Bail cancellation requires cogent evidence of supervening circumstances or misuse of liberty by the accused.

The applicant, Directorate of Enforcement (ED), sought the cancellation of regular bail granted to the respondents by the Special Judge Anticorruption (CBI cases), Jammu, vide order dated 26.11.2024

The case originated from an FIR registered by the CBI regarding the leakage of the JK Services Selection Board (JKSSB) examination for Sub-Inspectors

The ED alleged that the respondents were involved in money laundering, collecting approximately Rs. 2.52 Crore as proceeds of crime by disseminating leaked question papers

The respondents were arrested in mid-2024, and after the filing of the prosecution complaint under Section 44/45 of the PMLA, they were admitted to bail by the Special Court

The ED challenged the bail order on the grounds that the "twin conditions" of Section 45 PMLA were not satisfied and that the Special Court conducted a "mini-trial" of the evidence

The court primarily applied Section 45 of the PMLA, 2002, which mandates that bail can only be granted if the court is satisfied that there are reasonable grounds for believing the accused is not guilty and is unlikely to commit any offence while on bail

Regarding the cancellation of bail, the court relied on Section 483(3) of the BNSS (Section 439(2) CrPC) and the principles established in Dolat Ram Ors. v. State of Haryana, which require proof of interference with justice, evasion, or abuse of concession

It further applied the standard from Vijay Madanlal Choudhary v. Union of India, asserting that at the bail stage, the court must arrive at a finding based on "broad probabilities" rather than a meticulous weighing of evidence

The High Court examined whether the Special Court had ignored the statutory rigors of Section 45 PMLA. It observed that despite 14 days of ED custody, the prosecution failed to recover any proceeds of crime from the respondents or at their behest; only a portion (Rs. 25 lakhs) was recovered from other individuals who were not even arrested

The Court reasoned that the burden lies on the prosecution to produce material sufficient for the court to form a belief of guilt, which the ED failed to do

Furthermore, the Court distinguished between the "grant of bail" and the "cancellation of bail," noting that the ED failed to plead or prove any "supervening circumstances"—such as flouting bail conditions, tampering with witnesses, or misrepresenting facts—that are legally necessary to revoke an order of liberty

The Special Court's decision was found to be based on a tentative assessment of broad probabilities, in line with established precedents

The Court held that the Special Court had correctly applied the "broad probabilities" test under Section 45 PMLA and found no evidence that the respondents had misused their liberty or that the original bail order was perverse

The direct answer to the issues was that the mandatory satisfaction under Section 45 was sufficiently considered based on the lack of recovery, and no supervening circumstances existed to justify the cancellation of the respondents' freedom