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2022 (3) TMI 1439 - HC - Money LaunderingSeeking grant of bail - money laundering - Provisional attachment order - scheduled offences - completion of investigation of an offence under the provisions of the PMLA - would complete on issuance of an order under Section 5(1) of the said Act for provisional attachment or on filing of application under Section 5(5) of the Act for confirmation of the same or atleast when an order is passed under Section 8(3)(a) of the said Act? - person arrested subsequent to the order passed under Section 8(3)(a) of the said Act would be entitled for immediate release by applying the provisions of Section 167 (2) of Cr.PC. or not - twin conditions enumerated under the provisions of Section 45(1) of the Act is a Sine-qua-non for granting bail to an accused who has been arrested under Section 19 of the Act or not - arrest made under Section 19 of the Act is a preventive detention or not. Whether the investigation of an offence under the provisions of the PMLA would complete on issuance of an order under Section 5(1) of the said Act for provisional attachment or on filing of application under Section 5(5) of the Act for confirmation of the same or atleast when an order is passed under Section 8(3)(a) of the said Act? - If so, if a person is arrested subsequent to the order passed under Section 8(3)(a) of the said Act would be entitled for immediate release by applying the provisions of Section 167 (2) of Cr.PC.? - HELD THAT - It is pertinent to note that nowhere it is mentioned as to what is the time limit for filing a complaint/final report under Section 45 of the Act. However, there can not be a situation where a person is arrested and he is continued in custody eternally on the pretext that there is no time limit fixed under the Act for filing the complaint/final report as is contemplated under section 45 of the said Act. Admittedly, the proceedings under the Act is judicial proceedings. Whenever a person is arrested by the investigating agency his personal liberty is taken away by the investigating agency for a particular purpose. As is provided in Section 167 of Cr.PC., supra, if an Investigating Agency fails to file a final report as contemplated under Section 173 Cr.PC. within 60 days or 90 days as the case may be depending upon the maximum punishment prescribed in a given penal statute, the person who has been arrested by the Investigating Agency acquires indefeasible right to be released forthwith. Even though there is no specific time limit prescribed under the Act for filing complaint/final report as contemplated under Section 45 of the Act, whenever a person is arrested by the Directorate of Enforcement under the provisions by resorting to the powers vested in it under Section 19 of the Act., the Directorate of Enforcement is expected to file a complaint/final report within 60 days from the date of arrest. In the event of failure to do so, indefeasible right is definitely to accrue to an accused under the Act. Having regard to the scheme of the Act, especially the investigation powers is given to the Directorate of Enforcement and the proceedings before the Directorate of Enforcement in summoning the accused recording his statement, collection of evidence being treated as judicial proceedings as is found in Section 50(4) of the Act referred to supra, the said proceedings cannot be termed as completion of investigation. The proceedings that takes place before filing of the final report is for the purpose of prima facie satisfaction of the Directorate of Enforcement that a provisional attachment order was passed which needs confirmation in order to protect the assets and to put an end to the money laundering. The arguments put forth on behalf of the petitioner that the petitioner is entitled for statutory bail under Section 167(2) of the Cr.PC., on issuance of the order passed under Section 5(1) of the Act for provisional attachment or filing an application for its confirmation before the adjudicating authority under Section 5(5) of the Act. In other words, the attachment of the property and its confirmation though is part of the same investigation, it is not for the purpose of filing the complaint under Section 45 of the Act and it is for the purpose of attachment of the property - for all practical purposes, the investigation would not be complete so as to make available a right to the petitioner for statutory bail under Section 167(2) of Cr.P.C. - questions are answered in negative. Whether an accused is entitled for grant of bail taking note of the fact that he has been enlarged on bail in respect of predicate offences? - Whether twin conditions enumerated under the provisions of Section 45(1) of the Act is a Sine-qua-non for granting bail to an accused who has been arrested under Section 19 of the Act? - Whether an arrest made under Section 19 of the Act is a preventive detention? - Whether the petitioner has made out a case for grant of bail? - HELD THAT - Close reading of section 45(1) of the Act makes it clear that before a court grants bail to an accused person, for an offence under the Act, an opportunity must be provided to the prosecutor to oppose the application and in the event of the prosecution opposing the application, court must be satisfied that there are reasonable grounds for believing that an accused is not guilty of such offence and he is not likely to commit any offence while on bail. Therefore, one can easily construe while exercising the power under Section 439 of Cr.PC., for grant of bail. The twin condition referred to supra must be satisfied before a court intends to grant the bail. The language employed in Section 45(1) of the Act is in the form of twin conditions akin to the language employed by the legislature under Section 37 of the NDPS Act - the court which is considering the bail application must get satisfied that there are reasonable grounds that accused may not be guilty and he may commit further offence as money laundering is a continuous offence. The