2022 (9) TMI 563 - HC - Money Laundering

Court denies bail in 96,000 crore money laundering case due to seriousness of allegations and applicant's involvement.

The court rejected the bail application, citing the serious nature of money laundering allegations amounting to approximately ninety-six thousand crores ... Seeking grant of bail - money laundering - proceeds of crime - incorporation and operation of 450 Indian entities and 104 foreign entities for routing proceeds of crime and also enabling purchase of offices and properties as if with untainted funds - applicability of Section 45 of the PMLA - HELD THAT:- In the present case, therefore, since this is a fresh bail application, the court would be required to consider whether there are fresh circumstances or subsequent events that call for a fresh application of mind or whether it is a mere repetition of previous grounds. Even without the application of the principle of issue-estoppel, the court in order to maintain consistency in the decision making, would be slow in entertaining such pleas, which are mere repetition of the earlier pleas, which had not found favour with it - Since the question of adherence or non-adherence to the provisions of Section 19 of the PMLA have been raised and rejected by a Coordinate Bench, there is no cause to discuss that again here. The conclusions remain the same. This bail application would have to be considered in terms of the provisions of Section 45 of the PMLA and the twin requirements, namely, (i) that there are reasonable grounds for believing that he is not guilty of such offence and (ii) that he is not likely to commit any offence while on bail, will have to be met. The allegations against the applicant are very serious in nature. A huge amount of rupees ninety-six thousand crores is supposed to have been laundered. There has been multiple layering, calling for painstaking and detailed investigations. The applicant has fully participated in the money laundering by lending his companies accounts to his brother and making accommodating entries. A sum of Rs. 35 crores is directly traceable to the applicant. A mere exculpatory statement to the respondent can never suffice to form a ground, leave alone a reasonable ground to believe that the applicant is not guilty of the offence - the pendency of those investigations does not enure in favour of the applicant. Rather, considering his previous conduct, in furnishing fake addresses and remaining out of bounds of the investigating agencies for almost two years, necessitating the issuance of NBWs, interference with investigations is a possibility that cannot be ignored. His remaining away from the reach of the law is also suggestive of his being a “flight risk”. Considering the gravity of the offence, the previous reluctance of the applicant to co-operate with the investigating agencies, providing of fake addresses as well as absconding from law, are all factors indicative of the non-fulfillment of the twin conditions under Section 45 of the PMLA, to justify the grant of bail to the applicant. Bail application dismissed. Issues Involved:1. Entitlement to bail under Section 439 Cr.P.C. and Section 45 PMLA.2. Allegations of money laundering and involvement of the applicant.3. Compliance with Section 19 of PMLA.4. Previous bail application and issue-estoppel.5. Health issues of the applicant.6. Prosecution's conduct and procedural aspects.Issue-wise Detailed Analysis:1. Entitlement to Bail under Section 439 Cr.P.C. and Section 45 PMLA:The applicant filed for bail under Section 439 Cr.P.C. read with Section 45 PMLA. The court emphasized the twin conditions under Section 45 of the PMLA, which require reasonable grounds for believing that the accused is not guilty and that he is not likely to commit any offense while on bail. The court noted the serious nature of the allegations, involving laundering of approximately ninety-six thousand crores, and the applicant's active participation in money laundering. The court concluded that the applicant did not meet the twin conditions, thus rejecting the bail application.2. Allegations of Money Laundering and Involvement of the Applicant:The case against the applicant involved operating firms for money laundering in conspiracy with a co-accused. The applicant was alleged to have incorporated numerous entities for routing proceeds of crime and enabling the purchase of properties with untainted funds. The investigations traced proceeds of crime amounting to Rs. 5,65,11,22,269/-, with the extent of money laundering exceeding ninety-six thousand crores. The applicant's involvement was substantiated by the discovery of Rs. 35 crores in his accounts and his role in assisting his co-accused.3. Compliance with Section 19 of PMLA:The court addressed the applicant's argument regarding the non-compliance with Section 19 of the PMLA, which pertains to the arrest procedure. The court noted that the applicant was arrested in execution of non-bailable warrants (NBWs) issued by the Special Judge, PMLA, thus there was no occasion to comply with Section 19. The court reviewed the Directorate of Enforcement's file, confirming that the satisfaction and reason to believe the applicant's guilt were recorded, thus dismissing this objection.4. Previous Bail Application and Issue-Estoppel:The court discussed the principle of issue-estoppel, noting that it does not apply to bail applications, which are interlocutory orders. The court referred to previous judgments, emphasizing that renewed bail applications can be moved based on fresh circumstances or subsequent events. The court found that the current application did not present new grounds but reiterated previous arguments, which had already been rejected.5. Health Issues of the Applicant:The applicant cited health issues, including the loss of an eye and deteriorating health, as grounds for bail. The court acknowledged these concerns but did not find them sufficient to override the gravity of the allegations and the applicant's previous conduct, which included absconding and providing fake addresses.6. Prosecution's Conduct and Procedural Aspects:The applicant alleged that the prosecution acted with vengeance, issuing multiple notices during the peak of the Covid-19 pandemic and prosecuting the lab staff who prepared his medical reports. The court reviewed these claims but focused on the procedural correctness of the applicant's arrest and the ongoing investigations. The court found no procedural irregularities that would justify granting bail.Conclusion:The court concluded that the gravity of the offense, the applicant's previous reluctance to cooperate with investigating agencies, and the provision of fake addresses indicated non-fulfillment of the twin conditions under Section 45 of the PMLA. Consequently, the bail application was rejected. The court clarified that the observations made were solely for the purpose of disposing of the bail application.