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of <h1>Money laundering bail denied in Rs. 51.12 crore red sanders smuggling case involving forged documents</h1> <h3>Badshah Majid Malik Versus Directorate of Enforcement, Mumbai Zonal Unit – II, Mumbai and others</h3> Badshah Majid Malik Versus Directorate of Enforcement, Mumbai Zonal Unit – II, Mumbai and others - 2024 (390) E.L.T. 183 (Bom.) Issues Involved:1. Bail application of the applicant.2. Allegations of smuggling and money laundering.3. Jurisdiction and scope of investigation by the Enforcement Directorate (ED).4. Applicability of twin conditions under Section 45 of the PML Act.5. Legal precedents and their applicability.Detailed Analysis:1. Bail Application of the Applicant:The applicant sought release on bail after being charge-sheeted in connection with ECIR No. MBZO - II/40/2021. The charges stem from a prosecution complaint filed by the Directorate of Revenue Intelligence (DRI) for offenses under Sections 132, 135(1)(a)(ii), and 135(1)(b)(ii) read with 140 of the Customs Act, 1962. The applicant was accused of false declaration of consignments and smuggling Red Sanders.2. Allegations of Smuggling and Money Laundering:The investigation revealed that the applicant was the kingpin of a syndicate smuggling Red Sanders by mis-declaring them as Fabric/Glue/Radiators/Assorted Colours using forged documents. The applicant had a history of similar offenses and had been previously detained under COFEPOSA. The syndicate had smuggled out 17 consignments valued at Rs. 47 crores before being intercepted by DRI. The applicant and his associates had laundered the proceeds through shell companies, projecting them as untainted money.3. Jurisdiction and Scope of Investigation by the Enforcement Directorate (ED):The ED's investigation covered transactions from 2010 to 2017, beyond the predicate offense period (2014-2015). The applicant argued this was beyond ED's jurisdiction. However, the court held that the ED has the jurisdiction to investigate continuing offenses, irrespective of the date of the predicate offense. The Supreme Court's judgment in Vijay Madanlal Choudhary clarified that money laundering is a continuing offense, and the ED can investigate any process or activity connected with proceeds of crime.4. Applicability of Twin Conditions under Section 45 of the PML Act:The court considered the twin conditions under Section 45 of the PML Act, which set a higher threshold for granting bail. The applicant failed to discharge the burden of showing reasonable grounds for believing he was not guilty and was unlikely to commit any offense if released. The court noted the applicant's past involvement in similar activities and the statutory presumption under Section 24 of the PML Act, which allows the court to presume the involvement of proceeds of crime unless proven otherwise.5. Legal Precedents and Their Applicability:The applicant's counsel cited several Supreme Court decisions, including Vijay Madanlal Choudhary, P. Chidambaram, Directorate of Enforcement Vs. Deepak Mahajan, and Ranjitsing Brahmajeetsing Sharma. The court found that the principles laid down in these cases, particularly Vijay Madanlal Choudhary, supported the ED's jurisdiction to investigate continuing offenses. The court also referenced the Supreme Court's judgment in Tarun Kumar, which reiterated that money laundering is an independent offense connected with proceeds of crime derived from criminal activity.Conclusion:The court concluded that the applicant's bail application lacked merit. The ED's investigation was within its jurisdiction, and the applicant failed to meet the conditions for bail under Section 45 of the PML Act. The application was thus rejected.
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