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2015 (7) TMI 1313 - HC - Money LaunderingOffence under PMLA - Application for bail under Section 439 of the Code of Criminal Procedure - HELD THAT - Considered the statements of the Assistant General Manager of RBI, Kolkata, Seizure List, statements of some Directors of Rose Valley, statements of some office bearers of Rose Valley, statements of some debenture trustees of Rose Valley, statements of some debenture holders of Rose Valley, statements of AGM of Accounts of Rose Valley and statements of some Regional Managers of Rose Valley for formation of opinion whether the petitioner is involved in the offence of money laundering as alleged by the opposite party. On consideration of the above statements and other materials collected during investigation I cannot persuade myself to hold that no offence of money laundering is made out against the petitioner. The question whether the opposite party is entitled to file supplementary petition of complaint to prosecute the petitioner under Section 4 of the P.M.L. Act remains open for decision by the trial court. By making a pragmatic approach to the provision of Section 45(1) of the P.M.L. Act and on consideration of the antecedents of the petitioner in collection of money from open market for issuing secured debenture in violation of the guidelines of SEBI and on further consideration of the manner of keeping accounts of the Rose Valley, unable to hold that the petitioner is not likely to commit any offence while on bail. As a result, cannot persuade myself to grant bail to the petitioner at this stage. So, prayer for bail is rejected. The application is dismissed.
Issues Involved:
1. Application for bail under Section 439 of the Code of Criminal Procedure. 2. Compliance with SEBI guidelines and penalties imposed. 3. Allegations under the Prevention of Money-Laundering Act, 2002 (PML Act). 4. Interpretation and application of Section 45 of the PML Act. 5. Judicial precedents and their applicability to the case. 6. Determination of the likelihood of the petitioner committing an offence while on bail. Detailed Analysis: Application for Bail under Section 439 of the Code of Criminal Procedure: The petitioner filed an application for bail under Section 439 in connection with ML Case No. 03 of 2015. The petitioner has been in custody since March 25, 2015, and has cooperated with the investigation by visiting the office of the opposite party multiple times and depositing his passport. Compliance with SEBI Guidelines and Penalties Imposed: The petitioner, as Chairman of Rose Valley Real Estates Construction Ltd., collected money by issuing secured debentures. The Securities and Exchange Board of India (SEBI) imposed a monetary penalty of Rs. 1 crore, which was later reduced to Rs. 10 lakh by the Securities Appellate Tribunal. The proceeding under Section 24 of the SEBI Act is challenged in the High Court and is still pending. Allegations under the Prevention of Money-Laundering Act, 2002 (PML Act): The complaint was filed against the petitioner under Section 4 of the PML Act. The petitioner argued that no offence is made out under Section 3 of the PML Act. The opposite party alleged that the petitioner collected Rs. 12.82 crores from the public without submitting offer documents to SEBI or the Registrar of Companies, thereby committing an offence under Section 24 of the SEBI Act and Section 4 of the PML Act. Interpretation and Application of Section 45 of the PML Act: Section 45 of the PML Act imposes two conditions for granting bail: the prosecutor must be given an opportunity to oppose the bail application, and the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty and is not likely to commit any offence while on bail. The court found these conditions binding and overriding the general provisions of the Code of Criminal Procedure. Judicial Precedents and Their Applicability to the Case: The court referred to several Supreme Court judgments to guide its decision. In "Ranjitsing Brahmajeetsing Sharma V. State of Maharashtra," the Supreme Court emphasized that the court should not weigh evidence meticulously at the bail stage. In "State of Uttaranchal V. Rajesh Kumar Gupta," it was held that Section 37 of the NDPS Act must be construed pragmatically. Other cases like "Subrata Chattoraj V. Union of India" and "State of Gujarat V. Mohanlal Jitamalji Porwal" highlighted the seriousness of economic offences. Determination of the Likelihood of the Petitioner Committing an Offence While on Bail: The court considered the antecedents of the petitioner, the manner of collecting money, and the way accounts were kept. It concluded that the petitioner is likely to commit an offence while on bail. Therefore, the court could not grant bail at this stage. Conclusion: The application for bail was rejected, and the petition was dismissed. The court emphasized the binding nature of Section 45 of the PML Act over the general provisions of the Code of Criminal Procedure and highlighted the seriousness of the allegations and the potential for the petitioner to commit further offences if released on bail.
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