2023 (6) TMI 1340 - HC - Money Laundering

Seeking grant of Bail - Money Laundering - proceeds of crime - present applicant and the main accused Suryakant Tiwari were involved in illegal extortion from the coal transporters working in the Coal Mines within the State of Chhattisgarh - HELD THAT - What is apparently evident is that the prosecution in the course of the investigation has collected substantial materials showing strong nexus between the applicant and the other accused persons in the said crime. From the documents produced in the Court during the course of hearing, there seems to be prima-facie materials collected establishing Money Laundering at the hands of the present applicant and the other accused persons. The prosecution has been able to show documents collected in the course of the search and seizure showing incriminating evidences in the form of handwritten diaries and digital devices, like mobile phones, laptops, etc. which would disclose numerous cash transactions and other illegal transactions operated by the main accused Suryakant Tiwari as per the dictates of the present applicant, who being a public servant used Suryakant Tiwari and Manish Upadhyay her a front men. Having perused the entire voluminous documents produced by either side, the magnitude of the amount involved in the so called scam or the economic offence is incomprehensible. Further, the number of persons involved in the commission of the offence directly or indirectly and many of them being part of the bureaucracy itself and the period of commission of the offence spanning considerable period of time makes the gravity of the offence graver. What is required to be seen is the gravity and magnitude of the offence - An economic offence is a rampant and pervasive social wrongdoing; each country on the planet is confronting this socio-economic challenge in one or the other form. It is the most consequential threat to a nation s economy at large. It's nothing but another attempt to satisfy an individual s greed over need. For the law enforcement agencies, it becomes a Herculean task to conduct interrogation and gather evidence since tampering of evidence is easy given the nexus of the accused parties with the system. 20. In such circumstances, the need of impartiality and fair play requires distinctive modus operandi to lift the veil off of economic offences. One way is to keep the accused parties in custody for longer period, so that there will be minimum hinderance and maximum efficiency in the investigation not just that of the applicant but also of all others who are involved in the offence. For that purpose, bail ought not be allowed in the same way as conceded in the event of regular offences. Taking into consideration the magnitude of the offence, this Court is not inclined to grant bail to the present applicant as of now - bail application rejected.

Issues Involved:
1. Grant of bail under Section 439 Cr.P.C.
2. Allegations of involvement in money laundering and illegal extortion.
3. Application of Section 45 of the PMLA.
4. Potential influence on the investigation and evidence tampering.
5. Gravity and magnitude of economic offences.

Summary:

1. Grant of Bail under Section 439 Cr.P.C.
The applicant sought bail under Section 439 Cr.P.C. after being arrested in connection with Crime No. ECIR/RPZO/09/2022 for offences under Sections 186, 204, 353, 384, 120-B of IPC, 1860 read with Sections 3 and 4 of PMLA, 2002. The applicant, a Deputy Secretary in the office of the Chief Minister of Chhattisgarh, was arrested on 02.12.2022.

2. Allegations of Involvement in Money Laundering and Illegal Extortion
The prosecution alleged that the applicant was closely associated with the main accused, Suryakant Tiwari, and involved in illegal extortion from coal transporters. The investigation revealed financial transactions of large magnitude between the applicant and Tiwari. The modus operandi included extracting illegal levies on coal and iron pellet transportation, with the proceeds being used for money laundering as defined under Section 3 of the PMLA. Diaries recovered during the investigation indicated cash transactions and the involvement of other accused persons.

3. Application of Section 45 of the PMLA
The applicant argued for bail under the exceptions carved out under Section 45 of the PMLA, citing her cooperation with the investigation and her status as a woman. However, the court noted that the exceptions under Section 45(1) of the PMLA are also envisaged under Section 437 of the CrPC and are not mandatory for granting bail.

4. Potential Influence on the Investigation and Evidence Tampering
The respondent-Enforcement Directorate opposed the bail, highlighting the applicant's influence within the government and the likelihood of tampering with evidence and influencing witnesses. The prosecution presented documents showing the nexus between the applicant and other accused persons, and the use of proceeds of crime to purchase properties in the names of the applicant's relatives.

5. Gravity and Magnitude of Economic Offences
The court emphasized the seriousness of economic offences, noting their deep-rooted conspiracies and significant impact on the state exchequer and national economy. The court stated that economic offences should be viewed as grave offences, and granting bail in such cases could undermine public faith in the legal system.

Conclusion:
The court, considering the substantial material evidence and the gravity of the offence, rejected the bail application. The court stressed that economic offences require a distinct approach, and keeping the accused in custody ensures minimal hindrance and maximum efficiency in the investigation.

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