Rajasthan High Court denies bail to Bikaner restaurateur in PMLA case, applies Section 45 twin conditions

Jaipur: The Rajasthan High Court has refused bail to a Bikaner-based restaurateur accused in a money-laundering case registered by the Directorate of Enforcement, holding that the petitioner failed to satisfy the twin conditions stipulated under Section 45 of the Prevention of Money Laundering Act, 2002, and that the mere filing of a prosecution complaint and taking of cognizance cannot, by themselves, be grounds to release an accused when the mandatory statutory requirements remain unmet.

Justice Praveer Bhatnagar, dismissing the bail application filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, observed that Section 45 of the PMLA contains a non-obstante clause which has an overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them, and the two conditions stipulated under that provision are mandatory in nature.

Citing the Supreme Court’s decision in Union of India v Kanhaiya Prasad, the bench reproduced the following passage:

“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. Section 45 imposes two conditions for the grant of bail to any person, accused of an offence punishable for a term of imprisonment of more than 3 years under Part A of the Schedule. The two conditions are that (i) the prosecutor must be given an opportunity to oppose the application for bail; and (ii) 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 liable to commit any offence while on bail. As well settled, these two conditions are mandatory in nature.”

The petition arose out of an ECIR dated 08.09.2025 registered by the Directorate of Enforcement, Zonal Office, Jaipur, for offences punishable under Sections 3 read with Section 70 and Section 4 of the PMLA. The accused-petitioner, aged about 45 years and a resident of Bikaner, was presently lodged in Central Jail Jaipur.

Learned counsel for the petitioner contended that the petitioner had been falsely implicated and that the arrest was illegal, arbitrary and contrary to the provisions of the PMLA. It was submitted that the petitioner belonged to a modest background and was engaged in a small-scale restaurant business under the name ‘Dubai Darbar’, besides carrying out charitable and religious activities through the ‘Al-Furkan Educational Trust’. The deposits reflected in the accounts of the petitioner, it was urged, pertained to income generated from the restaurant business, bona fide donations and routine financial dealings, which had been deliberately misconstrued as proceeds of crime. Counsel further submitted that substantial public contributions had been collected for the medical treatment of the petitioner’s wife, who was suffering from cancer.

The respondent-Directorate of Enforcement, appearing through Special Public Prosecutor, opposed the bail, relying on the prosecution complaint, statements recorded under Section 50 of the PMLA, recoveries effected during investigation, and the pattern of financial transactions reflected in the petitioner’s accounts.

The Court emphasised the reverse-burden provision in the statute. Referring to Section 24 PMLA, it noted:

“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.”

The bench further noted, again citing Kanhaiya Prasad, that the High Court had to record satisfaction of the twin conditions before enlarging an accused on bail, and that the mere filing of the prosecution complaint or taking of cognizance was not, by itself, a sufficient ground:

“Merely because the prosecution complaint had been filed and the cognizance was taken by the court that itself would not be the ground or consideration to release the respondent on bail, when the mandatory requirements as contemplated in Section 45 have not been complied with.”

Applying these principles, the Court held that, having regard to the material on record — including the prosecution complaint, the statements recorded under Section 50 of the PMLA, the recoveries effected during investigation and the financial transactions reflected in the accounts — sufficient material existed indicating prima facie involvement of the petitioner in the alleged offence, and the petitioner had failed to satisfy the twin conditions stipulated under Section 45 of the PMLA.

The bail application was accordingly dismissed. The Court clarified that the observations made in the order were only for the purpose of deciding the bail application and would have no bearing on the merits of the case at trial.

Title: Mohammed Sadeeque v Directorate of Enforcement

Case No.: S.B. Criminal Miscellaneous Bail Application No. 3319/2026

Counsel for petitioner: Mr. Javed Khan

Counsel for respondent: Mr. Ajatshatru Mina, Special Public Prosecutor-ED with Ms. Apeksha Tiwari, Mr. Manav Sharma and Mr. Rhythm Shrimal