2022 (12) TMI 13 - HC - Money Laundering

Petitioner's bail denied in money laundering case over Rs.77 crores fraud. Section 45 PMLA applied.

The court denied the petitioner's regular bail application under the Prevention of Money Laundering Act due to the seriousness of the allegations ... Regular bail under PMLA with reference to Section 45 - Non-bailable and cognizable nature of offences under the PMLA - Rigors of Section 45 in economic offences / money-laundering cases - Diversion of bank funds as proceeds of crime - Cooperation in investigation not automatically entitling accused to bailRegular bail under PMLA with reference to Section 45 - Rigors of Section 45 in economic offences / money-laundering cases - Diversion of bank funds as proceeds of crime - Cooperation in investigation not automatically entitling accused to bail - Whether the petitioner is entitled to regular bail in the ECIR/PMLA prosecution. - HELD THAT: - The Court examined the material on record and found that the petitioner is a director of multiple companies and that the investigation alleges large-scale diversion of bank loans ultimately pooled into companies controlled by the petitioner. The complaint and related CBI FIRs disclose allegations that loans were taken in the names of persons described as employees or close relatives and were diverted, the total alleged quantum being significantly large. Section 45 of the PMLA imposes additional stringent conditions for grant of bail in money-laundering cases and requires the court, when opposed by the Public Prosecutor, to be satisfied that there are reasonable grounds for believing the accused is not guilty and is not likely to commit an offence while on bail. The Court observed that economic offences and money laundering are to be viewed seriously given their grave impact on public finances and that cooperation in investigation or prolonged custody does not, by itself, satisfy the statutory threshold for bail under Section 45. Having regard to the nature of allegations, the role of the petitioner as director of entities implicated, and the quantum and character of the alleged diversion, the Court was not satisfied that the conditions of Section 45 were met.Prayer for regular bail rejected; petition dismissed.Final Conclusion: On the facts and material before it - including the petitioner's alleged role as director of implicated companies, the allegation of diversion of substantial bank funds, and the statutory rigors of Section 45 of the PMLA - the Court declined to grant regular bail and dismissed the bail application. Issues Involved:1. Regular bail application under the Prevention of Money Laundering Act, 2002 (PMLA).2. Allegations of fraud and money laundering involving multiple FIRs and charge sheets.3. Compliance with Section 45 of the PMLA.4. Arguments regarding the petitioner's cooperation and lack of flight risk.5. Counterarguments by the Enforcement Directorate (E.D.) emphasizing the severity of the crime and the petitioner's key role.Detailed Analysis:1. Regular Bail Application under PMLAThe petitioner sought regular bail in connection with E.C.I.R. Case No.01 of 2022 for offences under Section 3 read with Section 70 of the PMLA, punishable under Section 4. The case is pending before the Special Judge, C.B.I. cum Special Judge under the PMLA, at Ranchi.2. Allegations of Fraud and Money LaunderingThe C.B.I. registered three FIRs alleging fraud amounting to Rs.31.24 crores with the Bank of India. The FIRs were:- FIR No. RC0932018S0007 dated 16.07.2018 for Rs.10.37 crores.- FIR No. RC0932018S0008 dated 20.08.2018 for Rs.8.03 crores.- FIR No. RC0932019S0001 dated 10.01.2019 for Rs.12.84 crores.The E.D. initiated inquiries as these offences were scheduled under the PMLA. The investigation revealed that the petitioner, along with associates, defrauded multiple banks, with the total amount exceeding Rs.77.36 crores. The funds obtained for various purposes were diverted to M/s Sarawgi Builders and Promoters Pvt. Ltd., engaged in real estate, indicating money laundering.3. Compliance with Section 45 of PMLAThe court highlighted the stringent conditions under Section 45 of the PMLA for granting bail. The section requires:- The Public Prosecutor's opportunity to oppose the bail application.- The court's satisfaction that there are reasonable grounds for believing the accused is not guilty and unlikely to commit an offence while on bail.The court referred to the Supreme Court's judgment in Vijay Madanlal Choudhary & Ors. Versus Union of India & Ors., emphasizing the need to consider the gravity of economic offences and the stringent view towards granting bail in such cases.4. Petitioner's Cooperation and Lack of Flight RiskThe petitioner's counsel argued that:- The petitioner cooperated with the investigation.- The petitioner was in custody for about eight months.- The loan was obtained with valid security and collateral.- The case involved fund diversion, not misappropriation, and lacked involvement of tainted money.- The petitioner posed no flight risk.The counsel cited the Supreme Court's decisions in P. Chidambaram Versus Directorate of Enforcement and Siddharth v. State of U.P. Another, arguing that bail should be granted considering the petitioner's cooperation and the absence of immediate need for custody.5. Counterarguments by E.D.The E.D.'s counsel contended that:- The petitioner was the main accused and the Director of five companies involved.- The loans were taken in the names of close associates and employees, indicating an intention to cheat from the beginning.- The loan amounts were diverted for purposes other than those stated, constituting a serious economic offence.- The rigors of Section 45 of the PMLA applied, and the petitioner did not meet the conditions for bail relaxation.The court also referred to the Supreme Court's observation in Rohit Tandon v. Directorate of Enforcement, emphasizing the severity and societal impact of white-collar crimes.Judgment:The court concluded that the petitioner did not meet the conditions for bail under Section 45 of the PMLA, given the gravity of the allegations and the amount involved (Rs.77 crores). The petitioner's prayer for regular bail was rejected, and the bail application (B.A. No. 8470 of 2022) was dismissed.