2016 (2) TMI 1062 - HC - Money Laundering

Bail application - Prevention of Money Laundering - Held that - If the Schedules to the Act are perused, the applicant is not charged with any of the offences punishable under PMLA referred in the Schedule. It is pertinent to note that the applicant is facing charge only for the offences punishable under PMLA and is not the accused wherein the allegations of cheating, forgery etc. have been made against other accused which are scheduled offence. Therefore, there might be some illegal activities committed by the applicant i.e. with regard to cricket betting, but in my prima facie opinion, the said income would not be covered under the definition of proceeds of crime. Application is allowed and the applicant is ordered to be released on bail in connection with ECIR No.- ECIR/03/AMZO/2015 Now PMLA Complaint Case No.10 of 2015 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 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 State of Gujarat and State of Maharashtra without prior permission of the concerned Sessions Judge; e mark presence with the respondent No.2 on every Monday of each English Calendar month 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.

Summary

Issues Involved:
1. Application for regular bail under Section 439 of the Code of Criminal Procedure, 1973, read with Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA).
2. Allegations of involvement in a Hawala racket and cricket betting.
3. Definition and applicability of "proceeds of crime" under PMLA.
4. Applicability of Section 45 of PMLA concerning the scheduled offence.
5. Burden of proof under Section 24 of PMLA.
6. Previous bail orders and their relevance to the current case.
7. Conditions for granting bail.

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. The application was filed in connection with ECIR No.- ECIR/03/AMZO/2015, now PMLA Complaint Case No.10 of 2015, registered for offences punishable under Section 3 read with Section 4 of the PMLA and Section 120-B of the Indian Penal Code.

2. Allegations of Involvement in Hawala Racket and Cricket Betting:
The case arose from an FIR lodged on 25.3.2015, alleging that 16 persons were involved in a Hawala racket and cricket betting. The investigation revealed that the accused, including the applicant, were involved in illegal activities through a partnership firm. Electronic gadgets and forged SIM cards were seized, which were used for betting.

3. Definition and Applicability of "Proceeds of Crime" under PMLA:
The applicant's counsel argued that the case does not fall under the definition of "proceeds of crime" as defined under Section 2(u) of the PMLA, since betting is not a scheduled offence. The counsel contended that the income derived from betting would not be covered under the definition of proceeds of crime.

4. Applicability of Section 45 of PMLA Concerning the Scheduled Offence:
The court noted that the applicant is not charged with any scheduled offence under the PMLA. The applicant is facing charges only under the PMLA and not for any scheduled offence. Therefore, Section 45 of the PMLA, which imposes stringent conditions for granting bail, would not be prima facie applicable.

5. Burden of Proof Under Section 24 of PMLA:
The respondent's counsel argued that under Section 24 of the PMLA, the burden of proof is on the accused to prove that the money involved is untainted. However, since the applicant is not facing any charge for a scheduled offence, the court held that Section 45(1) of the PMLA would not be applicable.

6. Previous Bail Orders and Their Relevance to the Current Case:
The applicant's counsel referred to previous bail orders granted to co-accused in similar cases, which were not challenged before the Supreme Court. The court considered these precedents and noted that the applicant is not facing any charge for a scheduled offence.

7. Conditions for Granting Bail:
The court decided to grant bail to the applicant, imposing several conditions, including:
- Not taking undue advantage of liberty or misusing it.
- Surrendering the passport.
- Not leaving the State of Gujarat and Maharashtra without prior permission.
- Marking presence with the respondent every Monday for three months and then once a month for a year.
- Furnishing the current address and not changing it without permission.

Conclusion:
The court allowed the application for bail, ordering the applicant to be released on bail with specific conditions. The court emphasized that the trial court should not be influenced by the preliminary observations made while granting bail. The request for a stay on the operation of the order was refused.