2018 (1) TMI 1121 - HC - Money Laundering

Seeking regular bail u/s 3 and 4 of PMLA - Held that - The petitioners have been in custody for more than 10 months, the nature of evidence is primarily documentary in nature, which documents have been collected, the trial is likely to take some time, the maximum sentence that can be awarded to the petitioners if convicted would be seven years imprisonment and that the petitioners have no previous involvement except the SFIO complaint on the same transaction in which they have been granted bail, this Court deems it fit to grant bail to the petitioners. It is therefore, directed that the petitioners be released on bail on their furnishing personal bond in the sum of ₹2 lakhs each with two sureties of the like amount, subject to the satisfaction of the learned Trial Court, further subject to the condition that the petitioners will not leave the country without the prior permission of the court concerned.

Issues involved:
Petition for regular bail under PMLA Sections 3 and 4 | Challenge to dismissal of bail applications | Validity of conditions for release on bail under PMLA | Allegations of money laundering and violation of Companies Act | Impact of Income Tax Department's assessment findings on bail application | Nature of evidence and severity of punishment in the case | Consideration of bail based on Supreme Court judgments

Analysis:
1. The petitioners sought regular bail under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA) based on allegations of money laundering through companies controlled by them. The complaint originated from an investigation by the Ministry of Corporate Affairs and subsequent criminal complaints filed against 31 accused persons, including the petitioners, for various violations under the Companies Act and IPC.

2. The bail applications were initially dismissed by the Court, leading the petitioners to approach the Supreme Court, which declared certain conditions for bail under PMLA unconstitutional. Despite subsequent bail applications being declined, the petitioners challenged the decisions, emphasizing the findings of the Income Tax Department regarding the nature of share capital and premium received by the companies involved.

3. The prosecution alleged that the petitioners laundered unaccounted income through companies, receiving commission on accommodation entries. However, the Income Tax Appellate Tribunal later overturned the Assessing Officer's findings, stating that the share capital was not accommodation entries but genuine investments.

4. The respondent argued that the predicate offence of money laundering was linked to a scheduled offence under IPC, irrespective of the Income Tax findings. Emphasis was placed on the substantial rotational entries in various companies, ongoing investigations, and the severity of the alleged offences.

5. Considering the nature of accusations, evidence, potential punishment, and the petitioners' character, the Court granted bail due to the primarily documentary evidence, the petitioners' custody duration, and lack of previous involvement. Bail was granted with specific conditions to ensure compliance and prevent interference with the investigation.

6. The Court's decision was based on the Supreme Court's guidelines for granting bail, considering factors such as the nature of accusations, evidence, potential punishment, and the larger interests of justice. The petitioners were directed to furnish a personal bond and comply with specified conditions to secure their release.

This detailed analysis covers the issues involved in the legal judgment, highlighting the key arguments, findings, and considerations that led to the Court's decision to grant bail to the petitioners.

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