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2022 (3) TMI 232 - HC - Money LaunderingSeeking grant of Regular Bail - funds from the Term loan were diverted to 25 non-contracting parties - Proceeds of crime - misappropriation or diversion of funds - siphoning off of funds - constitutional validity of Section 45 of PMLA - HELD THAT - Time and again, it has been opined by Courts across the country that bail is the rule and jail an exception. Besides reiterating this view, the Supreme Court in Sanjay Chandra 2011 (11) TMI 537 - SUPREME COURT has further laid down that both factors, i.e. severity of the punishment and gravity of the offence, have to be simultaneously weighed while determining whether or not to grant bail to an accused. In P. Chidambaram 2019 (10) TMI 879 - SUPREME COURT , it was held by the Supreme Court that even though gravity of the offence is an important factor for determining whether or not to grant bail, and economic offences of the nature involved in the case were prima facie grave, it is not a rule that bail shall inevitably be denied. No case may be seen as setting a precedent with respect to grant/rejection of bail, except on principle, and it will be for the Court concerned to determine the gravity of the charged offence in each case based on the facts and circumstances. Further, the gravity of the offence is a factor which is in addition to the triple test/tripod test. In matters of regular bail under Section 439 Cr.P.C., a Court must consider aspects, including but not limited to, the larger interest of the State or public, whether the accused is a flight risk, whether there is likelihood of his tampering with evidence, whether there is likelihood of his influencing witnesses, etc. Apart from these, another factor relevant to the question of bail would be the gravity of the alleged offence and/or nature of the allegations levelled, which may serve as an additional test and can be applied while keeping in view the severity of the punishment that the offence entails - It is equally well-settled that economic offences constitute a class apart and need to be visited with a different approach, given their severity and magnitude. Albeit these offences are likely to adversely impact the economic fabric of the country, bail shall not be denied to a person accused of an economic offence in a routine manner. Each case must be adjudged on the basis of the peculiar facts and circumstances, while striking a balance between the right to personal liberty of the accused and the interest of the society in general. Be that as it may, in 2017, the constitutional validity of Section 45 PMLA came to be challenged before the Supreme Court in Nikesh Tarachand Shah 2017 (11) TMI 1336 - SUPREME COURT , wherefore, by a judgment rendered in 2018, explicating the defects inherent in the provision and the challenges posed thereby, the Supreme Court held that the twin conditions imposed by Section 45(1) PMLA were manifestly arbitrary, discriminatory and violative of Articles 14 and 21 of the Constitution of India. Coming to the present case, it is noted that the applicant is a qualified Chartered Accountant, having deep roots in the society. He was not arrested in the scheduled offence and the charge sheet came to be filed without arrest. Thereafter, he was formally admitted to regular bail in the scheduled offence and his passport has already been seized by the ACB, Srinagar. The applicant has also admittedly joined investigation on a number of occasions. The evidence in the case is primarily documentary in nature, which has been seized. Under these circumstances, this Court is of the opinion that the applicant is not a flight risk and fears, if any, of his fleeing from justice can be allayed by imposing conditions and taking measures such as issuance of LOCs, etc. The statements of the witnesses having been recorded under Section 50 PMLA and the documents relevant to the investigation having been collected, the apprehensions regarding the applicant influencing witnesses and/or tampering with evidence are unfounded. This Court is of the view that the applicant satisfies the triple test for grant of bail - there are no reasonable ground for believing that the applicant is not guilty of the alleged offence. From a prima facie view of the material placed on record and in light of the gravity of the alleged offences, it cannot be said either that the applicant is not likely to commit any such offence while on bail. The bail application is dismissed.
Issues Involved:
1. Application for regular bail under Section 439 Cr.P.C. in a case involving allegations under the Prevention of Money Laundering Act, 2002 (PMLA). 2. Allegations of misappropriation and diversion of loan funds. 3. Applicability and interpretation of Section 45(1) PMLA post the 2018 amendment. 4. Considerations for granting bail in economic offences. Detailed Analysis: 1. Application for Regular Bail: The applicant sought regular bail under Section 439 Cr.P.C. in Complaint Case No.39/2021, filed under Sections 44/45 of the PMLA, arising from ECIR No. 14/STF/2019. The applicant was accused of misappropriating and diverting funds from a term loan sanctioned for a hotel project. 2. Allegations of Misappropriation and Diversion: The applicant, through AHPL, obtained a term loan of ?810 crores from a consortium of banks for constructing a luxury hotel. It was alleged that ?781 crores were routed through an Escrow Account and diverted to 25 non-contracting parties. These funds were further transferred to entities controlled by the applicant and used for settling unrelated loans and personal expenses, constituting 'proceeds of crime' under Section 2(1)(u) PMLA. The respondent argued that the funds were misappropriated and used for purposes other than the sanctioned project, violating loan conditions. The applicant contended that the funds were used for reimbursing investments made by APL and that the hotel project was completed and operational, indicating no diversion of funds. 3. Applicability and Interpretation of Section 45(1) PMLA: The court examined the applicability of Section 45(1) PMLA, which imposes twin conditions for granting bail: the Public Prosecutor's opportunity to oppose and the court's satisfaction that the accused is not guilty and unlikely to commit an offence while on bail. The Supreme Court in Nikesh Tarachand Shah had declared these conditions unconstitutional. However, the 2018 amendment to Section 45(1) PMLA, substituting the term "under this Act" for "under Part A of the Schedule," raised questions about the revival of these conditions. The court referred to recent Supreme Court decisions in Parkash Gurbaxani and Dr. V.C. Mohan, which indicated that the twin conditions must be considered in bail applications under PMLA, despite the 2018 amendment. 4. Considerations for Granting Bail in Economic Offences: The court reiterated that economic offences require a different approach due to their severity and impact on the economy. It considered factors such as the applicant's flight risk, potential to tamper with evidence or influence witnesses, and the gravity of the alleged offence. The applicant argued that he had deep roots in society, cooperated with the investigation, and was not a flight risk. The respondent contended that the applicant was the main conspirator, had not cooperated fully, and that further investigation was pending. Conclusion: The court found no reasonable ground to believe that the applicant was not guilty of the alleged offence and that he was unlikely to commit an offence while on bail. Considering the gravity of the allegations, the court dismissed the bail application, emphasizing that the decision should not affect the trial's merits. Key Points: - The applicant's deep roots in society and cooperation with the investigation were noted. - The court emphasized the need to consider the twin conditions under Section 45(1) PMLA post the 2018 amendment. - The gravity and impact of economic offences were highlighted as critical factors in bail decisions. - The bail application was dismissed, with no expression on the case's merits affecting the trial.
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