2023 (12) TMI 1170 - HC - Money Laundering

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, ... Seeking enlargement of petitioner on bail - siphoning of government funds - played an active role in floating shell companies in the said process - HELD THAT:- A perusal of the provision of Section 19 and 45 of PMLA goes to show that the Public Prosecutor has to be given an opportunity to oppose the application for bail, and where the Public Prosecutor opposes the application for bail, duty cast on the Court is that it should be satisfied whether there are reasonable grounds to believe that the person accused is not guilty of such offence and that he is not likely to commit any offence while on bail. The said provision is analogous to Section 37 of the NDPS Act, 1985 - if the Court comes to conclusion that there are reasonable grounds for believing that the person accused is not guilty of such offence and the second condition is that he is not likely to commit any offence while on bail. In the aforesaid identical case in Sanjay Raghunath Agarwal’s case [2023 (4) TMI 874 - SUPREME COURT], lodging of the prosecution complaint is sequel to the registration of the FIR in the predicate offence way back in the year 2021. In the present case on hand also, no charge sheet has been filed in the predicate offence for the last more than 15 months. The petitioner has been in jail from 04.03.2023. It is the first offence insofar as the petitioner is concerned. There are no other complaints registered as against him. The said argument gives room to say that second condition in clause (2) of sub-section (1) of Section 45 of the PMLA would be satisfied. In the aforesaid circumstances, continued incarceration of the petitioner, is not justified. In respect of a query raised by the investigating agency, the petitioner herein gave response to each and every question that has been asked for. Prosecution complaint was also filed on 01.05.2023. The petitioner was arrested on 04.03.2023 and since then he is in judicial custody. Time and again, petitioner is continuously attending before the investigating agency and co-operating with the investigation. This Court is of the opinion that it is not necessary to detain the petitioner in jail further. In view of the aforesaid facts and circumstances, this Court feels that request of the petitioner for grant of bail can be considered, however, on certain conditions. The petitioner shall be enlarged on bail on his executing a personal bond for a sum of Rs. 50,000/- with two sureties each for the like sum to the satisfaction of the I Additional Sessions Judge-cum- Metropolitan Sessions Judge, Visakhapatnam. On release, the petitioner shall co-operate with the investigating agency and shall attend before the investigating agency once in a week i.e. on every Friday between 10.00 AM and 5.00 PM. The Criminal Petition is allowed. Issues Involved:1. Bail Application under Sections 437 and 439 of CrPC2. Allegations and Investigation under IPC and PMLA3. Compliance with Section 19 and Section 45 of PMLA4. Judicial Precedents and ArgumentsSummary: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.