2023 (8) TMI 1239 - HC - Money Laundering

Applicant Granted Bail in Money Laundering Case

Prem Chand Singh S/o Shri Late Bilat Singh Versus Directorate Of Enforcement Through The Assistant Director Government Of India

The court granted bail to the applicant, who had been in custody for offenses under the Prevention of Money Laundering Act. Despite allegations of ... Seeking grant of bail - Money Laundering - proceeds of crime - diversion of funds - disproportionate assets more than 14 crores - HELD THAT:- Prevention of Money Laundering Act provides for a two pronged approach, one dealing with the proceed of crime and the other dealing with the persons guilty of the offence of money laundering. In the present case, as per the respondent/ED, the applicant is found to be an accessory to money-laundering and unless the twin conditions prescribed under Section 45(1) of PMLA is fulfilled, applicant is not entitled to bail. In GORAV KATHURIA VERSUS UNION OF INDIA AND OTHERS [2016 (6) TMI 309 - PUNJAB & HARYANA HIGH COURT], the Division Bench of Punjab and Haryana High Court, considered the applicability of the twin conditions/limitation imposed vide Section 45(1) on grant of bail in all the cases of PMLA. After considering the Prevention of Money Laundering (Amendment) Bill, 2011 and the amendment incorporated in 2013 in Section 45(1) in respect of limitation in grant of bail to a person accused of schedule offences earlier falling under part B of the schedule but now existing in part A thereof, held the reference to the offences under Part A of the Schedule in the context of Section 45(1) has to be necessarily read down to apply only to those persons who are arrested under Section 19 of PMLA on accusation of money laundering, who are accused of commission of scheduled offences which were listed under the Part A of the schedule existing prior to 2013 amendment. The constitutional validity of Section 45(1) of PMLA, 2002 was challenged before the Hon'ble Supreme Court in the case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. [2017 (11) TMI 1336 - SUPREME COURT]. The Hon'ble Supreme Court after detailed discussion about the statutory history of Section 45 of PMLA and adverting to various judgments cited by the respective parties and considering the similar provisions under Section 37 of NDPS Act and Section 20(8) of the TADA has struck down the pre-trial bail provisions under Section 45 imposing twin stringent conditions under Section 45(1) for the offence classified thereunder after holding that it is manifestly arbitrary, discriminatory, invalid and violative of Articles 14 and 21 of the Constitution. Time and again it has been held that personal liberty of an individual is a sacrosanct right and pretrial detention cannot be taken as a punitive measure. However, a balance is required to be maintained between the interest of an individual and the interest of the society at large. In the instant case, the applicant had been enlarged on bail under the predicate offences. Though the investigation for predicated offence and investigation under the PML Act are different and distinct, but in the present case also the charge sheet had been filed - The applicant is divested of all his powers and does not hold any post now, he has remained under custody for more than four months. As evident from the charge sheet, the investigating agency has already collected all the documentary evidence and recorded the statement of material witnesses, under such circumstances there is no possibility of tampering with the evidence or influencing the witnesses. The only apprehension of ED is with regard to co-operation in the pending FIR registered in various states, wherein he is named as a co-accused, for that stringent conditions may be imposed. It is deemed appropriate to allow this application and the applicant herein enlarged on bail subject to the conditions imposed - bail application allowed. Issues Involved:1. Application for bail under Section 439 of the Cr.P.C.2. Allegations and evidence against the applicant under the Prevention of Money Laundering Act (PMLA), 2002.3. Arguments by the applicant's counsel.4. Arguments by the respondent's counsel.5. Legal principles and precedents considered by the court.6. Decision on the bail application.Summary:1. Application for Bail:The applicant filed the first application under Section 439 of the Cr.P.C. for bail. The applicant has been in custody since 12.04.2023 for offences under Section 3 and punishable under Section 4 of the PMLA, 2002.2. Allegations and Evidence:The applicant was implicated in a case involving the diversion of funds amounting to Rs. 7.15 crores from various educational institutions to personal accounts. The Enforcement Directorate (ED) seized more than 1.65 crores in cash, foreign currency, gold jewelry, and FDRs during a search operation. The investigation revealed that the applicant and his family amassed wealth disproportionate to their known sources of income and diverted significant funds for personal gains.3. Arguments by Applicant's Counsel:The applicant's counsel argued that no case of money laundering was made out against the applicant. It was contended that the transactions were legal and disclosed to the Income Tax department. The counsel emphasized that the applicant is not a public servant and the provisions of the Prevention of Corruption Act do not apply. It was also argued that the applicant had cooperated with the investigation and suffered from various ailments requiring medical attention.4. Arguments by Respondent's Counsel:The respondent's counsel opposed the bail application, citing the applicant's involvement in serious economic offences and the potential for tampering with evidence. It was argued that the applicant misused funds from educational institutions for personal benefits and possessed disproportionate assets. The counsel relied on legal precedents to emphasize the gravity of money laundering offences and the stringent conditions for granting bail under Section 45 of the PMLA.5. Legal Principles and Precedents:The court referred to the Supreme Court's observations in the case of Rana Ayyub Vs. Directorate Of Enforcement (2023) and other relevant judgments. It was noted that Section 3 of the PMLA defines money laundering and includes activities connected to 'proceeds of crime'. The court also considered the constitutional validity of Section 45(1) of the PMLA, as discussed in the case of Nikesh Tarachand Shah Vs. Union of India (2018).6. Decision on Bail Application:The court acknowledged the applicant's cooperation during the investigation and the completion of the charge sheet. Considering the applicant's health condition, lack of custodial necessity, and the completion of the investigation, the court deemed it appropriate to grant bail. The applicant was released on bail subject to conditions, including furnishing a personal bond, appearing before the trial court as directed, making himself available for further investigation, not tampering with evidence, and not leaving India without the court's permission.