Delhi High Court grants bail in money laundering case citing prolonged custody and trial delays under Section 45 PMLA

Delhi HC granted regular bail to accused in money laundering case involving conspiracy to fraudulently establish Vivo group companies in India while concealing Chinese ownership. Court held that while Section 45 PMLA imposes twin conditions for bail, these don't create absolute prohibition. Given accused's custody since October 2023, trial at nascent stage with 48 accused and 527 witnesses, and delay not attributable to accused, prolonged incarceration violated Article 21 rights. Court emphasized constitutional mandate supersedes statutory bars when trial completion isn't foreseeable within reasonable time. Bail granted with conditions including Rs.1,00,000 personal bond.

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Issues Involved:

1. Allegations of money laundering and fraudulent activities by Vivo India and its associated companies.
2. Applicant's alleged involvement in setting up a network of companies and financial transactions with Labquest.
3. Allegations of issuing invitation letters to Chinese nationals and involvement in visa-related illegalities.
4. Applicant's constitutional right to life and liberty due to prolonged trial and incarceration.
5. Satisfaction of the twin conditions under Section 45 of the Prevention of Money Laundering Act (PMLA).

Issue-Wise Detailed Analysis:

1. Allegations of Money Laundering:

The prosecution alleged that Vivo Mobile India Private Limited, controlled by Vivo Mobile Communication Co. Ltd, China, engaged in money laundering by creating an elaborate network of companies in India under a corporate veil. It was alleged that Vivo India remitted significant funds outside India and acquired proceeds of crime, which were then siphoned off to overseas companies controlled by Vivo China. The prosecution complaint included allegations of using forged documents to facilitate these activities.

2. Applicant's Alleged Involvement:

The applicant, the Managing Director of Lava International Ltd., was accused of inviting Chinese nationals to India to help set up companies by concealing true ownership and circumventing FDI norms. It was alleged that he transferred Rs. 3.17 Crores to Labquest Engineering Pvt. Ltd. to assist Vivo China in establishing a network of companies. The applicant argued that these funds were loans repaid with interest before the alleged offences occurred, and no evidence was presented to show receipt of proceeds of crime in overseas entities.

3. Issuing Invitation Letters and Visa Illegalities:

The applicant was accused of issuing invitation letters to Chinese nationals who later committed offences using forged documents. However, it was noted that the invitations were issued before the period of the alleged offences, and no evidence linked the applicant to the visas granted to those accused of committing the offences. The applicant contended that the mere issuance of invitation letters did not imply mens rea for the subsequent offences.

4. Right to Life and Liberty:

The applicant argued that his right to life and liberty under Article 21 of the Constitution was affected due to the slow pace of trial, with numerous accused, witnesses, and documents involved. The court acknowledged that the right to a speedy trial is a constitutional mandate, and prolonged incarceration without trial could not be justified. It was noted that the applicant had been in custody for a significant period, and the trial was still at an early stage.

5. Satisfaction of Twin Conditions under Section 45 PMLA:

The court examined whether the twin conditions under Section 45 of the PMLA were satisfied, which required reasonable grounds to believe that the applicant was not guilty and not likely to commit any offence while on bail. It was concluded that the prosecution failed to provide sufficient evidence to establish the applicant's guilt or likelihood of committing further offences. The court noted the applicant's prolonged custody and the unlikelihood of the trial concluding soon, which warranted granting bail.

Conclusion:

The court granted bail to the applicant, emphasizing the constitutional right to liberty and a fair trial. It directed the applicant to furnish a personal bond and adhere to specific conditions, including not leaving Delhi/NCR without permission, providing contact details, and not tampering with evidence. The court clarified that the observations made were only for the purpose of the bail application and did not reflect on the merits of the case.

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