2022 (3) TMI 1057 - HC - Money Laundering

Seeking grant of regular bail - money laundering - proceeds of crime - forged documents - diversion/siphoning off of the funds - twin test laid down under Section 45 of PML Act satisfied or not - HELD THAT - Section 45(1) of the PML Act imposed two conditions before bail could be granted to a person accused of an offence punishable for a term of imprisonment for more than three years under Part A of the Schedule attached to the PML Act. As per these conditions, before grant of bail, the Public Prosecutor was required to be given an opportunity to oppose the plea for bail and that where the Public Prosecutor opposed such plea, the Court could order release of the accused on bail only after recording a satisfaction that there were reasonable grounds to believe that the person to be released was not guilty of the offence he was accused of and that while on bail he was not likely to commit any offence. The constitutional validity of the aforesaid provisions imposing the twin conditions for grant of bail, came up for consideration of the Hon'ble Supreme Court in NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. 2017 (11) TMI 1336 - SUPREME COURT the Hon'ble Supreme Court, after holding that the prescribed twin conditions for release on bail were violative of Articles 14 and 21 of the Constitution, declared Section 45(1) of the PML Act, as unconstitutional, to that extent. It is well settled principle of law that when the investigation is complete and the charge-sheet is filed in the Court, conclusion of the trial is likely to take a long time, a person/accused like the petitioner, who is aged about 53 years, can be released on bail, subject to his furnishing bail/surety bonds and with a condition that his passport shall remain deposited with the Court/Prosecuting Agency and he will not leave the country without seeking prior permission of the Court - After considering the entire matter and in particular that investigation is the case is complete and a complaint has already been filed by the E.D.; the petitioner has been in custody since 26.07.2021 and that the properties of the petitioner have already been attached, this Court is of the opinion that the present petition deserves to be allowed. Ordered accordingly. Bail granted subject to conditions imposed - application allowed.

Summary

Issues involved:
1. Regular bail application under the Prevention of Money Laundering Act, 2002 (PMLA).
2. Allegations of fraud and money laundering.
3. Petitioner's non-cooperation with the Enforcement Directorate (ED).
4. Constitutional validity of Section 45 of PMLA.
5. Petitioner's health and previous compliance.
6. Comparison with similar cases.
7. Conditions for granting bail.

Issue-wise detailed analysis:

1. Regular bail application under PMLA:
The petitioner sought regular bail in a case registered under Section 3 punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner's bail was previously denied by the Special Court, PMLA, Jalandhar.

2. Allegations of fraud and money laundering:
The petitioner was accused of being the mastermind behind a fraud involving the generation of proceeds of crime through bank loans obtained via forged documents. These proceeds were allegedly diverted and parked in various movable and immovable properties. The Directorate of Enforcement (ED) found that the petitioner operated multiple bogus entities and defaulted on loans amounting to ?21.31 crore.

3. Petitioner's non-cooperation with the ED:
The ED alleged that the petitioner did not cooperate with the investigation and made efforts to thwart it. The petitioner was arrested on the grounds of non-cooperation and failure to appear before the ED despite being summoned multiple times.

4. Constitutional validity of Section 45 of PMLA:
Section 45 of PMLA imposes twin conditions for granting bail: (i) the Public Prosecutor must be given an opportunity to oppose the bail application, and (ii) the court must be satisfied that there are reasonable grounds to believe the accused is not guilty and is unlikely to commit an offense while on bail. The Supreme Court in Nikesh Tarachand Shah declared these conditions unconstitutional. However, an amendment in 2018 attempted to revive these conditions, and the constitutional validity of this amendment is pending before the Supreme Court, as different High Courts have divergent views.

5. Petitioner's health and previous compliance:
The petitioner argued that he had tested positive for COVID-19, which affected his ability to appear before the ED. He claimed to have cooperated with the investigation by appearing multiple times and had entered a compromise with the bank, paying ?2.5 crore. The petitioner has been in custody since 26.07.2021 and contended that there was no justification for his continued detention.

6. Comparison with similar cases:
The petitioner’s counsel referred to a similar case (Sukhpal Singh Khaira Vs. Assistant Director, Directorate of Enforcement) where bail was granted. The court noted that divergent views on the revival of Section 45's twin conditions exist and that the Supreme Court's decision on this matter is pending.

7. Conditions for granting bail:
The court considered that the investigation was complete, and the charge-sheet was filed. Given the petitioner's age (53 years) and the fact that his properties were already attached, the court decided to grant bail subject to specific conditions:
- Furnishing personal and surety bonds of ?2 lakh.
- Submission of residential address and proof.
- Surrender of passport.
- Regular appearance before the Special Court.
- Not leaving the jurisdiction without court permission.
- No tampering with evidence or prosecution witnesses.

Conclusion:
The court granted bail to the petitioner with stringent conditions to ensure compliance and prevent any interference with the ongoing trial. The decision was influenced by the completion of the investigation, the petitioner's health, previous cooperation, and the pending constitutional validity of Section 45 of PMLA.