2022 (11) TMI 155 - HC - Money Laundering

Seeking grant of bail - Money Laundering - predicate offence - scheduled offence - creation of bogus/fake deposits by debiting loans and advances - allegation is said that the accused No. 1-Ramakrishna, who is said to be the Director of the co-operative bank lent loan to the petitioner to the tune of Rs. 105 crores without following the procedure and without obtaining proper and adequate security and collected the documents for the purpose of recovering the loan amount - main apprehension of the prosecution is that the petitioner is having considerable influence and if he is released on bail, he would scuttle the investigation and destroy the evidence and he may also defeat the objectives of the PML Act. HELD THAT - The petitioner was released on bail in the predicate offence, but this case is based upon the money laundering. Of course, Section 45 provides that if the Court is satisfied that there are reasonable grounds to believe that the petitioner is not guilty of such offence and he is not likely to commit any offence while on bail, then only he shall be released. Here in this case, the petitioner has not whispered and has not given any details of the property on which he has invested. Even though, he has received Rs. 60 crores by way of cash which was against the law has not disclosed the amount in which he has invested. Considering the facts and circumstances of the case, if the petitioner is granted bail, there is every possibility of obstructing the ED from attaching the properties and they require some more time for getting other sources to trace the property in which the petitioner has invested. When the petitioner has not disclosed about the investment, it is for the ED officials to find out any other method to unearth the properties and attach the same. Therefore, when the petitioner himself has not properly explained the investment made by him and is reluctant in giving information, the ED shall make an endeavour to find out truth in various other modes known to law. Hence, the petitioner cannot be released on bail at this stage. Bail application dismissed.

Summary

Issues:
Granting bail under section 439 of Cr.P.C. for offences under sections 420, 120B, 406, 409, and 34 of IPC, Section 9 of Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004, and Section 4 of the Prevention of Money Laundering Act.

Analysis:
The prosecution alleged irregularities in the functioning of a cooperative bank, including fake deposits and unauthorized loans, causing significant losses. The petitioner, accused No. 17, was arrested under the PML Act for availing a loan and being involved in money laundering activities. The petitioner claimed innocence, stating he was only a borrower repaying the loan and not involved in money laundering. However, the prosecution argued that the petitioner received substantial amounts without proper documentation and failed to explain investments adequately.

The petitioner's counsel argued that the petitioner was wrongly implicated, emphasizing his repayment of the loan and lack of involvement in the alleged offenses. They sought bail, highlighting the petitioner's willingness to comply with any conditions. In contrast, the prosecution contended that the petitioner had not properly accounted for received funds and posed a risk of tampering with evidence if granted bail.

Upon review, the court noted the serious nature of the allegations, including the creation of fake deposits and significant financial losses. The prosecution raised concerns about the petitioner's potential to obstruct investigations and dispose of assets. The court referenced a previous judgment denying bail to another accused in the case, emphasizing the need for thorough investigation due to the petitioner's lack of transparency regarding investments and funds received.

Ultimately, the court dismissed the bail petition, citing the petitioner's failure to disclose investment details and the prosecution's need for additional time to trace assets. The court determined that releasing the petitioner on bail could impede investigations and asset recovery efforts, given the lack of cooperation and transparency displayed by the petitioner during the proceedings.

In conclusion, the court's decision to deny bail was based on the seriousness of the allegations, concerns regarding potential obstruction of justice, and the petitioner's failure to provide sufficient information about investments and funds received, highlighting the importance of thorough investigation and asset tracing in cases involving financial irregularities and money laundering.