2021 (4) TMI 279 - HC - Money Laundering

Court grants bail in PMLA case citing repayment, cooperation, no necessity for detention. Conditions: surrender passport, report to ED, no tampering.

Deepak Virendra Kochhar Versus Directorate of Enforcement Through Assistant Director, Headquarter Investigation unit, The State Of Maharashtra

Deepak Virendra Kochhar Versus Directorate of Enforcement Through Assistant Director, Headquarter Investigation unit, The State Of Maharashtra - TMI Issues Involved:- Bail application for the offence under the Prevention of Money Laundering Act (PMLA)- Allegations of criminal conspiracy, cheating, and misconduct by public servants- Provisional Attachment Order of properties- Arguments for and against bail- Constitutional validity and interpretation of Section 45 of PMLA- Burden of proof under Section 24 of PMLAIssue-wise Detailed Analysis:1. Bail Application for the Offence under PMLA:The applicant sought bail in connection with the ECIR/02/HIU/2019 registered by the Enforcement Directorate for offences punishable under Section 3 read with Section 4 of the PMLA. The case originated from an FIR registered by the CBI for criminal conspiracy, cheating, and misconduct by public servants, specifically involving the sanctioning of loans by ICICI Bank to the Videocon Group in violation of bank policies.2. Allegations of Criminal Conspiracy, Cheating, and Misconduct by Public Servants:The FIR alleged that ICICI Bank sanctioned six high-value loans to Videocon Group companies from June 2009 to October 2011, which were later transferred to entities controlled by the applicant and his associates, resulting in illegal gratification and undue benefit to the applicant's wife, a then ICICI Bank official. The loans were alleged to be sanctioned in violation of the bank’s credit policy, leading to wrongful loss to ICICI Bank.3. Provisional Attachment Order of Properties:During the investigation, a Provisional Attachment Order was issued, attaching various properties, including a flat at CCI Chambers and cash seized from the premises of a company associated with the applicant. The order was challenged, and the Adjudicating Authority dismissed the original complaint, stating that the attached properties were not proceeds of crime.4. Arguments for and Against Bail:The applicant argued that he had cooperated with the investigation, provided necessary documents, and there was no need for further detention. He highlighted that the loans were repaid to ICICI Bank, and the Adjudicating Authority had found no evidence of proceeds of crime. The prosecution opposed the bail, citing the seriousness of the offence, ongoing investigation, and the risk of tampering with evidence.5. Constitutional Validity and Interpretation of Section 45 of PMLA:A significant issue was whether the twin conditions under Section 45 of PMLA, which were declared unconstitutional by the Supreme Court in Nikesh Tarachand Shah v. Union of India, were revived by the subsequent amendment to the section. The court referred to various judgments and concluded that the amendment did not revive the twin conditions, as the Supreme Court had declared the entire section unconstitutional.6. Burden of Proof under Section 24 of PMLA:The prosecution argued that under Section 24 of PMLA, the burden of proof lies on the accused to prove that the proceeds of crime are not involved in money laundering. The court noted that the presumption of guilt under Section 24 applies during the trial and not at the stage of bail.Conclusion:The court granted bail to the applicant, considering the repayment of loans to ICICI Bank, the applicant’s cooperation with the investigation, and the lack of necessity for further detention. The court imposed conditions, including surrendering the passport, reporting to the Enforcement Directorate, and not tampering with evidence. The court emphasized that the twin conditions under Section 45 of PMLA were not revived by the amendment and that the applicant had provided sufficient explanations for the transactions in question.