special powers vested in this court under Section 439 Cr.PC. cannot be exercised in the case of an accused facing trial under the provisions of the said Act, like any other accused who has been charged under the provisions of the IPC. Having regard to the language employed in Section 45(2), there is an embargo on the powers of this court to exercise the special powers vested in this court under Section 439 Cr.P.C. On careful reading of Section 45(2), one can easily understand that the wordings used under the said provision is in pari materia to section 37 of the NDPS Act. This court considered the rival contentions of the parties in the light of Section 19 of the Act. Argument of the counsel for de-facto complainant that arrest under Section 19 of the Act, cannot be construed as preventive detention cannot be countenanced in law - If the said argument is to be accepted, there remains nothing for the Special Court to decide the guilt or otherwise of the accused in the trial. The opinion of the Investigating Agency is no doubt judicial in nature, having regard to Section 50(4) of the Act. But, the Special Court has to charge the accused for the offence under Section 3 of the Act after taking cognizance of the said offence when once a complaint/final report under Section 45 of the Act, is filed. If the opinion of the Investigating Agency for the purpose of arrest under Section 19 of the Act, that an accused under the Act is prima facie guilty of offence under the provisions of the Act, it is only for the purpose of arrest and not binding on the Special Court. In the case on hand, it is no doubt true that the petitioner is enlarged on bail in respect of the predicated offences. The Investigating Agency is very well aware of the said fact. Despite the same, the investigating Agency proceeded to effect the arrest of the petitioner by resorting to the powers vested in it under Section 19 of the said Act. Therefore, the word guilty found under Section 19 of the Act is to be construed in that sense and not as an opinion that would bind the petitioner/accused and definitely not binding on the Special courts. Thus, the argument put forth on behalf of the petitioner that ipso facto, petitioner is entitled for the bail in view of the fact that the petitioner is enlarged on bail for the predicated offences cannot be countenanced in law - the questions are answered in negative. The petition is allowed.
Issues Involved:
1. Completion of investigation under the Prevention of Money Laundering Act (PMLA) 2. Applicability of Section 167(2) Cr.PC. for immediate release on bail 3. Entitlement for bail based on bail granted in predicate offences 4. Necessity of twin conditions under Section 45(1) of PMLA for granting bail 5. Nature of arrest under Section 19 of PMLA 6. General entitlement for bail Detailed Analysis: 1. Completion of Investigation Under PMLA: The court examined whether the investigation under PMLA is deemed complete upon the issuance of a provisional attachment order under Section 5(1) or upon filing an application for confirmation under Section 5(5). The court concluded that the issuance of a provisional attachment order and its confirmation is not tantamount to the completion of the investigation. These actions are part of the investigation aimed at preventing further money laundering and securing assets but do not signify the end of the investigation process. 2. Applicability of Section 167(2) Cr.PC. for Immediate Release on Bail: The petitioner argued that since the investigation was deemed complete upon the issuance of the provisional attachment order, he should be released on bail under Section 167(2) Cr.PC. The court determined that the Directorate of Enforcement must file a complaint/final report within 60 days from the date of arrest, as prescribed by the maximum punishment for money laundering under PMLA. In this case, the complaint was filed within the stipulated 60 days, and thus, the petitioner was not entitled to statutory bail under Section 167(2) Cr.PC. 3. Entitlement for Bail Based on Bail Granted in Predicate Offences: The petitioner contended that since he was granted bail in the predicate offences, he should be granted bail under PMLA. The court rejected this argument, stating that the arrest under Section 19 of PMLA serves a different purpose and is not automatically influenced by bail granted in predicate offences. 4. Necessity of Twin Conditions Under Section 45(1) of PMLA for Granting Bail: The court emphasized that Section 45(1) of PMLA imposes twin conditions for granting bail: the Public 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 noted that these conditions are akin to those under Section 37 of the NDPS Act and must be satisfied before granting bail under PMLA. 5. Nature of Arrest Under Section 19 of PMLA: The court addressed whether the arrest under Section 19 of PMLA constitutes preventive detention. It concluded that the arrest under Section 19 is not preventive detention but is intended for further investigation and to prevent ongoing money laundering activities. The opinion formed by the investigating agency for arrest is judicial in nature but not binding on the Special Court. 6. General Entitlement for Bail: The court assessed whether the petitioner had made a case for bail under Section 439 Cr.PC. It determined that the petitioner had cooperated with the investigation, and the Directorate of Enforcement had already seized necessary documents and assets. The court found that the petitioner had made out a case for bail, subject to stringent conditions to address any remaining apprehensions of the prosecution. Order: The petitioner was granted bail with conditions, including the execution of a personal bond, regular attendance before the Directorate of Enforcement, appearance in court on hearing dates, prohibition on tampering with witnesses, and restriction on leaving Bengaluru District without permission. Violation of any condition would entitle the prosecution to seek cancellation of bail.
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