2022 (6) TMI 96 - HC - Indian Laws

Money laundering suspect denied bail due to terrorism ties

The court held that the twin conditions of Section 45 of PMLA, 2002, were revived after the amendment and were applicable in considering the bail ... Revival of twin conditions in Section 45 of the PMLA by Amendment Act 13 of 2018 - reasonable grounds to believe commission of money laundering - likelihood of appellant committing offence if released on bail - application of Section 45(1) rigour in bail proceedings under the PMLA - economic offences and stringent approach to bailRevival of twin conditions in Section 45 of the PMLA by Amendment Act 13 of 2018 - application of Section 45(1) rigour in bail proceedings under the PMLA - The amended provisions of Section 45(1) of the PMLA effected by Amendment Act 13 of 2018 revived the twin conditions and are applicable while considering bail under the PMLA. - HELD THAT: - The Court held that Section 45 had previously been declared unconstitutional by the Supreme Court in Nikesh Tarachand Shah, but Parliament cured the defect by Amendment Act 13 of 2018. Consequently the twin conditions in Section 45(1) stood revived and the rigours of Section 45 are to be applied when considering bail in offences under the PMLA. The Court relied on the legislative validation principle that a competent retrospective amendment which removes the substratum of a judgment is a valid legislative exercise, and noted that the amended provision has not been stayed by the Supreme Court and therefore is to be treated as operative for bail determination.Section 45(1), as amended by Act 13 of 2018, is operative and its twin conditions are to be applied in the bail consideration under the PMLA.Reasonable grounds to believe commission of money laundering - likelihood of appellant committing offence if released on bail - economic offences and stringent approach to bail - There are reasonable grounds to believe that the applicant committed the offence of money laundering and that he is likely to commit an offence if enlarged on bail; accordingly bail is refused. - HELD THAT: - On the materials placed before it, including the investigation linking the applicant to an unlawful association, alleged extortion/levy collection and attachment of proceeds and vehicles, the Court found reasonable ground for believing the applicant guilty of money laundering. Having applied the revived rigour of Section 45(1) and taken into account the gravity of economic offences and risk of reoffending, the Court concluded that bail is not permissible. The Court specifically recorded that the applicant is likely to commit an offence if released and therefore declined to enlarge him on bail.Bail is refused as there are reasonable grounds to believe the applicant guilty of money laundering and he is likely to commit an offence if released.Final Conclusion: The Court held that the Amendment Act 13 of 2018 revived the twin conditions of Section 45(1) of the PMLA and, applying those rigours to the material on record, found reasonable grounds to believe the applicant guilty of money laundering and likely to reoffend; the bail application was refused. Issues Involved:1. Legality of the FIR and subsequent investigation.2. Validity of the charges under various sections of IPC, Arms Act, and Criminal Law Amendment Act.3. Application of PMLA, 2002 provisions.4. Applicant’s involvement and role in the alleged offenses.5. Constitutionality and applicability of Section 45 of PMLA, 2002 in granting bail.Detailed Analysis:1. Legality of the FIR and Subsequent Investigation:The complaint originated from an FIR (No.02/2016) dated 11.01.2016, registered at Tandwa P.S., Chatra District. It involved offenses under Sections 414/120-B read with 420/384/386 & 387 of IPC, Sections 25 (1-B) (a), 26 & 35 of the Arms Act, 1959, and Sections 17 (1) (2) of the Criminal Law Amendment Act. The FIR was based on secret information received by the Superintendent of Police, Chatra, about a committee formed in the Amarpali & Magadh Coal Area connected with T.P.C., a terrorist gang declared unlawful by the Government of Jharkhand. The police conducted a raid, resulting in the recovery of cash, weapons, and incriminating evidence linking the accused to the T.P.C. organization.2. Validity of the Charges:The charge-sheet (No.17/16) filed on 10.03.2016 before the Court of C.J.M., Chatra, included charges under Sections 414/384/386/387 & 120-B of IPC, Sections 25 (1-B) A, 26 & 35 of the Arms Act, and Sections 17 (1) (2) of the Criminal Law Amendment Act. The matter was handed over to the National Investigation Agency (NIA) due to the involvement of Maoist cadres and destructive activities against the State. The NIA re-registered the case as N.I.A. Case No. RC-06/2018/NIA/DLI, and supplementary charge-sheets were submitted, incorporating additional sections under the Unlawful Activities (Prevention) Act, 1967.3. Application of PMLA, 2002 Provisions:The Directorate of Enforcement commenced an investigation under the PMLA, 2002, registering Enforcement Case Information Report (ECIR) No. RNSZO/02/2016. The complaint alleged that the accused were involved in money laundering by projecting tainted money as untainted property. The investigation revealed the involvement of the accused in extorting levy from contractors and using the proceeds for terrorist activities. Properties and vehicles identified as proceeds of crime were attached under the PMLA provisions.4. Applicant’s Involvement and Role:The applicant was alleged to be an active member of T.P.C., extorting levy from local contractors and transporting coal on behalf of other transporters. The applicant's properties and vehicles were identified as proceeds of crime. The applicant claimed innocence, stating that the case was based on documentary evidence and that he was falsely implicated. He argued that the properties were attached by the Directorate of Enforcement, leaving no chance of siphoning off the properties.5. Constitutionality and Applicability of Section 45 of PMLA, 2002:The applicant's counsel argued that the twin conditions of Section 45 of PMLA, 2002, were declared unconstitutional by the Supreme Court in 'Nikesh Tarachand Shah Vs. Union of India & Anr.' The counsel cited various case laws to support the bail application. However, the Directorate of Enforcement contended that the defects in Section 45 were cured by Amendment No.13/2018, reviving the twin conditions for considering bail applications.The court held that the twin conditions of Section 45 stood revived after the amendment and were applicable while considering the bail application. The court cited several Supreme Court judgments emphasizing the seriousness of economic offenses and the need for a different approach in granting bail for such offenses. The court concluded that there were reasonable grounds to believe that the applicant was guilty of money laundering and that he was likely to commit any offense if enlarged on bail. Consequently, the bail application was refused.