2023 (12) TMI 685 - SC - Money Laundering

Woman deputy secretary denied bail in money laundering case involving extortion racket and proxy properties

The SC dismissed a bail application under PMLA in a money laundering case involving an extortion racket. The appellant, a Deputy Secretary/OSD in the ... Rejection of Bail application - Money Laundering - utilisation of proceeds of crime - scheduled offence or not - extortion racket - applicability of Section 45 of PMLA, being a lady - HELD THAT:- The object of the PMLA hardly needs to be delineated. The said Act has been enacted to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering and for the matters connected therewith and incidental thereto. As per Section 2(1)(p), “Money Laundering” has the meaning assigned to it in Section 3. The offence of Money Laundering has been defined in Section 3, which is punishable under Section 4 of the said Act. Section 45 makes the offences under the PMLA to be cognizable and non bailable. As regards the twin conditions for the grant of bail contained in Section 45(1), it has been held by the Three-Judge Bench in VIJAY MADANLAL CHOUDHARY & ORS. VERSUS UNION OF INDIA & ORS. [2022 (7) TMI 1316 - SUPREME COURT] that the underlying principles and rigours of Section 45 of the Act must come into play and without exception ought to be reckoned to uphold the objectives of the Act, which is a special legislation providing for stringent regulatory measures for combating the menace of money laundering. Though the findings recorded by the Court while granting or refusing to grant bail would be tentative in nature, nonetheless the Court is expected to express prima facie opinion while granting or refusing to grant bail which would demonstrate an application of mind, particularly dealing with the serious economic offences. The evidence relating to strong relations between the Appellant and Mr. Suryakant Tiwari, between the Appellant and Mr. Manish Upadhyay, and between the Appellant and Mr. Anurag Chaurasia; the evidences of movement of funds acquired out of extortion syndicate run by Mr. Suryakant Tiwari to Manish Upadhyay, proxy of the appellant; the utilization of proceeds of crime and acquisition of properties by the appellant in the name of her mother Shanti Devi and cousin Mr. Anurag Chaurasia along with the details of the said properties etc. have been detailed in the said prosecution complaint, which leave no doubt in the mind of the Court that prima facie the appellant has been found involved in the commission of the offence of money laundering as defined in Section 3 of the said Act. Whether the appellant being a woman should be granted the benefit of the first proviso to Section 45 of the PMLA? - HELD THAT:- The use of the expression “may be” in the first proviso to Section 45 clearly indicates that the benefit of the said proviso to the category of persons mentioned therein may be extended at the discretion of the Court considering the facts and circumstances of each case, and could not be construed as a mandatory or obligatory on the part of the Court to release them. Similar benevolent provision for granting bail to the category of persons below the age of sixteen years, women, sick or infirm has been made in Section 437 Cr.P.C. and many other special enactments also, however by no stretch of imagination could such provision be construed as obligatory or mandatory in nature, otherwise all serious offences under such special Acts would be committed involving women and persons of tender age below 16 years. There is sufficient evidence collected by the respondent Enforcement Directorate to prima facie come to the conclusion that the appellant who was Deputy Secretary and OSD in the Office of the Chief Minister, was actively involved in the offence of Money Laundering as defined in Section 3 of the PMLA. As against that there is nothing on record to satisfy the conscience of the Court that the appellant is not guilty of the said offence and the special benefit as contemplated in the proviso to Section 45 should be granted to the appellant who is a lady. In the instant case, there is neither discharge nor acquittal nor quashing of the criminal case by the court of competent jurisdiction against Suryakant Tiwari in the predicate/ scheduled offence. In that view of the matter the Court does not find any merit in the instant appeal - Appeal dismissed. Issues Involved:1. Legality of the High Court's dismissal of the bail application.2. Consideration of scheduled offences under PMLA.3. Misrepresentation of facts in the Special Leave Petition (SLP).4. Applicability of the proviso to Section 45 of PMLA for granting bail to a woman.Summary:1. Legality of the High Court's Dismissal of the Bail Application:The Supreme Court reviewed the order dated 23.06.2023 by the High Court of Chhattisgarh, which dismissed the bail application of the appellant under Section 439 of Cr.P.C. The appellant was arrested on 02.12.2022 in connection with an ECIR registered for offences under IPC and PMLA. The appellant contended that the High Court erred in not considering the chargesheet dated 08.06.2023 and the cognizance order dated 16.06.2023, which dropped the scheduled offences under Section 384 and 120-B of IPC.2. Consideration of Scheduled Offences under PMLA:The Court noted that the chargesheet and cognizance order were not part of the pleadings or arguments before the High Court. The Court emphasized that the existence of scheduled offences is crucial for proceedings under PMLA. The Court found that the appellant was actively involved in money laundering and that there was no discharge, acquittal, or quashing of the criminal case against the co-accused in the predicate/scheduled offence.3. Misrepresentation of Facts in the SLP:The Supreme Court found that there was an attempt by the appellant to misrepresent facts by alleging that the High Court did not consider the chargesheet and cognizance order, which were not available during the High Court proceedings. The Court criticized the appellant and her legal team for not verifying the facts and for making incorrect statements in the SLP.4. Applicability of the Proviso to Section 45 of PMLA for Granting Bail to a Woman:The Court discussed the discretion granted under the proviso to Section 45 of PMLA, which allows bail for women. However, the Court clarified that this provision is not mandatory and must be exercised judiciously. Given the substantial evidence against the appellant, the Court found no grounds to grant bail under this proviso.Conclusion:The Supreme Court dismissed the appeal, finding no merit in the arguments presented. The Court also imposed a cost of Rs. 1 Lakh on the appellant for misrepresenting facts, to be deposited before the Supreme Court Legal Services Authority within two weeks.