2015 (5) TMI 1080 - HC - Money Laundering

Court denies bail in global money laundering case involving drug proceeds transfer. Emphasizes witness tampering risk.

GAURAV GUPTA AND GAGANDEEP SINGH & ANR Versus DIRECTOR OF ENFORCEMENT

The court denied bail to the petitioners involved in a global money laundering network, transferring proceeds of crime from drug trafficking. ... Offences involving in money laundering - bail application - Held that:- As further investigation in the matter is still on and as per respondent, it may take one and half month to complete. The said statement was made two weeks ago. As the petitioners are in judicial custody, considering the offence serious in nature, thirty days are granted to the respondent to complete the further investigation as last chance. Thereafter, the petitioner would be entitled to move a fresh application for regular bail before trial court and same be decided on urgent basis. In the nature of the present case, without expressing any opinion on the merits of the case and also with regard to the claim of the respondent, the Court is not inclined to grant the relief of releasing the petitioner on bail at present as further investigation may prejudice the case of respondent. Issues Involved:1. Grant of bail under Section 439 read with Section 482 Cr.P.C.2. Involvement in money laundering under Section 3 of the Prevention of Money-Laundering Act, 2002.3. Jurisdiction of the court.4. Evidence and complicity in money laundering.5. Compliance with the Diplomatic and Consular Officers (Oath & Fees) Act, 1948.6. Allegations against Gaurav Gupta.7. Arguments for bail by petitioners.8. Prosecution's opposition to bail.9. Legal provisions and burden of proof under the Prevention of Money-Laundering Act, 2002.10. Applicability of Section 45 of the Act for bail.11. Further investigation and its impact on bail.Detailed Analysis:1. Grant of Bail under Section 439 read with Section 482 Cr.P.C.:The petitioners, who have been in custody since 25th September 2014, filed applications for bail under Section 439 read with Section 482 Cr.P.C. The applications were heard together.2. Involvement in Money Laundering under Section 3 of the Prevention of Money-Laundering Act, 2002:The Australian Federal Police conducted an investigation named 'Operation Zanella' which identified the petitioners as part of a global money laundering network. The Enforcement Directorate, based on a Mutual Assistance Request from Australian authorities, found that the petitioners were involved in transferring proceeds of crime generated from drug trafficking in Australia. Incriminating documents and currency were seized, and properties worth crores were identified as proceeds of crime.3. Jurisdiction of the Court:The petitioners argued that the alleged scheduled offence was committed in Amritsar, and thus, the court in New Delhi has no jurisdiction to try the offence. The court at Amritsar should have jurisdiction.4. Evidence and Complicity in Money Laundering:The petitioners contended that there was no evidence suggesting their direct or indirect involvement in money laundering. They argued that the evidence did not substantiate the allegations that they were involved in activities connected with proceeds of crime.5. Compliance with the Diplomatic and Consular Officers (Oath & Fees) Act, 1948:The petitioners argued that the authorities failed to comply with the rules, and the documents were not attested as required under the Diplomatic and Consular Officers (Oath & Fees) Act, 1948.6. Allegations against Gaurav Gupta:It was alleged that Gaurav Gupta was involved in an international syndicate laundering money generated from drug trafficking. He had regular transactions with the other petitioners and was in contact with individuals involved in money laundering activities. Gupta denied these allegations, stating he had no contact with the alleged individuals and had no bank account in Australia.7. Arguments for Bail by Petitioners:The petitioners argued that the statements recorded after their arrest were inadmissible. They also contended that the prosecution failed to establish any nexus between them and the scheduled offence. They emphasized that the restrictions under Section 45 of the Act do not apply as they were not accused of any scheduled offence under Part A of the Schedule.8. Prosecution's Opposition to Bail:The prosecution argued that the petitioners should not be granted bail due to the nature and gravity of the offence. They contended that the petitioners might influence witnesses or tamper with evidence. The prosecution emphasized that the offence of money laundering is continuous and that the petitioners were involved in significant transactions suspected to be proceeds of crime.9. Legal Provisions and Burden of Proof under the Prevention of Money-Laundering Act, 2002:The court referred to various provisions of the Act, including the definition of 'offence of money laundering' under Section 3, 'proceeds of crime' under Section 2(u), and the burden of proof under Section 24. The court also discussed the non-bailable nature of the offences under Section 45 and the conditions for granting bail.10. Applicability of Section 45 of the Act for Bail:The court noted that the petitioners were not accused of any scheduled offence under Part A of the Schedule. Therefore, the restrictions under Section 45 of the Act did not apply. However, the court emphasized the need to consider the nature of the offence and the evidence on record.11. Further Investigation and Its Impact on Bail:The court acknowledged that further investigation was ongoing, and letters of request had been sent to various countries for details of accounts and transactions. The court decided not to grant bail at this stage, allowing the prosecution 30 days to complete the investigation. The petitioners were granted the liberty to file fresh bail applications after the completion of the investigation.Conclusion:The applications for bail were disposed of, with the court granting the prosecution 30 days to complete the investigation. The petitioners were allowed to move fresh applications for bail thereafter. The court emphasized the seriousness of the offence and the need to wait for the final report before deciding on bail.