2023 (6) TMI 1004 - HC - Money Laundering

Court grants bail to petitioner in money laundering case citing cooperation with investigation and legal precedents

The court granted bail to the petitioner in a case involving allegations of money laundering and corruption. The court considered the stringent conditions ... Seeking enlargement on Bail - Money Laundering - Scheduled offences - swindling of money invested by the Government in a dubious manner - discrepancies including diversion of APSSDC funds through various shell companies - diversion of Government funds - Section 45 of the PMLA - HELD THAT:- It has been revealed about diversion of major funds to suspicious entities done by SEPL under the pretext of supply of software/ hardware/materials/services. It is alleged that in reality, the supply of such goods and services was not done. On examination of data and analysis of bank account statements shows that about Rs. 56.00 crores, out of the funds received from APSSDC, was transferred by SEPL to the entity ACI, and the said amount was diverted through a web of shell entities by way of layered transactions. The petitioner had knowledge that no goods or services were being provided by the shell companies to DTSPL. An amount of Rs. 241.00 crores was received by SEPL from DTSPL and a significant part of the said government funds were diverted through SEPL and complex web of shell companies under the guise of supply of software/ hardeware/materials/services - government funds were diverted by DTSPL, belonging to Vikas Khanvelkar, through SEPL and a web of shell companies, and in lieu of transfer of funds, cash was provided by entry operators who were managing the shell companies, and the said cash was moved from entry operators to Suresh Goyal. In the said diversion of government funds, the petitioner, Suman Bose and Vikas Khanvelkar played pivotal roles. Hence, the petitioner committed the offence of money laundering under Section 3 of the PMLA punishable under Section 4 of the PMLA. In the aforesaid identical case in SANJAY RAGHUNATH AGARWAL VERSUS THE DIRECTORATE OF ENFORCEMENT [2023 (4) TMI 874 - SUPREME COURT], lodging of the prosecution complaint is sequel to the registration of the FIR in the predicate offence way back in the year 2021. In the present case on hand also, no charge sheet has been filed in the predicate offence for the last more than 15 months. The petitioner herein has been in jail from 04.03.2023. It is the first offence insofar as the petitioner is concerned. There are no other complaints registered as against him. The said argument gives room to say that second condition in clause (2) of sub-section (1) of Section 45 of the PMLA would be satisfied. In the aforesaid circumstances, continued incarceration of the petitioner is not justified. In respect of a query raised by the investigating agency, the petitioner herein gave response to each and every question that has been asked for. Prosecution complaint was also filed on 01.05.2023. The petitioner was arrested on 04.03.2023 and since then he is in judicial custody. When time and again, petitioner is continuously attending before the investigating agency and co-operating with the investigation, this Court is of the opinion that it is not necessary to detain the petitioner in jail further. In view of the aforesaid facts and circumstances, this Court feels that request of the petitioner for grant of bail can be considered, however, on certain conditions. The petitioner shall be enlarged on bail on his executing a personal bond for a sum of Rs. 50,000/- with two sureties each for the like sum to the satisfaction of the Additional Sessions Judge-cum- Metropolitan Sessions Judge, Visakhapatnam - the Criminal Petition is allowed. Issues Involved:1. Legality of the petitioner's arrest under PMLA.2. Compliance with Section 45 of PMLA for bail.3. Examination of the petitioner's role and cooperation with the investigation.4. Consideration of precedents and legal principles for granting bail.Summary:Issue 1: Legality of the petitioner's arrest under PMLAThe petitioner was arrested under Sections 437 and 439 of the CrPC, seeking bail in connection with a case involving allegations of money laundering and corruption. The case was initially registered under various sections of IPC and the Prevention of Corruption Act, 1988, based on a report by the Chairman of APSSDC, alleging swindling of government funds. The investigation revealed that funds were diverted through shell companies, and SEPL, incorporated post the tri-party agreement among DTSPL, SISW, and APSSDC, played a central role in this diversion. The petitioner was implicated as having control over these entities and facilitating the diversion of funds.Issue 2: Compliance with Section 45 of PMLA for bailSection 45 of PMLA imposes stringent conditions for granting bail, including the requirement that the Public Prosecutor be given an opportunity to oppose the bail application and the court must be satisfied that the accused is not guilty and unlikely to commit any offense while on bail. The court examined whether these conditions were met in the petitioner's case. The petitioner argued that no charge sheet had been filed in the predicate offense, and he had been cooperating with the investigation. The court noted that the petitioner had been in jail since 04.03.2023, and no incriminating material was seized during searches of his premises.Issue 3: Examination of the petitioner's role and cooperation with the investigationThe petitioner was accused of circulating funds among entities connected to him and facilitating the diversion of government funds. Despite being implicated in the predicate offense, no charge sheet had been filed, and the petitioner had been granted bail in that case. The court noted that the petitioner had been cooperating with the investigation, attending multiple times, and providing explanations for the amounts transferred to his account.Issue 4: Consideration of precedents and legal principles for granting bailThe court referred to several precedents, including Vijay Madanlal Choudhary v. Union of India, P. Chidambaram v. Directorate of Enforcement, and Sanjay Raghunath Agarwal v. Directorate of Enforcement, which emphasized that bail is the rule and refusal is the exception. The court noted that the petitioner had been in jail for a considerable period, and there were no other complaints against him. The court concluded that continued incarceration was not justified and granted bail to the petitioner with certain conditions.Conclusion:The Criminal Petition is allowed, and the petitioner is granted bail on executing a personal bond with sureties. The petitioner must cooperate with the investigation, attend weekly, and surrender his passport.