Court denies bail, upholds amended law, in money laundering case.

The court dismissed the bail applications of the petitioners, emphasizing the seriousness of the offenses, the risk of flight, and the ongoing investigation involving illegal foreign exchange transactions and money laundering. The court found that the amended Section 45(1) of the PMLA, post its declaration as unconstitutional, was cured by the Legislature through an amendment in the Finance Act, 2018, making it presumed constitutional. Additionally, the court held that the Enforcement Directorate acting as both the complainant and the Investigating Officer did not automatically lead to bias or unfairness, following the Supreme Court's precedent in Mukesh Singh vs. State (NCT) of Delhi.

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Issues Involved:
1. Compliance with Section 19 of the PMLA.
2. Whether the Enforcement Directorate can act as both the complainant and the Investigating Officer.
3. The applicability of Section 45 of the PMLA post its amendment.

Detailed Analysis:

Compliance with Section 19 of the PMLA:
The petitioners argued that the arrest of Bimal Jain was made without compliance with Section 19 of the PMLA and the relevant rules, making his custody illegal. Section 19(1) PMLA requires the Investigating Officer to have material in his possession and reasons to believe that the person is guilty of an offense under the Act, and to forward the order and material to the adjudicating authority in a sealed envelope.

Court's Finding: The court noted that since Bimal Jain was arrested in execution of the Non-Bailable Warrants (NBWs) issued by the Special Judge, PMLA, the provisions of Section 19 could not be adhered to. The filing of the complaint by the Enforcement Directorate, which included Bimal Jain as an accused, indicated prima facie reasons to believe his guilt. The Special Judge took cognizance of the complaint, thereby reasonably believing Bimal Jain guilty of money laundering.

Enforcement Directorate as Complainant and Investigating Officer:
The petitioners contended that the Enforcement Directorate cannot be both the complainant and the Investigating Officer, citing potential bias and unfairness.

Court's Finding: Referring to the Supreme Court's judgment in Mukesh Singh vs. State (NCT) of Delhi, the court held that merely because the informant is also the investigator does not vitiate the investigation on grounds of bias or unfairness. The matter should be decided on a case-to-case basis, and the investigation would not automatically suffer from unfairness or bias solely because the informant is the investigator.

Applicability of Section 45 of the PMLA:
The petitioners argued that the twin conditions under Section 45 of the PMLA for granting bail were declared unconstitutional in the case of Nikesh Tarachand Shah vs. Union of India.

Court's Finding: The court acknowledged that the Supreme Court in Nikesh Tarachand Shah had declared the twin conditions of Section 45 as unconstitutional. However, the defects were cured by the Legislature through an amendment in the Finance Act, 2018, which revived Section 45(1). The Supreme Court in P. Chidambaram vs. E.D. took judicial note of this amendment. The Orissa High Court in Mohd. Arif vs. Govt. of India also held that the amended Section 45(1) must be applied while deciding bail applications. The Supreme Court dismissed the SLP against this judgment, and contrary views taken by other courts have been stayed by the Supreme Court. Therefore, the amended Section 45(1) is presumed constitutional.

Additional Findings:
The investigation revealed that Naresh Jain, along with his brother Bimal Jain and other accomplices, engaged in a criminal conspiracy involving illegal foreign exchange transactions and money laundering, causing significant losses to the exchequer and banks. They operated through a network of shell companies and forged documents. The petitioners were found to be well-connected both in India and abroad, with a high risk of fleeing the country if granted bail. Naresh Jain had a history of evading law enforcement, including fleeing from Dubai while on bail.

Given the gravity of the offenses, the risk of flight, and the ongoing investigation involving numerous entities and individuals, the court was not inclined to grant bail to the petitioners.

Conclusion:
The bail applications of both petitioners were dismissed. The court emphasized that the observations made should not be treated as a determination on the merits of the case.

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