2019 (8) TMI 327 - HC - Money Laundering

High Court upholds bail orders in money laundering case under Prevention of Money Laundering Act

Directorate Of Enforcement Versus Gagan Dhawan, Ranjit Malik @ Johny

The High Court upheld the bail orders granted to the respondents in a money laundering case under the Prevention of Money Laundering Act. Despite ... Grant of Regular Bail - non-application of mid - principles of Natural Justice - HELD THAT:- It is settled position of law that that the parameters for cancellation of bail and the grounds for challenging the order of grant of bail on the ground of arbitrary exercise of discretion, are altogether different. In matters of grant of bail, the merits of the case are not required to be gone into in detail. The court below in the impugned orders has taken note of the gist of the offence alleged against respondent-accused persons and has thereafter, taken into consideration the fact that the final report had been filed. This Court is of the considered view that respondent-accused persons deserve bail on merits and so, impugned orders granting bail to respondents-accused persons are not liable to be interfered with, as the impugned orders do not suffer from any infirmity or illegality - petition dismissed. Issues:1. Petitioner seeks quashing of bail orders granted to respondents in a money laundering case under PMLA.2. Challenge to the bail orders granted to Gagan Dhawan and Ranjit Malik @ Johny.3. Consideration of gravity of offence and parameters for grant of bail in economic offences.4. Comparison of the case with previous judgments and relevance of Section 45(1) of PMLA.5. Evaluation of the role and antecedents of the accused in determining bail eligibility.Analysis:The High Court heard two petitions together where the Directorate of Enforcement sought to quash bail orders granted to the respondents in a money laundering case under the Prevention of Money Laundering Act, 2002 (PMLA). The petitions challenged the bail orders issued to Gagan Dhawan and Ranjit Malik @ Johny in connection with the same case, ECIR/HQ/17/2017. The investigation revealed complex financial transactions involving the SBL Group, Income Tax Officers, and the accused individuals, leading to the registration of FIRs and ECIRs by the CBI and Enforcement Directorate.The petitioner contended that the gravity of the economic offences committed by the respondents warranted a different approach to bail, citing various Supreme Court judgments. On the other hand, the respondents argued that the severity of the offence should not be the sole factor in bail decisions, emphasizing the need to consider individual circumstances. They highlighted that co-accused had been granted bail and referenced legal precedents to support their stance.The Court observed that the impugned orders did not adequately address the gravity of the offences or the restrictions imposed by Section 45(1) of the PMLA. However, considering recent judicial pronouncements declaring Section 45(1) unconstitutional, the Court found that the bail orders were not inherently flawed. It noted that the money laundering amounts and roles differed between the two respondents, with one having property attached and a supplementary complaint filed against them.Ultimately, the Court concluded that the respondents deserved bail based on the merits of their cases, as the gravity of the alleged offences did not justify continued detention. It distinguished between grounds for bail cancellation and challenging bail orders on the basis of arbitrary discretion. The Court upheld the bail orders, stating that they were not unlawful or unjust, and dismissed the petitions while clarifying that the ruling did not impact the trial's merits.