2018 (7) TMI 2155 - HC - Money Laundering

Court grants bail to petitioner in money laundering case under amended law, emphasizing personal liberty

Radhey Shyam Dubey [Third Bail] Versus U.O.I. Thru. Joint Director, Director Of Enforcement Lucknow

The court granted bail to the petitioner, who was accused of money laundering under the Prevention of Money Laundering Act. This decision was influenced ... Money Laundering - proceeds of crime - gist of the allegations against the petitioner is that the petitioner while serving as a Bank Manager granted loan to various persons out of which the petitioner took commission and laundered the money/proceeds of crime - Section 45 of PMLA - HELD THAT:- Provisions of Section 45 of the PMLA, as they exist on date, provide that a person may be released on bail or on his own bond if bail applicant is under the age of sixteen years, or is a woman or is sick or infirm, or is accused either on his own or along with other co-accused of money laundering a sum of less than one crore rupees - Sub Section (2) of Section 45 of the PMLA further provides that limitation on granting of bail specified in Sub Section(1) is in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for the time being in force on granting of bail - Inversely, the provisions of Section 45 of the PMLA provide that the persons not falling in the above noted categories would not be entitled to be released on bail. An accused person who enjoys freedom is in a much better position to look after his case and to properly defend himself than if he were in custody. A presumably innocent person must have his freedom to enable him to establish his innocence. There cannot be an inexorable formula in the matter of granting bail. The facts and circumstances of each case will govern the exercise of judicial discretion in granting or cancelling bail. The petitioner is facing proceedings at the instance of Enforcement Directorate in view of case registered by Central Bureau of Investigation (CBI). In the CBI case also, the petitioner remained in custody from 4.7.2011 till 24.2.2012. The petitioner has been on bail in the CBI case. The CBI case formulates the basis for the Enforcement Directorate to proceed against the petitioner - We have also taken notice of the past conduct of the petitioner. No material has been placed before us to indicate that the petitioner has tried to influence the investigation by way of tampering with the evidence, influencing the witnesses or manipulating the records or overawing any authority or person. We cannot lose sight of the punishment provided under the PMLA. The punishment provided in the case of the petitioner is to be not less than three years but may extend upto seven years. The petitioner, at the cost of repetition, has already been in custody for nearly two years and seven months - Considering the spirit of the law guiding the granting or rejecting the application for bail, we are of the considered opinion that the petitioner is entitled to the grant of bail. Bail application allowed. Issues Involved:1. Application for bail under the Prevention of Money Laundering Act, 2002 (PMLA).2. Changes in the legal framework of Section 45 of PMLA.3. Previous bail applications and their rejections.4. Supreme Court's stance on bail under PMLA.5. Legislative amendments and their impact on bail provisions.6. Judicial discretion and principles governing the grant of bail.Issue-wise Detailed Analysis:1. Application for Bail under PMLA:The petitioner applied for bail in a case involving allegations of money laundering under Sections 3/4 of the PMLA. The petitioner, a former bank manager, was accused of granting loans in exchange for commissions and laundering Rs. 38,95,938/-. The petitioner had been in custody since 15.01.2016 after surrendering to the court process.2. Changes in the Legal Framework of Section 45 of PMLA:The court noted significant changes in Section 45 of the PMLA, which initially imposed stringent conditions for granting bail. The Supreme Court in 'Nikesh Tarachand Shah vs. Union of India' struck down sub-clauses (i) and (ii) of Subsection (1) of Section 45 as unconstitutional. Consequently, the legislative amendment further modified the provision, making it less restrictive for granting bail.3. Previous Bail Applications and Their Rejections:The petitioner’s earlier bail applications were rejected by the trial court and the High Court. The Supreme Court also dismissed the bail application but allowed the petitioner to raise the plea before the trial court. The current bail application was pressed on fresh grounds due to changes in Section 45 of PMLA.4. Supreme Court's Stance on Bail under PMLA:The Supreme Court's judgment in 'Nikesh Tarachand Shah' emphasized that the twin conditions for bail under Section 45 were unconstitutional. The apex court underscored the importance of personal liberty and directed that bail applications be considered on merits without the twin conditions.5. Legislative Amendments and Their Impact on Bail Provisions:The legislative amendment to Section 45 of PMLA, published on 29th March 2018, replaced the words 'punishable for a term of imprisonment of more than three years under Part A of the Schedule' with 'under this Act'. It also provided that individuals accused of laundering less than one crore rupees could be released on bail.6. Judicial Discretion and Principles Governing the Grant of Bail:The court highlighted the principles governing bail, noting that bail is the rule and jail is the exception. The primary consideration is whether the accused will appear for trial. The court emphasized that bail should not be withheld as punishment and should be granted unless there is a risk of the accused tampering with evidence or influencing witnesses.Conclusion:The court, considering the amended provisions of Section 45 of PMLA and the Supreme Court’s judgment, granted bail to the petitioner. The petitioner had cooperated during the investigation and had already been in custody for over two years and seven months. The court directed the petitioner to be released on bail, subject to conditions ensuring the trial's integrity. The prosecuting agency was given liberty to seek cancellation of bail if the petitioner delayed trial proceedings or influenced witnesses.