2023 (11) TMI 904 - SC - Money Laundering

Supreme Court dismisses bail appeal in money laundering case citing mandatory twin conditions under Section 45(1) PMLA

TARUN KUMAR Versus ASSISTANT DIRECTOR DIRECTORATE OF ENFORCEMENT

The SC dismissed a bail appeal in a money laundering case under PMLA. The court held that twin conditions under Section 45(1) of PMLA are mandatory for ... Commission of a serious offence of money laundering - Scheduled offences - seeking grant of bail - twin conditions for the grant of bail contained in Section 45(1) of PMLA satisfied or not - Principle of Parity - overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act - HELD THAT:- It is trite that the court while considering an application seeking bail, is not required to weigh the evidence collected by the investigating agency meticulously, nonetheless, the court should keep in mind the nature of accusation, the nature of evidence collected in support thereof, the severity of the punishment prescribed for the alleged offences, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witness being tampered with, the larger interests of the public/State etc. Though, the findings recorded by the Court while granting or refusing bail would be tentative in nature, nonetheless the Court is expected to express prima facie opinion for granting or refusing to grant bail which would demonstrate an application of mind, particularly dealing with the economic offences. So far as facts of the present case are concerned, as transpiring from the supplementary complaint filed against the appellant, apart from the statements of witnesses recorded under Section 50 of the PML Act, there has been sufficient material collected in the form of documents which prima facie show as to how the appellant was knowingly a party and actually involved in the process and in the activities connected with the proceeds of crime, and how he was projecting/ claiming such proceeds of crime as untainted and how he was the beneficiary of the proceeds of crime acquired through the criminal activities relating to the scheduled offences. As well settled by now, the conditions specified under Section 45 are mandatory. They need to be complied with. The Court is required to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and he is not likely to commit any offence while on bail - Such conditions enumerated in Section 45 of PML Act will have to be complied with even in respect of an application for bail made under Section 439 Cr.P.C. in view of the overriding effect given to the PML Act over the other law for the time being in force, under Section 71 of the PML Act. With the advancement of technology and Artificial Intelligence, the economic offences like money laundering have become a real threat to the functioning of the financial system of the country and have become a great challenge for the investigating agencies to detect and comprehend the intricate nature of transactions, as also the role of the persons involved therein. Lot of minute exercise is expected to be undertaken by the Investigating Agency to see that no innocent person is wrongly booked and that no culprit escapes from the clutches of the law. When the detention of the accused is continued by the Court, the courts are also expected to conclude the trials within a reasonable time, further ensuring the right of speedy trial guaranteed by Article 21 of the Constitution. Appeal dismissed. Issues Involved:1. Legality of the appellant's bail rejection.2. Applicability of Section 45 of the Prevention of Money Laundering Act (PML Act).3. Principle of parity in granting bail.4. Investigation completeness and trial duration.5. Nature and seriousness of economic offences.Summary:1. Legality of the appellant's bail rejection:The appellant challenged the High Court's decision to deny bail in connection with a money laundering case under the PML Act. The appellant was arrested based on a fourth supplementary complaint, alleging his involvement in financial irregularities and bank fraud through Shakti Bhog Foods Ltd. (SBFL). The court noted that the appellant was actively involved in the fraudulent activities, including procuring fake invoices and siphoning funds.2. Applicability of Section 45 of the PML Act:The court emphasized the mandatory nature of Section 45 of the PML Act, which sets stringent conditions for granting bail. The court must be satisfied that there are reasonable grounds to believe the accused is not guilty and will not commit any offence while on bail. The statutory presumption under Section 24 of the PML Act also places the burden of proof on the accused to show that the proceeds of crime are not involved in money laundering.3. Principle of parity in granting bail:The appellant argued for bail on the ground of parity with co-accused who had been granted bail. The court rejected this argument, stating that parity is not absolute law and must consider the specific role of the accused. The court distinguished the appellant's role from that of other co-accused, noting his significant involvement in the day-to-day operations and fraudulent activities of SBFL.4. Investigation completeness and trial duration:The appellant contended that the investigation against him was complete and that he should not be incarcerated indefinitely. The court disagreed, noting that the appellant failed to meet the threshold conditions of Section 45 of the PML Act. The court also referenced Section 436A of the Code of Criminal Procedure, which provides for the release of an accused if the trial is not concluded within a specified period, but emphasized that this relief is not automatic and must be considered on a case-by-case basis.5. Nature and seriousness of economic offences:The court highlighted the grave nature of economic offences, which have serious repercussions on the country's economy. It emphasized the need for a different approach in handling bail applications for such offences, given their complexity and the potential threat they pose to the financial system. The court cited previous judgments underscoring the seriousness of economic offences and the need for stringent measures to combat them.Conclusion:The Supreme Court dismissed the appeal, upholding the High Court's decision to deny bail. The court reiterated the stringent conditions under the PML Act for granting bail and emphasized the serious nature of economic offences, which require a careful and rigorous approach in judicial proceedings.