Bail granted to accused in government fund siphoning case under Section 45 PMLA after 15-month custody

AP HC granted bail to petitioner accused of siphoning government funds through shell companies under PMLA. Court applied Section 45 PMLA conditions, noting no chargesheet filed in predicate offence for 15 months despite petitioner's custody since March 2023. Citing Supreme Court precedent in Sanjay Raghunath Agarwal case, HC found continued incarceration unjustified given first-time offender status, cooperation with investigation, and satisfaction of statutory bail conditions. Bail granted with Rs. 50,000 personal bond, two sureties, and weekly reporting requirements.

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Issues Involved:
1. Bail Application under Sections 437 and 439 of CrPC
2. Allegations and Investigation under IPC and PMLA
3. Compliance with Section 19 and Section 45 of PMLA
4. Judicial Precedents and Arguments

Summary:

This Criminal Petition, under Sections 437 and 439 of the Code of Criminal Procedure, 1973 (CrPC), seeks to enlarge the petitioner on bail in connection with a case registered under various sections of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988, based on an FIR lodged by the Chairman of Andhra Pradesh State Skill Development Corporation (APSSDC). The petitioner is accused of being involved in the swindling of government funds through shell companies and other dubious means.

A case was registered against several individuals and entities, including the petitioner, for offences under Sections 166, 167, 418, 420, 465, 468, 471, 409, 201, 109 read with 120B IPC and Sections 13 (2) read with 13 (1)(c) and (d) of the Prevention of Corruption Act, 1988. The investigation revealed significant discrepancies, including the diversion of APSSDC funds through various shell companies, with major portions of the funds being transferred to Skillar Enterprise India Private Limited (SEPL) and other suspicious entities without actual supply of goods or services.

The learned senior counsel for the petitioner argued that Section 19 of the PMLA requires the Authorized Officer to have a reason to believe, based on material in possession, that the person is guilty of the offence, which must be recorded in writing. He contended that the investigation has been ongoing for over 15 months with no tangible evidence against the petitioner. The petitioner has been cooperating with the investigation and has not interfered with the process. The counsel cited several judicial precedents to support the argument for bail.

The learned Deputy Solicitor General of India, representing the respondent, emphasized the limitations under Section 45 of the PMLA for granting bail, arguing that there is an embargo for bail and highlighting the discrepancies revealed during the investigation, including the diversion of funds through shell companies.

The court noted that despite the ongoing investigation for over 14 months, no charge sheet has been filed in the predicate offence, and no incriminating material has been seized from the petitioner. The petitioner has been cooperating with the investigation and has been available to the investigating agencies. The court also considered the judicial precedents cited, which emphasized that bail is the rule and refusal is the exception, even in cases of economic offences.

Considering the facts and circumstances, the court concluded that continued incarceration of the petitioner is not justified and granted bail on certain conditions, including executing a personal bond and attending the investigating agency once a week. The petitioner is also restricted from leaving the country without prior permission from the competent court.

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