In an order passed on May 18, 2024, the XXI Additional City Civil and Sessions Judge (Principal Special Court for CBI Cases), Bengaluru (CCH-04), Sri Gangadhara C.M., B.Com., LL.B., allowed the anticipatory bail application in Criminal Miscellaneous Petition No. 2922/2024. The court granted pre-arrest bail protection to Ms. Shalini Jatwal in connection with Spl.C.C. No. 623/2023 (arising out of ED ECIR No. BGZO/03/2021), registered by the Directorate of Enforcement (ED), Government of India. The prosecution alleges offences under Sections 3, 4, 70, and 8(5) of the Prevention of Money Laundering Act, 2002 (PMLA).

Factual Matrix and Predicate Offence Background

The money laundering prosecution originated from predicate FIRs (Nos. 18/2020 and 19/2020) registered in December 2020 by the Cyber Crime Police Station, CID, Bengaluru, under Sections 384, 385, 419, and 420 IPC (extortion, cheating by personation, and cheating).

The Predicate Fraud Scheme

• Victim Exploitation: Complainants (including Ms. Pavitra M. and Ms. Vinditha) reported downloading mobile micro-loan applications (such as Kissht, My Bank, Money Box, Loan Gram, Coco Cash, Panda Rupee, Cashpot, and Need Rupee).
• Extortion & Defamation: The digital lending applications deducted exorbitant upfront processing fees and levied annual interest rates exceeding 36%. Upon disbursal, recovery agents systematically accessed contact lists, dispatched sexually explicit and abusive threats over WhatsApp, and circulated morphed images tagging victims as “Chor” (thief) to blackmail them into making recurring payments.
• Corporate Fronts & Shell Companies: Investigations by the CID and ED revealed a network of Non-Banking Financial Companies (NBFCs) and fintech shells—including M/s. Mad Elephant Network Technology Pvt. Ltd., M/s. X10 Financial Services Ltd., M/s. Baryonyx Technologies Pvt. Ltd., M/s. Track Fined Pvt. Ltd., M/s. Jamnadas Morarjee Finance Pvt. Ltd., and M/s. Cloud Atlas Future Technology Pvt. Ltd.—colluding with payment gateways like Razorpay to layer and siphon proceeds of crime.

Allegations Against the Petitioner

The ED alleged that M/s. Cloud Atlas Future Technology Pvt. Ltd. (Accused No. 6) was controlled by Chinese nationals (specifically referencing one Ms. Ru Zhonzhi) and operated the unauthorized loan app “Rupee Plus”. The company allegedly misused corporate credentials from M/s. Jamnadas Morarjee Finance Pvt. Ltd. to open payment accounts, fabricate documents, and extort funds from the public.

The ED implicated Ms. Shalini Jatwal as a named Additional Director of M/s. Cloud Atlas Future Technology Pvt. Ltd., holding her vicariously liable under Section 70 of the PMLA.

Profile of the Petitioner

• Name: Ms. Shalini Jatwal
• Parentage: Daughter of Sri Jai Bhagwan Jatwal
• Age: Approximately 38 years
• Professional Background: Former HR Manager at Sarvayoni Adyah Property Services Pvt. Ltd. (later renamed Repegon Technology Pvt. Ltd. / Concurrent Economy Pvt. Ltd.).
• Corporate Role: Appointed as Additional Director of M/s. Cloud Atlas Future Technology Pvt. Ltd. on August 22, 2020; resigned on December 18, 2020.
• Address / Venue: Registered Office at 12th & 14th Floor, Building No. 9, Tower B, Phase-III, DLF Cyber City, Gurugram, Haryana – 122 002.

Arguments Advanced

On Behalf of the Petitioner

1. Nominal Employee / Short Tenure: The petitioner argued that she was merely a salaried HR employee drawing a monthly salary from Concurrent Economy Pvt. Ltd. In May 2020, Chinese national Ms. Ru Zhonzhi offered her a short-term Additional Directorship, assuring her the company was non-operational.
2. Pre-FIR Resignation & Corporate Compliance: Upon discovering that the entity failed to maintain statutory compliance under the Companies Act, she tendered her resignation on December 18, 2020—prior to the registration of the predicate FIRs on December 21/22, 2020. She followed up with resignation emails on January 2, 2021, and notified the Registrar of Companies (ROC), Delhi, on May 28, 2021, when her name remained on the Ministry of Corporate Affairs (MCA) portal.
3. No Role in Day-to-Day Operations or Money Laundering: The petitioner had no involvement in acquiring, layering, or siphoning proceeds of crime, nor was she involved in running the “Rupee Plus” app or making harassing calls.
4. Cooperation with Predicate Investigators: She duly appeared before the Economic Offences Wing (EOW), CID, Bengaluru, following a Section 91 Cr.P.C. notice dated December 2, 2022. The CID did not arrest her.
5. Precedent on Arrest Post-Cognizance: Citing the Supreme Court judgment in Tarsem Lal v. Directorate of Enforcement (2024), the defence contended that since she was not arrested during investigation and the Special Court had taken cognizance, a well-founded apprehension of arrest existed if the ED sought further investigation under Section 44(1)(b) PMLA.

