2018 (9) TMI 2150 - HC - Money Laundering

Bail denied for money laundering scheme exceeding one crore rupees under Section 45 PMLA

The Calcutta HC dismissed a bail application under the Prevention of Money Laundering Act (PMLA), 2002. The petitioner argued that the lower court ... Money Laundering - seeking grant of bail - petitioner submitted that the learned Judge has failed to exercise his jurisdiction without appreciating the mandate of law and rejected the bail application in a mechanical and cryptic manner by not considering the provision of section 50 of the said Act, 2002 - violation of principles of natural justice - twin conditions of Section 45 of the Prevention of Money Laundering Act (PMLA) satisfied or not - HELD THAT:- It is found from the amended provision of section 45 of the Act that no person accused of an offence under this Act shall be released on bail or on his own bond unless he is under the age of sixteen years or is a woman or is sick or infirm or is accused either on his own or along with other accused of money laundering a sum of less than one crore rupees, may be released on bail, if the Special Court so directs. It appears prima facie from the entirety of the complaint and final report submitted after investigation that the accused petitioner along with other accused persons collected funds and laundered the proceeds of crime generated through cheating the public at large who were motivated to invest their money through agents of Rose Valley with high rate of interest. Bearing in mind the serious nature of the offence under section 45 of PMLA, 2002 and amended provision thereto, it is not required to enlarge the accused petitioner on bail even though the charge sheet has been submitted - application dismissed. Issues Involved:1. Application for bail under Section 439 of the Code of Criminal Procedure in connection with a money laundering case.2. Alleged failure of the lower court to consider legal provisions and principles in rejecting the bail application.3. Petitioner's role and involvement in the alleged money laundering offence.4. Applicability and impact of Section 45 of the Prevention of Money Laundering Act (PMLA) and its amendment.5. Constitutional validity of the twin conditions for bail under Section 45 of PMLA.6. Arguments regarding the petitioner's right to bail based on cooperation with investigation and lack of evidence of tampering or influencing witnesses.Issue-wise Detailed Analysis:1. Application for Bail under Section 439 of the CrPC:The petitioner sought bail in connection with a money laundering case under Section 4 of the Prevention of Money Laundering Act, 2002. The application was filed following the rejection of a previous bail plea by the Special CBI Court. The petitioner argued that the lower court failed to properly exercise its jurisdiction by not considering relevant legal provisions and guidelines for bail applications.2. Alleged Failure of the Lower Court:The petitioner contended that the lower court rejected the bail application in a 'mechanical and cryptic manner' without appreciating the mandate of law, specifically Section 50 of the PMLA, 2002. The argument was made that the court acted contrary to established legal principles by not properly evaluating the materials collected during the investigation.3. Petitioner's Role and Involvement:The petitioner claimed innocence, stating that he was merely a debenture trustee member of the Rose Valley Group without involvement in the alleged offence. He argued that he was made a trustee without any active role or contribution, and that the main responsibility for the debenture issue lay with another individual, Shri Goutam Kundu. The petitioner further emphasized that he had no authority to collect, disburse, or invest funds and that his bank accounts were not scrutinized.4. Applicability and Impact of Section 45 of PMLA:The petitioner referenced the Supreme Court decision in Nikesh Tarachand Shah v. Union of India, which declared the twin conditions for bail under Section 45 of PMLA unconstitutional. However, the respondent argued that the amendment to Section 45, effective from April 19, 2018, retained these conditions for offences involving sums over one crore rupees, making the cited decision inapplicable to the present case.5. Constitutional Validity of Twin Conditions:The petitioner argued that the twin conditions under Section 45 of PMLA were unconstitutional as they violated Articles 14 and 21 of the Constitution, turning the presumption of innocence on its head. The petitioner cited previous cases where the courts had granted bail without applying these conditions.6. Arguments Regarding Right to Bail:The petitioner emphasized his cooperation with the investigation and the lack of evidence suggesting he would influence witnesses or tamper with evidence if released on bail. The petitioner also highlighted that other accused persons in the same case had been granted bail and argued that denying him bail would amount to pre-trial conviction, violating his right to life and liberty.Conclusion:The court concluded that the petitioner, along with other accused persons, was involved in collecting funds and laundering proceeds of crime through deceitful means, as evidenced by the complaint and final report. Given the serious nature of the offence and the amended provisions of Section 45 of PMLA, the court was not inclined to grant bail. The application was dismissed, and the court directed the trial to proceed expeditiously.