Supreme Court Sets Aside High Court's Grant of Bail in Money Laundering Case, Orders Fresh Consideration

On 12 May 12, 2023, Supreme Court of India, comprising Justices M.R. Shah and C.T. Ravikumar, has set aside the grant of bail by the High Court of Telangana in a case involving offences under the Prevention of Money Laundering Act, 2002 (PML Act, 2002). The apex court directed the High Court to reconsider the bail applications in light of the observations made.

The case pertains to an FIR registered by the Economic Offences Wing, Bhopal, which implicated several individuals and companies in offences punishable under various sections, including Sections 120-B, 420, 468, and 471 of the Indian Penal Code, Section 66 of the Information Technology Act, 2000, and Section 7(c) read with Section 13(2) of the Prevention of Corruption Act, 1988. The FIR revealed alleged tampering with eTenders to secure favorable bids for certain projects of the Madhya Pradesh Water Corporation, amounting to a staggering Rs. 1769.00 crores.

The Enforcement Directorate, Hyderabad, initiated a money laundering investigation, pursuant to the offences charged in the FIR. The respondent, Aditya Tripathi, one of the accused, had filed a bail application before the High Court. The High Court allowed the bail applications, stating that the investigation was completed and chargesheets had been filed.

However, the Directorate of Enforcement, the appellant, approached the Supreme Court, arguing that the High Court had failed to consider the rigour of Section 45 of the PML Act, which pertains to the release on bail in money laundering cases. The appellant contended that the investigation by the Enforcement Directorate was still ongoing, and the seriousness of the scheduled offences under the PML Act had not been adequately considered.

The Supreme Court, after hearing arguments from both parties, held that the High Court had indeed erred in not properly considering the rigour of Section 45 of the PML Act and the nature of the allegations. The Court emphasized that the investigation for scheduled offences under the PML Act was distinct from the investigation for the predicated offences. Merely filing chargesheets for the predicated offences could not be a valid ground for granting bail in connection with the scheduled offences under the PML Act.

Consequently, the Supreme Court set aside the High Court's decision to grant bail and ordered a fresh consideration of the bail applications. The Court instructed the respondent to surrender before the competent court or the concerned jail authority within one week from the date of the judgment. The matter was remitted back to the High Court for reevaluation in light of the Court's observations.

This judgment by the Supreme Court reaffirms the stringent provisions of the PML Act and highlights the importance of thorough investigations into money laundering offences. It serves as a reminder that the seriousness of such offences must be taken into account when considering bail applications, and investigations should continue independently of chargesheets filed for other related offences.

12 May 12, 2023

Directorate of Enforcement vs Aditya Tripathi