2015 (10) TMI 2582 - HC - Money Laundering

Bail in connection with PMLA Case - conditional release - Held that - The application is allowed and the applicant is ordered to be released on bail on executing a bond of ₹ 1,00,000/- (Rupees One Lac only) with two local sureties of ₹ 50,000/- each to the satisfaction of the trial Court and subject to the conditions that he shall; a not take undue advantage of liberty or misuse liberty; b not act in a manner injuries to the interest of the prosecution; c surrender passport, if any, to the lower court within a week; d not leave the State of Gujarat and union territory of Delhi without prior permission of the Sessions Judge concerned; e mark presence with the respondent No.1 every Monday for a period of three months and thereafter on any day of the first week of each English Calendar month for a period of one year; f furnish the present address of residence to the I.O. and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of this Court; The Authorities will release the applicant only if he is not required in connection with any other offence for the time being. If breach of any of the above conditions is committed, the Sessions Judge concerned will be free to issue warrant or take appropriate action in the matter. Bail bond to be executed before the lower court having jurisdiction to try the case. It will be open for the concerned Court to delete, modify and/or relax any of the above conditions in accordance with law. At the trial, the trial court shall not be influenced by the observations of preliminary nature, qua the evidence at this stage, made by this Court while enlarging the applicant on bail.

Issues Involved:
1. Legality of the arrest under PMLA and Code of Criminal Procedure.
2. Applicability of Section 3 and 4 of PMLA to the applicant's case.
3. Definition and relevance of "proceeds of crime" under PMLA.
4. Applicability of Section 45 of PMLA to the applicant's bail application.
5. Burden of proof under Section 24 of PMLA.
6. Consideration of previous judgments and their relevance to the present case.
7. Conditions for granting bail under Section 439 of the Code of Criminal Procedure.

Detailed Analysis:

1. Legality of the arrest under PMLA and Code of Criminal Procedure:
The applicant contended that his arrest was illegal and contrary to the provisions of law. It was highlighted that an application under Section 482 of the Code was filed before the Court, which permitted the applicant to file for bail. The applicant's counsel argued that the arrest was not in accordance with the procedural requirements under PMLA and compared it with similar provisions in other acts like the Customs Act, Central Excise Act, Railway Property Act, and Income Tax Act.

2. Applicability of Section 3 and 4 of PMLA to the applicant's case:
The applicant's counsel argued that the case does not fall under the definition of money laundering as per Section 3 of PMLA, which involves activities connected with proceeds of crime. It was submitted that the alleged cricket betting does not constitute a "scheduled offence" under Section 2 (y) of PMLA, and hence, the provisions of Section 45 of PMLA would not apply.

3. Definition and relevance of "proceeds of crime" under PMLA:
The applicant's counsel argued that the money derived from cricket betting does not fall under "proceeds of crime" as defined in Section 2 (u) of PMLA since betting is not a scheduled offence. Therefore, the income from betting cannot be considered as proceeds of crime under PMLA.

4. Applicability of Section 45 of PMLA to the applicant's bail application:
The counsel argued that since the applicant is not charged with any scheduled offence under Part A of the Schedule of PMLA, Section 45 (1) of PMLA, which imposes stringent conditions for bail, would not be applicable. The applicant should be considered for bail under Section 45 (2) of PMLA and the provisions of the Code.

5. Burden of proof under Section 24 of PMLA:
The respondent's counsel argued that under Section 24 of PMLA, the burden of proof is on the accused to prove that the proceeds of crime are untainted property. The applicant failed to establish that the money involved was untainted, thus making Section 45 applicable. However, the court noted that since the applicant is not facing any charge for a scheduled offence, the burden of proof under Section 24 would not be relevant in this context.

6. Consideration of previous judgments and their relevance to the present case:
The respondent's counsel relied on previous judgments where bail was denied in similar cases. However, the court distinguished the present case by noting that the applicant is not charged with any scheduled offence under PMLA. The court considered the decisions in the cases of Afroz Mohmad Hasanfatta and Rakesh Manekchand Kothari, where the accused were facing charges of scheduled offences, unlike the present applicant.

7. Conditions for granting bail under Section 439 of the Code of Criminal Procedure:
The court considered the allegations, the absence of direct links between the applicant and other accused, and the lack of antecedents. The court also noted that the investigation was almost complete and the maximum punishment under PMLA is seven years. Considering these factors, the court granted bail to the applicant with specific conditions to ensure compliance and prevent misuse of liberty.

Conclusion:
The application for bail was allowed, and the applicant was ordered to be released on bail with conditions to ensure compliance with the investigation and trial process. The court emphasized that the observations made were of a preliminary nature and should not influence the trial court's final decision. The request for a stay on the implementation of the order was refused.

← Previous Next →