Prem Prakash v. Union of India through Directorate of Enforcement 2024 INSC 637

 Case name: Prem Prakash v. Union of India through Directorate of Enforcement

Citation: 2024 INSC 637; Criminal Appeal arising out of SLP (Crl.) No. 5416 of 2024, Supreme Court of India​

Date of judgment: 28 August 2024​

Bench / Judges: B. R. Gavai and K. V. Viswanathan, JJ. (judgment by K. V. Viswanathan, J.)​

 

Facts

An FIR (Sadar P.S. Case No. 399 of 2022, Ranchi) alleged that a one‑acre plot at Cheshire Home Road, Ranchi, was fraudulently acquired through forged title documents and sham sale transactions involving various accused; the FIR did not name Prem Prakash. Since sections 420 and 467 IPC are scheduled offences, the Enforcement Directorate (ED) registered ECIR No. 5 of 2023 under the PMLA. ED alleged that ₹1.01 crore out of the sale consideration flowed, via accounts of Punit Bhargava, to M/s Jamini Enterprises, said to be beneficially owned by Prem Prakash, and that he used his connections to get the land mutated and facilitate the deal. He was arrayed as A‑8, arrested on 11 August 2023 (while already in custody in another ECIR), and his bail application under section 45 PMLA was rejected by the Special Court and by the Jharkhand High Court.​

 

Judgment / Holding

The Supreme Court allowed the appeal, set aside the High Court’s order dated 22 March 2024, and directed that Prem Prakash be released on bail in ECIR No. 5 of 2023 on furnishing a bond of ₹5 lakh with two sureties, subject to conditions (surrender of passport, weekly reporting to the IO, and non‑tampering with evidence). Applying section 45 PMLA in light of Vijay Madanlal Choudhary and Manish Sisodia (II), the Court held that there were reasonable grounds to believe the appellant was not guilty of the alleged money‑laundering offence and was not likely to commit any offence while on bail, particularly given over a year’s incarceration, non‑commencement of trial, and weak material linking him to the forged sale deed or “proceeds of crime.”​

 

Key observations

• The Court reaffirmed that even under PMLA “bail is the rule, jail the exception,” as a facet of Article 21, and that section 45 imposes stringent but not absolute restraints; courts at the bail stage need only form a prima facie view on “reasonable grounds for believing” based on probabilities, not proof beyond reasonable doubt.​
• It stressed that under section 24 PMLA the prosecution must first establish three foundational facts (existence of scheduled crime, derivation of property as proceeds of crime, and the accused’s involvement in a process or activity connected with such proceeds) before the statutory presumption and twin conditions can operate.​
• The Court held that statements of the appellant recorded under section 50 PMLA while he was already in judicial custody in another ED case are hit by section 25 of the Evidence Act and cannot be used against him, and that co‑accused statements (e.g., Afshar Ali, Saddam Hussain) have only limited corroborative value akin to section 30 Evidence Act.​

 

Obiter dicta

• The judgment clarifies that when a person is in custody in one PMLA case, any statement the same agency records under section 50 in another ECIR cannot safely be treated as voluntary; to admit it against the maker would offend fair‑procedure requirements under Article 21 and the protective logic of section 25 Evidence Act.​
• It emphasises the importance of detailed, case‑specific counter‑affidavits by ED in bail matters, explaining how the three foundational facts are made out, rather than relying on generic assertions; only then can the presumption under section 24 shift the burden to the accused.​
• Relying on recent PMLA bail decisions, the Court reiterates that prolonged pre‑trial custody, especially where trial is nowhere near conclusion and the case does not involve extreme offences or massive public victimisation, should weigh heavily in favour of conditional liberty; pre‑trial detention must not become “punishment without trial.”​