2019 (8) TMI 1137 - HC - Money Laundering

Offence under PMLA - pre-arrest bail - HELD THAT - Severity of the punishment alone cannot be the criteria to determine as to whether bail has to be granted or not. Gravity of the offence is a relevant criteria which has to be considered while granting or refusing the bail. During the course of hearing, reliance was placed by learned ASG upon Section 265-A of Cr.P.C. to urge that in an offence punishable with term up to seven years, plea bargaining can be entertained, is misplaced as proviso to Sub-Section (1) (b) of Section 265-A of Cr.P.C. contains a rider that plea bargaining is not available where the offence committed affects socio and economic conditions of the country. A bare perusal of petitioner s statement recorded u/s 50 of the PMLA reveals that he is evasive in his replies. However, gravity of the offence committed can be gauged from the contents of the aforesaid statement recorded under Section 50 of PMLA. In any case, it cannot be prima facie said that petitioner s statement recorded under Section 50 PMLA does not incriminate him. This Court is of the prima facie opinion that custodial interrogation of petitioner is required for an effective investigation. Mere attachment of petitioner s property in Income Tax proceedings would not justify grant of pre-arrest bail to petitioner, who is not only evasive in his replies but is trying to influence the witnesses. It is so evident from the statement of witnesses recorded by respondent, which has been provided to this Court in sealed cover. Upon considering this case in its entirety, this Court finds that grant of pre-arrest bail to petitioner would stall effective investigation in this case.

Summary

Issues:
1. Petitioner seeks pre-arrest bail under Sections 3 & 4 of the Prevention of Money Laundering Act, 2002 (PMLA).
2. Whether the principles of natural justice require the petitioner's statement recorded under Section 50 of the PMLA to be supplied to him.
3. Whether the severity of punishment or gravity of the offense should be the criteria for granting or refusing bail.
4. Whether custodial interrogation of the petitioner is necessary for an effective investigation.
5. Whether the petitioner's attempts to influence witnesses and tamper with evidence justify denial of pre-arrest bail.

Issue 1: Pre-arrest Bail under PMLA
The petitioner sought pre-arrest bail under Sections 3 & 4 of the PMLA, claiming innocence as his name appeared only in the fifth supplementary complaint. The petitioner's counsel argued that the purpose of custodial interrogation is not just for confession, citing Article 20(3) of the Constitution of India. The defense emphasized that arrest under the PMLA requires a belief in the accused's guilt, not mere suspicion as under the CrPC.

Issue 2: Principles of Natural Justice
The petitioner contended that the copy of his statement recorded under Section 50 of the PMLA should be provided to him as per principles of natural justice. The defense argued that denying the petitioner access to his statement while providing it to the court undermines his right to defense and contradicts the essence of natural justice.

Issue 3: Severity of Punishment vs. Gravity of Offense
The defense argued that severity of punishment should be considered while granting bail, citing cases where plea bargaining was permissible in cases punishable up to seven years. However, the court held that severity of punishment alone cannot determine bail; gravity of the offense is crucial. The court noted that the petitioner's evasive replies and the gravity of the offense, as indicated in his statement under Section 50 of the PMLA, are significant factors.

Issue 4: Custodial Interrogation
The court found that custodial interrogation of the petitioner is necessary for an effective investigation. The defense's argument that the petitioner's statement does not incriminate him was countered by the court's opinion that custodial interrogation is essential, especially considering the petitioner's attempts to influence witnesses and tamper with evidence.

Issue 5: Influence on Witnesses and Evidence
The respondent highlighted the petitioner's attempts to influence witnesses and tamper with evidence, emphasizing the adverse impact of the offense on the country's economy. The court found that mere attachment of the petitioner's property in Income Tax proceedings does not warrant pre-arrest bail, especially when the petitioner's actions indicate non-cooperation and attempts to influence the investigation.

In conclusion, the court dismissed the petitioner's application for pre-arrest bail, emphasizing the need for custodial interrogation for an effective investigation and the gravity of the offense committed. The court held that granting bail would impede the investigation, considering the petitioner's actions and the magnitude of the money laundering involved.