2023 (9) TMI 1469 - SCH - Money Laundering

Money Laundering - proceeds of crime - predicate offence - proceeds of the offence in the custody of the main accused were used to infuse amount in the share capital of the bank of which the appellant was Vice Chairman - main accused was allowed to take over the said bank - persons who were shown as members/shareholders were not eligible to become members - HELD THAT - The only allegation against the appellant is that he allowed the principal accused to invest the proceeds of the crime in the share capital of a bank of which he was the Vice Chairman - Though it is alleged that close associates/relatives of the main accused were made members and they were not entitled to become members, it is not the case of the prosecution that the share holders are fictitious persons. The appellant has undergone incarceration for a period of 1 year and 9 months and there is no possibility of the trial commencing in the near future. Conclusion of trial will take a very long time. It is directed that the appellant shall be produced before the competent Court within a period of one week from today. The competent Court shall enlarge the appellant on bail on appropriate terms and conditions. However, the respondent shall be heard before fixing the terms and conditions. Appeal allowed.

Summary

Issues involved: Bail application in a case under the Prevention of Money Laundering Act, 2002 where the appellant is not shown as an accused in the predicate offence, but is alleged to have assisted the main accused in investing proceeds of the crime in a bank.

The appellant was arrested in connection with an offence under the Prevention of Money Laundering Act, 2002, and 57 witnesses have been cited by the prosecution. However, the charge has not been framed yet. The appellant, who was the Vice Chairman of a bank, is accused of knowingly assisting the main accused in infusing Rs.8 crores in the form of share capital in the bank without proper formalities. It is alleged that the main accused was allowed to take over the bank, and ineligible persons were shown as members/shareholders.

The Supreme Court considered the peculiar facts of the case before granting bail to the appellant. Notably, the appellant is not shown as an accused in the predicate offence, and the only allegation against him is related to allowing the main accused to invest the crime proceeds in the bank where he was Vice Chairman. The prosecution did not claim that the shareholders were fictitious, and the appellant has already spent 1 year and 9 months in incarceration with no immediate trial prospects. The Court directed the appellant to be produced before the competent Court within a week for bail on appropriate terms and conditions, with a provision for the respondent to be heard before finalizing the conditions.

Separate Judgment: No separate judgment delivered by the judges mentioned in the case.