2024 (10) TMI 1636 - HC - Money Laundering

Former MD denied bail in liquor syndicate case involving bribe collection and duplicate hologram conspiracy under Section 45 PMLA

Arun Pati Tripathi Versus Directorate Of Enforcement Raipur

The Chhattisgarh HC rejected regular bail under Section 483 BNSS read with Section 45 PMLA for an applicant charged in a liquor syndicate case. The ... Seeking grant of regular bail u/s 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023, read with Section 45 of the Prevention of Money Laundering Act (PMLA) - predicate offence - applicability and interpretation of Section 45 of the PMLA - HELD THAT:- In the present case, the predicate offence has been registered against the applicant by ACB/EOW, Raipur Chhattisgarh under 120-B, 420,467,468,471 of IPC and Section 7 & 12 of the Prevention of Corruption Act which are schedule offences included in Paragraphs 1 & 8 of Part-A of the Schedule to PMLA, 2002 as defined under Section 2(1)(y) of the Act. The predicate offence FIR; documents including the statements recorded u/s. 50 of PMLA, 2002 shared by Mr. Thandi Lal Meena, Assistant Director, Prosecution Complaint filed by the IT and the date shared by the Income Tax Department were analyzed by the ED. From the statements of the witnesses who had reaffirmed their statements given in the earlier ECIR 11 it has come into fact that a well planned systematic conspiracy was executed by the syndicate to earn illegal commission in the sale and licensing of liquor in the State of Chhattisgarh. From the investigation by the ED it has been revealed that CSMCL was used by the syndicate to enforce a parallel excise department which comprises of senior bureaucrats of State, politicians and officials of Excise Department. The applicant was leading the CSMCL and was the MD of the organization. It has been further revealed that the applicant was assigned with the task of maximizing the bribe commission collected on liquor procured by M/s. CSMCL and for making necessary arrangement for sale of non duty paid liquor in the CSMCL run shops. In the instant case, after investigation by the ED, it has come to notice that the placement of the applicant as the head of M/s. CSMCL and Special Secretary in State Excise Department being an influential person and close to senior bureaucrats, masterminds of the present liquor syndicate earned profits. The applicants direct involvement in the commission and execution of the entire scam has been investigated wherein extortion of commission from the sale of unaccounted liquor could be attributed - The applicant is alleged to have conspired with M/s. Prizm Holography by lowering the tender conditions and ensured supply of lacs of duplicate holograms which were required to make the1liquor look real liquor. It is the case of prosecution that a criminal syndicate comprising of high level State Government officials, private persons and political executives of the State Government were operating in the State of Chhattisgarh and collecting illegal bribe from the State Departments and State Public Sector undertakings by sale of liquor which is one of the major source of their illegal earning. In the initial investigation, it has come into account that there was massive corruption in the Excise Department of Chhattisgarh since the year 2019 - it cannot be said that no prima facie ofence whatsoever is made against the applicant. After carefully analyzing the material available on record which goes to show that there is prima facie involvement of the applicant in the crime in question and the charge sheet has been filed. Since, the allegations against the petitioner were serious nature therefore there was material to infer his involvement in serious crimes. Conclusion - Taking into consideration the facts and circumstances of the case, and taking into account the nature and gravity of the offence, the role of the applicant herein, the manner in which he is alleged to have conspired with other co-accused persons and thereby was part of a syndicate and involved in the illegal earning by assisting in providing duplicate holograms, transferring funds to foreign lands, charged with economic offences of huge magnitude and considering the nature of charge and gravity of offence, the applicant is charged, which is extremely serious and looking to the special and stringent provision under Section 45(1) of the PMLA for grant of bail, in the considered opinion of this Court, it is not proper to order release of present applicant on regular bail. The prayer for bail made by the applicant under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 (BNSS) read with Section 45 of the PMLA, is hereby rejected. ISSUES PRESENTED and CONSIDEREDThe primary legal issues considered in this judgment include:Whether the applicant is entitled to regular bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023, read with