2023 (7) TMI 1314 - HC - Money Laundering

Seeking grant of bail - Money Laundering - Conspiracy - proceeds of crime - predicate offence - irregularities in the framing of the Excise Policy - case of Revenue is that petitioner Benoy Babu had prior knowledge of liquor policy 2021 before it was made public which enabled Pernod Ricard to arrange finances even before the public announcement of the policy to create vehicle which was later on used for generating parking and use of proceeds of crime. HELD THAT - Section 45 of PMLA provides that notwithstanding anything contained in the Code of Criminal Procedure 1973 no person accused of an offence under this Act shall be released on bail or on his own bond unless (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail. It is also pertinent to mention here that Section 45 also provides that this condition is in addition to the limitations imposed under Section 439 of the Code of Criminal Procedure 1973 or any other law for the time being in force on granting of bail. It is settled proposition Section 45 PMLA do not impose an absolute restraint on the grant of bail and the court at this stage is to prima facie consider whether applying the standard of broad probabilities the material against the applicant would result in conviction. The bare reading of Section 3 of PMLA would make it clear if a person is involved in any process or activity connected with the proceeds of crime including its concealment possession acquisition or use and projecting or claiming it as an untainted property shall be guilty of offence of money laundering. Therefore it is not necessary to attribute section 3 of the PMLA that the alleged person must have acquired or in possession of the proceeds of the crime - The present case is very peculiar in nature and may not have any parallel factual matrix. In brief the allegation in the predicate offence was that the conspiracy was hatched between the political head and certain persons which included an individual allegedly representing the government with the manufacturer liquor wholesaler and retailer. The conspiracy allegedly was hatched to introduce a new excise policy to benefit certain individuals who had given advance kickbacks to the AAP. Presently this court is considering the bail application of the abovesaid accused person namely Mr.Benoy Babu who was arrested for the offence under Section 3 of the PMLA. For the purpose of clarity Mr.Bonoy Babu was an employee of M/s Pernod Recard. Similarly the allegations against Benoy Babu an employee of M/s Pernod Recard is that he was also in a deep conspiracy from the stage of formulation of policy and extended corporate guarantee of 200 crores to enable the other stakeholders to generate the proceeds of crime. It is correct that extending a corporate guarantee per se may not be a crime. However if it is connected with any activity or process connected with the proceeds of crime it would inevitably come within the purview of money laundering under section 3 of PMLA. In this regard a reference can also be made to Vijay Madanlal Chaudhary 2022 (7) TMI 1316 - SUPREME COURT wherein it has inter alia been held that while construing the expression and in Section 3 as or to give full play to the said provision so as to include every process or activity indulged into by anyone including projecting or claiming the property as untainted property to constitute an offence of money-laundering on its own. Further it was observed by the Ld. Special Judge that the applicant namely Benoy Baby was the signatory in the capacity of attorney of M/s Pernod Ricard to the documents pertaining to the grant of licenses to M/s Indospirit and it was the applicant/accused who performed all the operations in respect to the appointment of wholesaler furnishing corporate guarantees. Even though he was not the Director or major shareholder in the M/s Pernod Ricard it was observed that in terms of the provisions contained under section 70 (2) of the PMLA he is equally liable for the offence of money laundering committed in the present case apart from the company itself or any of its Directors Secretaries or other Managers connected with the commission of the said offence directly or indirectly - Allegedly applicant/accused is further being associated with some other amounts of proceeds of crime and the total proceeds being attributed to him are stated to be around Rs. 563 crores. The accused persons in the present case acting in furtherance of the conspiracy circumvented the policy and got framed the policy in such a manner to continuously generate and channel illegal funds. The allegations are that deliberate loopholes were left to facilitate illegal and criminal activities. There is sufficient material on the record that the petitioner was indulging or knowingly assisting in process or activity connected with the proceeds of crime and it cannot be said that there are reasonable grounds for believing that petitioner is not guilty of such offence and he is not likely to commit any offence well. It was allegedly a well spun conspiracy to generate P.O.C. In such cases every person who is connected with any process or activity relating to P.O.C. cannot avoid his/her responsibility. The allegations are very serious in nature. Bail application dismissed.

Summary

Issues Involved:
1. Whether the petitioner, Benoy Babu, is guilty of money laundering under Section 3 of the PMLA.
2. Whether the petitioner should be granted bail under Section 45 of the PMLA.

Summary:

Issue 1: Guilt of Money Laundering under Section 3 of PMLA

The petitioner, Benoy Babu, was accused of being involved in a conspiracy related to irregularities in the framing and implementation of the excise policy of GNCTD of Delhi for 2021-22. The allegations included that the policy was designed to benefit certain individuals who had given advance kickbacks to the AAP leaders. The Enforcement Directorate (ED) claimed that Benoy Babu, an employee of Pernod Ricard, played a key role in this conspiracy by extending a corporate guarantee of Rs. 200 crores to enable other stakeholders to generate proceeds of crime.

The ED's investigation revealed that Benoy Babu was directly involved in Pernod Ricard's wholesale business going to Indo Spirits, signed the approval letter for making Indo Spirits its exclusive distributor even before formal approval, and was aware that Sameer Mahandru, the owner of Khao Gali and Bubbly Beverages, was also involved. Furthermore, Benoy Babu allegedly coordinated with Arun Pillai for events hosted by Pernod Ricard and was involved in cartelization with retailers by granting financial assistance of Rs. 200 crores.

Additionally, the ED found that Benoy Babu was in possession of the draft excise policy before it was made public and had deleted relevant WhatsApp chats. The ED also alleged that Benoy Babu was involved in sending 4,000 emails to authorities through media agencies to project fake public approval of the policy.

The court noted that Section 3 of the PMLA captures every process and activity connected with the proceeds of crime, including concealment, possession, acquisition, or use, and projecting or claiming it as untainted property. The court found sufficient material on record to indicate that Benoy Babu was indulging or knowingly assisting in activities connected with the proceeds of crime.

Issue 2: Grant of Bail under Section 45 of PMLA

The court considered the twin conditions under Section 45 of the PMLA, which require the Public Prosecutor to be given an opportunity to oppose the bail application and the court to be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence and is not likely to commit any offence while on bail.

The court noted that economic offences constitute a class apart and need to be viewed seriously. The court also considered the nature of the accusations, the severity of the punishment, the character of the accused, and the larger interests of the public/State.

The court found that the allegations against Benoy Babu were serious and involved a well-spun conspiracy to generate proceeds of crime. The court concluded that there were no reasonable grounds for believing that Benoy Babu was not guilty of the offence and that he was likely to commit further offences if released on bail.

Therefore, the court dismissed the bail application, stating that Benoy Babu had failed to pass the twin conditions under Section 45 of the PMLA.