2020 (4) TMI 699 - HC - Money Laundering

Bail Application - PMLA act - substance of the charge against the petitioner is that he was the person in control and management of one Rose Valley Group of Companies - price of debenture charged as per wishes of petitioner and without permission from statutory authorities - HELD THAT - This Court is of the view that Section 436A in its application cannot be read de hors its provisos. The object and purpose of the section is to ensure that the person is not detained pending trial for a period that may exceed half of the total punishment prescribed under the Section under which he is charged. Upon exceeding such period, the petitioner is in fact entitled to be granted bail. The right to bail under Section 436A is not absolute. This Court notes that Rose Valley Group of Companies is being prosecuted various other proceedings both civil and criminal - Application dismissed.

Summary

Issues:
Application for bail under Prevention of Money Laundering Act, 2002 - Consideration of statutory rights under Section 436A of the Cr.P.C - Discretion of the Court to decline bail - Involvement in Chit Fund scam - Rejection of bail application.

Analysis:
The petitioner, an accused under the Prevention of Money Laundering Act, 2002, moved an application seeking bail. The petitioner was alleged to be in control of a group of companies and accused of issuing debentures without statutory permissions. The defense argued that the petitioner had been in custody for over 5 ½ years without the trial commencing, invoking Section 436A of the Cr.P.C, which provides a statutory right for release on bail after a certain period of detention.

The defense further contended that the petitioner's case should have been considered by the High Powered Committee for release of undertrials and convicts, as directed by the Supreme Court. However, the prosecution pointed out that the Committee had excluded individuals accused of or convicted for commercial and economic offenses from consideration for bail or parole. The prosecution also highlighted the discretionary power of the Court to decline bail under the first proviso of Section 436A.

The Court observed that while Section 436A aims to prevent prolonged detention pending trial, the first proviso grants the Court discretion to deny bail even after the statutory period has elapsed. Considering the gravity of the petitioner's alleged involvement in the Chit Fund scam, which caused financial harm to numerous individuals, the Court concluded that the petitioner's application for bail under Section 436A could not be entertained and was consequently rejected.

In addition to rejecting the bail application, the Court directed the jail authorities and the State to provide appropriate medical assistance to the petitioner if needed. The judgment emphasized that the right to bail under Section 436A is not absolute and may be subject to the Court's discretion, especially in cases involving serious economic offenses and significant public impact.