2021 (9) TMI 478 - HC - Money Laundering

Court denies bail cancellation, finds application valid under Section 439(2), no Section 45(1) conditions, Trial Court's bail decision sound.

The court rejected the application for cancellation of bail, ruling that the application under Section 439(2) was maintainable, the twin conditions of ... Applicability of application u/s 439(2) of the Cr.P.C. - accused is released from the ‘custody’ or not - decision in Nikesh Tarachand Shah [2017 (11) TMI 1336 - SUPREME COURT] has lost its significance because of amendment in Section 45(1) of the PMLA Act or not - irrelevant material acted upon or not - relevant material ignored or not? Whether Section 439(2) of the Cr.P.C. can have no application unless accused is released from the ‘custody’? - HELD THAT:- The instant application filed by the prosecution under Section 439(2) is maintainable, although the accused actually has not been released. Primary objection as to the maintainability is overruled. Whether decision in Nikesh Tarachand Shah [2017 (11) TMI 1336 - SUPREME COURT] has lost its significance because of amendment in Section 45(1) of the PMLA Act? - HELD THAT:- In Nikesh T. Shah, the Hon’ble Apex Court has struck down Section 45 of the PMLA Act, as a whole having found it arbitrary and violative of Article 14 & 21 of the Constitution of India and not just applicability of twin conditions to scheduled offences - Once, it is held that twin conditions enumerated under Section 45 of the PMLA Act have no application while granting bail to accused of money laundering, it is to be ascertained, whether the trial Court granted bail on irrelevant considerations. Whether Trial Court while granting bail, acted upon the irrelevant material and ignored the relevant material? - HELD THAT:- The prosecution case rests and founded on documentary evidence and, therefore, even if applicant is released on bail, chances of tampering the prosecution evidence are weak and faint. Apart from that, it is worthwhile recording here that NSEL Management, Persons, Defaulters of NSEL and persons associated with Aastha Group (Mohit Aggarwal and Sham Kejriwal) have been granted bail either by Special Court or by the High Court, having a greater role than the present applicant. Mr. Chavan, the learned Senior Counsel for the respondent, has placed for my perusal, orders granting bail to twenty co-accused, who may have similar or greater role than the present accused. Even otherwise offence under Sections 3 and 4 of the PMLA Act is offence punishable upto seven years - the trial Court while granting bail to respondent-accused has not acted upon the irrelevant material and ignored the relevant material. Application dismissed. Issues Involved:1. Maintainability of the application under Section 439(2) of the Cr.P.C.2. Applicability of the twin conditions under Section 45(1) of the PMLA Act post-amendment.3. Whether the Trial Court acted on irrelevant material while granting bail.Issue-wise Detailed Analysis:1. Maintainability of the Application under Section 439(2) of the Cr.P.C.:The respondent's counsel argued that the application under Section 439(2) of the Cr.P.C. was not maintainable since the accused had not been released from custody. They cited precedents to support that the prosecution could not seek cancellation of bail unless the accused was actually released. However, the prosecution countered that the scope of Section 439(2) should not be restricted to actual release and argued that such an interpretation would defeat the purpose of the provision. The court agreed with the prosecution's view, stating that interpreting Section 439(2) to require actual release would render it redundant and conditional, thus, the application was maintainable even if the accused had not been released.2. Applicability of the Twin Conditions under Section 45(1) of the PMLA Act Post-Amendment:The prosecution contended that the twin conditions of Section 45(1) of the PMLA Act were revived by the 2018 amendment and should apply to the case. They relied on the Supreme Court's judgment in P. Chidambaram and other High Court judgments to support their argument. However, the court noted that the Supreme Court in Nikesh Tarachand Shah had struck down Section 45 of the PMLA Act as a whole for being arbitrary and violative of Articles 14 and 21 of the Constitution. The court agreed with previous judgments that the 2018 amendment did not revive the twin conditions and they would not apply while granting bail for offences under the PMLA Act.3. Whether the Trial Court Acted on Irrelevant Material While Granting Bail:The prosecution argued that the Trial Court granted bail by ignoring relevant material and considering irrelevant factors. They pointed out that the Trial Court had previously found prima facie evidence of the respondent's involvement in money laundering and that there was no progress in the investigation to justify the bail. The court examined the reasons provided by the Trial Court for granting bail, including the filing of the charge-sheet, lack of efforts to arrest other accused, and the withdrawal of the respondent's objection to property attachment. The court found that the Trial Court had not acted on irrelevant material and had considered the relevant factors appropriately. The prosecution's arguments were not sufficient to overturn the bail order.Conclusion:The court rejected the application for cancellation of bail, ruling that the application under Section 439(2) was maintainable, the twin conditions of Section 45(1) of the PMLA Act did not apply post-amendment, and the Trial Court had not acted on irrelevant material while granting bail. The interim order was not continued.