate rejecting his argument that his fear of arrest should be weighed against protection previously granted to him by the Supreme Court in the underlying FIR.

"The protection granted in the predicate offence operates in the context of the said FIR and cannot by itself be construed as extending to the distinct and independent proceedings under the PMLA" the judge said in an order dated 18 August.

Economic offences form a distinct category and call for a different approach to bail the court said noting that such cases often involve deep-rooted conspiracies and serious financial repercussions for the country.

The ED had searched Singh's home in Delhi and recorded reasons to believe he was a key conspirator in the case. His counsel argued the scheduled offences chiefly involved cheating forged documents and property transactions under the SARFAESI Act with the main allegations directed at co-accused persons and said there was no claim that Singh himself had induced anyone to part with money or forged any document.

The ED opposed the plea saying Singh should have first approached the sessions court and had repeatedly failed to join the investigation despite several summonses. His presence was essential for confronting him with documentary and digital evidence the agency said adding that anticipatory bail at this stage would seriously hamper the probe.

The court noted that material on record traced proceeds of crime worth around Rs 26.18 crore to Singh and that neither he nor any authorised representative had appeared before the ED despite repeated summonses only a written reply had been filed through his lawyer which the court said reflected an attempt to avoid the inquiry.

"The petitioner has not been able to demonstrate that there are reasonable grounds for believing that he is not guilty of the offence alleged against him" the court said citing his conduct statements recorded under Section 50 of the PMLA and the financial trail from his bank accounts as sufficient material connecting him to the alleged proceeds of crime.

The anticipatory bail application was accordingly dismissed.