2024 (11) TMI 670 - HC - Money Laundering

Money laundering accused gets bail as twin conditions under Section 45 PMLA cannot override constitutional right to liberty

Jawed Imam Siddiqui Versus Directorate of Enforcement

Delhi HC granted regular bail to accused in money laundering case involving misuse of position to appoint relatives in DWB for pecuniary benefits. Court ... Seeking grant of regular bail - Money Laundering - predicate offence - misuse of position to appoint and engage relatives and other known persons to various posts in the DWB, from which they derived pecuniary benefits - HELD THAT:- A plain reading of Section 45 of the PMLA shows that the public prosecutor must be given an opportunity to oppose the application and the Court should have reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. The twin conditions though restricts the right of accused to be released on bail but do not impose absolute restraint and the discretion vests in the Court. Section 45 of the PMLA while imposing additional conditions to be met for granting bail, does not create an absolute prohibition on the grant of bail. When there is no possibility of trial being concluded in a reasonable time and the accused is incarcerated for a long time, depending on the nature of allegations, the conditions under Section 45 of the PMLA would have to give way to the constitutional mandate of Article 21. What is a reasonable period for completion of trial would have to be seen in light of the minimum and maximum sentences provided for the offence, whether there are any stringent conditions which have been provided, etc. It would also have to be seen whether the delay in trial is attributable to the accused. The issue of long incarceration and right of speedy trial also cropped up in Manish Sisodia v Directorate of Enforcement [2024 (8) TMI 614 - SUPREME COURT], wherein it has been held by the Supreme Court that the right to bail in cases of delay in trial, coupled with long period of incarceration would have to be read into the Section 439 CrPC as well as Section 45 of PMLA while interpreting the said provisions. Prem Prakash v. Union of India through the Directorate of Enforcement [2024 (8) TMI 1412 - SUPREME COURT], is another recent decision where it has been reiterated that the fundamental right enshrined under Article 21 cannot be arbitrarily subjugated to the statutory bar in Section 45 of the Act and the constitutional mandate being the higher law, the right to speedy trial must be ensured and if the trial is being delayed for reasons not attributable to the accused, his incarceration should not be prolonged on that account. The view taken in the Manish Sisodia and Prem Prakash cases was reiterated recently by the Supreme Court in the case of Vijay Nair v. Directorate of Enforcement [2024 (9) TMI 321 - SC ORDER], where it was held that liberty guaranteed under Article 21 of the Constitution does not get abrogated. In a situation such as the present case, where there are multiple accused persons, thousands of pages of evidence to assess, large number of witnesses to be examined, the trial is not expected to end anytime in the near future and the delay is not attributable to the accused, keeping the accused in custody by using Section 45 PMLA a tool for incarceration or as a shackle is not permissible - The accused in a money laundering case cannot be equated with those punishable with death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, 1985, murder, cases of rape, dacoity, etc. As held in the catena of judgements, Constitutional Courts have the power to grant bails on the grounds of violation of Part III of the Constitution and Section 45 does not act as an hindrance to the same. The sacrosanct right to liberty and fair trial is to be protected even in cases of stringent provisions present in special legislations. Considering the totality of the facts and circumstances, the fact that the main accused is out on bail, the period of custody undergone, the likelihood of supplementary challan being filed qua the main accused and that the trial has been stuck at the stage of supply of documents under Section 207 Cr.P.C., keeping in mind the import of the catena of decisions of Supreme Court discussed hereinabove, it is directed that the applicant be released on regular bail subject to him furnishing respective personal bond in the sum of Rs. 1,00,000/- with one surety of the like amount to the satisfaction of the concerned Jail Superintendent/concerned Court/Duty J.M./link J.M. and subject to the fulfilment of further conditions imposed - bail application allowed. Issues Involved:1. Legality of the applicant's involvement in money laundering.2. Application of Section 45 of the Prevention of Money Laundering Act (PMLA) in granting bail.3. Right to a speedy trial and prolonged incarceration.Issue-wise Detailed Analysis:1. Legality of the Applicant's Involvement in Money Laundering:The applicant sought regular bail in proceedings related to allegations of money laundering, stemming from an FIR registered by the CBI against the main accused, who was alleged to have misused his position to derive pecuniary benefits. The Enforcement Directorate (ED) alleged that the main accused laundered proceeds of crime by investing in immovable properties through associates, with the applicant being a knowing recipient of these proceeds. The applicant argued that he was not named in the FIR or chargesheet of the predicate offence and contended that the sale transaction of his property was legitimate, with no knowledge of the source of funds being illicit. The court noted that the determination of the authenticity of sale agreements and the veracity of statements recorded under Section 50 of the PMLA would be assessed during the trial, not at the bail stage.2. Application of Section 45 of the PMLA in Granting Bail:Section 45 of the PMLA imposes twin conditions for granting bail, requiring the court to have reasonable grounds for believing that the accused is not guilty and is unlikely to commit an offence while on bail. The court acknowledged that while these conditions restrict the right to bail, they do not impose an absolute restraint. The court emphasized that the constitutional mandate of Article 21, which ensures the right to life and personal liberty, takes precedence. The court referenced several Supreme Court judgments that highlighted the importance of considering the duration of incarceration and the likelihood of trial completion when deciding bail applications, especially under statutes with stringent bail conditions.3. Right to a Speedy Trial and Prolonged Incarceration:The court underscored the principle that 'bail is the rule and jail is the exception,' rooted in the constitutional mandate of Article 21. The court noted that the applicant had been in custody since November 2023, and the trial was delayed due to procedural issues, with no immediate prospect of conclusion. The court highlighted that prolonged incarceration without trial completion violates the right to a speedy trial. The court referred to multiple Supreme Court decisions that stressed the need to balance statutory restrictions with constitutional rights, particularly when trials are unlikely to conclude promptly. The court concluded that given the applicant's prolonged custody and the trial's delay, bail should be granted, subject to conditions ensuring the applicant's availability for trial and preventing tampering with evidence.Conclusion:The court granted bail to the applicant, emphasizing the constitutional right to a speedy trial and fair procedure. The decision highlighted the need to harmonize statutory conditions with constitutional mandates, particularly in cases involving prolonged pre-trial detention. The court imposed conditions on the applicant to ensure compliance with legal proceedings and prevent interference with the investigation.