2022 (6) TMI 1213 - HC - Money Laundering

Seeking grant of bail - Money Laundering - present applicant-Hemant Kumar Sinha was the Chief Secretary of the trust and it was alleged that the trust was engaged in collecting money from the public by cheating the poor people and inducing them to invest money which would become fourfold within 16 months - applicability of provisions of Section 45(1) of PMLA - HELD THAT - This Court is of the considered view that the provisions of Section 45 of the Act, 2002 prior to judgment of Hon ble Apex Court in the case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. 2017 (11) TMI 1336 - SUPREME COURT was declared unconstitutional; but the defects of provisions of the said act was cured by the Parliament by way of Amendment Act 13 of 2018 and consequently, the twin conditions of Section 45 while disposing of the bail applicant under the Act, 2002 stood revived. The twin conditions under Section 45 (1) for the offences classified thereunder in Part-A of the Schedule was held arbitrary and discriminatory and invalid in Nikesh Tarachand Shah. Subsequently, the Section 45 of the Act, 2002 has been amended by Amendment Act 13 of 2008, whereby the words imprisonment for a terms of imprisonment of more than three years under Part A of the schedule has been substituted with accused of an offence under this Act . The Hon ble Apex Court in THE ASST. DIRECTOR ENFORCEMENT DIRECTORATE VERSUS DR. V.C. MOHAN 2022 (1) TMI 511 - SUPREME COURT held once the prayer for bail is made for the offence under PMLA 2002, the rigors principle underlying Section of 45 get triggered on. There are reasonable ground to believe that the applicant is guilty of the offence of money laundering and he is likely to commit the offence, if enlarged on bail - bail application dismissed.

Summary

Issues:
Bail application under Prevention of Money Laundering Act, 2002.

Analysis:
1. The bail application was filed for the release of the applicant in connection with an Enforcement Case Information Report (ECIR) under Section 4 of the Prevention of Money Laundering Act, 2002. The applicant, as the Chief Secretary of a trust, was alleged to have collected money from the public through fraudulent schemes, leading to an investigation and subsequent charge-sheet against him and others involved in the trust's activities.

2. The applicant's counsel argued that the applicant was not a trustee but an employee of the trust, had not misused bail previously granted, and was in poor health, thus seeking bail. It was highlighted that co-accused individuals had already been granted bail, while the applicant had been in custody for an extended period.

3. The Directorate of Enforcement opposed the bail plea, asserting that the applicant was extensively involved in financial transactions of the trust, holding operating and signing rights of its bank accounts. The enforcement agency presented documentary evidence to support their claims and emphasized the application of Section 45 of the Act, which had been amended post a Supreme Court judgment.

4. The court deliberated on the constitutionality of Section 45 of the Act, which had been previously declared unconstitutional but later amended by the Parliament. The court noted that the twin conditions of Section 45 were revived post the amendment, leading to the consideration of those conditions in bail applications under the Act.

5. Citing legal precedents, including judgments from the Supreme Court, the court emphasized the seriousness of economic offenses like money laundering, highlighting the impact on the national economy and the community. Considering the evidence and arguments presented, the court concluded that there were reasonable grounds to believe the applicant was involved in money laundering and could commit the offense if released on bail, ultimately rejecting the bail application.