2015 (12) TMI 1661 - HC - Money Laundering

Bail application - Prevention of Money Laundering - Held that - The burden of proof as referred to herein above relates to proceeds of crime. As stated herein above since the applicant is not facing any charge for any offence under Part A of Schedule Section 45 (1) of the PMLA would not be prima facie applicable and therefore it is not required that the applicant is to be declared as not guilty of such offence at the time of dealing with an application for bail. Under Section 45 (2) of PMLA the other provisions of the Code would be applicable and therefore the case is to be dealt with accordingly. Therefore I am dealing with the same. As far as the allegations levelled against the present applicant are concerned I have gone through the statement of the applicant himself. It appears that applicant is one of the partners of SAM DELHI along with another accused of the Original Complaint No.8 of 2015 who were operating their own book in Delhi making and receiving bets on different matches. The investigation is almost over and on completion of investigation the present complaint has been filed by the authority. I have also considered the fact that the maximum punishment is of 7 years and therefore the case of the applicant can be considered by imposing certain conditions. In my view the judgments relied upon by Ms. Patel would not be applicable to the facts of the present case. Hence the application is allowed and the applicant is ordered to be released on bail registered at the instance of the respondent No.2 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 certain conditions .

Summary

Issues Involved:
1. Application for regular bail under Section 439 of the Code of Criminal Procedure, 1973 and Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA).
2. Allegations of involvement in a Hawala racket and cricket betting.
3. Interpretation of "proceeds of crime" and "scheduled offence" under PMLA.
4. Applicability of Section 45 of PMLA regarding bail conditions.
5. Burden of proof under Section 24 of PMLA.

Issue-wise Detailed Analysis:

1. Application for Regular Bail:
The applicant sought regular bail under Section 439 of the Code of Criminal Procedure, 1973, read with Section 45 of the PMLA, in connection with ECIR No. - ECIR/03/AMZO/2015 [PMLA Complaint No.10 of 2015]. The application was initially rejected by the Special Designated Court at Ahmedabad, leading to the present application.

2. Allegations of Involvement in Hawala Racket and Cricket Betting:
The FIR lodged on 25.3.2015 alleged that the applicant, along with others, was involved in a Hawala racket and cricket betting. The Enforcement Department raided a farm house where 16 individuals were found engaging in these activities. The applicant was arrested on 15.7.2015, and a supplementary complaint was filed against him.

3. Interpretation of "Proceeds of Crime" and "Scheduled Offence" under PMLA:
The applicant's counsel argued that the case did not fall under the definition of "proceeds of crime" as per Section 2(u) of PMLA since cricket betting is not a scheduled offence under Section 2(y) of PMLA. The counsel emphasized that the alleged amount derived from cricket betting does not constitute proceeds of crime, and hence, the applicant should not be charged under Section 3 of PMLA.

4. Applicability of Section 45 of PMLA Regarding Bail Conditions:
The court examined Section 45 of PMLA, which imposes stringent conditions for granting bail. However, since the applicant was not charged with any scheduled offence under Part A of the Schedule, Section 45(1) was deemed not applicable. Consequently, the court considered the bail application under Section 45(2) of PMLA, which allows for the application of other provisions of the Code of Criminal Procedure.

5. Burden of Proof under Section 24 of PMLA:
According to Section 24 of PMLA, the burden of proof lies on the accused to establish that the proceeds of crime are untainted. The prosecution argued that the applicant failed to prove that the money involved was untainted. However, since the applicant was not facing charges for any scheduled offence, the court found that Section 45(1) was not applicable, and thus, the stringent bail conditions were not required.

Judgment:
The court allowed the bail application, ordering the applicant to be released on bail with specific conditions, including surrendering his passport, not leaving Gujarat and Delhi without permission, marking presence with the respondent, and furnishing his current address. The court emphasized that the trial court should not be influenced by the preliminary observations made while granting bail. The rule was made absolute to the specified extent, with direct service permitted.