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2022 (12) TMI 1382 - HC - Money LaunderingSeeking grant of bail - Money Laundering - Embezzlement of money - allegation against the petitioner is that he has committed offence of money laundering which is punishable under Section 4 of PMLA Act, 2002 - HELD THAT - The mandate of law is that apart from Section 45 of PMLA Act, 2002, the requirement under Section 439 Cr.P.C. should also be taken note of. In the case on hand, there are grave allegations that are directed against the petitioner. Also, by the submission of the learned Standing Counsel for Enforcement Directorate, it is clear that the presence of the petitioner could not be secured easily. Learned Standing Counsel states that only after issuance of Look Out Circular, the petitioner could be traced out and arrested. The apprehension of the investigating agency i.e., the Enforcement Directorate is that in case, the petitioner is enlarged on bail, he may interrupt the investigating process by threatening the witnesses. Having considered the submissions thus made, this Court is of the view that even if Section 45 of PMLA Act, 2002 is not applied, independently also, the petitioner is not entitled for bail at this stage when the investigation is in progress and where the allegations are grave in nature and that too, when fraud is committed by embezzlement of an amount to a tune of Rs.318 crores and Indian depositors were deceived. Therefore, this Court is of the view that the request of the petitioner cannot be honoured at this stage. This Criminal Petition is dismissed.
Issues Involved:
1. Petitioner's request for bail under Section 439 Cr.P.C. 2. Allegations of money laundering and fraud. 3. Application of Section 45 of the PMLA Act, 2002. 4. Petitioner's involvement and role in the alleged crimes. 5. Investigation status and potential impact on ongoing investigations. Issue-Wise Detailed Analysis: 1. Petitioner's Request for Bail Under Section 439 Cr.P.C.: The petitioner, accused No.2 in ECIR No.ECIR/HYZO/26/2022, filed a criminal petition seeking bail under Section 439 Cr.P.C. The petitioner's counsel argued that despite a complaint filed by M/s Farmax Private Limited in 2013, no charge sheet has been filed after nine years, indicating a lack of evidence against the accused. The counsel emphasized that the petitioner is a Chartered Accountant and merely acted as an advisor, without involvement in the alleged fraudulent activities. 2. Allegations of Money Laundering and Fraud: The case involves M/s Farmax India Limited, which raised USD 71.09 million through Global Depository Receipts (GDRs), but only received Rs.2.20 crores. The remaining amount was allegedly misappropriated by the petitioner and others through forgery and pledging forged documents. SEBI's investigation revealed violations of SEBI regulations and fraudulent schemes orchestrated by accused No.3, Arun Pacharia, who controlled the subscribing firm M/s Vintage FZE. The fraudulent activities led to significant financial losses for Indian investors. 3. Application of Section 45 of the PMLA Act, 2002: Section 45 of the PMLA Act, 2002, imposes stringent conditions for granting bail to individuals accused of money laundering. The court must ensure that the Public Prosecutor has an opportunity to oppose the bail application and must be satisfied that the accused is not guilty and unlikely to commit any offense while on bail. The court acknowledged these conditions and emphasized their importance in the context of the petitioner's bail request. 4. Petitioner's Involvement and Role in the Alleged Crimes: The petitioner's counsel argued that there is no connection between the petitioner and the proceeds of crime generated by accused No.3, Arun Pacharia. The petitioner is neither a beneficiary nor involved in generating the proceeds of crime. The Enforcement Directorate, however, contended that the petitioner facilitated the preparation of documents and agreements, helped in opening bank accounts, and was involved in the fraudulent activities. The petitioner is also accused of assisting in the generation of proceeds of crime and potentially investing them in various properties. 5. Investigation Status and Potential Impact on Ongoing Investigations: The Enforcement Directorate argued that the petitioner's presence was secured only after the issuance of a Look Out Circular and that releasing him on bail could hinder the investigation. The agency expressed concerns that the petitioner might flee or threaten witnesses, disrupting the investigation process. The court noted that the investigation is ongoing, with crucial documents yet to be traced, and the allegations involve a significant embezzlement of Rs.318 crores and deception of Indian depositors. Conclusion: The court concluded that the petitioner is not entitled to bail at this stage, considering the grave nature of the allegations, the ongoing investigation, and the stringent conditions under Section 45 of the PMLA Act, 2002. The criminal petition was dismissed, and any pending miscellaneous petitions were closed.
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