Failure to Satisfy Section 45 PMLA Twin Conditions Precludes Bail Despite Alleged Role as Victim in Predicate Offence

The Petitioner, former CFO of Reliance Power Limited (RPL), was arrested on 10.10.2025 by the Directorate of Enforcement (ED) in connection with ECIR/STF/14/2025.

The case originated from FIRs alleging that RPL, through its subsidiary, submitted forged Bank Guarantees (BGs) worth ₹68.20 Crores and fabricated SBI endorsements to the Solar Energy Corporation of India (SECI) for a tender.

The ED alleged that ₹11.73 Crores constituted proceeds of crime channeled via agreements executed by the Petitioner.

The Petitioner contended he was a victim of fraud by a third-party agent (BTPL) and had himself lodged the initial police complaint.

After the Trial Court dismissed his bail plea on 11.03.2026, he moved the High Court for regular bail.

1. Whether the Petitioner satisfied the "twin conditions" for bail under Section 45 of the Prevention of Money Laundering Act (PMLA), 2002.

2. Whether the continued detention of the Petitioner for over eight months, considering the trial had not commenced, entitled him to bail on grounds of "pre-trial punishment".

The Court applied Section 45 of the PMLA, which mandates that bail can only be granted if there are "reasonable grounds" to believe the accused is not guilty and is unlikely to commit any offence while on bail.

The Court acknowledged the burden of proof under Section 24 of the PMLA regarding proceeds of crime.

The Court referenced Vijay Madanlal Choudhary v. Union of India regarding the constitutionality of Section 45.

The Court referenced Pankaj Bansal v. Union of India regarding the requirements for a valid arrest.

The Court noted the admissibility of statements recorded under Section 50 of the PMLA at the bail stage as per Rohit Tandon v. Directorate of Enforcement.

The Court examined the ED’s evidence, specifically Section 50 statements and WhatsApp communications.

The ED presented a statement from one Amar Nath Dutta alleging the Petitioner insisted on obtaining a hard copy of a BG despite knowing the issuing bank did not provide them.

Electronic evidence suggested the Petitioner personally suggested modifications to the issuing bank's particulars and provided instructions for forged endorsements.

While the Petitioner argued he acted in professional good faith and was the original complainant, the Court held that at the bail stage, it cannot ignore incriminating material or undertake a detailed trial-like appreciation of evidence.

The Court found the electronic trail and statements established a prima facie link to the alleged conspiracy.

The Court dismissed the bail application, holding that the Petitioner failed to satisfy the "twin conditions" under Section 45 of the PMLA.

The Court concluded that the period of eight months in custody was not sufficient grounds for bail given the seriousness of the economic offence.