2020 (12) TMI 1098 - HC - Money Laundering

Bail Denied for Amrapali Group MD Amidst Rs. 6,000 Crore Fraud Allegations, Citing PMLA's Stringent Conditions.

Anil Kumar Sharma Versus Enforcement Directorate, Lucknow Zone, Lucknow

The HC denied the bail application of the accused, a Managing Director of the Amrapali Group, under Section 439 CrPC and Section 45 PMLA. The decision ... Offence under PMLA - seeking bail - accused-applicant, who is Managing Director of Amrapali Group of Companies - investigation has been going on qua other accused and matter involves huge amount of ₹ 6,000/- Crores - HELD THAT:- The object of PMLA is to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering. Money laundering is a serious economic offence and serious threat to the national economy and national interest and, these offences are committed with cool calculation with the motive of personal gain regardless of the consequences on the society. Considering the order [2019 (7) TMI 1233 - SUPREME COURT] in which involvement of the accused in offence has been meticulously flagged, his conduct before the Supreme Court and, the fact that the investigation is still on and money trail has to be completely unearthed, it would not be appropriate to enlarge the accused on bail. Therefore, the plea for bail is refused and the bail application is rejected. Issues Involved:1. Bail application under Section 439 CrPC read with Section 45 of the PMLA.2. Allegations of defrauding and cheating by the Amrapali Group of Companies.3. Supreme Court’s intervention and directives regarding the completion of real estate projects.4. Forensic audit findings and involvement of the accused in money laundering.5. Legal principles governing bail in economic offences.Detailed Analysis:1. Bail Application under Section 439 CrPC read with Section 45 of the PMLA:The accused, Managing Director of Amrapali Group of Companies, filed a bail application under Section 439 CrPC read with Section 45 of the PMLA after the Special Judge/Sessions Court PMLA, Lucknow, rejected his bail application. The High Court considered the Supreme Court’s directives, the gravity of the offence, and the ongoing investigation involving a substantial amount of Rs. 6,000 Crores.2. Allegations of Defrauding and Cheating by the Amrapali Group of Companies:Amrapali Group of Companies, managed by the accused, entered into real estate projects promising timely delivery of flats to buyers. However, they failed to deliver, defaulted on payments to authorities, and misappropriated funds collected from home buyers. The accused and other directors were involved in diverting funds to bogus and sham companies, leading to significant financial losses for the buyers.3. Supreme Court’s Intervention and Directives Regarding the Completion of Real Estate Projects:The Supreme Court intervened to protect the interests of the home buyers, directing the Amrapali Group to complete the projects. Despite several directives, the Group failed to comply, leading to the freezing of bank accounts and attachment of properties. The Court appointed NBCC to complete the projects and directed various authorities to ensure compliance with its orders to protect the home buyers.4. Forensic Audit Findings and Involvement of the Accused in Money Laundering:Forensic auditors appointed by the Supreme Court uncovered that funds amounting to Rs. 5619.47 Crores were diverted to bogus companies. The accused was identified as the kingpin in creating sham companies and diverting funds. The Supreme Court directed the Enforcement Directorate to investigate the money laundering aspects and submit quarterly reports.5. Legal Principles Governing Bail in Economic Offences:The court emphasized that economic offences, due to their complexity and impact on public funds, require a different approach in bail matters. Referring to precedents, the court highlighted that economic offences involving large public funds need to be viewed seriously. Section 45 of the PMLA imposes stringent conditions for granting bail, including the requirement for the court to be satisfied that the accused is not guilty and is unlikely to commit the offence while on bail.Conclusion:The High Court, considering the Supreme Court's detailed findings and ongoing investigations, rejected the bail application. The court underscored the severity of the economic offences and the necessity to adhere to the stringent conditions under the PMLA for granting bail. The involvement of the accused in a large-scale fraud and money laundering, as meticulously flagged by forensic auditors, warranted the refusal of bail to ensure the integrity of the ongoing investigation and protection of public interest.