2020 (7) TMI 425 - HC - Money Laundering

Court denies bail due to money laundering scheme & lack of cooperation. Decision won't impact trial judgment.

The court denied the bail application under Section 439 of the Cr.P.C. due to the petitioner's involvement in a significant money laundering scheme, lack ... Grant of Bail - Money Laundering - siphoning of funds - proceeds of crime - money circulation scheme - cheating and defrauding by alluring to invest ₹ 10,000/- in the attractive investment Scheme - HELD THAT:- In the instant case, the petitioner has been in possession of the “proceeds of crime” and it appears that he along with others have attempted to project the same as untainted money by transferring the same to different bank accounts in a bid to camouflage it and project it to be genuine transactions. The contention of the petitioner in so far as the question of being a pre-existing “knowledge” as per Section 3(b) of the Act and in order to be held culpable under Section 4 of the Act, the same deserves to be rejected for the simple reason that the question as to whether the accused had prior knowledge needs to be culled out from the facts and circumstances of the case - Even otherwise, the use of the disjunctive “or” in Section 3 makes it clear that presence of knowledge is not the only criteria making the accused culpable under the Act. The offence of Money Laundering is nothing but an act of financial terrorism that poses a serious threat not only to the financial system of the country but also to the integrity and sovereignty of a nation. The International Monetary Fund estimates that laundered money generates about $590 billion to $1.5 trillion per year, which constitutes approximately two to five percent of the world's gross domestic product - The offences, such as this, are committed with a deliberate design with an eye on personal profit and often shown to be given scant regard for a sordid residuum left behind to be borne by the unfortunate “starry eyed” petty investors. The perpetrators of such deviant “schemes,” including the petitioner herein, who promise utopia to their unsuspecting investors seem to have entered in a proverbial “Faustian bargain” and are grossly unmindful of untold miseries of the faceless multitudes who are left high and dry and consigned to the flames of suffering. The issue of retrospective application of penal laws/scheduled offences which has been vehemently raised by the petitioner, but for the purposes of the instant application, the said issue need not be gone into, especially in view of the materials on record which point towards prima facie involvement of the petitioner herein and thus at this stage, what is required to be ascertained is the question of the prima facie involvement of the petitioner in the light of Section 24 of the Act - There is no hard and fast rule regarding grant or refusal to grant bail. Each case has to be considered on its facts and circumstances and on its own merits. However, the discretion of the Court has to be exercised judiciously sans any element of arbitrariness. This Court is not inclined to release the accused Petitioner on bail - Bail application dismissed. Issues Involved:1. Bail application under Section 439 of the Code of Criminal Procedure, 1973.2. Allegations of money laundering under the Prevention of Money Laundering Act, 2002 (PMLA).3. Investigation and evidence against the petitioner.4. Compliance with Section 45 of the PMLA for bail.5. Filing of supplementary complaints by the Enforcement Directorate.6. Petitioner's alleged non-cooperation with the investigation.7. Retrospective application of penal laws/scheduled offences.Detailed Analysis:1. Bail Application Under Section 439 of Cr.P.C.:The petitioner sought bail in connection with Complaint Case C.M.C. (PMLA) No.47 of 2017. The court considered the petition under Section 439 of the Code of Criminal Procedure, 1973.2. Allegations of Money Laundering:The case originated from an FIR alleging that M/s. Fine Indisales Pvt. Ltd (FIPL) defrauded the public through a deceptive investment scheme. The investigation revealed that FIPL collected approximately Rs. 703 crores from the public through a Ponzi scheme and laundered the money through various shell companies and bogus transactions. The petitioner was implicated in these activities, specifically involving the transfer of Rs. 25 crores to M/s. Lemon Entertainment Ltd., where he was a director.3. Investigation and Evidence Against the Petitioner:The investigation showed that the petitioner and his associates transferred large sums of money through multiple accounts to conceal the original source of funds, constituting money laundering. The petitioner and his father held significant shares in M/s. Lemon Entertainment Ltd., and the petitioner was involved in the company's financial transactions. The petitioner was also found to have avoided multiple summonses issued by the Enforcement Directorate.4. Compliance with Section 45 of the PMLA for Bail:Section 45 of the PMLA makes the offence of money laundering non-bailable. The court must be satisfied that there are reasonable grounds to believe the accused is not guilty and will not commit any offence while on bail. The Supreme Court's rulings in Gautam Kundu vs. Manoj Kumar and other cases were cited to emphasize the mandatory nature of these conditions. The court found that the petitioner did not meet these conditions.5. Filing of Supplementary Complaints by the Enforcement Directorate:The petitioner argued that the supplementary complaint filed by the Enforcement Directorate was not permissible. However, the court held that further investigation and filing of supplementary complaints are allowed under Section 173(8) of the Cr.P.C. and are applicable to investigations under special statutes like the PMLA. The court referred to the Supreme Court's decisions in Directorate of Enforcement vs. Deepak Mahajan and S.R. Sukumar vs. S. Sunaad Raghuram to support this view.6. Petitioner's Alleged Non-Cooperation with the Investigation:The petitioner was found to have avoided 10 out of 11 summonses issued by the Enforcement Directorate, indicating non-cooperation. The prosecution argued that the petitioner might flee, tamper with evidence, or influence witnesses if released on bail. The court took a serious view of this non-cooperation and the petitioner's attempts to evade the investigation.7. Retrospective Application of Penal Laws/Scheduled Offences:The petitioner raised the issue of the retrospective application of penal laws, but the court did not delve into this matter for the purposes of the bail application. The court focused on the prima facie involvement of the petitioner in money laundering activities.Conclusion:The court rejected the bail application, citing the petitioner's significant role in the money laundering scheme, non-cooperation with the investigation, and the serious nature of the offence. The court emphasized that the observations made would not influence the trial court's decision on the merits of the case. The bail application under Section 439 Cr.P.C. and the connected I.A. were dismissed.