2022 (1) TMI 320 - HC - Money Laundering

Bail granted in Section 120B case with less than Rs. 1 Crore proceeds, petitioner required to surrender passport

Rajeev Sharma Versus Directorate Of Enforcement

The court granted bail to the petitioner, emphasizing that the predicate offence was under Section 120B IPC and the proceeds of the crime were less than ... Seeking grant of Bail - Jurisdiction - predicate offence under Official Secrets Act - petitioner contends that the offences punishable under the Official Secrets Act not being the Scheduled Offences under the PMLA, ECIR recorded by the respondent and the arrest made pursuant to that as also the complaint filed is without any jurisdiction - Proviso to Section 45 of the PMLA - HELD THAT:- Indubitably, offences punishable under the Official Secrets Act are not in the list of Scheduled Offences under the PMLA. Whether the charge sheet filed in the predicate offence is for offences punishable under Sections 3/4/5 of Official Secrets Act read with 120B IPC or for Section 120B IPC substantively or whether in the absence of any charge sheet under Section 411 IPC having been filed by the Special Cell, Delhi Police, the respondent/Enforcement Directorate could have recorded the above-noted ECIR for offences punishable under Sections 3 & 4 of the PMLA on the ostensible ground that since Section 120B IPC is a Schedule Offence and the Enforcement Directorate had jurisdiction to investigate into offence of money laundering pursuant to the offences under Sections 3/4/5 of Official Secrets Act would be a matter to be dealt by the learned Trial Court at the stage of charge. It may be noted that the charge sheet filed by the Special Cell does not note the offence punishable under Section 411 IPC. Even in the complaint filed by the respondent before the learned Trial Court, Section 411 IPC being the predicate offence has not been mentioned. Considering that the predicate offence, if any, against the petitioner is under Section 120B IPC and Section 411 IPC only and the proceeds of the crime which are alleged to be laundered are a sum of ₹48,20,788.50 paisa and that the petitioner has been in custody now for nearly six months, this Court deems it fit to grant bail to the petitioner. It is directed that the petitioner be released on bail on fulfilment of the conditions imposed - application allowed. Issues Involved:1. Jurisdiction and applicability of PMLA in the context of the Official Secrets Act.2. Validity of the ECIR recorded by the respondent.3. Conditions for granting bail under PMLA.4. Allegations and evidence against the petitioner.5. Petitioner's risk of flight, tampering with evidence, and influencing witnesses.Issue-wise Detailed Analysis:1. Jurisdiction and Applicability of PMLA:The petitioner was arrested under the Official Secrets Act and subsequently under PMLA. The petitioner's counsel argued that the Official Secrets Act is not a Scheduled Offence under PMLA. Thus, the ECIR and subsequent arrest under PMLA lack jurisdiction. The respondent countered that the involvement of Sections 120B IPC and 411 IPC, both Scheduled Offences under PMLA, justified proceedings under PMLA.2. Validity of the ECIR Recorded by the Respondent:The petitioner was arrested based on an ECIR recorded by the respondent. The petitioner contended that the proceeds of crime, as per the respondent, amounted to Rs. 48,20,788.50, which is less than Rs. 1 Crore, making the twin conditions for bail under Section 45 of PMLA inapplicable. The respondent maintained that the petitioner was involved in serious espionage activities, justifying the ECIR and arrest.3. Conditions for Granting Bail under PMLA:The court referred to Section 45 of PMLA, noting that the twin conditions for bail were struck down by the Supreme Court in Nikesh Tarachand Shah's case. The court emphasized the triple test for bail: flight risk, tampering with evidence, and influencing witnesses. The court found no evidence that the petitioner tampered with evidence or influenced witnesses while on bail for the Official Secrets Act offences.4. Allegations and Evidence against the Petitioner:The respondent alleged that the petitioner supplied confidential information to Chinese intelligence officers and received remuneration through shell companies. The petitioner countered that the information was not classified and provided explanations for his foreign trips and financial transactions. The court noted that the predicate offence against the petitioner was under Section 120B IPC, and the proceeds of the crime were less than Rs. 1 Crore.5. Petitioner's Risk of Flight, Tampering with Evidence, and Influencing Witnesses:The court considered the petitioner's roots in society, his wife's employment in JNU, and the lack of allegations of tampering with evidence or influencing witnesses. The court found no substantial risk of flight, given the petitioner's compliance with investigation directives prior to his arrest.Conclusion:The court granted bail to the petitioner, noting that the predicate offence was under Section 120B IPC, and the proceeds of the crime were less than Rs. 1 Crore. The petitioner was directed to furnish a personal bond of Rs. 5 lakhs with two surety bonds, surrender his passport, and appear before the Investigating Officer monthly for six months. The petition was disposed of accordingly.