2022 (4) TMI 1611 - HC - Money Laundering

Seeking grant of bail - Money Laundering - predicate offence - transfer of huge amount to various accounts and misappropriation of the same by keeping it as liquid security/margin for credit facility - HELD THAT - The provisions of Section 45 of the Act, 2002 prior to judgment of Hon ble Apex Court in the case of Nikesh Tarachand Shah 2017 (11) TMI 1336 - SUPREME COURT was declared unconstitutional, the defects of provisions of the said act was cured by the Parliament by way of Amendment Act 13 of 2018 and consequently, the twin conditions of Section 45 while disposing of the bail applicant under the Act, 2002 stood revived. The Hon ble Apex Court in the case of CHEVITI VENKANNA YADAV VERSUS STATE OF TELANGANA AND ORS. 2016 (10) TMI 1229 - SUPREME COURT has held where there is a competent legislative provision which retrospectively removes the substratum of foundation of a judgment, the said exercise is a valid legislative exercise provided it does not transgress any other constitutional limitation. The twin conditions under Section 45 (1) for the offences classified thereunder in Part-A of the Schedule was held arbitrary and discriminatory and invalid in Nikesh Tarachand Shah. Subsequently, the Section 45 of the Act, 2002 has been amended by Amendment Act 13 of 2008, whereby the words imprisonment for a terms of imprisonment of more than three years under Part A of the schedule has been substituted with accused of an offence under this Act. Keeping in view the documentary evidence collected by the E.D., it is found that the conduct of the applicant in transferring the huge amount which was proceeds of the crime to the several bank accounts and also purchasing 53 vehicles revealed that there are reasonable ground to believe that the applicant is guilty of the offence of money laundering and he is likely to commit the offence, if enlarged on bail - Bail application dismissed.

Summary

Issues Involved:
1. Bail application u/s 3 and 4 of the Prevention of Money Laundering Act, 2002.
2. Allegations and evidence against the applicant.
3. Applicant's defense and submissions.
4. Legal provisions and precedents considered.
5. Court's decision on the bail application.

Summary:

1. Bail Application u/s 3 and 4 of the Prevention of Money Laundering Act, 2002:
The applicant sought bail in connection with ECIR No.03 of 2021, registered u/s 3 and 4 of the Prevention of Money Laundering Act, 2002, pending before the Additional Judicial Commissioner-I-cum-Special Judge, C.B.I.-cum-PMLA, Ranchi.

2. Allegations and Evidence Against the Applicant:
The complaint was based on an FIR by the CBI against M/s. Bhanu Construction and others for offences u/s 120-B read with Sections 406, 409, 420 of IPC and Sections 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The prosecution alleged that Rs.100.01 crores were fraudulently transferred to the account of M/s. Bhanu Construction, which was then misappropriated by the applicant, Sanjay Kumar Tiwary, a partner in the firm. The investigation revealed that the applicant transferred the amount to various accounts and used it for business transactions, including purchasing 53 vehicles.

3. Applicant's Defense and Submissions:
The applicant contended that the transfer was due to the negligence of the Deputy Manager, SBI Hatia Branch, and he believed the amount was credited from Nabadurga Construction Pvt. Ltd. He argued that he utilized the money for business purposes under a bona fide belief and made efforts to return the amount. The applicant cited several case laws to support his bail plea, arguing no offence was made out against him.

4. Legal Provisions and Precedents Considered:
The court considered Sections 2(p), 2(y), 3, and 4 of the Act, 2002, and the amended Section 45 of the Act. The court also reviewed judgments from various High Courts and the Supreme Court, including the cases of Nikesh Tarachand Shah, Cheviti Venkanna Yadav, Prakash Gurbaxani, YS Jagan Mohan Reddy, and State Of Gujarat vs. Mohanlal Jitamalji Porwal.

5. Court's Decision on the Bail Application:
The court found that the applicant's conduct in transferring the proceeds of the crime to several bank accounts and purchasing vehicles indicated reasonable grounds to believe he was guilty of money laundering. The court concluded that the applicant was likely to commit the offence if released on bail. Consequently, the bail application was rejected.