Supreme Court cancels bail granted to an accused in ED case

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The Supreme Court on Thursday (February 13, 2025) cancelled the bail granted to an accused in a sand mining case being investigated by the Enforcement Directorate and directed him to surrender before the special court concerned within one week.

Kanhaiya Prasad was arrested on September 18, 2023. He remained in incarceration for over seven months and the Patna High Court granted him bail on May 6, 2024. Considering the ED’s plea, the Supreme Court rejected his prayer to continue on bail till his bail application was decided afresh by the High Court.

“It is well settled position of law that Section 45 of the PMLA starting with a non-obstante clause has an overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them,” said the order, adding that “the conditions enumerated in Section 45 will have to be complied with even in respect of application for bail made under Section 439 of Cr.P.C”.

“Further, Section 24 provides that in case of a person charged with the offence of money-laundering under Section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering. Therefore, the burden to proof that proceeds of crime are not involved in money laundering would lie on the person charged with the offence,” it said.

The Court said: “It is no more res integra that the offence of money laundering is an independent offence regarding the process or activity connected with the proceeds of crime, which had been derived or obtained as a result of criminal activity relating to or in relation to a schedule offence. Hence, involvement in any one of such process or activity connected with the Proceeds of Crime would constitute offence of money laundering. This offence otherwise has nothing to do with the criminal activity relating to a schedule offence, except the Proceeds of Crime derived or obtained as a result of that crime.”

“As well settled, the offence of money laundering is not an ordinary offence. The PMLA has been enacted to deal with the subject of money laundering activities having transnational impact on financial systems including sovereignty and integrity of the countries…any casual or cursory approach by the Courts while considering the bail application of the offender involved in the offence of money laundering and granting him bail by passing cryptic orders without considering the seriousness of the crime and without considering the rigours of Section 45, cannot be vindicated,” said the order.