2020 (12) TMI 1093 - HC - Money Laundering

Court denies anticipatory bail in gold smuggling case citing ongoing investigation & serious allegations under PMLA.

M. SIVASANKAR Versus STATE, ADDL. R2 DIRECTORATE OF ENFORCEMENT

The court dismissed the applicant's request for anticipatory bail under Section 438 Cr.P.C. due to the ongoing investigation and serious allegations ... Grant of Anticipatory Bail - Money Laundering - proceeds of crime - allegation that the persons named Sarith, Swapna and Sundeep along with several other accused smuggled primary gold from abroad through diplomatic channel of UAE consulate - HELD THAT:- There is no specific provision in the Money Laundering Act dealing with granting of anticipatory bail. The act of money laundering has both civil and criminal repercussions which the offender may have to face. Apart from adjudication, the perpetrator of the crime will also have to face penal consequences. The provisions would indicate that authorities for the purpose of the Act who can take action for violation of the provisions in the Act are the Director, Additional Director, Deputy Director, Joint Director, Assistant Director and such other classes of officers as may be appointed for the purpose under Section 48 of the PMLA. The fact that very senior and experienced officers are empowered to act against the offenders of the PMLA itself would indicate the extent of caution and experience they have to deploy before implicating anyone as an accused or an offender. Under the PMLA, the authorites under the Act are bound to carry out investigation by collecting evidence and for that purpose, they have been sufficiently empowered to summon persons or require them to produce evidence, records, statements and also carry out searches of properties and persons, and even properties can also be seized or attached. But, the fact that very senior officers are alone empowered to proceed in arresting an offender indicates that they would do so only on having sufficient grounds to arrest the person. If that be so, the fact is that the applicant has not yet been made an accused and that he is only required for the purpose of interrogation by the officers of ED and it will have to be concluded that the prayer for anticipatory bail made by the applicant is premature. Even though the applicant is intended to be made an accused on sufficient materials being collected against him, considering the gravity of the offences under the PMLA, the applicant definitely may not be entitled to the extraordinary relief of pre-arrest bail - this Court is not inclined to restrain the applicant from being arrested and the prayer for pre-arrest bail is also premature. The application for anticipatory bail is dismissed. Issues Involved:1. Applicant's request for anticipatory bail under Section 438 Cr.P.C.2. Allegations and investigation against the applicant.3. Applicant's cooperation and involvement in the investigation.4. Legal precedents and statutory provisions concerning anticipatory bail under PMLA.Detailed Analysis:1. Applicant's Request for Anticipatory Bail:The applicant, a senior civil servant, filed for anticipatory bail under Section 438 Cr.P.C., fearing arrest in connection with Crime No. ECIR/KCZO/31/2020 by the Enforcement Directorate (ED). The applicant argued that despite extensive questioning by multiple agencies, no incriminating evidence was found against him. He emphasized his cooperation with the investigation and his willingness to abide by any conditions imposed by the court.2. Allegations and Investigation Against the Applicant:The applicant was implicated in a gold smuggling case involving several accused, including Swapna Suresh, to whom he had introduced his Chartered Accountant (CA). The ED and other agencies, such as the NIA and Customs, conducted extensive investigations, including interrogations and searches, but had not yet formally accused the applicant. The ED's counter affidavit highlighted the seizure of gold and large sums of money, and the ongoing analysis of digital evidence. The ED argued that the applicant's involvement in financial transactions with Swapna Suresh indicated potential complicity in money laundering activities.3. Applicant's Cooperation and Involvement in the Investigation:The applicant claimed his interactions with Swapna Suresh were purely professional and social, denying any knowledge of her illegal activities. He admitted to introducing her to his CA but denied involvement in financial transactions. The ED, however, presented evidence suggesting the applicant's deeper involvement, including instructions to the CA regarding the management of Swapna Suresh's finances and the operation of a bank locker. The ED argued that the applicant's evasive responses and the evidence collected warranted further investigation.4. Legal Precedents and Statutory Provisions Concerning Anticipatory Bail Under PMLA:The court examined various precedents, including decisions from the Supreme Court and High Courts, which emphasized the seriousness of economic offences and the stringent approach required for anticipatory bail in such cases. The court noted the absence of a specific provision for anticipatory bail under the PMLA, highlighting the Act's focus on penal consequences and the authority of senior officers to conduct thorough investigations. The court cited cases like Vakamulla Chandrasekhar v. Enforcement Directorate, Y.S. Jagan Mohan Reddy v. CBI, Rohit Tandon v. Directorate of Enforcement, and P. Chidambaram v. Directorate of Enforcement, which underscored the gravity of economic offences and the limited scope for anticipatory bail.Conclusion:The court concluded that the applicant's request for anticipatory bail was premature, given the ongoing investigation and the serious nature of the allegations under the PMLA. The court emphasized that senior officers would ensure compliance with statutory provisions if an arrest became necessary. Consequently, the application for anticipatory bail was dismissed.