2024 (9) TMI 936 - HC - Money Laundering

Bail denied for mastermind in money laundering scheme using bank accounts and entry providers for commission-based fund routing.

HC dismissed bail application in money laundering case. Petitioner was identified as mastermind in routing funds through bank accounts using entry ... Regular bail - prevention of money laundering - proceeds of crime - triple test under Section 439 of Cr.P.C. - rigors of Section 45 of the PMLA - socio-economic offences and bail - modus operandi and mastermind liability - nexus with predicate offenceRegular bail - triple test under Section 439 of Cr.P.C. - socio-economic offences and bail - rigors of Section 45 of the PMLA - Application for grant of regular bail to the petitioner is rejected. - HELD THAT: - The Court applied the established factors for bail in economic offences, including the triple test under Section 439 Cr.P.C., and noted that socio economic offences require a stricter approach. The Court found direct and material allegations against the petitioner indicating involvement in laundering proceeds of crime and functioning as a key person in the nexus that provided fictitious entries. Considerations included the nature and magnitude of the alleged offence, the materials relied upon in the complaint, the established modus operandi, and ongoing investigative and trial exigencies. In light of these factors and authorities emphasizing the rigours of Section 45 of the PMLA, the balance of competing considerations did not favour enlargement on bail. [Paras 6, 9, 16, 17, 18]Bail is declined and the regular bail application is dismissed.Proceeds of crime - modus operandi and mastermind liability - nexus with predicate offence - Whether the petitioner is connected with the predicate offence and involved in handling proceeds of crime. - HELD THAT: - The Court examined the materials in the complaint and found that the petitioner managed transactions, instructed associates to operate accounts, and procured bank accounts (some allegedly opened on forged identity documents) for making entries. The complaint and recorded statements attributed transfer of funds identified as proceeds of crime to bank accounts operated on the petitioner's instructions, and described a coordinated modus operandi involving the petitioner, entry providers and the principal accused. On this basis the Court concluded prima facie that the petitioner had nexus with the predicate offence and was a central figure in laundering the alleged proceeds. [Paras 5, 9, 10, 11]The petitioner is prima facie connected to the predicate offence and to proceeds of crime, forming a material basis for continued custody.Final Conclusion: The petition for regular bail is dismissed after the High Court, applying the triple test and PMLA jurisprudence, concluded that the petitioner is prima facie linked to laundering of proceeds of crime and that the balance of considerations disfavors bail. Issues Involved:1. False implication and lack of evidence against the petitioner.2. Jurisdiction and connection to the predicate offence.3. Compliance with procedural requirements during arrest.4. Role and involvement of the petitioner in the alleged money laundering activities.5. Comparative analysis of bail granted to co-accused and other related cases.6. Principles for granting bail in economic offences.7. Public interest and seriousness of the offence.Issue-wise Detailed Analysis:1. False Implication and Lack of Evidence Against the Petitioner:The petitioner argued that he was falsely implicated without cogent and reliable evidence. He highlighted that he was not initially named in the main complaint and was only included in the supplementary complaint. He emphasized that the main complaint was against other individuals, and he had no connection to the predicate offence registered under FIR No. 13/2019 by ACB, Jamshedpur. The petitioner also mentioned his cooperation with the investigation and the completion of the investigation against him, arguing that there was no likelihood of concluding the trial shortly.2. Jurisdiction and Connection to the Predicate Offence:The petitioner contended that the Enforcement Directorate (ED) exceeded its jurisdiction by arraigning him as an accused, as he could not be remotely linked to the predicate offence. He pointed out that the FIR was against Suresh Prasad Verma, with whom he had no connection. The petitioner argued that the prosecution complaint did not establish a prima facie case under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), 2002.3. Compliance with Procedural Requirements During Arrest:The petitioner argued that the grounds of arrest were not informed to him in writing, violating the mandate of the Supreme Court judgment in Pankaj Bansal v. Union of India and others. He highlighted that this procedural lapse further weakened the case against him.4. Role and Involvement of the Petitioner in the Alleged Money Laundering Activities:The ED's counsel presented evidence showing the petitioner's involvement in money laundering activities. Statements from witnesses, including Tara Chand and Ram Prakash Bhatia, indicated that the petitioner managed transactions and facilitated the transfer of funds through various bank accounts. The petitioner was found to be involved in the illegal business of money transfer and providing bogus entries in lieu of commission. The investigation revealed that the petitioner was a key person in the nexus, managing the laundering of proceeds of crime.5. Comparative Analysis of Bail Granted to Co-accused and Other Related Cases:The petitioner cited several cases where co-accused were granted bail, including Harish Yadav, Rajkumari, Genda Ram, Mukesh Mittal, Prem Prakash, and Manish Sisodia. However, the court distinguished these cases based on the specific facts and roles of the individuals involved. The court noted that the petitioner's case was different due to his direct involvement and the gravity of the allegations.6. Principles for Granting Bail in Economic Offences:The court referred to the Supreme Court's judgment in P. Chidambaram v. Central Bureau Investigation, which outlined the principles for granting bail in economic offences. The court emphasized the need to consider the nature of the accusation, severity of the punishment, reasonable apprehension of tampering with witnesses, and the larger interest of the public or the State. The court also cited the judgment in Central Bureau of Investigation Vs Santosh Krnani and Another, which highlighted the seriousness of corruption and the need to deal with it with iron hands.7. Public Interest and Seriousness of the Offence:The court considered the seriousness of the offence and the public interest involved. It noted that socio-economic offences have deep-rooted conspiracies affecting the moral fibre of society and causing irreparable harm. The court emphasized that such offences require a different approach in the matter of bail, as highlighted in the judgment of State of Bihar v. Amit Kumar.Conclusion:The court, after considering the submissions and the material on record, found that the petitioner was directly involved in the money laundering activities and was the mastermind behind the transactions. The court emphasized the seriousness of the offence and the need to uphold the integrity of the investigation. Consequently, the court dismissed the bail application, stating that the petitioner was involved in the proceeds of crime and should not be released on bail.