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2022 (6) TMI 617 - HC - Money LaunderingSeeking grant of regular bail - Money Laundering - commission of predicate offences - disbursal of duty drawback on the overvalued exports subsequently leading to extra duty drawbacks - offences under Sections 132 and 135 of the Customs Act, 1962 - twin conditions as envisaged under Section 45 of the PMLA are applicable or not - HELD THAT - In the matter of regular bail under Section 439 of the 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 would be the gravity of the alleged offence and/or nature of the allegations levelled, which may serve as an additional test that 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. But 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 applicant and the interest of the society in general. The embargo imposed by Section 45(1) PMLA on grant of bail that has taken form of twin conditions (i) that the Public Prosecutor shall be given an opportunity to oppose the application for release, and (ii) where the Public Prosecutor opposes such application, the Court should be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence and that he is not likely to commit any offence while on bail. The limitations so imposed are in addition to those imposed under Cr.P.C. and have an overriding effect over the provisions of the Code, in case there occurred any inconsistency between the provisions of the two - Be that as it may, in 2017, the constitutional validity of Section 45 of the 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) of the PMLA were manifestly arbitrary, discriminatory and violative of Articles 14 and 21 of the Constitution of India. In the instant case, the offence is squarely made out against the applicant as DRI has already filed a complaint and cognizance has already been taken by the concerned Court. As per the allegations, the applicant is unique modus operandi to procure the goods from various places within India to export the same in the name of different firms/companies by inflating the value by several times. Two sets of invoices bearing the same serial number and dates were prepared. The invoices of inflated value were produced before Indian custom authorities and actual values were sent to consignee therefore on the basis of inflated values, extra duty drawbacks were claimed by accused other than what was admissible, and in this manner, Rs. 32.25 crores were fraudulently availed by applicant/accused - The DRI has already filed a complaint against the applicant and cognizance has been taken by the concerned Court and there is no challenge to the cognizance and, therefore, there is no force in the argument of the applicant that no schedule offence is made out. This Court finds 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 alleged offence, it cannot be said that the applicant is not likely to commit any such offence while on bail - Bail application dismissed.
Issues Involved:
1. Validity of the third bail application under Section 439 of Cr.P.C. 2. Allegations of predicate offences under Sections 132 and 135 of the Customs Act, 1962. 3. Applicability of Section 45 of the PMLA post the 2018 amendment. 4. Allegations of inhuman treatment and procedural lapses by ED officials. 5. Examination of the applicant's involvement and the gravity of the alleged offences. Issue-wise Detailed Analysis: 1. Validity of the third bail application under Section 439 of Cr.P.C.: The applicant filed a third bail application seeking regular bail in proceedings emanating from ECIR NO. DLZO-1/09/2019. The applicant had been in judicial custody since his arrest on 25th September 2021, and his previous bail applications were dismissed. The court considered the larger interest of the state, the flight risk of the accused, likelihood of tampering with evidence, and the gravity of the alleged offence. 2. Allegations of predicate offences under Sections 132 and 135 of the Customs Act, 1962: The applicant, a director in M/s Durga Apparels Pvt Ltd, was accused of fraudulent export of goods to claim undue DEPB/Duty Drawback scheme, causing a loss of Rs. 32.25 Crores to the exchequer. The DRI alleged that the applicant was involved in submitting low-value invoices and arranging full export proceeds through foreign buyers, leading to excess duty drawbacks. The applicant was alleged to manage various enterprises facilitating this fraud. 3. Applicability of Section 45 of the PMLA post the 2018 amendment: The court examined the twin conditions under Section 45 of the PMLA, which were declared ultra vires in the landmark judgment of Nikesh Tarachand Shah. However, the 2018 amendment to Section 45 reintroduced these conditions. The court noted that the constitutional validity of this amendment is under active consideration by the Supreme Court. The court referred to various judgments, including Rohit Tandon and Dr. V.C. Mohan, to outline the parameters for adjudicating bail applications under Section 45. 4. Allegations of inhuman treatment and procedural lapses by ED officials: The applicant alleged that during his appearance on 7th April 2021, he was pressurized to bribe ED officials and was severely tortured when he resisted, resulting in grave physical injury. The applicant filed a complaint and an application under Section 156(3) of Cr.P.C. for registration of FIR, which was still pending. The applicant argued that his arrest was a counterblast to his complaint against ED officials. 5. Examination of the applicant's involvement and the gravity of the alleged offences: The court noted that the applicant was the key person in the fraudulent export operations, involving inflated invoices and conversion of proceeds of crime into cash through entry operators. The applicant's involvement in managing various enterprises and reintroducing funds into banking channels was substantiated by documentary evidence and statements recorded under Section 50 of the PMLA. The court emphasized the severity and magnitude of economic offences and the need for a different approach in such cases. Conclusion: The court found no reasonable ground for believing that the applicant was not guilty of the alleged offence. Given the gravity of the offence and the material placed on record, the court concluded that the applicant was likely to commit such offences while on bail. Accordingly, the bail application was dismissed. The court clarified that any observations made would not affect the proceedings before the trial court. Pending applications, if any, were also disposed of, and the judgment was ordered to be uploaded on the website forthwith.
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