2023 (8) TMI 1241 - HC - Money Laundering

Court grants bail in Money Laundering Act case based on lack of evidence

Badri Narayan Tiwari Versus Directorate Of Enforcement (Lko. Zonal Office) Lko.

The court granted bail to the applicant in a case under the Prevention of Money Laundering Act, citing parity with co-accused individuals who had been ... Seeking grant of Bail - Money Laundering - Company had lured the public to invest in its schemes with the promise of good returns, but the Company did not fulfill its promise and did not return even the invested amounts - HELD THAT:- Prima facie it appears that the applicant has been implicated in the present case merely on the basis of suspicion. It is a settled principle of law that however strong a suspicion may be, it cannot take place of a proof beyond reasonable doubt. This fact is also relevant that the E.D. had registered the ECIR on 29.06.2019 and statement of applicant was recorded under Section 50 PMLA on 22.10.2019, 23.10.2019 and 20.03.2020, but he was not taken into custody. The applicant remained in custody in connection with the scheduled offences since 26.02.2021, and although the applicant was named as accused in supplementary compliant filed on 30.01.2022, the E.D. did not seek his custody even during that period - The E.D. took the applicant into custody on 21.07.2022, only after he was granted bail by the Hon’ble Supreme Court on 13.07.2022, after having spent about one and a half years in custody and the investigation of the case already stood completed long ago and there was no need for his custodial interrogation. The trial is likely to take many years to conclude because many of the named accused persons have not appeared yet or they have not been arrested yet and 11 witnesses are to be examined by the Prosecution and documents running into 5,000 pages have to be proved - The applicant is said to be one of the key decision makers for purchase of property by GIPL, alongwith Vijender Singh and Vijender Singh has already been granted bail and, therefore, the applicant is also entitled to be released on bail on the ground of parity. The applicant is also entitled to be released on bail. Accordingly, the bail application stands allowed. Issues Involved1. Bail Application for the Applicant.2. Allegations and Evidence against the Applicant.3. Legal Provisions and Interpretations.4. Parity with Co-accused.Issue-wise Comprehensive Details1. Bail Application for the Applicant:The applicant sought bail in Session Case No. 1485/2022 under Section 3/4 of the Prevention of Money Laundering Act, 2002 (PMLA). The applicant was not initially named in the FIRs or ECIR but was later included as an accused in the supplementary complaint filed by the Enforcement Directorate (E.D.).2. Allegations and Evidence against the Applicant:The E.D. registered ECIR/LKZO/05/2019 based on multiple FIRs alleging that M/s Garvit Innovative Promoters Ltd. (GIPL) lured the public into investing in fraudulent schemes. The applicant was implicated based on statements from various individuals, including the main accused Sanjay Bhati, who identified the applicant as a key decision-maker in property purchases and development for GIPL. The E.D. alleged that the applicant received cash payments and was involved in decisions regarding payments from GIPL's accounts. Additionally, funds were transferred to companies controlled by the applicant, purportedly as proceeds of crime.3. Legal Provisions and Interpretations:The court examined the definition of 'proceeds of crime' under Section 2(u) of the PMLA and relevant case law, including the Supreme Court's judgment in Vijay Madanlal Choudhary vs. Union of India. The court emphasized that possession of unaccounted property acquired by legal means may be actionable for tax violations but does not necessarily constitute proceeds of crime under the PMLA. The court also referred to the principle that suspicion, however strong, cannot replace proof beyond reasonable doubt.4. Parity with Co-accused:The applicant argued for bail on the grounds of parity, noting that co-accused Manoj Tyagi had been granted bail and Vijendra Singh had received anticipatory bail. The court acknowledged that the applicant had been in custody since 21.07.2022, and the trial was likely to be prolonged. The court found that the applicant's role was similar to that of co-accused who had been granted bail, thus entitling the applicant to bail on the ground of parity.ConclusionThe court allowed the bail application, noting the applicant's entitlement to bail on the grounds of parity, the lack of prima facie evidence of the applicant's involvement in planning the fraudulent scheme, and the prolonged nature of the trial. The applicant was ordered to be released on bail with conditions to ensure compliance with the judicial process.