Delhi HC Grants Bail in Spurious Cancer Drug Case Under PMLA, Says No Clear Link Between Proceeds of Crime & Predicate Offence [Read Order]

In a recent ruling, the Delhi High Court granted bail in a spurious cancer drug case under Prevention of Money Laundering Act (PMLA) saying that there is no clear link between the alleged proceeds of crime and the main offence.

The case came from many bail applications filed by accused persons after ED registered a case based on a Delhi Police FIR. The police had got information about a group making and selling fake cancer medicines. During raids, some persons were found filling and relabelling vials of costly cancer drugs without license.

The ED said that the accused were part of a network where empty vials were collected, filled with fake substances and sold as real medicines. It also said that money earned from this was proceeds of crime and moved through bank accounts and other ways.

The accused argued that their role was very limited and some of them were not even named in the main FIR. They argued that there is no proof they knew the drugs were fake. They also argued that their statements under Section 50 PMLA were not voluntary because they were in custody. They said many other persons with similar role were not arrested and they already spent more than two years in jail.

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The ED’s counsel argued that the offence is very serious because it involves life saving drugs. It said statements and money records clearly show involvement. The counsel argued that total money should be seen together and strict PMLA bail conditions should apply.

Justice Girish Kathpalia observed that ED must first show proper link between money and the main offence. The court observed that statements given in custody cannot be treated as fully voluntary if they are against the accused.

The court explained that the material on record does not clearly show that the money is connected with crime. It also observed that many drug samples were found genuine and it is not clear that accused knew about fake drugs.

The court pointed out that ED did not check important things like role of doctors, hospitals or end users. It also observed that some persons with similar role were not arrested which raises issue of fairness. The court further observed that accused are in jail for more than two years and trial will take long time. It explained that long jail time without trial affects personal liberty.

The court held that there are reasonable grounds to believe that accused are not guilty for bail purpose and they are not likely to commit offence if released. The court allowed bail and ordered release of accused with conditions. It also said that these observations are only for bail and will not affect final trial.

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