2021 (2) TMI 1255 - HC - Money Laundering

Petitioner Granted Bail in Money Laundering Case

The court granted bail to the petitioner in a case involving offences under the Prevention of Money Laundering Act, 2002. The court considered the ... Seeking grant of Bail - bribe - allegation of disproportionate assets - offences under Sections 7, 13(1)(d) and 13(2) of the Prevention of Corruption Act and Sections 384 and 120-B of IPC - HELD THAT:- The Apex Court in Nikesh Tarachand Shah [2017 (11) TMI 1336 - SUPREME COURT] held Section 45 of the Act of 2002 unconstitutional “as a whole”. The Apex Court observed that Section 45 of the Act of 2002 was a drastic provision and is inconsistent with the principle of “presumption of innocence”. The Apex Court further observed that Section 45 of the Act of 2002 is akin to Section 20(8) of the TADA and that the latter was upheld only because it was imminent for the State to deal with terrorist activities. The amendment, which has been incorporated under Section45 of the Act of 2002 substitutes the words “under this Act” for“punishable for a term of imprisonment of more than three years under Part A of the Schedule”. Prior to the amendment, Section 45of the Act of 2002 was applicable to offences punishable for a term of imprisonment of more than three years under Part A of the Schedule, however, after the amendment, Section 45 of the Act of 2002 was made applicable to the offences punishable under the Act. If this amendment is to be taken note of, even for offences, which are punishable for 3 years, the twin condition shave to be considered - The Apex Court in Nikesh Tarachand Shah case has already declared the twin conditions as void and unconstitutional being violative of Articles 14 and 21 of the Constitution of India and has directed the High Courts to decide the bail application ignoring the twin conditions. Merely by an amendment and substitution of some words and insertion of the Explanation, the twin conditions would not be revived, as the twin conditions were held to be violative of Articles 14 and 21 of the Constitution. The petitioner was granted bail in the predicate FIR way back on 23.8.2017. As far as assets purchased by the petitioner is concerned, it is a flat worth ₹ 14 lacs. The petitioner himself is MBBS, MD (Pediatrics). There is no chance of his fleeing from justice or threatening the witnesses as the witnesses in this case are government personnel - the sentence provided under the Act of 2002 ranges from 3 years to 7 years, that the petitioner has remained in custody for a period of 5 months, that conclusion of the trial will take time and that the petitioner has been given benefit of bail in predicate FIR, it is deemed proper to allow the present bail application. Bail application allowed. Issues:Bail application under Section 439 Cr.P.C. for offences under Prevention of Money Laundering Act, 2002 - Consideration of twin conditions under Section 45 of the Act of 2002 - Constitutional validity of Section 45 - Grant of bail based on legal precedents - Opposing arguments by Directorate of Enforcement.Analysis:Issue 1: Bail Application under Section 439 Cr.P.C.The petitioner filed a bail application under Section 439 Cr.P.C. concerning ECIR No. JPZO/02/2014 registered by the Enforcement Directorate for offences under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002.Issue 2: Consideration of Twin Conditions under Section 45 of the Act of 2002The petitioner's counsel argued that the twin conditions under Section 45 of the Act of 2002 were declared unconstitutional by the Supreme Court in Nikesh Tarachand Shah case, citing violation of Articles 14 and 21 of the Constitution of India. The petitioner's counsel contended that the twin conditions should not be revived even after an amendment to the Act.Issue 3: Constitutional Validity of Section 45The court analyzed the constitutional validity of Section 45 of the Act of 2002 in light of the Nikesh Tarachand Shah case. The court noted that the twin conditions were held to be void and unconstitutional, and subsequent amendments did not revive them, as they were deemed violative of fundamental rights.Issue 4: Grant of Bail Based on Legal PrecedentsThe petitioner's counsel relied on legal precedents such as Nikesh Tarachand Shah case, Sanjay Chandra case, P. Chidambaram case, and Arnab Manoranjan Goswami case to support the bail application. These cases emphasized the importance of considering factors like severity of punishment, nature of accusation, and prima facie satisfaction of the court in support of the charge when granting bail.Issue 5: Opposing Arguments by Directorate of EnforcementThe Directorate of Enforcement opposed the bail application, arguing that the petitioner was involved in money laundering, held directorial positions in companies, and was a trustee in a trust involved in financial transactions. The Directorate contended that the twin conditions were revived post-amendment and cited the decision in Upendra Rai case to support their stance.In conclusion, the court allowed the bail application, considering factors such as the petitioner's professional background, minimal chance of fleeing from justice, and the prolonged period of custody. The court emphasized the importance of timely consideration of bail applications and upheld the decision based on legal principles and precedents, disregarding the revived twin conditions under Section 45 of the Act of 2002.