2019 (11) TMI 794 - HC - Money Laundering

Money Laundering - proceeds of crime - grant of anticipatory bail - attachment proceedings - scheduled offences - HELD THAT - The endeavour under the Amendment Act, 2013, vis-a-vis Sections 5 8 is to enable attachment proceedings against the persons who are accused of a scheduled offence; persons who have been accused of money laundering alone; persons who have come in possession of the proceeds of crime. It is evident that in view of the 2013 Amendment to the PML Act, a person can be tried for an offence of money laundering alone without restricting the meaning attributable to it as being with reference to a scheduled offence alone - Hence, section 8, as amended by the Amendment Act of 2013, cannot be said to be arbitrary and violative of the fundamental right of a person if the proceedings are continued under the PML Act, even if the trial of a scheduled offence results in an acquittal and the alleged proceeds of crime pertained to that scheduled crime. The offence of money laundering is a continuing offence, inasmuch as, by its very definition, the offence continues as long as accused is in possession, acquisition of the ill gotten wealth since the projection is not one time offence and continues till such time person is in possession of ill gotten wealth. Thus the time of its generation is of no consequence but the possession, acquisition and its projection as untainted is as long as the projection as untainted continues, the offence will continue and cannot be said to have been applied retrospectively - The investigation under PMLA after the year 2009 would not be treated as applying the Act retrospectively for the reason of ill gotten wealth being generated prior to the amendment coming into force because accused at the time of investigation under PMLA was in possession, acquisition and projecting such proceeds of crime as untainted. Prima facie, allegations are serious in nature and the petitioner has played active and key role in the present case. It cannot be disputed that entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book, as such offences affects the very fabric of democratic governance and probity in public life. No doubt, bail is right and Jail is exception, but, if bail is granted in such case, a wrong message goes to the public at large. The petitioner is not entitled for grant of bail - bail application dismissed.

Issues Involved:
1. Bail application under Section 439 of the Code of Criminal Procedure (Cr.P.C.).
2. Allegations under the Prevention of Money Laundering Act, 2005 (PMLA).
3. Connection between the predicate offence and the money laundering offence.
4. Flight risk, tampering of evidence, and influencing witnesses.
5. Health conditions of the petitioner.
6. Role and gravity of the offence.
7. Distinction between the evidence collected by the CBI and the Enforcement Directorate (ED).

Detailed Analysis:

1. Bail Application under Section 439 Cr.P.C.:
The petitioner filed a bail application under Section 439 Cr.P.C. seeking bail in the ECIR under PMLA while in judicial custody. The petitioner argued that he is a law-abiding citizen with deep roots in society, not a flight risk, and willing to comply with any conditions imposed by the court. The respondent ED opposed the bail, citing the need for custodial interrogation and ongoing investigation.

2. Allegations under PMLA:
The petitioner was implicated in a case involving the grant of FIPB approval to INX Media, leading to alleged money laundering activities. The ED registered an ECIR based on a CBI FIR, which accused the petitioner’s son and others of corruption. The ED argued that the petitioner played a key role in money laundering through a web of shell companies and benami transactions.

3. Connection between Predicate Offence and Money Laundering Offence:
The petitioner contended that the offences alleged by the CBI and ED are part of the same transaction, and hence, there should not be a separate remand. However, the court held that the offence under PMLA is distinct and independent of the predicate offence investigated by the CBI. The court emphasized that money laundering is a continuing offence, and the PMLA investigation is not retrospective.

4. Flight Risk, Tampering of Evidence, and Influencing Witnesses:
The court considered three factors for bail: flight risk, tampering with evidence, and influencing witnesses. It was not alleged that the petitioner was a flight risk, and there was no chance of tampering with evidence as it was already with investigating agencies. However, there were allegations of the petitioner and his family pressurizing witnesses, which the court found concerning.

5. Health Conditions of the Petitioner:
The petitioner cited health issues as a ground for bail, mentioning bouts of illness and weight loss. The court acknowledged the health concerns but noted that directions had already been issued to the jail superintendent regarding the petitioner’s medical care. Therefore, the health ground was not sufficient for bail.

6. Role and Gravity of the Offence:
The court emphasized the serious nature of economic offences, which affect the entire community and the nation’s economy. It noted the petitioner’s alleged active and key role in money laundering, involving complex layering of proceeds through shell companies and benami transactions. The court stressed that granting bail in such cases could send a wrong message to the public.

7. Distinction between Evidence Collected by CBI and ED:
The ED argued that the material in the PMLA investigation is distinct from that collected by the CBI in the predicate offence. The ED provided evidence of shell companies, benami bank accounts, and properties abroad linked to the petitioner and his co-conspirators. The court found the allegations serious and supported by substantial evidence.

Conclusion:
The court dismissed the bail application, citing the seriousness of the allegations, the petitioner’s key role in the offence, and the potential impact on public trust and the national economy. The court clarified that the observations made are specific to the bail application and should not prejudice the petitioner’s case in any manner.

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