On Behalf of the Enforcement Directorate (Respondent)

1. Maintainability Challenge: The Special Public Prosecutor argued that since the Special Court had already taken cognizance in Spl.C.C. No. 623/2023 and issued summons, an anticipatory bail petition under Section 438 Cr.P.C. was not maintainable, and the petitioner ought to appear before the court directly.
2. Prima Facie Case: The ED contended that as a director of M/s. Cloud Atlas Future Technology Pvt. Ltd., the petitioner was actively involved in corporate actions that facilitated extortion and money laundering.
3. Section 45 PMLA Twin Conditions: The ED submitted that the stringent statutory bar under Section 45 PMLA applied, and the petitioner failed to prove she was not guilty.

Judicial Analysis and Legal Reasoning

The Special Court examined the maintainability of pre-arrest bail under PMLA and the satisfaction of Section 45 twin conditions:

1. Maintainability & Apprehension of Arrest (Tarsem Lal Principle)

The court addressed the ED’s objection regarding maintainability by relying on the landmark Supreme Court decision in Tarsem Lal v. Directorate of Enforcement [Criminal Appeal No. 2608/2024, decided May 16, 2024]:

• Under Para 23(j) of Tarsem Lal, when the ED conducts further investigation under Section 44(1)(b) regarding an offence, it retains the power under Section 19 PMLA to arrest a person not explicitly arrayed as an accused in the initial complaint.
• Because the ED reported that further investigation against M/s. Cloud Atlas Future Technology Pvt. Ltd. was active, and summons issued to its registered office had returned unserved with the endorsement “Left Premises”, the court held that the petitioner faced a genuine, well-founded apprehension of arrest.

2. Satisfaction of Section 45 PMLA Twin Conditions

To grant bail under Section 45 of the PMLA, the court evaluated whether reasonable grounds existed to believe the petitioner was not guilty and not likely to reoffend:

• Pre-FIR Resignation: Documentary evidence established that the petitioner tendered her resignation on December 18, 2020, before the predicate FIRs were registered. Her repeated emails to company management and the ROC Delhi demonstrated a bona fide effort to sever ties before criminal proceedings commenced.
• Lack of Operational Control: The court noted that the Chinese nationals controlled the company’s financial and operational decisions. No evidence demonstrated that the petitioner acted as Managing Director or possessed operational/signatory control over the bank accounts used for siphoning loan proceeds.
• Gender Proviso: The court observed that the petitioner is a woman, aligning with the beneficial proviso under Section 45(1) of the PMLA.
• No Bad Antecedents: The prosecution produced no evidence of prior criminal records or risk of flight.

Final Pre-Arrest Bail Order & Conditions

Answering Point No. 1 in the affirmative, Special Judge Sri Gangadhara C.M. allowed the petition under Section 438 Cr.P.C. and directed that in the event of arrest in connection with Spl.C.C. No. 623/2023, the Assistant Director, Enforcement Directorate, Bengaluru, shall release Ms. Shalini Jatwal on bail upon executing a personal bond for ₹1,00,000/- (Rupees One Lakh only) with two sureties for the likesum, subject to the following conditions:

1. Court Attendance: The petitioner shall appear before the Special Court on all hearing dates without fail, unless her presence is explicitly dispensed with.
2. ED Investigation Cooperation: The petitioner shall appear before the Investigating Officer as and when summoned and fully cooperate with ongoing investigation procedures.
3. Witness Protection: The petitioner shall not, directly or indirectly, induce, threaten, or promise any person acquainted with the facts of the case, nor tamper with prosecution evidence.
4. Passport & Travel Restrictions: The petitioner shall not leave India without obtaining prior permission from the Special Court.
5. Residential Address Update: The petitioner shall promptly inform the ED of any change in her residential address.

Note: Breach of any imposed condition grants the Investigating Officer liberty to apply for immediate cancellation of bail.