Section 45 of the Prevention of Money Laundering Act (PMLA).The applicability and interpretation of Section 45 of the PMLA in the context of granting bail, especially concerning the twin conditions for bail.The significance of the predicate offence and its implications on the proceedings under the PMLA.Whether the applicant's prolonged pre-trial incarceration justifies the grant of bail.The impact of previous Supreme Court decisions on the interpretation of bail provisions under the PMLA.The relevance of the applicant's alleged role in the economic offences and the gravity of the charges against him.The consideration of the applicant as a flight risk due to his alleged involvement in money laundering activities.ISSUE-WISE DETAILED ANALYSIS1. Entitlement to Bail under BNSS and PMLAThe applicant sought bail under Section 483 of the BNSS, 2023, read with Section 45 of the PMLA. The Court examined whether the conditions for granting bail under these provisions were satisfied. The relevant legal framework included the twin conditions under Section 45 of the PMLA, which require the prosecution to be given an opportunity to oppose the bail application and the Court to be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence.2. Interpretation of Section 45 of the PMLAThe Court considered the interpretation of Section 45 of the PMLA, particularly in light of previous Supreme Court judgments. The applicant's counsel argued that bail is the rule and jail is the exception, highlighting the Supreme Court's stance that Article 21 of the Constitution, which ensures personal liberty, should guide the interpretation of Section 45. However, the Court noted that the twin conditions under Section 45, as amended in 2018, remain applicable and must be satisfied for bail to be granted.3. Predicate Offence and its ImplicationsThe predicate offence against the applicant involved charges under the IPC and the Prevention of Corruption Act, which are scheduled offences under the PMLA. The Court assessed whether the existence of these predicate offences justified the proceedings under the PMLA. The prosecution argued that the applicant was involved in money laundering activities, including the acquisition and concealment of proceeds of crime, thus warranting the application of PMLA provisions.4. Prolonged Pre-Trial IncarcerationThe applicant's counsel emphasized the prolonged pre-trial incarceration as a ground for bail, arguing that the applicant had already spent significant time in custody without trial progression. The Court acknowledged the principle that prolonged detention without trial could justify bail but weighed this against the gravity of the charges and the applicant's alleged involvement in the offences.5. Previous Supreme Court DecisionsThe Court referred to several Supreme Court decisions, including V. Senthil Balaji and Prem Prakash, which reiterated the principle that bail is the rule and jail is the exception. However, it also considered the Supreme Court's acknowledgment of the twin conditions under Section 45 of the PMLA, emphasizing that these conditions must be met for bail to be granted.6. Applicant's Role and Gravity of ChargesThe Court examined the applicant's alleged role in the economic offences, including his involvement in a criminal syndicate that manipulated liquor sales and licensing for illegal gains. The prosecution presented evidence of the applicant's direct involvement in the conspiracy, including the collection of bribes and the use of duplicate holograms to facilitate the illegal sale of liquor.7. Flight Risk ConsiderationThe prosecution argued that the applicant posed a flight risk due to his alleged involvement in money laundering activities with international connections. The Court considered this argument, noting the applicant's frequent travel abroad and the presence of associates in foreign countries, which could facilitate evasion of legal proceedings.SIGNIFICANT HOLDINGSThe Court held that the applicant did not satisfy the twin conditions under Section 45 of the PMLA, as there were no reasonable grounds to believe that he was not guilty of the offences charged. The Court emphasized the gravity of the economic offences and the applicant's alleged role in the criminal syndicate, which involved significant illegal financial activities.The Court concluded that the applicant's prolonged pre-trial incarceration, while a consideration, did not outweigh the seriousness of the charges and the potential flight risk posed by the applicant. It held that the special and stringent provisions under Section 45(1) of the PMLA justified the denial of bail in this case.Accordingly, the Court rejected the applicant's prayer for bail, maintaining that the conditions for granting bail under the PMLA were not met, and the applicant's release was not warranted given the circumstances and the nature of the allegations against him.