2013 (2) TMI 792 - HC - Money Laundering

Application for bail - Held that - Considering the magnitude of the offence and the fact that in the past applicant had not cared to respondent to the summonses of the department the possibility of the applicant not being available for investigation or trial cannot be entirely ruled out. This is more so because of magnitude of the crime. He was arrested does not show that he would not abscond in future. Expecting that the authorities dealing with this investigation may complete the investigation fast and put the applicant to a quick trial without clubbing all the cases together bearing in mind the limitation in the Code of Criminal Procedure about joinder of trials the applicant s application for bail is rejected.

Issues Involved:
1. Legality of arrest and authority of the arresting officer.
2. Compliance with procedural safeguards during arrest.
3. Applicability of additional limitations on granting bail under Section 45 of the Prevention of Money Laundering Act, 2002.
4. Consideration of bail based on the gravity of the offence and the applicant's past conduct.

Issue-wise Detailed Analysis:

1. Legality of Arrest and Authority of the Arresting Officer:
The applicant challenged the legality of his arrest, contending that the Assistant Director who arrested him was not properly authorized under the Prevention of Money Laundering Act, 2002 (the Act). The court examined Section 19 of the Act, which empowers the Director, Deputy Director, or Assistant Director to effect arrests. The applicant argued that the arresting officer must be appointed under Section 49(1) of the Act. The court referred to a notification dated 13th September 2005, which appointed Assistant Directors under the Foreign Exchange Management Act, 1999 (FEMA) as Assistant Directors for the purposes of the Act. The court found that the arresting officer, being an Assistant Director under FEMA, was deemed authorized under the Act.

2. Compliance with Procedural Safeguards During Arrest:
The applicant argued that the arresting officer must be specifically authorized by the Central Government as per the Prevention of Money Laundering (The Forms and The Manner of Forwarding a Copy of Order of Arrest of a Person Along with The Material to The Adjudicating Authority and Its Period Of Retention) Rules, 2005. The court held that the rules framed under Section 73(2) of the Act were for maintaining records and did not control the substantive provisions of Section 19 of the Act. Thus, the Assistant Director did not require additional authorization from the Central Government to effect the arrest, and there was no violation of procedural safeguards.

3. Applicability of Additional Limitations on Granting Bail Under Section 45 of the Act:
The applicant contended that since he was involved in offences listed under Part B of the Schedule to the Act, the additional limitations on granting bail under Section 45 did not apply. The court agreed with this proposition, noting that the restrictions under Section 45 were applicable only to offences under Part A of the Schedule. Therefore, the applicant's bail application would be considered without the additional limitations imposed by Section 45.

4. Consideration of Bail Based on the Gravity of the Offence and the Applicant's Past Conduct:
The court considered the gravity of the offence, noting that the applicant was involved in cheating over 5000 persons and the amount involved exceeded Rs. 500 crores. Additionally, the applicant had not cooperated with the investigation, ignored 32 summonses, and had a history of not complying with bail conditions in other cases. The court found that the magnitude of the crime and the applicant's past conduct indicated a high risk of absconding and tampering with evidence. Consequently, the court denied the bail application, emphasizing the need for a swift investigation and trial.

Conclusion:
The court rejected the applicant's bail application, concluding that the arrest was lawful, procedural safeguards were followed, and the applicant's involvement in a serious offence and past conduct justified continued detention. The court urged the authorities to expedite the investigation and trial.

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